Banks afraid to declare profit

Friday, June 20, 2008
A lot of banks are refusing to declare their monthly business results as the happenings of the monetary market have been badly affecting their operations.

Last year, when the national economy performed well, and helped banks reap fat profit, banks regularly made their business public. However, the situation seems to be quite different this year. Though banks still made profit in the first months of the year, their operations were not as prosperous as last year.

The reports released recently by the banks do not contain inflation about pre-tax profit. The reports only emphasise their good liquidity and satisfactory capital mobilisation.

Techcombank announced it obtained satisfactory business results in the first five months of the year. The bank’s total assets by the end of May had reached nearly VND49tril, an increase of VND9tril over the beginning of the year, while its mobilised capital had reached VND42,287bil, up by 21%. Also according to Techcombank’s report, the good capital mobilisation helped the bank maintain high liquidity. However, the bank did not declare the pre-tax profit for the first five months of the year.

The deputy director of a joint stock bank said that it seems that banks are hesitating to declare profit at this moment, both the ones who made profit and the ones who did not.

Explaining this, he said that the banks that made fat profit do not want to reveal their profit at this ‘sensitive moment’, when businesses have to bear very high interest rates. Therefore, the main message banks want to send to the public is that they still are maintaining high liquidity.

People may find it easier to find out information about ACB and Sacombank, the two banks listing on the bourse, since releasing financial reports is a must for listed companies.

Sacombank reaped VND640bil worth of pre-tax profit in the first five months of the year, and the bank expects to obtain VND2tril worth of pre-tax profit this year.

ACB has also reported satisfactory business results for the first five months of the year with VND612bil worth of pre-tax profit. Especially, ACB earned a lot of income from its gold trading floor, which brought about VND1bil a day to the bank.

Eximbank said that though conditions are not favourable, Eximbank still got satisfactory results thanks to its advantages in providing services to import-export companies and trading foreign currencies. The bank hopes to get VND1,200-1,500bil worth of pre-tax profit, nearly double that of last year.

In general, big banks still are maintaining good business results, while small banks are witnessing profit decrease. The representative of a bank in HCM City said that the pre-tax profit of the bank in May decreased by over VND50bil from the previous month.

Banking experts say that the current difficulties may last until the end of the year. However, after that, the banks that have overcome the difficulties will enter a new period of prosperity. (DTCK)

NamA Bank raises dong deposit rates

Friday, June 20, 2008
From June 17, Nam A Commercial Joint Stock Bank (NamA Bank) officially increased the dong deposit rates to the highest level of 18.36% per year to assure the competitiveness amongst banks.

Particularly, 1-3 week term deposits will get the interest rates of 17.04-17.28% per year, 1-3 month terms 17.88%, 4-12-month terms 17.76% and 13-36-month terms 17.64%.

Notably, from one to three-month terms, the interest rate of 18.36% per year will be applied on deposits worth over five billion dong, 18.24% for deposits worth 1-5 billion dong, 18.12% for from 500 million to one billion dong, 18.00% from 100-500 million dong and 17.88% for deposits worth below 100 million dong.

According to the bank, customers with week deposits will not be allowed to withdraw the principal before due. Deposits with from one-month terms will be allowed to withdraw the principal before due but they have to let the bank know earlier one day.

AAA insurer buys 50% stake into Hung Dai Duong Co

Friday, June 20, 2008
AAA Insurance Joint Stock Co recently signed a strategic partnership contract to buy back 50% stake into Hung Dai Duong Co to set up a joint venture named AAA-Hung Dai Duong Joint Stock Co.

Hung Dai Duong specialises in fields of Granite mining and processing.

The joint venture will increase the mining and processing capacity of Hung Dai Duong by five times.

Song Da 4 subsidiary to list shares on HaSTC

Friday, June 20, 2008
Hanoi Securities Trading Center (HaSTC) recently announced that the Song Da 4 Joint Stock Co (coded SD4) would officially list 7.5 million shares on the northern bourse on June 25.

Gia Lai highland central province-headquartered SD4 with a chartered capital of 75 billion dong, of which the state holds 64% of chartered capital, operates in such fields as irrigation and hydropower works construction, road transportation, civil and industrial works construction and 110KV transformer stations and electric wires installation and construction.

Vitcostone finishes selling 750,000 shares to Beira Limited

Friday, June 20, 2008
The Vitcostone high-class Ashlar Facing Stone Co (Vitcostone), a joint venture between Vinaconex Joint Stock Co and Australia-based WK Marble & Granite PTY Co, recently announced that it finished selling 750,000 shares with the price of 45,000 dong per share and 100 billion dong of convertible bonds to Beira Limited-owned by DWS Viet Nam Fund Limited whereby Beira Limited will become the Vitcostone's strategic shareholder.

Vitcostone operates in such fields as construction materials business and production, minerals processing and exploitation and goods transportation services business. The company's products mainly are to export to overseas markets.

During the first five months of the year, Vitcostone made a revenue of over 147.7 billion dong, equalling to 40.91% of the year's plan, and over 35 billion dong from after tax profit or 50.43% of the year's target.

Coc Sau coal firm to list shares on HaSTC

Friday, June 20, 2008
Hanoi Securities Trading Centre (HaSTC) recently announced that on June 26 it would officially list ten million shares of Coc Sau Coal Joint Stock Co under the Vietnam Coal and Mineral Industry Group (Vinacomin) on the northern bourse with the code of TC6.

The Quang Ninh province-headquartered company with a chartered capital of 100 billion dong, of which the state holds 51% of chartered capital specialises in minerals trade and processing, mine works construction, industrial and civil works construction, mine equipment and transportation means processing and reparation, construction materials trade and production, hotel and restaurant service business and material export and import.

Enthusiasm weak on informal share trades

Friday, June 20, 2008
Prices of many shares rapidly have increased again in the first three trading days of the week. The stock market is expected in recovery after a long "hibernation" phase. However, the informal stock market doesn't "wake up" still. Though the pressure of selling out is reducing, the transparency of the formal stock market has not yet been better.

The reason investors apprehend securities investment in the informal stock market was simply that the transparency is very weak. Most of shares are traded not successfully. Mai Bich Phuong, the director of Empower Securities Co, said that the informal stock market is more eventful after some recovery days. However, the transactions are still difficult to come to success.

Buyers are not willing to buy with huge money amount due to the undecided attitude to observe the market whereas sellers want to sell at higher price. Some investors, who have to pay debt to banks, want to offload shares to return the debts, but it is not easy to trade successfully.

Real estate sector shares have seriously been affected by "frozen" of the domestic real estate market. Hoang Anh Gia Lai's share reduced down to 75,000-78,000 dong per share. In additional, there are few others being traded but with low trading value. Among them, Bao Viet Securities Co only saw 100 shares changing hands recently.

Bank shares are considered as the most tradable in the informal market, while investors are very cautious and prudential. Eximbank's share price was up from 21,000 to 27,000 dong/share on 17 June during three consecutive transaction days. Yet, in late same day, the share price stopped increasing and started to decline to 26,000 dong per share.

500,000 Eximbank shares have been traded in the last three trading days. Vietcombank's shares also started to increase and reached the price of 37,000-38,000 dong each. However, investors are still afraid of investing in this market.

The main reason is that monetary-tightening up policies make investors wonder about revenue and profit of banks this year. Practically, there are so many banks facing the difficulties even the affects have just started in the first half of 2008. Most recently, a slew of banks listed the optimistic business results in Jan-May. Such as Eximbank received a pre-tax profit of 588 billion dong and Sacombank earned 600 billion dong. But, it is not easy for small to medium size banks to get satisfactory profits in the first five months of 2008.

According to a director of a foreign investment fund operating in Vietnam, for foreign investors, the banking sector has developed potentially. Yet, it is required that investors must have long-term view because bank shares cannot recover in unstable markets.

The bank shares such as Eximbank, Eastern Asia Commercial Bank, Techcombank, and Military Bank, have attracted investors in the informal stock market except shares of small size banks. The heat of the formal market not only causes negative impacts but also leads to sharp declines in the informal market's shares.

Selling pressure burdened on the informal stock market as the listed stock market rallied. However, as brokerages said the investors' attitude is up and down. A lot of investors, who have money and think that the securities sector is at high potential, but are not willing to buy with huge investment capital.

Quan Duc Hoang, the president of board of director of I.A capital, said that securities investment at the moment is a big opportunity. "Foreign investors are paying much attention to Vietnamese stock market", he continued "but the banking sector is not their high demand, they interested in aquatic sector, mine ores industry, consumer products sector nowadays".

According to specialists, the banks' interest rate of 18-18.5% per annum attracted more funds from the stock market to banks. Many investors afraid of another decline of the stock market in the near future and they kept the money at banks to get high profit, affecting transactions on the informal stock market. The above reasons showed that the informal stock market is still frozen. (TBKTVN)

Telecommunication firm No 1 to list shares on HaSTC

Friday, June 20, 2008
Hanoi Securities Trading Centre (HaSTC) recently announced that on June 25 it would officially list two million shares of the Telecommunication Joint Stock Co No 1 on the northern bourse with the code of ONE.

The Hanoi-headquartered company with a chartered capital of 20 billion dong operates in such fields as production and consumption materials business, trade services, electronic and informatics services and software transformation and production.

Hapaco Hai Au to pay dividend

Friday, June 20, 2008
Hapaco Hai Au Joint Stock Co (coded GHA) yesterday June 18 reported that June 30 will be the registration deadline for the company to close the shareholders list and pay 2007 dividend of 15% in shares (one share for 1,500 dong).

The dividend payment date is on July 22.

The securities depository centre will halt receiving GHA-coded securities depositories on June 27, 30 and July 1.

GHA located in the northern city of Hai Phong with a chartered capital of 13 billion dong specialises in such fields as paper products processing and production and machines, materials and equipment export and import.

Changes in Securities Law and guidance documents mulled

Friday, June 20, 2008
State Securities Commission (SSC) on June 17 organised a seminar to overview the Law on Securities after one-year of implementation. Given public comment that the Law and guidance documents still have some problems needed to be amended.

Information disclosure

Law on Securities and relevant documents have not yet had detailed guidance on operation of share retail of public companies, share sale and listing of foreign entities on the Vietnamese stock market. Meanwhile, in fact, there were some 100% foreign invested companies (with the workforce of less than 100 employees) selling shares to employees and then the share volume was still traded on the informal stock market. Investors in such case will have to face many risks and not be protected whereas the foreign firms do not have responsibilities like domestic firms under current regulations.

We are questioned about legal proceedings relating to foreign enterprises who want to sell shares in Vietnam but it is only answered that Vietnamese laws have not ruled yet, according to Nguyen Vu Quang Trung, deputy general director Hanoi Securities Trading Centre (HASTC).

As estimated, share sales will be tightened up, which also will be enclosed with transaction listing and registration. Decree No 14/2007/ND-CP will be amended that issuers must list and register securities transactions on the formal stock market in parallel with share sakes. This will make changes in so far operations of the informal stock market.

Especially, in order to mass issue and sales of shares with unclear purposes, SSC proposed the finance ministry that securities offering applications must be added approved investment projects and the plan of using capital raised from the public for those projects.

In addition, it is proposed that the regulations on information disclosure should be more particular, including rules on financial institutions and individuals forced to announce information.

For example in Singapore, as an individual that has economic relationship with an enterprise (like one of that firm's director board) also has to announce full information to avoid insider transactions, Trung said.

Represented for PWC Auditing firm, Nguyen Thi Lan again concerned the professional and the trust of audited fiscal reports. She also gave a particular example that her company refused to provide comprehensive auditing service for a corporate, however then that corporate by some way still had an auditing appraisal for its financial report and met full terms to list on the stock market.

Nguyen Vu Quang Trung spoke, the corporate value appraisal needs to be independent because it now depends heavily on enterprises and consultants.

Right time to apply derivative tools

Regarding stock brokerages, the Law on Securities must provides more details on the brokers' position as intermediary finance institutions, Le Hong Khoi�general director of Trang An Securities Joint Stock Co gave his point of view at the seminar.

Securities companies must launch other specifications such as helping investors by lending activity through account depository. So far small investors suffered the most risks because of not protected by financial tools that become popular in the world.

Law on Securities also should expand mentoring over derivative share offerings and the trading market for the kind of share as well as products of new investment funds [fund certificates], Trung proposed again. (Lao Dong)

Recovery raises rumours of bull trap on stock market

Friday, June 20, 2008
Stock market has reversed upward a tad after months of a bear run. However, is this an opportunity? Investors, particularly retail investors, are tired of watching the stock market going down and down day by day. Due to the stock market slide, the capital that should be pumped into the stock market is transferred to other investments such as gold, foreign currencies, even for eliminating the risks some investors deposited their money to banks although they known that real return could be negative despite of interest rate is increasing.

Starting from Hanoi Securities Trading Centre, followed by HCM stock Exchange has witnessed a recovery during some recent days. The question is whether the VN-index and HASTC-index will still be in upward trend in coming days or it is just rally in some trading days in the down trend or a bull trap.

Opportunities

Share prices declined sharply in comparison with the year early, many shares have approached to face value and even others are under face value. The opportunity of buying "cheap shares" with the prices close to face value, which was previously only available for promoters [founding shareholders] or "special shareholders" one or two-years ago, is available to everyone at the moment. Many shares that had priced at 20 times of face value now are currently traded at 40.000 dong each. People said the opportunity of lifetime has come.

An other point of view has been agreed by people is that in the context of real negative interest rate because of high inflation, investors should select securities as a long-term investment channel with a strong faith that the macro economy will stable soon and the economy will continue to develop in next time.

In addition, investments in gold and foreign currencies will not bring in high profits, even it is impossible to make profit by trading in the foreign currency market. So that, securities investment is the most prospective nowadays.

The above optimistic thinking has been contributed by State Securities Commission's recent decision of increasing the stock-trading band for both stock exchange floors. Many investors believe that transparency will be better with a big trading volume.

Threats

The first threat to the stock market will happen when the payment period of T+4 (four days after the transaction finishes) comes, at this time, many shares has increased more than 5% in prices and there will be more opportunity that investors make real profits by selling shares.

Whether the demand for securities will be maintained for next trading days because there is no clear signal for a real recovery of the stock market. Moreover, the Consumer Price Index (CPI) of June is being listed. CPI is a critical factor in making decisions of financial policy makers, and charter accountants.

In addition, even for analysts, it is difficult to find shares that could bring in a dividend higher than banks' interest rate in 2008. Because of paying the capital cost accounting for 20% of money amount that that company has to pay to creditors (if company has debt) is great efforts at the moment.

How many do investors tend to long-term investment nowadays? Even though the macro economy is stable and enterprises reached satisfactory business results, the stock market will grow stably when investors join the markets as the true investors.

It is supposed that the stock market continues growing up and investors are glad to waiting for the day when the new stock trading band is enforced, the opportunity of the increased stock trading band to 3-4% will be enclosed with the threat that it could be reduced with the corresponding fall because many share prices will increase at attractive rate of 5-10% by that time.

Notably, it is hard to find any comments on the stock market from experts for guiding investors some recent days. So identifying opportunities or threats of the stock market depends only on investors. (TBKTVN)

Tan Hoa Plastics lists shares in HCM City

Friday, June 20, 2008
Tan Hoa Plastics Joint-Stock Company listed on June 19 on the HCM City Stock Exchange (HOSE) to become its 152 nd company.

The company saw 520 shares traded on the first day, closing at 44,000 VND (2.4 USD) against a reference of 55,000 VND. A 20 percent price fluctuation is allowed on the first trading day.

Tan Hoa, which makes plastic packaging material, has a charter capital of 80 billion VND (4.8 million USD).

Nguyen Huy Cao An, its deputy chairman, said domestic customers account for 60 percent of his company’s turnover. Supermarkets overseas like Carrefour and Intermache are among the major buyers.

The company targets a turnover of 321 billion VND this year, 42 percent up over last year, and an unchanged gross profit of 15 billion VND.

It plans to move its workshops in HCM City to a new site in Long An province’s Tan Duc Industrial Park in the fourth quarter, tripling its annual capacity to 15,000 tonnes.

The land where the workshops are now situated will be used to develop office buildings and or factories for lease.

An Binh Bank goes live with Temenos T24 model bank

Friday, June 20, 2008
Temenos Group, the provider of integrated core banking systems, today announced that An Binh Commercial Joint Stock Bank (ABBANK), one of Vietnam's largest joint-stock banks by chartered capital, has become the seventh client in the country to go live with TEMENOS T24 (T24). T24 now provides the bank with centralised core banking across its retail and corporate banking operations in 57 branches and is helping the bank to launch a range of new delivery channels including ATM and internet banking.

ABBANK implemented T24 Model Bank, which includes pre-configured products and processes for banking best practice, in order to reduce its implementation time and costs, minimise customisation and lower project risk. This is a Universal Model Bank implementation built on the Vietnamese Model Bank country platform for both retail and corporate operations. Temenos developed the Vietnamese Model Bank over eight months in order to combine T24 functionality with all State Bank of Vietnam (SBV) related requirements as well as meeting all the banking practices in Vietnam. ABBANK is the first local bank project that uses the Vietnamese Model Bank. T24 was deployed jointly by the bank, a local Temenos Professional Services team and other specialist partners over an 11-month period.

Nguyen Hung Manh, vice Chair of ABBANK says: "Because T24 Model Bank is a proven technology, we have been able to benefit from a fast, low-risk implementation. We are now ready with a banking platform that will support the bank as it launches new delivery channels to help us achieve rapid business growth over the next two-years."

T24 will support the bank's plans to increase its customer base from 55,000 accounts to two million by 2010. T24's flexibility and scalability will also help expand its branch network to 200 locations across the country. This exponential growth could not be achieved with the bank's previous system.

During the evaluation period, ABBANK considered several vendors before signing the deal with Temenos in December 2006. The implementation project was initiated in February 2007 and went live on 9 January 2008. Temenos installed T24 core functionality, including comprehensive retail and corporate banking capabilities. The system runs on IBM AIX. T24 replaced GoldRiver, the bank's legacy system.

Andreas Andreades, CEO, Temenos, comments: "The joint deployment with ABBANK is especially important as it demonstrates the quality of our implementation skills combined with our strong local knowledge. As our seventh go live in Vietnam, this project also further confirms our commitment to the Vietnamese market, which we support through our local staff and offices as well as our deep understanding of best-practice banking procedures inherent in Vietnam Model Bank. ABBANK Bank is fast becoming a large retail bank and we are happy to support them in their growth plans. With our increasing focus on retail banking we are now able to offer immense flexibility and richness of functionality combined with a superior cost of ownership. Our fully upgradeable packaged core banking system is highly beneficial for banks that previously had to rely on bespoke and heavily customised solutions."

TEMENOS T24 is a functionally rich, scalable, and proven integrated banking system. It is delivered as a pre-configured Model Bank solution that incorporates industry best-practice, enabling fast and predictable implementations and immediate, measurable benefits. Temenos' Model Bank approach allows a fast ROI and a highly flexible and responsive approach to banking ensuring maximum business agility based on T24's flexible features. T24 offers integrated and comprehensive information on the institution at all times including a single customer view, and a single view of the enterprise including risk and profitability.

T24 incorporates modern technology including a comprehensive Service Orientated Architecture (SOA), fully enabled for standard, SOAP (Simple Object Access Protocol) web services, and BPEL process execution and compliant with industry leading ESBs (Enterprise Service Buses). T24 can be deployed on fully scalable, multi-server n-tier architecture. It provides a full front-to-back solution from electronic delivery channels such as mobile devices and internet banking right through to settlement, general ledger and other back office functions all in a fully integrated, reliable and cost effective environment. Temenos' total commitment to open standards enables its customers to benefit from the latest advances in technology ensuring business agility, continuity, data integrity and reduced downtime delivering a significant, immediate and ongoing return on investment.

About ABBANK

An Binh Joint-Stock Bank (ABBANK), is one of the leading joint-stock banks of Vietnam and one of the ten banks with the largest registered capital of Vietnam. After 13 years of growth and development since establishment in 1993, ABBANK has made great advances in its business performances and results in the last 3 years, marked by significant milestones such as: Electricity of Vietnam Group (EVN) became a strategic shareholder of ABBANK with 30% of shareholdings in 2006, ABBANK and An Binh Securities (ABS) has successfully issued dong 2000 billion bond for EVN in 2006, EVN bond issued by ABBANK has been selected by Asia Money 1.2007 as the best local currency bond of Asia in 2006.

Currently ABBANK has a network of 53 branches and transactional offices in 20 provinces of Vietnam, serving 5,000 business clients and 50,000 individual customers. More information about ABBANK can be obtained at www.abbank.vn.

About Temenos

Founded in 1993, Temenos Group AG is a provider of integrated modular core banking systems to over 580 financial institutions in 110 countries worldwide. Temenos software provides banks with a single, real-time view of the client across the enterprise, enabling banks to maximise returns while streamlining costs. Whether providing 24/7 functionality to the wholesale, retail and private or universal banking sectors, partnering with central banks on core system replacement, or working with the World Bank on solutions for the emerging markets, Temenos knows banking. The company has a transparent approach to its operations and brings to bear its experience, expertise, commitment and professionalism on every project.

Headquartered in Geneva, Switzerland, the company has 42 offices in 31 countries and is listed on the main segment of the SWX Swiss Exchange (TEMN). www.temenos.com

CONTACT: Max Chuard, Temenos, director Corporate Finance & IR Member of the Executive Board Tel: +41 (0) 22 708 1157 e-mail: mchuard@temenos.com Ben Robinson, Temenos Investor Relations manager Tel: +44 (0)207 290 3012 e-mail: brobinson@temenos.com Peter McKenna, Temenos Marketing director Tel: +44 (0)207 423 3842 e-mail: pmckenna@temenos.com Sole Chirco/Alisha Benson, Team 660 Metia for Temenos Tel: +44 (0)203 100 3718 Tel: +44 (0)203 100 3739 e-mail: sole.chirco@metia.com e-mail: alisha.benson@metia.com

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June 20, VN Index ends a week with another 1.94% fall

Friday, June 20, 2008
The Ho Chi Minh City Stock Exchange (HOSE) today closed a week by seeing another decline on the stock market when the VN Index lost 7.25 points or 1.94% to 366.02 pts. After one trading week with two increases and three declines, the VN Index lost total 6.66 points or 1.79%.

The trading volume of shares and fund certificates reached over seven million units worth nearly 230 billion dong, increasing 33.55% in volume and 33.72% in value in comparison with the previous session.

There were over 80% of shares decreasing in the session today. Among 156 share codes and fund certificates being listed on the southern bourse, the stock market saw 13 shares increasing, nine stood still, 131 decreasing and three with no transactions.

Notably, seven share codes reached the ceiling price such as AGF up 700 dong to 25,700 dong per share, KDC leaped 2,000 dong to 78,500 dong, VIC and ITA added 2,000 dong to 80,000 dong and 76,000 dong per share together with others like LBM, SCD, SDN, SSC, TMC, UNI, VID, DXP and CYC.

Three shares with no trades were DMC, BTC and VKP.

SSI reached the biggest trading volume with 2,931,430 shares, accounting for 42% of the total share codes being traded and followed by DPM with 688,760 shares, VIC 272,120, PVD 256,270, STB 251,780, REE 234,510, SBT 154,880 and VNM with 154,500 shares being transferred.

Influenced from the southern bourse, the Hanoi Securities Trading Center (HaSTC) today June 20 also tumbled on the stock market as the HaSTC Index slipped to 110.4 points after losing 2.20 pts or 1.95% with the total market trade of increasing considerably to 1,804,800 shares worth nearly 35 billion dong.

Amongst 139 listed shares on the northern bourse, the stock market witnessed seven shares increasing while 109 others decreasing, one remained unchanged and 22 with no trades.

Seven gainers were L62 up 1,200, NGC +600, SJC +400, S64 and SD6 +300, SJM and VNR +200.

One remained unchanged namely BLF.

MIC showed the strongest decline as losing 2,500 dong per share, ACB slipped 1,700, RCL and SD2 dropped 1,400 and BVS, NVC and VC2 added 1,200 dong per share.

PVS took the first place in trading volume with 479,700 shares, followed by BLF with 153,100 and PVI with 120,600 shares being traded.

Central bank plans further monetary policy tightening

Friday, June 20, 2008
The State Bank of Vietnamese again on June 19 announced a further tightening of monetary policy over the next six months to fight inflation and stabilise the domestic monetary market.

The central bank is determined to keep total credit growth under 30% (year on year) by the end of this year.

It plans to do this through flexible management of exchange – rate instruments, open-market operations and refinancing activities.

The bank said the credit system would be more closely monitored in terms of credit quality, lending for real estate investment, “business on valuable papers,” consumer loans and other trading on foreign currencies and gold.

Credit loans or investment will be saved for effective business, particularly in farm production and the export sector.

Small loans will also be made available for those on low incomes and students in line with recent Government policy.

However, loans will be limited for non-production sectors, at the same time.

The money watchdog also plans to set up a master project to prevent speculation on foreign currency on parallel markets (blackmarkets).

In fact, in the past few months, the central bank has been aggressive on monetary policy, which is seen to have generated positive results.

In an effort to further curb credit expansion and raise the attractiveness of dong deposits, the base rate was further increased to 14% on June 10.

The central bank also responded in a timely way curbing dramatic fluctuation of the US dollar on the parallel market.

It has restricted illegal foreign currency trading and tried to bring the blackmarket rate back toward the official rate.

Previously, the daily trading band was also adjusted from plus or minus 0.75% to plus or minus 1% to reflect the real market.

Sacombank's Nam Says Private Investors Selling Stocks

Friday, June 20, 2008
Nguyen Ho Nam, director of Ho Chi Minh City-based Sacombank Securities Co., the brokerage unit of Saigon Thuong Tin Commercial Joint-Stock Bank, comments on the drop in the Ho Chi Minh City Stock Exchange's VN-Index.

Vietnam's benchmark index today fell 7.25, or 1.9%, after the daily trading limit was widened to 3% from 2% yesterday. The measure closed at 366.02.

``I don't think stocks fell because banks are selling shares. The market is now dominated by private investors. Private investors are speculating among each other. They bought shares a few days ago and that's why the VN Index rose. Now they are selling to make a quick profit.

``I really don't know about the stock market next week, it's so unpredictable.''