WTO stimulates stocke exchange of Vietnam

Two weeks ago the socialist republic of Vietnam reached an agreement with the US with the aim to join the world trade organisation WTO. Unlike the neighbouring country Cambodia, which joined the WTO some time ago, the dynamic of Vietnam's economic development makes it one the tiger states in the East-Asian region with growth rates only comparable to China. Vietnam's econonmy is growing at a medium rate of 7 percent and even saw a growth rate of 8.4 percent in 2005.

The stock exchange of Ho Ch Minh City (HSTC) reacted positively to the WTO announcement. The VN index which comprises the 36 listed companies has already been touching the 600 points mark. At the end of last year it had only shown a record of 250 points. Presently, the index is following the general Asian trend with a latest downwards correction to 545.39 points (- 8.7% in May).

Notwithstanding this latest correction, Vietnam's stock exchange now seems to pick up the dynamic of the booming economy and awake from its rather dormant fate. Since the launch of the HSTC six years ago the listed stock has been moving in untroubled waters. The vitalising push came from the new listed companies, such as REE, Vinamilk and Taya Vietnam, bringing the market capitalisation to $ 1.7 bln (which corresponds to a raise of 100 times).

The next bigger IPOs are expected from Sacombank, Vietcombank and a few telecom providers. With the IPO of the Saigon Thuong Tin Commercial Bank (Sacombank), which has an inofficial OTC market value of $ 900 million, HSTC is aiming at the $ 3 bln mark. According to the Finance minister, Nguyen Sinh Hung, the number of listed companies could double during 2006.

Source: NZZ am Sonntag


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