[Vnbiz] Not on Vietnam but may shed light on the inflationdebate....a readers rsponse from

Wed Mar 5 01:34:22 PST 2008

Dear CACC,

Vnindex ended at 583 points today. The index is going down steadily and inflation seems keeping high while the State increased petrol prices and it is noticeable that electricity price will be adjusted very soon. 

Finally, SCIC agrees buying back some stocks and acts as a market maker. However, it is doubtful that the SCIC performs this task properly because of its competence matter. 

Have a nice day!

Dan

http://www.tinnhanhchungkhoan.vn/tintuc.php?nid=9906

SCIC sẽ mua vào cổ phiếu

(ĐTCK-online) Ngày hôm nay (05/3/2008), Tổng Công ty Đầu tư và Kinh doanh vốn Nhà nước (SCIC) kết hợp với Ủy ban Chứng khoán Nhà nước sẽ đưa ra danh sách các cổ phiếu mà SCIC thực hiện mua lại. Đây là thông tin từ ông Nguyễn Đoan Hùng, Phó chủ tịch Ủy ban Chứng khoán Nhà nước (UBCK) trong cuộc họp báo sáng nay của UBCK. 

Tiêu chí lựa chọn cổ phiếu chưa được công bố, nhưng ông Hùng cho biết, ít nhất sẽ dựa trên các cổ phiếu tốt, có uy tín và có tính thanh khoản cao. Thời điểm và tổng giá trị giải ngân cho việc mua lại này cũng vẫn là con số chưa được tiết lộ cụ thể. Tuy nhiên, ông Hùng cho rằng: động thái mua vào của SCIC là nhằm khẳng định rằng: Chính phủ đang nỗ lực ổn định giá cả thị trường trong nước. Điều quan trọng là nhà đầu tư phải tự ý thức được rằng: nếu họ không tự duy trì niềm tin vào thị trường mà cứ liên tục bán ra ồ ạt, không ngân sách nhà nước nào có thể cứu được cả. Chính phủ, Ủy ban chứng khoán Nhà nước chỉ có thể nỗ lực đảm bảo một nền kinh tế tốt, khỏe mạnh làm nền tảng cho sự phát triển của TTCK.

Nhiều giải pháp dài và ngắn hạn

Theo Ông Hùng, ngoài các giải pháp mang tính dài hạn như ổn định thị trường tiền tệ trong nước, chống lạm phát…vẫn tiếp tục duy trì cho vay đầu tư chứng khoán, bất động sản, đặc biệt là nên giảm các đợt IPO…Cũng liên quan đến vấn đề chung và dài hạn  của thị trường. Trong năm 2008, UBCKNN sẽ phối hợp cùng với Sở Giao dịch và Trung tâm GDCK sẽ tiếp tục tập trung nâng cấp hệ thống giao dịch, đó là hướng tới bỏ giao dịch sàn và tiến hành giao dịch trực tuyến. Dự kiến trong tháng 6/2009 sẽ chính thức đi vào hoạt động. Bên cạnh đó, UBCKNN cũng đang nghiên cứu về việc sẽ cho phép một nhà đầu tư được phép mở nhiều tài khoản, hay nhà đầu tư có thể vừa mua, bán một loại cổ phiếu trong cùng một phiên. Nghiên cứu soạn thảo cung pháp lý về thị trường phái sinh, repo cổ phiếu…nhằm phòng tránh rủi ro cho thị trường. 

Hiện tại, theo thông tin từ một số CTCK, mức P/E bình quân của thị trường đã xuống ở mức khoảng 13 lần, một con số vô cùng hấp dẫn với ngay cả những nước phát triển chứ không riêng gì với Việt Nam, một quốc gia có tốc độ tăng trưởng cao. Trong báo cáo của HSBC tổng quan về TTCK khu vực châu Á - Thái Bình Dương, Việt Nam đã được nâng lên vị trí khuyến nghị thứ 6 trong số các nước ở khu vực có mức độ hấp dẫn đầu tư nhất. Và, thực tế, những ngày gần đây, khối lượng mua của nhà đầu tư nước ngoài luôn tăng mạnh, chiếm khoảng 30% giá trị giao dịch toàn thị trường và khối lượng giao dịch mua tăng gấp 10 lần bán. "Điều này cũng cho thấy sức cầu của khối ngoại vẫn đang tăng mạnh, điểm đáng ngại có lẽ chính là từ phía các nhà đầu tư trong nước", ông Hùng cho biết thêm, 

Theo con số thống kê từ phía Ủy ban Chứng khoán Nhà nước, hiện đang có khoảng 5.000 tỷ đồng tiền mặt trong tài khoản của các quỹ đầu tư sẵn sàng cho việc giải ngân. Ông Hùng lưu ý: "Các quỹ đầu tư nước ngoài cho biết, họ đã sẵn sàng dồn tổng lực để đầu tư. Số lượng tiền có thể sẽ tiếp tục tăng cao vì trong thời gian vừa qua, chúng tôi đã nhận được nhiều văn bản xin đăng ký huy động thêm".

  _____  

From: vnbiz-bounces at mail.saigon.com [mailto:vnbiz-bounces at mail.saigon.com] On Behalf Of Tran Dinh Hoanh
Sent: Wednesday, March 05, 2008 3:43 AM
To: vnbiz at vietlinks.net
Subject: Re: [Vnbiz] Not on Vietnam but may shed light on the inflationdebate....a readers rsponse from

Dear anh Craig & CACC,

Thanks for the post, Craig.  The facts may confuse people but the conclusion is relatively clear: "Soon the monetary alarmists in China will see that strength in Asian currencies, slowing money supply growth, a downturn in export growth, soaring import price inflation, eroding trade balances, and downside reversals taking place in output and GDP growth threaten far worse negative consequences than they ever imagined (the least of which is placing Asian equities in danger) and will reverse course once again."

I agree with the above analysis:  Basically the main problem at this point is the weakening of the USD, which makes all Asian currencies appreciate in value, which in turn makes Asian exports more expensive and therefore reduces Asian exports. The reverse is true, Asian imports become more expensive.  So we have here low export and high import, which will create trade deficit and thus inflation pressure.

For Vietnam, I think lowering the price of the VND relatively the USD (as Vietnam's State Bank has done) is a good move.  This would make Vietnamese export more competitive and will increase export volume  (Whether the export amount will increase is the result of the final math:  Export amount = export volum x export price).  Let's hope that export amount may increase or at least stay the same as last year.  (But if the USD continues to slide, whether Vietnam can continue to lower is VND is another story).

At the same time, we need to reduce import.  Vietnam import a lot from China (construction materials, household items), these imports will become much more expensive, especially because the Chinese Yen is appreciating against the USD.  I have proposed a luxury sales tax on luxury consumers items, hoping that will reduce some imports.  

Housing costs may increase because construction material imports increase in price.  Gold price is also increasing, that may bring housing cost up along too (psychology).  But housing, especially new housing is not a matter of every day concern, so the pressure is not immediate.

The immediate pressure is food price for the population, especially for the poor, which has the highest CPI increases.  I will repeat my proposal here that the government uses the windfall profit gains from exporting crude oil to offset the price of gasoline sold domestically.  That will take some inflationary pressure off gasoline and food.

If the we have a high CPI increase, but the highest increase is in housing and gold, and the lowest increase is in food and gasoline, then the majority of the population will still be able to handle the situation well..

(I repeat my previous message about the stock market money here  I still stick with my prediction that the VNINDEX will stabilize around 600 -- unless there is a psychological crash among investors, which is hard to predict.  So chances are we won't have anymore "sudden" inflationary pressure from the "stock crash.")   

Have a great day!

Hoanh

 ___________ 

2008/3/4 Craig Stevenson <cstevenson2000 at gmail.com>:

[ Vietnam Business Forum ]

Hi all:

Thought this might be of interest and shed some light on the inflation debate.

It is a readers response to a posting on China Financial Markets by Dr/Professor Michael Pettis who, essentially teaches future Chinese Investment Bankers.

The site for Dr Pettis' blog is: http://www.piaohaoreport.sampasite.com/

Bio on Dr Pettis:  

Michael Pettis is a professor at Peking University's Guanghua School of Management, where he specializes in Chinese financial markets.  He has also taught, from 2002 to 2004, at Tsinghua University's School of Economics and Management and, from 1992 to 2001, at Columbia University's Graduate School of Business.   He is a member of the board of directors of ABC-CA Fund Management Co., a Sino-French joint venture based in Shanghai.

Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987, when he joined the Sovereign Debt trading team at Manufacturers Hanover (now JP Morgan). Most recently, from 1996 to 2001, Pettis worked at Bear Stearns, where he was Managing Director-Principal heading the Latin American Capital Markets and the Liability Management groups. He has also worked as a partner in a merchant banking boutique that specialized in securitizing Latin American assets and at Credit Suisse First Boston, where he headed the emerging markets trading team. Besides trading and capital markets, Pettis has been involved in sovereign advisory work, including for the Mexican government on the privatization of its banking system, the Republic of Macedonia on the restructuring of its international bank debt, and the South Korean Ministry of Finance on the restructuring of the country's commercial bank debt. 

Pettis is a member of the Institute of Latin American Studies Advisory Board at Columbia University as well as the Dean's Advisory Board at the School of Public and International Affairs.  He is the author of several books, including The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (Oxford University Press, 2001).  He received an MBA in Finance in 1984 and an MIA in Development Economics in 1981, both from Columbia University.

Anyway his post was discussing rising concerns over inflation and issues related to monetary policy and a reader wrote the following:

"The tug of war between monetary alarmists and pro-growth members is by no means over. The pendulum will swing back to pro-growth once China's leadership realizes the alarming extent to which Asia's growth engine is sputtering, and that China has no special immunity to the accelerating regional fallout. 

Clearly, the impact of the slowdown in the US macro-economic scene combined with the deepening debacle in US credit derivative markets, is beginning to have a more pronounced impact on Asia. The breadth and extent of the negative fallout was completely underestimated by Asian leaders, and is much greater than is simply reflected by the action to date in equity markets. 

(Significantly, today every single one of the 33 sector indexes within the broader Topix Index posted a loss for the day. The share price of China Merchant Holdings, owner of stakes in China's five largest container ports plunged by (-) 7.5%, leading the Hang Seng to a (-) 3.3% loss for the day with every single stock in the 43 stock index posting a decline. Beijing Capital Land, China Overseas Land, and Gaungzhou R & F properties...three of the top mainland property developers, all fell by more than (-) 4% following brokerage house downgrades to the Chinese real-estate market, on the back of a decline in housing starts and home prices.) 

The suggestion that deflation in the US Housing and mortgage/credit derivatives market would not spill over into the high-flying Asian markets was a product of wishful thinking at best. 

Foreign (i.e. US) investors were huge sellers of stocks in Taiwan this morning, with net capital outflow from equities hitting 13.5 billion Taiwan dollars, following net selling of more than 5.3 billion on Friday. 

Asia collectively is now experiencing slowing growth in exports, industrial output, and GDP growth, accompanied by disinflation in money supply growth, along with intensifying appreciation in almost every Asian currency relative to the dollar. 

Moreover, inflation indicators throughout Asia reveal an upside acceleration in price pressure, despite the slowing export-output-GDP growth. Stagflation is appearing everywhere, spilling outward from its primary source (the US economy) secondary to hyper-easy Fed monetary policy, worsening deflation in the US housing market as well as within US consumer's balance sheet, and in terms of the global rise in commodity prices. 

The Bank of Japan released January's macro data revealing a worrying CONTRACTION in the monetary base, sliding back into deflationary territory. Current Account Balances declined, taking the year-year rate of contraction to (-) 14.4%. The number of new job applicants rose to 577,400 versus Decembers 398,800 while the number of job offers plunged to (-) 11.4% yr-yr. Japan's Purchasing Manager's Index also turned down while the CPI hit its highest level in a decade during December and January. The Nikkei's 2 year exp-ma has reversed to the downside. 

Korean import prices rose to a (+) 21.2% yr-yr basis in January as compared to August 07 rate of (-) 0.7% when the Fed first began easing monetary policy in response to the credit crunch. Despite the Won's appreciation and rising exports, Korean trade balance has now turned from running a longstanding surplus to a deficit due to import price inflation. Korean equities appear on the brink of a technical breakdown below the 52 week exp-ma. 

In Hong Kong there has been a notable erosion within the money supply trajectory and bank lending data. Although still nominally positive, what is important to note is that the trend has reversed. Both money supply and equities are caught up in disinflation. 

Money supply in Taiwan has experienced an outright contraction/collapse in January. Despite deflation in the money supply and appreciation in the currency, Taiwan's wholesale price inflation is soaring, hitting double digits rates. 

In Thailand, import growth has exploded to a new all time high on a yr-yr basis at nearly 50%, causing the country's trade surplus to vanish and turn to a deficit, just like South Korea's. Despite a strong currency, rising import prices have pushed Thailands CPI significantly higher, thus indirectly resulting in negative real interest rates, triggering the Baht to soar even higher....putting further downside pressure on the trade balance. The central bank dare not ease for fear of exacerbating the upward pressure in CPI. 

As Asian currencies appreciate against the dollar they will eventually/inevitably reach new historic "reverse crisis" levels. Whereas in 1997-98 export contraction and currency depreciation threatened to unleash disinflationary dominance in commodities, the reverse weakness in the USD and exploding Asian import dynamics will unleash hyperinflationary forces in the commodity sector, something that China is well on her way to experiencing. 

Lastly, consider the case of Singapore. M2 Money Supply growth rate has reversed, CPI is rapidly rising reaching a (+) 6.6 % yr-yr despite significant currency appreciation. Singapore's "official" overnight rate is 1%, thus real interest rates are a deeply negative (-) 560 basis points........but even this is not enough to support the stock market. In the face of rising inflation, slowing export growth, and the slowdown in the money supply expansion the market has fallen below its 52 week exp-ma and roa. 

Soon the monetary alarmists in China will see that strength in Asian currencies, slowing money supply growth, a downturn in export growth, soaring import price inflation, eroding trade balances, and downside reversals taking place in output and GDP growth threaten far worse negative consequences than they ever imagined (the least of which is placing Asian equities in danger) and will reverse course once again."

By kevinfischer2002 - Tue, 04 Mar 2008 03:55:34 GMT

Not sure if this helps to clarify some issues or confound others but, where possible, enjoy,

Craig

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