31 Aug 2012 Intellasia Finance Vietnam - Hong Kong Business ...

FINANCE
Vietnam finance & business 31 August 2012
Foreign institutions
believe Vietnamese
stocks cheap and
attractive
Overseas institutions bought more Vietnamese equities than they have sold each day
since August 20 except for yesterday, when they divested $1.7 million, according to
HCM City exchange data compiled by Bloomberg. Foreigners bought a net $16.4 million
of stocks last week, the biggest weekly purchases since the period ended March 30.
Sacombank Denial
Tram Be, deputy chair of Saigon Thuong Tin Commercial Joint-Stock Bank (STB), or
Sacombank, denied rumours that he had been summoned or detained by police, according
to an e-mailed statement from the bank today. The stock fell 1 percent to 19,800
dong extending its decline since August 20 to 13 percent.
"The market will likely stabilise in next few days as rumours about more arrests of
banking executives turned out to be unfounded," Pham Ngoc Bich, managing director
of institutional sales at Saigon Securities wrote in a note to clients today.
Asia Commercial Bank (ACB) gained 3.2 percent to 19,600 dong in Hanoi trading. The
stock had slumped 27 percent since August 20 to yesterday. Moody's Investors Service
lowered the lender's credit rating to B2 from B1 on August 24 and put the company on
review for future downgrades following the "negative developments at the bank," it
said.
Bank Liquidity
Fitch Ratings also placed Asia Commercial Bank on review for a possible downgrade,
it said on August 24. The lender's long- and short-term issuer default ratings may be
cut if there's sustained weakening in the bank's liquidity and reputation.
State Bank of Vietnam Governor Nguyen Van Binh said August 21 the monetary authority
stands ready to ensure banks have adequate cash after the detention of Asia
Commercial's Kien. The central bank injected 13 trillion dong into the financial system
through open-market operations on August 22, the most over a seven-day period this
year. It added 3.5 trillion dong yesterday.
Prime minister Nguyen Tan Dung's government is seeking to shore up a banking system
saddled with the highest bad debt in Southeast Asia that credit-rating companies
cite as a threat to the economy.
Vietnam Joint-Stock Commercial Bank for Industry and Trade, the second-largest
lender, climbed 3.2 percent to 19,600 dong. The stock slumped 12 percent from August
20 to yesterday.
http://www.bloomberg.com/news/2012-08-29/vietnam-s-stocks-rise-after-valuationsslump-to-three-month-low.html
31/AUG/2012 INTELLASIA | VIETNAMNET
The latest report by JPMorgan Chase showed the active outlook onto the Vietnam's
economy and stock market. Meanwhile, Bloomberg newswire believes that Vietnamese
stocks have become cheap enough to buy in.
Dated August 24, "Vietnam Strategy Update," the latest report by JPMorgan about the
Vietnamese stock market highlighted the impacts of the arrest of Nguyen Duc Kien,
former deputy Chair of the Asia Commercial Bank, on the market, saying that the VN
Index decrease, caused by the arrest, has made Vietnamese stocks become more attractive.
In general, the analysis team of JPMorgan Chase does not think these are the big worries.
The low VN Index has created a more attractive starting point for the foreign investors
to join the market, though the index has increased by 12 percent since the
beginning of the year.
JPMorgan Chase has advised investors to buy the shares of the enterprises in the fields
of consumer goods, pharmacy, infrastructure and some selected export companies.
Meanwhile, investors have been advised to keep away from real estate and construction
material companies' shares.
The economic environment has been improved considerably. Especially, the inflation
rate fell to 5.4 percent in July from the highest peak of 23 percent in August 2011. Vietnam
witnessed the trade surplus of 100 million dollars in July instead of trade deficit.
The total trade deficit of Vietnam in the first six months of the year was 58 million dol-
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