Low trading volumes hint at market freeze

The Ho Chi Minh City Stock Exchange continued to see shares prices battered in almost all codes on May 15, while trading volumes continue to hover almost record lows.

The VN-Index slipped another 8.83 points, or 1.86 percent, on the day to close at 466.67. In eight-straight sessions of declines, the Index has lot an overall 55.69 points, or 11 percent of its value.

Volume in May 15’s trading was just over two million shares, worth around 84 billion VND (5.2 million USD). Foreign investor trading was also modest, with 757 shares bought and 282,860 sold.

Saigon Securities Inc (SSI) saw a volume of only 6,000 shares, when it has historically been on the stocks with highest liquidity, posting transaction volumes of millions per day as recently as a month ago.

Of 154 listed codes on the exchange, only two codes were gainers on May 15 while fully 150 hit the floor. Buying was so depressed that 99 percent of buy orders were matched immediately, while some investors couldn’t sell shares even after offering them at floor prices.

“Many people don’t even bother to come here anymore to observe market developments,” said Pham Ngoc Linh, an investor with SeABank Securities Co. “Without even looking, they already know that share prices are going to keep falling.”

According to the State Securities Commission, the problems involving the stock market were not only with the market but also related to the economic situation, so measures supporting the market had to wait on broader Government decisions on how to manage the economy.

The commission held a meeting on May 14 discussing measures for the market and submitted its report to the Government for consideration on the following day. If approved, some measures would be applied instantly, the commission said.

Meanwhile, investors worried that current market developments might send the market into a long-lasting freeze similar to that in 2002-06. The VN-Index then fell from 500 points to around 130, and the market remained level for most of the four-year period.

“There is little chance that the market will freeze,” said financial analyst Nguyen Quang A, former board chairman of VPBank.

“The stock market is playing a very important role in the economy with total capitalisation reaching 45 percent of national GDP at the beginning of the year, so the Government has to take necessary measures to keep it stable and healthy,” he said.

“The market has become a familiar investment channel for the public as well as reliable channel for companies to raise capital. The people’s knowledge of the stock market has also improved greatly. They won’t abandon it.”

In the northern market, the HASTC-Index closed down 2.76 points, or 1.91 percent, to 142.09. Trading volume was improved, tripling Wednesday’s figure to over 812,000 shares, for a total value of 25.73 billion VND (1.6 million USD).

First private financial group makes debut

The Saigon Thuong Tin Commercial Bank (Sacombank) officially made debut as the Sacombank Group on May 16, becoming the first private financial group in Vietnam .

The Sacombank Group with 11 subsidiaries operates on a charter capital of 5.2 trillion VND and total assets of 79.9 trillion VND. It has a total staff of more than 6,500.

During the launch ceremony, the group signed memoranda of understandings with the Industrial Bank of Taiwan and Dragon Capital to jointly carry out financial projects and set up securities trading and brokerage channels.

Power company’s Q1 profits rise sharply

Vinh Son Song Hinh Hydro-power Joint Stock Company (VSH), earned revenue of 144.9 billion VND in the first quarter; 56.55 percent higher than the same period last year.

The company made more than 102 billion VND profit, an increase of 71.78 percent.

VSH produces power, managers and maintains hydro-power plants, does consulting, and trades in electric materials and equipment.

Cement gets shifted to stabilize south market

The Vietnam Cement Industry Corporation (Vicem) shifted 30,000-50,000 tonnes of cement to Ha Tien 1 Co in the south on Wednesday.

This move aimed to stabilize the cement market in the south. The transportation would be completed within 10 to 15 days, according to the Ministry of Construction.

Ha Tien 1 Co would offer the cement at a price of 53,500 VND per bag (50kilo/bag), while the retail cement price on the black market stands at 78,000-80,000 per bag.

Ba Ria - Vung Tau attracts 1.7 billion USD

So far this year, the southern province of Ba Ria -Vung Tau has lured 1.7 billion USD from five domestic investment projects and eight foreign direct investment projects.

In 2008, the province invested more than 1 trillion VND for the infrastructure development of Industrial Zones (IZs) and 20 billion VND for land clearance.

Currently, Ba Ria – Vung Tau has 12 IZs, covering 3,200ha. Fifty percent of IZs have been occupied with a rate of 80-100 percent.

New 185 million USD paper mill planned

The Dong Nai-based Tan Mai Paper Joint-Stock Co has unveiled a plan to build a major paper and pulp plant in the central province of Quang Ngai .

The paper mill, to be built in Binh Son District’s Binh Long Commune close to Dung Quat Economic Zone, will produce 200,000 tonnes of paper in addition to 130,000 tonnes of pulp per year.

With an investment of 3 trillion VND (185 million USD), products from the new plant will replace imported paper on the local market. Part of the mill’s production will be for export.

The mill, when operational, will help curb the shortage of paper in the local market and at the same time, offer employment opportunities to thousands of workers in the central region, said the chairman of Quang Ngai People’s Committee Nguyen Xuan Hue.

The company is applying for a license for the paper mill project, the provincial authority said following a meeting between the company’s management board and Quang Ngai People’s Committee earlier this week.

SCC sends perfume to Nigeria, looks at Japan

Saigon Cosmetic Joint Stock Co (SCC) has just signed a 150,000 USD contract to export 80,000 bottles of perfume to Nigeria , said Le Thi Kim Hoang, the Co’s deputy director.

This is the company’s new market. Currently, SCC is also preparing to expand their market into Japan .

SCC’s export turnover is expected to reach 250,000USD in the first two quarter of the year.

Seafood sector angles for Egypt

Seafood exporters are eyeing Egypt as a potential market after demand was forecast to surge 10 percent annually, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

VASEP said it was reported that Egyptian demand for seafood would rise 10 percent in the next five years due to a population increase and a greater number of foreign residents.

Egypt currently consumes roughly 1 million tones of seafood yearly, of which 250,000 tonnes are from imports. Main seafood suppliers to Egypt include Holland , the UK , Germany , the US and Norway .

According to VASEP, although export turnover to Egypt is quite small, Vietnamese seafood exports to the market have reported high growth rates. Last year, the country made more than 20 million USD from seafood exports to Egypt , a 4.7 fold increase over 2006.

Vietnam trade counsellor in Egypt , Dang Ngoc Quang, said though Vietnam earned only 100 million USD in exports to Egypt , the market held greart potential.

However, Quang recommended domestic exporters pay attention to trade promotions like seminars to popularise Vietnamese export products in the market.

According to VASEP, most Vietnamese seafood imported to Egypt was through foreign companies, so Vietnamese seafood trademarks in the market have remained unknown and unpopular.

VASEP also suggested that domestic seafood exporters scrutinize Egyptian import quality regulations to minimise any product rejections given the strictness of the market’s seafood monitoring.

Egypt requires imported seafood to meet a series of regulations including preservative and chemical prohibitions and temperature stipulations.

Taiwan invests in real estate, fertiliser production

Vietnam and Taiwan inked an agreement on strategic cooperation in fertiliser production in Hanoi on May 15.

Under the agreement, the Vietnam General Corporation of Agricultural Materials and Taiwan’s Concord Venture Fund will set up one or some joint ventures in real estate and fertiliser production.

The two companies agreed to invest 30 million USD in real estate projects in Hanoi, import fertiliser from Taiwan and produce fertiliser in Haiphong port city.

Vietnam ranks fourth in rubber export

Vietnam is now the fourth biggest exporter of rubber in the world, after Thailand , Indonesia and Malaysia .

In April, the country fetched 113 million USD from exporting 46,000 tonnes of rubber, recording year-on-year increases of 10.5 percent in revenue and 12.47 percent in volume.

As a result, Vietnam in the first four months of 2008 exported 169,000 tonnes of rubber, earning 405 million USD, down 7.14 percent in volume but up 23.85 percent in revenue over the same period last year.

Vietnamese rubber is now sold to 40 foreign countries and territories. As Vietnam ’s biggest market, China buys over 60 percent of the country’s rubber, followed by Singapore and Republic of Korea .

This year, Vietnam targets to export 780,000 tonnes of rubber to earn 1.5 billion USD. 

(Source: VNA)