THANH CONG SECURITIES COMPANY Floor 3&5, Centec Tower, Nguyen Thi Minh Khai, Dis.3, HCMC Phone : + 84 (08) Website:

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1 THANH CONG SECURITIES COMPANY Floor 3&5, Centec Tower, Nguyen Thi Minh Khai, Dis.3, HCMC Phone : + 84 (08) Website: MONTHLY REPORT AUGUST 2012 Research Department research@tcsc.vn 1. Overview macroeconomic 2. Financial market 3. Stock market 4. Stock market in September 2012

2 OVERVIEW VIETNAM S MACROECONOMIC Vietnam August CPI Snaps Contracting With 0.63% Rise: GSO Vietnam consumer price index (CPI) in August is estimated to have risen by 0.63 from July, ending the decline saw in the past 2 months, the General Statistics Office said. The August CPI led the figure to +2.86% from December 2011 and +5.04% from August As many as 9 out of the 11 baskets of goods contributed to the calculation of the CPI data saw their prices rise this month. The biggest increasing was seen in prices of medicine and health care services, soaring 5.44% of which health services surged 7.71%. Of note, prices of medicine and health care services rose 3.36% after Vietnam allowed to raise prices of 12% of the over 1000 healthcare services from May. Prices of transportation rose 1.07% due to 3 time petrol price hikes in the month. Disbursed FDI capital reaches nearly $7.3b in Jan-Aug In the first eight months of this year, FDI (foreign direct investment) capital disbursement is estimated to have reached $7.28 billion, equalling to 99.7 percent over the same period last year, according to report of the Overseas Investment Department (under the Ministry of Planning and Investment-MoPI). The report said as of August 20, 2012, the country had 672 newly licensed FDI projects with a total pledged capital of $5.52 billion,

3 equalling to 56.5 percent over the same period last year. Till August 20, 2012, as many as 244 ongoing FDI projects registered to increase investment capital with a total additional capital of $2.95 billion, or 96.8 percent of the same period last year. Totally, in Jan-Aug, newly pledged and raised FDI capital in Vietnam was estimated at $8.47 billion, or 66.1 percent yearon-year. Processing and manufacturing industry sector attracted the most attention of foreign investors with 281 projects worth $5.74 billion, accounting for 67.8 percent of the total FDI capital in Jan-August. Japanese investors topped the list of foreign investors in Vietnam with $4.33 billion (or 51.1%) and followed by Samoa with $889.8 million (10.5%) and Korea at $654.7 million, or 7.7 percent of the total investment capital. So far, Binh Duong province has attracted the biggest volume of foreign investment with $1.84 billion. Trade deficit hits $62 million in eight months Vietnam has run a moderate deficit of $62 million in the past eight months despite impressive export growth. Exports rose 17.8 percent year-on-year to $73.35 billion in eight months, while imports reached $73.41 billion, up 6.7 percent, according to the General Statistics Office. In August alone, Vietnam earned $ 9.8 billion from exports, down 3.8 perecnt from the July figure, and slipping into a deficit of $150 million. The downward trend in exports reversed gains in the previous two months when Vietnam enjoyed a trade surplus in June and July.

4 The GSO said that Ho Chi Minh City s export turnover reached $19.26 billion in the past eight months, representing a trade surplus of $1.58 billion. In the reviewed period, Hanoi reaped $6.65 billion from exports while the capital city s imports hit $15.48 billion. GDP grow 4.38 percent in first six months The General Statistics Office on June 29 announced at a press conference that the Gross Domestic Product (GDP) growth rate in the first six months of the year rose by 4.32 percent compared to the same period last year. The economy has showed signs of recovery in the second quarter of this year, especially in industrial and construction sectors which rose from 2.94 percent in the first quarter to 4.52 percent in the second quarter. In the first six months, agriculture, forestry and fishery sectors increased 3.8 percent over the same period last year, of which agriculture rose 3 percent; forestry gained 5.7 percent; and fishery surged 5.8 percent.

5 FINANCIAL MARKET IN AUGUST 2012 GOVERNMENT BONDS Date Issuer Term Offering value (VND bn.) Winning value (VND bn.) Successful ratio Bidding rate (%) Successful rate (%) No. participants 06/08/2012 Treasury 2 2,000 1,650 83% /08/2012 Treasury 3 2,000 2, % /08/2012 Treasury 5 2,000 2, % /08/2012 VDB 2 1,000-0% /08/2012 VDB 3 1,000-0% /08/2012 VDB 4 1,000-0% /08/2012 VBSP 3 1, % /08/2012 VBSP 5 1,000-0% /08/2012 Treasury 2 1,000 1, % /08/2012 Treasury 3 2,000 2, % /08/2012 Treasury 5 2,000 2, % /08/2012 Treasury % /08/2012 VBSP 2 1,000-0% /08/2012 VBSP 3 1,000-0% /08/2012 VBSP % /08/2012 Treasury 2 2,000 1,010 51% /08/2012 Treasury 3 2, % /08/2012 Treasury 5 2, % /08/2012 VBSP 2 1,000-0% /08/2012 VBSP 3 1,000-0% /08/2012 VBSP % /08/2012 Treasury 2 2,000 1,100 55% /08/2012 Treasury 3 2,000 1,590 80% /08/2012 Treasury 5 1,000-0% /08/2012 VBSP 2 1,000-0% /08/2012 VBSP 3 1,000-0% /08/2012 VBSP % In August 2012, Ha Noi trading exchange held nine auctions of bonds issued by Treasury, Vietnam Development Bank and Vietnam Bank for Social Polices with the

6 total issuing value of VND 35,000 bn. for 2-year, 3-year, 5-year and 10-year bond. According to the results announced in August 2012, total successful amount was VND 15,800 bn., as for 2-year bonds, VND 4,760 billion worth of bonds were sold, with the interest rate % p.a; as for 3-year, VND 6,590 billion worth of bonds were sold with the interest rate of % p.a; as for 5-year VND 4,200 billion worth of bonds were sold with the interest rate of % p.a; 10-year bond has been issued with the small amount of VND 500 bn. were sold VND 250 bn. Successful rate in August is 45.1%, the terms has highest successful sold rate was 3- year bond with the successful rate was 50.7%. In the early August, the average exchange rate of USD fell in most of the period, the interbank overnight rate was at 2.21% p.a, except for 9-month term at 11.17%, interest rate of remaining terms were ranged from 2.64% (for 1-week) to 8.99% p.a (6-month term). Evening August 20 th, Mr. Nguyen Duc Kien were arrested by Police for his "illegal business". Mr. Nguyen Duc Kien is the Vice Chairman of the Vietnam Professional Football JS Company (VPF), Chairman of the Hanoi FC and the cofounder of many commercial joint stock banks like the Asia Commercial Bank (ACB), Kien Long Bank, etc. Kien was named in the list of the top 100 richest men in the stock market of Vietnam. This information has great impact on the banking system in particular and the Vietnamese financial system in general. The average interbank interest rate increase on 21/08 and 23/08 in the short term of 3 months or less.

7 INTERBANK EXCHANGE RATE In August 2012, the central bank continued to keep the interbank VND/USD exchange rate at 20,828 dong. Meanwhile the USD bought and sold in commercial banks have large fluctuations in August. On August 22 nd - 23 rd, USD increased VND in these days. Then the market went back to be stable. Buying and selling price of USD by banks and free market were both down from the previous weekend. Specifically, the USD was listed commercial banks in the range of VND20,860-20,875 per USD and USD traded in the free market of about VND20,890-20,905 per USD, fell by 160 VND / USD

8 GOLD MARKET Source: SJS In the middle of August, the domestic gold price increase along with the rise of gold in the world. Suddenly, on August 23 rd - 27 th, domestic gold prices soared to a peak of four months amid global gold prices was moving sideways and then decline. Traders said gold, reasons behind the gold price fluctuations was unusual demand and supply. In order to stabilize the gold market, on August 23 rd, the State Bank of Vietnam (SBV) issued Decision 1623/QD-NHNN in term of the organization of production and management of SBV s gold bars. According to the Decision, SJC is the unit processing gold for SBV and no longer produce gold bars, scratched or non-sjc gold are used as raw materials for producing gold. A representative of the State Bank said the decision aims to monitor the use of gold materials and to avoid gold of unclear origins being produced into SJC gold. The new rule also enables the central bank to control the gold supply and easily regulate the market when necessary. Source: TCSC

9 STOCK MARKET IN AUGUST 2012 Stock market has slumped in August after the shock news that Mr. Nguyen Trung Kien and General Director of Asia Commercial Bank (ACB) arrested released. Before the news announced, the stock market have gained quite impressive in few days, from August 01 st to 20 th, Ho Chi Minh exchange has only 3/14 sessions decreased, while on August 20 th Ha Noi exchange has increased by more than 2% compared to the close on July 31 st. After August 20 th, the market stock has plummeted sharply, over sell occurs on most of stocks, especially banking industry. Over sell occurred in next few days pushed VN Index and HNX Index decreasing steeply. On August 28 th, VN Index downed 11% compared to August 20 th when VN Index stepped back to points from points. HNX Index also fall 15% from August 20 th to August 28 th. However, liquidity during this period rose sharply

10 because foreign investors increased their trading while domestic investors over sold shares because of psychological fear. Trading value in Ho Chi Minh exchange in August 21 st, 22 nd and 24 th were both over VND 1,000 bn. per day, average trading value in Ha Noi exchange in these three days were over VND 500 bn. per day. In August, the average trading value in Ho Chi Minh and Ha Noi stock exchange are VND 677 bn. and VND 392 bn. respectively, rose 6.8% and 12% compared to last month. MARKET ANALYSIS IN SEPTEMBER 2012 Since September 04 th, investors can sell securities on T +3 days instead of waiting one more day (T +4) as past. Shorten the waiting time paying stocks also means reducing the risk for investors; it will encourage investors to enter the market, increase liquidity. Stock market maybe will move sideways until there are positive signs of economy.

11 REFERENCES

12 Authors Trang Nguyen Thu

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