The VN Index suffered decreases on the two final trading days this week, 31 points on Thursday and another 34.73 points yesterday, closing the week at 744.15, after reaching a six-year record high of 809.66.

"The index jumped from 633.05 at the end of November to the record high of over 809 on Wednesday, which shows a hot market," said the centre’s director Tran Dac Sinh.

"I’m afraid that a setback like the one in April will occur again. The average P/E (price/earnings ratio) of listed companies is around 38 compared to 10 to 17 of other markets," said Sinh.

"That ratio means share prices are now too high over their fundamental value so the market may adjust at any time."

He said the positive performance of listed companies, the country’s WTO membership and the approved PNTR by the US Congress and increased financial investment were among the factors that pushed up the price.

The first IT bluechip FPT made its debut on December 13 at VND400,000, and rose every trading day to VND510,000 on Wednesday, then declined to VND461,000 yesterday.

Yesterday 65 companies suffered losses, three remained unchanged and seven enjoyed increases.

More new listings

The Nam Viet (NAV) listed 2.5 million shares yesterday and 27,500 shares were transferred at VND90,000.

This company produces cement roofing sheets and has recently expanded into making furniture.

It plans a new share issue early next year to double its equity capital to reach VND50 billion; another issue by the year’s end will help increase its capital to VND80 billion.

The earlier issuance will be for its shareholders, who will acquire the new shares equal to the volume they hold at face value. The latter one will be released to the company’s strategic holders and the public.

The collected money will be used to develop major projects, including investment in a wood processing industrial park on a 40ha land lot in Dong Nai Province.

In 2004 and 2005 Nam Viet Co gained an annual net profit growth of 90 per cent. This year it expects to achieve VND20 billion compared to VND9.5 billion in 2005.

Last year it paid 12 per cent dividends apart from a more-than-60 per cent share bonus.

Garmex Saigon (GMC) is the first company in the garment sector listed at the centre with almost 2.3 million shares. At VND45,000, 4,000 shares were traded.

This company plans to extend its operation to real estate projects of commercial and office buildings and residential areas in HCM City.

Also at the price of VND45,000, 1,000 shares of the Do Thanh Technology Company (DTT) changed hands this week.

The company, with an equity capital of VND20 billion, produces PET bottle and plastic items and plastic moulds.

It hopes to earnVND3.6 billion this year and the figure is expected to grow to VND4 billion next year and VND5 billion in 2008.

The Au Lac Securities Company was officially inaugurated on Thursday in HCM City with a chartered capital of VND50 billion (US$3.1 million), up from VND23 billion when it received a license from the State Securities Commission earlier this month.

A Lac’s general director Nguyen Hong Mai said the increase was to improve its financial capacity. The figure is expected to rise to VND150 billion next year.

"Our strategic customers will be local and foreign institutions in the fields of fund management, banking and finance," said Mai. However initially her company will focus on tapping the market in major cities and key economic zones.

The company plans to make its debut in the Ha Noi centre in two weeks.

Last week the VN Direct Securities Company began operation at the HCM City Securities Trading Center.

Both companies offer services including brokerage, underwriting and consultancy.

Milestone for bank

Sacombank, the first commercial bank listed at the country’s stock exchange, celebrated its 15 years of operation on Thursday. Established in 1991 with a VND3 billion capital, the figure increased to the existing VND2 trillion.

It runs the largest network among joint stock banks, with more than 160 branches. It attracted investment from ANZ, Dragon Capital and the World Bank’s financial arm, IFC.

Apart from banking services Sacombank has diversified its activities, joining hands with partners to set up the VietFund Management Co, Sacombank Securities, Asset Management Co, Sacombank Leasing, SacomRex remittance company and SacomReal real estate company.

It aims to be the country’s best retail bank in 2010 and financial group in 2020.

By November-end the bank’s total assets reached VND24 trillion, up over 60 per cent compared to a year earlier.

In the first 11 months of the year, it earned a gross profit of VND482 billion and the figure of the entire year is expected to be VND520 billion, compared to the set target of VND407 billion.

Source: VietnamNews