Around 50 foreign and local experts and investors are discussing issues relevant to Viet Nam’s securities market at a two-day conference that began yesterday in HCM City.
Le Dang Doanh, senior economist at the Institute of Development Studies, gave an overview of the country’s current economic situation.
According to him, the first five months in 2008 saw a GDP-growth rate of 7.4 per cent. Export turnover was US$23.4 billion while imports brought in $37.8 billion, creating a trade deficit of $14.4 billion. CPI increased over 19%.
The VN Index declined to less than 400 from around 1,200 in 2007.
The current high interest rate is a heavy burden for the business community, according to Doanh.
Foreign investors believe in the mid and long-term prospects of the economy, but are concerned with the volatility of the economic situation.
Doanh stressed State efforts to re-establish trust for investors.
Viet Nam’s economic growth rate this year is expected tobe between 6.2 to 7.2%.
"Higher disbursement rates of FDI and ODA could contribute to stabilising the international payment balance," he said.
Viet Nam may also push reforms further and accelerate the equitisation of State-owned enterprises.
"The 7.5% economic growth rate in the last 10 years is very impressive and I understand that more recently the stock market has experienced a downturn and the Government has focused on controlling inflation. No doubt this has been painful for investors but it does not appear to lead to withdrawal of foreign investment," said Michael O’Sullivan, President of the Australian Council of Superannuation Investors.
Bui Thu Thuy, Securities Services Deputy Head for HSBC HCM City Branch, singled out market entry as a key issue for foreign investors, and detailed regulations, taxation and the process of starting securites trading in Viet Nam.
Other topics included evaluating trends in the country’s stock exchange, the importance of corporate governance and trasparency in building market confidence.
Today (second working day), human resources, bond markets, alternative investments tools, fund risk and investment techniques for the local securities market will be covered.
The event is co-organised by Singapore-based Informa Finance Asia and local firm Quang Ba I.A.C. (VNS)
Wednesday, 25 June 2008
Securities meet links investors, experts
Quang Nam road construction firm asks permission to list 1.2m shares on HaSTC
Quang Nam Transportation Traffic Construction Joint Stock Co is asking Hanoi Securities Trading Centre's approval to list 1.2 million shares on the northern bourse.
The company has a chartered capital of 12 billion dong, in which 53.8% held by the state and 46.2% held by internal and external shareholders.
ABBank applies interest rate 18.2% per year
From June 20, An Binh Commercial Joint Stock Bank (ABBank) officially applied deposit rate of 17.8% per year as for one-month term deposit receiving the interest rate at the end of terms, three months at 18%, and from six to 12 months 18.2% per year.
In addition, ABBank also officially applied new interest rate benchmark as for US dollar deposits whereby one-month term will get the interest rate of 7.3% per annum, six months 7.5%, 12 months 7.7% and 13 months 8% per annum.
ABBank also applied the progressive interest rates as for both dong and US dollar deposits, except demand deposits. Particularly, the interest rates as for deposits worth from 100-500 million dong will be added by 0.2% per year, from 500 million-one billion dong by 0.3%, one-five billion dong by 0.4% and from five billion dong and higher by 0.5%
11 firms register to join HaSTC's floor for unlisted public companies
A source said that there are now 11 companies registering transactions on Hanoi Securities Trading Centre (HaSTC)'s floor for unlisted public companies including eight banks and securities companies among 40 enterprises receiving HASTC's invitation.
According to Nguyen Vu Quang Trung, vice director of HaSTC, first off, commodities for the market are mainly selected shares of companies meeting State Securities Commission (SSC)'s requirements on corporate administration and management of shareholder book. Those are mainly securities brokerages, banks, financial institutions and insurers.
"Initially, we estimate that about 40 corporate participants will be divided into many small groups so the registration will depend on depository progress taking about two weeks for each candidate. Currently, over 10 businesses registered to join the HASTC's floor for unlisted public companies just from the first stage", Trung added.
Time by time, HaSTC will bring these companies to depository and trading registration. However, with aforementioned legislation background, shares of unlisted public corporates will be gradually put into centralised transactions with a strict treatment.
Pubic companies must carry out centralised deposit, so if not being put into transactions via the floors, transference procedures of these corporate shares cannot be made. In addition, corporates also can violate regulations on information disclosure.
As reported, legally, the scheme on unlisted public companies was completed already, which gained the Ministry of Finance's approval and was set for forthcoming issue by SSC.
On the other hand, HaSTC also finished the draft rule on distance transaction that will first off be applied on the securities trading of unlisted public companies. This draft rule was sent to seek relevant agencies' opinion.
Systematically, according to Trung, both HaSTC and Vietnam Securities Depository (VSD) Centre are ready for securities transaction of unlisted public companies.
In February 2008, HaSTC piloted the trading model in in-house transactions. In April, distance transaction was trial with VSD and 69 securities brokerages to check the exact and connection quality. (TBKTVN)
SCB increases deposit rates strongly
From June 23, the dong deposit rates at Saigon Commercial Joint Stock Bank (SCB) were increased strongly, especially as for terms of from one week.
In particular, deposits with from one to three week terms will carry the yearly interest rate of 17.4-17.8%, one to three-month terms at 18.1-18.3%, three-nine-month terms at 18.5% and 370 day term 18.8%. The demand interest rates were also increased to 9% per year and from three-six day terms were ranged between 14-14.6% per year.
Also from June 23, customers with the balance worth from 20 million dong as for individuals and 50 million dong as for institutions will be allowed to joined "overnight investment" product with the interest rate of 13% per year.
On the same day, SCB announced that it increased prize-based bills of exchange rates to 18.8% per annum with from 30-day term and introduced "savings with principal interest rates" product with the interest rate of 17.4% per year. Each redeposit will plus by 0.2-18.4% per year of interest rates.
June 25, Stock market remarks three consecutive increases
Influenced from two previous sessions, the stock market today June 25 witnessed another surge with over 80% of shares increasing. The VN-Index of Ho Chi Minh City Stock Exchange (HOSE) ended at 383.78 points after adding 7.81 pts or 2.07% with the total matching order trade of over 9.3 million shares and fund certificates worth nearly 343 billion dong.
Among 152 share codes and four fund certificates being listed on the southern bourse, the stock market saw 127 shares increasing while eight stood still at the comparative price, one with no trades and 20 decreasing.
The sole share with no transactions was BTC.
Out of big shares with the largest market capitalisation, VPL lost 3,000 dong to fall to the floor price while others increasing such as STB, DPM, VNM, PVD, ITA, HPG and PPC.
DHG was the biggest gainer as adding 4,000 dong and followed by DMC +3,000, VIC and VNM up 2,500 and ITA, KDC, PVD and SGH leaped 2,000 dong per share.
Some big losers were DQC, SJS, BBC, SC5 and TTP.
STB reached the biggest trading volume with over 1.5 million shares, REE followed with 581,260, FPT 282,020, VF4 266,390, VTO 214,650, BF1 213,740, PVT 204,930 and others like VSH, PPC, HAP, HPG and NTL.
Similarly, Hanoi Securities Trading Centre (HaSTC) also bounced on the stock market when the HaSTC Index bounded 2.18 points or 1.98% to close at 112.06 pts with the total market trades of 4,690,800 shares worth over 93 billion dong.
Amongst 141 listed shares, the stock market recorded 30 shares decreasing, seven with no trades, five stood still and 99 remain increasing.
Seven with no trades were CID, HBE, HSC, HUT, LBE, LUT and NPS.
Five stood still namely KBC, L43, ONE, S96 and SD4.
MIC performed the strongest increase when adding 2,200 dong, ACB up 1.700 dong, VSP +1,600, RCL and SCJ +1,500, S99 +1,200, BVS, NTP, VC2 and VNR +1,100 dong per share.
SD2 showed the biggest decrease as losing 1,400 dong, L62 slipped 1,300 dong, DTC, HLY, PSC and SNG dropped 1,200 dong per share.
SD7 stood at the first place in trading volume with 515,600 shares, followed by ACB with 479,000, PVI 401,900, KLS 386,700, HPC with 218,500 and PVS with 170,800 shares being traded.
Viet Nam still apple of Singaporean eyes
Despite Vietnam’s slowing economy, more than 300 businesspeople flocked to a conference in Singapore Tuesday to learn about opportunities in the country, with most believing the hard times won’t last long.
The businesspeople, Singaporean investors and representatives of multinationals based in the city-state, discussed the economic situation and prospects at the conference “Doing Business in Viet Nam.”
Many of the attendees said they planned to expand their businesses into Viet Nam, which is becoming more attractive as the Singaporean market has become so crowded and competition in China and India so tough.
Laila Salim, a director of Caden Technologies Pte. Ltd., said she knew many companies had shifted their business to Viet Nam from China.
Viet Nam has been hit by sky-rocketing inflation this year, which hit 25% year-on-year in May.
The once-booming stock market is the world’s worst performing exchange this year, losing 60% of its value since January.
The government has revised down this year’s targeted economic growth rate to 7% from the previous 8.5-9% target band.
However, dozens of businesspeople told Thanh Nien they were still upbeat about the prospects of Vietnam’s economy.
“We are not very worried,” some said, while said they expected “the difficulties will pass in six months.”
Huynh Buu Quang, Head of Commercial Banking at HSBC Viet Nam, said high inflation was inevitable as global food and oil prices continued their remarkable rise.
Speculation and excessive imports worsened the situation, he said.
Quang said Vietnam’s stock market was adjusting itself after several years of being overvalued.
But he assured the audience that the problems, including that of the financial and real estate markets, were “short-term” and the government’s policies were proving effective.
Quang’s opinion was echoed by some of the conference’s other speakers.
Simon Ong, Group Managing Director of Kingsmen Creatives Ltd., an event organizer with a Vietnamese offshoot, said his company was still confident about the business prospects this year and in the future.
With a long-term view and good planning, doing business in Vietnam would be successful, he said.
Meanwhile, Michael Connor, a professor at Nanyang Technological University, criticized some overly negative reports about the Vietnamese economy.
Despite its struggling economy, Viet Nam attracted US$31.6 billion in newly-registered foreign direct investment in the first half of this year, $10 billion more than the amount pledged in all of 2007, the Vietnamese government’s Ministry of Planning and Investment said. (TN)
Japan's Daiwa Securities Corp to buy into SSI
Japanese brokerage Daiwa Securities Group Inc will become a strategic shareholder of the Saigon Securities Inc (SSI) by owning at least 10% of its shares.
Under a strategic cooperation agreement signed between the two sides on June 23, Daiwa committed to providing its Vietnamese partner with technical assistance, technology and personnel training, and to help diversify its products and get access to the Japanese stock market.
The Japanese brokerage will send a member to join SSI’s board of directors.
According to SSI, Daiwa will buy more than 11.68 million shares of SSI which are listed on the Ho Chi Minh City Stock Exchange, bringing the total number of SSI shares owned by Daiwa to 18 million, equivalent to 13.17% of the Vietnamese brokerage’s charter capital.
Apart from Daiwa, ANZ has also become a foreign strategic partner of SSI, holding 17.08 million shares or 12.5% of SSI’s charter capital.
PM calls for strengthening management over stock market
Prime Minister Nguyen Tan Dung has banned individuals and institutions from organising stock transaction floors illegally in order to strengthen the management of the stock market and ensure its sustainable growth.
In his instruction issued on June 23, the PM has forbidden enterprises, which are non-Vietnamese legal entities to offer or sell securities in Vietnam, except for cases that follow the international commitment roadmap signed by the country.
He banned state enterprises from using government, investment development funds and major construction capital to make financial contributions or purchase shares of stock investment funds, including risk investment funds and securities companies.
The PM ordered that all IPOs must register with the State Securities Commission and IPO violations must be stopped and punished in accordance with the law. (VOV)
Saigon Securities, PetroVietnam, Vietnam-Italy Shares On June 25
The Ho Chi Minh City Stock Exchange's VN-Index rose 7.81, or 2.1%, to close at 383.78, the biggest gain since March 10. The following shares were among the most active in the market.
PetroVietnam Drilling & Well Services Joint-Stock Co. (PVD VN), a provider of services to the oil and gas industry, gained 2,000 dong, or 2.9%, to 70,000, the biggest advance since March 26. Crude oil for July delivery yesterday touched $138.75 a barrel, the highest since reaching a record $139.89 on June 16, before settling at $136.74.
Saigon Securities Inc. (SSI VN), Vietnam's biggest publicly traded brokerage, climbed 800 dong, or 2.8%, to 29,400, the highest since June 10. Trading turnover on Vietnam's stock exchange this month averaged 387 billion dong ($23 million) per day, 46% higher than the daily average in May.
Vietnam-Italy Steel Joint-Stock Co. (VIS VN), a steelmaker based in the northern province of Hung Yen, slid 600 dong, or 2.8%, to 20,900, the lowest since the stock started trading in December 2006. Viet Nam will raise export taxes on steel ingots and scrap steel by 10%, from as much as 5%, the Tuoi Tre newspaper reported yesterday, citing a decision signed by Do Hoang Anh Tuan, deputy finance minister.
Interest rate policy putting bankers between hammer and anvil
Truong Van Phuoc, General Director of Eximbank, said that by raising deposit interest rates, banks well know that they are endangering themselves, but there simply is no alternative.
The State Bank of Vietnam on June 19 released Dispatch No 5455 instructing banks to stop collecting loan fees, asking borrowers to pay security on loans and employing other tactics which could indirectly lead to an increase of actual lending interest rates.
The dispatch proves to be bad news for bankers, who expect that banks will face more difficulties in the time to come.
The director of a joint stock bank said that bankers are now between the hammer and the anvil. They have to raise deposit interest rates in order to satisfy depositors in the context of high inflation and lower lending interest rates in order to satisfy the State Bank and businesses.
The director said that banks have to offer the deposit interest rate of 19% per annum, while they cannot lend at more than 21% per annum, which means the margin of profit of 2%, not enough to cover banks’ expenses.
That explains why some banks have stopped providing loans.
He said that banks have to offer high interest rates just to retain their current depositors; they have no hope of bringing in more money.
Truong Van Phuoc, General Director of Eximbank, said that by raising deposit interest rates, banks well know that they themselves are putting the knife to their throats. However, if they don’t do that, they will not be able to retain clients.
Banks continue to adjust interest rates on VND deposits. ACB is now offering 18.9% per annum for 13-month term deposits, a rate which has been applied since June 20. ABBank, once again, announced it would raise interest rates as of June 20, now offering 18.2% on 6-12 month term deposits. One day ago, VP Bank raised the rate to 18.8% for 6-month term deposits.
US$ deposit interest rates have also been increasing in the last few days. Since June 20, ABBank’s interest rates have been 7.3% per annum for 1-month, 7.5% for 6-month, 7.7% for 12-month and 8% for 13-month term deposits.
Ocean Bank is now leading the market with the offered interest rate of 8.4% for 12-month term deposits.
Other banks are also offering very high rates, including SCB 8%/annum, Eximbank 7%/annum, Dong A 7.65%/annum for 24-month term deposits.
Banks have to raise US$ deposits as people rushed to buy foreign currencies recently for fear of further dollar price increases. However, analysts fear that the move will worsen the current situation.
The move will unintentionally make the foreign currency speculation in the market more serious, especially as worries still exist about the further devaluation of the local currency. With such high US$ deposit interest rates, those who keep dollars will get double profit: they don’t need to worry about the currency value decrease, while they still can enjoy high interest. This will encourage more and more people to purchase dollars. As such, banks are now lending a hand to the activity of speculating foreign currencies and dollarisation.
