HSBC stoic as stock market plunges

Saturday, May 17, 2008
Hong Kong Shanghai Banking Corp (HSBC) most recently announced the periodic report on the salutation and prospect of Vietnam's economy in general and forecast on Viet Nam's finance and stock market in particular, in which the foreign bank still kept optimistic on Viet Nam.
Reviewing regular reports of HSBC about Vietnamese stock market, it is easy to see that the bank's experts always consider Viet Nam to be an attractive market in long-term and proposed an increase in purchase.
In the arguable report on April 7 concerning the investment strategy in Asian market for the second quarter of 2008, HSBC assessed that Viet Nam, along with Japan, Philippines and Australia are better-avoided markets due to macroeconomic instability. The report also caused shocks as forecasting that VN Index could be down to 600 pts by the end of the year instead of the previously predicted 1,100 pts.
However, it is not for this HSBC will change its point of view on Vietnamese market because just in that report, Vietnam was still regarded as the highly potential market in long-term thanks to a reduction in share prices. In addition, HSBC proposed to increase the capital allocation ratio into Viet Nam from 0.5% to 1%.
In the latest report released on May 8, the foreign bank continues keeping optimistic about the future of Vietnamese market in long-term. Besides, it is notable that HSBC believed Viet Nam's VN Index plunged to the bottom already.
At least Vietnamese stock market stopped declining after the government offered market support measures in March, and VN Index seemed to drop to the bottom of 500 pts, cited the May 8 report. But, right after the assessment, the stock market still saw the new bottom level showing that VN Index yesterday May 14 remained at 475.5 pts.
Regarding the stock market situation last month, HSBC's statistics showed that the VN Index within April surged by 1%, much lower than the 8% growth of MSCI of Asia Pacific market excluding Japan and 14% increase of Chinese market's H shares.
About transparency, Viet Nam market's average trading value remained small at only US$21 million each day, not equalling to one third of the figure by the end of 2007.
As usual, foreign investors are active buyers as for Vietnamese shares with the net purchase of US$122 million in April against US$59 million in March.
Given predication on market prospect, like previously publicised reports, HSBC continued saying that many potential risks still exist in Vietnamese stock market in short-term once instabilities in macro-economic policies have not been solved yet.
The current inflation rising by over 21% against the same period of last year along with the increasing trade deficit, government's economic growth target will be factors making domestic investors to be on knife-edge.
In this time, HSBC's experts also concerned a new investment channel in Viet Nam as from the stock market slumped and the real estate market became less brick. That is gold investment.
According to the foreign bank, the key factor affecting to the market in some recent months is whether listed firms' profit have to suffer affects from the current economic situation.
It is supposed that EPS of 2008 and in the following year only could grow 20% while price to earning (P/E) ratio of STC listed firms over next 12 months will be 11.8 times, representing a cheap share price in the market in long-term. These figures were announced in the April 7 report.
Written in the latest report, Dragon Capital forecasted EPS growth could be 3% only this year and 7% in 2009. If the growth rate declines, above assessments on Vietnamese stock market will not be exact any more.
At present, most of 15 largest capitalisation companies excepting securities brokerages all reported a high profit growth during the first quarter of this year, led by HPG with the EPS growth of 451%, followed by energy sector shares especially DPM with EPS growth of 77% and VSH 72%. The biggest loser was SSI with the EPS of—75%, according to HSBC's May 8 report.
Once again HSBC advised foreign investors to gather Vietnamese shares for long-term reserve. Notably, listed firms namely Vinpearl and Vinamilk with good quality are that focus on their key sectors and do not expand to other fields such as banking or gold business, which are emerging to become attractive shares.
Especially, in the latest report, HSBC did not give any forecast on VN Index. Perhaps, the bank's experts still maintained the 600 pts forecast level. (TBKTVN)

SAFI transport firm targets 24b dong profit

Saturday, May 17, 2008
Sea and Air Freight International Co, or SAFI recently announced this year's business plan with 103 billion dong in revenue, 24 billion dong from after tax profit and dividend of 12%.
This year, the company continues carrying out project of expanding its warehouse in HCM City's Dist 7, the project to build storehouse and branch office in Da Nang and the office building project in HCM City's Dist 1.
In addition, this year the company also invest capital to set up joint ventures with some foreign partners and set up Dung Quat Port Development Joint Stock Co and establish a warehouse area building company in Hanoi's environs with the total investment capital of 47.7 billion dong.

Dien Quang lamp maker targets 222b dong profit in 2008

Saturday, May 17, 2008
Dien Quang Lamp Joint Stock Co yesterday May 14 announced this year's business plan with 1.27 trillion dong in revenue and 222 billion dong in profit.
Last year, the company reached 1.12 trillion dong in revenue and 203.25 billion dong from after tax profit.

Habeco releases 2007 fiscal report

Saturday, May 17, 2008
Hanoi Beer – Alcohol – Beverage Joint Stock Corporation (Habeco) recently released its 2007 fiscal report with the total asset of 385.690 billion dong, total revenue from sales and service provision of 540.952 billion dong, and net revenue from sales and service provision at 412.229 billion dong.
Last year, the company also gained 181.764 billion dong in combined profit from sales and service provision, 3.247 billion dong in revenue from financial activities, 117.940 billion dong in net business profit, 47.321 million dong from other profits, 117.987 billion dong in total pre-tax profit and EPS of 24,327 dong.
On the other hand, it spent over 7.554 billion dong on financial costs, 26.382 billion dong on sale cost, more than 33.135 billion dong on corporate administration cost, and 1.206 billion dong on other costs. (TBKTVN)

HMC reports 15.92b dong profit in Q1

Saturday, May 17, 2008
The HCM City Metal Joint Stock Co (coded HMC) recently reported the business result in the first quarter of this year with over 1.115 trillion dong in net revenue from sales and service provision, up 130.59% against the same period of 2007 and 15.92 billion dong from after tax profit, rising 86.85% yoy.

This year, the company plans to gain 3.8 trillion dong in revenue, 60 billion dong from pre tax profit and dividend of 16-18% and carry out its construction projects.

Closing the trading session on May 15, HMC-coded shares closed at 20,100 dong per share, losing 400 dong or 1.95% with 8,050 shares being traded.

PPC targets 693.5b dong profit

Saturday, May 17, 2008
Pha Lai Thermo Power Joint Stock Co (coded PPC) recently released the 2007 annual report with 777.822 billion dong from pre tax profit and total investment capital of 1.104 trillion dong in many projects.
Up to the end of 2007, PPC paid dividend of 10% for the first phase of 2007 and paid at 5% for the second phase on March 7.
This year, the company targets over 3.638 trillion dong in total revenue and over 693.518 billion dong from pre tax profit.

Providential Holdings reports Q3 FY '08 financial results

Saturday, May 17, 2008
Providential Holdings, Inc. (OTCBB:PRVH), a company engaged in merger and acquisitions consultancy, financial services, independent energy and resources, real estate development and investing in unique opportunities, announced financial results for the third quarter of fiscal year 2008 ended March 31, 2008.

Revenue for the third quarter was US$31,000, a decrease from the US$2.5 million reported in the same quarter last year. Net loss for the quarter was US$276,772 or US$0.00 per diluted share, compared to net income of US$2,373,712 or US$0.01 per diluted share in the comparable quarter last year.

For the nine months ended March 31, 2008, Providential reported revenues of US$705,338 and a net loss of US$386,230. This compares to revenues of US$2.7 million and net income of US$1.9 million in the comparable period last year.

Providential Chair and CEO Henry Fahman said, "The revenues for the third quarter and nine-month periods were low due to the nature of our revenue recognition methods. Traditionally, we are compensated with equity from our client companies, and since transactions have a long sales cycle and take a long time to complete, our quarterly revenue stream is uneven. Revenues are recognised in the financial quarter in which the transactions are completed. On another note, our recent projects, such as the PHILAND Pointe91 development, the formation of IndoChina Mining Corporation, the launching of Providential Vietnam Growth Fund, and our management services subsidiaries were both human and capital intensive, but their progress continues to be very steady. We are confident in their ability and moreover, Providential Holdings as an entity, to generate positive results."

About Providential Holdings, Inc.

Providential Holdings and its subsidiaries engage in a number of diverse business activities, the most important of which are M&A advisory services and investing in the rapidly growing economies of Vietnam and Asia. As part of its activities in Vietnam, Providential has been hosting seminars in conjunction with the Nasdaq Stock Market, the Vietnamese Chamber of Commerce and Industry and a leading US investment banking firm, to help Vietnamese companies go public and raise capital through the US financial markets. For more information on Providential Holdings,

Vimedimex pharmaceutical firm releases background

Saturday, May 17, 2008
Developed from Viet Nam National Medical Products Import Export Co II (Vimedimex II), which was established in 1984, HCM City-headquartered Vimedimex made its equtisation in December 2005 with a chartered capital of 25 billion dong. So far, Vimedimex has launched five branches in Hanoi, Can Tho, Tay Ninh, Binh Duong and Da Lat.

The company that specialises in pharmaceutical materials production, export, import and distribution and real estate sector reached 2.982 trillion dong in revenue, up 18% on 2006, 18.6 billion dong from after tax profit, rising 173% against 2006 and dividend of 16% last year.

This year, the company plans to bring the figures to 2.751 trillion dong in net revenue, 24.4 billion dong in profit and 20% dividend. At the same time, Vimedimex expected to hike its chartered capital to 81.41 billion dong.

Vimedimex is carrying out four realty projects capitalised at over 620 billion dong including office buildings and medicine supermarket.

The company plans to set up medicine and pharmacy service production business development and finance investment company with a chartered capital of 200 billion dong, of which Vimedimex invests 20%.

This upcoming company together with Vimedimex will jointly carry out four investment projects above in 2008-2010 and other projects in medicine and pharmacy sectors.

HSBC awards VIB

Saturday, May 17, 2008
Vietnam International Commercial Joint Stock Bank (VIB Bank) on May 9 received the award of Prominent International Payment Bank from HSBC.

HSBC's award is built based on defining quality of international payment orders and yearly payment turnover of banks through the foreign bank. Head of Corporate Banking at HSBC reported, over 95% of VIB's payment orders are matched with Society for Worldwide Interbank Financial Telecommunication (SWIFT)'s structure.

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Publish Postal bank was granted the similar prize by Citigroup.

Foreign banks take stronger footing in Viet Nam

Saturday, May 17, 2008
Business operation of foreign banks in Viet Nam now is under many regulations that although have been freed up to a certain extent in line with Vietnam's WTO commitments. Due to this, these banks only account for a small market share in Viet Nam's banking sector. However, once more time, a lot of banking specialists gave warnings over domestic banks that they [banks] should improve their financial strength, administration and technology to prepare for the forthcoming fierce competition.

After over on year from entering WTO, the financial dept of Viet Nam's banking system has been improved considerably. In 2006, the ratio of total deposits on GDP was 78.4%, rising 12% year-on-year. The figure was increased to 95.4% last year. In addition, total chartered capital of banks in 2007 soared by 54% against the previous year.

Regarding business operation, the unpaid debt ratio declined from 5% in 2005 down to 3.5% in 2006 and below 3% in 2007. Most commercial banks reached the capital adequacy ratio of 8%.

At present, with the nationwide network, local commercial banks still account for over 90% market share but like a previous survey, up to 45% of customers will shift to borrow loans from foreign banks, 50% will choose services of foreign banks and 50% will send money at foreign banks.

Up to now, foreign banks' branches in Viet Nam only make up 13% market share of capital mobilisation and about 9% of lending market. According to a SBV's report released last week, total asset of foreign banks' branches by the end of 2008 reached 215 trillion dong and their total pre-tax profit gained 2.4 trillion dong with the growth of lending and deposit market share of 0.4% against 2006. The report also predicted that the above figures will continue rising over next years when Vietnam is step by step opening the door of banking market under WTO commitments. Accordingly, within five years from becoming the official member of WTO, Vietnam can restrict the right of receiving dong deposits of a foreign bank branch. From January 1, 2008, the deposit limit that a foreign bank branch is allowed to receive is 800% of its authorised capital. However, the ratio will be extended to 900% in 2009, 1,000% in 2010 and abolished from 2011.

One financer said that many foreign banks' branches now apply a lower lending rate than domestic lenders to expand market share.

Factually, because State Bank of Viet Nam ruled that foreign bank branches are not allowed to receive dong deposits from entities that are not that bank's borrowers, so the banks' market share expansion by boosting lending is normal.

According to specialists, branches of foreign banks are playing a very important role in Viet Nam's foreign currency market. Most of foreign indirect capital (FII) flow into Viet Nam is through the branches. Moreover, these branches can raise US dollar in foreign countries with a lower interest rate than in Viet Nam. After that they re-lend to Vietnamese banks.

Foreign banks have another advantage of non-credit services, which is also the disadvantage of local banks. Particularly, HSBC's revenue of international payment accounts for one third of its total figure. (DTCK)