Late performance disclosures ring exchange warning bell

Late performance disclosures ring exchange warning bell
Late business performance disclosure by listed firms is ringing a warning-bell for market regulators, as it seems to be becoming a phenomenon on the Vietnamese exchanges.
In November, the blue-chip company Pha Lai Thermal Power informed shareholders of zero dividend payments due to profit losses. The impact was deemed serious enough for the HCM City Stock Exchange’s management board to give the company a warning.
Early this month, other listed firms like Construction No.5, or Investment and Construction Development Co made public their altered business results.
Nguyen Thi Hoang Lan, deputy director of Ha Noi Securities Trading Centre, said that it was acceptable for firms to make adjustments in business performance amidst the present market turmoil.
"However, enterprises should make public such information in a timely fashion, to enable investors to make good investment decisions," said Lan.
Nguyen Hoa Binh, Chairman of Vietcombank, confirmed that its disclosure of business adjustment in November was late.
"In the context of market turmoil, however, it is difficult to forecast a company’s future. Actually, I must confess that we deliberated a lot before making public our business performance. I hope there will be sympathy for our late disclosure," he said.
The Bank for Foreign Trade of Viet Nam, known as Vietcombank, has changed the year’s targets for total asset, credit growth and bad debt ratio.
A representative from Construction No 5 Co, who wished to remain anonymous, excused his companies’ late disclosure by saying: "Even at the end of the third quarter, we believed that we could reach the year’s target. But, the fluctuation lasted longer than we expected, along with spending for provision fund. We only recognised the inadequacy of the year’s business result early this quarter."
Nguyen Hong Quan, An Binh Securities’ acting director, said that late disclosure greatly decreases investor confidence.
"Investors are paying more attention to the business results from listed firms, as well as to changes in business performance. The situation will cause serious consequences, if it becomes a trend," said Quan.
The Viet Nam Association of Finance Investors is urging listed firms to make disclosures sooner to protect investors from unexpected loss and to promote transparency. (VNS)

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.

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.

Analysts ask for changes in Securities Law

Monday, June 23, 2008
The current Securities Law needs changing in order to more effectively offer legal protection to every member of the stock market, according to securities analysts.

Over the past year that the law has been in effect, they have analysed its effectiveness, and released the findings earlier this week.

Foremost among concerns, is the need for a legal framework for stock retailing by public firms, as well for the auctioning and listing shares of foreign-invested firms.

Nguyen Van Thanh, an analyst from Da Nang Securities, said, "The number of foreign-invested firms in our country is significant. There should be a regulation allowing them to sell shares in our local stock market."

The opening up of such firms would make the market more active, providing investors with more chances to invest, he added.

The problem however, is that many foreign-invested companies are unsure how to proceed. According to Nguyen Vu Quang Trung, deputy director of Ha Noi Securities Trading Centre, one of the most frequently asked questions by foreign-invested companies in Viet Nam, is how to list shares in the local stock market.

As there is no regulation covering this, the process of listing shares in the market is difficult, Trung said, noting that demands for clearer guidelines are increasing from all sides.

"The rules for stock retailing should be tightened so as to avoid the dilution that occurs when firms offer too many shares at a time," said John Nolan, an analyst from a HCM City fund management company.

He added that strict regulations would help manage the volume of shares in the stock market, preventing it from the share-overload that is currently evident.

The Securities Law also regulates derivatives such as options, margin trading, and future contracts. However, these instruments have not been implemented yet.

Le Ho Khoi, director of Trang An Securities, said that these instruments were the basis of defining a securities company as a real financial institute, not simply by the activities of brokers in each trading session.

These derivatives also help investors reduce risk in securities investment, Khoi added, noting them as an important lever for the future development of the exchange.

Nguyen Trong Nghia, head of the Legislation Division at the Ministry of Finance, said that the Vietnamese stock exchange was young and would naturally experience ups and downs, but these help highlight important matters to the regulators.

As a result, changes in the Securities Law are necessary as it has only been in existence for a year, he added.

Vu Thi Kim Lien, vice chairman of the State Securities Commission, said it would collect the ideas from market members to complete the draft of the revised Securities Law by the end of this year.

She added that those elements which are legally adjustable will be drafted and sent to the Ministry of Finance for permission to implement this year. (VNS)

PetroVietnam, Pha Lai Thermal, Sacombank Stocks On June23

Monday, June 23, 2008
The Ho Chi Minh City Stock Exchange's VN-Index rose 2.93, or 0.8%, to close at 368.95, climbing for the first time in four days. The following shares were among the most active in the market.

Financial companies: Saigon Securities Inc. (SSI VN), the country's biggest publicly traded brokerage, rose 800 dong, or 3%, to 27,800. Saigon Thuong Tin Commercial Joint-Stock Bank (STB VN), known as Sacombank and the exchange's fifth-biggest company, climbed 500 dong, or 2.5%, to 20,200.

The State Securities Commission of Vietnam, the nation's market regulator, is drawing up a plan to set up a fund to stabilize the stock market, the Dau Tu Chung Khoan newspaper reported, citing Chairman Vu Bang.

PetroVietnam Drilling & Well Services Joint-Stock Co. (PVD VN), a provider of services to the oil and gas industry, gained 1,500 dong, or 2.3%, to 66,500. Crude oil for July delivery rose 2% to settle at $134.62 a barrel in New York on June 20.

Pha Lai Thermal Power Joint-Stock Co. (PPC VN), Vietnam's largest publicly listed coal-power company, declined 700 dong, or 2.8%, to 24,100. Power station coal prices at Australia's Newcastle port, a benchmark for Asia, climbed to a record, rising 1.5% to $162.66 a metric ton in the week ended June 22, according to the globalCOAL NEWC Index.

Viet Nam May Set Up Stock Stabilization Fund

Monday, June 23, 2008
The State Securities Commission of Viet Nam, the nation's market regulator, is drawing up a plan to set up a fund to stabilize the stock market, Dau Tu Chung Khoan newspaper reported, citing Chairman Vu Bang.

The fund will buy stocks when the market has difficulties and sell shares when the market is doing well, the report said.

The State Securities Commission (SSC) last week lifted a limit for gains or losses on the stock exchange in an attempt to boost trade and improve the market investments.

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)

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)

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.

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.''

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)

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.

JPMorgan's Fernandez Says Foreigners Buying Vietnamese Stocks

Tuesday, June 10, 2008
David Fernandez, head of emerging markets research at JPMorgan Chase & Co. in Singapore, comments on Vietnamese stocks. Fernandez spoke in a Bloomberg Television interview today.

The VN Index, a measure of 151 companies on the Ho Chi Minh City Stock Exchange, fell 1.61% to 373 today, the lowest since Feb. 23, 2006. The benchmark has lost almost 60% from the start of the year on concern the government will raise interest rates to quell inflation of 25.2%, the fastest since at least 1992.

On inflation and stocks:

``The inflation data are probably close to peaking. You could probably still end the year at closer to 20%.

``For equities in Viet Nam, everyone agrees that the past couple of years have been an extremely frothy time, with valuations just at levels that were unreasonable.

``Talking to our investors, who continue to want to get exposure, if you look at the foreign numbers, foreigners continue to be buyers in this market. These are buyers who are dedicated to Viet Nam, who are there for the long term.

``I would look at other asset prices as an indicator as to whether the worst is over.''

On the Viet Nam dong:

``The market had started to price in that there would be an immediate and very sharp devaluation. Meetings I had with the government last week indicate that there's no plan to do that. There's no pressure on the balance of payments for Viet Nam to devalue the dong.

``The first thing is to make sure markets understand that there is no plan to devalue the dong. Viet Nam has run very large current account surpluses, they need to intervene more aggressively to show the market they're serious.'' (Bloomberg)

May 27, HaSTC Index loses 2.29 pts, HOSE stock trading hit by computer problem

Tuesday, May 27, 2008
The Hanoi Securities Trading Center (HaSTC) today still kept decreasing impetus on the stock market by falling another 2.29 points or 1.83% to end at 123.17 pts with the total market trade of 555,900 shares worth nearly 16 billion dong.

Amongst 137 listed shares on the northern bourse, the stock market recorded only three shares increasing while 94 others decreasing, two remained unchanged and 38 with no trades.

Three shares increasing were YBC jumped 500 dong, DHI added 300 dong and TBC up 200 dong per share.

Two shares stood still including KBC and STC.
DTC showed the strongest decrease when losing 1,600 dong and followed by ACB slipped 1,500, VSP down 1,400 dong, BVS, RCL and SCJ dropped 1,300 and NBC slashed 1,100 dong per share.

ACB reached the biggest trading volume with 71,100 shares and followed by TBC with 65,000 and VC2 with 58,300 shares being transferred.

The Ho Chi Minh City Stock Exchange (HOSE) today was started with another bearish situation. By the end of the first phase, transactions were halted due to technical problems of STC transaction system.

This problem has not still been repaired yet so today the bourse will suspend matching orders and share transactions.

HOSE will send documents or fax to membership companies to announce the situation.

Central bank urged to cut reserve requirements to boost stocks

Sunday, May 25, 2008
The State Bank of Viet Nam (SBV) should reduce reserve requirements for banks to help stabilize the stock market, the Viet Nam Association of Financial Investors said.

Reserve requirements for commercial banks should be cut to 8% of deposits from 11% at present, the association said in a statement on its website.

The reduction will raise the supply of funds in banks, it added.

“Investors will be more ready to join the stock market then,’’ Nguyen Hoang Hai, general secretary of the association, said in a telephone interview Friday.

Vietnam’s benchmark stock index has fallen 50% this year.

Bank lending rose 14.7% in the first four months, according to the central bank, reaching almost half the 30% cap that the central bank imposed to rein in credit growth and tame inflation.

The investors association represents members such as fund managers and brokers, and its board includes former government officials. (Bloomberg)

Foreigners brave market nosedive to buy more shares

Sunday, May 25, 2008
Foreign investors showed great faith in Vietnamese stocks, heavily buying shares offloaded by local players this month, brokers said. The VN-Index of 154 listed companies on the Ho Chi Minh Stock Exchange tumbled every day over the past three weeks, losing more than 18 percent, to close at 428.05 points on Friday.

So far this year, the benchmark index has plunged 54% to take out the unfavorable honor of being the world’s worst performing stock market.

Despite the gloomy market that has prompted local traders to jettison their stocks, foreigners remained net buyers.

When the market retreated below 500 points on May 12, foreign traders pumped in VND54 billion (US$3.3 million) into shares.

On May 20, local investors continued their share selling frenzy, sending the VN-Index below another key resistance level of 450 points.

In contrast, foreigners bought shares worth VND19 billion ($1.19 million).

The index dropped further in the next trading day, with 140 stocks falling, as local traders kept bailing out of the market.

Foreigners again continued to defy local player’s panic, notching up shares worth VND19.2 billion ($1.2 million).

They bought shares worth VND65.2 billion ($4 million) on Friday when the VN-Index lost 6.7 points, or 1.54%, to close at 428.05.

Investment fund Anpha Capital Managing Director Louis Nguyen revealed his fund had only lost around 2% over the first three months of the year.

His fund had entered the share market relatively late, favoring other investments in the early months of the year.

Profits from these investments had helped his fund avoid heavy losses, he said.

Despite expecting his fund’s losses from stocks to increase as the market’s free-fall continued, Nguyen said shares were becoming very attractive.

He said Anpha Capital was eyeing shares of five or six companies, which had good earning reports.

Another director of a foreign-owned investment fund in HCMC, who did not wish to be named, said his fund sustained fairly heavy losses as the market slumped this year.

However, he said his fund will still buy more shares on both formal and informal markets.

“We planned to pump more money in the market when it fell below 500 points.

But it kept on falling further, so we decided to wait for a suitable time,” he said.

Healthcare stocks attract investors

Healthcare stocks have moved to centre stage, receiving increasing investor attention in recent weeks. "Healthcare enterprises always post steady profits, even when the economy faces tough times," said Bien Viet Securities Co deputy director Vu Duc Nghia.

The Viet Capital Fund Management Co has also opened a fund dedicated to the sector. The Viet Capital Healthcare Fund targets investments in pharmaceutical, hospital/high-tech clinic, medical device and hospital service stocks.

The fund has total capital in the first stage of VND500 billion (US$31.25 million) with potential for further expansion and is currently open to domestic institutional investors which are reputable enterprises or financial institutions.

"The fund aims not only for long-term, sustainable profits with minimised risks for our investors, but also for opening up a new direction in areas with significant socio-economic benefits," said fund director Pham Gia Tuan. "It will also encourage the introduction of state-of-the-art diagnostic and treatment technology accompanied by high quality services for the Vietnamese people, reducing the burden on the public health sector."

According to analysts of the Viet Capital Fund Management Co, national spending on healthcare in Viet Nam is lower than in other nations, suggesting high potential for this sector’s further development.

Spending on healthcare in Viet Nam is only 1.48 per cent of GDP, while in Thailand it’s 6 per cent and in the US, 15.3 per cent.

Stock brokerages have also found that price-per-earning ratios for healthcare stock were currently around 24, compared to a total market average of 12-13.

"This rate is promising for investors in the future," Nghia said.

An anonimous teacher from the National Economic University noted that the high P/E rate was not decisive for the change of investors into healthcare stocks.

"Traders may be afraid of earning money from hot stocks like property or banking, and then losing it," he said. "Then they change to healthcare stocks."

Domestic pharmaceutical producers were still overdependent on imported materials, making it hard to keep a lid on drug prices, he said.

"But despite that, pharmaceutical enterprises still have a stable market which is enough to ensure investors a steady profit. Less is sometimes more."

May 23, Foreigners Net Buyers Of VND57 Billion Shares

Friday, May 23, 2008
Foreign investors were net buyers of VND57 billion ($3.56 million) of Vietnamese stocks Friday, out of a total VND267 billion traded, the Ho Chi Minh Securities Trading Center said.

Volume traded totaled 4.95 million shares, with foreigners accounting for 31% of the total, according to the stock market operator. (Dow Jones)

Foreign strategic investors still bullish on local banks

Friday, May 23, 2008
Overseas financial institutions are increasing their stakes in domestic commercial banks even as shares in these banks have underperformed, following the overall downward trend of the nation’s stock market.

Earlier this year, London-based Standard Chartered increased its stake in Asia Commercial Bank to the 15-per-cent maximum that a foreign strategic investor is allowed by law to hold. Meanwhile, Singapore’s OCBC is obtaining regulatory approval for its acquisition of 15% of Viet Nam’s VPBank.

Most recently, the State Bank of Viet Nam granted special approval to Eximbank to sell 25 per cent of its shares to four foreign strategic investors, including Japan-based Sumimoto Bank.

"Not counting the credit problem which your domestic banks are facing, the banking sector in Viet Nam has many opportunities to develop more strongly in the future," said John Nolan, an analyst with a HCM City fund management board.

Foreign investors can see this potential more clearly than local stock traders, Nolan said, because they are experienced in other stock markets.

They were attracted by the good business performance of domestic banks even as banking stocks have been declining.

"During the first quarter of this year, business performance of domestic banks was quite good, and these are the factors on which foreign institutions base decisions to pour money in," Nolan said.

Sacombank in the first quarter of this year posted a profit of VND435 billion (US$27.18 million), a year-on-year increase of 44 per cent. VPBank in the same period earned VND105 billion in profits.

"Compared with previous years, these profit figures are lower. But, at a time when inflation is high and credit growth slowing, these profits sounded fine," Nolan said.

"The investment of four financial institutions in Eximbank is an example. It’s clear that those partners have seen the financial capacity of Eximbank," he added.

Now, domestic commercial banks were entering another potential, highly-publicised interest rate war, giving them an opportunity to draw even more attention from foreign institutions.

Independent analyst Nguyen Tien Dung said, "In competition, the banks with strong financial power will survive and thrive, while the others will go bankrupt or be acquired by larger banks."

This would lead to even higher quality commercial banks in the future, Dung said, as well as better prices for banking stocks. (VNS)