VietNam Business: market

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Wednesday, February 23, 2011

Market plunges for third straight day

Investors watch stock prices at Vincom Securities Co. The VN-Index lost 3.34 points, or 0.73%, from a day earlier to close at 454.25 on Tuesday - Photo: Le Toan

HCMC – The local market declined for the third consecutive session on Tuesday, with the VN-Index shedding 3.34 points, or 0.73%, from the day earlier to close at 454.25 although liquidity improved sharply.

The market opened briefly higher again but subsequently fell back into negative territory and traded lower during the second matching phase to hit a low of 451.82 before rebounding slightly at the close.

On the Hochiminh Stock Exchange, demand surged 27.5% against the previous session to 53.8 million shares while supply rocketed 42.7% to over 64 million shares. Closing the day, the market’s total trading volume was 33.5 million shares worth VND884 billion, up 26% and 28% from a day earlier respectively.

Only 32 stocks advanced on Tuesday while 192 others closed in the red, including one stock hitting its ceiling price and 26 issues dropping to the floor prices.

Ocean Group Co. (OGC) took the lead in terms of liquidity but it lost 3.7% to VND28,200 per share on volume of 1.6 million shares. Vietnam Mechanization Electrification & Construction Co. (MCG) was the second biggest traded stock, adding 2.4% against the previous day to VND20,000 with 1.3 million shares changing hands.

Saigon Machinery Spare Parts Co. (SMA) began to trade over eight million shares on the bourse on Tuesday and it closed at VND15,000 against the reference price of VND16,200 with only 3,200 shares traded.

Foreign participation also recovered as investors acquired 3.8 million shares worth VND148 billion and offloaded 1.8 million shares worth 67 billion, making up 16.7% and 7.6% of the market’s buying and selling value respectively.

The Hanoi market also suffered three losing sessions in a row on higher turnover of VND587 billion. The HNX-Index fell 2.33 points, or 1.96%, against the previous session to close at 116.56.

There were 42 stocks rising while 258 others dropping back, of which one stock touched the ceiling price and 24 stocks plunged to the floor prices. Foreigners were slight net buyers again, accounting for 1.9% and 1.2% of the market’s buying and selling value respectively.

Vietnam International Securities Co. (VIS) in its report said investors once again became impatient and boosted selling towards the end of the session.

“We see that they were too cautious and declined to acquire shares at high prices, mostly because of strong fluctuations of gold and dollar prices. The Hanoi market also failed to improve as most investors still stayed on the sidelines,” VIS said.

HCMC Securities Corp. (HSC) said the buying size was more likely positioning than a major wave of buying. “However, with foreign limits in a host of blue-chips close to being full the smart money is picking up shares now while they can. We keep our positive medium and long-term stance while remaining cautious short term,” HSC said.

Vietnam has no devaluation plans: newspaper

Vietnam has no devaluation plans: newspaper The State Bank of Vietnam has no plans to adjust the dong exchange rate against the US dollar, even though the dong's value has been dropping on the unofficial market, a local newspaper reported on Tuesday.

"At present the State Bank does not have any plans for exchange rate adjustment," Governor Nguyen Van Giau was quoted by the Saigon Giai Phong daily as saying, rejecting market rumors of a dong devaluation.

The central bank has devalued the dong three times since November and speculation of another devaluation has been putting pressure on the currency, making businesses reluctant to sell dollars.

Dollar demand has also been rising as businesses need the currency for loan repayments and importers need dollars for settlements.

However, the dong edged up to 19,870/19,920 per dollar on the unofficial market on Tuesday morning from 19,920/19,970 on Monday, while it was steady at VND19,490/19,500 on the interbank market, with the selling rate at the permitted ceiling.

Victoria Kwakwa, the World Bank's representative in Vietnam, told reporters on Tuesday that "we think that broadly the government has been moving in the right direction" on monetary and fiscal policy.

However, she said more could be done by the authorities to communicate their policy stance and give more information on indicators, so as to build up confidence in overall macroeconomic management.

This would help "address some of the left-over expectations of inflation and continued instability that are underpinning some of the challenges".

The Bank's lead economist for Vietnam, Deepak Mishra, said he expected pressure on the dong to ease over time, but how the market reacted would depend on the government putting forward a "credible road map" for dealing with the problem.

The International Monetary Fund warned in September that Vietnam needed to concentrate on maintaining the level of the dong, and said that repeated comments from the government about the need to lower lending rates was counter-productive.

"A lack of coordination between monetary and fiscal policies, or the appearance thereof, would amplify market skepticism," it said.

Tuesday, February 22, 2011

Dollar rises to record vs dong on unofficial market

HCMC – The U.S. dollar surged to a new record high of VND20,000 per dollar on the unofficial market on Tuesday and as a result businesses are seeking to hold on to the greenback for fear of foreign exchange risk.

The dollar on the underground market on Tuesday afternoon traded at VND19,980 for buying and VND20,020 for selling, up VND50 from the previous day and VND170 from late last week.

Reportedly rumors that the central bank would continue devaluing the Vietnam dong were behind the dollar rally on the unofficial market on Monday. However, the central bank governor, Nguyen Van Giau, on Tuesday affirmed in Saigon Giai Phong newspaper that there would be no more dong devaluation but his message did not appease the market.

The central bank has yet to take a single move to ease the dollar fervor. Commercial banks on Tuesday quoted the dollar selling price at VND19,500 per dollar although no companies could buy the dollar at that price.

Corporate clients must now pay extra fees to buy dollars at banks, virtually appreciating the dollar versus the dong.

There are no official reasons for the dollar jump but market watchers said shaky confidence in the local currency had led to volatility on the foreign exchange market, so any rumors could drive the dong down.

When the dong fell to VND20,000 per dollar, the dollar price in futures contracts on Asian markets on Tuesday afternoon was VND19,950 for one month and VND21,520 for one year.

There are signs that enterprises are holding on to dollar funds on their bank accounts. A source from the State-owned bank BIDV told the Daily BIDV’s dollar purchases had dipped strongly recently, because corporate customers declined to sell.

Individuals are also speculating on the dollar, the source said.

According to a report by the central bank’s HCMC Branch by late August, dollar purchases from enterprises accounted for 40% of the city-based banks’ total.

If enterprises had sold the dollar to banks last week, it would have lost VND500 for each dollar. Therefore, no one wants to sell dollars to banks given the continued price increase of the dollar on the unofficial market, the source said.

Meanwhile, companies having dollar debt are rushing to buy dollars for premature payment.

Outstanding dollar loans rose sharply in the first nine months of this year, and in HCMC alone, dollar credit expanded by a whopping 36.4%.

Dollar supply is in decline while dollar demand is sharply up, leading to a sudden imbalance on the foreign exchange market, the source said. However, the source affirmed BIDV could meet all legitimate corporate needs for dollars.

Meanwhile, the general director of a joint-stock bank told the Daily that dollar funds were ample but prohibitively high prices really mattered.

Bank denies new rumours of devaluation

The State Bank of Vietnam is not planning any adjustments to foreign
exchange rates, State Bank Governor Nguyen Van Giau said on Oct. 19 in
Hanoi .

The statement was made to the public in an effort to ease speculative
rumours that the Vietnamese dong might be further devalued – rumours
which had driven the black market price for a US dollar on Oct. 19 to
20,030-20,050 VND, up 150 VND over Octoner 18’s rate.

On
the non-deliverable forward (NDF) market on Oct.19 – a currency futures
market – the US dollar was expected to rise to 19,948.99 VND by next
month, 20,279 VND in three months,20,749.540 VND in six months and
21,520.76 VND by October of next year.

Rumours have also
begun circulating that the interbank rate – the rate at which banks
trade currencies amongst themselves – has already risen as high as
19,870-19,990 VND per dollar, although the official rate set by the
centre bank remains at 18,932 VND per dollar.

Commercial banks are meanwhile quoting nominal sell prices of 19,500 VND per dollar.

The deputy head of the State Bank's HCM City branch, Nguyen Hoang
Minh, said that the central bank has worked with relevant agencies to
establish hot lines to monitor the forex market and stamp out
speculative business practices.

The State Bank also
reaffirmed that it will penalise banks that sell the dollar at prices
higher than the official ceiling rate.

But, Minh noted,
the HCM City branch has not yet caculated practical demand for the
dollar in October, and that market inspections are difficult because of
limited human resources.

A senior central bank official
who asked to remain anonymous commented, "The sudden appreciation of the
greenback has resulted from rising global gold prices and dollar
accomodation. Some enterprises which have revenue in US dollars are also
keeping the dollars in accounts and not selling them back to the banks.

"However, there is a postive balance in the dollar supply in the banking system of 250-300 million USD." ./.

Monday, February 21, 2011

Gold slips VND500,000 from all-time high, dollar keeps rising

Local gold prices Wednesday slid about VND500,000 off the all-time high to VND32.8-32.9 million, while dollar prices kept pushing forward to VND20,100 in the black market.

Ho Chi Minh City’s SJC bullion was listed at VND32.8 million a tael and VND32.9 million a tael for bid and ask respectively, down VND70,000 a tael from opening prices. A tael is equal to 37.5 grams or 1.2 troy ounces.

Local gold trading was lackluster this morning as investors stayed on the sidelines on price volatility. Bid and ask spread were mostly narrowed to VND100,000 a tael to encourage profit-taking.

In Asia trade this morning, spot gold was flat at $1,336 an ounce. It fell to a two-week low of $1,334.45 on Tuesday, compared to an all-time high of $1,387.10 hit last week.

In the local forex market, dollar bid and ask prices at gold shops rallied to VND20,000 and VND20,050. But Vietcombank’s dollar bid and ask were unchanged at VND19,490 and VND19,500 respectively.

In the global market, the dollar soared at the news that China central bank raised the lending interest rate by 0.025 percent to curb inflation and cooling off the overheating realty market, and held steady on Wednesday morning as investors poised to cut short positions.

Vietnam central bank governor on Tuesday ruled out the rumors of another dong devaluation, adding that the central bank will likely take actions to improve the liquidity in the market in the coming time.

Gold slips VND500,000 from all-time high, dollar keeps rising

Local gold prices Wednesday slid about VND500,000 off the all-time high to VND32.8-32.9 million, while dollar prices kept pushing forward to VND20,100 in the black market.

Local gold trading was lackluster this morning as investors stayed on the sidelines on price volatility. Bid and ask spread were mostly narrowed to VND100,000 a tael to encourage profit-taking.

In Asia trade this morning, spot gold was flat at $1,336 an ounce. It fell to a two-week low of $1,334.45 on Tuesday, compared to an all-time high of $1,387.10 hit last week.

In the local forex market, dollar bid and ask prices at gold shops rallied to VND20,000 and VND20,050. But Vietcombank’s dollar bid and ask were unchanged at VND19,490 and VND19,500 respectively.

Saturday, February 19, 2011

Vietnam has no devaluation plans

HANOI - The State Bank of Vietnam has no plans to adjust the dong exchange rate against the US dollar, even though the dong's value has been dropping on the unofficial market, a state-run newspaper reported on Tuesday.

"At present the State Bank does not have any plans for exchange rate adjustment," Governor Nguyen Van Giau was quoted by the Sai Gon Giai Phong daily as saying, rejecting market rumors of a dong devaluation.

The central bank has devalued the dong three times since November and speculation of another devaluation has been putting pressure on the currency, making businesses reluctant to sell dollars.

Dollar demand has also been rising as businesses need the currency for loan repayments and importers need dollars for settlements.

However, the dong edged up to VND19,870/19,920 per dollar on the unofficial market on Tuesday morning from VND19,920/19,970 on Monday, while it was steady at VND19,490/19,500 on the interbank market, with the selling rate at the permitted ceiling.

However, she said more could be done by the authorities to communicate their policy stance and give more information on indicators, so as to build up confidence in overall macroeconomic management.

This would help "address some of the left-over expectations of inflation and continued instability that are underpinning some of the challenges".

"A lack of coordination between monetary and fiscal policies, or the appearance thereof, would amplify market skepticism," it said.

Indices slip on sluggish trade

Shares closed off slightly for a second day on the HCM Stock Exchange,
with the VN-Index slipping by 0.17 percent on Oct.18 to end the session
at 457.59 points.

Trades continued sluggish, with only 26.4 million shares changing hands, worth just 686.5 billion VND (32.3 million USD).

Vietnam Mechanisation Electrification and Construction (MCG), the
most-active share on the day with 1.6 million traded, was also the day's
top gainer, closing up 4.8 percent as its shareholders commenced a
planned purchase of 3.2 million shares.

Buying by
foreign investors began slowing down, as they just picked only a net of
about 100,000 shares on the HCM City market, worth a net of 11 billion
VND (564,102 USD). They were net buyers on the Hanoi market, but by
a volume of just 354,100 shares, worth only 8.2 billion VND (420,512
USD).

On the Hanoi Stock Exchange, the HNX-Index
also fell for a second day, ending the session down 0.67 percent to
118.89 points.

The value of trades grew by 4.2
percent over Oct. 15 to 371.2 billion VND (19 million USD), on a total
volume of 17.3 million shares. PetroVietnam Construction (PVX) was the
most-active share on the northern bourse, with 1.7 million traded.

Ocean Bank deputy director Nguyen Hong Hai said that stock markets
were coping with shortage of new capital inflows as both major
institutional investors saw not many changes in market situation.

Tightened credit contributed to limit capital inflows, even as the
number of shares listed on the market was expected to continue
increasing through the end of the year, Hai said.

Vietnam International Securities Co analysts predicted that indices
would fluctuate with a narrow band this week, as economic fundamentals
were sound enough to prevent a steep dip in the market./.

Friday, February 18, 2011

Finance Ministry to control prices

Customers buy bread at Big C supermarket in Ha Noi. — VNA/VNS Photo Tran viet

HA NOI — The Ministry of Finance has said it will step in to control prices on the domestic market following predictions that they are expected to rise by the end of the year.

Nguyen Tien Thoa, director of the ministry's Pricing Management Department, said the recovery of the world economy and increasing demand for materials for production and business would push prices up on the world market by the end of this year.

He said the department should be able to keep the expected increases down to a modest level. However, the high demand for goods and services before Tet, plus any diseases in livestock would keep the pressure on prices.

Difficulty in raising capital for production and electricity costs would also add to the pressure.

Thoa said the State would check on the amount of goods in stock and register sales prices of 17 essential goods to avoid speculation.

By the end of December, prices of electricity, coal, paper, cement, tap water, transport would be stabilised.

Last week, Prime Minister Nguyen Tan Dung called on ministries, agencies and municipal and provincial authorities to implement strategies to stabilise the market and boost production.

Directive No1875/CT-TTg has been designed to ensure Viet Nam's growth rate reaches 6.5 per cent and the consumer price index (CPI) does not rise above 8 per cent. — VNS

Wednesday, February 16, 2011

Brokers see slight rebound this week

HCMC – Although the local market suffered a losing week due to low liquidity last week, securities companies predicted the VN-Index would bounce back slightly as company earnings reports are out this week.

With three rising and two falling sessions, the VN-Index lost 0.87 point, or 0.19%, from the previous week to 458.39. Liquidity plunged deeply as the daily trading volume averaged at 25.2 million shares worth VND664 billion, down 33.6% and 31.8% from a week earlier respectively.

APEC Securities Co. said listed enterprises are expected to report good earnings results this week and this will help improve investor sentiment after a couple of weeks of dull trading. This is seen as an opportunity for long-term investors to buy stocks with positive financial outlooks as share prices have fallen to attractive levels.

“The market, however, will not recover strongly this week as most investors are still cautious. The VN-Index may move within the range of 445 and 465 points given flat trading in the coming time before entering into a sustainable rally,” APEC said.

Fiachra Mac Cana, managing director of HCMC Securities Corp., said last week the market saw a couple of trends being confirmed such as the appetite of foreign investors for a number of large cap stocks and the inactivity of the domestic investment community that seemed to be paralyzed by the overhang of a number of factors. The gold price rally certainly drew some attention away from equity markets, while the renewed weakening of the dong against the U.S. dollar on the unofficial market forced people to rush to the greenback as a safe haven.

“All these factors seem to have created an environment that resembles a bear market, but if we look over a longer period we have to conclude that we are just still in the correction phase that started in October last year,” Mac Cana said.

“The short-term strategy of the domestic investment community makes it look like we are in a correction on the way down, while from a non-emotional perspective it seems more likely that we are in a correction or consolidation on the way up.

“The difficulty here is, of course, the timing of the end of the consolidation. It could easily take a number of months for the market to digest supply issues, higher average monthly inflation and the upcoming political event early next year.”

Vietnam International Securities Co. (VIS) said investors were pessimistic due to lack of positive changes of the international and domestic economy last week. Foreign participation turned lukewarm as the investors were net buyers to the tune of 4.7 million shares worth VND282 billion, falling 3.8 times and 2.5 times from the previous week respectively.

“Liquidity will be the biggest challenge for the market this week. However, business results of listed firms will help support the market rebound as positive reports will draw the attention of investors,” VIS said.

Meanwhile, the Hanoi market shed two points, or 1.64%, from the previous week, to close at 119.69. The market’s daily trading volume averaged at 18.8 million shares worth VND421 billion, both down around 18% from a week earlier. The market is predicted to recover slightly this week.

Saturday, February 12, 2011

Viet Kieu begin to invest in VN property market

HA NOI — A large number of Viet Kieu (overseas Vietnamese) have started to invest in the Vietnamese real estate market.

Investments had become more diversified and stronger than ever, said Megagroup's Director Nguyen Xuan Chau.

Chau added that the trend had started around 10 years ago and really picked up over the past two years.

In 2010, he said, a series of resorts and ecological tourism projects were announced with a growing number of North American management and consultancy firms co-ordinating the projects.

To capitalise on this, Minh Viet Investment Joint Stock Company recently bought into the franchise of a famous foreign company in order to use its trademark to invest in Viet Nam's real estate market.

According to the com-pany's director Chi Edward, his company will use the trademark to do business in training and brokerage as well as managing and developing the real estate market in Viet Nam.

The company had previously invested in projects in Ha Noi, HCM City and the northern province of Quang Ninh.

As further proof, at the end of 2009, the director of Binh Thien An Joint Stock Company, Viet kieu Trinh Thanh Huy, decided to return from Russia and announced that his company was looking to pour hundreds of millions of dollars into the real estate market in HCM City.

Binh Thien An is currently involved with the Thao Dien Metropolice project in District 2 of HCM City.

In the second and third quarters of this year, many other tourism developments were announced by overseas Vietnamese investors from eastern Europe.

The Vietnamese real estate market was still young. It had a huge potential to attract investment from overseas Vietnamese, Chau said.

Referring to a recent survey, experts said the new trend would create competitiveness in the market which would help develop it further.

The survey was carried out at an international real estate exhibition with the participation of 46 countries.

The results showed that investment interest in the Vietnamese real estate market had grown by 20-30 per cent since 2008.

Another survey conducted by a British company also found that in the next two years, Viet Nam would become one of the top three markets of interest in the world. — VNS

Friday, February 11, 2011

Vietnam real estate market offers more affordable options

Vietnam real estate market offers more affordable options The local residential market is undergoing a positive development: affordable housing is on the rise, according to the consulting firm CB Richard Ellis.

In a report released on Tuesday, the firm found that a wave of low-cost housing projects broke ground in Hanoi during the third quarter revealing a movement toward more affordable residential options.

The report authors also said that a new regulation (which caps the proportion of units sold via capital contribution contracts at 20 percent) is expected to help the market by enhancing transparency, placing pressure on developers with low financial capabilities, reducing the threat of price bubbles, and limiting speculative forces.

In the third quarter, the market was quieter with fewer new projects launched. Only 1,950 units were added to the market compared to last quarter’s 4,600 units, the report indicated.

The capital city expects to see the launch of 3,000 units in the fourth quarter, bringing total new supply in 2010 to nearly 16,000 units, it said. Following the opening and improvement of major infrastructure routes, western and southern districts are attracting new residents with easier access to core urban districts.

‘Pent-up demand’

Meanwhile, the fastest-growing segment of the real estate market in Ho Chi Minh City is also affordable homes.

“Twelve affordable projects were launched in the third quarter with asking prices ranging between US$563 and $923 per square meter,” CBRE said in a separate report, released on Wednesday.

“Despite the up-tick in inflation seen in the third quarter, the base of Vietnam’s economy is strong,” said Marc Townsend, managing director of CBRE Vietnam.

Commenting on the trend toward the affordable segment of the market, Rudolf Hever, associate director of Research and Consulting, said it’s clear that “as the Vietnamese economy continues to grow, and incomes increase, there is pent-up demand from people who were previously priced out of the market.”

He said the government has made a lot of effort to support the residential property market, including measures to increase transparency and increase the availability of loans.

“All these efforts work together, encouraging prospective home buyers to look at new and existing developments as a realistic option,” said Hever. “As these affordable projects achieve critical mass, the availability of facilities and amenities in these areas will increase too.”

Vietnam real estate market offers more affordable options

In the third quarter, the market was quieter with fewer new projects launched. Only 1,950 units were added to the market compared to last quarter’s 4,600 units, the report indicated.

‘Pent-up demand’

Meanwhile, the fastest-growing segment of the real estate market in Ho Chi Minh City is also affordable homes.

“Twelve affordable projects were launched in the third quarter with asking prices ranging between US$563 and $923 per square meter,” CBRE said in a separate report, released on Wednesday.

“Despite the up-tick in inflation seen in the third quarter, the base of Vietnam’s economy is strong,” said Marc Townsend, managing director of CBRE Vietnam.

He said the government has made a lot of effort to support the residential property market, including measures to increase transparency and increase the availability of loans.

Vietnam needs to heed black market, official rate gap, ADB says

Vietnam needs to heed black market, official rate gap, ADB says Vietnam should pay attention to the “widening” gap between black market and official exchange rates, which can be considered a barometer of investor confidence, according to the Asian Development Bank.

“We certainly need to keep watching,” Ayumi Konishi, the ADB’s country director for Vietnam, said at a press conference in Hanoi. The “trend certainly reflects people’s expectations.”

Vietnam’s dong is about 1.8 percent cheaper to buy in the black market than the official rate paid by banks and devaluations are likely in 2011 to bring the exchange rate into line, Credit Agricole CIB said in an Oct. 11 research note.

While other Asian countries like China or Thailand are worried about appreciation, the concern in Vietnam is “sharp devaluation rather than any gradual adjustment in the value of the dong,” said Jayant Menon, an economist in the Office of Regional Economic Integration at the Manila-based ADB.

The dong traded between 19,830 and 19,870 per dollar at money changers in Ho Chi Minh City on Friday afternoon, according to a telephone information service run by state-owned Vietnam Posts & Telecommunications. The rate in the interbank market was 19,499, the weakest level since at least 1993, according to data compiled by Bloomberg.

The State Bank of Vietnam fixed the reference rate at 18,932 on Friday, a level unchanged since Aug. 18. The currency is allowed to fluctuate up to 3 percent on either side of the rate, which means it can be traded at low as 19,500.

“Vietnam is running a trade deficit so some sort of controlled depreciation of the currency to improve competitiveness is not a bad idea,” Menon told reporters after the conference. “The concern is sudden sharp, erratic falls in the value of the dong, caused by lack of confidence.”

Vietnam’s cumulative trade deficit in the first nine months reached $8.58 billion, according to the General Statistics Office. For September alone, the gap rose to $1.05 billion from $395 million in August.

Monday, February 7, 2011

Market barely inches up, trade low

HCMC – The southern stock market made a fractional gain in the second straight rising session on Thursday, in line with rallies in the world, but liquidity remained depressed. The VN-Index rose a mere 0.96 point, or 0.21%, from the day earlier to 458.66.

Demand on the Hochiminh Stock Exchange dropped 13.7% against the previous session to nearly 49 million shares while supply rose 6.3% to 49.4 million shares. Closing the day, only 23.2 million shares worth VND597 billion changed hands, falling by 7.2% and 14.5% against the session earlier respectively.

The market opened higher and quickly jumped to above 460 points before sellers stepped in, pushing the index down to 457.88 at the end of the continuous matching phase. The market then recovered slightly and finally closed in the positive territory.

The number of losers was still higher than that of gainers at 105 to 84, of which six stocks ended the day at their ceiling prices and nine others plunged to the floor prices.

Vietnam Mechanization Electrification & Construction (MCG) became the biggest traded issue, jumping 4.7% to VND17,900 per share with over one million shares traded, followed by Société De Bourbon Tay Ninh Co. (SBT), which closed flat at VND11,800 on the volume of 717,000 shares.

Foreigners were still net buyers as they bought 3.1 million shares worth VND115 billion and sold two million shares worth VND40 billion, accounting for 19.4% and 6.7% of the market’s buying and selling value respectively.

The Hanoi market moved higher on Thursday but turnover remained low at VND421 billion. The HNX-Index inched up a mere 0.06 point, or 0.05%, from the previous session to close at 120.45.

There were 172 stocks rising versus 85 others falling, including seven stocks hitting the ceiling prices and seven others dropping to the floor prices. Foreigners were net buyers to the tune of around VND6 billion worth of shares.

HCMC Securities Corp. (HSC) it its comment said the only difference with Wednesday’s action was that buyers and sellers were much more in balance.

“Holders became relatively insensitive to further small losses, while buyers only placed small orders just in case. With an absence of economic, monetary and corporate news, there was no wonder that investors moved to the sidelines, waiting for something to happen somewhere,” the stock broker said.

Everyone was waiting for the other investors to pull the trigger and very few investors were actually doing anything, it said.

“On Friday again we saw the resilience of a number of stocks that don’t really go down anymore on days where the index loses ground, while they do move upwards if there’s an absence of bad news. Besides, these stocks can be found among the large caps as well as the smaller segment of the market. Solid companies with good fundamentals are certainly out there and don’t even come at a premium these days,” HSC said.

Sunday, February 6, 2011

Market participants still lukewarm despite rally

HCMC – The local market bounced back on Wednesday given supporting news of interbank and lending rate cuts, with the VN-Index gaining 3.38 points, or 0.74%, from the previous session to close at 457.7. However, participation was still lukewarm, with the trade volume dropping and value merely inching up.

The market opened on a slightly weaker note and dropped 1.09 points to 453.23 after the first matching phase. It recovered slightly from the second matching phase and then moved higher to close at the highest level of the day.

Liquidity stayed low with 25 million shares worth VND698 billion traded, dropping by 17% in volume but increasing by 12% in value against the previous session respectively. On the southern bourse, bids rose 5.7% to 56.7 million shares while offers plunged 20% from the day earlier to 46.4 million shares.

Up to 135 stocks closed the day higher while 71 stocks lost ground, of which 11 issues hit their ceiling prices and three others closed at the floor prices.

Ocean Group Co. (OGC) remained the most active traded stock, advancing 2% to VND30,100 per share on the volume of 1.2 million shares, followed by Agribank Securities Co. (AGR) that jumped to its ceiling price of VND12,800 with around 950,000 shares traded.

Foreign trading improved as the investors bought 4.3 million shares worth VND162 billion and offloaded 2.5 million shares worth VND63 billion, making up 25% and 10% of the market’s buying and selling value respectively.

HCMC Securities Corp. in its comment said on Wednesday’s gain was important in technical terms as the market broke through all major moving averages. “But with volumes at these levels we should not put too much fate in technical moves like these. Investor interest remains very low and it seems that risk tolerance is extremely low at this moment,” said the stock broker.

“Although on Thursday’s move could gather some momentum over the coming days and put price a bit higher, we believe that there are other factors such as the large supply overhang that continue to keep a lid on equity prices. Therefore, any rally is likely to be short-lived for the moment and probably for the coming weeks. With valuations and dividend yields at very reasonable levels, especially if we compare them to a number of other markets in the region, we continue to recommend investors to accumulate positions on any correction,” the broker added.

The Hanoi market also recovered on Wednesday but turnover kept moving down to just VND370 billion. The HNX-Index inched up 0.58 point, or 0.48%, from the previous day to 120.39.

Out of the 344 listed stocks, 134 closed the day higher and 121 stocks closed down, of which four stocks hit the ceiling prices and seven others closed at their floor prices. Foreigners were net buyers to the tune of VND4.6 billion worth of shares.

Local traders wooed to explore Cuba’s new policies

HCMC – Vietnamese traders are being advised to join a trade and investment forum next month in Cuba’s capital city La Habana, which a trade official said would be a good chance for them to explore new policy changes in the country.

The first-ever forum of its type between Vietnamese and Cuban traders would open up many opportunities for Vietnamese entrepreneurs in both investment and trade, said Nguyen Xuan Khien, head of the American Market Department under the Ministry of Industry and Trade.

He said that Cuba’s recent moves to call for investment into real estate, and give support to the private sector in business deals would be a good opportunity for local traders to push relations with Cuba’s state-owned enterprises.

Khien noted that one of the most liberal policies in the Central American country is that it allows for land leasing contracts with terms of up to 99 years for developers of golf courses, hotels and resorts. The American Market Department will increase researching to provide local traders with further information on preferential investment policies of Cuba, he added.

“Given good political relationship between Vietnam and Cuba, I think that our traders will have more advantages in entering the very new market,” Khien said.

Khien’s department will co-host the Vietnam-Cuba Trade and Investment Forum in La Habana, which is expected to appeal traders of rice, garment and textile, footwear, electronics, and pharmaceutics among others.

Cuba has set up trading relations with Vietnam for long, buying rice, electronics, processed foods, and textile products from Vietnam but mostly through government-to-government contracts. Now is the time for private traders to bolster trade relations.

However, Cuba with its closed-market policy for half a century also has caused difficulties for international traders. Dang Xuan Cuong, head of the import-export division of Vifon Co. specializing in processed foods, said his company began exporting to the country in 2008 and met many difficulties concerning the payment and transport.

Cuban importers, mostly state-owned enterprises, often ask for deferred payment from 300 to 500 days after delivery.

“This retard is seen as part of their trading habits” Cuong said.

The food processor and other enterprises mostly have to deliver goods via a third country to solve the matter.

Another difficulty, according to this salesman, is due to the trade embargo imposed by the U.S. on Cuba that makes sea transport to Cuba prolong up to three months. Despite the difficulties, according to Cuong, Vifon’s next move is to deploy market researching programs in order to grab the different taste and customer habits in this pretty new market.

“I find business opportunities in this market, and market research is the first step for deeper entrance into the market. This is very important since with the constant improvement on policy, I think Cuba in one or two years will be attracting a lot more investors from around the world,” Cuong added.

Saturday, February 5, 2011

Air travel surges 20 percent in 9 months

The aviation market in the first nine months saw a year-on-year increase
of more than 20 percent in the number of passengers, estimated the
Civil Aviation Administration of Vietnam.

The administration estimated that roughly 15 million passengers went
through the country's airports in the first nine months of this year, of
which Vietnam Airlines, Jetstar Pacific and Vietnam Air Service Co
(Vasco) accounted for more than 11 million.

In the
first nine months, the administration also estimated that roughly
340,000 tonnes of goods were transported via air, an increase of 36
percent over the same period last year.

Industry
insiders forecast the country's aviation market in the last quarter will
continue to surge due to an increased number of flights licensed by the
aviation authorities for foreign airlines including Turkish Airlines,
Poland 's LOT and Qatar Airways.

Vo Huy Cuong,
director of the administration's Air Transport Department, attributed
the steady growth to the continuing strong expansion of the domestic
segment backed by flagship carrier Vietnam Airlines.

Cuong said that Vietnam Airlines and its subsidiary Vasco still account
for the lion's share of around 80 percent of the domestic market while
the rest is covered by Jetstar Pacific.

With the
introduction of Air Mekong and Blue Sky Air recently, which lifts the
number of operational airlines in the country to nine, it is expected
that the competition in the domestic aviation market will increase.

The administration expects that the country's overall aviation market
will grow roughly 20 percent in 2010, higher than the 14 percent figure
it projected earlier this year, thanks to more domestic services and a
significant increase in the number of international visitors.

The administration's statistics showed that roughly 26.2 million
passengers and 445,800 tonnes of cargo were transported by air last
year, four times higher than in 2000./.

Illegal trade in tobacco continues despite strict ban

HA NOI — Illegal tobacco continues to flood the domestic market despite a crackdown on smuggling that began one month ago, according to local media.

In accordance with Decree No 76, those who smuggle, trade or store less than 1,500 illegal cigarette packs will be fined up to VND100 million (US$5,200) and prosecuted if they are in possession of a larger quantity.

Smokers can still easily purchase illegal tobacco at small shops along many streets in Ha Noi, including Hang Hanh, Hang Buom and Nguyen Sieu, according to municipal market watchers.

Illegal tobacco vendors have been forced to operate more carefully to cope with the crackdown.

Head of Market Watch Team No 2 in Ha Noi Luu Bach Chien said several tobacco shops that were selling illegally-imported tobacco purchased small quantities, which were difficult to detect.

The Ha Noi Market Watch Department has busted 17 smuggling operations, seizing more than 2,300 packs, since early September.

HCM City's Market Watch Team 5B busted an operation at Ta Uyen-Pham Huu Chi crossroads and seized 8,890 cigarette packs in late September.

Deputy head of the Ha Noi Market Watch Department Vuong Chi Dung said the new ban would help discourage smugglers.

However, Dung said it was difficult for officials to identify and punish tobacco magnates because illegal cigarettes are often traded by vendors or sold at small shops that purchase small quantities.--VNS

According to the Viet Nam Tobacco Association, illegal cigarettes make up 20 per cent of the domestic market share, which accounts for VND3-3.5 trillion ($153-178 million) in losses from the State budget because the cigarettes are not taxed. — VNS

Friday, February 4, 2011

Air travel surges 20% in 9 months

HA NOI — The aviation market in the first nine months saw a year-on-year increase of more than 20 per cent in the number of air travel passengers, estimated the Civil Aviation Administration of Viet Nam.

The administration estimated that roughly 15 million passengers went through the country's airports in the first nine months of this year, of which Vietnam Airlines, Jetstar Pacific and Viet Nam Air Service Co (Vasco) accounted for more than 11 million.

In the first nine months, the administration also estimated that roughly 340,000 tonnes of goods were transported via air, an increase of 36 per cent over the same period last year.

Industry insiders forecast the country's aviation market in the last quarter would continue to surge due to an increased number of flights licensed by the aviation authorities for foreign airlines including Turkish Airlines, Poland's LOT and Qatar Airways.

Vo Huy Cuong, director of the administration's Air Transport Department, attributed the steady growth to the continuing strong expansion of the domestic segment backed by flagship carrier Vietnam Airlines.

Cuong said that Vietnam Airlines and its subsidiary Vasco still accounted for the lion's share of around 80 per cent of the domestic market while the rest was covered by Jetstar Pacific.

With the introduction of Air Mekong and Blue Sky Air recently, which lifts the number of operational airlines in the country to nine, it was expected that the competition in the domestic aviation market would increase.

The administration expected that the country's overall aviation market would grow roughly 20 per cent in 2010, higher than the 14 per cent figure it had projected earlier this year, thanks to more domestic services and a significant increase in the number of international visitors.

The administration's statistics showed that roughly 26.2 million passengers and 445,800 tonnes of cargo were transported by air last year, four times higher than in 2000. — VNS

Wednesday, February 23, 2011

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