Thu Duc export import firm postpones second phase shares issue

Thursday, June 19, 2008
Thu Duc export import firm postpones second phase shares issue

Thu Duc Export Import Trade Joint Stock Co (coded TMC) recently said that it would postpone issuing shares for the second phase to the existing shareholders. These are shares being issued according to the plan of increasing chartered capital from 40 billion dong to 50 billion dong with the price of 18,000 dong per share.

In addition, TMC is also waiting for the company's director board's approval to issue shares to double its chartered capital from 40 billion dong to 80 billion dong when the stock market recovers and could assure the company's shareholder's benefit.

Comeco to pay dividend in shares

Thursday, June 19, 2008
Oil and Gas Materials Joint Stock Co (Comeco-coded COM) recently announced that June 27 will be the registration deadline for the company to close the shareholders list and pay dividend for the second phase of 2007 in shares.

According to the Ho Chi Minh City Stock Exchange (HOSE), the company would offer extra 465,308 shares at the ratio of 6% (six new shares for 100 shares held). The transaction date is scheduled on July 30.

The HCM City securities depository centre branch will halt receiving securities depositories on June 26, 27 and 30.

Techcombank increases dong deposit rates to 18.7% per year

Thursday, June 19, 2008
From June 16, Viet Nam Technology and Commerce Joint Stock Bank (Techcombank) applied a new interest rate benchmark for dong deposits with the possible highest level of up to 18.7% per year.

In particular, as for super-lucky savings with deposits worth over ten million dong and the terms of from at least six months, the interest rate is 18.35% per year, from one to five months 17.85-18.25% per year.

Especially, as for Phat Loc savings (getting the interest rates according to the deposit balance), the highest interest rate could be 18.7% per year. Particularly, more than six-month terms with deposits worth less than 100 million dong will get the interest rate of 18.4% per year, from 100-500 million dong 18.45%, from 500 to below one billion dong 18.5%, from one-three billion dong 18.6% and over three billion dong 18.7% per year.

With the multipurpose savings (flexible principal withdrawal), the interest rate is 18.5% per year for 12-month term and longer and from six to nine-month terms from 18.2% to 18.4% per year.

Southern waterway firm to equitise in 2008

Thursday, June 19, 2008
The Southern Waterways Corp recently announced that the company's equitisation plan was sent and await for some ministries and departments' approval to submit to the government as soon as possible.

At present, the firm completed basic steps for equitisation and auditing. Accordingly, the company's real value is 880.152 billion dong, of which state-owned capital value is 670.993 billion dong.

As the plan, after the equitisation, the company's chartered capital will be 671 billion dong including 342.21 billion dong hold be the state, accounting for 51% of chartered capital, 4.37 billion dong or 0.65% stake will be sold to the company's employees, two billion dong or 0.29% stake will be sold to the company's labour union, 200 billion dong or 29.8% stake is to be sold to the strategic investors and 122.41 billion dong remain or 18.24% stake will be auctioned to the public.

The firm chose Cube Investment Fund Management Ltd Co to be the company's strategic investor to submit to the prime minister's consideration and decision. If everything goes smoothly, the Southern Waterways Corp's equitisation could be completed within this

Vietnam different from Thailand in 1997, says Chinese economist

Thursday, June 19, 2008

A Chinese economist of US based Morgan Stanley said that it is impossible to compare Vietnam's current economic issues with Thailand's monetary and financial crisis that occurred in the late 1990s and it is also so hard to say that Viet Nam could be the start of a new financial recession in Asia.

Firstly, although Vietnam's state bank system and state enterprises have shown big problems, there does not appear any signal of comprehensive depression and bankruptcy. Secondly, foreign investment capital pumped into Vietnamese stock market now only accounts for about 20% equalling to US$6 billion. So the withdrawal of the money amount will not cause strong impacts.

Lastly, Viet Nam's foreign debts remains very small because 90% of this are long-term debts so Viet Nam does not have to suffer high pressure of short-term debt payment. In addition, the country's foreign capital attracting policy currently is fairly flexible and foreign investors' faith in Vietnamese environment has not signalled to be eroded yet, he added.

But, he warned, if the dong continues depreciating against the US dollar and inflation continues climbing without the government's effective intervention, an economic crisis would be hard to be predicted in advance. (VNA)

Widened trading band: some happy, others wary

Thursday, June 19, 2008
The decision by the State Securities Commission (SSC) to raise the daily trading band by 1% on both Hanoi and HCM City bourses has been applauded by some investors, but not those who fear it will result in sharper falls of the stock market.

With the decision, the daily trading band for the Hanoi Securities Trading Centre (HASTC) will be +/-4%, while the band for the HCM City Stock Exchange (HOSE) will be +/-3%.

Huy Nam, a securities expert, said that he once called for the resumption of the initially applied trading band of 10% and 5%, respectively.

“The modest widening shows that SSC is still too cautious with its moves. Wider trading bands bring more good things to the market,” Nam said.

However, Nam added that the decision, in any case, is a good thing for the market. But widening the trading band is just a short-term measure. In the long-term, the stock market needs more than just a wide trading band.

“Wider trading bands will allow stock prices to fall down more sharply or go up more sharply, but this will certainly help improve the liquidity of stocks,” Nam said, adding that more transactions will make the market more bustling.

He said that the low liquidity, which was caused by the measures to tighten the market, was one of the reasons that investors have left the market.

Those investors may return to the market when they hear that the liquidity has been improved.

However, he stressed that widening the trading band only can help invite investors to the market. There still needs to be more actions taken to revive the ailing stock market.

Meanwhile, Tran Huy Duong, Analysis Director of Hoa Binh Securities Company, has expressed his concern that the move by SSC may cause the market to fall more sharply.

Duong said that SSC seemed to be hasty to widen the trading band when the market saw 4-5 trading sessions of increasing. He believes that it is not the right time now to widen the daily trading band, as the market still has a lot of uncertainties.

The wider trading bands will encourage investors to make deals. If they make bank deposits, they will get the maximum profit of 18% per annum, while if they make securities investments, they can get the profit of 3-4% every day. A lot of investors who once suffered losses may come back to the market.

However, Duong can see problems in the SSC’s move.

“We well know that some institutions which hold mortgaged stocks may push up the sale of the mortgaged stocks once the daily trading band increases, which would certainly cause troubles for the market,” Duong said

Duong anticipates that the stock market will see the market prosper for some 4-5 trading sessions after June 19 (the day when the decision on widening the trade band becomes effective). However, the market may go down after that, as the investors who bought shares at low prices before may sell then.

However, Duong agrees with Huy Nam: the market needs long-term measures rather than just a short-term trading band widening. (VNN)

Monetary market sees positive changes

Thursday, June 19, 2008
There have been clear signs of the considerable improvement of the monetary market: the VN Index increases, banks have enough compulsory reserves and their liquidity has improved. Meanwhile, the VND/US$ exchange rate more truly reflects the supply and demand on the market.

Dollar shortage eased

On June 16, the State Bank of Vietnam published on its website the translated version of the report by securities firm Nomura, Tokyo, which said that there is not a high possibility of the VND’s sharp devaluation. The VND will bear modest pressure originating from the trade deficit. The pressure will decrease gradually if the government’s policy on slowing down economic growth has impacts on exports.

By posting a report by a foreign institution on its official website, it seems that the State Bank of Vietnam wants to imply the measures it will apply in the time to come. The report proves to have information that comes in line with the recent announcements by the government.

According to the report, the foreign currency reserves, not including gold, by the end of February 2008 had reached $26.3bil, much more than imports for three months. Meanwhile, the foreign debts by the end of 2007 had accounted for 29% of GDP, much lower than Thailand’s 59.7% seen in late 1996, when the Asian financial crisis took place. Therefore, there is nothing to worry about in regards to the foreign debts of Viet Nam.

The government of Viet Nam has decided to shift its focus from high economic growth to inflation control. Therefore, the forex policy will focus more on fighting inflation rather than improving the competitiveness of export products. The sharp devaluation of the VND would have the opposite effect: it would make inflation more serious. Therefore, the State Bank of Vietnam will not do that.

On June 17, businesses said that the ‘dual exchange rate’ (the official rate announced by commercial banks and the black market rate) situation had improved considerably. The gap between the actual exchange rate and the announced rate was lowered from VND1,200/US$1 to VND800-900/US$1, and then VND600US$1. This spells that the short supply of the dollar has been eased.

Bankers say that the move by the State Bank of Viet Nam on June 10 to adjust the official exchange rate has helped more dollars flow into banks.

Liquidity thirst over

According to the State Bank of Vietnam, in the week of June 9-13, right after the State Bank announced new decisions on interest rates, banks rushed to raise their deposit interest rates. The interest rates hovered around 15.84%-17.5% that week.

Last week, the State Bank offered to purchase valuable papers in big quantities of VND6-15tril per trading session, in order to help improve the liquidity of banks.

After a lot of efforts, the credit market has become more stable with the interest rates staying firmly at 17.5-18%. The 19% interest rate a bank offered several days ago has become abnormally high and the bank has stopped the programme to mobilise capital at this interest rate.

Currently, the interbank market interest rate is staying at 13% per annum, a sharp fall if noting that it once skyrocketed to 20%. (SGTT)

Dong Gains as Standard & Poor's Says No Currency Crisis

Thursday, June 19, 2008
Viet Nam's dong gained as Standard & Poor's said ``extensive'' capital controls and the management of its currency will prevent overseas investors from fleeing the nation.

``Viet Nam is not in a currency crisis,'' Ping Chew, the Singapore-based head of Asian sovereign and corporate ratings at S&P in an interview on June 17. ``There's definitely a bit of hot money that went in. But is it going to leave en masse like that which decimated Asia in 1997? I don't think so.''

The currency gained 0.01% to 16,618 per dollar as of 10:15 a.m. in Hanoi, according to data compiled by Bloomberg. A stronger currency cheapens imports and makes exports more expensive.

Viet Nam's central bank has increased borrowing costs three times this year to 14%, the highest in Asia, as the Southeast Asian nation seeks to tame accelerating inflation. Consumer prices surged 25.2% in May, the fastest since 1992.

The State Bank of Viet Nam set today's reference rate at 16,454 a dollar, compared with the rate of 16,457 yesterday, according to its Web site. The currency is allowed to trade up to 1% on either side of it. (Bloomberg)

Vietnamese Economy `Not in a Crisis,' ANZ Bank Executive Says

Thursday, June 19, 2008
Australia & New Zealand Banking Group Ltd. said Vietnam's economy isn't facing a crisis, with cash still flowing easily through the country's banking system and inflation likely to slow.

Morgan Stanley last month said the Vietnamese dong was heading for a ``currency crisis,'' citing a widening current- account deficit, and warned of the risk of a ``systemic banking crisis.''

Calyon, Credit Agricole SA's investment banking unit, said this month that the exchange rate for dong non-deliverable forwards points to a possible balance of payments crisis in Viet Nam. Citigroup Inc. said in a report this month that the risk of a banking crisis is the primary problem facing Viet Nam.

``It's very interesting to see international commentators, when there is a problem, using the word `crisis','' Alex Thursby, Asian-Pacific managing director for ANZ, told reporters yesterday in Ho Chi Minh City, without citing anyone by name.

``I don't think there's a crisis,'' Melbourne-based Thursby said. ``There's a requirement to bring inflation down and a focus on that, but the Vietnamese economy has many strengths, between domestic demand and continuing investment by organizations that want to export.''

Vietnam's inflation rate accelerated to 25.2% in May, the fastest since at least 1992. Exports rose 27% through May, according to preliminary figures from the General Statistics Office in Hanoi.

`Reasonable Shape'

Vietnam's economy ``is in reasonably good shape,'' buoyed by ``correct'' recent interest-rate increases by the country's central bank as a measure to control inflation and by ``strong'' foreign-exchange reserves, Thursby said. Dong and dollar liquidity in the banking system has been ``strong,'' he said.

``There may be pockets which are not quite as strong as other pockets, but generally the system is still relatively liquid and that all bodes very well for the future,'' he said. ``I don't get a feeling this is as bad as some people would like to suggest.''

While a ``herd mentality'' has led to a loss of confidence in the dong among some Vietnamese, the country's banking system is stable, said Dam Bich Thuy, ANZ's chief executive for Viet Nam.

``We see some people trying to get dollars, but then they still put their dollars back into the banks,'' Hanoi-based Thuy said. ``They don't take money out and put it under the mattress.''

ANZ has a 10% stake in Saigon Thuong Tin Commercial Joint-Stock Bank and a 12 percent stake in Saigon Securities Inc., and wants to further expand its branch network in Vietnam, Thursby said. The Australian lender has branches in Hanoi and Ho Chi Minh City and a representative office in the southern Mekong Delta city of Can Tho. (Bloomberg)

June 19, First session with new stock trading band, VN Index falls strongly

Thursday, June 19, 2008
The cautious psychology of investors in the first trading session being applied the new price vibration amplitude of shares and fund certificates on both floors Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HaSTC) made the stock market less ebullient. The hope of a market with more recoveries after having four satisfactory trading sessions was extinguished in the session yesterday June 18 when a large volume of shares were offering for sale, a much higher volume against the orders to buy although the demand still being remained at high level.

Ending the session today June 19, the VN Index lost 8.8 points or 2.3% to 373.27 pts with the total matching order trade of 5,243,980 shares worth 172 billion dong, falling one fourth in volume and 72.7% in value in comparison with the previous session.

HOSE today welcomed a new member coded VKP of Tan Hoa Plastic Joint Stock CO with the total volume of shares being listed on the southern floor of eight million shares and the comparative price of 55,000 dong and vibration amplitude of +/-20%, bringing the total share codes being listed on the southern bourse to 152 shares and four fund certificates. The session today witnessed six shares increasing, seven stood still, two with no trades and 141 decreasing.

Among gainers, ITA added 2,000 dong to 74,000 dong per share, AGF up 700 to 25,000, DPR leaped 1,300 to 47,500 and others like COM, BHS and SDN.

With a new vibration amplitude but most of 141 losers fell to the floor price.

The new recruit VKP lost 11,000 dong to 44,000 dong per share with 520 shares being traded.

DPM stood at the first place in trading volume with 935,160 shares, followed by SSI with 361,810, HPG 244,480, PVD 198,840 and others such as PPC, VSH, PRUBF1, VIC and VIP.

Similarly, the Hanoi Securities Trading Center (HaSTC) today June 19 continued falling on the stock market as the HaSTC Index slipped to 112.6 points after losing 1.34 pts or 1.18% with the total market trade of increasing considerably to 1,333,400 shares worth over 26 billion dong.

Amongst 139 listed shares on the northern bourse, the stock market witnessed three shares increasing while 106 others decreasing, one remained unchanged and 29 with no trades.

Three shares increasing were DTC up 1,700 dong, SJC added 700 dong and BLF jumped 300 dong per share.

The sole share stood still namely YSC.

29 shares with no transactions including B82, BHV, C92, CID, CTB, DAC, HBE, HCT, HLY, HPS, HSC, HUT, KMF, L62, LBE, LTC, LUT, NGC, NPS, PSC, SD3, SDY, SIC, SNG, STC, TPH, TST, VC3 and YBC.

KBC was the biggest decliner when losing 3,400 dong, followed by MIC lost 2,600 dong, ACB slipped 1,800 and RCL and SD2 dropped 1,500 dong per share.

BLF reached the biggest trading volume with 153,000 shares and the others with below 100,000 shares being traded.