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BUSINESS IN BRIEF 23/3   2010-03-23 - VietNamNet/VNA

Wary investors depress shares

 

Watchful investor psychology continued to obscure the stock market, driving the VN-Index down another 0.85 percent to 511.58 points.

 

The volume of the day’s trade on the HCM City Stock Exchange (HoSE) fell by 21.7 percent to just over 42 million shares, while trading value also decreased by more than 25 percent to 1.77 trillion VND (92.7 million USD).

 

While most major shares on the southern bourse lost value, bank shares such as Vietinbank (CTG) and Vietcombank (VCB) posted gains. The Cable and Telecommunication Materials Corp (SAM) surprised the market as the most active share with over 4.2 million units traded.

 

SAM shares rose thanks to its removal from the HoSE list of shares under warning because it earned profits last year. It was placed on the list due to posted business losses in 2008, said Au Viet Securities Co. ’s deputy general Nguyen Anh Thi.

 

On the Hanoi Stock Exchange, the HNX-Index also declined by 0.85 percent to end the day at 168.40 points. Trading volume reached over 26.2 million shares, worth a combined total of more than 891 billion VND (46.7 million USD).

 

Kim Long Securities Co. (KLS) led the northern market with 2.8 million shares changing hands.

 

“The market performed as it did in February when investors were waiting for the State Bank’s prime interest rate decision for the next month,” said Thi, noting that investors were cautious and sold shares whenever they could make a profit.

 

Thi also pointed out that capital investment was shifting quickly from a particular group of shares to another according to supporting information that meanwhile hindered the steady market rise.

 

While the macroeconomic state currently shows no hidden critical risks and presents a stable growth potential for 2010, most securities companies predicted the market would show a rising tendency for the medium-and long-term, and recommended long-term investors to buy when the market declines.

 

Foreign investors concluded on March 22 as net sellers, responsible for a net sell of more than 600,000 shares, worth a combined 22.5 billion VND (1.2 million USD). Meanwhile, they were also net buyers with 195,900 shares bought at a total value of 7.8 billion VND (408,376 USD).

 

Saigon Bank opens asset company

 

The joint stock Saigon Commercial Bank (SBC) on March 22 inaugurated an asset management company it has set up to diversify its services.

 

The SCB Asset Management Company, which has a charter capital of 200 billion VND (10.5 million USD), will manage the assets mortgaged with SCB and foreclosed due to borrowers’ failure to repay loans, making decisions about whether to lease out or sell them or use them as contribution to the bank’s joint ventures.

 

The company would securitise overdue loans by packaging them as assets and sell them to other credit institutions and asset managers, and also buy such assets from others, the company’s chairman, Nguyen Anh Phuoc, said.

 

The bank’s network of more than 110 branches and transaction offices would help in his company’s development, he added.

 

Vietnam, WB make good team

 

Cooperation between Vietnam and the World Bank (WB) has been productive, Deputy Prime Minister Nguyen Sinh Hung said at his meeting with the WB Vice President for Asia-Pacific, James Adam.

 

Deputy PM Hung praised and thanked the financial institution for its effective support and assistance to Vietnam .

 

As the world is challenged by numerous risks and the global economic crisis is posing new threats, the WB should play an important role in the global economy’s growth and act as a locomotive in attracting resources to aid nations to deal with such challenges as climate change, the leader said.

 

He told the WB official that at present the Vietnamese Government pursues the goals of recovering the economy and ensuring economic growth at a reasonable rate in addition to addressing problems in society, culture, education, and poverty.

 

In the medium and long terms, Vietnam has set out to ensure macro-economic stability to provide a foundation for its development in the following years, Deputy PM Hung said.

 

He referred to the country’s development of its 10-year strategy and its visions for 2030 with a focus on growth quality and economic restructuring.

 

The Vietnamese leader said he hoped to continue gaining the WB’s attention and assistance, as Vietnam is one of the countries that will be the most seriously affected by climate change.

 

The WB executive shared his views with Deputy PM Hung concerning threats currently challenging the world as well as the impacts of climate change, affirming that the WB is a steadfast partner, helping Vietnam tackle the problem.

 

He expressed the hope that in addition to providing direct assistance, the WB would mobilise a large sum of capital from all around the world to aid Vietnam in fighting climate change.

 

Adam also affirmed that the WB will supply Vietnam with consultancy regarding education and macro-economic issues.

 

Binh Phuoc hosts talks on founding int’l cashew association

 

 
Representatives of cashew organisations around the world gathered in the southern province of Binh Phuoc, on March 22 for a conference on founding a Global Cashew Association (GCA).

 

The event was part of the Golden Cashew Festival – the first of its kind in the country--which kicked off on March 20 in Binh Phuoc.

 

According to the Chairman of the Vietnam Cashew Association, Nguyen Thai Hoc, this is a closed meeting for all concerned sides to present preliminary studies and reports regarding the establishment of the GCA.

 

Participants agreed to hold another important meeting in Beijing , China on May 21 this year, which is expected to adopt the final decision on the GCA, with the four founding members: the African Union, Brazil , India and Vietnam .

 

On the same day, some 200 cashew traders, intermediaries, exporters and importers, both local and foreign, took part in an international consumers’ conference on cashew exports.

 

During the event, the organising board briefed the participants on state policies on developing the cashew sector and provided an overview of Vietnam ’s cashew trade relations as well as answering requests for information from interested customers.

 

Vietnam is striving to raise its cashew nut export revenue to one billion USD this year, maintaining its position as the world’s largest exporter of the staple.

 

Bao Viet starts bancassurance with MHB

 

Bao Viet Holdings, one of the leading insurers in the country, will sell its insurance products through the Mekong Housing Bank (MHB) network.

 

Under a cooperation agreement signed between the two firms in Hanoi on March 22, Bao Viet and MHB will cooperate to develop a kind of transaction, best known as bancassurance, for both life insurance and non-life insurance products.

 

Clients of each firm will enjoy incentives when using the other’s products, says the agreement.

 

Accordingly, Bao Viet and MHB will be responsible for sharing business information as well as experiences and creating favourable conditions for each other to invest in profitable projects.

 

Addressing the signing ceremony, Le Quang Binh, Chairman of Bao Viet’s Management Board, affirmed that the agreement would help Bao Viet expand its market share and bring about value-added benefits for clients of both firms.

 

More efforts needed to maintain FDI growth

 

Addressing the passivity of managers in attracting FDI and balancing investment structure are measures Vietnam needs to implement immediately to maintain FDI inflows and reach an expected growth of investment.

 

Vietnam saw a fairly good start in FDI attraction in January with 40 projects being licensed with a total registered capital of over 285 million USD, an increase of 78.2 percent over the same period last year. With this result, many economic analysts showed their optimism about this year’s FDI growth.

 

However, FDI inflows were put a hold in February, resulting in the total newly-registered and added FDI standing at only 1.78 billion USD in the first two months of this year, equivalent to 27.3 percent of the year-on-year figure.

 

The country also faces difficulties in targeting FDI inflows to important sectors such as supporting industries, human resource development, agricultural product processing, high valued added services, energy-saving industries and sectors with large export proportion. It is reflected by a majority of projects of over 100 million USD poured into real estate.

 

In addition, many managers tend to wait for projects instead of actively seeking investors or making specific investment attraction plans for each economic area and each locality.

 

Vietnam sets a target of attracting around 22 billion USD in newly registered FDI and disbursing between 10-11 billion USD in 2010.

 

To that end, experts said that the country needs to improve investment promotion quality, target investment attraction to trans-national groups and give priority to technological transfer and environmentally-friendly projects.

 

Surveying investors’ capacity should be considered an essential phase in FDI appraisal in order to avoid “dead” projects.

 



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