The Newest One In Asia Finance Essay

Vietnamese stock market is one of the newest 1 in Asia which consist of Ho Chi Minh Stock Exchange HOSE, Hanoi Stock Exchange and Over-the-counter market. HOSE has been operation since July 2000 with the first name of Ho Chi Minh Security Trading Center ( HOSTC ) which was changed in 2007. HNX operated at the first clip in 1998 as Hanoi Security Trading Center ( HASTC ) , the new name was born in 2009.

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The potency of Vietnamese stock market is great, which can offer investors non merely plentifulness of chances but besides strivings and concerns. The chief cardinal measure taken towards the development of the stock market has been to diversify ownership of national assets through denationalization procedure. The basic legal foundation which is Law on Company and Law on Private Enterprises has been passed. Enterprise rating has proved to be the most hard issue in executing the transition of state-owned endeavors. Accounting criterions have besides been implemented late. The gait of execution has been done easy but the advancement and figure of reforms is rather singular in such a short clip. As the economic system expands which requires an addition in capital investing, the Government is speed uping current denationalization procedure every bit good as forcing the development of fiscal market as the hereafter beginnings of investing for Vietnam ‘s economic enlargement. The development of Vietnamese stock market is fueled by the rate and the gait of the equalisation plan.

The stock market now attracts many investors. It has become an of import portion of Vietnamese fiscal market. Three exchanges are really eventful with 100s of listed stocks which are traded each twenty-four hours, which requires a immense sum of hard currency flow. In this state of affairs, it is necessary to understand all the constructs and besides the operating manner related to this market if you want to take portion in this sort of investing. This reappraisal will uncover the procedure of trading in 4 hebdomads with the aim of taking the first measure nearing stock market every bit good as analyzing investing scheme for taking portion harmonizing to its profitableness, whereby my ability of analysing information which influences stock market, measuring market tendency and catching chance will be challenged. It will assist me cognize what necessitate to be considered and understand common steps of fiscal public presentation and its function in doing determination.

II. Share portfolio

Investing scheme

There are a assortment of schemes investors use when analysing stocks. Here are a few of them:

Value Investment: The authoritative Warren Buffet scheme seeks to happen stocks that are undervalued by the market. Investors who use this scheme seek to happen stocks that they believe will gain more than analysts expect or believe the house has assets that are presently underappreciated by the market.

Growth Investment: Investors looking to happen the following Microsoft by and large focus on stocks with a high potency for growing. In a similar manner to the value scheme, these investors seek to happen stocks that they believe will turn faster than the market expects.

Technical Analysis: Some people use charts to foretell a stock ‘s motion. These bargainers are known as ‘chartists ‘ and this method of trading is known as proficient analysis. Technical analysis tends to be used for short-run trades alternatively of long-run investings.

After sing my state of affairs, I decided to take the 2nd method because I merely have VND 30,000,000, a really little sum of money to put in three companies and doubtless, it was non plenty for us to purchase a big measure of portions waiting for the dividend. Furthermore, the stock market in Vietnam was non stable. Because portion monetary value fluctuated continuously, it gave me a opportunity to purchase portions when the monetary value was low and so sell them when the monetary value was higher. The thought was that we ought to maintain path of our stocks to catch the market waves seasonably. One of serious errors that stockbrokers frequently make is being excessively greedy. When portions are lifting, they think that they will travel on lifting forever and they are loth to sell them at the right minute. My scheme was to seek to foretell the best point of market to sell our stocks. In add-on, I set my scheme following attacks such as equilibrating our portfolio, which means spliting my investing into different parts to maintain me survive alternatively of seting all money into one basket ; puting stop-losses including puting a point at which I may see whether I should halt our investing or go on it. Furthermore, it is surely that I took a close expression at the position of the market to do determinations. In general it was suited for me to surf stock market so. However, in the hereafter, after deriving a great sum of money, it could be a good thought to see the first method to avoid hazard.

Standards for taking portion

Type of company: First, I considered the capital of concern to see whether it is a blue-chip or a penny company. In item, blue-chip stock is the stock of a company with a national repute for quality, dependability and the ability to run productively. It has the function to steer the market and its stock is normally stable. Penny stocks are common portions of little public companies, which have possibility to fluctuate more. The capital affects the snap of portion monetary value in comparing with the alteration of market.

Following, concern sector of the company was considered to place which industry it works on. This information is of import for the ground that common public presentation of the whole industry can act upon the stock place.

Finally, a company repute can reflect a portion of its history, success and celebrity, which show how people thought about it. The higher its repute is, the better its profitableness can be because investors will be more willing to pass money on it.

Fiscal statement is an accurate study of the fiscal activities of a concern. It shows concern public presentation and profitableness in a peculiar clip. Investigating this papers helped me foretell how the company could make in this twelvemonth, which would impact its monetary value in the hereafter.

Liquid of a stock is base on the mean measure of portion traded each session. It made me clear to see whether or non a stock is easy to merchandise when the market fluctuates. Then, I could gauge if purchasing this portion, I could sell it easy when necessitating money or non.

Stock exchange that a stock is listed could impact on the measure of portion I bought for each exchange allowed a specific minimal trading measure. In our state of affairs, due to the fact that my investing was low ( VND 30.000.000 ) , so I needed to take the best portfolio in order to salve all money we invested.

Specifications show place, strength and profitableness of stocks. Because the public presentation of a stock may be different from the one of its company, it is non adequate if I merely see general information about the company but burying that the stock has its ain features. The most importance figures are P/E and EPS. Two companies may hold similar rates of EPS, but the 1 that has less portions than the other is more efficient in the usage of capital. If other factors are equal, evidently, the former is better than staying endeavor. Due to the fact that companies today can utilize techniques to cipher the EPS figure to be attractive, investors besides need to understand the computation of each endeavor to guarantee the quality of this ratio. It is best non to trust on a individual fiscal step which should be combined with fiscal analysis and other indexs.

Monetary value was the last figure I thought about before purchasing a stock. I had to see how much the monetary value at that minute was in order to compare it with the historical monetary value of that portion. Making so, I could foretell how much it might increase or diminish in a peculiar market state of affairs. Additionally, I could measure if the monetary value was appropriate to concern public presentation.

After a long clip of taking into history and thought, I decided to take my portfolio that satisfied all demands below. All 3 portions that I choose are listed at HNX.

Share portfolio

After sing for a long clip, I decided to purchase portions of 3 companies which are SIC, VC5 and ACB. I checked carefully figures before taking these companies ‘ portions.

Song Da Investment – Development Joint Stock Company ( SIC ) runs in the field of building and existent estate concern. Presently, the nucleus focal point of the company is building of civil, industrial, transit, irrigation, station offices, proficient undertakings in urban substructure and industrial countries, public H2O supply, transmittal line and substation. As one of the taking endeavors in the building industry, SIC were extremely appreciated in the ability of undertakings direction on existent estate by the investors in Vietnam and foreign states.SIC made a pronounced accomplishment last twelvemonth by raising their net income by more than 122 billion. The EPS rate of the company counted was 3,158 and P/E was 5.35. Furthermore, the liquidness ratio of the company ‘s portions is 2.15 % which is comparatively high. These figures are merely stating that we could set my outlook on the profitableness of SIC portions. Hopefully, the portions monetary values would be higher in the hereafter as the stock market in Vietnam had been fluctuated unpredictably.

Construction JSC Number 5 with the trade name of Vietnam Construction Joint Stock Company Number 5 ( VINACONEX 5 – JSC ) earned a immense sum of net income last twelvemonth transcending the program at the rate of 40.86 % . Furthermore, EPS rate and P/E rate of this company portions are 3,788 and 3.70 severally, the liquidness rate is 1.15 % which is besides lower than the former. That besides means I bought this company portions at a low monetary value. Undoubtedly, I am waiting for its addition in the following few yearss.

ACB stands for Asia Commercial Bank. The company ‘s last twelvemonth net income was 4,174 billion, a immense sum of money. Furthermore, the company ‘s EPS and P/E rate are 3,042 and 7.50 severally. I choose this portion because ACB is a bluish bit company, it helps me equilibrate the hazard and chance. It could be traded easy and its monetary value would non fluctuate excessively much so it would be our effectual shield to cut down loss if the market went down.

Trading window

Trading procedure

In order to analyse trading public presentation accurately every bit good as attack stock market practically, it is necessary to understand the manner this market operates and set my action under common demands. Therefore, I assumed that our money was put on a stock history of FPT Security and the duty of every dealing would be counted harmonizing to the regulations of this company. Furthermore, the trading procedure was controlled by certain factors such as revenue enhancement and period length between trading twenty-four hours and the twenty-four hours portion or money was transferred to our history.

Date

Action

Stock

Monetary value

Measure

Value

Duty ( 0.3 % )

Tax ( 0.1 % )

Cash on history

A

A

A

A

A

A

A

A

30,000,000

2/22

Buy

SIC

17,300

570

9,861,000

29,583

A

20,109,417

VC5

13,451

750

10,088,250

30,265

A

9,990,902

ACB

22,000

452

9,944,000

29,832

A

17,070

3/24

Sell

SIC

16,400

570

9,348,000

28,044

9,348

9,327,678

VC5

14,000

750

10,500,000

31,500

10,500

19,785,678

ACB

22,800

452

10,305,600

30,917

10,306

30,050,056

In the beginning of the period, I bought three sorts of portion which satisfied our standards. They belong to different classs of stock every bit good as concern sector, which helped us to equilibrate between chance and hazard. I divided the capital into 3 equal proportions in order to purchase 3 portions with equal money.

In this 5 hebdomads, I do n’t do any dealing because the stock market has some marks of retrieving. I sold all portions at the terminal of the period.

The tabular array below shows alterations in monetary value of 3 portions through each dealing.

Date

SIC

VC5

ACB

Monetary value

% Change

Monetary value

% Change

Monetary value

% Change

2/22

17,300

A

13,451

A

22,000

A

2/23

17,200

-0.58 %

13,903

3.36 %

22,300

1.36 %

2/24

16,400

-4.65 %

13,632

-1.95 %

22,100

-0.90 %

2/25

16,500

0.61 %

14,264

4.64 %

22,300

0.90 %

2/28

15,900

-3.64 %

14,264

0.00 %

22,600

1.35 %

3/1

15,700

-1.26 %

13,993

-1.90 %

22,500

-0.44 %

3/2

15,200

-3.18 %

13,181

-5.80 %

21,800

-3.11 %

3/3

14,700

-3.29 %

13,181

0.00 %

21,900

0.46 %

3/4

14,000

-4.76 %

13,090

-0.69 %

22,300

1.83 %

3/7

14,100

0.71 %

13,181

0.70 %

22,400

0.45 %

3/8

14,200

0.71 %

13,181

0.00 %

22,500

0.45 %

3/9

14,100

-0.70 %

13,000

-1.37 %

22,300

-0.89 %

3/10

14,600

3.55 %

13,800

6.15 %

22,700

1.79 %

3/11

15,500

6.16 %

14,700

6.52 %

23,000

1.32 %

3/14

14,800

-4.52 %

14,000

-4.76 %

22,700

-1.30 %

3/15

14,800

0.00 %

14,000

0.00 %

22,500

-0.88 %

3/16

14,800

0.00 %

13,800

-1.43 %

22,400

-0.44 %

3/17

15,000

1.35 %

13,700

-0.72 %

22,400

0.00 %

3/18

15,900

6.00 %

14,200

3.65 %

22,600

0.89 %

3/21

16,800

5.66 %

14,400

1.41 %

23,000

1.77 %

3/22

17,000

1.19 %

14,200

-1.39 %

22,800

-0.87 %

3/23

16,900

-0.59 %

14,000

-1.41 %

22,800

0.00 %

3/24

16,400

-2.96 %

14,000

0.00 %

22,800

0.00 %

Recent factors act uponing stock market

The portions monetary value was influenced by many things including macro and micro factors. Therefore investors needed to concern and analyse the impact of these information to do appropriate investing determinations.

Now I come to specific information and market events that were analyzed for each period of one hebdomad.

22/2/2011 – 26/3/2011

General Statistics Office ( GSO ) has merely announced the consumer monetary value index of Vietnam in February. Consequently, CPI increased 2.09 % over the old month. Comparison with the same period in 2010, CPI rose 12.31 % and 3.87 % addition compared to Dec-2010. At the same clip, Statistics Office of Hanoi and HCM metropolis have besides reported the CPI which are 1.98 % and 1.61 % , severally. In stock market, the inordinate terror of investors has led to the diminution of index. On HNX, the stock monetary value of about stocks in January are reasonably stable and low so it has smaller fluctuations than HOSE. The HNX Index at the terminal of the hebdomad are 97.36, diminution 4.95 ( -4.84 % ) compared to the last hebdomad. Therefore, the monetary value of SIC, VC5 and ACB have non alter excessively much this hebdomad.

28/2/2011 – 4/3/2011

Manufacturing activities in the U.S in February grow at the fastest gait in about 7 old ages because of the positive signals in employment, orders and exports. Comparison with the informations from Europe and Asia, it can be seen that U.S is the leader state in retrieving production. Besides, CPI of states which use Euro as currency addition slower than the anticipation. The energy ‘s monetary value continually increase although rising prices is ensured under control of the European Central Bank ( ECB ) . ECB intend to keep the base rate at record depression as 1 % .

In Vietnam, some economic experts said that the accommodation of crude oil, electricity monetary values can do CPI of 2011 rose by 2 % . Thus, until the present clip, rising prices has increased about 6 % . In stock market, there were non much macro information published but the stock market still fluctuated in negative way. At the terminal of the hebdomad, both indexes are decrease along with unfavourable alterations in liquidness and this is wholly contrary to the old hebdomad ‘s occurrences. The HNX Index lost 6.43 point ( -6.60 % ) in merely one hebdomad. This is because Kim Long Securities Joint Stock Company ( KLS ) has merely announced that it changes the chief concern – an unprecedented fact in Vietnam ‘s stock market. As the function of the taking stock in securities companies, this information has a strong consequence on non merely these companies ‘ stocks but besides many stocks. So that the monetary value of SIC, VC5 and ACB are besides decreased dramatically. The monetary value of SIC and VC5 are down to merely 14,000 and 13,090 severally at the terminal of the hebdomad.

7/3/2011 – 11/3/2011

The U.S. Treasury Department has said that the budget shortage of the U.S. federal authorities has increased 222.5 billion USD in February. This is the month that has the highest addition rate of the budget shortage of all time. This is an grounds of the province that the budget shortage is acquiring larger in the largest economic system in the universe. Besides, fabricating operations in Europe in February have the fastest growing rate over 10 old ages and this is a mark that Europe ‘ economic systems are on path to recovery.

Harmonizing to Sherman Chan – the economic expert of HSBC, the recent steps such as declined the value of Dong, raised the involvement rates, lowered the recognition growing mark indicate the authorities ‘s finding in work outing the instability in basic economic.

The motion of stock market this hebdomad showed the mark of recovery. Although there are non positive macro information but the merchandising force per unit area at the beginning of the hebdomad was non great. The index of two trading Sessionss at the terminal of the hebdomad aggressively increased so HNX drew a large hard currency flow. This is besides the first hebdomad of recovery after 3 hebdomads of back-to-back diminution of HNX Index. Thus, the monetary value of SIC and VC5 have a reasonably large leap this hebdomad, ACB ‘ monetary value besides increase but non excessively much.

14/3/2011 – 18/3/2011

Consumer monetary value index of the U.S in February has the largest addition in more than a twelvemonth because the latest figures showed that the US ‘ economic is turning. CPI in February rose 0.5 % compared with January, the highest addition since June 2009.

World Trade Organization ( WTO ) has announced that the universe trading overcome the effects of planetary economic crisis and acquire a new record of growing. Harmonizing to the WTO, the volume of universe trading in 2010 increased 22 % .

In Vietnam, the addition of the consumer ‘ demand in Tet Tan Mao, the recognition involvement rate, foreign exchange rate, electricity monetary values, coal, crude oil, etc non merely increased the input costs but besides caused the psychological factors that pushed the market monetary values higher. The monetary value figures in March besides reached the highest growing rate within 33 months, from June 2008. Besides, General Department of Customs of Vietnam show the information of import and export in February, the state of affairs was non satisfactory as forecasted aˆ‹aˆ‹last month, for both export and import.

In HNX, the monetary value of many stocks declined a small because of the inauspicious impact from the temblor and tsunami in Japan. So, SIC, VC5 and ACB is non the exclusion.

21/3/2011 – 24/3/2011

Harmonizing to Nguyen Sinh Hung – Deputy Prime Minister of Vietnam, the authorities will implement the stopping point and cautious pecuniary policy, particularly cut down public investing and overspending.

In stock market, the standards for measuring market tendencies, including indexs, volume and value of minutess were declined. In HNX, the index decreased due to the weakening of the hard currency flow and the assurance of investors. HNX-Index closed the hebdomad at 92.82, lower than the last hebdomad 2.39 ( -2.51 % ) . The value of mean dealing per session maintained at 569.37 billion, declined 4.4 % compared with the old hebdomad. Average trading volume reached 36.17 million portions, diminish 6.48 % . All 3 portions have a good start in the beginning of this hebdomad but diminution somewhat in following yearss.

Trading public presentation

Harmonizing to above informations and minutess, the net income was deliberate base on the expression:

Profit/loss = Selling value ( Market value ) – Buying value – Duty & A ; Tax

and

Return = Profit/loss: Buying value

Stock

Buying value

Selling value

Tariff & A ; Tax

Profit/ Loss

Tax return

SIC

9,861,000

9,348,000

66,975

-579,975

-5.88 %

VC5

10,088,250

10,500,000

72,265

339,485

3.37 %

ACB

9,944,000

10,305,600

71,054

290,546

2.92 %

Entire

29,893,250

30,153,600

210,294

50,056

0.17 %

The net income that I earned when the period was over was merely VND 50,000, approximately 0.17 % of the initial capital ( VND 30,000,000 ) . Below chart expressed the alterations of our plus value after each merchandising minutess. It would demo our public presentation more clearly.

Decision

To sum up, this study provides an overview about portion portfolio towards how to take a portfolio while purchasing and selling efficaciously. It seems to be a demo exercising for the novices who are the first clip nearing stock market. By back uping and assisting from experient people and analyzing difficult our group members have studied and known a portion of stock market every bit good as portions. With the sum of money – VND 30.000.000, although it is unreal, fortuitously we used our given money reasonably and got net income which is besides a successful pattern.

Besides, harmonizing to the statistical tabular arraies above, they represent that stock market is in the volatility period, so investors should see and analyze carefully before doing determination.

Recommendation

There are 100s types of stocks which are traded presents and we have merely known a few of them. In fact, many investors have merely known about some companies that are listed and their operating activities, but non about their portions. Whether the stock of a well-known company is parallel to its repute, whether their monetary value can increase, diminish or merely stay steadily and whether their liquidness is good or bad. Answering these inquiries is non easy and it requires both clip and attempt. However, if fall ining stock market is your program, it is deserving puting effort to look into specialist cognition of securities field, which can assist you to set your steps and predict market tendency.

There is no perfect investing program. The scheme that works with a individual may non be suited for another. Therefore, each individual needs to understand his/her ain fiscal state of affairs every bit good as attempt to foretell current market tendency in order to do appropriate stairss.

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