Vietnam Stock Market News: Viet Nam to raise dong deposit rate cap to 12 pct

Vietnam Stock Market News: Viet Nam to raise dong deposit rate cap to 12 pct

SSC To Halt Licensing New Securities, Fund Management Cos

Monday, April 28, 2008
The State Securities Commission (SSC) said Monday that it has decided to temporarily halt issuing licenses to new securities and fund management companies as part of efforts to boost the industry's performance.
"In order to support the stable development of the stock market, the State Securities Commission will temporarily halt the reception of applications for setting up new securities and fund management companies," the SSC said on its Web site.
The SSC's move follows the government's asking last week of all state-owned companies to review their operations; these entities have invested VND23.34 trillion ($1.45 billion) in securities and fund management companies in recent months, according to analysts.
"The SSC's decision is a right move because it will help existing companies to improve operations in terms of service quality, rather than by simply slashing service fees," said Phan Hong Quan, a director of Hanoi-based EuroCapital Securities.
"Viet Nam's stock market is relatively small, and licensing too many securities companies has caused unfair competition," Quan told Dow Jones Newswires.
"Many local brokerage firms, including EuroCapital Securities, are seeking foreign investors for their expertise and to help boost operations," Quan said.
There are currently 87 securities companies and 30 fund management firms licensed by the SSC, but not all of them have started operations.
Quan forecast that about half of the existing securities companies will soon close their offices because of losses, following a 44% plunge in domestic stocks so far this year. The benchmark domestic share index has fallen more than 55% since its peak in March 2007. (Dow Jones)

April 28, Foreigners Net Buyers Of VND131 Billion Of Shares

Monday, April 28, 2008 of VND131 billion ($8.2 million) of Vietnamese stocks Monday, out of a total of VND289 billion traded, the Ho Chi Minh Securities Trading Center said.
Volume was 8.9 million shares, with foreigners accounting for 32.9%, according to the stock market operator. (Dow Jones)

Viet Nam to raise dong deposit rate cap to 12 pct

Monday, April 28, 2008
Commercial banks in Viet Nam will raise the ceiling rate on dong deposits with a maturity of six months or longer to 12% from 11%, effective Tuesday, the Viet Nam Banks Association said on Monday, a move that should help smaller lenders.

The ceiling for interest on deposits of less than six months will be raised to 11.5 percent from 11 percent, the association said in a statement, citing agreements by commercial banks at meetings in Hanoi and Ho Chi Minh City last week.

It said banks should have plans to implement the rates as agreed among members of the association "in order to stabilise the market's interest rate level, to limit funds being shifted from one bank to another".

The authorities are apparently worried that smaller banks may have trouble attracting deposits, which would lead to liquidity problems at a time when demand for loans remains strong and might prompt the need for central bank aid.

The cap was imposed as a way of stopping money being moved between accounts as banks outbid each other for deposits, a practice that was working against official efforts to tighten liquidity to fight inflation.

Annual inflation in April jumped to 21.42%, the sixth consecutive month of double-digit price rises.

The association said in its statement that the higher deposit rate should help protect depositors against rising inflation.

The central bank said last week that apart from injecting cash via open market operations, it would step up lending, especially to smaller banks, to boost their liquidity.

Viet Nam could ease its restrictions in the next few months. (Reuters)

Banks not allowed to offer promotion programmes?

Monday, April 28, 2008
The Ministry of Industry and Trade and the State Bank of Viet Nam have agreed not to grant more licences to commercial banks to carry out promotion programmes at this moment, in order to protect the current ceiling interest rate, according to Secretary General of the Viet Nam Banking Association Duong Thu Huong.
Stopping promotion programmes to maintain ceiling interest rate
Huong said that banks can continue the promotion programmes for which they got licences before. However, they will not be able to launch other promotion programmes in order to attract capital.

Promotion programmes have been used by banks as an effective tool to call for more capital from the public, especially as they are ordered not to offer deposit interest rates higher than 11% per annum. Banks have been trying to dodge the regulations by offering attractive gifts or bonus interest rates to clients, which have made actual deposit interest rates higher than 11% per annum.

However, the State Bank of Viet Nam and VNBA, who believe that high deposit interest rates will harm the national economy at this moment, have decided that promotion programmes should not continue.

Depositors want promotion programmes

Nguyen Thi Minh, a retired woman in district 3 in HCM City, said that with the interest rates offered by commercial banks all the same, the thing that helps her make a decision about which bank to deposit money in are promotion programmes, which means that promotion programme show the competitiveness of banks at this moment.

A recent survey made by a big joint stock bank shows that attractive promotion programmes can sway up to 50% of depositors, especially clients between the ages of 35-60.

That explains why the decision to stop licencing promotion programmes has been facing strong opposition from banks.

Stopping licencing promotion programmes? It’s illegal!

According to experts, VNBA setting the 11% ceiling interest rate proves to come contrary to the Competition Law, and may cause depositors losses.

If VNBA and the Ministry of Industry and Trade plan to stop licencing promotion programmes, they will, once again, be violating the rules of market liberalisation. The experts say that the two organs should think through the legal considerations before stopping licencing promotion programmes.

Lawyer Nguyen Van Hau, Head of the Information and Propaganda Division under the HCM City Bar Association, said that the State Bank of Viet Nam and the Vietnam Trade Promotion Agency would violate laws if they stopped licencing promotion programmes.

Promotion activities are considered legal activities under the Commercial Law. Competent agencies only have the right to prohibit promotion programmes if promotion programmes runners violate current regulations. If the prohibition by state management agencies can cause losses to enterprises, they can initiate legal proceedings against the agencies. (Tuoi tre)

Tien Phong Plastic pays 30% dividend

Monday, April 28, 2008
Shareholders of the Thieu nien tien phong Plastic JSC (Tifoplast) agreed on a 30% dividend for 2007 at the annual shareholders’ meeting on April 26.
Last year, the company’s total revenue hit VND 905 billion, up 12.9% compared to the targeted figure with a total production of over 33,000 tonnes, up 15% year-on-year.
Total after-tax profit hit VND 125.4 billion, up 5.5% compared to 2006’s figure.
According to Hoang Van Ngoc, chairman of the Management Board and General Director of Tifoplast, last year the company poured strong investment in modernising equipment and increasing production capacity from 30,000 tonnes a year in 2006 to 35,000 a year in 2007. At the same time, the company has also expanded its distribution network with over 200 sale agents and thousands of retail shops from Da Nang northwards.
Last October, the company was licensed to build a factory to produce plastic pipe in Binh Duong and is applying for construction of a similar plant in Vientiane, Laos. The company will also move part of its current factory in inner Haiphong city to the suburban areas to expand production.

This year, the company targets a total turnover of VND 1 trillion; total production of 36,000 tonnes and an after-tax profit of VND 140 billion. (Nhan Dan)

April 28, Stock market recovers after six continuous decreases

Monday, April 28, 2008
The domestic stock market recovered on the first trading session of the week as the market indicator of the southern bourse ended its string of six consecutive decreases while the HASTC-Index of the northern bourse saw the second increase in a row. Many stocks listed on both bourses gained on today’s session. Trading volumes were also improved.

Ending the trading session today April 28, the 1775th trading session of the Vietnamese stock market, the Ho Chi Minh City Stock Exchange (HOSE) opened a new week by seeing a rally on the stock market as the VN Index regained 3.54 points or 0.68% to 519.42 pts with the total matching order trade of nearly nine million shares and fund certificates worth over 382.5 billion dong, closing six consecutively decreasing sessions on the stock market.

Among 154 shares and fund certificates being listed on the southern bourse, the stock market saw 90 shares increasing while 10 others stood still at the comparative prices, 53 shares decreasing and one share with no trade namely BTC of Binh Trieu Construction and Mechanic Joint Stock Co.

Total order matching trading volume was over 8.9 million shares and fund certificates worth VND 383 billion.

SSI lost 1,000 dong to 50,000 dong per share, FPT slipped 1,500 to 82,500, STB dropped 600 to 34,100 dong per share.

Meanwhile, some others reaching the ceiling price included VNM, VPL, PVD up 2,000 dong to 132,000 dong, 115,000 dong and 115,000 dong per share, DPM, HPG and ITA leaped 1,000 dong to 52,500 dong, 62,000 dong and 71,000 dong, VIC jumped 1,500 dong and PPC bounced 700 dong per share.

STB kept the pole place in trading volume with 1,789,050 shares, DPM followed with over one million shares, SSI with 589,730 shares, FPT with 458,890 shares, VHG with 361,920 shares and others like VFMVF1, DPR, VSH and PRUBF1.

Foreign investors bought 69 share codes with the total volume of over 3.2 million shares worth VND 176 billion while sold only over 500,000 units worth VND 27 billion. DPM reached the biggest trading volume with 780,480 shares, SSI with 356,650 shares, FPT with 227,110 and VSH with 173,280 shares.

Similarly, the Hanoi Securities Trading Center (HaSTC) today April 28 surged on the stock market as the HaSTC Index added 2.16 points or 1.28% to end at 171.11 pts with the total market trade of 3,659,500 shares worth over 135 billion dong.

Amongst 135 listed shares on the northern bourse, the stock market saw 71 shares increasing while 47 others decreasing, nine shares stood still and eight shares with no trades.
Nine shares stood still including BTH, CJC, DCS, HEV, SJE, TJC, TPH, TXM and XMC.

Eight others with no trade were C92, CTB, HSC, HUT, NPS, PSC, VE9 and VTL.

MIC was the biggest gainer as adding 2,700 dong and followed by ACB and SCJ up 2,000 dong per share, others increased below 2,000 dong per share.

SD2 was the strongest decliner when losing 1,600 dong and followed by SD7 slipped 1,500 dong, SDA sropped 1,300 dong, CDC slipped 1,200 dong and BVS and L62 lost 1,000 dong. Others fell below 1,000 dong per share.

KLS took the first position in trading volume with 620,600 shares, followed by ACB with 341,200 shares, PVS with 226,600, DBC with 194,500 shares, PVI with 183,600 and HPC with 102,500. Others reached the trading volume of below 100,000 shares.

Power station approved for Mekong Delta

Monday, April 28, 2008
The Tan Tao Group has received approval for blueprints for a new power station, industrial zone and a new urban area in Kien Luong District in the Mekong Delta province of Kien Giang.

The Tan Tao chairwoman, Dang Thi Hoang Yen, said relevant agencies and ministries had agreed with the designs made by the group in cooperation with the provincial government.

The central government had already decided to build the 600-hectare, 4,400-megawatt power station.

The group was also assigned by Prime Minister Nguyen Tan Dung to join hands with the local government to design a deep-water port in the district.

Most Asian stock markets show marginal gains

Monday, April 28, 2008
Asian markets gained marginally on Monday as growing optimism about the US economy and a more stable dollar lifted Tokyo's index to a two-month high.

Still, many traders and investors remain cautious ahead earnings reports and key US economic data this week, as well as and central bank meetings on interest rate policies in the United States and Japan.

Optimism about the American financial sector's health has improved market sentiment, but some investors are wary ``before the earnings season gets into full swing,'' said Shinko Securities' strategist Tsuyoshi Segawa in Tokyo, where the Nikkei 225 stock index gained 30.9 points, or 0.2%, to 13,894.37.

Japanese financial stocks soared after gains in their counterparts on Wall Street last week. Mitsubishi UFJ Financial Group jumped 10%. Mizuho Financial Group closed up 9.5%, while Shinsei Bank jumped 13.5%.
The dollar's stability against the yen also buoyed exporter shares. Honda Motor Co. rose 3.0%, Nissan Motor added 2.8% and Mazda Motor shot up 7.9%.

In Hong Kong, investors sought the safety of utility companies amid the uncertainty. The blue-chip Hang Seng Index rose 0.6%, to 25,666.29.

``Several key data to be released this week may confirm the US economy is in recession,'' said Alex Tang, research director at Core Pacific Yamaichi International. ``I don't expect to see any positive catalyst from the coming economic indicators.''

The US is reporting gross domestic product and consumer confidence date this week, and many in the market expect the US Federal Reserve to cut its key interest rate another quarter point. The Fed has now cut its federal funds rate six times since September, and last cut the rate 75 basis points in mid-March.

Utility firms led Hong Kong's blue-chip gains. Hong Kong & China Gas, the city's dominant gas supplier, climbed 1.8%. CLP added 0.6%. Hongkong Electric rose 0.4%.

China Life Insurance, China's largest life insurer by premiums, fell 1.6% after it reported a 61% drop in first-quarter net profit on lower investment income.

Oil refiner Sinopec fell 2.7%. Its first-quarter net profit fell 69% from a year earlier, as a government subsidy couldn't fully offset surging oil costs. The poor earnings of Sinopec also pulled down the Shanghai market, where the benchmark index fell 2.3% to 3,474.72.

``The key focus of Monday's session was oil refiners, following the release of Sinopec's weak first-quarter earnings. The fact that oil prices hit a record high made a bad picture worse,'' said TX Investment analyst Qiu Yanying.

Sinopec's Shanghai shares fell 4.4%. And PetroChina, the publicly traded arm of China's biggest oil company, China National Petroleum Corp., fell 4.3%.

Chinese oil companies have suffered heavy losses on refining due to government controls that bar them from passing on record crude prices to consumers. Companies have been subsidizing their refining losses with profits from their drilling units.

New York crude oil futures hit a record high of US$119.93 a barrel on Monday after the weekend shut-in of a pipeline system that carries 700,000 barrels of North Sea crude a day to the UK.

Vietcombank to increase dividend to shareholders

Tuesday, April 29, 2008
Vietcombank's first shareholders' meeting was held in Hanoi on April 26 with the nomination of director board, supervision board for the term of 2008-2013, the approval on operation regulations, business orientation and plans in 2008.

Accordingly, the bank's director board includes seven members and the supervision board has five members with the wage equalling to 0.36% of its after-tax profit.

Speaking at the meeting, the bank's general director and chair Nguyen Phuoc Thanh pointed out changes and high risks of the domestic banking and stock market. This year the business safety will be given high priorities with targets of maintaining the bad debt ratio of 2.6% and the growth rate of below 30%. In addition, the bank plans to add 905 billion dong to the risk prevention fund, bringing the total figure to 2.321 trillion dong for particular risk prevention fund and 810 billion dong for general risk prevention fund.

By December 31, 2008, Vietcombank's total asset could be 211.084 trillion dong, rising 7.72% year-on-year while the revenue is targeted at 4.537 trillion dong, up 13.94% yoy, revenue from service and other activities estimated at 2.339 trillion dong, up 6.97% and a dividend of 12.08%.

Vietcombank expects to become a financial holdings group ranking among Asia's top 50-70 largest ones in the period of 2015-2020 with the capital scope of over US$30 billion and total ownership capital of about US$2 billion by 2015.

The meeting also passed the plan to select foreign strategic partners and the roadmap of domestic and overseas listings. (VNA)