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Moolah
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Posting #1: Tue Apr 8th, 2008 01:21 |
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Posted on BTimes:
Is it time to buy into battered Vietnam stocks?
Published: 2008/04/08
Vietnam has an inflation problem, but it’s a great market to pick up value, says a chief investment officer, adding that price/earnings ratios for many firms have fallen to below 10 times — cheaper than the Thai and Philippines markets
HONG KONG: The hype about Vietnam’s WTO entry and its “mini-China” potential has been washed away by double-digit inflation but, ironically, now could be the time for funds to pour money into the country’s ravaged stock market.
Investment managers who talked up Vietnam in the past two years say that amid the slump in shares, bargains are emerging in the US$70 billion economy, which is still expected to grow as much as 7.5 per cent this year despite a global slowdown.
Government estimates show foreign direct investment disbursements would jump 25 per cent to US$10 billion in 2008 from last year, when it joined the World Trade Organisation.
After two years of what some have described as gambling in the fledgling stock markets of the Communist Party-run Southeast Asian country, investors are urged to take a long-term view.
“I used to joke that Vietnam didn’t need a casino because it’s got two: the Hanoi and Ho Chi Minh City stock exchanges,” said Bradley Lalonde, chief investment officer at BIDV-Vietnam Partners Investment Management. “In a way, it became that.”
However, Lalonde said companies had not borrowed heavily and still needed capital to take advantage of an emerging middle class and a fast growing economy that has drawn manufacturers such as Samsung Electronics Co Ltd, Intel Corp, Compal and Foxconn.
Some companies, including listing candidates who have already had initial public offerings pushed back, would look to foreign investors to raise equity through private placements.
“Yes, they’ve got an inflation problem, but it’s a great market to pick up value,” said Lalonde.
He said price/earnings ratios for many firms had fallen to below 10 times — cheaper than the Thai and Philippines markets.
STOKED EXPECTATIONS
Investment strategist Spencer White, who helped stoke Vietnam fever in 2006 with a report calling it a “10-year buy" while he was at Merrill Lynch, said market bubbles were popping.
“One bubble has burst — equities. The other bubble currently bursting is the property market,” said White, who is an adviser to Thien Viet Securities in Ho Chi Minh City.
Property prices have fallen about 10-15 per cent this year, after quadrupling in cities last year.
“That means opportunity,” White said at a sparsely attended Hong Kong conference session on Vietnam. “I’ve seen more private equity teams in the last six weeks than in the previous six months.”
While the global credit crunch has done little to encourage investment in risky emerging markets, Vietnam’s headaches are rooted in soaring food, fuel and house prices, reflected in a 19.4 per cent jump in the consumer price index in March.
To battle inflation, authorities have sought to restrict bank lending, which grew 50 per cent last year. The government also has raised bank reserve requirements and interest rates, and imposed stricter rules on lending.
The Ho Chi Minh Stock Exchange is the worst performer in Asia this year, losing 43 per cent, after being one of the top performers a year ago. The share slump prompted government intervention in March to buy back shares and restrict the intra-day trading band to 1 per cent.
The market rose sharply on Monday after regulators doubled the intra-day share trading band to 2 per cent to increase liquidity.
“The panic that was around suggested that the Vietnam story was over, but that’s clearly not the case,” said Kevin Snowball of PXP Asset Management in Ho Chi Minh City. “The government intervention achieved its aim to slow down the fall and the panic and now people can stop and think long term.”
Sacombank Securities, whose research tries to educate with a “word of the day” explaining terms such as net asset value, says catfish exporter Navico is trading at 8.8 times earnings, while Petrovietnam Fertilizer and Chemicals Co, information technology firm FPT and Industrial group Hoa Phat are at around 13 times.
Still, Vietnam remains an opaque market, lacking research to aid investors. The stock market is still illiquid and the government interventions have highlighted the risk that new rules can be sprung on investors.
“It’s possible to make a quick killing but you could be the one to get killed,” investment manager Lalonde said. - Reuters
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MooFassa
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Posting #2: Wed Jun 4th, 2008 12:38 |
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04-06-2008: RHB Bank upbeat on long-term prospects in Vietnam
by Sharmila Ganapathy
KUALA LUMPUR: RHB banking group is upbeat on Vietnam’s long-term prospects despite the economic woes in that country.
“As with all countries with a vibrant economy, Vietnam will go through a cyclical economic challenge. Our investment in retail brokerage is a long-term vision for RHB banking group.
“We believe Vietnam is a good location for long-term business opportunities,” its group managing director Michael J Barrett told The Edge Financial Daily via email.
On Tuesday, The Edge Financial Daily reported RHB Bank saying it was planning expansion in Vietnam, Indonesia, Thailand, Brunei and Singapore “soon”, targeting 10% of its revenue to come from overseas operations in 2010 from 4% in 2007.
RHB Capital Bhd, the holding company of RHB Bank, gained five sen to close at RM5.05 yesterday.
Already, the cloud seems to be lifting on most of the Malaysian companies with exposure in Vietnam, with share prices of several continuing to rebound. Gamuda Bhd, which was the worst hit counter last Friday among local firms with interests in Vietnam, gained 13 sen or 5.2% to close at RM2.63.
Property developer SP Setia Bhd, which dropped two sen to RM3.94 on Tuesday, gained four sen to close at RM3.98. Berjaya Land Bhd, however, dropped four sen to RM4.82. Public Bank Bhd lost 10 sen to RM11.30. Malayan Banking Bhd, whose share price fell 10 sen to RM7.40 on Tuesday, was unchanged.
Construction player WCT Engineering Bhd lost six sen to close at RM3.28. While property and construction firm Ireka Corporation Bhd gained four sen to close at RM1.07.
CLSA Malaysia head of research Loong Chee Wei believed that the situation in Vietnam would have less an impact on Malaysia and other regional economies as they had stronger foreign reserves and economic fundamentals compared to the past.
“Vietnam still offers opportunities for long-term views. Ultimately, the inflation rate needs to be kept under control, this is still a major concern,” he added.
Vietnam, which has been enjoying healthy foreign fund inflows and status as the next growth destination in Asia, had its debt outlook rating slashed by Fitch Rating last Thursday on concerns the country’s double-digit inflation (consumer prices shot up by more than 25% year-on-year in May).
The country’s stock market has also been one of the worst performers this year and speculation is rife that authorities will take measures to devaluate the Vietnamese dong if inflation spiralled out of control.
Kenny Yee, head of research at OSK Investment Bank, believed it is still too early to gauge contagion effects of Vietnam on other Asian countries. However, he concurred that most Asian economies including Malaysia possessed healthy foreign reserves to withstand a shock from Vietnam.
“Only specific companies such as furniture companies with operations in Vietnam will see impact on earnings, as well as the property and construction sector players,” Yee added, citing pesticide maker Imaspro Corporation Bhd as one company who would see a minimal impact.
HLG Research, on the other hand, appears to be bracing for the probable worsening of the situation in Vietnam. In its report dated June 2, the brokerage said: “Right now, the Vietnamese dong is facing downward pressure in its peg-limited trading band. This is followed by a steep downtrend in the Vietnam Stock Exchange.”
“It appears that the real problems in Vietnam are beginning to get really serious very fast. Every small daily depreciation will most likely mean less revenue from Vietnamese ventures for Malaysian companies.
“However, the rout will be mitigated by foreign funds which are waiting on the sidelines, ready to pounce on drastically cheaper and extremely attractive Vietnamese stocks. However, there is still a distance to go before a support can be found for the weakening dong and Vietnam Stock Exchange,” it added.
Attachment: strategyVietnam04.pdf (Downloaded 0 times)
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MooFassa
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Posting #3: Wed Jun 4th, 2008 12:39 |
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| From Citigroup Attachment: Vietnam-.pdf (Downloaded 1 time)
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Moolah
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Posting #4: Tue Jun 10th, 2008 14:04 |
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Vietnam Raises Interest Rate to Highest in Asia, Lets Dong Fall
By Nguyen Kieu Giang
June 10 (Bloomberg) -- Vietnam increased the benchmark interest rate to the highest in Asia to cool the quickest inflation since at least 1992, and will allow the dong to weaken.
Governor Nguyen Van Giau will raise the base rate to 14 percent from 12 percent to stabilize the economy from tomorrow, according to a statement on the central bank's Web site. The bank also lowered the dong's reference rate for tomorrow by 2 percent to avoid currency speculation.
The rate increase may help restore confidence in the benchmark stock index, which has lost almost 60 percent this year and is the world's worst performer. Vietnam faces a potential currency crisis because of spiraling inflation, according to Deutsche Bank AG and Morgan Stanley.
``This is good news for the market,'' said Dam Bich Thuy, Hanoi-based chief executive officer of Australia & New Zealand Banking Group Ltd.'s Vietnam unit. ``The move shows that the government is taking action to address investors' concerns.''
The rate increases are the third this year. The Southeast Asian nation also raised the refinancing rate to 15 percent from 13 percent and the discount rate to 13 percent from 11 percent, the statement said.
The State Bank of Vietnam will set the dong's daily reference rate at 16,461 per dollar tomorrow, 2 percent lower than today's rate, it said. The currency is allowed to trade up to 1 percent on either side of the rate. The trading band will remain at 1 percent, the bank said.
Depreciation Pressure
``The exchange rate is under great pressure for depreciation although the Vietnamese government is trying to manage that very slowly,'' said Adam McCarty, chief economist of Mekong Economics Ltd. in Hanoi. ``They should probably do it faster than they are doing it, although they are trying to manage expectations.''
The dong fell 0.04 percent to 16,297.5 against the dollar as of 5 p.m. in Hanoi. The currency has weakened 2.7 percent in the past three months. Offshore 12-month non-deliverable dong forwards trade at 22,575 per dollar, Bloomberg data show, indicating traders are betting on a 28 percent drop in a year.
Morgan Stanley said last month that the dong is poised to weaken because Vietnam's current-account deficit may widen this year to an ``unsustainably large'' level. Vietnam will need an International Monetary Fund-style assistance program in coming months that may include a dong devaluation, Deutsche Bank said last week.
Stocks Slump
Stocks may extend this year's slump as the government raises interest rates, restraining earnings growth, Mark Matthews, Asia Pacific head of equity strategy at Merrill Lynch & Co. in Hong Kong, said in an interview last week.
The VN Index, a measure of 151 companies on the Ho Chi Minh City Stock Exchange, fell 1.61 percent to 373 today, extending its record losing streak to 24 days.
``Interest-rate increases are just one of the measures the central bank will take to reduce money in the banking system,'' said Nguyen Anh Tuan, deputy director of the investment banking division at the Vietnam Bank for Industry and Trade in Hanoi.
Central banks in the Philippines and Indonesia this month increased borrowing costs to tackle surging food and energy prices. Vietnam last week cut its growth target for this year and said it needed to prioritize getting inflation under control. Consumer prices surged 25.2 percent from a year earlier in May.
Vietnam's central bank needs to push borrowing costs higher than the rate of inflation to prevent the economy from overheating, James McCormack, Fitch Ratings' head of Asia-Pacific sovereign ratings, said on May 30.
``Asian central banks are finally waking up to the fact that the inflation threat has to be dealt with before the need to support growth,'' said Callum Henderson, head of foreign-exchange strategy at Standard Chartered Bank in Singapore.
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Moolah
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Posting #5: Tue Jun 10th, 2008 14:06 |
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14% woh!!!!!!!!!!!!!!
Macam mana ni????
article on TIme: http://www.time.com/time/world/article/0,8599,1812810,00.html?imw=Y
Monday, Jun. 09, 2008
Vietnam's Troubled Economy
By Martha Ann Overland/Hanoi
A year ago, Vietnam was being hailed as the next Asian miracle, a success story to match the rise of the Asian tigers of the 1990s and more recently the stunning growth of China and India. Thanks to economic reforms, the communist country was attracting record amounts of foreign investment. The economy expanded by 8.5% last year—among the fastest rates in the region—and housing prices doubled and tripled, driven up in part by frantic buyers who stood in line to snap up condos before they had even been built. The country's nascent stock market was minting millionaires. In Hanoi and Ho Chi Minh City, their flashy new cars clogged roads better suited for bicycles.
But a funny thing happened on the way to prosperity. Halfway through 2008, Vietnam's authoritarian government finds itself grappling with soaring prices, collapsing markets and an increasingly restive workforce. Inflation, now running at an annual rate of 25%, is eating up much of the gains made by citizens over the last several years. Vietnam's stock market, which has fallen 58.5% since January, currently holds the unhappy title of being the worst-performing in the world in the last 30 days. Citing the government's difficulty in reining in inflation, Moody's, which grades creditworthiness, lowered Vietnam's ratings outlook last week to negative from positive. Poor ratings signal that banks may have trouble meeting their financial obligations, undermining investors' confidence in the country. In a nutshell, the economy overheated and the government was too slow to respond, says Jonathan Pincus, chief economist for the United Nations Development Program in Vietnam. "It's how we got into this problem," he says.
Inflation is causing trouble worldwide, of course, but it's particularly acute in Vietnam, where prices for virtually everything, from food to fuel to housing, have been spiking. Much of Vietnam's recent growth has been driven by its expanding manufacturing sector, but now assembly line workers' salaries are being outpaced by basic living costs. The result has been a rash of strikes—unusual in communist Vietnam—that are hurting the country's image as a haven for multinational companies looking for alternatives to China for manufacturing sites. Over the last six months, there have been more than 300 strikes throughout the country. Most last only a few days, with management usually agreeing to small pay increases. In April, a company that manufactures sneakers for Nike agreed to give workers a 10% increase, or about an additional $6.30 a month. But that amount is not enough to make much of a difference when workers go to the grocery store.
Prime Minister Nguyen Tan Dung told the country's National Assembly on May 31 that the number of households going hungry has doubled in one year. "The government understands and shares with the people," Dung said. "And sees it is their responsibility to try to best curb inflation." So far, Hanoi has moved to cool the economy by requiring banks to increase their reserves; the central bank has also raised interest rates to 12%. But inflation is being made worse by Vietnam's weakening national currency. The Vietnamese dong has fallen roughly 1.5% against the dollar in the past six months. But the recent dismal economic news is threatening to weaken it further. This past week the dong jumped from 16,120 to the dollar to 18,500 on the black market as traders rushed to put their dong into dollars and gold. The currency swoon makes imports, from food to commodities, more expensive. Jocelyn Tran, whose Ho Chi Minh City company contracts with local factories to supply apparel to U.S. stores, says the price of Chinese-made yarn has jumped 15% this year. "Our factories are absorbing it by cutting out the profit margin," says Tran. Even though some factories have raised wages, she complains that workers are still going on strike.
The government in Hanoi has been slow to tackle some of the problems in part because battle lines are no longer neatly drawn between Communist Party hardliners and the party's more liberal economic reformers. Decision-making has been fragmented to the point of paralysis, says Pincus. For example, no single entity is in control of monetary policy. In a system that works on consensus— not just among the party but committees, ministries and provinces—it has been difficult to get leaders to make tough decisions. "It's always harder to distribute the pain," says Pincus. "It's much easier to distribute the goodies."
To tackle inflation, the government knows it needs to raise interest rates and rein in spending, particularly by state-owned enterprises that have used state financial institutions as their own piggy banks. But any sudden moves can also threaten to strangle businesses and scare away new investors, which Vietnam must avoid if it is to meet its revised 7% growth rate. Still, while the numbers look bad now, Vietnam's long-term economic outlook is good, says Tom Nguyen, head of global markets at Deutsche Bank in Ho Chi Minh City. Some think the government's ability to deal with public dissent swiftly and harshly lessens the threat that strikes will turn into violent protest or will encourage calls for political change. Vietnam remains a stable country of 85 million people with a young and educated workforce. "It is unreasonable for any of us investors to expect this development process not to have challenges," says Nguyen. "But some of the heartache has to fall in the lap of the people who had unrealistic expectations." Unfortunately, most of the heartache will be felt by Vietnam's poor as they struggle to put food on the table.
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Moolah
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Posting #6: Tue Jun 10th, 2008 14:11 |
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14% woh.... another .... err.... err..... 
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Moolah
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Posting #7: Tue Jun 10th, 2008 14:13 |
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Vietnam Adjusts Exchange Rate
By JAMES HOOKWAY
June 10, 2008 8:27 a.m.
Vietnam effectively devalued its currency by almost 2% to bring official exchange rates closer to black-market rates, which have fallen sharply as Vietnamese investors buy dollars to escape the soaring inflation rates marring the high-growth economy.
In a statement on its Web site, the State Bank of Vietnam said it would set Wednesday's official exchange rate at 16,461 dong per dollar, down from 16,139 dong on Tuesday.
The central bank said the change was designed to "better reflect" demand and supply in the foreign-exchange market. It also increased its main interest rate for dong-denominated loans to 14% from 12% in a bid to tamp inflationary pressure.
Normally, official exchange rates show very little fluctuation and are set by the central bank each day. The central bank also maintains a narrow trading band where the value of the dong can rise or fall by only 1% daily. That trading band will remain in place with the new rate.
Last week, Prime Minster Nguyen Tan Dung told visiting economists that there was no need to decrease the value of the dong. But black-market rates for dollars have been increasing recently, and one dollar now buys 18,000 dong to 18,500 dong -- as much as 13% more than Tuesday's official exchange rate. Investors who flocked to Vietnam's once-booming stock market have been steadily selling off shares in order to raise cash to buy dollars as seven months of double-digit inflation begin to take their toll.
Consumer prices rose by 25.2% year-on-year in May -- a 13-year high -- while a series of strikes have hit the country's burgeoning manufacturing sector. The International Monetary Fund has urged Vietnam to increase interest rates in order to choke off inflation, and in addition to raising the chief lending rate, Vietnam's central bank also increased its refinancing rate on Tuesday to 15% from 13% and the discount rate to 13% from 11%.
Many economists say the country has acted too slowly in responding to the sudden spike in inflation, which began last year as fuel prices rose and was exacerbated by floods and pest infestations which drove up the price of food this year. The country's torrid economic growth rates, which have averaged 7.5% a year since 2000, have also stoked rising prices.
Nondeliverable forward futures contracts for Vietnamese dong, which currency traders use to trade currencies which aren't freely convertible, have indicated that the dong could fall 30% against the dollar in the next 12 months, largely because of the worsening inflation problem.
Still, the potential appears limited for speculative attack on the dong led by foreign investors. Goldman Sachs, for instance, noted in a research report Tuesday that while many investors are worried that Vietnam's balance of payments could suffer if foreign direct investment inflows or exports slow, it is difficult to trade the currency offshore and that this could slow the dong's fall.
"Given the existing foreign exchange controls in Vietnam, we believe the likelihood of an outright currency attack on the Vietnamese dong initiated by international speculators remains limited," Goldman Sachs said.
--- from Wall Straits Journal ---
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Moolah
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Posting #8: Tue Jun 10th, 2008 14:15 |
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Vietnam ups interest rates, cuts dong value
HANOI, June 10 (Reuters) - Vietnam is raising interest rates from June 11 and lowering the value of the dong by 1.96 percent on Wednesday to try to fight double-digit inflation and currency speculation, the central bank said on Tuesday.
State Bank of Vietnam statements said the benchmark interest rate would rise to 14 percent from 12 percent effective on Wednesday.
It also increased the refinancing rate to 15 percent from 13 percent and the discount rate to 13 percent from 11 percent, raising the rates for the third time this year.
"Overall the move is constructive and shows they are taking a multi-pronged approach: cracking down on illegal speculation, hiking rates to cool domestic demand and conceding some dong weakness," said Claudio Piron, currency strategist at JP Morgan Chase Bank.
The central bank said it was maintaining a daily dollar-dong trading band of +/-1 percent.
But it said the official daily exchange rate for June 11 only would be 16,461 dong per dollar, down from 16,139 dong per dollar on Tuesday, representing a cut of 1.96 percent.
One Vietnamese banking analyst said the central bank "is testing the waters" but setting just a one-day rate.
"It's totally unpredictable what the rate the day after tomorrow will be."
Vietnam's economy and the dong are under pressure from inflation running at more than 25 percent and soaring imports that have tripled the trade deficit this year to $14.4 billion.
The government said last week it had no plans to devalue the dong in spite of the forwards markets pricing in a nearly 30 percent depreciation against the dollar in one year.
The government also said it had sufficient foreign currency reserves to meet investor demand to convert funds into dollars.
The dollar jumped to around 18,000 dong last week in the gold shops in Hanoi and Ho Chi Minh City, or about 11 percent higher than the central bank's regulated rate, after residents rushed to buy the currency to hedge against soaring inflation.
(Reporting by Nguyen Nhat Lam and Grant McCool in HANOI; Vidya Ranganathan in SINGAPORE; editing by Neil Fullick)
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Moolah
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Posting #9: Wed Jun 11th, 2008 00:50 |
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Some links from CBS Marketwatch...
http://www.marketwatch.com/News/Story/vietnam-shares-tank-again-moodys/story.aspx?guid=%7B8E928A22%2D9978%2D4071%2D9AF5%2D2F0C0F787C57%7D
http://www.marketwatch.com/News/Story/has-mania-vietnamese-stocks-gone/story.aspx?guid=%7B61D04089%2D393C%2D4729%2D99F1%2D3C758019FD89%7D
see this one comment posted on http://www.marketwatch.com/news/story/story.aspx?guid=%7BA4F99EF7%2DB0EC%2D4D3D%2D805E%2D295FAE82A586%7D&siteid=rss
This is a time bomb which has been ignored by the western media. Watch out for Malaysia, Philiphine, Indonesia, and even Thailand and South Korea. This is the same group which was attacked by George Soros 10 years ago. High commodity prices and low manufacturing margins will work against this group of countries.
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Moolah
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Posting #10: Wed Jun 11th, 2008 01:08 |
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This is how SCARY the market is looking!!!!!!!!!
Here is the 3 year chart
The index closed at 373...
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