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Vietnam Stocks on SGX-Mainboard
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vuthanh
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09-Jan-2008 17:16
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Good news for vietnamese companies today. Vietnam Milk Corporation (Vinamilk) has been approved by Stocks Exchange Commission of Vietnam to list 3% of its registrated capital on SGX-Mainboard. The most difficult gate was opened. We might see Vinamilk on SGX by late first quarter of 2008. One of biggest challenge of vietnamese companies to be listed overseas is how to resolve the problem of foreign ownership room management. As stipulated by law, room for foreign investors in vietnamese enterprises which listed on stocks market is limited to 49% (as most companies except for banks which has the foreign ownership room is less than 30%). This set the invisable barrier to overseas listing of vietnamese enterprises which already be owned up to 49% by foreigners on Vietnam stocks market. As for Vinamilk, its existing foreign room on Ho chi Minh Stocks Exchange is around 4x%, so that to be listed on SGX, Vinamilk has to ask for the permission, this procedure consumes much time for there was no precedent. Finally, Stocks Exchange Commission approved the idea of reducing the foreign room on Ho Chi Minh Stocks Ex of Vinamilk from 49% to 46%, thus letting Vinamilk issue 3% of its capital on SGX. |
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TradeChancellor
Veteran |
26-Dec-2007 22:00
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Thanks for the great clarification Vuthanh. Personally, i find the 0.1% per overall transaction more attractive than the 20% on capital gains. Taxes are rather high though. My friend actually helped me to find out about opening an account in Vietnam. Basically, there are 3 forms to submit: Personal Information form, Application for Opening Transaction Account Form and Securities Trading Code Registration Form. I will have to visit Hanoi to submit these forms as well. If $ and time permit, i may go to Hanoi during 4Q of 2008 and apply as well as holiday. Have a blessed and successful 2008! |
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vuthanh
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26-Dec-2007 20:22
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Hi Tradechanceller, the 2 types of tax as you mentioned are separated. Tax on dividend is 5% and you have to pay careless of what kind of dividend you receive (5% on the total stocks dividend in case of receiving stocks as dividend instead of money, price of stocks dividend is calculated by the end of fiscal year). As for tax on capital gains, there are 2 options and you could select by yourself: 20% on the yearly total gains or 0,1% directly deducted from each sucessful transaction conducted through your account. Cheers friend @178investors: I have the same sentiments as you do now. But there is a fact that the procedure for foreign IPOs of VN companies on Vietnam government side is as dificult as looking for proves of brides in Vietnam courts for the reason that most governmental agencies are corrupted so brides could be seen anywhere but no clue found. Cheers and hope you and me all get well next year Happy new year to all |
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TradeChancellor
Veteran |
22-Dec-2007 09:57
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hi Vuthanh, thanks for sharing with us the vietnam stock market situation. Please help me with a question below. I'm thinking of opening an account to trade in vietnam stocks. But there will be a 25% tax on stock income. Is the 25% tax charges on dividend or capital gains? |
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178investors
Veteran |
18-Dec-2007 00:07
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a typo error... it's "brides" not "bribes" |
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178investors
Veteran |
17-Dec-2007 23:56
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About 2yrs since, have been hearing this and that viet companies coming here for listings but never materialise. Will 2008 be another year of waiting in vain? ...playing hard to get...is it? At least, the viet bribes beat all those big names to reach here first. Don't keep investors waiting... time and tide wait for no man... when the good time ends... that's IT! |
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zhuge_liang
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17-Dec-2007 20:46
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Saigon Securities Inc., Vietnam's top brokerage in which ANZ has a 10% stake, plans to list on the Singapore stock market next year, state media reported on Mon. "SSI aims to be the first Vietnamese company to list in S'pore in '08," SSI Chairman Nguyen Duy Hung was quoted as saying by the Lao Dong (Labour) newspaper. Last month, the company said it made a net profit of 805.53 b dong (US$50 m) in the first 10 months of this year, nearly 6x more than in the whole of last year, on revenues of 1.13 t dong. SSI became the only listed brokerage on the Ho Chi Minh Stock Exchange on Oct 29 after moving from the over-the-counter Hanoi market. SSI, in which Japan's Daiwa Securities Group Incorporation owns 1.25%, is valued at about US$1.3 b. |
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zhuge_liang
Supreme |
15-Dec-2007 00:04
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Vinamilk, Vietnam's top dairy firm, made a gross profit of 923 billion dong (US$57.3 million) in the first 11 months, 2.8% more than the target for the whole of '07, it said in a statement. The company, the 2nd largest among the 130 companies listed on the Ho Chi Minh Stock Exchange, did not give a net profit figure and gave no comparisons for the same period last year. Vinamilk's statement said it had revenues of 6.22 trillion dong in the first 11 months, 83.7% of the target for the whole of this year. The results were unaudited, it said. Vinamilk had aimed to raise its annual profit by 22.7% to 898 billion dong this year on revenues of 7.43 trillion dong. The Ho Chi Minh City-based firm has hired a consultant to prepare for a listing on SGX expected in '08, but no concrete date has been set. (US$1=16,116 dong) |
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zhuge_liang
Supreme |
08-Dec-2007 19:34
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Vietcombank, Vietnam's first state-run bank to sell shares to the public, said on 7/12 it plans to list on the Ho Chi Minh Stock Exchange in early '08 and float its shares overseas in '09. "We might list on either the Hong Kong or S'pore market, (with) 10 or 12% of the total shares," Vietcombank chairman Nguyen Hoa Binh said at a news briefing ahead of the bank's domestic IPO on Dec 26. Hanoi-based Vietcombank, Vietnam's 4th-largest lender by assets and the country's biggest firm to conduct an IPO to date, would list on the country's main exchange by the late first quarter of 2008 or early in the second quarter, Binh said. State-run companies in Vietnam often undergo partial privatisation by selling shares to employees and outsiders at an auction before their stock market listing, which often comes several months later. The IPO of Vietcombank, or the Bank for Foreign Trade of Vietnam, has been delayed but is still much awaited by investors and financial analysts, who expect the planned listings of 4 state-owned banks this year to boost capital markets in Vietnam. Vietcombank had planned to pick foreign strategic investors first and then conduct the IPO in Oct. "We have selected a number of potential foreign strategic partners but price remains an obstacle to a happy marriage," Binh said. Vietcombank has set a starting price of 100,000 dong (US$6.20) per share for bidding at the Dec 26 auction, when it plans to raise at least US$604 million via selling 97.5 million shares, or 6.5% of its stock, the Ho Chi Minh Stock Exchange said. As such, the bank would have a market value of US$9.3 billion, the largest firm in the country to sell shares to the public. The government has ordered Vietcombank and 3 other state-run lenders to partially privatise this year, a move seen as a test of the market-opening commitments made by Vietnam before joining the World Trade Organisation in Jan. Agribank, the country's largest bank, also plans to partly privatise next year. So far only 2 privately-owned banks, Sacombank and Asia Commercial Bank, are listed on the country's fledgling markets. (US$1=16,122 dong) |
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zhuge_liang
Supreme |
30-Nov-2007 01:21
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Motorbike maker Vietnam Manufacturing & Export Processing (Holdings) Ltd plans to raise up to US$135 million in a Hong Kong IPO, according to a term sheet obtained by Reuters on 28/11. The company, which produces motorbike engines and makes and sells motorcycles, is offering 226.92 million shares, or 25% of its enlarged share capital, at a price range of HK$3.61-HK$4.64 each, the term sheet said. Of the shares on offer, 77% are new and 23% existing. The Vietnamese company, which kicks off a marketing roadshow for its IPO on 28/11, plans to start its Hong Kong IPO on Dec 3, with a trading debut scheduled for Dec 14. BNP Paribas is sponsoring the deal. |
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vuthanh
Member |
26-Nov-2007 02:16
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Many thanks to you, tiandi. @Sojourner: VCB (Vietcombank) is planned to sell its shares for the first time to the public (IPO) by December this year. It sent an application to the State Bank of Vietnam late week (you might know that VCB is a State-owned bank so need to ask for the permission from State Bank) and is waiting for the approval (some rumors say that it shall soon receive the permission next week to prepare for IPO process on time). Investors (included foreigners) are allowed to buy 6,5% of its registered capital, it is informed that VCB shall have the total of 1,5 bil shares with par share of 10.000 vnd (0,598 usd), meaning that there will be 97,5 mil shares selling out at this IPO. You should notice that foreigners have the right as domestic investors to bid for these 97,5 mil shares without any limitation. You can place your bid at Hostc or through underwriting securities companies which will be announced 2 weeks before IPO. It is likely that VCBS (VCB securities company, its website is www.vcbs.com.vn) might be one of IPO underwriters. Do remember that you need to have an account at a Vietnamese securities company as a must to participate in the IPO. Some financial infos on VCB: registered capital after IPO: vnd 15.000 bil (equal to usd 0,898 bil). Total shareholder's equity is valued at around vnd 11.800 bil (usd 0,7bil) before IPO. FY 2006 net income was vnd 2.855 bil (usd 0,17bil), FY 2007 net income is estimated vnd 2.500 bil (usd 0,149bil). Investors consider VCB very attractive for it is now the leading bank of Vietnam in most services, it has many priorities such the perfect system of subsidiaries and branches at best places in populated cities, excellent relationship with State-owned enterprises (visible power that any bank in Vietnam desires), shares in most powerful State-owned corporations (it is rumored that before 2005 VCB invested about vnd 31.100 bil in many sectors of Vietnam economy) ... |
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tiandi
Senior |
23-Nov-2007 22:17
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vuthanh, you may like to visit Stock Exchange of Singapore website for details on listing / IPO. Here is a link that allow you to find the relevant information. http://info.sgx.com/sgxweb_st.nsf/NEWDOCNAME/Listing_Intro?OpenDocument&sidenav=Issuers I also copy information on IPO timeline below for your reading IPO Timeline Prior to submission of the listing application, the company is advised to consult SGX to resolve any specific issues. This will speed up the listing process and reduce any additional costs that may arise due to a delay. The timeframe for a listing varies for different companies, ranging from two months to two years. On the average, the whole process should last about 12 to 18 weeks. Given that time is of the essence, the company should budget a reasonable amount of management time and appoint the appropriate professionals to assist in the listing process. The indicative timeline for the listing process is as follows:  |
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sojourner
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22-Nov-2007 23:31
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Vuthanh, Heard that Vietcombank will be listing in Vietnam soon, i presume on the Sai Gon exchange. Could you share information on how foreigners can apply for IPOs in Vietnam. Pls email me sojournerr@gmail.com sometime. Cheers. |
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178investors
Veteran |
22-Nov-2007 23:20
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Vuthanh, me not a corporate finance expert in ipo so don't have the answer to your question about listing. cheers! |
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vuthanh
Member |
22-Nov-2007 21:02
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Dear Victor_lee and 178investors There should be a decree of Government and a circular of Ministry of Trade to make clear the tax mechanism. These texts will be drafted and issued in 2008. However, it could be understood that investors have to pay 20% of their gains each time they have incomes in a transaction (the gain means selling prices minus buying prices). One good news is that the rate is reduced to 20%, instead of 25% as I said (sorry for this error) and investors can chose not to pay tax of 20% but pay a fixed amount of 0,1% calculated on the total capital for each successful transaction (doesn't mind you gain or lose). Buy the way, I have a question on the procedures for accepting IPO on SGX-Mainboard of a foreign company. How long does it take normally (from the moment where documents are remitted to SGX direction until the company is listed on SGX-Mainboard). In Vietnam, a normal listing takes around 2 - 3 months. @178investors: the public (most experts on the field) goes against the attitude of imposing such a high rate immediately, they prefer a rate of 5-10% at the beginning then up to 20-25% after 5-10 years. In facts, Vietnam stocks market needs more time to grow and get stable. This law is issued for the only reason that national budget is now deficit, the Government is responsable for balancing so they decided to increase taxes (it is funny that they don't try to reduce wastes in administration, public purchase or corruption). |
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178investors
Veteran |
21-Nov-2007 22:55
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Vuthanh, thanks for translating. So the capital gains tax of 25% is coming soon. I believe this tax apply only when one sell and the gain is then taxed. Is that view correct? Long-term investors may not be so hurt compared to daily traders who are trading very regularly. I think your Government is worried many people may get hurt once the bubble burst. So, they try to implement that tax to deflate the bubble slowly but it can sometime trigger a crash if everyone think it is bad and decide to exit all at the same time. Well, a crash is not necessarily a bad thing like what the Chinese people termed crisis. There is opportunity in crisis. Provided you have capital to capitalize on it when it happens. I sense that you have a mountain of worry in your words. Are you holding many expensive Vietnam Stocks? Take care and best of luck. |
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victor_lee
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21-Nov-2007 10:07
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Does the 25% include the unrealised gains? |
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vuthanh
Member |
20-Nov-2007 23:38
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Căn cứ theo quy định tại khoản 2 mục VIII Thông tư 38/2007/TT-BTC ngày 18 tháng 4 năm 2007 của Bộ Tài chính hướng dẫn về công bố thông tin trên thị trường chứng khoán, Sở Giao dịch Chứng khoán Thành phố Hồ Chí Minh công bố thông tin xử phạt Đại diện giao dịch với các nội dung sau: Hi 178investors, Translation: Based on the stipulation of article 2, chapter VIII of the Circular 38/2007/TT-BTC dated 18th April 2007 issued by Ministry of Finance on the publication of infos on the stocks markets, the stocks exchange of Ho Chi Minh city informs that the Ministry shall panish representatives of securities companies with the following detail contents: ... Nothing interesting to read more, 178investors. My friends, today, 20th Nov 2007 is a very sad day for Vietnam stocks markets. The national assembly has just approved the personal incomes law as I mentioned in last post, as a result, the tax on incomes originated from stocks transacted on Vietnam stocks markets shall be imposed at an annual rate of 25% beginning taking effect from 1st January 2009. If someone watching VNIDEX and Hastc index could see a big correction, this stupid measure has surely caused a downtrend of Vietnam stocks markets since late october. No one can imagine what will happen the days to come. You, singapore investors, are very happy living in a no-tax stocks market, cheers. Anyway, as I said in previous posts, this stupid administrative measure shall be a motive for most vietnamese companies to list on foreign markets as soon as possible to satisfy their capital thirst. First company that might be present on SGX-Mainboard in early 2008 is SSI (Saigon Securities Company). By now, the company is preparing some procedures, that could take time for this is the first Vietnamese company to be listed on SGX-Mainboard. Talking about 6 years of development process of this company is like telling a sucess story of Vietnam securities market recently. More infos on this company could be seen here: www.ssi.com.vn (look for english version). Let me introduce its strong and week points later. |
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178investors
Veteran |
20-Nov-2007 21:38
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Hello Vuthanh, I received an unsolicited email purportedly from Vietnam. Can you help translate what it says. +++++++++++++++++++++++++++++++++++++++++++++++++ Căn cứ theo quy định tại khoản 2 mục VIII Thông tư 38/2007/TT-BTC ngày 18 tháng 4 năm 2007 của Bộ Tài chính hướng dẫn về công bố thông tin trên thị trường chứng khoán, Sở Giao dịch Chứng khoán Thành phố Hồ Chí Minh công bố thông tin xử phạt Đại diện giao dịch với các nội dung sau: +++++++++++++++++++++++++++++++++++++++++++++++++ |
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thelee
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20-Nov-2007 17:09
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Hi Vuthanh Very good info on the Vietnam stocks and companies. Please contact me leethe@hotmail.com. |
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