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 MAY 2012 Research Department research@tcsc.vn 1. Overview macroeconomic 2. Financial market 3. Stock market 4. Stock market in June 2012

2 OVERVIEW VIETNAM S MACROECONOMIC Vietnam s May CPI Accelerates to+0.18%: GSO Vietnam consumer price index (CPI) in May is estimated to have increased by +0.18% from April mostly thanks to rise in prices of traffic and other goods and services. This month s CPI has increased back after two months of slowdown, the data showed. However, May s CPI still posted the lowest onmonth rise compared with May s CPI in the past 6 years, according to data compiled by StoxPlus. May increase extended the figure to +2.78% from December 2011 and +8.34% from May As many as 8 out of the 11 baskets of goods contributed to the calculation of the CPI data saw their prices rise this month. Prices of other goods and services recorded the biggest increase of 3.09% on-month, followed by prices of traffic basket which posted 1.32% increase. In the down side, prices of housing and construction materials (including rent, electricity, water, water, fuel and construction materials) showed the highest drop with 0.97%. FDI projects disburse US$4.5 billion in five months A total of US$4.51 billion was disbursed for foreign direct investment (FDI) projects across the country in the first five months this year, 99.8% of the amount disbursed during same period last year, according to the Ministry of Planning and Investment Foreign Investment Agency (FIA). The country also attracted US$5.32 billion in

3 FDI in five months, equal to 68.2% for the corresponding period in Around 283 FDI projects were licensed with a total registered investment of US$4.12 billion and 82 projects applied to increase capital by US$1.2 billion, a decrease of 25.3% and 47.5%, respectively, compared to the same period last year. The processing industry attracted the highest number of FDI projects, accounting for 62.3% of the total registered capital, followed by the real estate, transport and storage sectors. With new and supplementary capital of US$3.68 billion Japan contributed 69.1 percent of all FDI and led 39 countries and territories investing in Vietnam in the first five months of this year. Foreign investors poured their capital into 39 provinces and cities in Vietnam, of which Binh Duong Province attracted US$1.6 billion or 30.1 percent, Hai Phong US$928.8 million and 17.4 percent, and Dong Nai US$698 million and 13.1 percent, respectively. Trade deficit reaches US$700 million in May Trade deficit in May in Vietnam is estimated to reach about US$700 million, with the first five months of the year reporting a deficit of $622 million, accounting from 1.45 per cent of total export turnover in the country. In May alone, export turnover reached $9.1 billion, of which $3.72 billion came from the domestic sector and the remaining from foreign invested sector. The month s import turnover touched $9.8 billion, an increase of $841 million over April. Of this figure, import turnover of both domestic and foreign invested sectors hit $4.9 billion each.

4 GDP growth in Q1 gains 4pct Vietnam s GDP in the first quarter (Q1) of this year reached 4 percent compared to the same period last year, according to the General Statistics Office. The growth of the industry was 3 percent, while last year the figure was 13 percent. The low increase is attributed to the fact that production, domestic consumption and exports are meeting many difficulties. Besides, GDP in the agro-forestry-fishery sector surged by 2.8 percent, while the figure in Q1 in 2011 was 3.65 percent. GDP of industry and construction was up 2.9 percent and service was up 5.3 percent. At the same time, the Index of Industrial Production (IIP) grew 4.1 percent, the lowest level over recent years. The figure was 9.3 percent in 2011 s Q1. The country s GDP in the first three months of 2011 increased 5.57 percent against the same period of 2010.

5 FINANCIAL MARKET IN MAY 2012 GOVERNMENT BONDS Date Issuer Term Offering value (VND bn.) Winning value (VND bn.) Successful ratio Bidding rate (%) Successful rate (%) No. participants 10/05/2012 VBSP % /05/2012 VBSP % /05/2012 Treasury 3 3,000 3, % /05/2012 Treasury 5 3,000 3, % /05/2012 Treasury 2 1,000 1, % /05/2012 VDB 5 3, % /05/2012 VDB 3 2, % /05/2012 VBSP % /05/2012 VBSP % /05/2012 VDB 5 3,000 1,100 37% /05/2012 VDB 3 2,000 2, % /05/2012 Treasury 2 2,000 1,100 55% /05/2012 Treasury 3 3,000 1,350 45% /05/2012 Treasury 5 3, % /05/2012 Treasury 10 2, % In May 2012, Ha Noi trading exchange held six auctions of bonds issued by Treasury, Vietnam Development Bank and Vietnam Bank for Social Polices with the total issuing value of VND 29,000 bn. for 2-year, 3-year, 5-year and 10-year bond. According to the results announced in May 2012, total successful amount was VND 15,700 bn., as for 2- year bonds, VND 2,100 billion worth of bonds were sold, with the interest rate % p.a; as for 3-year, VND 7,250 billion worth of bonds were sold with the interest rate of % p.a; as for 5-year VND 5,850 billion worth of bonds were sold with the interest rate of % p.a. and VND 500 bn. of 10-year bond was sold. Successful rate in May is 54.1%, the terms sold highest were 2-year and 3-year bond with the successful rate were 70% and 67% respectively. In May, the liquidity of banks is stable when interest rates do not fluctuate while the interbank interest rates continued to decline. Deposit rate in VND is stable compared to last week. Currently, popular interest rate is 2.4-3% pa. for non-term savings, for

6 deposits with maturities of less than 01 months, popular interest rate is 3.5-4% pa; and for deposits with maturities of 01 months or more is % pa. According to Decision No. 1081/QD-NHNN and Circular No. 17/2012/TT-NHNN dated , from May 28, the ceiling deposit interest rate will be about 11% / year and ceiling lending interest rates in accordance with Circular 14/2012 for agriculture and rural development, export and supporting industries, small and medium enterprises will be about 14% / year. Besides, the other key interest rates also fell 1%. Specifically, the refinancing interest rate is 12% / year, the rediscount rate is 10% / year, overnight interest rates in the interbank electronic payment are 13% / year and OMO interest rates are 11% / year. During the day the State Bank issued Decision 1081 and Circular 17, the interest rate on the interbank market was down a new record. Accordingly, the overnight rate fell from 1.5 to 1.8%/ year, one week term interest rate is 2 to 2.5%/ year and 1 month interest rate is 4-5%/ year. Compared with yearly of this year, overnight interbank interest rate has decreased 11% pa.

7 INTERBANK EXCHANGE RATE In May 2012, the central bank continued to keep the interbank VND/USD exchange rate at 20,828 dong. USD price in May was quite stable, buying and selling announced by commercial banks didn t change so much compared to last month. However, exchange rate differences between the free market with commercial banks began to increase in recent days.

8 GOLD MARKET Source: SJS In May, gold price in global markets and domestic market fluctuated. In May 16 th, gold prices in global market plunged sharply, pushed domestic price fell sharply to VND million/tael, but then gold price rebounded to above VND 42 million/tael in a week later. In the last 3 days last month, domestic price trend is not clear, fluctuated in the range VND million/tael while gold prices in the world struggled. Trading gold in May was less active. Another reason was decree No. 24/2012/NĐ-CP dated April 3, 2012 on gold trading management stipulates that only state monopolies are approved to produce gold bars, export gold and import raw material to produce gold bars. The decree has also specified several conditions that organizations and individuals must satisfy in order to obtain a permit from the State Bank of Vietnam. Accordingly, the legal ownership of gold of organizations and individuals is recognized, while the use of gold as a means of payment, as was allowed in the past, is now considered against the law. Source: TCSC

9 STOCK MARKET IN MAY 2012 After boosting period in last month, stock market has fallen sharply in May. VN Index and HNX Index have broken the supporting level at 430 points and 74 points respectively. At the last trading day in May, VN Index slide points, down 9.4% compared to last trading day in April; meanwhile, HNX Index slide 5.79 points, down 7.3%. Liquidity in both bourses declined slightly in May 2012, the average trading value in Ho Chi Minh and Ha Noi stock exchange are VND 1,432 bn. and VND 754 bn. respectively. On Ho Chi Minh stock exchange, foreigners net bought VND 130 bn. with the total trading value buy and sell in May was VND5,920bn. after they had net sold VND730bn. in April. On Ha Noi stock exchange, foreigners continue to net buy, buying and selling

10 of foreigners in HNX both increased in May. Compared to April 2012, buying value increased 58% and selling value increased 69%. PV Gas Shares (GAS) after listing on 21/5 has become the largest market capitalization stock, it attract trading of foreign investors. However, trading of foreign investors continued to decline, the net buying value in the first week was VND155bn. in but net buying value in following week was only VND16bn. In May, foreigners top selling share was BVH with total net selling value of VND158bn. BVH stock price had down 29% in this month, including 9 consecutive decreasing sessions. MARKET ANALYSIS IN JUNE 2012 Supporting level of 430 points of VN Index and 74 points of HNX Index are quite stable, many times after the market increased and reached these level, indexes rebounded and turned down. Euro sovereign-debt crisis not yet ended, Spain has recently become the new victim of the debt crisis, the world economy was plunged, Vietnam's economy also be affected. Investors must look closely at the market's liquidity and join the market when there are signs of recovery.

11 REFERENCES

12 Authors Trang Nguyen Thu

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