Vietnam’s benchmark stock index gained

The VN Index advanced 4.5 percent, the most since July 24, to close at 517.05 on the Ho Chi Minh City Stock Exchange, the highest in more than a month. Vietnam Export-Import Commercial Joint-Stock Bank, the country’s fourth-biggest listed bank, gained by the daily limit of 5 percent to 25,200 dong. PetroVietnam Fertilizer & Chemical Joint-Stock Co. climbed 5 percent, the most since Aug. 25, to 35,700 dong.

State Securities Commission Chairman Vu Bang Dec. 30 said the minimum period that buyers must hold shares before selling them may be reduced by one day. The government on the same day ordered the closure of about 20 gold trading floors in the country by March 30.

“A relatively big capital flow is expected to transfer from gold exchanges to the stock market,” said Giang Trung Kien, head of research at FPT Securities Inc., the brokerage unit of Vietnam’s biggest listed software maker. “Investors were trading very excitingly today because they expect the liquidity in the market will rise after the new rules.”

Investors currently have to wait three days after the date of purchase for the transaction to clear before they’re able to sell the shares. The delay will be cut to two days after the date of purchase, Bang said in an interview in Hanoi.

Agribank Securities Joint-Stock Co., the brokerage unit of Vietnam’s biggest lender by assets, rose 5 percent to 25,200 dong. Joint-Stock Bank for Foreign Trade of Vietnam, the country’s largest listed lender, added 4.9 percent to 49,300 dong, the highest since Nov. 16.

First Day

Shares surged in the first trading session of 2010 after a strengthening economy helped boost the index 57 percent last year, the most since 2006. The Southeast Asian nation’s economy expanded 5.3 percent last year and the government expects growth of 6.5 percent this year.

“We hold positive forecasts if you incorporate the growth rate of Vietnam and the general view of Vietnam and other emerging countries,” said Louis Nguyen, chairman and chief executive officer of Saigon Asset Management, which manages about $125 million.

“The forward price-earnings ratio appears to be reasonable,” he said by phone today. The “true” ratio for shares on the VN Index is 15 times earnings or less, he said. That compares with a multiple of 22.5 times estimated earnings for shares on the MSCI Asia Pacific Index.

--Editors: Reinie Booysen, Richard Frost

The 100 top stock millionaires in 2008

Chairman of Hoang Anh Gia Lai Group Doan Nguyen Duc has been announced as the richest person on the stock market. The total assets the members of the group have reach nearly $2.6bil.
Chairman of Hoang Anh Gia Lai Group Doan Nguyen Duc (left)Surpassing some 4,000 candidates for the position of champion, Chairman of Hoang Anh Gia Lai Group Doan Nguyen Duc became the richest stock millionaire in 2008 as he is holding VND6,160bil worth of HAG shares.

Starting business as a small workshop in Gia Lai province which specialised in making desks and chairs for students, Duc and his colleagues gradually developed the workshop into a company and then a multi-field group, from specialising in afforestation, woodwork processing, construction materials to real estate development, tourism and football business.

In 2006, Hoang Anh Gia Lai’s chartered capital was VND296bil. Two years ago, the group began listing its shares on the HCM City bourse, and its capital increased by six-fold compared to 2006, to VND1,798bil. The total market capitalisation of Hoang Anh Gia Lai by December 31, 2008 had reached VND11,328bil, or 2.5% of the market’s total scale.

Besides Duc, two other members of Hoang Anh Gia Lai are also named in the top 100 list. His brother ranks 50th with VND143bil worth of HAG, while the deputy general director of the group ranks 100th with assets worth VND54.2bil.

In 2008, one more member of the Saigon Investment Group entered the bourse, SGT, a telecom company, which helped the group’s chairman Dang Thanh Tam have even more listed shares.

However, as the stock market has been falling, the huge volume of shares of Tam (45mil KBC, 7.4mil ITA and 13.86mil SGT) are valued at VND3,280bil only. As the asset value is half as much as in 2007, Tam has yielded the No 1 position to Doan Nguyen Duc, and now ranks third.

Pham Nhat Vuong, a young entrepreneur, still keeps his second position. Vinpearl, the brother of Vincom, has listed 100mil shares on HCM City bourse. With 49mil VIC and 20mil VPL, Vuong now has VND5,225bil worth of shares, an increase of VND1,500bil compared to 2007.

According to local newspaper VnExpress, which initiated the listing of 100 top millionaires, the 2008 list was compiled from information of 310 of the 345 listed companies.


Nearly 4,000 individuals are named in the prospectuses of the above companies; they have the total assets in shares of VND44,359bil, or 3% of GDP. 85% of the assets belong to 100 stock millionaires. Of these, 66 men are holding VND28tril worth of shares, while the remaining assets belong to 34 women.

The top 100 list in 2008 welcomes 16 new members, mostly coming from newly listed companies like Vinpearl, Hoang Anh Gia Lai, Hoa Sen. There are two names from two companies listed before 2008, but have just joined the top 100 list. Only 15 VIP’s have had their assets increase in comparison with 2007. The assets of the other 85 persons have decreased by VND40tril, mostly because of the stock price decreases.

(Source: VNE)

Violence Clouds India’s Economic Future - NYTimes.com

NEW DELHI — The terrorist siege in southern Mumbai, not far from its financial district, is likely to threaten India’s already murky economic future and thwart plans to transform the city into a regional financial center, economists and investors said.

India’s economy had already been slowing significantly, because of the global credit crunch and the rupee’s decline. The country’s leading stock market index, the Sensex, has been cut in half since January as foreign investors redirected billions of dollars out of the country. Real estate markets around the country are cooling off.

Now foreign investors and business executives, who fueled much of India’s blistering growth over the past three years, are expected to be even more cautious about investing in India, at least in the short run, analysts said. Local companies and executives, who have already put the brakes on growth projections, could revise them further.

“Of course there will be some setbacks” related to the attacks, said Hitesh Kuvelkar, associate director at First Global, a financial research firm. Even before the attacks, First Global predicted that India’s economic growth could slow to about 6 percent in 2009 and less than 4 percent in 2010.

The attacks, which left more than 150 people dead by Friday evening, made targets of foreigners, witnesses said. The heavily armed terrorists were able to bypass security at two of India’s most expensive hotels, and it has taken India’s military several days to quell the violence, raising questions about safety in even the most exclusive locations.

It may be some time before the hotels, the Taj Mahal Palace and Tower and the Oberoi, once regular haunts for executives, become deal-making hubs again. “I would not feel comfortable either staying in or going to meetings at the Taj or the Oberoi, at least in the near future,” said Joel Perlman, the president of Copal Partners, a research company.

Officials from India’s Finance Ministry and its stock exchanges have long promoted Mumbai’s potential as a major international financial center, but outsiders have been skeptical of that ambition. New glass office towers in northern Mumbai house some of the world’s largest banks not far from impoverished neighborhoods; there is a shortage of housing for business executives; and basics like public transportation are either overcrowded or inconvenient.

The international financial crisis and growing fears of terrorism could delay plans for Mumbai’s continued growth for years.

Tourism, which employs 20 million people throughout India, is sure to slow down, at least temporarily. “Tourists tend to be fickle and nervous,” said Matthew Brooks, the head of industry analysis at Business Monitor International, a research firm that specializes in emerging markets.

Even as India has emerged as an economic, political and cultural power in recent years, it has endured a steady increase in terrorist attacks. Since January 2004, more people have been killed in India in terrorist attacks than in any other country except Iraq, according to Political and Economic Risk Consultancy, which is based in Hong Kong.

Kamal Nath, India’s minister of commerce and industry, said in a telephone interview that he did not expect the attacks to have any lasting effect on the Indian economy, because, he argued, international investors have accepted that there is some risk of terrorism almost anywhere.

Others are not so sure. “If you have a situation where terrorism becomes endemic, that’s a more serious problem,” Mr. Brooks said.

The government will no doubt try to convince software company executives, bankers and other businesspeople that India remains a safe and attractive place to do business. “We are going to reassure people that this is an absolute exception and not the rule,” Mr. Nath said. “It’s not something that’s taken lightly by the government.”

Many people compared the Mumbai attacks to the attacks on the World Trade Center in 2001. After all, Mr. Perlman, of Copal Partners, said, New York “still retained its position as the main financial center in North America and the world.”

Heather Timmons reported from New Delhi, and Keith Bradsher from Mumbai.

Rate cut by China helps rupee rise the most in 3 weeks

Mumbai: The rupee rose the most in three weeks on speculation global funds will increase purchases of Asian stocks after China cut its key lending rate by the most in 11 years to spur growth.
The rupee climbed to the highest since 14 November as the benchmark share index completed the week’s best advance after the People’s Bank of China cut its lending rate by 1.08 percentage points to 5.58%.
The rupee also climbed on speculation NTT DoCoMo Inc., Japan’s biggest mobile phone operator, brought in part of the $2.7 billion it agreed this month to pay for 26% of Tata Teleservices Ltd.
“The rupee has gained as flows seem to be coming in from some hedge funds, possibly for equity purchases,” said Paresh Nayar, chief foreign-exchange and bond trader at Development Credit Bank Ltd in Mumbai. “Some of the Tata Teleservices money is also said to be coming in.”
The rupee advanced 1.1% to 49.435 per dollar in Mumbai, according to data compiled by Bloomberg. That is the biggest gain since 4 November.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, climbed 3.8%. The index is trading near the cheapest levels relative to earnings in at least five years.
The price-earnings valuation of the Sensex has fallen to 9%, near the lowest since Bloomberg started compiling such data in 2003, from a record high of 31.1 reached in January.
China’s central bank also lowered the reserve requirement for the biggest banks to 16% from 17%, effective 5 December. The requirement for smaller banks will fall to 14% from 16%. The cuts are aimed “at ensuring sufficient liquidity in the banking system, and to promote steady loan growth,” the bank said in a statement.
Templeton Asset Management Ltd, Aberdeen Asset Management Ltd and F&C Management Ltd are buying Indian stocks as strategists predict a rebound in the rupee, after it fell more than 20% this year.
The median forecast of 17 strategists in a Bloomberg survey is for the currency to strengthen to 48.5 by the end of June. “Investors are speculating the global financial crisis is nearing an end and some stability will return to the financial markets soon,” said Ravindra Babu, a foreign-exchange trader at state-owned Andhra Bank in Mumbai. “The rupee will continue its rising streak in the near term.”
Offshore forward contracts showed traders scaled back bets for how far the rupee will weaken in the next month.
Non-deliverable contracts showed an implied rate of Rs49.78 to the dollar, versus 50.5 on Tuesday.
Forwards are agreements in which assets are bought and sold at current prices for future delivery. Rupee forwards traded overseas are non-deliverable, meaning they are settled in dollars rather than the local currency.
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Stocks will fall deeply?

The stock market has experienced four falling trading sessions so far this month. Meanwhile, experts say that there are signs of further falls in the time to come, and that there is only a 10% chance of the recovery of stock prices this year.
Investors watching the world’s markets
Investors are watching the world’s markets
It is clear that the uncertainties in the world’s financial market and US economy have been making Vietnamese investors uncomfortable.
Lam Minh Chanh, Director of Dai Viet Securities Company, said that Vietnam, as a part of the world, will not remain untouched by the global financial market crisis.

Meanwhile, the director of an investment fund has warned that the business results of listed companies in the third and fourth quarters of the year will not be satisfactory and also be a barrier for the recovery of the VN Index in the last months of the year.

Le Dat Chi, a lecturer in the Faculty of Corporate Finance, HCM City Economics University, said that the securities indexes of the markets in the world have been sliding after bad news from the US and then Europe. He said the global economy will continue to be gloomy.

Chi said that the macroeconomy in Vietnam remains unsatisfactory despite the good news about the consumer price index (CPI), trade deficit and money supply. The worries about listed companies’ business results will badly affect share items which have big capitalisation volumes.

“Technical analysis shows that there is a 10% possibility of stock prices recovering. If stock prices do not bounce back on October 8, prices will fall further to a new threshold of 360 points,” he said.

In the latest news, the VN Index on October 8 dropped by another 12.91 points to 401.33 points, the deepest low since July 2008.

However, Chi said that the current stock prices are considered very cheap, and should prompt investors to buy stocks. A higher demand would help the stock market bounce back.

The analysis director of a securities company said that with the everyday trading volume of less than VND800bil it will be very difficult to push the market up. The director also said that the high P/E is really an obstacle for the recovery of the VN Index in the short term. He went on to say that there will not be optimistic signs for the stock market until mid 2009 when the economy becomes stable.

Chanh from Dai Viet Securities Company said that the VN Index will depend on investors. Investors believe that the business results of listed companies are unsatisfactory. Therefore, the only thing that could change their minds now is the increased performances of the world’s stock markets.

No intervention needed

Though experts have given pessimistic forecasts about the world’s and Vietnam’s stock markets in the time to come, they say that no intervention from the government should be made at this moment.

Chi said that administrative orders should not be abused, and that it is necessary to let the market follow economic laws and truly reflect its value.

Vu Bang, Chairman of the State Securities Commission (SSC), said that the watchdog has not made any plans to interfere in the market at this moment.

“SSC is still keeping close watch over the market and it will consider taking necessary measures only if the VN Index nearly falls to the previous low of 366 points,” Bang said.

Bang added that if the VN Index remains around 400 points, this should be understood as the market being stable. The state management agency will take actions only if it sees wide-scale sales and serious problems in liquidity.

Vietnam's Dong may fall 10% by year end

Vietnam's dong may fall 10 percent by year-end as the government seeks a gradual depreciation to avoid a ``currency crisis'' and a sudden devaluation, according to Calyon, the investment banking arm of Credit Agricole SA.

Accelerating inflation, a widening trade deficit and a near 60 percent slide in local stocks this year have seen the currency decline for three straight months, the longest losing streak since August. The dong, which is allowed to trade within 1 percent on either side of a daily fixing rate, will weaken 29 percent in the next 12 months according to trading of non- deliverable forwards.

``The dong depreciation pressure remains strong,'' Calyon strategists including Sebastien Barbe wrote in a research note yesterday which he confirmed in a telephone interview today. ``We expect the dong to soften further to about 18,000 versus the dollar by the end of 2008.''

The dong gained 0.2 percent today to 16,242.50 versus the dollar as of 9:50 a.m. in Hanoi, according to data compiled by Bloomberg. The currency has weakened 1.5 percent in 2008. Offshore 12-month non-deliverable forwards trade at 23,000, Bloomberg data show.

The trade deficit, inflation and slowing fund inflows will weigh on the currency this year, Barbe wrote. The dong will fall to 16,500 per dollar by the end of June, 17,500 by end-September and 18,000 by year-end he said.

The government will seek to avoid a sudden devaluation of 30 to 40 percent as this will worsen inflation, widen the trade deficit by increasing the cost of imports and ``jeopardize portfolio investments and foreign direct investments,'' Barbe said in the note.

Wider Band

``If they want to implement a 10 percent depreciation in a few weeks, they could do it within the current 1 percent band,'' Barbe said in the interview. ``But if they want to signal to the market that they want more flexibility and they want depreciation, they could widen the band to 2 percent.''

The State Bank of Vietnam said in April it planned to widen the dong's daily trading band to 2 percent from 1 percent, without giving any date for the change.

Vietnam's authorities have to ability to avoid a sudden currency devaluation due to the nation's foreign-exchange reserves, ``resilient foreign direct investments, limited short- term external debts and robust export sector,'' Barbe said.

The government will raise interest rates to slow the economy and opt for a ``a controlled but significant depreciation of the dong to avoid a full fledge currency crisis,'' the note said.

Consumer prices rose 25.2 percent last month, the most since 1992, the Hanoi-based General Statistics Office said May 27. The trade deficit more than tripled in the first five months of the year to $14.42 billion from $4.25 billion in the same period a year earlier, the government said May 26.

The government this week cut its economic growth forecast for 2008 to 7 percent from 9 percent, and said curbing inflation was its top priority.

To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net.