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BUSINESS IN BRIEF 11/11   2008-11-11 - VNA

Swiss corp. builds second factory in Vietnam

Switzerland-based Automation and Power Technologies Group ABB on Nov. 11 officially launched the construction of its second factory in Vietnam with an investment of 30 million USD.

The new factory, located in northern Bac Ninh province, is expected to produce power equipment and medium and high voltage power systems and 80 percent of the total output will be exported.

ABB General Director Gary Marler said the new factory will lay the foundation for the corp.’s long-term operation in Vietnam.

One of the reasons ABB continues to expand its investment in Vietnam is the availability of labour which helps the company produce quality products with competitive price, he added.

ABB began its operation in Vietnam in 1993 and currently has a 500-employee factory in Hanoi.

Foreign investors, lower rates buoy market

The VN-Index marched in place on Nov. 11, closing up a negligible 0.01 percent to end the day at 366 points.

A total of 16 million shares were traded on the day at a value of 518 billion VND (30.8 million USD).

Foreign investors were net sellers on the day, with 710,000 shares bought and 1.87 million units sold, for a net sales figure of 79.2 billion VND (4.7 million USD).

Hoang Thi Hoa, director of the analysis department at Viet Capital Securities, said supply and demand on the market were now in relative balance, with liquidity being well maintained.

In the three final trading days of last week, foreigners were net buyers with net buys worth 140 billion VND (8.3 million USD), Hoa noted.

Hoa said that lower interest rates and renewed foreign investor interest were helping sustain a market still challenged by the psychology of domestic investors, world market fluctuations, and the impact of the US economic crisis on Vietnamese exports.

Analysts in general were predicting that many listed firms would report lower profits in the fourth quarter and that more bad economic news was on the way, including higher inflation in the final two months of the year due to recent heavy rains and flooding.

In Hanoi on Nov. 10, the HASTC Index added 1.99 points, or 1.71 percent, to close at 118.35. About 9.57 million shares changed hands for a total turnover of 273 billion VND (16.25 million USD).

Asia Commercial Bank’s listing of 200 million additional shares would present some challenges for the market this week, EuroCapital Securities said in a report.

PXP Vietnam to start hedge fund next year

PXP Vietnam Asset Management, which oversees 225 million USD, plans to start a hedge fund by early next year, said co-founder Kevin Snowball.

The PXP Vietnam Value Fund will raise as much as 200 million USD to invest in undervalued stocks. PXP, the initials of the highest mountain Phan Xi Pang in Vietnam, is betting that the stock market will recover as inflation eases and the nation's trade deficit widens at a slower pace.
The benchmark Vietnam Index may double to 750 by the end of 2009, Snowball said.

“In the long term, the story's intact,'” Snowball said in an interview in Ho Chi Minh City. “As long as the government handles the development of the economy and the market correctly - so far they're doing a very good job -- then I think we're fine.”

According to the Bloomberg biz news, the index of 163 companies traded on the Ho Chi Minh Stock Exchange has lost about 60 percent this year, the biggest decline in Asia after China. It is set to rise to 500 by the end of the year “given continued diminishing volatility globally and macroeconomic stability,” he added.

The Vietnam Value Fund will be PXP's first open-ended fund, allowing investors to withdraw their money after a one-year lock- in, with restrictions on what can be redeemed at once. The fund will have the flexibility to use hedging when and where available, and if the manager feels it appropriate taking pricing and market conditions into account, Snowball said, adding that PXP will start small and then build its performance record before a full launch by early 2009.

PXP, set up six years ago by Snowball and Jonathon Waugh, currently manages three closed-end funds listed in Ireland that invest in publicly traded Vietnamese companies and those preparing to list on the stock exchange.

Vietnam, Australia to offer master’s degrees in economics

A memorandum of understanding regarding a training and study cooperation programme between the State Bank of Vietnam (SBV) and the Australia National University (ANU) was signed in Hanoi on Nov. 10, according to SBV.

The MoU, signed by SBV Vice Governor Nguyen Toan Thang and Prof. Ian Chubb, President and Vice Director of the ANU, aims at establishing a framework for cooperation between the SBV and the ANU with Study Programmes provided by the Crawford Institute.

This is an opportunity to develop a training programme offering master’s degrees in International and Developmental Economics for SBV staff members.

The SBV said the MoU forms a basis for the establishment of a mechanism to promote its cooperation in training and academic study with the ANU, increasing the benefits for both sides, whilst expanding the scope of bilateral cooperation.

Foreign investors flock to VinaCapital meeting

Monetary markets, the private economic sector, real estate development, technology and infrastructure topped the agenda of an investment meeting organised by VinaCapital, which took place in Ho Chi Minh City .

The two-day event, running from Nov. 10-11, attracted over 100 foreign investors.

VinaCapital’s CEO Don Lam, a leading fund manager in Vietnam , pledged to make changes to the group’s operations based on participants’ suggestions in order to “bring the world to Vietnam”.

Andy Xie, former CEO of Morgan Stanley in the Asian-Pacific region, advised Vietnam to further focus on exports, woo more foreign investment and draw upon its international experiences in maintaining property values in a reasonable way so as to prevent rampant real estate speculation.
Chi Pham, a VinaCapital economic expert, extolled the virtues of the Vietnamese Government’s policy in dealing with economic difficulties, pointing to the country’s third quarter GDP growth, which outstrips the growth recorded during the previous quarter, lower budget deficits and virtually-curbed inflation.

“The Vietnamese economy is certain to recover soon, probably during the fourth quarter of the year,” Pham said.

VinaCapital is operating four funds with a total value of more than 1.9 billion USD, namely the Vietnam Opportunity Fund, VinaLand, the Vietnam Infrastructure Limited and DFJ VinaCapital.

An additional property fund is currently in the pipeline, scheduled for early 2009, in the form of limited partners. 

(Source: VNA)

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