Pre stock market trading

Illustrative photo

The stock code SHB of Saigon-Hanoi Commercial Joint Stock Bank has continuously been increasing and now has suddenly soared to VND 28,500 per share in the day sessions from less than VND 16,000 per share in the trading session on 10 March. With an increase of up to 80% in less than a month, SHB not only established a historic peak but also became the focus of GSO during this period.

In these sessions, SHB liquidity pushed up very high, with tens of millions of shares transferred in each session. It was this huge demand that helped SHB to have impressive reversal moments, being traded at a sudden drop at ceiling price, with the order to buy millions of shares pushed up at the same time. For example, on the 26 March session nearly 80 million shares matched, equivalent to VND 1,520 bn.

Previously, more than 1.2 billion shares of SSB or Southeast Asia Commercial Joint Stock Bank, also had a wave of rapid increases of 20% on 24 March on HOSE, from reference price of VND 16,800 per share to VND 20,150 per share. Immediately after that, SSB continued to have a series of increases and surpassed the peak of VND 28,000 per share in the session on 31 March. Thus, after only six sessions, SBB recorded an increase of nearly 70%. Although SSB is just a rookie, SSB liquidity is huge with millions of shares traded per session.

Similarly, BAB or North Asia Commercial Joint Stock Bank, moved to list from UPCoM to HNX at reference price of VND 16,000 per share, and increased by 30% right in the session on 12 March, to VND 20,800 per share. The streak of BAB continued to last for many successive sessions, helping this stock to surpass the level of VND 36,000 per share in the session on 12 March. Thus, within only eight sessions, BAB recorded an increase of approximately 130%.

The increase in sessions of the above two stocks caused missed shareholders to decide to pour in money to collect the banking codes with prices below VND 20,000 per share, equivalent to the starting point of SHB. In the opinion of investors, if SHB and SSB go up to nearly VND 30,000 per share, banks with the same starting point cannot have prices below 2.0 but must have an equivalent price.

With this thought, investors did not hesitate to pour capital into many bank shares. In particular, two banking codes, STB of Saigon Thuong Tin Commercial Joint Stock Bank, and EIB of Vietnam Export-Import Commercial Joint Stock Bank, increased to the limit due to huge demand from investors. On 30 March, STB created a liquidity record with nearly 100 million shares transferred, equivalent to a value of VND 2,000 bn.

Unreasonable increase

The fact that SHB suddenly reached its historical peak surprised the stock market because it seemed to have no information outside of its 2021 business plan, with pre-tax profit growing 70% year-on-year. Meanwhile, SHB is facing risks stemming from too fast capital gains in the past. Since 2015, SHB chartered capital has nearly doubled, from VND 9,486 bn to VND 17,558 bn, of which, in the first three quarters of 2020, SHB issued an additional VND 5,552 bn. Capital scale increased rapidly in a short time, while business efficiency increased slowly, and not commensurate with the net profit margin (NIM) of only about 2.8%, but much lower than the industry average of 3.84%.

Although SHB 2021 profit story is still quite vague, for investors this is easier to understand than the case of STB and EIB. STB received less positive information related to the pledge of STB to secure the loan, with the debt balance likely to lose the capital of nearly VND 1,900 bn. Specifically, KLB has cooperated with customers to handle all collaterals related to their loans to a group of customers with collaterals of 176 million shares of STB. As for EIB, the best news comes from the proposed amendment of the regulations to organize the annual shareholders meeting. EIB is currently the only bank unable to hold the 2020 shareholders meeting due to insufficient attendance.

Investors suspicious

The fact that BAB doubled its price after being listed on the HNX is an unusual and equally mysterious phenomenon. Earlier at the end of 2017, BAB had quietly put 500 million shares to list on UPCoM with a starting price of VND 20,000 per share. BAB listing price surprised investors at that time because it was 1.62 times higher than the book value of VND 12,318 per share, even higher than that of major listed banks at that time. However, despite the suspicions of investors, BAB still increased strongly after being listed, and there was a time when this stock increased to nearly VND 29,000 per share.

Although this rising wave of BAB took place during the time when bank stocks attracted cash flow, it was still questioned by investors because the business activities of BAB were very weak compared to other listed banks. According to the financial statements of 2020, the pre-tax profit of BAB was VND 737 bn, down by 21%. The decrease was mainly due to the sharp increase in the cost of provisioning while the net interest income grew weakly.

Notably, BAB’s NPL at the end of 2020 was VND 628 bn, an increase of 25.6% compared to the beginning of the year, and the ratio of NPLs to outstanding loans increased from 0.69% at the end of 2019 to 0.79%. As in the past, the stockholder structure was too condensed and had no major shareholders owning more than 5% of the shares, which was too easy to drive the price of BAB shares.

The rising wave of SSB is also being questioned because the bank shareholder structure is almost similar to BAB. Concentrated shareholder structure is also the reason why SSB liquidity has not increased, especially during ceiling hitting sessions. With this feature, according to analyst forecasts, when the bank waves pass, SSB and BAB will be the first bank stocks to lose liquidity.

On the contrary, investors holding shares of SHB or STB are not too worried about liquidity, but face a huge risk of price decline when stocks enter the adjustment phase. Investors holding SHB shares will not forget the 5 April session. From reference price of VND 27,000 per share, this stock suddenly dropped sharply to floor price of VND 24,300 per share, when the holder suddenly launched an order to sell millions of shares at floor price.

Kim Giang

The Ha Noi property market is expected to recover strongly this year thanks to positive performance in the housing segment in the first quarter. — Photo kinhtedothi.vn

The Ha Noi property market is expected to recover strongly this year thanks to positive performance in the housing segment in the first quarter, according to experts.

CBRE Viet Nam’s survey in the first quarter of 2021 revealed there were approximately 4,400 condominium units launched in Ha Noi, up 270 per cent year-on-year but down 39 per cent from the previous quarter due to the disruption of the Tet holiday and a new wave of COVID-19 in Viet Nam.

The yearly growth showed a strong recovery from the first quarter of 2020 when the first wave of COVID-19 pandemic started in Viet Nam, said Do Van Anh, manager of the research and consulting division at CBRE Vietnam.

Most of the new supply during the quarter came from follow-on launches (14 projects) and there were only three brand new projects introduced to the market.

The mid-end segment continued to be the most popular with 80 per cent of total new launches. In terms of location, the east and the west of the city were the major sources of new projects, contributing 77 per cent of new launches, Anh said.

Moderate new supply during the quarter helped close the gap between newly launched and sold units. A total of 4,200 units were sold during the quarter, of which, the affordable segment recorded more units sold than launched.

In Q1, the average primary price in the Ha Noi market was recorded at US$1,461 per sq.m (net of VAT and maintenance fee), up by 7 per cent year-on-year and 3 per cent quarter-on-quarter, according to the survey.

The mid-end segment continued to dominate the Ha Noi condominium market, while stock in other segments was not abundantly available. Due to the launches of new projects at attractive locations, the average primary prices of high-end and affordable segments increased by 9 per cent and 5 per cent quarter-on-quarter, respectively.

In the secondary market, some of the recently completed high-end projects in developed residential areas such as Ba Dinh, Cau Giay and Nam Tu Liem districts recorded annual pricing growth of 3-7 per cent. The average secondary pricing of those districts (including long-time completed projects) only increased by 1-3 per cent year-on-year.

In addition, projects close to nearly completed infrastructure projects such as along the ongoing constructed elevated Ring Road No 2 and areas under recently approved or pending approval master plans such as Long Bien District experienced a pricing growth of 5-9 per cent year-on-year, according to CBRE Vietnam.

“There has been a fairly reasonable price increase certainly in Ha Noi, with the price of Grade A and Great B sector only up to around 5 per cent year-on-year. So that’s a reasonable growth rate. And I think it is an indicator of the recovery in Viet Nam’s economy,” said Matthew Powell, Director of Savills Hanoi.

“The active construction across sectors and locations of Ha Noi signals a strong bounce-back of the city real estate market. We expect not only the residential sector but also the commercial sector will welcome additional projects involving international players and local players coming from southern Viet Nam,” said Nguyen Hoai An, Director of CBRE Vietnam’s Ha Noi branch.

Moving forwards, the level of the new launch and sold units are expected to hover around 24,000-26,000 units in 2021. In the upcoming quarters, new residential projects and townships are set to be launched in different areas in Ha Noi in both urban and rural districts. In terms of selling prices, the average primary pricing is expected to increase at about 4-6 per cent year-on-year in 2021, according to CBRE Vietnam.

Meanwhile, according to Savills Vietnam’s quarterly report on the Ha Noi property market released on Wednesday, the new supply of 942 dwellings on the Ha Noi villa and townhouse market in the first quarter of this year, up 39 per cent year-on-year, was from four newly launched projects and the next phases of three existing projects.

The primary supply of 1,979 dwellings was up 28 per cent 47 per cent year-on-year and Hoai Duc District led with a 37 per cent share.

Performance on the villa and townhouse segment in the first quarter improved to 934 sales, up 232 per cent year-on-year. Hoai Duc District also led here with a 56 per cent share.

“Landed property continued to attract strong buyer attention despite the pandemic’s effects. New supply was mostly in the west with its abundant land and improving infrastructure,” said Powell.

In 2021, approximately 3,600 dwellings from 16 projects will enter the market, with most in Hoai Duc and Dan Phuong districts. Western areas with abundant land and improving infrastructure will continue to perform well. — VNS

Vietinbank’s chairman Lê Đức Thọ delivered a speech at the 2021 annual general meeting of shareholders. — VNS Photo

HÀ NỘI — Vietinbank (CTG) targeted pre-tax profit of VNĐ16.8 trillion (US$728.1 million) in 2021, increasing 2.14 per cent from last year.

The information was released at the Vietinbank 2021 annual general meeting of shareholders held in Hà Nội yesterday.

Vietinbank’s chairman Lê Đức Thọ said they proposed to the State Bank of Việt Nam (SBV) a profit growth plan of about 10-20 per cent this year. After consideration, the central bank decided to temporarily assign the profit of VNĐ16.8 trillion as submitted at the meeting.

2021 is the first year VietinBank has complied with Circular 41, raising operational standards under Basel II, which requires the bank to adapt to meet the requirements.

This year, VietinBank aims to increase total assets by 6-10 per cent and maximum credit balance growth of 7.5 per cent according to the SBV’s limit. Its non-performing loans (NPLs) is scheduled at below 1.5 per cent. Capital mobilisation from economic entities and individuals is expected to grow at 8-12 per cent.

Thọ said the bank will continue to work towards recording higher business growth, dramatically improving quality and efficiency, expanding the scale of operations, implementing appropriate credit growth solutions, and effectively balancing capital sources.

It will also promote credit activities in green and environmental protection fields, he added.

He emphasised that the bank will further its implementation of solutions to support customers affected by natural disasters and pandemics, especially the COVID-19 pandemic, in line with directions from the Government and the central bank.

The bank’s NPL ratio was at 0.94 per cent while bad debt coverage was at 132 per cent. VietinBank also bought all special bonds at VAMC in less than two years instead of five years as expected.

At the meeting, the bank submitted two dividend plans. Under the first option, the bank will pay 5 per cent cash dividends, the remainder will be paid in stock dividends at the rate of 17.77 per cent.

Under this plan, at the time of dividend payment, VietinBank has not completed the capital increase from the share dividend from the previous years’ profits. Charter capital when implementing the dividend is VNĐ37.2 trillion.

According to the second plan, after paying a five per cent cash dividend, the bank will pay stock dividend at the rate of 12.64 per cent. With this plan, at the time of dividend payment, VietinBank has completed the capital increase through the share dividend from the previous years’ profits, the charter capital when implementing the dividend payment is VNĐ48 trillion.

These numbers can be adjusted for credit balance growth and the bank’s performance.

However, he said that the specific dividend rate will still have to wait for the SBV and the Ministry of Finance for approval.

Regarding the issue of capital increase, the chairman said there is no plan to adjust the ownership ratio of State shareholders. The State ownership rate in VietinBank is currently at 64.45 per cent, the lowest possible level according to current regulations.

“Foreign ownership is currently approximately the maximum of 20 per cent. The market immediately absorbed after IFC withdrawal,” he added.

The general meeting of shareholders 2021 also submitted a plan to dismiss the position of member of the director board for the term of 2019-24 for Shiro Honjo at the request of MUFG Bank – a major shareholder of VietinBank. At the same time, Masashige Nakazono, CEO, Division of Strategic Planning, Planning Division at MUFG Bank was elected.

Its stock, CTG, was traded at VNĐ42,000 per share on Friday, increasing VNĐ8,000 per share over December 31, 2020. — VNS

Paul Mandl, team leader of the ARISE Plus Programme (left) and Igor Driesmans, EU Ambassador to ASEAN

It has been only a few months since the launch of the ACTS. How important is the ACTS in terms of regional trade flows and socio-cultural cooperation, and what other benefits will it provide?

Igor Driesmans: The ACTS is a vital building block of ASEAN economic integration. It acts as a catalyst for the development of seamless and efficient transport flows among ASEAN member states, facilitating regional trade in goods through standardised and harmonised customs procedures. Thanks to its sophisticated and powerful IT system, the ACTS can track regional transit cargo movements from departure to destination. In addition, the digital network enables pre-arrival processing by customs at borders and destination, providing for advanced risk management for the protection of society.

Major advantages are in place for reliable traders, permitting door-to-door loading and delivery of regional cargo operations. The ACTS brings all the stakeholders in the public and private sector of ASEAN closer together, promoting regional cooperation in handling goods under customs transit. These stakeholders include ASEAN customs authorities and government transport agencies along with freight forwarders, logistics, and transport providers along with importers, exporters, and manufacturers.

Paul Mandl: These are early days for the ACTS, and so far ASEAN member States have not run many ACTS movements. This is partly due to the advent of the COVID-19 pandemic, and some refinement of national regulations. Therefore, we will be in a better position to respond to this question once more ACTS transactions have taken place.

How was trade cooperation developing in ASEAN in 2020 amid COVID-19? How can the ACTS accelerate ASEAN integration and boost its growth and competitiveness as an economic bloc in the new normal?

Igor Driesmans: In 2020 the EU and ASEAN upgraded their relations to a strategic partnership, which is a strong political message on the willingness of both sides to deepen and widen our partnership. Trade and economic relations are an important cornerstone of this partnership.

Examples of cooperation are many. Following the outbreak of the COVID-19 pandemic, the EU announced €800 million of Team Europe support to Southeast Asia, followed by a further €20 million in December 2020, on top of substantial contributions to the COVAX facility, which will provide fair and equitable access to COVID-19 vaccines to ASEAN countries and worldwide.

We also look into the post-pandemic future – there are many complementarities between the ASEAN Comprehensive Recovery Framework and our Recovery Plan for Europe, which aim to “build back better and greener” by prioritising sustainability and paying due attention to digitalisation. These are areas that offer ample opportunities for further business cooperation, trade, and investment opportunities.

We also believe in the great potential of connectivity, as confirmed by the Joint Statement on Connectivity, which was adopted during our Ministerial Meeting in December 2020. In the near future, we aim to finalise negotiations of the Comprehensive Air Transportation Agreement (CATA), which could provide an additional boost to our airlines’ post-COVID recovery but will continue to cooperate in all other areas, including on energy, transport, people-to-people and digital issues, with the view of exploring a possible connectivity partnership in the future.

Paul Mandl: The ACTS is a vital building block of ASEAN economic integration. It acts as a catalyst for the development of seamless and efficient transport flows between ASEAN member states, facilitating regional trade in goods through standardised and harmonised customs procedures, in conjunction with a sophisticated and powerful IT system. This system tracks regional transit cargo movements from departure to destination. In addition, the digital network enables pre-arrival processing by customs at borders and destination, providing for advanced risk management for the protection of society.

Major advantages are in place for reliable traders, permitting door-to-door loading and delivery of regional cargo operations. The ACTS brings all the stakeholders in the public and private sector of ASEAN closer together, promoting regional cooperation in handling goods under customs transit. These stakeholders include ASEAN Customs Authorities and Government Transport agencies along with freight forwarders, logistics and transport providers, importers, exporters, and manufacturers.

The ACTS offers a special facilitated regime for monitoring goods required for disaster relief, including vaccines. These goods can be entered into the ACTS without the need for an accompanying guarantee as the goods are exempt from customs duties and taxes, and the operation will be overseen by ASEAN governments or their approved agencies.

How can the ACTS boost future business potential? What are the broad benefits that an efficient road logistics network can bring to the region?

Igor Driesmans: Currently, the ACTS handles the movement of goods only by road, but it has the potential to cater for multimodal movements by all modes of transport. Analysis of possible upgrading is currently in progress to include the movement of dangerous goods and products covering sanitary and phyto-sanitary (SPS) regulations. This will further enhance the future business potential in ASEAN, as demand is high for their inclusion under the ACTS regime.

The ACTS is today in use in six ASEAN member states: Cambodia, Lao PDR, Malaysia, Singapore, Thailand, and Vietnam, and will hopefully be expanded to the remaining four ASEAN Member States when the conditions will allow – the most significant being the implementation of roll-on roll-off ferry services (that is, for Indonesia and the Philippines).

Paul Mandl: The ACTS boosts business potential by reducing the costs of doing business in ASEAN. A recent survey indicates that the cost of a regional transit movement of goods by road can be reduced by 27 per cent if the ACTS is used. The faster, more efficient regional movement of trucks under the ACTS provides a platform for greater efficiency in the use of trucking fleets which helps to reduce carbon footprints. This also provides an incentive for more goods to be traded within ASEAN in this way.

In particular, the ACTS is able to facilitate the movement of exports via Vietnam to adjoining countries, Lao PDR, Cambodia, and Thailand, and elsewhere in ASEAN. The ACTS offers similar facilitation for imports from elsewhere in ASEAN via Vietnam to the ASEAN market.

An efficient road logistics network brings benefits of all kinds, in particular, economic benefits that improve the living standards of all concerned. This is because intraregional trade is an engine of economic growth. Faster, more efficient road transit movements under the ACTS will offer such benefits.

Roads are the arteries through which the economy pulses. By linking producers to markets, workers to jobs, students to school, and the sick to hospitals, roads are vital to any development agenda.

What is the role of the EU in the development and implementation of the ACTS? What are prospects can you foresee for trade between ASEAN and the EU?

Igor Driesmans: The EU has supported ASEAN in the development and implementation of the ACTS through the Arise Plus programme with an investment of €10 million. In addition to the €5 million invested by ASEAN, this constitutes one of the biggest financial contributions towards the practical establishment of the ASEAN Economic Community.

We have provided the technical expertise required for the development of the ACTS. This is based on the successful automation of transit movements in Europe, under the New Computerised Transit System (NCTS). EU experts have worked alongside ASEAN experts for many years to develop and maintain the system. For example, one of our experts is currently working with Vietnam customs to prepare for the latest release of the ACTS software as well as providing training to customs bodies and the private sector on how to use the system. We also have provided additional EU funding for the ACTS Central Management Team (CMT) based in the ASEAN Secretariat in Jakarta, Indonesia, consisting of experts from the ASEAN region. The CMT has the responsibility to manage the day-to-day operations of ACTS, to ensure the long-term sustainability of the ACTS in ASEAN.

The EU is the third-largest trading partner of ASEAN, as well as one of the largest investors in the region. We share a similar outlook on open markets, on the importance of the rules-based multilateral order, and on the value of regional cooperation. We should build on this shared outlook an even closer cooperation.

We share a common interest in green and digital transformation. These are also at the heart of the EU’s new trade policy and offer opportunities for more business cooperation and regulatory dialogues.

Given the intensity of our trade relationship, it is not surprising that ASEAN is the region with whom the EU has engaged in a number of FTA negotiations. Two were successfully completed and are being implemented: namely with Singapore and Vietnam. Negotiations are ongoing with Indonesia. Those and other possible future bilateral FTAs could serve as building blocks towards deeper region-to-region relations. To bring us closer to this goal, significant work has been done by the EU-ASEAN Joint Working Group in preparing the grounds for further region-to-region engagement. This work shows that while there are many important areas of commonality, there are also notable gaps, especially in areas that are of crucial importance to the EU, such as trade and sustainable development, public procurement and intellectual property rights. The EU is ready to engage further to make progress in these areas.

By Bich Thuy