Two more firms to buy back fund shares

Friday, April 25, 2008
The Ho Chi Minh City Stock Exchange (HOSE) recently announced that on April 22, there were two more listed companies registering to buy back shares to make fund shares namely Thanh Thanh Ceramic Joint Stock Co (coded TTC) and Ben Tre Seafood Export Import Joint Stock Co (coded ABT).

In particular, TTC will buy back 100,000 TTC-coded shares within two months from May 5 to July 5 under the model of negotiation and order marching.

ABT will buy 800,000 ABT-coded shares under the same model within three months from May 6 to August 6.

Vietcombank reports performance in Q1

Friday, April 25, 2008
Bank for Foreign Trade of Viet Nam (Vietcombank) recently announced that up to March 31, its total capital reached 195.587 trillion dong, 105.562 trillion dong in outstanding debts, up 10.1% against last year and the overdue debt rate was 1.4%.
In particular, the bank’s turnover from export and import payment sector gained US$8.428 billion in the first quarter of 2008, up 32.3% against the same period of last year or 24.9% of this year’s plan and accounting for 25.2% of the country’s export and import market share. In January-March, Vietcombank’s export turnover obtained US$4.799 billion and import spending was US$3.628 billion.

As for card sector, the bank launched 5,365 more international credit cards in the first quarter of the year, bringing the total figure to 26,207 international credit cards issued by Vietcombank. The lender also issued 242,687 cards of connect 24 and 12,197 MTV cards and Visa debit cards. Turnover from international card payments gained US$174 million or 32.5% of the year’s plan, and the turnover from using credit cards issued by Vietcombank was 484 billion dong, equalling to 12.7% of the year’s target.

As for field of trading foreign currency, the bank reached over US$7 billion, a year-on-year increase of 36%, of which, Vietcombank bought in US$3.481 billion, up 34% yoy and sold out US$3.551 billion, increasing 38% yoy. Foreign currency being sold out for importing petrol reached US$504 million, a higher level than US$399 million of the same period of previous year.

In the first quarter of 2008, Vietcombank’s after tax profit attained over 900 billion dong.

This year, the bank targets to keep outstanding debt below 30% and the bad debt at maximum of 2.6% and reach 158.861 trillion dong in total deposits from the economy and a chartered capital of 15 trillion dong.

The bank also plans to expand its network with branches in Hanoi, Thanh Hoa, Ha Tay, Tien Giang and Tay Ninh and 60 transaction offices nationwide.

With this target, Vietcombank expects to earn 4.537 trillion dong in revenue, up 13.94% on 2007, 2.339 trillion dong in revenue from other services and business activities, a year-on-year increase of 6.97% and 3.383 trillion dong in profit. (SBV)

Vietcombank says bad debt edges up to 1.4 percent in Q1

Friday, April 25, 2008
Vietcombank, Viet Nam’s third-largest lender, said Wednesday its overdue debt edged up to 1.4% of outstanding loans in the first quarter of this year, from less than 1.3% in the year-ago period.

The Hanoi-based bank, Viet Nam’s first state-run bank to float last December, said loans on March 31 rose 10% from the end of last year to VND105.56 trillion (US$6.6 billion).

The government has said it would reduce ownership gradually to 51% of stake in Vietcombank, which handles a quarter of Viet Nam’s total export and import payments.

Vietcombank did not give a reason for the higher overdue debt or provide its bad debt rate in the first quarter but said it made a net profit of 900 billion dong ($55.59 million), a statement on the central bank’s website (www.sbv.gov.vn) said.

Its total assets eased 0.3% from the end of 2007 to VND195.59 trillion ($12.13 billion) in March, the statement said without giving a comparative figure for profit in the first quarter of 2007.

Vietcombank Chairman Nguyen Hoa Binh said it was the first time in the bank’s 45 years of operation that the total assets declined.

The lender is set to list overseas in 2009

Global economic slowdown and rapid changes on domestic monetary markets has affected Vietcombank’s performance, Binh said at a news briefing Tuesday.

Vietcombank is due to hold its first shareholder meeting on Saturday in Hanoi.

The bank has said the meeting would discuss business targets for 2008, selection of a foreign strategic investor and also its domestic share listing.

Chairman Binh said Vietcombank would list shares on the country’s main exchange in Ho Chi Minh City in June while the actual debut date would depend on shareholders’ approval as well as approval from market regulators.

Vietcombank also planned to list overseas next year, Binh said without naming a specific market but Vietcombank officials have said the bank could list in Hong Kong or Singapore.

The lender has projected a credit growth of 30% this year, in line with a central bank’s 30% growth target for the entire banking industry as it moved to tighten money supply to control double-digit inflation.

Last year Viet Nam’s lending surged 54%.

Vietcombank expected its gross profit to rise 11.68% to VND3.38 trillion ($209 million) in 2008, it said in a report issued to shareholders ahead of the Saturday meeting.

The bank aims to cut bad debt to 2.6% of loans this year from 3.4% last year while its projected return-on-equity would ease to 15.71% from 16.95% in 2007, the report said.

Credit growth at banks and financial institutions in the Southeast Asian nation reached about 50 percent last year, according to the International Monetary Fund.

The government is prioritizing controlling inflation over economic growth.

Viet Nam may reduce this year’s target growth rate to around 7% instead of the 8.5-9% band set last year. (Reuters)

April 25, VN Index keeps falling, HaSTC Index rallies

Friday, April 25, 2008
Ending the trading session today April 25, the 1774th trading session of the Vietnamese stock market, the Ho Chi Minh City Stock Exchange (HOSE) closed a week be seeing another decline as the VN Index lost 2.54 points or 0.48% to 515.88 pts with the total matching order trade of nearly seven million shares and fund certificates worth over 290 billion dong, marking the sixth consecutive decreasing session on the stock market.

Among 154 shares and fund certificates being listed on the southern bourse, the stock market recorded 52 shares increasing, 15 others remained unchanged and 86 shares decreasing.

Out of top ten shares with the largest market capitalisation, three shares increased namely VNM up 2,000 dong to 130,000 dong, VIC leaped 1,500 dong to 90,500 dong and ITA bounced 1,000 dong to 70,000 dong per share. DPM stood still at the comparative price.

STB and PPC lost 700 dong to 34,700 dong and 37,100 dong per share, SSI, HPG and PVD dropped 1,000 dong to 51,000 dong, 61,000 dong and 113,000 dong per share, VPL slipped 2,000 to 113,000, FPT slashed 1,500 dong to 84,000 dong per share.

There were 40 shares reaching the ceiling price like DHG, IMP, KDC, TDH and ANV.

STB took the first place in trading volume with over 2.1 million shares, followed by DPM with 613,620 shares, SSI with 350,400, VTO with 284,400 shares and others including VHG, PPC and HPG.

Foreign investors bought in 71 share codes with the total volume of 1,586,250 shares. VTO reached the biggest trading volume with 318,800 shares, DPM with 255,580, SSI with 207,440 and VHG with 110,000 shares.

Conversely, the Hanoi Securities Trading Center (HaSTC) today April 25 rallied on the stock market as the HaSTC Index resumed 0.88 points or 0.52% to end at 168.95 pts with the total market trade of 3,523,620 shares worth nearly 152 billion dong.

Amongst 135 listed shares on the northern bourse, the stock market saw 39 shares increasing while 83 others decreasing, five shares stood still and eight shares with no trades.

Five shares stood still including DCS, SDY, VE9, VTL and VTV.
Eight shares with no trade were B82, C92, CAP, CID, HPS, HSC, HUT and NPS.

MIC was the biggest gainer when adding 2,600 dong and followed by NTP up 1,100 dong, others increased below 1,000 dong per share.

BVS showed the strongest decline when losing 2,300 dong and VSP lost 2,000 dong. Others fell below 2,000 dong per share.

KLS reached the biggest trading volume with 284,400 shares and followed by ACB with 210,900 shares, PVS with 194,400 shares and NVC with 127,700 shares.

Listed companies don’t want to increase chartered capital

Friday, April 25, 2008
The listed companies which have the chartered capital of less than VND80bil now have two choices, either raise chartered capital to VND80bil by February 2009, or list on the Hanoi bourse. However, most of them want another scenario, hoping that state management agencies will delay the deadline for the implementation of the regulation on VND80bil worth of chartered capital.

Nguyen Thi Lien Phuong, Chairman of the Seafood Company No 1 (SJ 1), said: “We don’t think of listing on Hanoi bourse because our business is now prosperous. I think state management agencies should not force us to raise chartered capital to VND80bil. The regulation should be imposed on newly listed companies only.”

Phuong said that in 2007, SJ 1 successfully issued 1.5mil shares to raise its chartered capital to VND35bil. The plan on issuing shares to raise chartered capital to VND80bil has not been implemented as the company still does not really need more capital. Moreover, the current conditions of the market prove to be not favourable enough for share issuance.

With the current chartered capital, the company’s management board has been under hard pressure to get profit. It needs to get VND9bil worth of profit, including VND7bil from the main business field, and VND2bil from other investments.

Ngo Duc Dung, Deputy Director of SJ 1 said that if the company must raise capital, it would use the money to implement the project on the trade complex and luxury apartments. However, to date, the project is still under negotiations with partners with no concrete agreement reached so far.

Dung said that the sum of VND39bil got from the share issuance in 2007 has been left unused.

In fact, listed companies absolutely do not want to issue shares to raise chartered capital at this moment if they don’t have a plan to use the capital to be mobilised effectively.

The Saigon Garment Company is planning to issue shares to increase capital to VND80bil as stipulated by the laws by the end of 2008. In order to make the share issuance plan feasible, the company has decided to sell shares to existing shareholders at VND12,000/share instead of VND20,000/share as initially planned.

Le Quang Hung, General Director of the company, said that the director board tried to persuade shareholders that the company needs to issue shares to mobilise capital for investment projects, otherwise, they would not accept the share issuance, though they know that the company will have to shift to list on Hanoi bourse.

Decree No 14 stipulates that in order to be eligible to list at the HCM City Stock Exchange, companies must have the chartered capital of VND80bil.

For the organisations which listed at HOSE before the decree became effective, if they cannot meet the above said requirements, they have two years to meet the requirements, or they will have to shift to list at the Hanoi Securities Trading Centre.(DTCK)

Friday, April 25, 2008
BankInvest partners with Hoa Phat Group

Denmark ’s BankInvest will become a strategic partner of Viet Nam ’s Hoa Phat Group when it purchases a 5.2% of stake of the local company.

Under an agreement signed in Hanoi on April 25, BankInvest’s capital will support Hoa Phat’s investment plans in steel production, industrial zones extension and civil engineering.

BankInvest will also use its business administration and management experience to help build Hoa Phat’s future strategic plans.

Hoa Phat will continue focusing on industrial production, especially steel, industrial zones, cement and minerals with an expected annual growth rate of turnover and profit from 20 to 25%.

Market falls, companies cancel listing plans

Friday, April 25, 2008
The prolonged falls of the stock market have made many companies shrink. They are considering cancelling or delaying their listing plans.
One of the topics of discussion at the shareholders’ meeting of a bank in Hanoi recently was the listing of the bank at the Hanoi Securities Trading Centre (HASTC).

Many shareholders asked if the share issuance would make the situation worse, since share prices have been decreasing dramatically since the beginning of the year.

Though the bank has fulfilled the procedures for listing at HASTC, its management and supervision board still worry about the feasibility of the plan as the market now shows unfavourable conditions.

The bank’s shareholders had two different viewpoints. Some of them, fearing that share prices will drop further, which will make their assets smaller, did not advocate the listing plan. Meanwhile, some others said that the listing will help improve the liquidity of shares, and those who want to give up investments, can easily sell shares on the bourse. The bank is planning to raise its chartered capital to VND4tril, double the current level.

The leader of the bank, contacted by reporters, declined to answer the question about his viewpoint on the listing plan, saying that this is really a very sensitive issue at this moment.

The same situation is being faced by two other banks in Hanoi. Sources say that one of the two has even decided to withdraw its application for listing on the bourse even though it has fulfilled all necessary procedures and all it has to do now is wait for an official licence.

Nguyen Son, Head of the Market Development Division under the State Securities Commission, said that businesses have the right to decide whether to list or not. However, he stressed that listing on the bourse means bringing shares of businesses into transactions on the market, while the companies’ business will not see any changes (chartered capital, volume of shares…).

Son has reminded companies that share liquidity will be improved if the shares can be transacted on the official market. Moreover, transparent information will create favourable conditions for more investors to access and buy shares of the company.

SSC has only advised companies to delay their plans to issue more shares to raise capital, while it does not think that companies have to delay their listing plans due to the market’s falls.

Meanwhile, according to General Director of Bao Viet Securities Nguyen Quang Vinh, the companies consulting Bao Viet are still ready for listing.

“It is quite a wrong viewpoint that companies should only list on the bourse when the market is hot,” Vinh said, adding that the companies which can meet the requirements for listing should still follow their listing plan.

Nguyen Van Dung, General Director of Tan Viet Securities Company, also said that the listing will not much affect companies’ business. Share prices are decreasing not because companies list or don’t list on the bourse.

Dung has reminded the companies which have decided to cancel their listing plans that share liquidity is a very important thing.

“It would be very dangerous if your shares cannot be sold or purchased. Investors will also not have opportunities to sell shares to get money to invest in other fields,” he said.

He added that the companies that got licences already but still hesitate to list will have their licences revoked. If so, they will have to follow the procedures again later when they change their minds, and it will take time. (DTCK)

Worry sparks over broker audit standards

Friday, April 25, 2008
A decision of State Securities Commission to authorise any independent auditing firms to audit publicly-held securities companies and fund management companies may result in poorer quality audits, some experts are warning.

The commission issued Official Dispatch No 657/UBCK-PTTT last week to accept independently-audited 2007 financial statements from all such companies.

"The decision could adversely impact the quality of audited financial statements because of the low standards of professional qualifications at different firms," said Bui Van Mai, director of the Ministry of Finance’s Department of Accounting and Auditing.

"Some auditing firms have been established for over a decade, with others were only set up two months ago. Some have dozens of auditors, others only three," Mai said.

Under the previous rule from the Ministry of Finance, around 141 independent firms were entitled to audit all kinds of enterprises, but only 26 companies were qualified to audit brokerage houses and fund management companies.

Nguyen Son, head of the market development department of the State Securities Commission (SSC), explained that the decision stemmed from the fact that the number of public firms was increasing strongly and there was huge pent-up demand for qualified auditors.

In fact, according to SSC statistics, there are now 904 unlisted and 300 listed, securities and fund management companies operating now in Viet Nam.

"It’s impossible for only 26 qualified firms to audit more than 1,200 public securities and fund management companies," said an expert from the SSC who asked to remain anonymous.

"We had no choice," he said, noting that this was an interim decision making it possible for companies to release audited 2007 financial statements no later than this month.

"The pressure to release the 2007 financial statements of public companies was high and the number of qualified auditing firms limited, so the SSC issued the decision," Mai agreed, however noting that the decision would have negative impacts on audit firms that have already made efforts to earn qualification for the list of 26 firms eligible to audit securities companies.

The decision should be only a short-term solution of a year or less, he said. Finding qualified firms meeting certain standards would be a long-term solution.

Auditor shortage

In 2005, only 200 new auditors were granted certificates, followed by another 250 in 2006. By last year, only 30 new auditors were licensed.

Many qualified auditors have also moved to other work in the financial, banking, and securities sectors.

Deloitte Viet Nam Co Ltd general director Ha Thi Thu Thanh said that "out of 141 independent auditing firms, only 28 employ more than seven auditors."

Thanh claimed that some independent auditing firms had been in operation only three years, with few experienced auditors, so the quality of their audits probably remained poor.

But, allowing more auditing firms to audit securities companies and fund managers should act as a "kind of unbinding valve [that] will help public firms published audited financial statements sooner, consistent with the Law on Securities," Thanh said. Most enterprises in Viet Nam end their fiscal year on December 31 of the previous year and are required to publish yearly financial reports in the early months of the following year, making them a peak time of auditing activity.

To ease the pressure, Mai advised businesses to select different fiscal years at different times of the year to audit and announce results, rather than everyone bunching up at the end of the year.

The 2003 Law on Accounting already permitted companies to select their own fiscal years to match business cycles.

"To change the fiscal year, enterprises only have to report to tax offices and then carry out accounting and auditing procedures normally under current regulations," Mai said.

"Companies around the world have selected their own fiscal years for a long time. I think that not only listed firms but also all other kinds of enterprises should change in order to follow international practice," Mai added.

Auditing firms should also merge to raise professional qualifications, Mai said. (VNS)

Viet Nam sees slower CPI increase in April

Friday, April 25, 2008
The General Statistics Office (GSO) reported Viet Nam ’s consumer price index (CPI) rose 2.2% in April, the slowest increasing rate since early this year.
The index increased 2.38%, 3.65% and 2.99% respectively in January, February and March.
In the first four months of 2008, the CPI soared 17.7% over the same period last year.

Hospitality experienced the highest price hike of 3.1%, followed by housing and construction materials at 2.62%, and transportation-post office services at 2.3%.

Other essential goods recording increases under 1% include pharmaceuticals and healthcare services, household utensils, garment, cultural and entertainment services, and education.

The domestic gold price in April experienced a 2.2% decrease over last month but the price of the US dollar rose 1.2% due to enterprises’ high demand for the foreign currency.

Despite positive responses after the government’s recent inflation control measures, the Ministry of Planning and Investment predicted the market is still facing complicated developments.

Rising fuel prices in the world market and recession of the US economy are considered factors likely to have a negative impact on Viet Nam ’s economic growth and prices of goods, the ministry said. (VNA)

Asahi Breweries Looking to Invest in Sabeco

Friday, April 25, 2008
Japan's Asahi Breweries Ltd. is considering investing in leading Viet Nam beer maker Saigon Beer-Alcohol-Beverage Corp. (Sabeco), informed sources said Friday.
Asahi, which has been in contact with Saigon Beer, hopes to acquire a stake of 10 pct initially and increase it to around 20 pct in the future, the sources said.
The major Japanese brewer approached Saigon Beer (Sabeco) after obtaining a tip that the Vietnamese company would release 20 pct of its outstanding shares, they said.

At a time when the Japanese beer market is shrinking, Asahi wants to boost its overseas operations particularly in such fast-growing markets as Vietnam.

But it is uncertain whether Asahi can actually obtain Sabeco's shares, because other major beer makers in the world are also looking to acquire a stake in the Viet Nam industry leader, the sources said. (Jiji Press)

Dragon Capital launches closed-end trust

Friday, April 25, 2008
Viet Nam investment specialist Dragon Capital has launched a closed-end investment trust looking to capitalise on the region's property opportunities.
The Dragon Capital Viet Nam Property fund was listed on AIM last week, seeded with an initial $90m (£45m) from institutional investors.
It is the sixth product in Dragon Capital's suite of funds, all of which target Vietnam and which encompass small and large cap equities, debt and natural resources.
John Shrimpton, co-founder of Dragon Capital, said the new trust would run on a diversified portfolio of investments from the real estate sector.
He said the firm's experience in property to date made the fund a natural extension.
Shrimpton explained: "Dragon Capital has grown up alongside Vietnam's nascent corporate and financial sectors.
"Our 12 years of real estate experience here and long-standing relationships with a broad swathe of the country's leading corporates provide excellent foundations on which the Viet Nam Property fund will seek to build successfully."
He said he was pleased to have raised a healthy amount of start-up money from high end clients against an uncertain global backdrop.
Neil Thurston, head of Dragon Capital's property team, said he was bullish on prospects for the country.

He said: "Viet Nam's rapid growth has resulted in acute under-supply across a range of property categories. Our aim will be to seek out investments that are most likely to benefit from the raw growth of the domestic economy."

Viet Nam has been one of the strongest Asian markets in recent years, with the local stockmarket returning 68 per cent since the start of 2006 against the MSCI Emerging Markets index return of 56.4%. (Financial Times)