Market stabilises but fears remain

Despite the domestic stock market getting back on track after a drastic plunge last week, a long-term rally remains uncertain. Despite bouncing back, investors still feel wary over the precarious nature of the market- Photo: Le Toan The "Black Monday" panic "Terror is a suitable word to describe the Vietnamese stock market last Monday, as it underwent the most terrible session of the whole year and the VN-Index lost 5.28 per cent to stand at only 526.93 points," said Tran Quang Binh, deputy head of Retail Research at Maybank Kim Eng Securities. The market panic was expressed in the massive drop in tickers, with the VN-Index witnessing 249 losers, of which 129 hit their nadir. The HNX-Index also dropped by 5.81 per cent to close at 73.09 with 205 losers, of which 74 hit the floor. Liquidity levels remained high, with the total transaction value reaching VND3,800 billion ($168.6 million) across the two exchanges. Within one month, the VN-Index lost roughly 112 points, … [Read more...]

Saigon Port plans share sale to banks

Saigon Port Company Limited will sell some 35.7 million shares to VietinBank and VPBank, which it plans to select as its strategic investors, during an auction on August 28. The volume of shares is equivalent to 16.5 percent of the firm's charter capital of VND 2.16 trillion (US$9.6 billion). The bid will be held at Maritime Securities in HCM City, and the initial price will be VND 11,514 (US$0.5) per share. Saigon Port made the announcement in an online notice following approval by its parent company, Vietnam National Shipping Lines, or Vinalines. The offer of the 16.5 percent stake means that the banks will have to compete to acquire a desired stake, as each of them had registered earlier this year to purchase 11 percent of the port company. Part of Saigon Port. Photo: tinnhanhchungkhoan.vn The State Bank of Vietnam has given VietinBank a nod to swap a debt that Saigon Port owes it, reportedly about VND 2.3 trillion (US$102.22 million), for a stake in the port company if share … [Read more...]

SBV makes third exchange rate adjustment this year

On August 19, the State Bank of Vietnam (SBV) increased the average interbank dollar exchange rate by 1 per cent from VND21,673 to VND21,890. The SBV also increased the trading band from +/-2 per cent out to +/-3 per cent. As a result, the ceiling price is now VND22,547, while the floor price is VND21,233 per $1. These moves followed changes made on August 12, when the SBV expanded the trading band from +/-1 per cent to +/-2 per cent. Sources: Bloomberg, VPBS The SBV stated at the end of last year that it would not increase the exchange rate by more than 2 per cent this year. However, it had already used up this quota by increasing the interbank exchange rate by 1 per cent on January 7 and again on May 7. The latest moves therefore bring the total increase in the reference rate to 2 per cent this year. Furthermore, the widening of the band actually allows for a 5.4 per cent devaluation year-to-date to the new ceiling price. However, in our opinion, the exchange rate adjustment … [Read more...]

Sai Gon Port plans share sale to banks

HCM CITY (VNS) — Sai Gon Port Company Limited will sell some 35.7 million shares to VietinBank and VPBank, which it plans to select as its strategic investors, during an auction on August 28. The volume of shares is equivalent to 16.5 per cent of the firm's charter capital of VND2.16 trillion ($9.6 billion). The bid will be held at Maritime Securities in HCM City, and the initial price will be VND11,514 (US$0.5) per share. Sai Gon Port made the announcement in an online notice following approval by its parent company, Viet Nam National Shipping Lines, or Vinalines. The offer of the 16.5 per cent stake means that the banks will have to compete to acquire a desired stake, as each of them had registered earlier this year to purchase 11 per cent of the port company. The State Bank of Viet Nam has given VietinBank a nod to swap a debt that Sai Gon Port owes it, reportedly about VND2.3 trillion ($102.22 million), for a stake in the port company if share transactions are … [Read more...]

Shares retreat for a second day

HA NOI (VNS) — Vietnamese shares dropped yesterday for a second day - and for a seventh session in the last eight - as global oil prices plunged to a six-year low, weighing on energy stocks. The benchmark VN-Index in the HCM City Exchange fell 1.9 per cent to 566.69 and has shed almost 8 percent since the beginning of last week. Energy companies slid an average of 4.6 per cent yesterday. PetroVietnam Gas Corp. (GAS), the country's biggest energy comapny with a market capitalisation of VND86.2 trillion ($3.85 billion), lost nearly 7 per cent while Petrovietnam Drilling & Well Service Corp. (PVD) lost 6.8 per cent. A global crude supply glut sent West Texas Intermediate to US$40.60 per barrel yesterday, the lowest price since March 2009. Oil is down more than 62 per cent from $106 per barrel last August. Some analysts said they expect oil prices to stay low. So far, the Organisation of the Petroleum Exporting Countries (OPEC) has refused to reduce its production to boost … [Read more...]

Sai Gon Port to sell shares to banks

A view of Sai Gon Port in HCM City. Vingroup will not become the port's strategic investor. — Photo bizlive HCM CITY (Biz Hub) — Sai Gon Port Company Limited will sell some 35.7 million shares to VietinBank and VPBank, which it plans to select as its strategic investors, during an auction on August 28. The volume of shares is equivalent to 16.5 per cent of the firm's charter capital of VND2.16 trillion ($9.6 billion). The bid will be held at Maritime Securities in HCM City, and the initial price will be VND11,514 (US$0.5) per share. Sai Gon Port made the announcement in an online notice following approval by its parent company, Viet Nam National Shipping Lines, or Vinalines. The offer of the 16.5 per cent stake means that the banks will have to compete to acquire a desired stake, as each of them had registered earlier this year to purchase 11 per cent of the port company. The State Bank of Viet Nam has given VietinBank a nod to swap a debt that Sai Gon Port owes it, … [Read more...]

First Vietnamese bank honoured by TDWI

VPBank has become the first ever Vietnamese business to have received the 2015 Best Practices Award in the Enterprise Data Management Strategies. The award, given by the US Data Warehousing Institute (TDWI), the premier source for in-depth education and research on all things data, honoured the bank for its pioneering vision and implementation approach for managing data. The Data Governance Programme of the bank, initiated and managed by BI Competency Centre (BICC), was adjudged top-notch compared to other applicants' entries vis-à-vis the judging criteria of business impact, relevance, maturity and innovation. TDWI also highly valued the bank for applying experiences from other developed countries in the world to build a roadmap for data management in each phase under international standards. VP Bank's representative said in addition to developing and renovating products as well as improving services' quality, the bank has always focused on investment in information and … [Read more...]

Macro and micro scenario feed rising stock index

Back in April, we forecast that the VN-Index would finish the second quarter at between 620 and 640. Our target was six days too early. The index closed the quarter at only 593, but surged to 625 on July 6. During the first six weeks of the quarter, both the VN-Index and HNX-Index recorded lackluster performance. Although the VN-Index was able to rise from 539 on April 1 to 568 on April 16, it then declined steadily to a low of 529 on May 18. The HNX-Index recorded similar performance. Although the macro news was generally positive during this time, market sentiment was poor. At this point, the market was trading well below what we considered to be its fair value, but there did not seem to be any catalyst to push stock prices up. 600 seemed like a difficult barrier for the VN-Index to push past. Then on May 19, rumours began to surface that the government would relax foreign ownership limits on Vietnamese-listed companies. Although we had heard such rumours before, this time seemed … [Read more...]

Vietnam seen devaluing further after busting limit of 2 pct decline

The government is seeking to safeguard export growth, which slowed to 9.5 percent in the first seven months from 14 percent a year earlier Vietnam’s central bank looks set to devalue the dong again after busting through its goal of limiting depreciation to 2 percent this year as China’s yuan weakened. The State Bank of Vietnam doubled the amount the exchange rate can move either side of a daily fixing to 2 percent on Wednesday. The dong fell 0.9 percent against the dollar that day and 0.3 percent on Thursday, bringing losses to 3.2 percent for 2015. The yield on local-currency five-year sovereign bonds rose six basis points to 6.55 percent over the two days, as the step promised to boost the economy while stoking inflation. "The stage is set for them to move," said Fiachra MacCana, managing director at Ho Chi Minh Securities Corp. in the city. "Another 1 percent is very likely at some point before the end of the year, with a possibility of up to 2 percent." Prime … [Read more...]

Vietnam’s M&A waiting for a new boom

(VOVworld) – Vietnam has witnessed dynamic mergers and acquisitions in both domestic and foreign firms of all sizes. The rapid growth comes from opportunities created by trade agreements with other countries and Vietnam’s new policies to increase foreign ownership in Vietnamese enterprises and allow foreigners to buy houses in Vietnam. The Vietnamese M&A market heated up again in 2014 after a chilly 2013 with a higher number of deals completed and higher transaction value. (Photo: vietnamnet.vn) The Vietnamese M&A market heated up again last year reaching 4.2 billion USD, up 15% from 2013. The average was worth about 11 million USD. Most of the deals involved large foreign corporations. Retailing was the biggest attraction: 36% of the value of the M&A deals were in retailing. With a population of 90 million, 60% of them of working age, Vietnam is attractive to both domestic and foreign retail investors. Last year, Vingroup became a dominant M&A player … [Read more...]

Coal companies post profits despite losses during floods

HA NOI (VNS)— All eight coal-mining companies under the Viet Nam National Coal and Mineral Industries Group (Vinacomin), listed on the two stock exchanges, have reported larger profits in the first half of 2015. This is good news for the coal sector, despite a reported loss of an estimated VND1.2 trillion (US$55 million) in the rainstorms and floods in the northern coastal Quang Ninh Province. The torrential rain and floods, the worst catastrophe in the past four decades that began on July 26, have severely affected mining and business activities here. All coal production in Quang Ninh, which is known to have the largest coal reserves, has been halted to focus on prevention of floods and post-flood recovery. Besides the report of the flood damage, Vinacomin said its business continued to grow in the first six months of this year. The group earned almost VND56.7 trillion ($2.6 billion) in revenue, up 5 per cent year-on-year and equivalent to 49.7 per cent of its annual … [Read more...]

Vietnam’s 2015 milk revenue estimated at $4.2 billion

Milk revenue in Vietnam has been predicted to stand at VND92 trillion ($4.2 billion) by the end of the year by Euromonitor International, an international market researcher. Its prediction would put growth at 23 per cent when compared to milk revenue in 2014 of VND75 trillion ($3.4 billion), which itself was 20 per cent higher than in 2013. Euromonitor International said that milk was one of the fastest growing goods in 2014 and will continue to grow. On average each person will drink from 27 to 28 liters per year by 2020, compared to 19 to 20 liters per year in 2014. Liquid and powdered milk are the most important goods in the milk sector, accounting for 74 per cent of market value. Powdered milk is estimated to account for 45 per cent of the Vietnam market, with growth of 10.1 per cent in the 2010-2013 period. However, from 2014 to 2015 consumption was falling, especially in urban areas. Consumers are willing to pay more for foreign powdered milk products, meaning foreign … [Read more...]

Mining companies post profits amid calamity

Vinacomin earned almost US$2.6 billion in revenue, up five per cent year-on-year and equivalent to 49.7 per cent of its annual target. — File Photo HA NOI (Biz Hub) — All eight coal-mining companies under the Vietnam National Coal and Mineral Industries Group (Vinacomin), listed on the two stock exchanges, have reported larger profits in the first half of 2015. This is good news for the coal sector, despite a reported loss of an estimated VND1.2 trillion (US$55 million) in the rainstorms and floods in the northern coastal Quang Ninh Province. The torrential rain and floods, the worst catastrophe in the past four decades that began on July 26, have severely affected mining and business activities here. All coal production in Quang Ninh, which is known to have the largest coal reserves, has been halted to focus on prevention of floods and post-flood recovery. Besides the report of the flood damage, Vinacomin said its business continued to grow in the first six months of … [Read more...]

Opportunities abound for professional advisors

M&A activities in Vietnam in 2014 were very robust, with total deal value increasing by nearly 30 per cent from 2013, according to reports from several independent research houses. VPBS has successfully advised on various equitisation transactions and IPOs of state-owned enterprises Notable deals were primarily in the retail sector, including Thailand’s BJC negotiating to buy Germany’s Metro Cash & Carry Vietnam in a deal valued at $879 million; Thailand’s Central Group purchasing a 49 per cent stake in Nguyen Kim with a value of $80 million; Vingroup buying Ocean Mart for $25 million; and Japan’s AEON taking a 49 per cent stake in Citimart valued at $20 million. The food and beverage sector has also seen significant mergers and acquisitions (M&A) activities, with Modelez International buying an 80 per cent stake in Kinh Do Binh Duong, an arm of Kinh Do Group that specialises in cakes and candies, for $370 million; Daiwa PI Partners and … [Read more...]

Bank credit outpaces deposits, lending rates

HCMCITY (VNS) — Bank credit growth so far this year stands at 7 per cent year-on-year, outstripping deposit growth, which is only 5 per cent, Dau Tu Chung Khoan newspaper reported. Reports from the VPBank Securities Company (VPBS) and BanViet Securities Company predict full-year credit growth to exceed the target of 13-15 per cent. The highest growth has been registered in lending to the property sector — 10.9 per cent – as it accounted for 8.3 per cent of total outstanding loans as of end July. VPBS analysts attributed the rapid credit growth to reasons like the reduction in interest rates. Deposit interest rates declined by 0.2-0.5 percentage points, allowing lending interest rates to fall by 0.3 percentage points, they said. With the prices of commodities and fuel falling in the global market since late last year, companies have been able to cut production costs, leading to a recovery in their business and increased credit demand as a result. The chief of a … [Read more...]

Vinalines still incurs losses

Lan Nhi A Vinalines ship docks at a port in this file photo. Vinalines has reported first half profit of VND124 billion but its consolidated business results show losses of VND197 billion - PHOTO: LE ANH A Vinalines report released on July 20 says that in the first half, the holding corporation’s total revenue was estimated at about VND9.3 trillion, representing 51% of the year’s target and falling 1% compared to the same period in 2014. A 7% year-on-year rise (or 14.6 million tons) in cargo transport volume and an 11% year-on-year surge (or 42 million tons) in cargo throughput at the corporation’s ports in the country contributed to attaining such revenue. Its 2014 revenue amounted to over VND19.8 trillion but its losses reached around VND1.63 trillion. Despite its loss-making operations, Vinalines will still proceed with an initial public offering in the third quarter this year. Vinalines said in quarter two this year the holding company settled VND1.43 … [Read more...]

Abundant liquidity key driver in OMO development

During the second quarter of 2015, the State Bank of Vietnam (SBV) withdrew large amounts of funds by issuing bills. At the same time, banks had little demand for borrowing from the SBV, demonstrated by the limited value of reverse repo transactions. Ample banking liquidity, limited issuance in the primary bond market in line with large foreign capital inflows were likely the most important drivers. A total of VND201 trillion ($9.24 billion) of SBV’s bills were issued in the second quarter, up 14.4 per cent compared to the previous quarter. Meanwhile, there was only VND39 trillion ($1.81 billion) in reverse repo transaction value, down 76 per cent compared to the first quarter. So while the SBV net withdrew money via Open Market Operations (OMO), the outstanding balance of reverse repo and bill issuance increased throughout the quarter. The total transaction value of reverse repos and bills issuance via the OMO in the first half of 2015 reached VND580 trillion ($26.6 … [Read more...]

Vinalines makes dent in its debt load

HA NOI (VNS) — The Viet Nam National Shipping Lines, or Vinalines, repaid more than VND1.4 trillion (US$64.2 million) worth of debts in the second quarter of this year. Its executives told a meeting held early this week to review first-half operations that this figure took the total repayments since late 2013 to more than VND3.6 trillion ($165 million). Deputy general director Nguyen Huu Long said the corporation had remaining debts of over VND7.6 trillion ($349 million), and its main tools remained selling them to credit institutions and converting some of the debts into equity. It has speeded up negotiations with major lenders like Vietinbank, ACB and VPBank and achieved some success, he said, adding that the debts would reduce remarkably by year end. Vinalines had been saddled with debts of around VND11 trillion, or $504 million, to 24 lenders, nearly half of them foreign. VietinBank led the list with VND2.23 trillion ($100.9 million) followed by VDB, Asian Commercial … [Read more...]

Embattled Vinalines repays $64.2m worth of debts

Vinalines has repaid more than $165 million worth of debts so far. — Photo ndh.vn HA NOI (Biz Hub) — The Vietnam National Shipping Lines, or Vinalines, repaid more than VND1.4 trillion (US$64.2 million) worth of debts in the second quarter of this year. Its executives told a meeting held on July 20 to review first-half operations that this figure took the total repayments since late 2013 to more than VND3.6 trillion ($165 million). Deputy general director Nguyen Huu Long said the corporation had remaining debts of over VND7.6 trillion ($349 million), and its main tools remained selling them to credit institutions and converting some of the debts into equity. It has speeded up negotiations with major lenders like Vietinbank, ACB and VPBank and achieved some success, he said, adding that the debts would reduce remarkably by year end. Vinalines had been saddled with debts of around VND11 trillion, or $504 million, to 24 lenders, nearly half of them foreign. VietinBank … [Read more...]

Investors encouraged to wait for positive market turns

Last week’s stock market volatility has kept the VN-Index around 630 points all week, edging up 0.28 percent on the week’s last trading day, while the HNX-Index concluded its last session in red, down 0.59 percent. A slump of hot bluechips in the insurance and banking sectors, which had previously enjoyed strong gains, together with the separation between stocks in the same industry are believed to be holding back the market. Liquidity on both national stock exchanges fell 17 percent from the previous week’s level to only 135 million shares changing hands. The decrease is owed to reduced cash flows pumped into the market and the increasing number of investors offloading their shares, said the Viet Dragon Securities Corporation (VDSC), adding that the stock market would remain volatile this week. The firm recommended short-term investors unload their shares when the market turns positive while long-term investors should maintain roughly half cash and half … [Read more...]