Last update 11/11/2010 05:44:11 PM (GMT+7)
Banks quietly raise deposit interest rates
VietNamNet Bridge – Though members of the Vietnam Banking Association have agreed to keep the ceiling deposit interest rate at 12 percent per annum, many banks have quietly raised the deposit interest rates to 14-15 percent, and the lending interest rates to 18-19 percent.
On November 10, the interbank interest rate exceeded the 20 percent per annum threshold.
Banks thirsty for deposits
Deputy General Director of a HCM City-based bank said that though the bank has raised the deposit interest rate to 12 percent per annum from 11 percent, it still has to struggle hard to retain deposits, because people are trying to withdraw money from the bank.
“We have never met such big difficulties in mobilizing capital before. Though the deposit interest rates have become sky high, depositors still do not want to put money into banks, because the dollar and gold prices both have been increasing sharply,” he said.
General Director of another bank said that though the deposit interest rates have been increasing sharply, this still cannot attract capital into banks.
Some depositors told bank officers that they will only deposit money if the interest rates are raised to 13.5-14 percent per annum.
The highest deposit interest rate is being offered by Phuong Tay Bank, at 15 percent per annum.
Small banks stop lending
Pham Quoc Thanh, Deputy General Director of An Binh Bank, said that the bank now only disburses money for the signed credit contracts, while it does not consider providing new loans at this moment.
General Director of another bank said the bank’s board of director had a meeting yestserday to discuss the solutions to the sharp falls in mobilized capital. The prompt measure put forward is that the bank will stop providing new loans until the situation can be improved.
Currently, the bank still can meet the requirements on capital adequacy ratio. However, in the next week, when other banks withdraw money as the deposits become matured, the bank will face difficulties.
Urgent intervention called
According to Dr Tran Hoang Ngan, Deputy President of the HCM City Economics University, the task of the State Bank is to ensure liquidity for banks and keep the interest rates at the reasonable levels to ensure the implementation of socio-economic plans. Therefore, Ngan said, the State Bank needs to make urgent intervention to the market by pumping money through the open market to stabilize the interbank interest rates. If the central bank does not take actions immediately, a new interest rate war among commercial banks may occur.
Ngan also said that the central bank should consider allowing commercial banks to mortgage their gold at the central bank to borrow Vietnam dong.
Cao Sy Kiem, former Governor of the State Bank also thinks that the State Bank needs to take urgent action in order to obtain the macroeconomic stability.
Source: Tuoi tre
Showing posts with label vietnam. Show all posts
Showing posts with label vietnam. Show all posts
Sunday 14 November 2010
Thursday 12 August 2010
Exotic plays for brave investors
Tired of considering the same old investments? We look at some of the more unconventional choices.
Vietnam is 'one of the most promising countries in the world', according to one analyst
Investors who are fed up with dismal returns from traditional markets are making steps to invest in more adventurous areas. Popular funds include those that invest in Latin America, Russia, India, gold and commodities.
Rebecca O'Keeffe, at Interactive Investor, said: "Our investors continue to look for more aggressive growth opportunities."
Selftrade, the broker, said its clients were now investing more "adventurously" in gold and silver exchange-traded funds (ETFs).
So if you are in an adventurous mood and are prepared to lose the shirt off your back if it all goes pear-shaped, then check out these four areas attracting interest from seasoned investors. Wealth warning: the usual caveats of getting advice apply.
VIETNAM
Three years ago, Vietnam was one of the best-performing stock markets in the world and numerous funds were launched to provide access for foreign investors.
However, the euphoria proved short-lived and in 2008 Vietnam was hit by a double crisis. Firstly, it was forced to raise interest rates sharply to choke off a surge in inflation and this was followed by the global credit crunch, which hit exports and foreign investment. Unsurprisingly, the country's stock market fell sharply and investors suffered.
Charles Cade, an analyst at Numis, said: "There was a bounce-back during 2009, helped by a domestic economic stimulus package. However, foreign investors have been reluctant to venture back into the market and have focused their attention on China instead. In our view, though, it is time to take another look. Vietnam remains one of the most promising countries in the world."
Mr Cade sites low labour costs and a young, growing workforce, a growing entrepreneurial culture, and significant natural resources – including agriculture, timber and oil – as reasons to be bullish.
While Vietnam is not on the radar of many financial advisers, Mick Gilligan, from stockbroker Killik, is a fan. He reckons that Vietnam is like a smaller version of China in that it has a centralist government keen to embrace a capital market approach.
"The equity market is still in its early stages of maturity, but it has exciting prospects. Our favoured routes would be FTSE Vietnam ETF [db-X Tracker] for those looking for market exposure and liquidity. VinaCapital Vietnam Opportunity fund also looks interesting and it currently trades on a 40pc discount to net asset value," he said.
MIDDLE EAST
These so-called frontier markets are the BRICs of the future, with burgeoning industry and a population with a thirst to better themselves through education and Western-style material acquisitions.
Sam Vecht, co-manager of BlackRock's Global Emerging Markets fund, considers Panama, Saudi Arabia and Qatar to have just as much investment potential as their better-known peers. "These countries are often ignored, but this is because of a lack of analyst and media coverage, rather than a lack of opportunities," he said.
However, before you rush to sign on the dotted line for a frontier fund, be warned. With great returns come great risks. Three years ago, New Star launched its Heart of Africa fund with the hope of making the most of the untapped potential of the likes of Zimbabwe and the Democratic Republic of Congo. Liquidity issues forced the fund to close in 2008 with investors losing 66pc of their money.
Many frontier markets are fraught with political unrest, while corporate governance, although it is improving, is another concern.
In March, Barings launched its Middle East and North Africa (MENA) fund to tap into its resource-rich economy.
But Hugo Shaw at Bestinvest, the financial adviser, issued a word of warning. "Returns may be high, but you should only invest in frontier markets if you are able to stomach a roller-coaster ride in price movements," he said.
Mr Shaw advised investors to consider investment trusts as a safer way to get exposure to frontier markets. They are better suited to less-liquid markets because the manager is not a forced seller or buyer. "Closed-ended investments, such as investment trusts, are better placed to deal with such issues, and Advance Developing Markets and Genesis Emerging Markets are two good examples," he said.
PLATINUM AND PALLADIUM
All talk of metal investing in recent months has focused on the haven and inflation hedge of gold. Yet other metals, notably platinum and palladium, are gaining interest from investors.
Two main factors drive these metals to premium prices: demand from the Asian market and their use in catalytic converters. Half of all cars need these converters, ensuring that demand remains strong.
Prices of these white metals has been falling of late, leaving analysts wondering whether a buying opportunity is around the corner. The reason for falling prices is the slowdown in the auto industry. Car sales in the US are down 11pc and plunged 25pc in Japan, while car production in China is down 6.9pc.
However, many analysts anticipate a strong resurgence in platinum and palladium prices towards the end of the year – buoyed by an anticipated recovery in sales in China.
"Prices have recovered from the 2008 trough, but by no means as far as they could rise as the wheels of the global economy begin to turn again and I think platinum has a greater upside potential than gold," said James Cook, product manager at Fidelity International.
"Long-term demand is assured by developing nations who will become the biggest new car buyers in the world, 2009 marked the sales of new cars in China outstripping those in the US. The now unstoppable drive to cleaner technology in cars means whatever size the Chinese car fleet grows to, it will need to be powered by cleaner cars with platinum a key raw material."
Adventurous investors can get exposure to platinum via an exchange-traded fund.
AGRICULTURE
Several fund groups are beginning to promote agriculture as an alternative to traditional equity funds.
One of the most notable recent launches is BlackRock's BGF World Agriculture fund, managed by Desmond Cheung and Richard Davis. The company outlines investment opportunities in the move in emerging markets farming away from pastoral to arable and a growing global population.
The sector has delivered positive returns over the past year. The average return for agriculture funds, based on £1,000 invested 12 months ago, is £1,150. The best performer is Allianz RCM Global Agricultural Trends, which has risen 20pc in the past year. The fund is almost entirely invested, having less than 1pc in cash, with the majority of the fund in North America. The fund is also invested in Singapore, Malaysia and Chile.
Meera Patel, of Hargreaves Lansdown, recommended investors do their homework when investing in agriculture, as one fund can differ very much from the next. Sarasin's AgriSar fund invests in the entire agricultural supply chain, from grain to supermarkets. This means that although you may miss out on large surges, there will be a much smoother growth.
"We would recommend Sarasin's fund to someone just looking to invest in agriculture for the first time," she said.
Saturday 19 June 2010
Foreign Investment funds now also 'surfing' (Vietnam News)
| Foreign investment funds now also ‘surfing’ | ||
| 13:42' 10/12/2009 (GMT+7) | ||
VietNamNet Bridge – Foreign investment funds, generally considered to be long term investors, have been observed making ‘surfing investments’ in
In two years, over 300 new foreign funds In the early part of this decade, the first years of Vietnam’s stock market, only a few investment funds were active in Vietnam, among them Vietnam Dragon Fund, VinaCapital and Mekong Capital. Because then there were only a few dozen companies listed on the bourse, it was easy to guess what the investment funds purchased and what they sold. A lot of domestic investors followed the funds’ lead, hoping for a bigger profit. As According to the Ministry of Finance, by November 2009, Foreign funds also dabble in short-term buys The investment strategies of new funds in The director of a well known foreign fund in Khong Van Minh, Director of the Jaccar Vietnam Fund, stresses that long term investment will remain the strategy of the fund. However, in order to get adapted to The 382 investment funds make different moves on the market. What they have in common is ample capital, which allows them to purchase shares continuously in many trading sessions and then sell shares in many trading sessions The managing director of the SAM Investment Fund says that “value investors” investors do not care if the market is rising or falling. They simply purchase shares when they find the prices reasonable. He says that a reasonable range for the VN Index now is 500-550 points. VietNamNet/DTCK |
Sunday 6 December 2009
Listing abroad not easy for local firms, insiders say (Vietnam)
Listing abroad not easy for local firms, insiders say
Last updated: Saturday, October 10, 2009 |
VnnNews - Listing procedures have proved difficult for Vietnamese firms aiming to sell shares on foreign stock markets.
The Hanoi-based infrastructure developer Cavico Corp. completed a “hard journey” in meeting all the requirements to become the first Vietnamese firm listed on the US national securities exchange NASDAQ last month, Chief Executive Officer Bui Quang Ha said.
“The listing procedure was a rigorous process, specifically the due diligence conducted by NASDAQ,” Ha said in a statement following the listing on September 18.
He said the company had consulted with the New York-based full-service investment bank Rodman & Renshaw LLC during the application while leading US law firm Sichenzia Ross Friedman Ference LLP represented Cavico during the process.
Cavico shares had been traded on the US OTC Bulletin Board under the ticker symbol CVIC before it was listed on NASDAQ, the largest US equities exchange.
“Following a comprehensive evaluation of all US exchanges, we determined that the NASDAQ Capital Market was the best fit for Cavico Corp.,” Ha said in the statement.
Trading of Cavico’s common stock commenced September 18 under the ticker symbol CAVO.
Founded in 2000, Hanoi-based Cavico Corp. focuses on large infrastructure projects, including hydropower facilities, bridges, tunnels, roads, and mines.
The PetroVietnam Finance Corp. (PVFC), a unit of Vietnam Oil & Gas Group, is now finalizing the documents needed to list on the Singapore Stock Exchange (SGX).
The company hopes to list during the second quarter of next year as Vietnam’s first credit organization listed abroad, Tong Quoc Truong, general director of PVFC, told Thanh Nien.
PetroVietnam, as the parent company is known, owns 78 percent of PetroVietnam Finance, which is the second-largest listed company on the Ho Chi Minh Stock Exchange.
Truong said the listing aimed to make the company brand known internationally, to mobilize funds from foreign investors and to expand its business across Asia, starting with Singapore.
Though advised by Morgan Stanley, a market leader in securities, Truong said it had been hard for the firm to fulfill all the listing procedures.
“There’re so many procedures that we’re still not sure how much farther we have to go from now until the listing.”
According to a stock expert who asked to remain anonymous, listing procedures are not the biggest problem as there are different options in every country.
Foreign exchange management regulations allow foreign investors to open an account in Vietnam and buy shares here, but not vice versa.
He said the system should be more equal for domestic and foreign investors.
The State Securities Commission in August began collecting its members’ opinions for a draft decree that would instruct domestic firms on how to list abroad.
Since 2007 many locally-listed firms have set overseas listing as a major goal, including Vietnam largest dairy firm Vinamilk (VNM) and PetroVietnam Drilling and Well Services Joint Stock Co. (PVD).
VietNamNet/TN
http://www.vnnnews.net/listing-abroad-not-easy-for-local-firms-insiders-say
Last updated: Saturday, October 10, 2009 |
VnnNews - Listing procedures have proved difficult for Vietnamese firms aiming to sell shares on foreign stock markets.
The Hanoi-based infrastructure developer Cavico Corp. completed a “hard journey” in meeting all the requirements to become the first Vietnamese firm listed on the US national securities exchange NASDAQ last month, Chief Executive Officer Bui Quang Ha said.
“The listing procedure was a rigorous process, specifically the due diligence conducted by NASDAQ,” Ha said in a statement following the listing on September 18.
He said the company had consulted with the New York-based full-service investment bank Rodman & Renshaw LLC during the application while leading US law firm Sichenzia Ross Friedman Ference LLP represented Cavico during the process.
Cavico shares had been traded on the US OTC Bulletin Board under the ticker symbol CVIC before it was listed on NASDAQ, the largest US equities exchange.
“Following a comprehensive evaluation of all US exchanges, we determined that the NASDAQ Capital Market was the best fit for Cavico Corp.,” Ha said in the statement.
Trading of Cavico’s common stock commenced September 18 under the ticker symbol CAVO.
Founded in 2000, Hanoi-based Cavico Corp. focuses on large infrastructure projects, including hydropower facilities, bridges, tunnels, roads, and mines.
The PetroVietnam Finance Corp. (PVFC), a unit of Vietnam Oil & Gas Group, is now finalizing the documents needed to list on the Singapore Stock Exchange (SGX).
The company hopes to list during the second quarter of next year as Vietnam’s first credit organization listed abroad, Tong Quoc Truong, general director of PVFC, told Thanh Nien.
PetroVietnam, as the parent company is known, owns 78 percent of PetroVietnam Finance, which is the second-largest listed company on the Ho Chi Minh Stock Exchange.
Truong said the listing aimed to make the company brand known internationally, to mobilize funds from foreign investors and to expand its business across Asia, starting with Singapore.
Though advised by Morgan Stanley, a market leader in securities, Truong said it had been hard for the firm to fulfill all the listing procedures.
“There’re so many procedures that we’re still not sure how much farther we have to go from now until the listing.”
According to a stock expert who asked to remain anonymous, listing procedures are not the biggest problem as there are different options in every country.
Foreign exchange management regulations allow foreign investors to open an account in Vietnam and buy shares here, but not vice versa.
He said the system should be more equal for domestic and foreign investors.
The State Securities Commission in August began collecting its members’ opinions for a draft decree that would instruct domestic firms on how to list abroad.
Since 2007 many locally-listed firms have set overseas listing as a major goal, including Vietnam largest dairy firm Vinamilk (VNM) and PetroVietnam Drilling and Well Services Joint Stock Co. (PVD).
VietNamNet/TN
http://www.vnnnews.net/listing-abroad-not-easy-for-local-firms-insiders-say
With high grade apartments unsalable investors’ money remains buried (Vietnam)
With high grade apartments unsalable investors’ money remains buried
Last updated: Tuesday, October 6, 2009 |
VnnNews – Though prices of luxury apartments have been decreasing sharply, the demand for expensive products remains low.
Speculators complain capital has been ‘buried’ in apartments as they still have not been able to sell them for the last several months.
Phan Ha, an investor in district 1 of HCM City, said that he has two unsold high grade apartments worth nearly 6 billion dong ($20,761) at Blooming Park building. When it was launched, Ha had purchased the two apartments at 30 million dong per square metre as an investment.
However, to date, Ha still cannot sell the apartments, and the apartments’ prices have not seen any increases.
However, the address and location would appear to still be fashionable. Blooming Park is located next to Thu Thiem new urban area and the Metro Supermarket. Besides, the land area is not far from the East-West Boulevard, Thu Thiem tunnel, the belt road of Phu My Bridge and Tan Cang Industrial Zone.
Ha still cannot find buyers even when he is offering to sell the apartments at the original prices. However the prices at 2.8 billion dong ($164,700) and 3.1 billion dong ($182,352), still remain unattractive to buyers.
Other projects have also left products unsalable. Director of Tran Nao Branch of Vinaland Nguyen Xuan Loc said that high grade apartments are not proving popular these days. Few appear interested in the apartments at The Vista, Riverside or Sunrise projects.
Explaining the lack of lack of attraction, Ngo Duong Hoang Thao, Chairman of Dai Dong Duong Consultancy Company, said the supply of high grade apartments has exceeded demand.
Nguyen Thi Thanh Huong, Director of Tin Nghia real estate trading floor, said there has been little interest in high grade apartments on her trading floor, however, land plots are selling very well.
According to Thao, the main buyers of high grade apartments are secondary investors, who hope that they can sell the apartments later for profit.
However, secondary investors are quiet after suffering losses on other deals and the economic downturn has made people poorer, thus unable to afford expensive houses.
Meanwhile, low cost apartments are selling well. Le Thanh Company has sold its 134 apartments in Binh Tan district easily. The company’s Director Le Huu Nghia said that the apartments have been selling well due to their reasonable price of 6.5 million dong ($382) per square metre which is much lower than $1,300-2,000 per square metre of high grade apartments.
Phuoc Ha
http://www.vnnnews.net/with-high-grade-apartments-unsalable-investors-money-remains-buried
Last updated: Tuesday, October 6, 2009 |
VnnNews – Though prices of luxury apartments have been decreasing sharply, the demand for expensive products remains low.
Speculators complain capital has been ‘buried’ in apartments as they still have not been able to sell them for the last several months.
Phan Ha, an investor in district 1 of HCM City, said that he has two unsold high grade apartments worth nearly 6 billion dong ($20,761) at Blooming Park building. When it was launched, Ha had purchased the two apartments at 30 million dong per square metre as an investment.
However, to date, Ha still cannot sell the apartments, and the apartments’ prices have not seen any increases.
However, the address and location would appear to still be fashionable. Blooming Park is located next to Thu Thiem new urban area and the Metro Supermarket. Besides, the land area is not far from the East-West Boulevard, Thu Thiem tunnel, the belt road of Phu My Bridge and Tan Cang Industrial Zone.
Ha still cannot find buyers even when he is offering to sell the apartments at the original prices. However the prices at 2.8 billion dong ($164,700) and 3.1 billion dong ($182,352), still remain unattractive to buyers.
Other projects have also left products unsalable. Director of Tran Nao Branch of Vinaland Nguyen Xuan Loc said that high grade apartments are not proving popular these days. Few appear interested in the apartments at The Vista, Riverside or Sunrise projects.
Explaining the lack of lack of attraction, Ngo Duong Hoang Thao, Chairman of Dai Dong Duong Consultancy Company, said the supply of high grade apartments has exceeded demand.
Nguyen Thi Thanh Huong, Director of Tin Nghia real estate trading floor, said there has been little interest in high grade apartments on her trading floor, however, land plots are selling very well.
According to Thao, the main buyers of high grade apartments are secondary investors, who hope that they can sell the apartments later for profit.
However, secondary investors are quiet after suffering losses on other deals and the economic downturn has made people poorer, thus unable to afford expensive houses.
Meanwhile, low cost apartments are selling well. Le Thanh Company has sold its 134 apartments in Binh Tan district easily. The company’s Director Le Huu Nghia said that the apartments have been selling well due to their reasonable price of 6.5 million dong ($382) per square metre which is much lower than $1,300-2,000 per square metre of high grade apartments.
Phuoc Ha
http://www.vnnnews.net/with-high-grade-apartments-unsalable-investors-money-remains-buried
Scarce dollar strains Vietnam currency market
Scarce dollar strains Vietnam currency market
Last updated: Sunday, October 4, 2009 |
VnnNews - Vietnam is facing a dollar shortage as a result of lackluster capital inflows this year, experts say.
VnnNews - Vietnam is facing a dollar shortage as a result of lackluster capital inflows this year, experts say, calling for adjustments to the exchange rate to ease the strain on the local currency market.
The foreign currency supply this year, for the first time, has fallen short of demand and the central bank had to sell part of its dollar reserves to ease the shortage, Le Duc Thuy, a former central bank governor, said in an interview published by the weekly Saigon Economic Times in mid September.
Although imports fell, the decline in exports and capital inflows was even greater, said Thuy, who is now chairman of the National Finance Supervision Committee.
A senior official at ANZ Vietnam, who is not authorized to speak on record, told Thanh Nien Weekly that foreign investments and overseas remittances have helped keep Vietnam’s balance of payment in check. But this year “we see a reduction in all of those sources due to the global crisis and the collapse of the stock market,” he said.
“From a microeconomic standpoint, businesses – especially exporters – are reluctant to sell dollars to banks in hope that their dollars will be worth more,” the ANZ official said.
“These factors combined lead to the scarcity of dollars for payment in the market… The increase of the dong/dollar rate reflects this scarcity.”
The dong has weakened about 2 percent this year against the dollar and touched a record low of VND17,862 on July 23, according to Bloomberg data.
“The currency market is now under strain,” Thuy said. “Businesses have difficulties in currency trading. Those who have foreign money don’t want to sell it while those in need of foreign exchange can’t buy it.”
Many businesses that needed dollars chose to take dong loans to benefit from a government rate subsidy package. They then bought dollars, Thuy said.
If businesses had just borrowed in dollars, they would not have put any pressure on the currency market, he said.
An increase in dollar borrowings could partially lessen the pressure on the exchange rate because businesses would have more dollars to settle payments, the official at ANZ said.
“It is important to note that while dollars for payment are quite scarce, dollars for lending, on the other hand, are rather sufficient. This is because banks are only allowed to lend the dollars from their customers’ [deposit] accounts, but not sell them.”
Exchange rate
Nguyen Khac Quoc Bao, a professor at the Ho Chi Minh City University of Economics, said in a telephone interview on Tuesday that the current pressure on the dong/dollar rate can be explained mainly by psychological factors.
Many people fear inflation will not ease and the dollar will gain value against the dong, and this prompts them to move their assets out of the dong and place it on the dollar, he said.
However, Bao said he expects the pressure on the currency market may ease soon as the central bank is likely to step in and adjust the exchange rate slightly.
The first good sign on the market may have emerged already. The central bank said in a weekly report on its website last Friday that local exporters have started increasing sales of dollars to commercial banks, helping ease the dollar shortage.
A banker told Reuters Monday that the central bank’s pledge to keep the dong stable has calmed businesses, especially exporters, and encouraged them to sell their dollar earnings.
The central bank had sufficient dollar reserves to intervene in the market when necessary, but the question is whether the bank needed to do so or not, Thuy said in the interview with the Saigon Economic Times.
“I think an adjustment in the official exchange rate is enough to keep supply and demand in balance, without the need for government intervention.” (Vietnam recently devalued its Dong)
An experience gained from the past is that dollar prices in the unofficial market should be kept within VND100 above the rates in banks, Thuy noted. “There will be problems if the gap is more than VND100.”
With a gap of VND500, for instance, a firm selling $1 million to a bank would earn VND500 million ($28,026) less than what they could from the unofficial market, he said, pointing out that this difference is enough for a medium-sized firm to pay salaries for several months.
VietNamNet/Thanh Nien
http://www.vnnnews.net/scarce-dollar-strains-vietnam-currency-market
VnnNews - Vietnam is facing a dollar shortage as a result of lackluster capital inflows this year, experts say.
The foreign currency supply this year, for the first time, has fallen short of demand and the central bank had to sell part of its dollar reserves to ease the shortage, Le Duc Thuy, a former central bank governor, said in an interview published by the weekly Saigon Economic Times in mid September.
- Foreign direct investment inflows into Vietnam dropped 11 percent to US$7.2 billion in the first nine months of this year from a year ago.
- Meanwhile, overseas remittances are forecast to fall to $6.8 billion this year, compared to $8 billion in 2008.
http://www.vnnnews.net/scarce-dollar-strains-vietnam-currency-market
Finance Ministry researcher warns that exports don’t always pay (Vietnam)
Finance Ministry researcher warns that exports don’t always pay
Last updated: Thursday, October 1, 2009 |
VnnNews – When Vietnam increases its exports, it must import more materials to make exports, an expert warns.
In the first nine months of 2009, garment exports brought Vietnam $6.7 billion in revenue, according to the General Statistics Office (GSO). Meanwhile, Vietnam had to import $4 billion worth of materials to create those exports.
Dr. Vu Dinh Anh, a deputy director of the Market and Price Research Institute, a Finance Ministry think tank, said that in the garment industry, the cost of materials is 80 percent of the total production cost. Therefore, Anh said, the more Vietnam exports garments, the more it has to pay to import materials.
Anh also reached a surprising conclusion: although exports create several tens of millions of jobs and bring some $60 billion every year to the national economy, if the cost of imports needed to enable the production of export products is considered, exports actually reduce GDP by two percent.
Among the import items, machinery and material inputs for domestic production account for the biggest proportions. Only ten percent of Vietnam’s imports are consumer goods. Therefore, experts say that even if Vietnam raises the tariff on cars and imposes a luxury tax on mobile phones, this still won’t close the trade gap.
Meanwhile, there are a lot of problems relating to exports. Though export volume has increased sharply (up 11 percent year over year), export revenues did not increase proportionately – in fact they fell by 10 percent!
Although crude oil exports increased eight percent year over year in the first eight months of 2009, revenues from oil exports fell by 41 percent. As for rice and pepper exports, though the export volume was up by 50 percent, total earnings fell by slightly.
Dr Nguyen Thi Nhieu of the Trade Research Institute warns that no breakthrough is likely from now to the end of the year. She said that the demand in the world market has just begun recovering from a low base and a lot of economies have applied measures to protect their local production. The competition among exporters has become stiffer in the world market, and Vietnam’s competitiveness remains weak.
Dr. Anh of the Market and Price Institute believes that it is not imperative to push up exports to fix the current problems in the trade balance and to avoid bad balance of payments impacts. Instead Vietnam should restructure the import-export menu and develop its internal market.
The General Statistics Office (GSO) has urged encouraging domestic consumption and relying on the internal market as the ‘fulcrum’ for development. GSO argues that Vietnam should make strategic choices among the materials it seeks to export and to supply to the domestic market.
Even during the Asian financial crisis of 1997-99, Vietnam was able to maintain positive export growth. However, this year the Ministry of Industry and Trade projects that Vietnam will export only $59 billion worth of products, a six percent decrease from 2008 and considerably short of the target. If this scenario holds, 2009 will be the first year in two decades of doi moi policy that export values will decrease.
VietNamNet/VNE
http://www.vnnnews.net/finance-ministry-researcher-warns-that-exports-dont-always-pay
Last updated: Thursday, October 1, 2009 |
VnnNews – When Vietnam increases its exports, it must import more materials to make exports, an expert warns.
In the first nine months of 2009, garment exports brought Vietnam $6.7 billion in revenue, according to the General Statistics Office (GSO). Meanwhile, Vietnam had to import $4 billion worth of materials to create those exports.
Dr. Vu Dinh Anh, a deputy director of the Market and Price Research Institute, a Finance Ministry think tank, said that in the garment industry, the cost of materials is 80 percent of the total production cost. Therefore, Anh said, the more Vietnam exports garments, the more it has to pay to import materials.
Anh also reached a surprising conclusion: although exports create several tens of millions of jobs and bring some $60 billion every year to the national economy, if the cost of imports needed to enable the production of export products is considered, exports actually reduce GDP by two percent.
Among the import items, machinery and material inputs for domestic production account for the biggest proportions. Only ten percent of Vietnam’s imports are consumer goods. Therefore, experts say that even if Vietnam raises the tariff on cars and imposes a luxury tax on mobile phones, this still won’t close the trade gap.
Meanwhile, there are a lot of problems relating to exports. Though export volume has increased sharply (up 11 percent year over year), export revenues did not increase proportionately – in fact they fell by 10 percent!
Although crude oil exports increased eight percent year over year in the first eight months of 2009, revenues from oil exports fell by 41 percent. As for rice and pepper exports, though the export volume was up by 50 percent, total earnings fell by slightly.
Dr Nguyen Thi Nhieu of the Trade Research Institute warns that no breakthrough is likely from now to the end of the year. She said that the demand in the world market has just begun recovering from a low base and a lot of economies have applied measures to protect their local production. The competition among exporters has become stiffer in the world market, and Vietnam’s competitiveness remains weak.
Dr. Anh of the Market and Price Institute believes that it is not imperative to push up exports to fix the current problems in the trade balance and to avoid bad balance of payments impacts. Instead Vietnam should restructure the import-export menu and develop its internal market.
The General Statistics Office (GSO) has urged encouraging domestic consumption and relying on the internal market as the ‘fulcrum’ for development. GSO argues that Vietnam should make strategic choices among the materials it seeks to export and to supply to the domestic market.
Even during the Asian financial crisis of 1997-99, Vietnam was able to maintain positive export growth. However, this year the Ministry of Industry and Trade projects that Vietnam will export only $59 billion worth of products, a six percent decrease from 2008 and considerably short of the target. If this scenario holds, 2009 will be the first year in two decades of doi moi policy that export values will decrease.
VietNamNet/VNE
http://www.vnnnews.net/finance-ministry-researcher-warns-that-exports-dont-always-pay
Vietnam stock market less attractive than neighbours’
Vietnam stock market less attractive than neighbours’
Last updated: Tuesday, November 17, 2009 |
VnnNews – HSBC still says Vietnam’s stock market is less attractive than other regional markets.
HSBC highlighted that after reaching a peak of 600 points in late October 2009, the VN Index had decreased by eight percent by November 9.
The VN Index has lost more points than other Asian markets from the beginning of the fourth quarter of the year to November 9. According to HSBC, since then Vietnam has remained the second worst market in Asia in the fourth quarter.
October 2009 witnessed the prosperity of Vietnam’s stock market with the daily trading volume of both the Hanoi and HCM City increasing by 63 percent to 315 million dollar from 193 million dollar in August.
However, HSBC pointed out that within the first five days of November, foreign investors had a net sale of 15 million dollar, a level which much higher than the one million dollar level seen in October.
The sale of foreign investors has led to the decrease in foreign ownership ratio in Vietnam’s stocks to 16 percent from 21 percent in July.
According to HSBC, foreign investors are now making up five percent of daily total trading volume on the market. After the VN Index has been decreasing, losing achievements gained in the fourth quarter, the market now has Asia Commercial Bank’s share (ACB) as the only share item which has the foreign ownership ratio at the ceiling level.
The report made conclusion that in the current context of Vietnam’s weak macroeconomic conditions, foreign investors will not return to the market soon.
The report affirmed that Vietnam’s stocks are now more expensive than stocks in other regional markets. The same conclusion has been repeated continuously in recent reports about Vietnam’s market.
According to HSBC, the current P/E (price to earning ratio) on HCM City bourse is 23.8. If suggesting that the EPS (earnings per share) of the next 12 months is 20 percent, then the P/E of the next 12 months would be 19.1, while the P/E of 2010 would be 15.
HSBC believes that these P/Es are well higher than other regional markets, such as Thailand (P/E of the next 12 months would be 12), China (14.7), Indonesia (14.6) and the Philippines (15).
The banking group said that it recognizes less factors which may foster growth in Vietnam than in other markets. The experts of the banking group have doubts about the recovery of the real estate market in Vietnam.
VietNamNet/TBKTVN
http://www.vnnnews.net/vietnam-stock-market-less-attractive-than-neighbours
Last updated: Tuesday, November 17, 2009 |
VnnNews – HSBC still says Vietnam’s stock market is less attractive than other regional markets.
HSBC highlighted that after reaching a peak of 600 points in late October 2009, the VN Index had decreased by eight percent by November 9.
The VN Index has lost more points than other Asian markets from the beginning of the fourth quarter of the year to November 9. According to HSBC, since then Vietnam has remained the second worst market in Asia in the fourth quarter.
October 2009 witnessed the prosperity of Vietnam’s stock market with the daily trading volume of both the Hanoi and HCM City increasing by 63 percent to 315 million dollar from 193 million dollar in August.
However, HSBC pointed out that within the first five days of November, foreign investors had a net sale of 15 million dollar, a level which much higher than the one million dollar level seen in October.
The sale of foreign investors has led to the decrease in foreign ownership ratio in Vietnam’s stocks to 16 percent from 21 percent in July.
According to HSBC, foreign investors are now making up five percent of daily total trading volume on the market. After the VN Index has been decreasing, losing achievements gained in the fourth quarter, the market now has Asia Commercial Bank’s share (ACB) as the only share item which has the foreign ownership ratio at the ceiling level.
The report made conclusion that in the current context of Vietnam’s weak macroeconomic conditions, foreign investors will not return to the market soon.
The report affirmed that Vietnam’s stocks are now more expensive than stocks in other regional markets. The same conclusion has been repeated continuously in recent reports about Vietnam’s market.
According to HSBC, the current P/E (price to earning ratio) on HCM City bourse is 23.8. If suggesting that the EPS (earnings per share) of the next 12 months is 20 percent, then the P/E of the next 12 months would be 19.1, while the P/E of 2010 would be 15.
HSBC believes that these P/Es are well higher than other regional markets, such as Thailand (P/E of the next 12 months would be 12), China (14.7), Indonesia (14.6) and the Philippines (15).
The banking group said that it recognizes less factors which may foster growth in Vietnam than in other markets. The experts of the banking group have doubts about the recovery of the real estate market in Vietnam.
VietNamNet/TBKTVN
http://www.vnnnews.net/vietnam-stock-market-less-attractive-than-neighbours
Hanoi’s real estate prices rise by 20%
Ha Noi’s real estate prices rise by 20%
Last updated: Sunday, November 15, 2009 |
VnnNews - Real estate in several areas of the capital city has seen 20-30 per cent increases in the last month.
Those affected include newly incorporated areas in expanded Ha Noi such as Ha Dong, Tu Liem and Thanh Tri.
Price of real estate in the areas was equal to or even higher than that in the inner city’s districts, said Dao Minh Thuy from the Ha Dong’s Long Thuy Property Brokerage Company.
Thuy said that a square metre of land along major streets in Ha Dong currently reached VND140-150 million (US$7,800-8,300) and roughly VND180 million ($10,000) in Tu Liem’s Le Duc Tho Street. A square metre of land in Bach Mai Street is currently about VND130-135 million.
Land located off small alleys had also sharply increased by roughly VND5 million per square metre over last month, said a property broker in the My Dinh area said.
A property investor, who bought a plot in Me Linh District at the price of VND9.2 million per square metre at a property trading floor two weeks ago, said that the floor currently appraised the land at the price of VND11 million per square metre.
Earlier this month, thousands of people crowded the sales office of the Nam Cuong Real Estate Co, expecting to be able to buy apartments at their original prices.
A deputy director of a construction company, who declined to be named, attributed the price rises in the past month to speculation.
Currently, people can only purchase apartments directly from investors if they have close relations.
The scramble for purchases is based on speculators expecting prices of the apartments to increase dramatically when they are later sold on the secondary market. The prices set for the Duong Noi flats, which will range in size from 50-200sq.m, are described as very ‘soft’, from $880 to $1,200 per square metre.
The deputy Minister of Construction, Nguyen Tran Nam, said that people often bought property based on rumours, warning investors to be careful with such information.
Nam said that some investors were overly influenced by rumours leading them to quickly invest but after little research. Whenever they heard that land prices in certain areas were “hot” they would immediately rush to buy.
Le Duc Hien, deputy head of sales at Viglacera Real Estate, said that the real estate market needed transparency.
Hien said that with transparency, clients would be able to purchase apartments at their original prices, while investors would gain prestige in the eyes of people. Real estate developers who could gain customers’ confidence would be the long-term winners in the market.
VietNamNet/VNS
http://www.vnnnews.net/ha-nois-real-estate-prices-rise-by-20
Last updated: Sunday, November 15, 2009 |
VnnNews - Real estate in several areas of the capital city has seen 20-30 per cent increases in the last month.
Those affected include newly incorporated areas in expanded Ha Noi such as Ha Dong, Tu Liem and Thanh Tri.
Price of real estate in the areas was equal to or even higher than that in the inner city’s districts, said Dao Minh Thuy from the Ha Dong’s Long Thuy Property Brokerage Company.
Thuy said that a square metre of land along major streets in Ha Dong currently reached VND140-150 million (US$7,800-8,300) and roughly VND180 million ($10,000) in Tu Liem’s Le Duc Tho Street. A square metre of land in Bach Mai Street is currently about VND130-135 million.
Land located off small alleys had also sharply increased by roughly VND5 million per square metre over last month, said a property broker in the My Dinh area said.
A property investor, who bought a plot in Me Linh District at the price of VND9.2 million per square metre at a property trading floor two weeks ago, said that the floor currently appraised the land at the price of VND11 million per square metre.
Earlier this month, thousands of people crowded the sales office of the Nam Cuong Real Estate Co, expecting to be able to buy apartments at their original prices.
A deputy director of a construction company, who declined to be named, attributed the price rises in the past month to speculation.
Currently, people can only purchase apartments directly from investors if they have close relations.
The scramble for purchases is based on speculators expecting prices of the apartments to increase dramatically when they are later sold on the secondary market. The prices set for the Duong Noi flats, which will range in size from 50-200sq.m, are described as very ‘soft’, from $880 to $1,200 per square metre.
The deputy Minister of Construction, Nguyen Tran Nam, said that people often bought property based on rumours, warning investors to be careful with such information.
Nam said that some investors were overly influenced by rumours leading them to quickly invest but after little research. Whenever they heard that land prices in certain areas were “hot” they would immediately rush to buy.
Le Duc Hien, deputy head of sales at Viglacera Real Estate, said that the real estate market needed transparency.
Hien said that with transparency, clients would be able to purchase apartments at their original prices, while investors would gain prestige in the eyes of people. Real estate developers who could gain customers’ confidence would be the long-term winners in the market.
VietNamNet/VNS
http://www.vnnnews.net/ha-nois-real-estate-prices-rise-by-20
Smart money ready for future profits (Vietnam)
Smart money ready for future profits
Last updated: Saturday, October 31, 2009 |
VinaCapital is holding its 2009 Investor Conference just as the Vietnamese economy is starting to heat up again. However, foreign investors have not yet returned to Vietnam after the 2008 crisis.
VinaCapital is holding its 2009 Investor Conference just as the Vietnamese economy is starting to heat up again. However, foreign investors have not yet returned to Vietnam after the 2008 crisis.
VinaCapital Group’s chairman Horst F. Geicke discusses with VIR the opportunities foreign investors should be looking for in 2010 and beyond.
Foreign direct investment registration and foreign portfolio inflows have dropped considerably in 2009. Can Vietnam regain the investment momentum lost after 2008?
Vietnam’s economic performance in second and third quarters of 2009 has been remarkable, including the recovery of the capital markets. But it’s true that foreign investors have been largely absent from the market, buying only about $36 million in shares. This is not the case for countries like Indonesia and Thailand, so we could say that Vietnam has temporarily lost its shimmer in the eyes of foreign investors. However, I believe this downturn will not last.
After the domestic crisis in early 2008 sunk the VNIndex to under 400 points, the market briefly recovered to 600 points in mid-2008 before the global crisis took hold and the index fell to a low of 235 in February 2009. With the country’s recent economic rebound, the market is once again at 600 points.
This type of turbulence always challenges foreign investors and has people rethinking their strategies. For VinaCapital, our view on the market here has not changed even during the recent turbulent times.
How should Vietnam approach foreign investors now? Is enough being done to attract investors that seem to have begun looking elsewhere?
One very positive sign is that during this volatile period, Vietnam’s government has managed economic policy with a notable degree of flexibility and competence. It is not often that a country can emerge from two full-blown economic crises in the space of 12 months to record 5 per cent gross domestic product growth and world-beating stock market gains. Vietnam’s economic resilience in 2009 has been nothing short of remarkable.
This will boost the confidence of foreign investors. That Vietnam experienced great volatility during the 2008 financial crisis was essentially unavoidable. How the government managed to stabilise the economy is what will garner attention, and this is something that should be explained and promoted to foreign investors as much as possible.
Among the positive press so far: HSBC in September predicted gross domestic product (GDP) growth in 2010 would be 6.8 per cent, and UK Trade & Investment for the second year running has Vietnam at the top of its non-BRIC ‘priority markets’ for global investors over the next five years. So people are taking notice.
VinaCapital will continue to work hard at promoting Vietnam. We have played an active role for six years in communicating the ‘Vietnam story’ to investors around the world. At venues like the World Economic Forum, Vietnam’s presence has been strengthened in part by VinaCapital’s efforts as a ‘commercial ambassador,’ bringing foreign investors and the country’s top corporate leaders together.
What are some of the main messages VinaCapital is delivering at its investor conference? What can you share about Vietnam’s current investment environment?
Above all, we believe that Vietnam is one of the top emerging markets in the world today. However, even as the dark clouds clear from the economy, events of the past two years have taught us all valuable lessons in preparing for the next rainy day.
Vietnam has great prospects, but at the corporate level there will be winners and losers. Proper asset allocation and risk management will be crucial to avoid unnecessary losses if the market experiences another unexpected downturn. We should manage our expectations and not encourage a return to the over-exuberance of 2006-07.
Identifying the winning sectors is not so difficult. But finding the winning companies and opportunities within these sectors is more challenging. The driving force in the domestic economy is urbanisation and the growing middle-class consumer base with its increasing demand for improved services and more modern living and shopping spaces.
Residential housing and retail facilities, urban infrastructure, consumer goods, healthcare and financial services are all areas that will develop rapidly. These sectors are relatively easy to identify, as they are common to many emerging markets.
VietNamNet/VIR
http://www.vnnnews.net/smart-money-ready-for-future-profits
Last updated: Saturday, October 31, 2009 |
VinaCapital is holding its 2009 Investor Conference just as the Vietnamese economy is starting to heat up again. However, foreign investors have not yet returned to Vietnam after the 2008 crisis.
VinaCapital is holding its 2009 Investor Conference just as the Vietnamese economy is starting to heat up again. However, foreign investors have not yet returned to Vietnam after the 2008 crisis.
VinaCapital Group’s chairman Horst F. Geicke discusses with VIR the opportunities foreign investors should be looking for in 2010 and beyond.
Foreign direct investment registration and foreign portfolio inflows have dropped considerably in 2009. Can Vietnam regain the investment momentum lost after 2008?
Vietnam’s economic performance in second and third quarters of 2009 has been remarkable, including the recovery of the capital markets. But it’s true that foreign investors have been largely absent from the market, buying only about $36 million in shares. This is not the case for countries like Indonesia and Thailand, so we could say that Vietnam has temporarily lost its shimmer in the eyes of foreign investors. However, I believe this downturn will not last.
After the domestic crisis in early 2008 sunk the VNIndex to under 400 points, the market briefly recovered to 600 points in mid-2008 before the global crisis took hold and the index fell to a low of 235 in February 2009. With the country’s recent economic rebound, the market is once again at 600 points.
This type of turbulence always challenges foreign investors and has people rethinking their strategies. For VinaCapital, our view on the market here has not changed even during the recent turbulent times.
How should Vietnam approach foreign investors now? Is enough being done to attract investors that seem to have begun looking elsewhere?
One very positive sign is that during this volatile period, Vietnam’s government has managed economic policy with a notable degree of flexibility and competence. It is not often that a country can emerge from two full-blown economic crises in the space of 12 months to record 5 per cent gross domestic product growth and world-beating stock market gains. Vietnam’s economic resilience in 2009 has been nothing short of remarkable.
This will boost the confidence of foreign investors. That Vietnam experienced great volatility during the 2008 financial crisis was essentially unavoidable. How the government managed to stabilise the economy is what will garner attention, and this is something that should be explained and promoted to foreign investors as much as possible.
Among the positive press so far: HSBC in September predicted gross domestic product (GDP) growth in 2010 would be 6.8 per cent, and UK Trade & Investment for the second year running has Vietnam at the top of its non-BRIC ‘priority markets’ for global investors over the next five years. So people are taking notice.
VinaCapital will continue to work hard at promoting Vietnam. We have played an active role for six years in communicating the ‘Vietnam story’ to investors around the world. At venues like the World Economic Forum, Vietnam’s presence has been strengthened in part by VinaCapital’s efforts as a ‘commercial ambassador,’ bringing foreign investors and the country’s top corporate leaders together.
What are some of the main messages VinaCapital is delivering at its investor conference? What can you share about Vietnam’s current investment environment?
Above all, we believe that Vietnam is one of the top emerging markets in the world today. However, even as the dark clouds clear from the economy, events of the past two years have taught us all valuable lessons in preparing for the next rainy day.
Vietnam has great prospects, but at the corporate level there will be winners and losers. Proper asset allocation and risk management will be crucial to avoid unnecessary losses if the market experiences another unexpected downturn. We should manage our expectations and not encourage a return to the over-exuberance of 2006-07.
Identifying the winning sectors is not so difficult. But finding the winning companies and opportunities within these sectors is more challenging. The driving force in the domestic economy is urbanisation and the growing middle-class consumer base with its increasing demand for improved services and more modern living and shopping spaces.
Residential housing and retail facilities, urban infrastructure, consumer goods, healthcare and financial services are all areas that will develop rapidly. These sectors are relatively easy to identify, as they are common to many emerging markets.
VietNamNet/VIR
http://www.vnnnews.net/smart-money-ready-for-future-profits
Major private gold shop shut down, owner reportedly flees (Vietnam)
Major private gold shop shut down, owner reportedly flees
Last updated: Wednesday, November 18, 2009 |
Tuan Tai gold shop, one of HCMC’s biggest private bullion traders, on Monday suspended its operations as police raided the store in the center in District 5.
The electronic board of Tuan Tai gold shop still displays gold prices on November 16, but its operations stop as the shop owner is suspected of having run away with debt.
People who were sitting in front of the shop at 37-39 Chau Van Liem Street on Monday said the shop owner, whom gold traders often refer to as Ms Kim Thanh, had run away due to big debt.
As witnessed by the Daily on Monday afternoon, jewelry and other gold products were no longer displayed at the shop.
Some anxious lenders of the shop owner who were either inside or outside the shop said the shop owner had raised funds from them at much higher interest rates than what banks were offering. They said the shop owner had disappeared since November 15.
The general director of a gold trading company said Tuan Tai was a fairly big gold trader in the city, so the closing of the shop would affect those people having a trade relationship with it.
Trading accounts held by Tuan Tai at some gold exchanges have been frozen due to great losses. On Tuan Tai’s website, it said it was a trading member of the gold exchanges of banks like Asia Commercial Bank (ACB), Vietnam Asia Commercial Bank, Eximbank, and Sacombank.
Police of District 5 and those of the district’s Ward 14 where the gold shop is registered declined to comment when reached by the Daily on Monday afternoon. Witnesses around the shop said police had come in the morning and took away things from the shop.
Tuan Tai Service Trading Production Limited Company gained a business license from the HCMC Department of Planning and Investment on October 18, 2005 with chartered capital of VND100 billion. Its operations include trading and importing gold and jewelry, and trading gold on foreign exchanges.
Tuan Tai is one of the few gold trading companies licensed by the central bank to trade gold on foreign exchanges. The company also provides big volumes of SJC gold bars to customers including commercial banks and local gold trading companies.
VietNamNet/SGT
http://www.vnnnews.net/major-private-gold-shop-shut-down-owner-reportedly-flees
Last updated: Wednesday, November 18, 2009 |
Tuan Tai gold shop, one of HCMC’s biggest private bullion traders, on Monday suspended its operations as police raided the store in the center in District 5.
The electronic board of Tuan Tai gold shop still displays gold prices on November 16, but its operations stop as the shop owner is suspected of having run away with debt.
People who were sitting in front of the shop at 37-39 Chau Van Liem Street on Monday said the shop owner, whom gold traders often refer to as Ms Kim Thanh, had run away due to big debt.
As witnessed by the Daily on Monday afternoon, jewelry and other gold products were no longer displayed at the shop.
Some anxious lenders of the shop owner who were either inside or outside the shop said the shop owner had raised funds from them at much higher interest rates than what banks were offering. They said the shop owner had disappeared since November 15.
The general director of a gold trading company said Tuan Tai was a fairly big gold trader in the city, so the closing of the shop would affect those people having a trade relationship with it.
Trading accounts held by Tuan Tai at some gold exchanges have been frozen due to great losses. On Tuan Tai’s website, it said it was a trading member of the gold exchanges of banks like Asia Commercial Bank (ACB), Vietnam Asia Commercial Bank, Eximbank, and Sacombank.
Police of District 5 and those of the district’s Ward 14 where the gold shop is registered declined to comment when reached by the Daily on Monday afternoon. Witnesses around the shop said police had come in the morning and took away things from the shop.
Tuan Tai Service Trading Production Limited Company gained a business license from the HCMC Department of Planning and Investment on October 18, 2005 with chartered capital of VND100 billion. Its operations include trading and importing gold and jewelry, and trading gold on foreign exchanges.
Tuan Tai is one of the few gold trading companies licensed by the central bank to trade gold on foreign exchanges. The company also provides big volumes of SJC gold bars to customers including commercial banks and local gold trading companies.
VietNamNet/SGT
http://www.vnnnews.net/major-private-gold-shop-shut-down-owner-reportedly-flees
Investors call for greater stock market clarity (Vietnam)
Investors call for greater stock market clarity
Last updated: Saturday, December 5, 2009 |
Foreign investors have suggested more openness from the government and improved transparency from listed firms as measures to lubricate trading on the stock market.
The Capital Markets Working Group (CMWG) said at a recent conference in Hanoi that the government should allow the establishment of different kinds of equity funds, including retirement equity funds, to attract professional investors and to raise market liquidity.
Vietnam should have more portfolio investors for long-term investments, the group said in its report. “Around 60 percent portfolio investors and 40 percent individual investors would suit the Vietnamese market,” it said
Portfolio investors now account for just 10 percent of the market.
They said the government should allow investors that hold more than five percent of shares of a certain stock to conduct trading beyond the daily limit, and to issue special stock exchange boards for foreign investors, which have been used by many countries across the world.
Overseas investors bought a net VND72.3 billion (US$3.9 million) of stocks on the Ho Chi Minh Stock Exchange Thursday as the benchmark VN-Index lost 0.87 percent to close at 494.8, the exchange said on its website.
It said foreign investors have purchased a net VND1.79 trillion worth of shares on the country’s main exchange so far this year, compared with VND5.8 trillion for all of 2008.
On Tuesday, they also bought a net VND34.9 billion ($1.9 million) of stocks on the exchange.
Other changes suggested by the CMWG to concerned government agencies – the Ministry of Finance and the State Securities
Commission – include legalizing margin trading and letting one investor own many accounts at different brokerages.
The group, whose members include the Vietnam Association for Financial Investors, the Vietnam Association of Securities Business, fund management firms such as Dragon Capital, Indochina Capital, and Vietnam’s largest brokerage Saigon Securities Inc., also blamed listed firms for releasing their business results later than scheduled.
Vietnam’s stock market, considered to be in its nascent stages by analysts, has fluctuated many times as investors react warily to a lack of news.
They recommended the government temporarily remove a listed firm from the exchange if it delays announcing its business results more than three times.
Chairman of the group, Dominic Scriven, also managing director of Dragon Capital Group – the largest and most experienced foreign portfolio investor in Vietnam, called for equal taxes for portfolio and individual investors as well as between local and foreign investors.
Tran Xuan Ha, deputy minister of Finance, said the current taxation already guarantees equality between investors. “The problem may just be about complicated procedures. That will be fixed.”
VietNamNet/Thanh Nien
http://www.vnnnews.net/investors-call-for-greater-stock-market-clarity
Last updated: Saturday, December 5, 2009 |
Foreign investors have suggested more openness from the government and improved transparency from listed firms as measures to lubricate trading on the stock market.
The Capital Markets Working Group (CMWG) said at a recent conference in Hanoi that the government should allow the establishment of different kinds of equity funds, including retirement equity funds, to attract professional investors and to raise market liquidity.
Vietnam should have more portfolio investors for long-term investments, the group said in its report. “Around 60 percent portfolio investors and 40 percent individual investors would suit the Vietnamese market,” it said
Portfolio investors now account for just 10 percent of the market.
They said the government should allow investors that hold more than five percent of shares of a certain stock to conduct trading beyond the daily limit, and to issue special stock exchange boards for foreign investors, which have been used by many countries across the world.
Overseas investors bought a net VND72.3 billion (US$3.9 million) of stocks on the Ho Chi Minh Stock Exchange Thursday as the benchmark VN-Index lost 0.87 percent to close at 494.8, the exchange said on its website.
It said foreign investors have purchased a net VND1.79 trillion worth of shares on the country’s main exchange so far this year, compared with VND5.8 trillion for all of 2008.
On Tuesday, they also bought a net VND34.9 billion ($1.9 million) of stocks on the exchange.
Other changes suggested by the CMWG to concerned government agencies – the Ministry of Finance and the State Securities
Commission – include legalizing margin trading and letting one investor own many accounts at different brokerages.
The group, whose members include the Vietnam Association for Financial Investors, the Vietnam Association of Securities Business, fund management firms such as Dragon Capital, Indochina Capital, and Vietnam’s largest brokerage Saigon Securities Inc., also blamed listed firms for releasing their business results later than scheduled.
Vietnam’s stock market, considered to be in its nascent stages by analysts, has fluctuated many times as investors react warily to a lack of news.
They recommended the government temporarily remove a listed firm from the exchange if it delays announcing its business results more than three times.
Chairman of the group, Dominic Scriven, also managing director of Dragon Capital Group – the largest and most experienced foreign portfolio investor in Vietnam, called for equal taxes for portfolio and individual investors as well as between local and foreign investors.
Tran Xuan Ha, deputy minister of Finance, said the current taxation already guarantees equality between investors. “The problem may just be about complicated procedures. That will be fixed.”
VietNamNet/Thanh Nien
http://www.vnnnews.net/investors-call-for-greater-stock-market-clarity
Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?
Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?
Last updated: Monday, November 30, 2009 |
Lao Dong was at a conference where various experts argued about where Vietnam’s groggy investors ought to put their money, if they still have any.
Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?
All investments are risky
The gyrations of the world gold market recently have helped many Vietnamese earn a fortune, but at least as many others have been cleaned out. Amateur investors are conspicuous in the latter group, having plunged in without good market information and all too often placing their bets with the help of dreams and horoscopes.
Nguyen Minh Tri, Director of Agribank’s Gold, Silver and Gemstone Company said that investors on the gold trading floors rarely ‘win.’ That’s because the gold price is influenced by many unpredictable factors, such as the crude oil price, the currency exchange rate and international politics.
According to Tri, a person with ten dong to invest should allocate two to gold. They should sell gold right away when they can make a profit instead of greedily waiting for a bigger profit.
The Deputy General Director of Asia Commercial Bank, Do Minh Toan, disagrees. Though it’s a high risk form of investment, he said, gold investors still have a lot of opportunities to earn fat profits.
Two experts consulted on stocks, Huynh Minh of Ban Viet Securities and Nguyen Ngoc Truong Chinh of Sen Vang Securities, said that if investors follow a long term investment plan instead of ‘surfing’ in and out of the market, they will always have opportunities.
We Vietnamese have always felt that tangible things like gold or real estate are ‘safer,’ Chinh noted. We think that we will still have ‘assets’ even when real estate or gold prices decrease, whereas we will lose everything if we invest in stocks and the companies go bankrupt.
Real estate market judged the least bad choice at present
Some speakers pointed out that investment preferences in Vietnam have been greatly influenced by changing Government policies, a sign of the market’s immaturity. Most investors just follow the crowd.
In 2006-2007, investors poured money into stocks. When the stock market cooled off, they rushed to ‘throw’ money into the real estate market. Then when there was a chill in real estate, many shifted to make speculative investments in gold. Such inconsistency rarely pays off.
Participants from the real estate sector called it the safest investment channel for investors who can’t afford to lose their money.
Thu Duc Housing Development Co. Chairman Le Chi Hieu declared “tourism real estate” the wave of the future. A top executive of Nova Real Estate Co. pointed out that in real estate, investors always have two options – they can either invest directly or through financial intermediaries.
Dr. Do Thi Loan, Secretary General of the HCM City Real Estate Association, advises people to choose real estate because of its reasonable profit and high safety.
However, Luong Tri Thin, Chairman of Dat Xanh, a construction and real estate company, pointed out that real estate investors remain vulnerable to legal uncertainties, “because the Government changes policies regularly.” Further, Thin argued, there’s a financial mismatch — real estate developers gnerally need to finance projects on a twenty to thirty year horizon but can only borrow money for a maximum term of 15 years.
VietNamNet/LD
Last updated: Monday, November 30, 2009 |
Lao Dong was at a conference where various experts argued about where Vietnam’s groggy investors ought to put their money, if they still have any.
Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?
All investments are risky
The gyrations of the world gold market recently have helped many Vietnamese earn a fortune, but at least as many others have been cleaned out. Amateur investors are conspicuous in the latter group, having plunged in without good market information and all too often placing their bets with the help of dreams and horoscopes.
Nguyen Minh Tri, Director of Agribank’s Gold, Silver and Gemstone Company said that investors on the gold trading floors rarely ‘win.’ That’s because the gold price is influenced by many unpredictable factors, such as the crude oil price, the currency exchange rate and international politics.
According to Tri, a person with ten dong to invest should allocate two to gold. They should sell gold right away when they can make a profit instead of greedily waiting for a bigger profit.
The Deputy General Director of Asia Commercial Bank, Do Minh Toan, disagrees. Though it’s a high risk form of investment, he said, gold investors still have a lot of opportunities to earn fat profits.
Two experts consulted on stocks, Huynh Minh of Ban Viet Securities and Nguyen Ngoc Truong Chinh of Sen Vang Securities, said that if investors follow a long term investment plan instead of ‘surfing’ in and out of the market, they will always have opportunities.
We Vietnamese have always felt that tangible things like gold or real estate are ‘safer,’ Chinh noted. We think that we will still have ‘assets’ even when real estate or gold prices decrease, whereas we will lose everything if we invest in stocks and the companies go bankrupt.
Real estate market judged the least bad choice at present
Some speakers pointed out that investment preferences in Vietnam have been greatly influenced by changing Government policies, a sign of the market’s immaturity. Most investors just follow the crowd.
In 2006-2007, investors poured money into stocks. When the stock market cooled off, they rushed to ‘throw’ money into the real estate market. Then when there was a chill in real estate, many shifted to make speculative investments in gold. Such inconsistency rarely pays off.
Participants from the real estate sector called it the safest investment channel for investors who can’t afford to lose their money.
Thu Duc Housing Development Co. Chairman Le Chi Hieu declared “tourism real estate” the wave of the future. A top executive of Nova Real Estate Co. pointed out that in real estate, investors always have two options – they can either invest directly or through financial intermediaries.
Dr. Do Thi Loan, Secretary General of the HCM City Real Estate Association, advises people to choose real estate because of its reasonable profit and high safety.
However, Luong Tri Thin, Chairman of Dat Xanh, a construction and real estate company, pointed out that real estate investors remain vulnerable to legal uncertainties, “because the Government changes policies regularly.” Further, Thin argued, there’s a financial mismatch — real estate developers gnerally need to finance projects on a twenty to thirty year horizon but can only borrow money for a maximum term of 15 years.
VietNamNet/LD
Stock market: Foreigners in the dark (Vietnam)
Stock market: Foreigners in the dark
Last updated: Sunday, November 22, 2009 |
VnnNews - Many foreigners investing in Vietnamese securities are being deprived of shareholder rights.
Too many foreign investors have been left out in the cold during shareholder meetings
VnnNews - Many foreigners investing in Vietnamese securities are being deprived of shareholder rights.
Language and legal barriers and being left on the sidelines at annual shareholder meetings were common complaints voiced at a forum on strengthening listed companies’ corporate governance rules, held in Hanoi last week.
A foreign five-year stock market veteran said many companies he had invested in had not provided him with information or documents on upcoming annual shareholder meetings as required by law. As a result, he could not join or authorise anyone to join the meetings as a proxy voter.
However, listed firms said many individual foreign investors’ addresses were unclear with invitation letters and documents often bouncing back. The Vietnam Custody Centre proposed changes to listed firm sample charter regulations. The centre said that listed firms and share issuers must place information, including English-language documents, about shareholder meetings on their websites. Moreover, it claimed that firms must send information to the centre so it could inform investors.
The centre also suggested introducing rules similar to Singapore’s, regulating all foreign investors opening a Vietnamese securities trading account to register an address in Vietnam so listed firms and market regulators could send necessary information their way.
Dr Nguyen The Tho, head of the State Securities Committee’s Issuance Management Department, pledged he would focus on legal changes, including those relating to the sample charter, to address this obstacle. Tho said online annual shareholder meetings might help remove geographical problems for foreign investors.
Overseas-based foreign investors’ difficulties in delegating someone to join shareholder meetings were also a hot topic at the forum. To authorise someone, an authorisation letter must be sent to Vietnam via a Vietnamese diplomatic agency in the country the investor is residing in, before being translated into Vietnamese, notarised then sent to the company’s executives.
Tho said improved corporate governance was the key to dealing with these complaints. He said the market regulator was completing a regulatory framework on corporate governance, including clarification of authorisation issues. “Changes to the sample charter applied to listed firms, attached to Decision 15/2007-QD-BTC, would be introduced next year to assist stock market transparency.”
VietNamNet/VIR
http://www.vnnnews.net/stock-market-foreigners-in-the-dark
Last updated: Sunday, November 22, 2009 |
VnnNews - Many foreigners investing in Vietnamese securities are being deprived of shareholder rights.
Too many foreign investors have been left out in the cold during shareholder meetings
VnnNews - Many foreigners investing in Vietnamese securities are being deprived of shareholder rights.
Language and legal barriers and being left on the sidelines at annual shareholder meetings were common complaints voiced at a forum on strengthening listed companies’ corporate governance rules, held in Hanoi last week.
A foreign five-year stock market veteran said many companies he had invested in had not provided him with information or documents on upcoming annual shareholder meetings as required by law. As a result, he could not join or authorise anyone to join the meetings as a proxy voter.
However, listed firms said many individual foreign investors’ addresses were unclear with invitation letters and documents often bouncing back. The Vietnam Custody Centre proposed changes to listed firm sample charter regulations. The centre said that listed firms and share issuers must place information, including English-language documents, about shareholder meetings on their websites. Moreover, it claimed that firms must send information to the centre so it could inform investors.
The centre also suggested introducing rules similar to Singapore’s, regulating all foreign investors opening a Vietnamese securities trading account to register an address in Vietnam so listed firms and market regulators could send necessary information their way.
Dr Nguyen The Tho, head of the State Securities Committee’s Issuance Management Department, pledged he would focus on legal changes, including those relating to the sample charter, to address this obstacle. Tho said online annual shareholder meetings might help remove geographical problems for foreign investors.
Overseas-based foreign investors’ difficulties in delegating someone to join shareholder meetings were also a hot topic at the forum. To authorise someone, an authorisation letter must be sent to Vietnam via a Vietnamese diplomatic agency in the country the investor is residing in, before being translated into Vietnamese, notarised then sent to the company’s executives.
Tho said improved corporate governance was the key to dealing with these complaints. He said the market regulator was completing a regulatory framework on corporate governance, including clarification of authorisation issues. “Changes to the sample charter applied to listed firms, attached to Decision 15/2007-QD-BTC, would be introduced next year to assist stock market transparency.”
VietNamNet/VIR
http://www.vnnnews.net/stock-market-foreigners-in-the-dark
Speculation and Manipulation in the Vietnamese Stock Market
Swimming with shark
Last updated: Saturday, December 5, 2009 |
VnnNews – Predatory stock ‘sharks’ hunt in packs, grouping together to invest big money small-time companies to boost share prices and feast on profits.
Big-time investment “teams” whose members are known as “sharks” have been fixing stock prices by investing via several different accounts to manipulate market sentiment, a Thanh Nien investigation has found.
Though Vietnamese law only allows stock market investors to open one account at one brokerage firm, sharks use accounts opened by their friends and family to place buy and sell orders.
With combined financial resources of up to thousands of billions of dong (dozens of millions of dollars) bolstered by leverage from brokers, a team can fix the price of any stock with a flood of sell or buy orders.
Saigon Securities Inc. stocks were hit by a team of sharks earlier this year. The predators were able to push the price of the major blue-chip public company up nearly four-fold from mid March to early June, a shark in Hanoi told Thanh Nien.
But in many cases, the sharks focus less conspicuously on small or newly listed stocks. Thanh Nien found out that sharks had doubled stock prices at least three Hanoi-listed Song Da Corporation subsidiaries, as well Vinavico Company and the Education and Finance Investment Company, for short periods of time this year.
A shark told Thanh Nien that small companies with a chartered capital of less than VND50 billion were often the targets of big predators. The ideal firms to “hit,” he said, were those with 50 percent stakes owned by board members and other executives who are not allowed to sell within six months after the issue. He said Vietnam’s stock environment was perfect for sharks because it nurtures rumors that easily fuel price hikes.
At such companies, board members and executives’ relatives usually hold another 20 percent, so only about 30 percent of shares are actually traded in the market, a broker whose clients are mostly sharks told Thanh Nien.
“[Sharks] only need to buy about 1-2 million shares to be able to manipulate the market prices of that stock,” said the broker, who refused to be named.
The sharks’ manipulative power has become so strong that small investors, who once based their decisions on foreign investors‘ moves, now bet on shark intelligence.
VIPs
It’s no wonder that many brokerage companies who enjoy hefty fees from big-time investors welcome sharks as VIPs, offering them many privileges that in turn help multiply the sharks’ strength.
Since many brokerages are owned by banks, they are also able to offer attractive leverages. Most sharks only need to provide 20-30 percent of a security’s value for a purchase, the rest is funded by the brokers. In some special cases, the leverage could be as high as 9 to 1.
“It’s the leverage that helps create ‘super investors.’ Cash can’t,” a Hanoi-based shark told Thanh Nien, adding that very few investors actually possess hundreds of billions of dong in cash.
While normal investors can only sell a stock four days after they buy it, many brokers also let sharks sell a stock within three days of purchase, allowing them to make quick profits or retreat in times of strong market fluctuation.
Sharks and brokers have also joined hands to spread rumors and “reveal” information that can help them fix prices.
Such “intelligence” is in fact highly valued by many opportunistic investors who do not care about studying the official statistics of listed companies in which they want to buy stocks.
One such investor, known only as N.V.T., said the purchases made on “mainstream” stock consulting are like “buying government bonds.”
“Following sharks is risky but hugely profitable,” he said.
The limits of power
However, one shark, who preferred not to be named, told Thanh Nien that the big investment teams were in fact not that powerful.
“[Big-time investors] can fix prices successfully mostly because they follow market trends to inflate prices of a certain stocks. It’s not that they can manipulate the market at will,” she said.
“When the market becomes really bearish, not even the big-timers, nor even god, can push stock prices. Fleeing is the best policy then.”
Indeed, many sharks admitted that the bear market since late October had left many of them “soaked in blood” as their leverages – their beloved weapon – turned out to be double-edged swords.
Black Friday
The 23rd of October this year is a painful memory for many sharks. The VN-Index has been bearish since then, falling from the peak of 626,14 to under 500 this month. Within just 10 days of that dark Friday, the index plummeted by nearly 60 points.
“For 10 consecutive days, I lost VND1 billion each. It was so painful,” said a shark in Hanoi known as H. Stock brokerage companies, which had treated big investors like kings, began preying upon the predators to recover their loans.
H. said leaders at the brokerage where she had accounts told the media that they did not force investors to sell when the VNIndex fell.
“Indeed they did not have to force anyone,” H. said with sarcasm. “On their own, they sold investors’ stocks to get claim their debts.”
Many investors who had been leveraged 4-to-1 said their brokers sold their stocks after just two bearish sessions. This practice usually ignites a vicious circle: other investors, seeing bigger ones selling en masse, also rush to sell, which drives prices further into the deep south and thus inflicts even more damage to the sharks’ pocketbooks.
At the same time, the central bank recently asked brokers to strengthen a ban on short-selling stocks, reiterating that investors can sell only stocks that they own in their accounts, meaning the soonest they can sell a stock is four days after they buy it, nullifying the sharks’ advantage of first sale.
As a result, sharks have “bled all over the floor,” said an investor who requested anonymity.
Fall from grace
In a bearish market, big speculators are always ready to break their relations with, or even betray, their “teammates,” brokers told Thanh Nien.
“When the market is bullish, they work closely together to push prices and fix prices. Everyone is too happy looking in the same direction. But when the wind turns, everyone cares only for his fate,” a deputy CEO of a Ho Chi Minh City-based brokerage said.
Some sharks told Thanh Nien their “shoals” broke a few days around October 23 when some “teammates” secretly sold their stocks at low prices to cut losses while the teams had agreed to push prices to higher levels.
In one such case, a big-time team agreed to push Ha Nam Mineral Company (KSH) stock prices to VND100,000 apiece, a shark told Thanh Nien. But some members who sensed a market U-turn coming, secretly sold the stocks at just VND82,000. The team’s whole plot then collapsed, as did the stock price, which now stands at just around VND50,000.
Intelligence on big-time teams’ plans to fix prices, once eagerly sought, embraced and followed by small investors and even some brokers, is now shunned as fraudulent rumors the biggies set up to sell their own stocks.
In fact, the trust in the “biggies’ stock market control power” vanished within a week of October 23, some investors said. During that week, small investors more than once pinned high hopes on the return of the bull market based on rumors that sharks would push the prices of a certain number of stocks. It turned out later, however, that it was a trick the sharks used to clear their own stocks.
VietNamNet/Thanh Nien
----
Sharks a valuable part of the food chain: Brokerage director
Le Dinh Ngoc, general director of the Hanoi-based Thang Long Securities Company said “shark” investors played a valuable role on the market, describing them as “professional investors.”
“They create demand. They merely invest in stocks and do not do anything else.”
Ngoc said the risks that these investors caused to the market should be considered side by side with the contributions they make.
His counterpart Nguyen Dinh Phong from VNDirect Securities Joint Stock Co., also in Hanoi, said shark investors created high liquidity and made trading more active.
These investors are also believed to enrich their brokerages as they pay brokering service fees of VND500 million to VND1 billion a month, a senior executive at another brokerage company said.
However leaders from other brokerages such as Bao Viet and Ban Viet said brokerages that offer privileges to VIP investors have robbed law-abiding brokerages and have helped big investors knock out smaller ones.
Nguyen Hoang Long, a small investor in Hanoi, said “When the market was rising, I could never buy although I tried many times, and I couldn’t sell either when the market was going down.”
Another investor in Hanoi named Le Thi Huong said in anger that “the stock market should be a transparent place that offers equal chances for anyone.”
A senior official from the State Securities Commission, who requested anonymity, told Thanh Nien “It is not that we don’t know about the pricing tricks, but investigating these claims and finding evidence to punish people involved is not easy.
“The investors can say they bought a certain stock because they found it promising. That’s not violating the law, for sure.”
A senior investigative officer from the commission said an investigation was possible but needed to be planned slowly and carefully, otherwise the commission would be shamed if both investors and brokerages manage to evade punishment.
http://www.vnnnews.net/swimming-with-shark
Last updated: Saturday, December 5, 2009 |
VnnNews – Predatory stock ‘sharks’ hunt in packs, grouping together to invest big money small-time companies to boost share prices and feast on profits.
Big-time investment “teams” whose members are known as “sharks” have been fixing stock prices by investing via several different accounts to manipulate market sentiment, a Thanh Nien investigation has found.
Though Vietnamese law only allows stock market investors to open one account at one brokerage firm, sharks use accounts opened by their friends and family to place buy and sell orders.
With combined financial resources of up to thousands of billions of dong (dozens of millions of dollars) bolstered by leverage from brokers, a team can fix the price of any stock with a flood of sell or buy orders.
Saigon Securities Inc. stocks were hit by a team of sharks earlier this year. The predators were able to push the price of the major blue-chip public company up nearly four-fold from mid March to early June, a shark in Hanoi told Thanh Nien.
But in many cases, the sharks focus less conspicuously on small or newly listed stocks. Thanh Nien found out that sharks had doubled stock prices at least three Hanoi-listed Song Da Corporation subsidiaries, as well Vinavico Company and the Education and Finance Investment Company, for short periods of time this year.
A shark told Thanh Nien that small companies with a chartered capital of less than VND50 billion were often the targets of big predators. The ideal firms to “hit,” he said, were those with 50 percent stakes owned by board members and other executives who are not allowed to sell within six months after the issue. He said Vietnam’s stock environment was perfect for sharks because it nurtures rumors that easily fuel price hikes.
At such companies, board members and executives’ relatives usually hold another 20 percent, so only about 30 percent of shares are actually traded in the market, a broker whose clients are mostly sharks told Thanh Nien.
“[Sharks] only need to buy about 1-2 million shares to be able to manipulate the market prices of that stock,” said the broker, who refused to be named.
The sharks’ manipulative power has become so strong that small investors, who once based their decisions on foreign investors‘ moves, now bet on shark intelligence.
VIPs
It’s no wonder that many brokerage companies who enjoy hefty fees from big-time investors welcome sharks as VIPs, offering them many privileges that in turn help multiply the sharks’ strength.
Since many brokerages are owned by banks, they are also able to offer attractive leverages. Most sharks only need to provide 20-30 percent of a security’s value for a purchase, the rest is funded by the brokers. In some special cases, the leverage could be as high as 9 to 1.
“It’s the leverage that helps create ‘super investors.’ Cash can’t,” a Hanoi-based shark told Thanh Nien, adding that very few investors actually possess hundreds of billions of dong in cash.
While normal investors can only sell a stock four days after they buy it, many brokers also let sharks sell a stock within three days of purchase, allowing them to make quick profits or retreat in times of strong market fluctuation.
Sharks and brokers have also joined hands to spread rumors and “reveal” information that can help them fix prices.
Such “intelligence” is in fact highly valued by many opportunistic investors who do not care about studying the official statistics of listed companies in which they want to buy stocks.
One such investor, known only as N.V.T., said the purchases made on “mainstream” stock consulting are like “buying government bonds.”
“Following sharks is risky but hugely profitable,” he said.
The limits of power
However, one shark, who preferred not to be named, told Thanh Nien that the big investment teams were in fact not that powerful.
“[Big-time investors] can fix prices successfully mostly because they follow market trends to inflate prices of a certain stocks. It’s not that they can manipulate the market at will,” she said.
“When the market becomes really bearish, not even the big-timers, nor even god, can push stock prices. Fleeing is the best policy then.”
Indeed, many sharks admitted that the bear market since late October had left many of them “soaked in blood” as their leverages – their beloved weapon – turned out to be double-edged swords.
Black Friday
The 23rd of October this year is a painful memory for many sharks. The VN-Index has been bearish since then, falling from the peak of 626,14 to under 500 this month. Within just 10 days of that dark Friday, the index plummeted by nearly 60 points.
“For 10 consecutive days, I lost VND1 billion each. It was so painful,” said a shark in Hanoi known as H. Stock brokerage companies, which had treated big investors like kings, began preying upon the predators to recover their loans.
H. said leaders at the brokerage where she had accounts told the media that they did not force investors to sell when the VNIndex fell.
“Indeed they did not have to force anyone,” H. said with sarcasm. “On their own, they sold investors’ stocks to get claim their debts.”
Many investors who had been leveraged 4-to-1 said their brokers sold their stocks after just two bearish sessions. This practice usually ignites a vicious circle: other investors, seeing bigger ones selling en masse, also rush to sell, which drives prices further into the deep south and thus inflicts even more damage to the sharks’ pocketbooks.
At the same time, the central bank recently asked brokers to strengthen a ban on short-selling stocks, reiterating that investors can sell only stocks that they own in their accounts, meaning the soonest they can sell a stock is four days after they buy it, nullifying the sharks’ advantage of first sale.
As a result, sharks have “bled all over the floor,” said an investor who requested anonymity.
Fall from grace
In a bearish market, big speculators are always ready to break their relations with, or even betray, their “teammates,” brokers told Thanh Nien.
“When the market is bullish, they work closely together to push prices and fix prices. Everyone is too happy looking in the same direction. But when the wind turns, everyone cares only for his fate,” a deputy CEO of a Ho Chi Minh City-based brokerage said.
Some sharks told Thanh Nien their “shoals” broke a few days around October 23 when some “teammates” secretly sold their stocks at low prices to cut losses while the teams had agreed to push prices to higher levels.
In one such case, a big-time team agreed to push Ha Nam Mineral Company (KSH) stock prices to VND100,000 apiece, a shark told Thanh Nien. But some members who sensed a market U-turn coming, secretly sold the stocks at just VND82,000. The team’s whole plot then collapsed, as did the stock price, which now stands at just around VND50,000.
Intelligence on big-time teams’ plans to fix prices, once eagerly sought, embraced and followed by small investors and even some brokers, is now shunned as fraudulent rumors the biggies set up to sell their own stocks.
In fact, the trust in the “biggies’ stock market control power” vanished within a week of October 23, some investors said. During that week, small investors more than once pinned high hopes on the return of the bull market based on rumors that sharks would push the prices of a certain number of stocks. It turned out later, however, that it was a trick the sharks used to clear their own stocks.
VietNamNet/Thanh Nien
----
Sharks a valuable part of the food chain: Brokerage director
Le Dinh Ngoc, general director of the Hanoi-based Thang Long Securities Company said “shark” investors played a valuable role on the market, describing them as “professional investors.”
“They create demand. They merely invest in stocks and do not do anything else.”
Ngoc said the risks that these investors caused to the market should be considered side by side with the contributions they make.
His counterpart Nguyen Dinh Phong from VNDirect Securities Joint Stock Co., also in Hanoi, said shark investors created high liquidity and made trading more active.
These investors are also believed to enrich their brokerages as they pay brokering service fees of VND500 million to VND1 billion a month, a senior executive at another brokerage company said.
However leaders from other brokerages such as Bao Viet and Ban Viet said brokerages that offer privileges to VIP investors have robbed law-abiding brokerages and have helped big investors knock out smaller ones.
Nguyen Hoang Long, a small investor in Hanoi, said “When the market was rising, I could never buy although I tried many times, and I couldn’t sell either when the market was going down.”
Another investor in Hanoi named Le Thi Huong said in anger that “the stock market should be a transparent place that offers equal chances for anyone.”
A senior official from the State Securities Commission, who requested anonymity, told Thanh Nien “It is not that we don’t know about the pricing tricks, but investigating these claims and finding evidence to punish people involved is not easy.
“The investors can say they bought a certain stock because they found it promising. That’s not violating the law, for sure.”
A senior investigative officer from the commission said an investigation was possible but needed to be planned slowly and carefully, otherwise the commission would be shamed if both investors and brokerages manage to evade punishment.
http://www.vnnnews.net/swimming-with-shark
Wednesday 4 November 2009
The story behind the US$1-billion revenue of gold trading floors in Vietnam
Not All That Glitters Is Gold
By Hai ly
Friday, October 30,2009,00:55 (GMT+7)
A gold trading floor with healthy liquidity should enable investors to place and match orders equal to thousands of taels each when gold prices jump or plunge
The story behind the US$1-billion revenue of gold trading floors
For the first time in history, gold prices exceeded US$1,050 an ounce, prompting the international and local media to predict that they may climb to US$1,100-1,200. Many individual investors on gold trading floors have incurred losses by betting on falling prices. “When prices first rose, a number of investors did not attempt to cut losses, but continue selling gold. However, a prolonged period of price increase has eroded their endurance. When global prices underwent a correction phase, investors could no longer withstand the losses. At that time, banks also started to step in. Together with owners of gold trading floors, they have dealt with the accounts of these investors,” said Nguyen Duc Thai Han, deputy general director of the Asia Commercial Bank (ACB).
Reaching US$1 billion
Unlike the sale of gold bars, the operations of most gold trading floors currently fall under two categories. Some gold trading floors such as those operated by SBJ (Sacombank Jewelry) and ACB allow investors to engage in mutual transactions. Others, meanwhile, require investors to place their orders with the owners of the trading floors, who will, in turn, place these orders with international trading floors. Their revenue is hard to measure. Both investors and management agencies should be concerned about the actual liquidity of domestic gold trading floors. Some trading floors put their daily order-matching volumes at 200,000-300,000 taels, or even 400,00 taels. The total revenue reaped by gold trading floors reaches US$1 billion per day, which far outshines that of the stock market.
Reality, however, is not so shiny. A close look at order-matching volumes at some gold trading floors has provided some surprising insights. In general, the value and volume of gold traded soars when gold prices fluctuate drastically. This also holds true for stocks and many material commodities. However, at many gold trading floors, trading volumes actually surge when global gold prices vary little. It is possible that owners of gold trading floors have placed orders worth hundreds or thousands of taels apiece when price disparity is insignificant, so as to generate staggering revenue. This, in turn, makes gold trading floors more competitive and appealing to investors. Investors may then open accounts at gold trading floors which capture their attention.
Should this be the case, are the actual trading volumes at domestic gold trading floors as enormous as many people think? A gold trading floor with healthy liquidity should enable investors to place and match orders equal to thousands of taels each when gold prices jump or plunge. How many gold trading floors actually satisfy this criterion? Or are they manipulating their revenue to lure investors?
It is vital for the authorities, especially the State Bank of Vietnam (SBV), which compiles and implements regulations governing gold trading floors, to accurately evaluate the scale of these floors. What is the appropriate deposit for gold trading? How much gold should banks keep to ensure liquidity? What about trading gold on accounts held by credit institutions? These are all controversial issues. There should also be regulations concerning the financial capabilities and business skills of both owners of gold trading floors and investors. At present, local gold prices move in tandem with their global counterparts and are also influenced by international speculation. Gold trading, therefore, comes with both high returns and high risks. Is this activity suitable for all investors? Unless the authorities can provide a satisfactory answer to this question, effectively managing gold trading floors is an uphill task.
On the other hand, the revenue which banks reap from gold trading floors also varies as gold prices fluctuate. The turnover comes from three sources:
1. trading fees of some VND2,000 per tael (or VND4,000 per tael if they are collected from both buyers and sellers);
2. overnight loans of gold and the dong, offered to gold trading accounts at gold trading floors (this activity is not related to mobilizing and lending loans as credit);
3. trading gold, domestically or otherwise, via accounts or purchase of gold bars.
For instance, ACB’s revenue generated by gold trading topped VND1 trillion last year, including VND1.4-1.5 billion of daily trading fees. ACB has been a member of the Dubai gold trading floor for three months, where the bank carries out its own transactions rather than those requested by its individual investors. This move has also sheltered ACB against drastic changes in the domestic gold market.
In developed countries, individuals access international stock, bond, foreign currency and gold markets, from the U.S. and Europe to Australia and Japan via brokers. This is not yet the case in Vietnam, where the necessary conditions have not been in place. Still, the proliferation of domestic gold trading floors makes it important for the Government to manage such activity efficaciously when it is allowed. Misleading revenue figures posted by gold trading floors will ineluctably trigger unhealthy competition and hamper the interest of investors.
http://english.thesaigontimes.vn/Home/business/trade/7199/
By Hai ly
Friday, October 30,2009,00:55 (GMT+7)
A gold trading floor with healthy liquidity should enable investors to place and match orders equal to thousands of taels each when gold prices jump or plunge
The story behind the US$1-billion revenue of gold trading floors
For the first time in history, gold prices exceeded US$1,050 an ounce, prompting the international and local media to predict that they may climb to US$1,100-1,200. Many individual investors on gold trading floors have incurred losses by betting on falling prices. “When prices first rose, a number of investors did not attempt to cut losses, but continue selling gold. However, a prolonged period of price increase has eroded their endurance. When global prices underwent a correction phase, investors could no longer withstand the losses. At that time, banks also started to step in. Together with owners of gold trading floors, they have dealt with the accounts of these investors,” said Nguyen Duc Thai Han, deputy general director of the Asia Commercial Bank (ACB).
Reaching US$1 billion
Unlike the sale of gold bars, the operations of most gold trading floors currently fall under two categories. Some gold trading floors such as those operated by SBJ (Sacombank Jewelry) and ACB allow investors to engage in mutual transactions. Others, meanwhile, require investors to place their orders with the owners of the trading floors, who will, in turn, place these orders with international trading floors. Their revenue is hard to measure. Both investors and management agencies should be concerned about the actual liquidity of domestic gold trading floors. Some trading floors put their daily order-matching volumes at 200,000-300,000 taels, or even 400,00 taels. The total revenue reaped by gold trading floors reaches US$1 billion per day, which far outshines that of the stock market.
Reality, however, is not so shiny. A close look at order-matching volumes at some gold trading floors has provided some surprising insights. In general, the value and volume of gold traded soars when gold prices fluctuate drastically. This also holds true for stocks and many material commodities. However, at many gold trading floors, trading volumes actually surge when global gold prices vary little. It is possible that owners of gold trading floors have placed orders worth hundreds or thousands of taels apiece when price disparity is insignificant, so as to generate staggering revenue. This, in turn, makes gold trading floors more competitive and appealing to investors. Investors may then open accounts at gold trading floors which capture their attention.
Should this be the case, are the actual trading volumes at domestic gold trading floors as enormous as many people think? A gold trading floor with healthy liquidity should enable investors to place and match orders equal to thousands of taels each when gold prices jump or plunge. How many gold trading floors actually satisfy this criterion? Or are they manipulating their revenue to lure investors?
It is vital for the authorities, especially the State Bank of Vietnam (SBV), which compiles and implements regulations governing gold trading floors, to accurately evaluate the scale of these floors. What is the appropriate deposit for gold trading? How much gold should banks keep to ensure liquidity? What about trading gold on accounts held by credit institutions? These are all controversial issues. There should also be regulations concerning the financial capabilities and business skills of both owners of gold trading floors and investors. At present, local gold prices move in tandem with their global counterparts and are also influenced by international speculation. Gold trading, therefore, comes with both high returns and high risks. Is this activity suitable for all investors? Unless the authorities can provide a satisfactory answer to this question, effectively managing gold trading floors is an uphill task.
On the other hand, the revenue which banks reap from gold trading floors also varies as gold prices fluctuate. The turnover comes from three sources:
1. trading fees of some VND2,000 per tael (or VND4,000 per tael if they are collected from both buyers and sellers);
2. overnight loans of gold and the dong, offered to gold trading accounts at gold trading floors (this activity is not related to mobilizing and lending loans as credit);
3. trading gold, domestically or otherwise, via accounts or purchase of gold bars.
For instance, ACB’s revenue generated by gold trading topped VND1 trillion last year, including VND1.4-1.5 billion of daily trading fees. ACB has been a member of the Dubai gold trading floor for three months, where the bank carries out its own transactions rather than those requested by its individual investors. This move has also sheltered ACB against drastic changes in the domestic gold market.
In developed countries, individuals access international stock, bond, foreign currency and gold markets, from the U.S. and Europe to Australia and Japan via brokers. This is not yet the case in Vietnam, where the necessary conditions have not been in place. Still, the proliferation of domestic gold trading floors makes it important for the Government to manage such activity efficaciously when it is allowed. Misleading revenue figures posted by gold trading floors will ineluctably trigger unhealthy competition and hamper the interest of investors.
http://english.thesaigontimes.vn/Home/business/trade/7199/
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