MARKET OVERVIEW

MARKET: Last week, the market increased from 510.48 to 517.42 points. The investor confidence index has increased from 50.21% to 62.7%; the 4 week average index increased from 33.65% to 41.53%. This indicates that general market expectation is positive, in light with the market undervaluation of 0.14%-0.24%. Stocks with surprising earnings, potential splits and capital offerings have been the market targets. The rally made by this group could not be justified by any means of valuation.

ECONOMICS: Last week saw a slight monetary tightening through open market operations (OMO). There was a net withdrawal of around VND4,296 billion compared to a significant net-injection of over VND13,502 billion in the week before. However, the term of new injection was extended to 28 days, predicting a good liquidity for banks in the next few weeks. The average overnight rate rose little from 6.83% to 6.90%.

The VND/USD rate in the black market continued to fall in the last week. On Friday, the bid and ask rates fell to VND19,090 and VND19,120 per USD, from VND19,200 and VND19,230 respectively at the beginning of the week. The gap between the VCB’s and unofficial rates are now narrowed to about VND 20-70 per USD, showing a stable condition for the exchange market.

A focal story of the market is comments on the credit growth and the interest rate level. We emphasize that the current problem is not because of that banks do not want but of that they do not dare to lend. Lending at extremely high interest rates always means the probability of credit default is very high and thus this does not encourage banks to offer loans. The general market demand and supply principle does not work in this kind of credit market. Hence, it’s necessary to lower the cost of lending gradually and banks then can reduce their lending rates. The banks may have committed to not lending at rates higher than 14-15% (indeed we think they wanted this more than anyone else), but apparently they need to consider the gap between the interest cost and revenue to make loans accordingly. Net injection through OMO is one of the means, but the volume has seemed to be not significantly large.

On global markets, U.S. stocks rose for a sixth week, giving the Standard & Poor’s 500 Index its longest winning streak since April 2009, as reports showed the fastest job growth in three years and higher-than-estimated retail sales. European stocks rose for a sixth straight week, the longest winning streak in a year, as a U.S. jobs report indicated the economy is strengthening and concern eased that Greece’s debt crisis will spread to other nations.

Asian stocks also rose for a second week, as U.S. economic reports raised confidence in the strength of global recovery, and as investors bet the Federal Reserve will leave the benchmark U.S. interest rate at a record low.

TECHNICAL: Our technical models show a market consolidation should continue. Based on our fundamental justification, we expect a healthy market rally from mid-April.

TRADING PLANS: Many clients have told us that they like trading in this market because they can make profit from picking stocks with surprising earnings, stock splits and capital offerings. This is definitely a strategy that we recommend. We also suggest holding and gradually accumulating more shares on the market dips.

Post by Quach Manh Hao

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Hanoi Stock Exchange (HNX) reported that Lam Thao Superphosphate and Chemicals Co (Lafchemco) earned over 30.42 billion dong from auctioning two million shares at the starting price of 14,000 dong/share.

After the auction finished, there were 60 winners including four institutions and 56 individual investors.

The averaging winning price was recorded at 15,214 dong/share. The highest bidding was two million shares and the lowest order was 500 shares. The highest bidding price was 20,100 dong/share.

Winners can pay to take these shares from November 20 to December 3, 2009.

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The management board of Hanoi general Investment

Joint Stock Co (Hanic) has recently approved for opening a branch in Singapore namely Hanic Singapore Branch (Hanicsi) for operating and managing the import-export works, exporting labourers and doing investment promotion activities.

The company's management board has assigned the steering board for following up the establishment of the branch in December 2009.

Apart from doing business activities in Singaporean markets, the company's new branch will support the company's domestic business department in expanding its business scope to foreign countries, as well as strengthening the company's trademark in international markets.

At present, Hanic has member companies of Hanic general trading centre, Mong Cai Branch and Vietnam Import Export Co Ltd (Vinaex) for exporting and importing works and three labour exporting centres.

Lately, the company has conducted collecting its shareholders' opinions for increasing chartered capital from 87.02 billion dong to 205.93 billion dong in Q1 of 2010.

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After the trading session on November 20, the Vietnam's stock market witnessed a fall after several gains. The trading session today closed with a fall of 4.21 points or 0.75 percent of VN Index to 555.84 pts.

The market liquidity slipped with the total trading volume of over 50.6 million shares worth over 2.5 trillion dong, down 17 percent in volume and 22 percent in value day on day.

Amongst 182 listed shares and four fund certificates on the stock market, the market saw 38 shares increased with 15 reaching the ceiling price, 127 others decreased with seven falling to the floor price and 21 remaining shares stood still at the comparative price.

Some gained the ceiling price such as PVF, PVT, PET, PIT, PGC, ASP, MTG and PVA, PVE, PVC, PVG, PGS, PVG and PLC on the northern floor.

Out of large marker capitalisation shares, only VIC gained 4,000 dong per share to 112,000 dong per share and BVH bounced 100 dong to 31,300 dong per share.

In terms of trading volume SSI led the market with 2.73 million shares and followed by PVT 2.24 million, STB 1.93 million, LCG 1.87 million, PVF 1.68 million and REE with 1.56 million shares being transferred.

The HNX Index today November 20 dropped 0.89 points or 0.48 percent to end at 184.79 pts with the total market trade of over 24.4 million shares valued at over 986 billion dong.

Some big gainers were BTH, CCM, HCT, KMF, MEC, PGS, PLC, PVA, PVC, PVG, PVS. SDN, SDT and TLC.

Shares reached big trading volume including VCG with over 2.3 million shares and then KLS with over 1.5 million shares and PVS and PVX with over 1.4 million and others with less than one million shares being traded.

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SME Securities Joint Stock Co (coded SME) has announced achieving profit after tax in October of 15.166 billion dong, and pre-tax revenue of 19.748 billion dong, up 283.08 percent against the previous month.

In details, the company's revenue from stock brokerage activities was estimated at 5.629 billion dong, increasing 126 percent in comparison with that of September. Especially, the company earned revenue from stock investment

and capital contribution of 13.372 billion dong, counting for 67.7 percent of the whole month. The new accounts being opened at SME Securities in October increased by 12 percent.

The company's progressive revenue up to the end of October 2009 was posted at 55.105 billion dong, surpassing the company's adjusted business plan.

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Between October 14 and November 13, VOF Investment

Ltd already offloaded 230,000 LCG coded shares of Licogi 16 Joint Stock Co., reducing the fund's ownership ratio in LCG down to 1,128,200 shares or 5.53 percent, HOSE reported on November 19.

Also, the fund sold out 300,000 ITC coded shares of Housing Investment Trading Joint Stock Co. from October 30 to November 13, 2009. Thus the number of ITC shares held by VOF Investment Ltd fell to 1,827,500 shares or 7.94 percent.

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Southern bourse-listed Construction Development and Investment Joint Stock Corp (coded DIG)'s board of directors recently passed a plan to offer 30 million shares totalled at 300 billion dong to pay dividend for 2009 at the ratio of 7:3 in Q4.

With issuing 30 million shares, DIG will finalise its chartered capital increase plan to one trillion dong.

Earlier, the company succeeded in retailing 10 million shares to hike chartered capital from 600 billion dong to 700 billion dong.
As planned, these shares will be officially listed on the Hochiminh Stock Exchange (STC) from November 20.

Reportedly, in Jan-Sep, DIG earned over 1.1 trillion dong of revenue, up 165.7 percent year-on-year, 520 billion dong of pre tax profit, rising 79 percent, and the company's after tax profit increased 53.2 percent to 426.5 billion dong.

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