Vinamilk Q1 net profit falls 3 pct

Tuesday, May 6, 2008
Vinamilk, Viet Nam's top dairy firm, said net profit in the first quarter fell 3% to 309 billion dong ($19.3 million) despite a 33% rise in revenues.
The company did not provide reasons for the fall in earnings from a year earlier.
In the January-March period, revenues reached 1.84 trillion dong ($115 million), compared with 1.38 trillion in the same period last year, the company report seen on Tuesday said.
The Ho Chi Minh City-based firm had recently forecast that its net profit would rise more than 18% this year to 1.14 trillion dong.
It also said it expected revenues to jump 23% to 8.2 trillion dong.
Vinamilk, the largest company on the Ho Chi Minh City exchange with a capitalisation of $1.49 billion, plans to list nearly 8.8 million shares overseas this year, increasing its registered capital by 5% to 1.84 trillion dong.
The company has said it wants to list in Singapore.
Vinamilk shares closed up 1.47% at 138,000 dong on Tuesday. (Reuters)

PM: Primary priority given to curbing inflation

Tuesday, May 6, 2008
The Vietnamese Prime Minister reiterated that his cabinet will continue to place top priority on reining in inflation in the coming months while addressing the National Assembly session in Hanoi on May 6.

Prime Minister Nguyen Tan Dung asked the law-making body to consider the Government’s request to lower the country’s GDP growth rate target of 8.5-9% to 7% for the current year.

PM Dung introduced to the law-makers the Government’s eight-solution package to curb inflation, stabilise macro-economy and ensure social welfare and sustainable development.

He emphasised the implementation of a tight and effective financial and monetary policy as the first in the package.

The PM also referred other tasks, including removing hindrances to production, services and investment attraction, accelerating exports to reduce trade deficit, intensifying management over the market and prices and fighting speculation and smuggling.

While expressing the resolve to control inflation, PM Dung admitted the Government’s shortcomings and weaknesses in managerial and executive work.

He pointed out that the Government had maintained a lax monetary policy for years, especially in 2007, thus driving general means of payments and total outstanding credits to rise high, leaving direct pressure on inflation.

Besides, the PM also pointed to the consecutive overspending rates of 5% for years while the economy has been growing bigger and bigger. “This has not been helpful to the control and slash of the State budget expenditure,” he said.

He mentioned the State’s weaknesses in managing various markets, including the stock and real estate market, and also prices and export and import activities.

Adequate attention has not yet been given to market forecasting and study work, the PM noted, noting agencies’ failure to provide the people with prompt, clear and consistent explanations on new developments arising from the market and the issuance of policies which are sensitive to them.

Reviewing the country’s socio-economic performance in 2007 and the first four months of the year, the Governmental leader said that almost all targets for 2007 were overfulfilled with an economic growth rate of 8.48 percent.

However, he noted, the unexpected developments of the world economy with high prices of crude oil, food, materials, machinery and equipment in the last months of 2007 have posed fierce challenges to the country’s economic management and negatively impacted the stability of the macro-economy.

The Government has promptly implemented a number of policies and measures to control inflation, enhance pricing management and stabilise the monetary, securities and realty markets. In addition, the Government has also helped remove difficulties for production development and promoted exports and limited trade deficit while ensuring the balance of essential goods and helping farmers, fishermen and disadvantaged people to stabilise their life and production.

PM Dung took the occasion to point out the shortcomings of the national economy such as the economic growth rate of 7.4% in the first quarter of 2008 is still lower than that of last year’s corresponding period (7.8%) and much lower than the whole year’s target of between 8.5 and 9%. The consumer price index rose 11.6% in April compared with last December and up 21.42% over April 2007.

He mentioned developments that are badly affecting the people’s life including inflation, price hike and trade deficit together with complex monetary, securities and real estate markets. (VNA)

Banking system in difficulties, but not desperation

Tuesday, May 6, 2008
Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Viet Nam, has denied the opinion that banks may fall into a financial crisis due to the tightened monetary policy and the sharp price falls of real estate, which is 50% of the mortgaged assets for bank loans.

What is your comment about the pressure of fighting inflation which is burdening commercial banks?

The Government should not be overhasty in fighting inflation by overly tightening the monetary policy, as this will make banks’ liquidity lower and bring more risks. We have to go step by step in fighting inflation in the context of the possible world crisis. We have to do the things that both allow us to curb inflation and ensure the liquidity of banks as well.

If the Government and State Bank of Vietnam become impatient to reduce the inflation rate to below the previous year’s level or restrain the credit growth rate at 30% this year, banks’ liquidity will be low.

The Viet Nam Banking Association still insists on the ceiling interest rate scheme. What would you say about this?

The association wants low lending interest rates in order to ease the burden on businesses. However, it is impossible to do both things at the same time, tightening monetary policy and keep low interest rates. I advocate the removal of the ceiling interest rate scheme.

I think that the State should keep a line of retreat open for commercial banks. It should not use administrative orders to regulate the market, with which the banks cannot survive.

As you may know, the US and European economies are paying heavy prices for the real estate bubble. How will the bubble burst in Vietnam, if it occurrs, affect the national economy?

The outstanding loans to fund real estate investments just amount to 10% of banks’ total assets. However, the properties which are the mortgaged assets for bank loans, account for up to 50% of banks’ total assets, nearly equal to Vietnam’s GDP. Therefore, it is clear that if the real estate market collapses, this will harm the financial system. Therefore, the Government must not let the market collapse, and must not let the bubble exist. The bubble must be burst, but gradually.

Statistics showed that some banks have lent 250% of mobilized capital. Do you think that it is a sign of banks’ crisis?

The figure is not worrying. Why can bank borrow VND1 and lend VND2.5? Because it can borrow money from bigger banks, and the money is in the fixed term loans among banks. No bank dares use overnight loans to lend. It seems that even the central bank’s officials do not well understand the principle, therefore, worries about the crisis have been raised.

Between low liquidity, falling real estate market, do you think that all these factors can trigger a banking crisis?

I think that the liquidity problems are just temporary, which cannot cause the collapse of the banking system. The banking system is in difficulties, but everything is still under control. In case one or several banks fall into crisis, the central bank will surely rescue them in order to avoid domino effects. (SGTT)

Is there a hand that controls the stock market?

Tuesday, May 6, 2008
Two months ago, an official from the State Securities Commission (SSC) revealed that it had discovered the transactions by some big institutions that aimed to restrain share prices. He said there was the hand of foreign institutions.

The transactions on the market in the last six months showed that the influence that investors think tries to sway the market, is really existing.

Nevertheless, until now, SSC still has not provided any further detail, including the names and the tricks of the institutions and individuals, as well as the things SSC will do to punish them in order to make the market healthier.

In the last several months, a lot of blue-chip items, including REE, FPT, SAM and SSI were once sold in big volume in a lot consecutive trading sessions at floor prices, which led to the massive sale of these items from small investors, who played the stock market with borrowed money and could not keep shares for a long period.

As a result, the prices of a lot share items plunged dramatically to the prices which were equal to 1/3 of the peak prices seen in March 2007.

An experienced investor said that he believes that some big investors have made use of the bad news like the gold price fluctuations, continued oil price increases, high inflation, the tightened monetary policy and the US economic recession, to force the stock prices down to unexpectedly low prices. Thousands of small investors had to sell shares out massively, and it was the right time for the big investors to buy shares in.

The transactions in the last six months showed that the arguments about the influence that tries to control the market are reasonable.

Most recently, in April 2008, SSC’s inspectors took an inspection tour to securities companies, the members of the HCM City Stock Exchange, where they checked the transactions made at the companies. The inspectors found out five most suspicious accounts out of 300,000 accounts.

These were the accounts which had the biggest transaction value and highest transaction frequency.

In mid April 2008, the second inspection tour was taken, when inspectors tried to find the trails related to an account with abnormal transactions.

The inspectors found out that right before Tet 2007, an individual investor transacted over 1mil shares of the share item listed among the top 10 items that had the biggest market capitalization value (the transactions of the share item were carried out in 3 consecutive trading sessions). After Tet, in 3 trading sessions, the investor sold over 1mil shares of the same share item.

SSC found out that the investor was assisted by a staff from a securities company in buying and selling shares.

A securities expert said that the cooperation among the Ministry of Public Security, Securities Depository Centre and SSC is needed to track down the transactions that aimed to control share prices.

He also said that SSC should ask the Government to raise the punishment on the violations relating to securities transactions. The current low fine levels of VND30-50mil for individuals, and VND50-70mil for violated institutions prove to be too low, not high enough to deter violators. (TBKTVN)

April 06, Stock market keep decreasing

Tuesday, May 6, 2008
Ending the 1778th trading session of the Vietnamese stock market, the Ho Chi Minh Stock Exchange (HOSE) today May 6 continued falling on the stock market when the VN Index slipped another 2.93 points or 0.56% to 518.35 pts with the total matching order trade of over five million shares and fund certificates worth nearly 253 billion dong, marking the second consecutively decreasing session.

Among 154 shares and fund certificates being listed on the southern bourse, the stock market recorded 34 shares increasing while four others stood still at the reference price, 114 shares decreasing and two shares with no transaction.
Two shares with no transaction were BTC and VTC.

Out of top ten shares with the largest market capitalisation, three shares reached the ceiling price namely VNM up 2,000 dong to 138,000 dong and HPG and ITA leaped 1,000 dong to 65,000 and 74,000 dong per share. In addition, VPL also added 2,000 dong to 120,000 dong per share.

Meanwhile, DPM lost 500 to end at 52,000 dong per share, PVD dropped 2,000 dong to 117,000, STB slipped 600 to 32,300 dong, FPT slashed 1,500 dong to 78,000, SSI down 900 to 47,200 dong and BMI lost another 1,300 dong to 32,400 dong per share.
DPM reached the biggest trading volume with 586.880 shares and followed by PPC with 478,110 shares, VHG with 375,250 shares, VTO with 345,250 shares and others including HPG, VSH, SSI, VNM and PVD.

Foreign investors bought 57 share codes with the total volume of 3,365,210 shares. Of which, BT6 reached the biggest volume with 861,080 shares, followed by DPM with 408,650 shares, PPC with 310,370, VTO with 259,680 and others like HPG, VHG, VSH and VNM.

Similarly, the Hanoi Securities Trading Center (HaSTC) today May6kept decreasing impetus on the stock market as the HaSTC Index lost another 3.16 points or 1.89% to end at 163.89 pts with the total market trade of 2,007,900 shares worth nearly 74 billion dong.

Amongst 136 listed shares on the northern bourse, the stock market saw ten shares increasing while 99 others decreasing, four shares stood still and 23 shares with no trade.

Ten shares increasing included MIC added 2,900, BHV up 800 dong, PSC +1,000, HPC and S55 +700, DST, NVC and PVE +500, LBE +300 and VBH increased 200 dong per share.

Four shares stood still including CSG, KBC, LUT and VSC.
S99 showed the biggest decline when losing 2,400 dong and followed by ACB slipped 2,300 dong and BVS and SCJ dropped 2,100 dong.

PVS stood at the first place in trading volume with 379,900 shares, followed by CSG with 185,600, ACB with 157,800, PVI with 134,800 and NVC with 114,700 shares being traded.

Thanh Cong apparel firm to issue 1tr dong of convertible bonds

Tuesday, May 6, 2008
Thanh Cong Garment and Textile Joint Stock Co recently announced that it plans to issue one trillion dong of convertible bonds separately to mobilise investment capital for its realty projects from 2008 to 2010 with the total volume of 10 million three-year bonds and the coupon rate of 12% per annum.
The convertible rate in the first year will be 1:3 or one bond will be converted into three ordinary shares, the rate will be 1:2 in the second year and 1:1 in the third year.
These bonds will be issued to both domestic and foreign individual and institution investors.
Creditors owning from 15,000 convertible bonds and higher will receive preferential rights in buying apartments in the company's realty projects.

Truong Hai Automobile targets 2008 dividend of 45%

Tuesday, May 6, 2008
Truong Hai Automobile Joint Stock Co's shareholders' meeting recently passed the business plan this year with over 6.98 trillion dong in revenue, 554.411 billion dong from after tax profit and planed to pay 2008 dividend of 45%.
The shareholders' meeting also reported business result last year with 2.692 trillion dong in revenue, 244.82 billion dong from after tax profit and EPS was 4,780 dong per share.
The company would pay dividend of 19% in cash and 12% in shares for the second phase of 2007.
This year, Truong Hai Co plans to invest in large-scaled automobile installing and manufacturing complex in Chu Lai open economic zone and develop spare part manufacturing mills and showroom system.

SMC posts over 20b dong profit in Q1

Tuesday, May 6, 2008
The listed firm on Ho Chi Minh Stock Exchange, SMC Trade and Investment Joint Stock Co (coded SMC) recently reported the business result in the first quarter of this year with 1.007 trillion dong in revenue and 20.1 billion dong in profit, equalling to 40% of the whole year's target.
The company's business result in the first quarter of this year increased 89.6% in comparison with the same period of last year.
Notably, in April, the SMC signed two contracts to distribute 13,000 tonnes of steel for Taiwan-based Bao Gia Joint Stock Co's Bao Gia office building and another 9,000 tonnes for the first phase of Korea-based GS Engineering & Construction Corp's XI RiverView Palace apartment project in HCM City.

LienViet Bank signs two strategic partnership agreements

Tuesday, May 6, 2008
Lien Viet Commercial Joint Stock Bank (LienViet Bank) recently announced that on May 3 it inaugurated its branch in the southern province of Hau Giang and signed strategic cooperation agreements with two domestic big partners namely Dong Thap Petroleum Trading Co (Petimex) and Agriculture Bank Insurance Joint Stock Corp (ABIC).
Accordingly, LienViet Bank will take full advantage of petroleum, hotel and seaport service sectors of Petimex. Conversely, Petimex will use LienViet Bank's banking and financial services.
As for ABIC, the two signatories pledged to use services of each other. Of which, ABIC pledged to open principal accounts and carry out payment activities frequently via Lienviet Bank.

Bank shares lose lustre on capital raising drives

Tuesday, May 6, 2008
With the plans to increase by two or three times in chartered capital, most banks decide to offer preferential shares to employees with an aim to hold qualified workforce. Compared with the previous year, the preferential volume of bank shares for employees now seems to be more superfluous. However, due to the less attractiveness of bank shares, many employees are not too much keen on their bank shares though with very preferential prices.
Among 458 million ordinary shares with par value of 10,000 dong that Eximbank plans to issue to raise the chartered capital from 2.8 trillion dong to 7.38 trillion dong within this year, the bank will sell 12 million shares to employees with the price of no less than the face value. According to Eximbank, the share issue aims to set up a share fund for the policy of attracting qualified human resources called "Human Resources Development Fund" that will be maintained until 2010.
Similarly, in line with the approved plan, Asia Commercial Bank (ACB) will offer 2.5 million bonus shares among forthcoming 372.57 million shares at 10,000 dong par to its employees. This is a part of the bank's plan to hike the chartered capital from the current 2.63 trillion dong to 6.355 trillion dong in 2008. As estimated, about 2,500 employees are allowed to join the share offering under ACB's bonus share regulation.

Meanwhile, in the plan to increase the chartered capital up to 6.048 trillion dong from 4.449 trillion dong at the moment, Sacombank will issue three million shares worth 30 billion dong on par to its key employees with the selling price of 15,000 dong per share. Yet, the employees must pledge to hold preferential shares and derivative rights within three-years from the issue date.

For HCM City Housing Development Bank (HDBank), as a part of the plan to hike the chartered capital from one trillion dong to two trillion dong in this year, five million shares worth 50 billion dong on par enclosed with preferential interests will be offered to employees with the issue price of 10,000 dong per share equalling to the par value of the bank share. But, buyers are only members of director board, supervision board and management board of the bank. Additionally, the buyers must commit to hold these preferential shares within six months and derivative rights from the bank gains authorities' approval on capital increase. Also, Pacific Bank will offer 60,000 shares [accounting for 3% of the share volume in the plan to reach a chartered capital of two trillion dong] to its employees.

Factually, not all employees are enthusiastic with bonus shares or preferential shares of banks in forthcoming capital increases. Two-years ago when bank shares were still considered "king shares" in terms of attractiveness, a lot of employees expected to buy banks' bonus or preferential shares even at that time, issue price was higher 4-5 times over par. But currently, the selling price that equals to 1-1.1 times over par still does not satisfy employees because of the stock market slump. In fact, prices of bank shares were down 70-80% sharply as compared with the same period of 2006. Typically, the STB coded share price of Sacombank in April ever stood at only over 30,000 dong each while the bank announced to sell shares to employees at the price of 15,000 dong. Therefore, at present, the issue of preferential shares to increase chartered capital is unlikely an investment opportunity for employees, even it can become the challenge for many banks' leaders.