Thread: Latest news on the Dong!

Originally Posted by Jason Lee

Well, stop traffic my dong is here.If you want dong you can't go wrong with Dinar Trade Inc.

Sounds good with your feedback!!!

YB.

Vietnam May Impose Controls to Curb Dong, ANZ Says (Update2)

By Jake Lee

Feb. 12 (Bloomberg) -- Vietnam may derail a rally in the world's best-performing stock market by imposing capital controls to curb gains in the dong, said Australia & New Zealand Banking Group Ltd.

The government may put restrictions on overseas funds on March 1 to deter speculators, wrote Alex Joiner and Amy Auster, economists at Australia's third-biggest bank in Melbourne. They cited unidentified reports from financial institutions. Phung Khac Ke, deputy governor of the State Bank of Vietnam, declined to comment.

``The authorities appear to be ready to use a rather blunt instrument,'' wrote Auster and Joiner in a Feb. 8 research note. ``The risks are clearly to the downside.''

Concern over possible controls pushed the benchmark stock index down almost 6 percent in the final two days of last week, paring this year's advance to 38 percent. Thailand's penalties on foreign investors withdrawing assets, imposed in December, triggered a slump in stocks, bonds and the baht.

The dong was at 15,990.00 per dollar at 12:37 p.m. in Hanoi, close to its strongest since July. By the end of the year, ANZ sees the dong weaker at 16,213. It's fallen for the past 11 years as the nation favors a weaker currency to spur exports. Katie Dean, a senior Asian economist at the bank, confirmed the report.

JPMorgan Chase & Co.'s research analyst Sriyan Pietersz in Bangkok also wrote in a report sent Feb. 7 that unidentified ``local sources'' say Vietnam plans capital controls similar to Thailand.

Appreciation Pressure

The currency is facing appreciation pressure after stocks gained on speculation the Communist country's entry into the World Trade Organization last month will boost economic growth. It gained 0.02 percent in January and 0.25 percent in December, the biggest monthly advance in more than 11 years, eroding the value of the nation's overseas shipments.

Vietnam may require overseas investors to keep money held in stocks and bonds for one year, and removing the funds may require a 30-day approval period after the initial 12 months, Auster and Joiner wrote. The central bank isn't independent from the government, and the dong breaking its depreciation path is a ``serious matter,'' they added.

Those rules would be similar to Thailand, which retains restrictions on investments of less than a year in bonds, real- estate mutual funds and foreign-currency borrowings. The penalty on share purchases was canceled a day after its introduction triggered a 15 percent slump in the Thai equity market.

So far, the dong's climb has failed to dent exports, as goods sent to the U.S., its largest market, jumped 30 percent in the first 11 months of 2006, a U.S. International Trade Commission report showed on Jan. 16.

Vietnam's Ho Chi Minh Stock Index was at 1054.26, almost double its level of about 535 three months ago. It rose to a record on Feb. 7. Vietnam's key stock index posted Asia's biggest gain in 2006.

This seems very interesting...

Big international funds to come to Vietnam
17:20' 21/03/2007 (GMT+7)

VietNamNet Bridge – A delegation of big international investment funds will come to survey Vietnam’s market in order to seek business opportunities in Vietnam at the end of March 2007, according to Open Asean Consulting Ltd’s representative office.

Soạn: HA 1062899 gửi đến 996 để nhận ảnh này

Representatives of Wall Street’s Morgan Stanley, the global financial services firm, and a market leader in securities, asset management and credit services, will be among the delegation. This is also a partner of Open Asean Consulting Ltd.

During the visit to Vietnam, the delegation will work with ministries, branches and relevant authorities. The investment funds aim to learn about the investment environment in Vietnam, the equitisation process and policies related to the stock market’s development in order to draw up development strategies for the funds in the future.

In related news, Reuters today reported that the State Capital Investment Corporation (SCIC) is forming a joint venture with Morgan Stanley, which will have its headquarters in Hanoi.

The joint venture, to be named SCIC Morgan Stanley Securities, will provide investment banking products such as M&A advisory and capital markets underwriting, equity and debt sales and trading, as well as research.

The joint venture is expected to become operational in the fourth quarter of 2007.

SCIC in Vietnam is considered a special corporation, which, on behalf of the state, manages the state owned capital in companies and makes investment deals with the capital.

Le Song Lai, Deputy Director General of SCIC, stated in a recent interview with local press that SCIC would sell parts of the state capital the corporation is holding in 55 companies. He also said that at least 20 companies to which SCIC makes capital contributions would list their shares on the bourse in 2007.

Currently, only 17 out of the 200 companies in which SCIC manages the state owned capital are listing on securities trading centres.

Two months ago, SCIC sold its 600,000 shares in a plastics company to three big investors under the negotiation method. In general, SCIC holds 30-35% of total shares of listing companies.

Among the companies in which SCIC is holding shares, Vinamilk (the Vietnam Dairy Products Joint Stock) Company has announced its intention to list its shares on a foreign stock market. Mr Lai said that the plan to list on foreign bourses by Vietnamese companies would be advocated by SCIC leadership.

(Source: Tien phong)

(21-03-2007)

Economist David Fernandez, managing director and head of JPMorgan Chase Bank’s Emerging Asia Research Department, shared his forecast on Viet Nam’s economy for this year with Viet Nam News.

What is the outlook for the nation’s economy according to JP Morgan’s recent report on Viet Nam?

JPMorgan recently published a report on Viet Nam’s economy which explores not only the macroeconomics of the country but also aspects like the local currency and foreign currency bonds, foreign exchange and the equity market. It is because JPMorgan’s clients are interested in all aspects of the economy and in all of its asset classes.

The first point in the report I want to mention is Viet Nam’s GDP growth this year.

The country’s GDP growth is still high and steady. For the last 10 years, Viet Nam has reached a GDP growth rate of 7.1 per cent, putting it between China and India in that field. The important thing is that the growth is very stable. Unlike other Southeast Asian countries which go up and down [according to their] electronics exports. Viet Nam’s economy has not been subjected to such swings. The share of electronic products in Viet Nam’s exports is less than 5 per cent. It is very low compared to other countries in Asia. That is a very important factor for investors.

In my analysis, I am looking at long-term factors such as demographics, capital accumulation and productivity, which indicate the medium term for Viet Nam will be higher at 9 per cent.

During the next few years, electronic products will become a greater export for Viet Nam with growth set to be at 7.8 per cent and higher during the coming years. And electronics will be a key factor in the economy’s growth.

Viet Nam continues to attract foreign direct investment (FDI). At present, foreign investors have wanted to diversify their investment market so Viet Nam will be a new destination.

Like other developing countries, Viet Nam is running a trade deficit which is resulting from importing materials for infrastructure building and production.

But a trade deficit is one of the points of the overall balance payment. Other points of the balance payment show a surplus. Even though Viet Nam is running a trade deficit, remittances from overseas Vietnamese, revenue from tourism and services continues to rise.

As a result, the current account balance continues to be in surplus. JPMorgan estimates the surplus is over US$1billion this year.

FDI has been high and steady and portfolio inflow looks this year to be extremely strong.

So our expectation is that the foreign reserves of the State Bank of Viet Nam (SBV) could rise up by between US$4 to 5 billion this year.

I forecast the Vietnamese dong to stay well below VND16,000 a dollar. There is about one per cent appreciation this year. Stability of the local currency is positive for investors.

The local bond yield could continue to drop sharply. Last year, the bond yield was at 8.5 per cent. Now it has dropped to 7.2 per cent and continues to decrease.

Inflation continues to come down this year. According to JPMorgan’s forecast, inflation will be at 6 per cent late this year. Lower inflation supports the idea of a lower bond yield.

More important is an imbalance between supply and demand in the bond market. Government issuance is steady this year but issuance from corporations is small. In the meantime, the demand for bonds from investors, fund managers and importantly new industries from outside of Viet Nam, continues to rise. JPMorgan’s clients from the UK and US continue to be attracted by Vietnamese Government bonds even though the bond yield has already fallen so much.

My view is Vietnamese bonds are expensive and will get more expensive because of the supply – demand imbalance.

You forecast the Vietnamese dong to continue to appreciate this year. But Viet Nam’s economy depends a great deal on exports. How will the currency appreciation affect the economy?

Export growth is rising so fast in Viet Nam. Total trade, including exports and imports over GDP has grown from 50 per cent in 1992 to over 120 per cent now, which makes the country a competitive option.

How much can currency appreciation damage the economy’s growth? I think the dong will appreciate but will still be stable.

For competitiveness of currency, we should look at the real exchange rate not nominated exchange rates. My analysis is that the dong is still competitive now. And the 1 per cent appreciation will not damage the competitiveness of Viet Nam’s exports.

The other thing to remember is that the 1 per cent appreciation over the US dollar needs to be looked at in the context of what is happening to other currencies in Asia at the same time.

We expected other Asian currencies to appreciate even more than 1 per cent. All Asian currencies except for the Japanese yen, Korean won and Indian rupee are expected to appreciate this year.

For example, in 2007, the Chinese yuan will appreciate over the US dollar up to 10 per cent while the Malaysian ringgit appreciates by about as much.

So 1 per cent appreciation for the dong is much smaller than other Asian currencies.

Currently, foreign indirect investment (FII) inflow is very high. If foreign investors draw back their money, do you think there is a great risk of a financial crisis like the one in Asia during the 1980s occurring in Viet Nam?

Before, Viet Nam did not have a portfolio indirect investment flow coming in so there was no risk. Now money continues to move in and it creates potential risks.

However, my view is that there is a little chance of capital outflow because at present foreign investors continue to struggle just to get in the market. They believe in the long-term structural positives of Viet Nam.

So there is a risk but creating an appropriate environment will make them want to stay.

I don’t think it is helpful to force people to keep their money in the country. The job of country and companies is to make them want to stay.

I think foreign investors want a stable political environment and transparency in terms of how assets are appraised.

In terms of policy-making, I am very confident that foreign investors can count on Viet Nam’s stable environment and predictable policies on exchange rate, investment and equitisation.

However, I am concerned about transparency. Although foreigners can see predictable policies for the next several years, people now ask for more transparency in companies. My observation is that transparency in Viet Nam is not very high.

If investors find that transparency is not improved fast enough, outflow of capital may occur.

Viet Nam was successful in issuing its first international bond. Do you think it should make the second issuance?

Coming from Viet Nam’s perspective, the country wants to issue international bonds with an aim to diversify its fundings. Besides, Viet Nam wants to evaluate the demand from investors as well as its prestige in the international market.

Coming from the perspective of foreign investors, they would love Viet Nam to issue more bonds in US dollars. And I forecast the demand would be very high.

You forecast that Viet Nam has a good perspective in the medium term. What happens if in the long term, the country’s economy slows down and has problems with paying international bonds?

Viet Nam still has an extremely small amount of debt on a commercial basis. The rate is much lower than that of other countries in the region. Viet Nam has just issued one bond while, by comparison, Pakistan has issued two and the Philippines has for decades been issuing long term dollar bonds.

By contrast, Viet Nam has issued a very tiny volume of bonds.

The best way to judge is to look at the market. Investors can pick up any bond in the world. They choose Viet Nam because they think it is safe. Market pricing indicates that Viet Nam should not have any difficulty in paying the debt in 2016.

The risk is possible but any country faces it.

Viet Nam’s equity marker is booming. Do you forecast any risks to it?

In the equity market, fundamentals and valuations are not important currently, rather pure supply and demand plays the most important role.

There are lots of imbalances in supply and demand in both official and OTC (over-the-counter) markets now.

I know the demand for buying Viet Nam’s equities is large and growing. The easy thing for foreign fund managers to do is to go to their clients in Europe and the US and tell them they are going to invest in Viet Nam equity and to raise the money from them. I know many investors in Singapore, South Korea, Hong Kong and outside Asia just dedicated to investing in Viet Nam. They have raised over $1 billion dollars that has yet to be put into Viet Nam’s equity market.

So the supply-demand dynamic tells me that even with acceleration of equitisation this year, the demand for listed companies is high and stock prices will stay high.

I think the bigger concern and big risk is at the OTC market where many more company stocks are available, but they are much less liquid. This is the place where risks are highest. It is because individual investors cannot know the stock price and find a place for security. It is time for people to look to the regulators to create a more transparent and predictable OTC market. There are many concerns in the OTC equity market and policy makers should take some action now.

Equity market valuation is so high and may continue go higher. This is producing the strange result that overall productivity in Viet Nam’s economy may be lower because more people will focus more on the stock market than on their jobs.

Many companies focus on increasing stock portfolios in the stock market. In other words, individuals and businesses are moving away from the core businesses because the stock market is moving up so quickly they feel they can earn more playing the market than doing their actual jobs.

And one of the solutions for the supply – demand imbalance is to increase supply. That’s why I think it is important to move the equitisation process forward and issue more equities in the formal market. — VNS

I especially find it interesting this 'economist' saying to focus on the 'real exchange rate'. Hmmm...sounds like something that could be applied other revaling currencies. But, I am pondering that '1 per cent' comment? Anyone?

It was Vietnam Dong 16573 to the USD. Now it is $1 =15,895 Vietnam Dong. So that one percent has made my dong worth more value already.

Last Updated 13/03/2007 3:50:07 PM

VIETNAM: Stock market booms as global counterparts fall

Vietnam's stock market is booming. But even as investors watch as their profits rise, they are worried that the government intends to intervene.

Listen | Audio Help

Presenter/Interviewer: Karon Snowdon
Speakers: Alex Joiner, international economist, ANZ Bank

SNOWDON: Vietnam is starting to get new names, the flavour of the month, a mini-China and the like.

Investment is indeed booming. Equities on the six year old stock market rose by 140 per cent in 2006 and are up another 50 per cent so far this year.

The index hardly noticed the last few weeks when billions of dollars of value were knocked off stock markets almost everywhere else.

There are some technical reasons for that including an under-developed trading system with some unique characteristics.

But according to Alex Joiner from the ANZ Bank, investors will continue to throw money at Vietnam's stock market.

The same goes for foreign direct investment.

JOINER: The target for FDI put out by the government last year was six-point-five billion. It's actually attracted 10-billion in 2006 and this was a significant increase on the six-point-eight billion attracted in 2005. The government is going for 12-billion in 2007 and it's well on the way to achieving that already with over 700-million dollars worth of foreign direct investment in the first two months of this year.

SNOWDON: Part of the growth has come from the corporatisation of former state owned companies.

It's helped double the number of companies on the stock market in the past year and a half.

In that time the market's capitalisation has gone from a small 500 Million dollars to a remarkable 16 Billion.

That sort of volume of money - much of it foreign, builds up pressure, and the steam has to be let off eventually.

The currency the dong has been appreciating against the wishes of the Vietnam State Bank. Alex Joiner:

JOINER: All these pressures have forced the State Bank of Vietnam to install a release valve by widening the trading bands in which the dong operates and this has allowed some pressure to be released, but the currency has appreciated. Only in the past few weeks has the currency again been set at a depreciating rate and it's only then it's broken back through the 16-thousand dong per US dollar mark.

SNOWDON: Now I've seen the word bubble used to describe Vietnam for some time now. Is there any risk of overheating now?

JOINER: Well there's certainly as I've just said there's pressures building up, but to use the words overheating and bubble at this stage is probably a little bit premature.

SNOWDON: It all means a spectacular balancing act by the authorities to encourage the foreign investment Vietnam needs against the capacity of its infant institutions and regulations to cope.

Investors are worried about speculation that won't go away that the Government will impose restrictions, maybe through a capital gains tax to cool down speculation.

Such rumours in China helped drive the nine per cent stock market fall of several weeks ago.

And like in China, Vietnam also poses challenges investors need to be aware of.

JOINER: Well that's certainly true. There is a lot of buzz created around these rapidly growing economies and we only now are seeing the information that we need to sort of actually make the investment decisions crucial to when someone puts their money into an economy such as this. For example the state-owned enterprises are being floated on the stockmarket often do not have independent ratings or audits from independently recognised companies, so people that are investing in some of these stocks are not really getting the full information on the companies that they are investing in. So this transparency is being developed but it certainly is not perfect at the moment.


Asia Pacific - Programs - VIETNAM: Stock market booms as global counterparts fall

New oil field found offshore Vung Tau
10:26' 22/03/2007 (GMT+7)
Soạn: HA 1063355 gửi đến 996 để nhận ảnh này

VietNamNet Bridge - Thang Long Joint Operating Company (Thang Long JOC) on March 21 announced to discover a new oil field at White Rhino structure in the 15-2/01 block offshore Vung Tau.

According to Nguyen Van Tam, Administrative and Personnel Manager of Thang Long JOC, the new oil field is at the depth of 2,640-2,700m compared to the sea level. Initial surveys show that it can yield around 5,000 barrels a day.

This is the second in the past four months Thang Long JOC discovering new oil fields.

This year the company will drill three more exploratory wells at other structures to evaluate the oil and gas potential of the 15-2/01 block.

(Source: TN)

Arabian prince to build hotel in Da Nang
10:12' 22/03/2007 (GMT+7)
Soạn: HA 1063333 gửi đến 996 để nhận ảnh này
Da Nang beach.

VietNamNet Bridge - Representatives of the Kingdom Hotels Investments group (KHI, which has the prince of Arab Saudi Alwaleed Bin Talal Abdulaziz Alsaud as its chairman, Wednesday signed an agreement with the Da Nang authorities on the construction of a five-star hotel in the city in 2007.

Patricia Lee, Vice Chairwoman of the KHI group in Asia - Pacific, said that KHI will replace KDL Vegas to build the five-star Raffle hotel with initial investment capital of US$60 million in the central city of Da Nang.

Raffle Hotel will located on My Khe beach, with around 150 luxurious rooms, 15 villas (600sq.m per villa), and a high-class spa zone.

(Source: Tuoi Tre)

Vietnam - economy to be reckoned with
08:42' 22/03/2007 (GMT+7)

VietNamNet Bridge - The vitality of the Vietnamese economy and its superb growth rates are making Vietnam an economic force to be reckoned with.

HSBC Holdings Plc Chief Executive Mike Geoghegan made the remark at the Vietnam Investment Forum held in Ha Noi on March 19-20, adding that that is why so many people have come to attend the forum.

More than 1,000 investors and representatives from organisations, groups, financial funds and companies from all over the world gathered in Hanoi for the forum, which focused on issues related to Vietnam's accession to the World Trade Organisation (WTO), its impacts on the country's economy, particularly the banking sector and capital market, including the stock market.

Almost all speakers acknowledged the strong development of the Vietnamese capital market with its total value reaching 14 billion USD, representing 22.4 percent of the country's GDP.

They agreed that the growing stock market has helped drive the expansion of the capital market. Economists at the forum said that although hot at the moment, the stock market is yet to face the risk of developing into a bubble that could burst at any time.

According to Kenvin Snowball, Director of the PXP Vietnam Asset Management Co. Ltd, there would be an adjustment of 10-15 percent in the long run, and such a bubble, if any. would only occur in 6-12 months.

The stock market's growth also has its impacts on the monetary market.

Opinions at the forum suggested that the Vietnamese government increase supply in order to quench the thirst of investors, step up the equitisation process of State-owned enterprises, and remove barriers for foreign investors.

A transparent legal framework and institution for the banking-financial sector, well-performing systems of transport, electricity and telecommunications are also necessary for the economic development, they suggested.

(Source: VNA)

Biggest online trading floor to open this April
21:32' 28/03/2007 (GMT+7)

VietNamNet Bridge - The largest online trading floor of Vietnam will open in April by the Vietnam Financial Investment Joint Stock Company (TigerInvest).

The goods of this trading floor will be companies, investment opportunities, projects, brand franchising, financial and investment information, and opportunities for investors who want to expand their business or start their business.

Investors and businesses can register to participate in this online trading floor from March 26 to May 26, 2007 at TigerInvest.com - Connecting Investors - Adding value.

According to experts, around 50,000 companies, mainly small and medium ones, will be established this year and around 50% of them would go bankrupt in the first two years. This will be a fat land for corporate merging and trading activities.

(Source: VOV)