Securities companies cut staffs

Friday, May 9, 2008
The golden age of securities companies is over. This time last year, companies were trying to recruit more staffs, while they are trying to cut staffs now.

The director of the HCM City branch of a securities company, who asked to remain unnamed, said that the income of the company is not enough to pay staffs.

He said that the brokerage fees the company collects from clients have been decreasing due to the market’s continued falls. “Last year we could earn VND300mil a day and VND40bil a year, while we paid VND10bil to the staffs. Nowadays, the brokerage fee is just VND20mil a day.”

The branch, which previously had 30 brokerage officers, now has 20 only, as the company is trying to cut expenses. The number of investors has dropped by 50%; a lot of investors are going to the trading floor just to explore the situation, while not making transactions.

In fact, securities companies have other sources of revenue, including revenue from share trading activities. However, as stock prices keep falling, the trading activities do not bring profit. Sources say that some companies still hold a huge volume of shares which now have market prices of only 40-50% of the prices at which they purchased stocks.

In late 2006 and early 2007, securities companies noisily expanded networks and opened more branches and transactions points, employing more staffs. The situation is quite different now: many companies have had to cancel their network expansion plans and cut jobs.

Last year, a new staff who just graduated from university was paid VND4-5mil a month, while he is now paid VND2.5-3mil/month only. A company reportedly paid VND1,500-2,000 at least for a division head, and the high pay has become a heavy burden on these companies now.

However, optimistic securities companies’ leaders say that now is a golden opportunity for securities companies to ‘filter’ staffs. Previously, when companies rushed to recruit staffs to serve the developing business, they did not have enough time to examine candidates.

Foreigners Net Buyers Of VND51.6 Billion Of Shares

Friday, May 9, 2008
Foreign investors were net buyers of VND51.6 billion ($3.2 million) of Vietnamese stocks Friday out of a total VND127 billion traded, the Ho Chi Minh Securities Trading Center said.
Volume was 2.78 million shares, with foreigners accounting for 37.1% of the total, according to the stock market operator. (Dow Jones)

Habubank links up with Banknetvn

Friday, May 9, 2008
The Hanoi Building Commercial Joint Stock Bank (Habubank) yesterday celebrated its link up with the Vietnam National Financial Switching Joint Stock Co (Banknetvn).
Habubank’s customers who use debit cards will be able to do transactions at 2,000 ATMS belonging to Banknetvn members, including Agribank, BIDV, VietinBank, and ABBank. Habubank is also a member of Vietnam Bankcard (VNBC).

City to hold investor convention

Friday, May 9, 2008
A three-day financial seminar and exhibition will begin in HCM City on May 30 as part of co-operation between Singapore’s NextVIEW Group and the HCM City Stock Exchange.

"This year’s Asia Trader&Investor Convention (ATIC) is more evidence of our commitment to HOSE and Viet Nam to provide investor education, data services and international marketing expertise," Stephen Lai, CEO of NextVIEW Group, said at a press briefing on Wednesday.

The first two-day ATIC was held by the group in the city last May, in co-operation with HOSE, attracting some 4,000 investors.

He said the event was targeted at high-quality investor education, a one-stop financial marketplace and investor networking.

This year 50 seminars and forums will feature 40 international and local financial experts delivering talks in Vietnamese, English and Chinese. Topics covered will include Viet Nam and global outlooks, stock market trading methods, money management, properties, gold and commodities investment, co-listing opportunities for Vietnamese companies and overseas investment opportunities. HOSE and NextVIEW will invite around 100 international fund managers, brokers and financial investors to participate in the Viet Nam Investment Summit event during the opening session.

Merging small banks to curb inflation?

Friday, May 9, 2008
Merging small banks to form bigger ones, loosening the conditions for bank refinancing and removing the ceiling interest rate are the three things suggested by experts to solve banks’ problems.
Dr Nguyen Chung Binh, lecturer at Harvard University:
The channels of distributing capital to the national economy are stuck, which is the result of the tightened monetary policy. With the low interest rates capped at 12% per annum, depositors are enjoying negative interest as the interest rates prove to be lower than the inflation rate. Instead of making bank deposits, people inject their money in short-term investments, gold, construction materials and rice, which has been distorting the finance market.

However, the removal of the ceiling interest rate scheme alone will not help much in making money circulate, though. If the ceiling interest rate scheme is removed, a new interest rate race will occur, which will certainly burden businesses and the national economy. It may happen that a series of people’s credit funds will collapse, the scenario that we once saw in 1990.

I think that the central bank should take necessary measures to reduce the number of banks in order to make the monetary market open and clear.

There are too many banks in Vietnam, while there is no powerful bank. Commercial banks have been trying to develop their business scope by expanding their networks to mobilise more capital. Therefore, they have been fiercely competing with each other in developing credit, while not paying attention to developing associated services. Banks have been focusing on expanding operation scales, while their corporate skills are not commensurate with the growing network. Banks cannot control their risks, while the central bank does not know what banks are doing. Therefore, state management agencies do not have reliable figures to make suitable policies.

It is necessary to merge small banks into bigger banks in order to improve corporate skills. Only the banks that can meet three requirements of big capital, good risk management system and transparent management should be maintained. South Korea, a $1,000bil economy, is an example. Prior to 1997, the country had 25 banks, and the number has been reduced by half.

Le Tham Duong, Head of the HCM City Business Administration Faculty under the HCM City Banking University:

The official capital channels for the national economy are getting stuck, while the unofficial channel, the black market, is now bustling.

If the ceiling interest rate scheme is removed, the deposit interest rate may go up to 17% in the highest scenario, while the lending interest rate 25%. If so, this would help improve the liquidity of commercial banks, while helping curb inflation and boost economic growth. With high lending interest rates, businesses will have to think carefully before borrowing money, and they will only get loans if they have feasible business projects. Those projects which do not have feasible projects will stay away from bank loans. Therefore, the demand for capital will decrease, banks will have to reduce lending and deposit interest rates.

Nguyen Dang Don, Deputy Head of the Banking Faculty under the HCM City Economics University:

The State Bank should loosen the conditions for refinancing banks in order to ensure the liquidity of banks. Interest rates must be decided by the market rather than the intervention of the Vietnam Banking Association.(PL TP HCM)

SBV warns against online money trading

Friday, May 9, 2008
The State Bank of Viet Nam has alerted people to the appearance of a lot of online money trading companies, and warned people about that kind of trading.

According to the State Bank of Viet Nam, in the last time, several companies, which only had the functions of giving consultancy and brokerage services, have set up websites to call for investment in gold and foreign currencies with the transactions carried out via the Internet.

Those who trade online have to pay $5,000 at least (equal to 5-10% of the transaction value), with payment in cash or by money transfer.

What attracts people to this sort of trading is the very high offered interest rates, 5-20% per month.

The State Bank of Viet Nam has stated that under the current laws, only institutions which are licenced by the State Bank are allowed to trade foreign currencies. Therefore, the said activities by the companies, including the brokerage and transaction services, are violations of the law.

In fact, online trading proves to be very risky, and the high offered interest rates prove to be utopian. No official investment channel can bring the interest rate of 20% nowadays. For securities investments, investors could only get 20% profit if share prices hit the ceiling prices for 10 consecutive trading sessions, something which is improbable now.

The State Bank has also warned that online trade organisers may try to swindle clients and disappear after they withdraw money from the accounts of the clients. “The biggest suffers in these cases are the clients,” the bank has warned.

The super-profit of 20% proves to be very attractive in the eyes of investors in the context of the falling stock prices, real estate prices and risky gold trading deals.

In fact, online trade companies once mushroomed in 2006-2007, and the names ‘Colony’ or ‘Golden Rock’ were well known at that time.

In 2006, the Chief Representative of Golden Rock Limited, a monetary online trading brokerage company, reportedly left Viet Nam with access to $10mil in investors’ money.

However, it seems that a lot of investors did not learn anything from the lesson.

The scenario repeated itself as $1mil of ‘investment capital’ disappeared with the director of Chien Thuat Service Consultancy Company. Chien Thuat was licenced in 2006, and had the chartered capital of VND5bil.

Not until April 2008, when the police examined the company, did the 150 investors of the company find out about the swindling. (Tien phong)

Small investors learn expensive lesson

Friday, May 9, 2008
Low-income groups are realising that the securities market wasn't the safest bet, as the figures continue to crash and they find themselves in debt.

"It's not only qualified, experienced people, but all of society who went crazy with the market. Lower income groups are suffering the most," said Vu Duc Nghia, vice director of Bien Viet Securities joint-stock company.

These people considered the securities market a gamble because they didn't know anything about even the basics, added Nghia.

In the mass rush to invest with promises of getting rich quickly, many people were pushed into investing. To them, joining the securities markets was like following a fashion trend, added Nghia.

Nguyen Thi Nga (not her real name), a tailor from Dong Da District learned a big lesson when she decided to take a risk by investing all of her money as well as borrowing off her friends and relatives to buy holdings.

Nga waited to sell to get more profit, but has now lost everything she had and is even in debt.

"Seeing people rush to buy, I thought I could take this chance to get rich," said Nga.

With similar ambitions Le Hung, a xe om driver, was determined to join the market simply because he believed his cousin who worked for a securities company could help him make some money.

"I gave money to my cousin to play with and hoped for the best," said Hung.

As a carpenter from the central province of Ha Tinh, Nguyen Van Tinh was barely making enough money to feed his whole family of seven.

After speaking with some friends, he figured the securities market was like gambling but with better odds. Tinh decided to sell all of his equipment, borrow money from friends and take the risk.

Now, he's looking for a way to pay back the debt.

"Now I have no equipment, I don't know what to do for money. The whole family was counting on my gamble and now they've lost their faith in me," said Tinh.

Specialised advice

To sort out this skewed image of the market, many people were pushing each other to join stock market training courses. This solution, however, proved to be a waste of time and savings as the students didn't really appreciate the long term benefits of the course.

"Low income people often want to earn money as quick as possible, so they don't take the course seriously," said Dao Lien Minh from the securities training centre under the Securities Boarding Committee.

Even when the centre offered free classes, few people were interested in joining. To them, time spent in class was time they should be spending earning money.

Recently, television stations have been pushing programmes providing securities market knowledge. Unfortunately, uninformed people often aren't interested in these programmes.

"Participants should see investing in the securities market like a business requiring information, direction and experience," said Nghia.

"Seeing the securities market as a get-rich fast scheme is a mistake that will usually end up badly for those who see it as a game," concluded Nghia. (VNS)

May 09, Stock market closes to 500 points

Friday, May 9, 2008
The Ho Chi Minh City Stock Exchange (HOSE) today May 9 continued falling on the stock market when the VN Index slipped another 7.61 points or 1.49% to 500.33 points with the total matching order trade of nearly 2,784,140 shares and fund certificates.
Among 154 shares and fund certificates being listed on the southern bourse, the stock market recorded three shares increasing, three others stood still at the reference price and 148 shares decreasing.
Three shares increasing were SAF, BSH added 500 dong to 28,300 dong and 28,100 dong and ITA leaped 1,500 dong to 76,500 dong per share.
Three shares remained unchanged namely TMS, VPL and SFN.
DPM reached the biggest trading volume with 1,195,210 shares and followed by STB with 166,420, SSI with 114,880, PPC with 94,450 and PVD with 93,600 shares.
Foreign investors bought 56 share codes and two fund certificates with the total volume of over one million shares and fund certificates. Of which, DPM accounted for the largest volume with 525,520 shares, followed by PVD with 60,180, VHG with 50,000, VHC with 38,020, PPC with 33,980 and others like RAL, ITA, TRC and ALP.
Like the southern bourse, the Hanoi Securities Trading Center (HaSTC) today May 9 kept decreasing impetus on the stock market as the HaSTC Index lost another 3.19 points or 2.03% to end at 154.23 pts with the total market trade of 1.201 million shares worth nearly 44 billion dong.
Amongst 136 listed shares on the northern bourse, the stock market saw three shares increasing while 112 others decreasing, two shares stood still and 19 shares with no trade.
Three shares increasing were MIC added 3,200 dong and HPC and VC3 up 300 dong,
Two shares stood still including KBC and XMC.
ACB and S99 showed the strongest decliner when losing 2,200 dong and followed by VSP lost 2,000 dong. Others slipped below 2,000 dong per share.
ACB also took the pole place in trading volume with 222,900 shares, followed by TBC with 210,900 shares, and others with below 100,000 shares like BCC, NVC and HPC.

Economic growth forecast at 7.2 pct in 2008

Friday, May 9, 2008
Viet Nam is predicted to post gross domestic product (GDP) growth of 7.2% this year, compared with 8.84% last year.
In the most likely scenario forecast by Vietnam's Central Institute for Economic Management (CIEM), the institute also predicted the country's inflation rate of 19.4% and export growth of 26.2% in 2008.
In the most optimistic scenario, the country is forecast to record GDP growth of 7.6%, and inflation rate of 16% downwards, said the CIEM's Vietnam Economic Report 2007.
The report's most pessimistic scenario shows a drop of 6.6% in economic growth, and inflation rate of 22.3% this year.
Next year, Vietnam's inflation rate may fall to 10% downwards, and stay at 5-7% for several years.
The Vietnamese government has proposed the National Assembly of Vietnam, the country's top legislature, to cut its GDP growth target to 7% this year from initial goal of 8.5-9% due to unfavorable changes in the international and domestic markets.
Vietnam is estimated to post an economic growth of 7.4% in the first quarter of this year, compared with 7.8% in the same period last year.

Market regulator advises delay in share sales

Friday, May 9, 2008
State Securities Commission is encouraging companies to halt or delay planned share sales, after recent offerings were poorly received, a local newspaper reported.
Share sales this year by Hanoi Beer-Alcohol-Beverages Corp., Kim Long Securities Joint-Stock Co. and Saigon Beer-Alcohol-Beverages Corp. fell victim to bearish market sentiment.
No new licenses for sales have been granted in the past two months.
New listings on the Ho Chi Minh Stock Exchange have also slowed, according to the report.
Ten companies received permission to trade this year and love yet to do so, the report said, citing Tran Dac Sinh, general director of the exchange.

Some shareholders in the Joint-Stock Commercial Bank for Foreign Trade of Vietnam, known as Vietcombank, oppose the bank’s plan to list its shares this year, Thoi Bao Kinh Te Viet Nam newspaper reported April 28.

Vietcombank, which held an initial share sale in December, said in April that it planned to list its shares on Ho Chi Minh City’s exchange by July. (Bloomberg)