FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

VAM: Vietnam Market Analysis – March 2013

The indices were mixed in the month of March. While the VN-Index gained 3% to close at 491, the HNX declined by the same quantum to 60.25. The VN30 edged up 0.62% to close the month at 552.3. After being net seller in February, foreigners have turned to net buyer with the value of USD55.6mn this month, suggesting that although difficulties still persist, sentiment was slightly improved.
 
Rate cuts to aid growth as inflation eased
A month after Tet, macro data indicated a significant weakness in total demand. Retail sales increased only 11.7% YoY in the first quarter, slowing from a 21.8% YoY pace in the same period last year. Besides, GDP expanded merely 4.89% YoY in 1Q2013, edging up from 4.75% YoY in the same period last year when growth was the slowest since 1999. A weak demand and noticeable deceleration in food and food stuff index caused CPI to decline 0.19% MoM in March, easing inflation to 6.64% YoY from 7.02% YoY in February. As inflation eased, the Central bank cut rates for the seventh time since the start of 2012 to spur growth. The cap on Dong deposit interest rates is reduced to 7.5% from 8% while other implemented rates such as refinancing and discount rates are lowered by 1% as well.
 
AMC plan not yet finalized; credit almost frozen
The establishment of a debt asset management company (AMC) was delayed until at least the end of April as government is skeptical about how much the company can help resolve bad debt between banks and businesses. On the other hand, the bank lending is still very weak as the credit growth only reached 0.1% YTD in the first quarter although the target for this year is 12%. While the economy is struggling with a slowdown of lending, the postponement of AMC might disappoint market further.
 
Dong still firm despite trade figures
According to GSO data, there was a trade deficit of USD300m in March, widening from a revised deficit of USD94mn in February. Nevertheless, the Dong remained stable as the year-to-date trade balance still remains at a surplus of USD481mn. After first three months of 2013, export increased 19.7% YoY while import improved 17% YoY as well. The unexpected improvement in import this month, in which imports of machinery and equipments was up 28.7% YoY should be viewed as the signal to preliminary recovery from manufacturing sector. Indeed, the HSBC PMI index posted in the positive territory at 50.8 in March, reaching the highest level since April 2011.
 
Challenging business environment
The Vietnamese Chamber of Commerce and Industry has announced the result of the Provincial Competitiveness Index (PCI) in 2012. The decline in median PCI score in 2012 reflected the slowdown in improvement of business environment across provinces. The most notable finding from the survey was that both foreign and domestic enterprises are more pessimistic about future prospect as optimism of enterprises, measure by the share of firms willing to expand in the next two years, has fallen to the historic low level of 33%. In addition, recent surprising petro price hike by 6.5% would make things more challenging as it would eat into businesses’ profit margin and hurt consumer spending.
 
Government’s effort to unfreeze the real estate market
Following the commitment to help the real estate sector, the SBV has revealed a draft of the social housing program. In which, 3% of the total loan book of 5 state owned banks will be dedicated to the social housing fund.  Buyers and developers of social houses will be provided loans with preferential interest rates in 10 and 5 years, respectively. For the first 3 years, starting from 15th April 2013, the lending rate will be 6%. The program is expected to bring some cheers to real estate developers and home buyers, however as most inventories are in mid and high end segments, the program may not be effective enough to rescue the whole troubled real estate market
 
Our ViewDespite some modest improvements, the first quarter of 2013 still ended with lackluster GDP and credit growth, coupled with a challenging business environment. Indeed, as domestic retail sales still remained weak, much of improvement was from external demand rather than from internal demand. All of these revealed that the economy is still struggling and may not have reached the bottom. Fortunately, recent effort of the government to spur growth has buoyed the stock market somewhat and hopefully it could buoy production and business activities as well.  After a sudden hike in petrol price that brings back the inflation risk, we think the scope for further rate cut is limited. Hence, in the long run, resolving the core problem (bad debt) still plays a critical role in regaining domestic confidence and recovering the stagnated economy.
We keep our cautious view on the economy and the stock market until clearer signs of recovery surface. In the mean time, as the AGM season has started, we will focus on screening for companies that still do well in the difficult time.

Filed under: News, Risk Management, Vietnam, , , , , ,

EUREX Group and Bombay Stock Exchange (BSE) in Technology Alliance

Eurex Group and the Bombay Stock Exchange (BSE) announced today that they have agreed to deepen their strategic partnership through a long-term technology alliance under which BSE will join the Eurex technology roadmap and deploy Deutsche Börse Group’s trading architecture in a first step. BSE aims to replace its derivatives market platform in the course of 2013 and plans to subsequently replace also its cash market platform. This agreement is an important step in further developing the strategic partnership between Eurex and BSE.

The new partnership in the technology sphere will allow BSE to quickly achieve the highest global standards for speed, reliability and order-handling capacity. It will bring to BSE state-of-the art levels of capacity and latency, already in place at the International Securities Exchange (ISE) since summer 2011 and in roll-out at Eurex Exchange. By aligning BSE, Eurex Exchange and ISE markets on a common trading infrastructure, IT costs for shared customers will be significantly reduced. This will also reduce technology development and installation efforts for Eurex and ISE members who wish to connect to BSE and vice versa as well as strengthen the case for cross-listing.

“We expect our technology alliance with Eurex will help BSE to compete more effectively in India, to help us attract more international participants into our marketplace and improve our market share in derivatives and equity trading,” said Ashish Chauhan, MD and CEO of BSE. “It will quickly put BSE into the Premier League of exchanges in terms of the performance of our matching engine and overall technology infrastructure.”

“This technology alliance strengthens our long-term partnership with BSE, and is another milestone in our Asian strategic roadmap, in which India obviously plays an important role. This technology alliance also contributes to growing our global liquidity network, based on common market infrastructure, for the benefit of both our partners and our members,” said Andreas Preuss, CEO of Eurex and Deputy CEO of Deutsche Börse AG.

Source: MondoVision, 12.03.2013

Filed under: Asia, Exchanges, India, Trading Technology, , , , , , , ,

VAM: Vietnam Market Analysis – February 2013

After a long Tet holiday, rumors about financial policy changes and further arrests of top bank leaders emerged and eroded all the stock market’s gains from the beginning of February. Consequently,  the VN-Index closed the month with a 0.52% loss, whilst HNX shed 1.05%. With a 3.05% fall, the VN30 seemed to be even more sensitive to the panic.
 
Inflation subdued in the month of Tet
Thanks to the phasing out of pharmaceutical products price increases, inflation slowed somewhat in February as the consumer price index climbed 7.02 percent YoY (versus 7.07 percent YoY in January). The concerns about the “traditional” consumer price hikes during the Tet holiday did not materialize, partly due to weaker festive demand than usual. The government also decided not to raise retail prices of petroleum products including gasoline to ensure economic stability and keep inflation under control. However,  Ministry of Finance did not provide the information on price stabilization fund balance for petroleum products, so it remains unclear on how the gasoline price control will transpire in the coming time.
 
Trade surplus continued, foreign reserves given a boost
According to GSO, the trade balance in February continued to show a surplus, reaching USD900mn, the highest monthly level ever and the ninth month of surplus in a row. With this result, following the USD700mn in Jan, the YTD trade surplus is now around USD1.6bn, a comfortable level which should lend healthy support to the already strong foreign reserve (by Vietnam standard) and consequently the value of the Dong. However, exchange rate showed unexpected volatility in the first two weeks after Tet, possibly due to brisk actions in the gold market and the upsetting rumours. To comfort the market, a Central bank spokesman has stated that no depreciation is being planned for the foreseeable future.
 
Newly released NPLs figure eased concerns on banking system reform.
While the Prime Minister requested to establish the AMC in 1Q 2013, the new NPLs figure released by the Governor was encouraging. Accordingly, bad debt on banking system has come down from 8% in June 2012 to 6% as banks wrote off non-performing loan balance at the end of last year. As the Government set credit growth target of 12% in 2013 to boost economic growth and implement the “dual-targets”, the destination for credit flow is still at stagnation point. Whilst total liquidity (M2) increased 3.31% YTD, the credit growth up to 21 Feb was till in negative territory at – 0.16% YTD.
 
Business environment still appears challenging
In line with stagnation on the supply side, demand remained weak with retail sales increasing only 3.6% in Jan-Feb period, which is not different from Dec 2012’s level. While the inventory level hiked 19.9% Y-o-Y, industrial production showed no improvement. In a related note, the government released that by February, the number of enterprises going out of business was 8,600, which exceeded the figure of 8,000 newly created enterprises, implying the fact that the business environment is still very difficult.
 
A bumpy recovery progress reflected by a drop in the PMI.
After adjusting for seasonal factors, including the Tet holidays, the HSBC Vietnam Manufacturing PMI posted 48.3 in February, down from 50.1 in January. This has been the largest dip since last August. Notably, in February, the survey showed a first drop in four months of manufacturing output; a decline in the level of new order received and a sixth time in seven months increase in average input prices.
 
Our ViewAfter a long Tet holiday, the stock market was hit by negative rumors about possible currency devaluation, financial policy changes and further arrests of banking officials. Although these rumours were addressed and corrected in a timely manner by the relevant authorities, the stock market and economy in general showed its uncertainty and vulnerability. In 2013, the story will be mainly about boosting production and restructuring the economy. Fortunately, Vietnam’s leaders’ determination is supported by a relatively stable currency and a healthy trade balance.
We remain cautious and will carefully watch development in the political space and changes in macro economy as that will definitely affect the stock market. We are generally comfortable with our equity position but may look to selectively acquire more stocks if the macro environment becomes more favourable.

Filed under: Banking, News, Risk Management, Vietnam, Wealth Management, , , , , , , , , ,

VAM: Vietnam Market Analysis – January 2013

All indices recorded strong gains in January as investors’ sentiment improved
The VN-Index surged 15.5% to close at 479.8 while the HNX jumped 9.7% to 62.62. The VN30, after reaching its all time high at 577, eased back to 564.01 at the end of the month, gaining 16%.
 
Timely measures to give market a boost
With effect from15th January 2013, the trading band on HSX and HNX have been loosened to 7% and 10%, from 5% and 7%, respectively. Besides, SSC also introduced other measures to support the stock market such as tax incentives, allowing to issue stocks below par value, increasing margin ratio and most importantly, increasing foreign ownership limit by non-voting rights in some selective industries (namely at weak banks to over 30%, and at securities companies to 100%).
Furthermore, SBV also intends to participate in domestic gold trading to stabilize domestic gold price, closing the gap with global price, thus discouraging people from holding too much gold. Those measures to boost the stock market, especially the possibility on increasing foreign ownership and the proposal to tighten gold control have somewhat created the wave of optimistic buying in January.
 
A wave of Japanese FDI and record remittances to welcome Tet
According to the Ministry of Planning and Investment, FDI disbursement in January reached USD420mn in total, up 5% YoY. Total newly registered and top-up capital grew 74% YoY, of which newly approved projects registered USD257mn, a 293% YoY increase, and top-up capital touched USD24.3mn, rising 25.2% YoY. Japanese became the biggest investor making up 57.6% total newly approved projects so far this year.
Thanks to the surge before Tet holiday, total remittances this year are estimated at a record USD10 billion. The total foreign reserve has increased to USD26bn, equivalent to 2.3 months of imports, a historical high and an 8.3% increase from USD24bn as at the end of 2012. The healthier FX reserve helps to safeguard the value of the Dong.
 
Tet, on the other hand, narrows trade surplus
Januaryrecorded a smaller trade surplus as demand for imports increased before Tet holiday. Exports exceeded imports by only USD200 million in January, after a revised trade surplus of USD498 million in December. From the previous month, export value decreased 2.5% while the import value edged up about 0.4%, although both of them showed huge improvement, more than 40%, compared to the same period last year. Foreign invested enterprises continue to be the leading sector with 66% and 55% of total export and import value, respectively. They also outperform domestic sector in terms of more import growth and less export reduction during the first month of 2013.
 
Credit drop and CPI jump surprise market.
The industrial production index (IIP) decreased 3.2% from December amid pessimistic outlook for stagnation on retail sales. Indeed, consumers continued to reduce spending at the prospect of lower income and no year-end bonus. The retail sales edged up just 2.2% MoM in Jan, the month before a long Tet holiday. As a result, credit dropped 1.06% YTD, according to the press release from a government meeting.
In contrast, January’s PMI moved in a different direction with the IIP since it increased to 50.1 from 49.3, thanks to modest improvement in new order volumes from domestic market and marginal job growth. Amidst stagnation of industrial production and credit growth, a solid increase in average input prices, a component of PMI basket, after a marginal reduction in December, suggests that SBV should be more cautious about further easing as inflation risk came back from the beginning of a new year. Jumps in health care (9.5% MoM) and foodstuff (1.96% MoM) items led CPI to soar 1.25% MoM (7.07% YoY) in January, exceeding market expectation. Accordingly, inflation risk puts any rate cut rumors on hold until at least after Tet holiday.
 
Government charts out tasks for banking sector with focuses on inflation control and bad debt resolution
Main objectives of SBV in 2013 continue to be curbing inflation, stabilizing macro economy alongside with restructuring banking sector and tackling NPL issues. For 2013, the SBV targets to keep credit growth at 12%. Importantly, SBV has submitted to government the plan that allows AMC to purchase bad debts based on book value (after provision) and pay by bonds to the bank. Banks could use AMC bonds as collateral to get cheap fund from SBV at a discount rate. Commercial banks with NPLs higher than 3% will be forced to bring down their NPLs to 3%.
On the other hand, as there are many linkages between real estate market and NPL problems in banking system, government also issued the Resolution No.2, which introduces several tax incentives, credit line for low income individuals to purchase social houses and transferring commercial housing projects into social housing. However since social housing only accounts for a small portion of property sector, we think these solutions are not effective enough to rescue the whole troubled real estate market.
 
Our ViewBullish momentum remained in the first month of 2013 thanks to good round of macroeconomic indicators release. While capital inflow continued being positive, actions of authorities looked effective in boosting the market. However, as stocks ran too high and too fast during the last two months, we start to be skeptical about the strength of this momentum. A month before Tet, inflation risk seems to be coming back and industrial stagnation looks a bit tense. We maintain a cautiously optimistic view and relatively high equity holding, particularly stocks with strong fundamentals in consumers, pharmaceuticals and materials sectors. As Government is showing more and more determination to improve the economy and clean up the banking sector, stickers with strong cash flow, low debt and high beta are also in our consideration to pick up to ride the market’s uptrend.

Filed under: Exchanges, News, Vietnam, Wealth Management, , , , , , , , , , ,

Avaloq the Swiss Wealth Management Solution provider opens office in Australia

The Avaloq Group, the international reference for integrated and comprehensive banking solutions, is pleased to announce the opening of its first branch office in Australia.

As part of its continuous internationalisation strategy and aim to extend its presence in the most demanding financial markets globally, Avaloq has opened an office in Australia end of last year. The expansion to Australia – a new continent for Avaloq – comes after the company successfully established local offices in various regions in recent years.

Avaloq signed its first customer on the Australian continent – one of the reasons why the company decided to further extend its international presence and open a branch in Sydney. The Australian market bears a great potential for wealth management platforms such as the Avaloq Banking System. The fully integrated solution offers the entire field of investment products and additionally covers local tax and superannuation requirements. Combined with a team of experts, equipped with substantial know-how and experience regarding the Australian financial market, Avaloq significantly improves its local position.

“Opening an office in Australia is yet another important step in our internationalisation strategy and an additional milestone in Avaloq’s remarkable company history. Building up a local presence in the most demanding financial centres worldwide ensures that we are close to the markets and companies we work with. This allows us to cater towards our client’s needs and requirements without having to work around different time zones”, says a delighted Francisco Fernandez, CEO Avaloq. “The Australian market has immense potential, with demand for wealth management platforms increasing. Being present in Australia is the logical move for the company”, Fernandez continues.

The new Avaloq branch in Australia will significantly profit from the vast experience of the regional headquarters in Singapore, which was established in 2007. The Singapore branch has seen strong expansion in recent years under the management of Martin Frick, Managing Director Asia Pacific.

Source: Avaloq, 12.02.2013

Filed under: Australia, Banking, Singapore, Wealth Management, , , , , , , ,

Latin America: Investor News Letter 18 January 2013

Mexico
Mexican Peso Slides on Carstens Hint at Interest-Rate ReductionMexico’s peso fell the most in four weeks after central bankers signaled that a further slowdown in inflation could prompt them to lower interest rates.
Nieto seeks to open Mexican energy sector
Los Tres Amigos: Positioning Your Portfolio In Mexican Peso Denominated Deb
Most U.S. funds missed Mexico gains, Brazil drop in 2012
Japanese investments in Mexico steady
Region completes work on international infrastructure project with Mexico

Brazil
Brazil’s Real Declines on Inflow Concern; Swap Rates Climb
Brazil: Daylight piracy
“SQUEEGEE merchants of the seas”: that is the nickname shipping companies have bestowed on the pilots who guide ships into Brazilian ports. Their legal monopoly and unregulated fees place them among the country’s highest earners: 150,000 reais ($73,500) a month, estimates the shipowners’ association. It costs twice the OECD average to import a container to Brazil, says the World Bank—and since that excludes bribes and fees for go-betweens, the true figure is surely greater.
Brazil Seeks Private Partners to Operate Rio de Janeiro, Belo Horizonte Airports
Brazil announces regional airport infrastructure investment plans
Brazil aviation faces turbulence after rapid ascent
Brazil ports starved of investment, buried in red tape-group
Guyana, Brazil sign on to infrastructure plan
Brazilian municipality of São Bernardo do Campo to improve sustainable urban mobility with loan from IDB

Latin America
Argentina: Tax & Estate Planning
Argentina rapidly changing oil/gas industry levies to attract foreign investment
Bolivia takes over Spanish-owned Iberdrola energy suppliers
Colombia: ANI to launch four new public infrastructure concessions valued at US$1.95bn
Colombian Peso Advances on Foreign Investment Outlook
Chile: First Solar Stakes Claim in Latin America
Peru’s investment opportunities attracts Qatar’s firms Peru: Infrastructure gap put at $88bn
Peru-based AFPs invest over US$3.5bln in infrastructure
Cement Industry Figures In Peru: Btg Pactual Begins Coverage Of Cpac With A Buy Recommendation
Peru to invest over US$701mln in access infrastructure projects
Peru: Ezentis shifts focus to Latin America, helped by $64M Telefónica Peru contract
Peruvian entrepreneurs expect investment to continue growing in 2013
Venezuela: What Hugo Chavez’s Illness Means for Venezuelan Mining

Latin America and Caribbean PhotoVoltaic Demand Growing 45% Annually Out To 2017 
Latin American ports record strong performance in 2012
South America: A Powerhouse, Not a Circus
10 Latin American startups to look out for in 2013

Filed under: Argentina, Brazil, Chile, Colombia, Energy & Environment, Japan, Latin America, Mexico, News, Peru, Risk Management, Venezuela, , , , , , , , , , , , , , , , , , , , , , ,

VAM: Vietnam Market Analysis – December 2012

Improved economic conditions somewhat buoyed the stock market in the last month of the year as all three indices moved up
The VN-index closed at 413.7, gaining 11.23% while VN30 closed at 485.4, picking up 9.42%. HNX was the best performer of three indices, increasing 11.83% to close the month at 57.09.
 
Macro indicators showed joyful December
Market confidence was regained thanks to better-than-expected CPI, trade balance, interest rates cut and detail implementation of the Government on spurring the economy. For the first time in four months CPI slowed in December, with consumer prices rising 6.81% from a year earlier after climbing 7.08% Y-o-Y in November. Consequently, the State Bank cut benchmark interest rates for a sixth time to help companies cope with difficulties in production and business. The trade balance posted a first year of surplus (of US$284mn) since 1993. Despite a gloomy year, FDI disbursement reached USD10.5bn, dropping a marginal 5% YoY. As a result, foreign reserves are significantly improved, reaching US$24 billion, equivalent to 12 weeks of import. The Dong remains unchanged.
 
However, stability was achieved at the cost of growth
Vietnam’s economy expanded at the slowest pace in 13 years in 2012 as a slump in bank lending dampened domestic demand. GDP grew 5.03%, down from 5.89% in 2011, and the lowest since 1999. Bad debt and the gloomy business environment hampered credit growth, which ended 2012 at 6.45% YoY while total liquidity growth and deposit growth were 19.85% and 20.29% YoY, respectively.As the lenders’ liquidity position becomes comfortable and full-year inflation was a lower-than-expected 6.81%, the central bank decided to cut all policy rates and deposit cap rate by 1%, effective on December 24, in an attempt to make banks lend more. But as the real interest rate is still positive, some are speculating on another rate cut, even as the World Bank warned against easing too soon.
On the other front, the HSBC’s Vietnam PMI index fell back to deterioration in December, down to 49.3 from 50.5 last month, as a result of reduction in order inflows, disinvestment of inventory holdings and stagnating production volumes.
 
Government details its determination to spur the economy
To spur the economy and resolve the financial system, the Government started implementing a detailed action plan. Businesses may enjoy lower corporate income tax rate in 2013, i.e. 23% for large enterprises and 20% for SMEs (down from 25% earlier); real estate will receive more support based on a newly approved proposal by MoF, which includes a 50% VAT reduction, 2-year extension on the deadline of land use fees payment and the establishment of AMC aiming to solve rising NPLs. Moreover, USD300mn from Asian Development Bank in a 25-year loan package will help to restructure SOEs in 2013.
 
Authority changes rules to push the capital market
On the capital market, SSC submitted its proposal in support of the stock market to the Ministry, in which key measures might include tax incentives, allowing to issue stocks below par, increasing margin ratio and trading band and most importantly, increasing foreign ownership limit. Otherwise, SBV governor also announced that they are working on revising the Decree 69/2007, wherein special cases, i.e for restructuring commercial banks, the foreign ownership ratio might be allowed to exceed 30%. Since 10th January, the number of gold bar shops will decline from 8,000 to 2,400 including around 900 in Ho Chi Minh City and 400 in Hanoi, after SBV completes the licensing procedures. 
 
Our ViewOn the background of good macro economic indicators coming out in December and improved investor sentiments after seeing the Government’s determination to spur the economy being detailed into action plans, the stock market had a good run in the last month of 2012. We are cautiously optimistic and have started to mobilize cash into Vietnam Dong to be ready for deployment toward increasing equity level for the Fund. We are keen to buy stocks of strong companies with sound cash flow and healthy balance sheets in fundamental industries such as consumers and materials.

Filed under: Banking, Exchanges, News, Risk Management, Services, Vietnam, Wealth Management, , , , , , , , , , , ,

VAM: Vietnam Market Analysis – November 2012

Whilst SBV is still struggling to tackle bad debt, additional banking scandal has fanned market concerns about banking system instability
Coming as another shock that made the market drop 3.27% in one day was the resignation of Mr. Dang Van Thanh as Chairman of Sacombank following his wife’s resignation from Sugar Bourbon Tay Ninh. Though there are many rumors spread around this news, the market is looking at it as uncertainty still exists in the banking system. Fortunately, depositors’ reaction seemed to be calmer this time as there was no sign of “bank run” after the resignation. In the meantime, decision on the SBV’s initiative in setting up company to own and manage bad debt for banks has not been reached.
 
Stability continues to be the priority for next year
The government ended the National Assembly meeting with a good showing of strong determination to restructure the banking system at the lowest cost possible, and preventing any systemic collapse. Since the peak in August last year, inflation has been successfully controlled, at the cost of slowest GDP growth in 13 years. The national CPI growth rate posted a modest increase of 0.47% M-o-M in November, a deceleration from 0.85% in the last month and 2.2% in September when one-off adjustments were made to pharmaceutical and health care items. The government forecasts that 2012 CPI would be around 7.5% Y-o-Y and a decade low target of 6% is set for next year as well.
 
Lower inflation adding pressure on rate cuts
Lower expected FY2012 inflation of 7.5% and healthy liquidity condition of lenders are adding more pressure on rate cuts. By Nov 20, total deposit also increased 15.98% YTD while credit growth including trust investment and corporate bond investment was only 4.15% YTD. Banks now turn to bonds to put excess cash to work, which consequently causes the yield to drop. Under this circumstance, the Government has made known their contemplation of cutting deposit rate or putting a ceiling for lending, with a view to creating better environment to spur economy in 2013. The Government expects the economy will expand at 5.5% next year.
 
Dong confidence is strengthened
Despite the gloomy condition, FDI sector is doing well. Foreign companies’ export turnover rose 30% in eleven months through November, accounting for about two-thirds of total exports. The YTD FDI disbursement has reached USD9.9bn up to November 2012. This amount was down just slightly from USD10.05bn in 11M2011. The negligible decline showed that the foreign capital flow into Vietnam was still stable, helping the balance of payment to remain in surplus this year. The YTD trade balance is also a surplus despite a small deficit in November. And it is likely that Vietnam will record the first year of trade surplus since 1995. The deficit if any, will be lower than USD1bn. The export gains have reinforced Vietnam’s foreign-exchange reserves, expected to reach the equivalent of about 12 weeks of imports by the end of the year, which in turn would support the value of Dong.
 
PMI data signals recovery
The seasonally adjusted HSBC Vietnam Manufacturing PMI posted an increment to 50.5 from 48.7, which is above the neutral 50.0 value for the first time since September 2011. Although the index showed only a marginal improvement, it reflected returns to growth in both production levels and new orders during November. The increase in November’s PMI underscores optimism the economy is recovering after 14 month slowdown, which is in line with the situation in China and U.S. 
 
All three indices moved lower over November with low liquidity
The Vn-Index closed at 377.82, losing 2.64%. The HN exchange tumbled 3.36% to 51.05, whilst the VN30 dropped 3.19% to 443.68.
 
Our ViewWe are hopeful that the worst may be over. The market is waiting for clearer signs of economic turnaround while the Government is showing its determination in solving its problems. The trade-off between stable economy and growth requires consistency in policy setting. The stability of Dong and low inflation target level next year make Vietnam’s business environment more attractive. Fortunately, on the bottom-out journey, Vietnam would be helped by the data signaling a recovery in U.S. and China.

Filed under: News, Risk Management, Vietnam, , , , , , , , ,

Nyse Technologies expands SFTI network in Asia

Nyse Technologies, the commercial technology division of Nyse Euronext, today announced the continuing expansion of its Secure Financial Transaction Infrastructure (SFTI) in Asia with the introduction of two access centres located in Hong Kong.

Customers now, for the first time, have direct access to the SFTI network, allowing them to connect from Hong Kong to services offered by NYSE Technologies through SFTI, including access to Hong Kong Exchanges & Clearing (HKEx), all major international trading venues, market data solutions, plus the NYSE Euronext capital markets community.

As part of the expansion of the SFTI network to include Hong Kong, NYSE has also extended SFTI to the new HKEx Data Centre colocation facility, giving customers there access to all the services available on SFTI through a simple cross connect to their colo racks. NYSE Technologies also plans to expand SFTI in the region to connect other markets like Australia and Korea.

NYSE Technologies’ Secure Financial Transaction Infrastructure provides access to a comprehensive range of capital markets products through a single point of access and offers low-latency trading access to the NYSE Liffe and NYSE Euronext markets. SFTI Asia is the most recent extension of the global backbone, enabling Asian firms to receive market data and trade on multiple markets. Designed to be the industry’s most secure and resilient network, SFTI is specifically built for electronic trading and market data traffic thus enabling firms to reduce their time-to-market, improve their performance and significantly lower the cost of their trading infrastructure. Furthermore, the global backbone allows customers to connect to their trading infrastructure distributed in financial centres around the world using a SFTI connection on the other side of the world.

“The addition of these important access centres in Hong Kong is a further step in the expansion of NYSE Technologies’ footprint and reach of the SFTI Asia network and adds to our established presence in Singapore and Tokyo.” Daniel Burgin, Head of Asia Pacific, NYSE Technologies, commented. “Offering multiple access centres in the Asia Pacific region allows them to use SFTI Asia to connect to regional and global exchanges and markets in a cost effective way through a single connection at each of the client’s locations around the region. This eliminates the overheads and costs associated with maintaining separate network connections in each location to multiple trading venues.”

Source: NYSE Technology 06.12.2012

Filed under: Australia, China, Data Management, Data Vendor, Exchanges, Hong Kong, Japan, Korea, Market Data, News, Singapore, , , , , , , , , , , , , ,

HKEx completes LME acquisition

Hong Kong Exchanges and Clearing Limited (HKEx) and LME Holdings Limited (LME Holdings), the parent company of The London Metal Exchange Limited (LME), are pleased to announce that the acquisition of the entire issued ordinary share capital of LME Holdings by HKEx has completed today.

Completion was effected by the delivery of the relevant court orders to the Registrar of Companies for England and Wales.

The transaction brings together the leading operator of exchanges and clearing houses in Asia, with the world’s leading non-ferrous base metals trading venue.

Charles Li, Chief Executive of HKEx said, “We are delighted that, as of today, the LME is formally part of the HKEx group. We are confident that this partnership will deliver enormous benefits over time as we leverage our relationships and knowledge to build on LME’s strong global position.”

Martin Abbott, Chief Executive of the LME said, “The LME will remain the world’s foremost base metals exchange thanks to HKEx’s position in Asia, its infrastructure and resources. We begin a new chapter today but the LME is more secure than at any point in its 135-year history.”

Source: Finextra, 06.12.2012

Filed under: Exchanges, Hong Kong, Services, , , , , , , ,

Latin America: Investor News Letter 17 November 2012

Mexico

Slim Acquires Controlling Stake in Real Oviedo, El Pais Reports

Billionaire Carlos Slim agreed to invest 2 million euros ($2.5 million) to acquire a controlling stake in Spain’s soccer team Real Oviedo, newspaper El Pais reported today.

Mexico lawmaker introduces bill to legalize marijuana
Sherwin-Williams to buy Mexico’s Comex for $2.34 billion
Mexico Third-Quarter GDP Rose at Slowest Pace in Over Year
Cemex Latam Falls in Bogota After $1.14 Billion Initial Sale
Mexican banks invest domestically
Mexico: Investors’ New China
TransCanada to build, operate Mexican natural gas pipeline; will invest US$1B

 

Brazil

Top names drop off list of Thyssen Americas bidders

FRANKFURT – Several top steelmakers are sitting out ThyssenKrupp’s auction of its U.S. and Brazilian mills and there appears little interest in the latter, suggesting the German firm may fall well short of its $9 billion asking price.

Eletrobras to take over bankrupt Brazil power utility
Cuba opens sugar sector to foreign management
Microsoft’s investment in Brazil to spur Rio research boom-execs
Telecom Italia looking at GVT, other opportunities
Wuhan Steel shelves plans to build Brazil mill
A new wave of Brazilian infrastructure investment
Brazil’s Itaqui port plans $3.2 billion upgrade
Rio Olympics, World Cup at risk with royalty bill, governor warns

 

Latin America

Paving the Way  High-­Tech Financial Infrastructure Hits LatAm

Foreign market leaders such as Fidessa, Direct Edge and Navatar are challenging local providers in the race to meet the booming region’s needs. The growth in size and sophistication of LatAm capital markets has both fueled and been fueled by the implementation of high-tech financial infrastructure in the region, as the hardware and software that have  been the foundation …

 Latin American yields fall further in a warning to bond investors
Impoverished Iberians, booming Latin America eye new relations
Africa and Latin America Still Fight Vulture Funds
More LatAm ETFs Your Broker Forgot to Mention
UN asks LatAm firms to grow with social responsibility
Private Equity Lures Pensioners as Bond Yields Sink
Argentina’s Debt Restructuring Argument Could Be Very Significant For The Global Economy
Argentina’s YPF 3rd-Quarter Profit Down 51% on Year at $159 Million
Bolivia Returns to the Global Bond Market
Chile pension fund-ordered estimate lowers Endesa Latam asset value
Chilean regulator to put new limits on pension fund investments
Germany’s Solarstrom enters Latin America with 2MW in Chile
Colombia opens criminal probe into Interbolsa collapse
Colombia’s Interbolsa brokerage to be liquidated
Public-Private Partnerships in Colombia: Scaling-up Results
Paraguay, Worst LatAm Economic Result of 2012
Peru May Invest About $5.2 Billion in Water, Wastewater Projects
Aeropuertos del Peru mulling over opportunities in Brazil and Chile
Overseeing Peru’s international appeal at ProInversión

Filed under: Argentina, Banking, Brazil, Chile, China, Colombia, Energy & Environment, Latin America, Mexico, Peru, Risk Management, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

VAM: Vietnam Market Analysis – October 2012

Another down month for the 2 main bourses

Read detailed VAM monthly  Monthly Market Analysis and Chart October 2012

The month of October saw the VN index close at 388.2, losing 0.47% whilst the HNX index fell 4.42% to close at 53.02. The VN30 somehow managed to move the opposite direction, gaining 0.82% to close at 458.56 and was again the best performer of the 3 indices.
 
CPI slowed down as price increases for healthcare and education were nearly completed
The Consumer Price Index rose 0.8% MoM in October, after jumping 2.2% the previous month due to one-off price adjustments in two major government-controlled sectors. Consequently, the YTD inflation appeared to be calmer at 6.02% as the healthcare and pharmaceutical component of the CPI basket decelerated from 17.02% to 5.94% and the education component decelerated from 10.54% to 1.88%. Although pricing pressure from food and foodstuff is seasonally higher in the last quarter, we think the one-digit inflation target of FY2012 is likely to be met. In addition, there is positive news for inflation, as the Ministry of Industry and Trade announced that input price for electricity production has declined in the last three months, and no price adjustment would be scheduled in November.
 
PMI weakened in October
The seasonally adjusted HSBC Manufacturing PMI posted 48.7 in October, down from 49.2 in September. As such, the headline PMI has remained below the critical 50.0 mark for seven months running. Partly, stocks of purchases fell further in October, as the downturn in the manufacturing sector led companies to empty out their inventory holdings. A number of firms also linked lower stocks to reduced levels of input purchasing. Weaker global demand led to a further solid reduction in new export business during October as well. Incoming new export orders have fallen in each of the past six months; subsequently, the latest decline in new export orders was the steepest in the 19-month survey history. In which, companies reported reduced inflows of new business from China, Japan and Taiwan.
 
SBV serious in solving bad debt
According to the latest SBV estimates, the level of NPLs at the end of June stood at 8.82%, which is even higher than that at the end of March (8.6%). As such, the SBV has submitted a proposal to the Prime Minister to set up an asset management company to take over the VND100 trillion (US$6 billion) worth of bad debt. Two options are: (i) to expand the role of the existing Debt Asset Trading Company under the MoF, or (ii) to set up an entirely new entity under the SBV. However it will take time to make any proposal a reality as it will need National Assembly approval which will push it to Q2 2013 at the earliest. In the meantime, banks are required to revalue their loan collaterals, and we believe this process will weigh down financial performance of lenders in the upcoming period.
 
Deadline for closing gold position extended to 30th June, 2013
After declaring the widened gap between domestic and world gold prices is primarily due to banks rushing to cover their gold positions before 25th Nov, SBV has extended the deadline to 30th June, 2013. Total gold mobilization until the new deadline must not exceed the gold needed to settle gold accounts. Since there are still 20 tons of gold needed to repay depositors and banks are not allowed to import gold, the extended deadline is meant to ease pressure on domestic gold price and help banks avoid sizable losses that would occur if they were to buy gold at peak price just to meet the deadline on 25th Nov.
 
Budget deficit in 10M2012 exceeds the whole year target
The YTD budget deficit in October rose to VND155.2 trillion from VND138 trillion last month, exceeding the VND140 trillion full-year target. As of 31st Oct, total tax revenue amounted to VND523.4 trillion, equivalent to 71% of the yearly plan. On the other hand, government spending approached VND 678.6 trillion, or 75% of the yearly plan. The budget deficit equals to 6.9% of GDP, far higher than the target of 4.8%-4.9% for the year, suggesting that room for fiscal policy to stimulate domestic growth is quite limited.
 
Trade balances returned to deficit in October. FDI disbursement unchanged year on year
The trade deficit is USD 500 million in October as imports increased 12% MoM to US$10.4 billion, whilst exports only increased 4% MoM to US$9.9 billion. With a large deficit in October, the trade balance has returned to deficit of US$357 million from a surplus of US$143 million in September. Since demand for import tends to be seasonally high in the last two months of the year, we think the trade balance by year end will likely be a larger deficit. However, the news that FDI disbursement in October reached US$900 million, unchanged year-on-year has provided some comfort that foreign investors still see investment opportunities in Vietnam. In fact, it is heart-warming that the FDI disbursement year to date (US$9 billion) has almost tracked the level achieved over the same period last year (US$9.1 billion), despite tougher economic conditions.
 
Our ViewOur view has hardly changed since last month. As Vietnam’s top leaders are debating on critical issues including proposed amendments to the Constitution and several laws, we see little clarity on the economy or stock market until all that is settled. As such, we prefer to be conservative at this time, holding high cash and only retaining our core equity holdings; companies with strong fundamentals which we have high conviction in and believe will stand the test of change. We take this opportunity to screen the market for resilient companies with little or no debt, strong market position, high growth potential, good cash flow and savvy management with integrity, for possible immediate action when the market turns.
Source: VAM, 16.11.2012

Filed under: News, Risk Management, Vietnam, , , , , , , , , , ,

Latin America: Investor News Letter 2 November 2012

MEXICO

Mexico 2013 inflation view steady despite price spike
Credit Suisse Raises $420 Million to Create Mexico Fund
Mexico: Big investment for citrus producers
Indigenous Groups Protest Mexico’s Biggest Wind-Energy Project
FOX BUSINESS – Mexican fishermen and indigenous groups from the southern state of Oaxaca protested Wednesday in front of the Mexico City offices of participants in a wind-energy project that would be one of the largest ever in Latin America, targeting Coca-Cola bottler and convenience-store operator Femsa (FMX), the Inter-American Development Bank and the Danish government, among others.

BRAZIL

The Brazilian Law on Money Laundering
Precautions Investors Must Take when Investing in Brazil. Brazil has recently altered its money laundering law. The new bill has tightened the government’s grip on most of the investment operations and has significantly broadened financial institutions’ and investment brokers’ duties to report suspicious activities …

ThyssenKrupp Brazil mill fined for pollution, could face closure
The long, brutal haul from farm to port in Brazil
Brazil hit by new blackout, infrastructure in spotlight
Brazil Gives Tax Exemption to Foreign Mortgage Investors
Brazil Power Generators Ask to Renew 106 of 123 Concessions

LATIN AMERICA

Private Aviation takes off in Latin America
The growth of private wealth in LatAm has led to a rise in demand for private aircraft and private aviation services. For the region’s mounting numbers of high-net-worth and ultra-high-net-worth individuals, a plane can be purely a luxury item, of course; but for increasingly global and mobile professionals and business owners, it meets a demand unsatisfied by local transportation alternatives, as well .

Colombia Regulators Seize Interbolsa Brokerage on Funding

Colombia’s financial regulators seized Interbolsa SA’s brokerage, the country’s largest, after the company said it faces a “temporary” funding shortage.

 Latin America stocks rise on China, U.S. data
20 Latin American in the World’s 200 Richest People
Argentina bonds close lower after S&P downgrade
Argentina Plans Regulatory Overhaul to Spur Investments
Increase in pension fund investments makes for headwinds in Andean market
Colombia Equity Fund targets European countries for distribution
Protests in Peru Scaring Off Mining Investment, Government Responds With Social Programs
Honduran supreme court rejects idea of building independently governed ‘model cities’
CAF and OFIC ink agreement to promote energy efficiency projects in Latin America
Modern airport terminal to be opened in Bogota
IDB approves $200m financing for Latin America hydro plant

Filed under: Argentina, Asia, Banking, Brazil, Central America, Chile, Colombia, Latin America, Mexico, News, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

Latin America: Investor News Letter 19.October 2012

Mexico

Elektra to offer No-Fee Banking and Long Term loans to US low income population
Billionaire Ricardo Salinas said he wants to offer no-fee banking deposits and longer-term loans to low-income U.S. consumers, aiming to export his Mexico business model, successful in 8 Latin American countries to the world’s biggest economy.

Mexico’s market shines as reforms, confidence take hold
NYSE Technologies, Bolsa Mexicana and ATG build Mexican trading infrastructure
Slim-backed Mexican firm plans IPO, new cement company
Alsea to invest $110 million in Mexico, Argentina Starbucks cafes
Mexico passes law to combat cartel money laundering

Brazil

Itau Sinks as Rousseff Plan Hurts Bank Profits: Corporate Brazil

Brazil’s push to drive down consumer borrowing costs is eroding the value of its biggest banks.

Brazil wants to restrict strikes in public sector
Monsanto suspends collection of royalties in Brazil following state court ruling
Brazil M&A hits five-year low on turmoil, state intervention
Brazil and South Africa Form Partnership On Future Investment Promotion Initiatives
Brazil’s Water Sector Benefits From Investment Ahead of World Cup, Olympics

Latin America

Cencosud of Chile to Acquire Carrefour Colombia Division

Cencosud SA agreed to buy Carrefour SA’s Colombian unit for 2 billion euros ($2.6 billion) as it taps rising consumer spending in Latin America and the world’s second-largest retailer retreats from markets it can’t dominate.

Venezuela/Paraguay rift spoils Brazil’s plans for a ‘normal’ Mercosur summit
Singapore, the fastest growing market for Latin America
CAF Encourages Singapore to Invest in Latin America
Cuba Praises China-Latin America Ties
Latin America can produce double-digit investment returns over next decade
Arab and Latin American leaders agree to investment bank
LatAm’s Largest Solar Power Plant  in Peru receiving 40 MW of Solar PV Modules from China
Arab and LatAm leaders agree to investment bank
Peru central bank could allow more pension funds invested abroad
Latin American Ratings Strong Enough to Weather a Commodity-Cycle Downturn
Latin American gold rush brings riches, conflict
Latin lithium output mired in controversy

Source: Various 19.10.2012

Filed under: Argentina, Banking, Brazil, Chile, China, Colombia, Energy & Environment, Mexico, Peru, Singapore, Venezuela, , , , , , , , , , , , , , , , , , , , , , ,

Nyse Technologies, Bolsa Mexicana and ATG build Mexican trading infrastructure

Nyse Technologies, the commercial technology division of Nyse Euronext (NYX: NYX) today announced that in collaboration with Bolsa Mexicana de Valores (BMV) and Americas Trading Group (ATG) it has built and deployed a state-of-the-art trading infrastructure complete with global connectivity, risk management functionality and direct market data distribution for customers trading in Mexican markets.

Designed to support the launch of Bolsa Mexicana’s new matching engine and midpoint hidden order book, this solution incorporates advanced technology developed specifically for every part of the trade cycle to provide unprecedented accessibility, performance and risk management for trading on Bolsa Mexicana’s exchanges with the aim of establishing Mexico as a premier Latin American investment destination.

Initially, this collaboration will provide:
• A new co-location model for access to cash and derivatives markets (through ATG directly at the KIO Data Center)
• Global connectivity for buy side, sell side and vendors from the US, Europe, Asia and also other Latin American markets such as Brazil and Chile.
• Sophisticated risk management functionality for international order routing (solution implemented by NYSE Technologies)
• Low touch order stamping by Bolsa Mexicana’s members to settle orders
• Global Market Data distribution via NYSE Technologies Secure Financial Transaction Infrastructure (SFTI) with direct contracting with BMV

“We are excited to again work with one of Latin America’s leading market operators in Bolsa Mexicana and market participants in ATG to deliver dramatic improvements across critical elements of the trade cycle,” said Dominique Cerruti, NYSE Technologies. “By continuing to improve access to key Latin American exchanges and customers, we continue to realize our vision of creating a global capital markets community with cutting-edge connectivity, performance and risk management.”

“Today’s announcement with NYSE Technologies and ATG demonstrates our ongoing commitment to grow and enhance our markets in Mexico to deliver highly flexible multi-market, multi-asset trading,” said Jorge Alegria, Head of Market Operations, Bolsa Mexicana de Valores. “We look forward to extending our relationship and cooperation with NYSE Technologies in several important areas that will f further expand that growth and performance in the near future.”

Source: FinExtra, 18.10.2012

Filed under: Asia, BMV - Mexico, Chile, Colombia, Data Management, Data Vendor, Latin America, Market Data, Mexico, Risk Management, Trading Technology, , , , , , , , , , , , , , ,

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