Weekly Market Update

26 February 2013

Weekly Market Update

Exchange rates 26 Feb 13 05 Feb 13 VND EUR GBP JPY HKD 20915 1.3050 1.5180 91.82 7.7577 20835 1.3495 1.5751 92.28 7.7550 Change (%) 0.38% -3.30% -3.63% -0.50% 0.03% SBV Official Rate* Open High Low Close

Viet Nam
Currencies

Last Week Previous Week HSBC Fixed Income research is available 20828 20828 20828 20828 20828 online: 20828 Internet 20828
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Disclaimer & disclosures

20828 This report must be read with the disclaimer,

* (SBVS official rate closed 2012 at 20,828) Source : Reuters

disclosures and analyst certifications on p3 that form part of it. Issued by HSBC BANK (VIETNAM) LTD.

2012-2013 USD/VND graph

21100 21050 21000 20950 20900 20850 20800 20750 20700 2-Jan-12 2-Mar-12 2-May-12 2-Jul-12 2-Sep-12 2-Nov-12 2-Jan-13

2012-2013 O/N VND funding

ON 10 9 8 7 6 5 4 3 2 1 0 27-Feb-12

Treasury & Capital Markets Treasurer Pham Hong Hai VN 84 8 3520 3173 For further information please contact: Trading Team: Nguyen Thi Thang Dinh Duc Quang Ngo Dang Khoa Nguyen Tien Dat Ho T Kim Tuyen HCM Sales Team: Lam Phi Yen Vu Trong Linh Duong Buu Linh Ngo Quang Hien Le Khanh Truc Vinh Tran Thuc Khuong Ngoc Bich Ngan HN Sales Team: Nguyen T H Phuc Nguyen Hoai Phuong Dao Ngoc Thang Vu T M Huong VN VN VN VN VN VN VN VN VN VN VN VN VN 84 8 3823 4447 84 8 3520 3160 84 8 3520 3167 84 8 3520 3492 84 8 3520 6262 84 8 3520 3303 84 8 3520 4113 84 8 3520 3275 84 8 3520 3231 84 8 3520 3284 84 8 3520 3166 84 8 3520 3231 84 8 3520 6473

27-May-12

27-Aug-12

27-Nov-12

Source: HSBC

Source: HSBC

Other markets 26 Feb 13 SIBOR 1 Month 3 Months 6 Months 0.20250 0.29250 0.46000 1594.00 13784.17 11398.81 22544.23 05 Feb 13 0.20250 0.30000 0.47000 1674.88 13880.08 11046.92 23148.53

Inter-bank offer rates (domestic) VND Overnight 1 Week 1 Month 2 Months 3 Months 6 Months 1 Year 2.07 2.98 5.05 6.05 6.53 7.44 8.50 USD 0.16 0.32 0.88 1.05 1.18 1.46 1.98

Gold Dow Jones Nikkei 225 Hang Seng

Source: Reuters

VN VN VN VN

84 4 3933 3173 84 4 3933 3171 84 4 3933 3177 84 4 3933 3177

treasury@hsbc.com.vn

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Weekly Market Update

Weekly Commentary VND weakening against USD After long holiday, the USD/VND opened the week at the level of 20850 then moved up gradually to 20900 in the first few days once banks covered some short positions that they had run before Tet coupled with some gold purchase from people after Tet. Liquidity was quite good. Demand from corporate remained modest. The USD/VND started to be more volatile on Thursday trading in range of 20890-20900 in the morning. Liquidity became worse in the afternoon when demand increased while supply decreased pushing the USD/VND rate to 20950. The market started to be nervous after hearing about the rumor of some official arrest at some State-owned Enterprises (SOEs), liquidity was very thin and limited. The USD/VND rate exceeded 21000 level at one time. Bid/offer spread widened to 50-100 pips. However, the market was calm down and almost back to normal the next day after the SSC (State Securities Commission of Vietnam) and the MoP (the Ministry of Police) stamped down all the rumors. The SBV also came out to confirm it would take appropriate measures to ensure the market stability. Then the USD/VND was cooled down and traded in range of 20880-900 which was around 0.24% higher compared to the earlier level of the week. According to the Ministry of Industry and Trade, Vietnam has probably posted USD 900 million of trade surplus in the first two months of 2013 which would add more bullets to Vietnam's FX reserve, currently estimated at USD 30 billion. This would give the SBV more fire power to monitor and stabilize the FX market if needed. Going forward, we think the USD/VND will be stable in the range of 20875-20905 given the current FX reserve and market liquidity. The USD/VND rate might be moving in a flexibly-stable way to support export. *The exchange rate is the mid level between bid and offer VND gim gi so vi USD Sau k ngh di, t gi USD/VND m ca u tun mc 20850 sau tng nh dn ln 20900 trong vi ngy u tun khi mt s ngn hng mua vo gim bt trng thi ngoi hi m m h c trc Tt nhm mc ch kim im k hn trc , ng thi ngi dn cng mua vng nhiu hn sau Tt. Thanh khon th trng ngai hi kh tt. Nhu cu mua bn ca cc doanh nghip vn cn khim tt. T gi USD/VND bt u bin ng nhiu hn vo ngy th nm v giao dch trong khong 20890-20900 vo bui sng. Tuy nhin, thanh khon tr nn t hn trong bui chiu khi nhu cu mua tng ln trong khi ngun cung gim i y t gi tng ln mc 20950. Th trng bt u thn trng sau khi c mt s tin n v vic bt gi mt s cn b mt vi doanh nghip. Thanh khon th trng cc k km, t gi tng vt mc 21000 v gi cho mua cho bn c ni rng ra mc 50-100 im. Tuy nhin, th trng bnh tnh tr li v gn nh bnh thng ngy hm sau sau khi UBCK v B Cng An ng ra dp tt mi tin n. NHNH ng thi thng bo s theo di v s dng nhng bin php thch hp n nh t gi v th trng. T gi USD/VND gim xung v giao dch mc 20880-20900, tng 0.24% so vi gi u tun. Theo B cng thng, c tnh Vit Nam xut siu khong USD 900 triu trong hai thng u nm 2013, gp phn tng trng ngun d tr ngoi hi hin c tnh khong USD 30 t. y s l mt ngun lc to ln NHNN c th can thip gi n nh t gi v th trng khi cn thit. Trong thi gian ti, chng ti cho rng t gi c th giao dch n nh quanh 20875-80905. T gi c th giao dch mt cch linh hot n nh gip tng trng xut khu. *T gi ngoi hi tham kho l trung bnh gia t gi mua v bn Interest rates swing widely during Tet Even though late this year, it finally happened. Market liquidity got tightened one week before Tet (4-8Feb13) with major causes being customers withdrawing money for spending during the long holiday. On 18Feb13 average interbank offered rates peaked at 5.68pct for overnight tenor (highest in last 6 months), one week 6.08pct and one month 6.25pct. However, once the holiday was over, liquidity quickly came back to the system and interest rates continued its same easing momentum that it had since early January. As at 26Feb13, average offered rate stayed low at 2.03pct for overnight (164bps lower than 4Feb13), 2.67pct for one week (146bps lower) and 5.00pct for one month (11bps lower). SBV stood by the market during the tightening period before the holiday. Total amount lent to banks by reverse repos over the Open Market topped VND 36.52 Trio within one week before Tet hitting the record for of the past one year. Currently the outstanding borrowings from SBV as at 26Feb13 was only VND 46 Bio as banks have paid back most of the loans.
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Weekly Market Update

T-bill issuance has resumed after Tet. Total successful issuance reached VND 21,969 Bio for tenor 91Days (yield ranging 6.33-6.35pct) and VND 9,754 Bio for tenor 182Days (yield static at 7.20pct). There was also one successful MOFs T-note issuance for value date 26Feb13, with amount of VND 2 Trio and yield of 7.85pct for 364Days. Li sut bin ng mnh trong dp Tt

Mc d tr trong nm nay, nhng th trng li sut bin ng mnh trc Tt. Thanh khon th trng trong 1 tun cui trc Tt (4-8/2/2013) vi nguyn nhn chnh l cc khch hng rt tin chun b cho nhng khon chi tiu cho k ngh di. Vo ngy 18/2/2013, li sut cho vay bnh qun th trng lin ngn hng t nh 5,68% cho k hn qua m (cao nht trong vng 6 thng gn y), 1 tun mc 6,08%, v 1 thng mc 6,25%. Tuy nhin, sau khi qua l, thanh khon nhanh chng quay tr li h thng v li sut tip tc gim c sn t hi u nm n gi. Vo ngy 26/2/2013, li sut cho vay bnh qun xung mc thp 2,03% cho k hn qua m (gim 164 im so vi ngy 4/2/2013), 2,67% cho 1 tun (gim 146 im), v 5% cho 1 thng (gim 11 im). NHNN vn ng bn cnh th trng trong sut giai on thanh khon tht cht ny. Tng lng tin m NHNN cho cc NHTM vay qua knh TTM t mc 36,52 ngn t ng trong vng 1 tun trc khi ngh Tt t mc k lc trong vng 1 nm qua. Hin nay s lng d n qua knh ny ch mc 46 t ng, do cc NHTM tr li s tin vay dp Tt. NHNN gi thu tr li pht hnh Tn phiu NHNN sau Tt. Tng lng pht hnh t 21.969 t ng cho k hn 91 ngy (vi li tc t 6,33-6,35%), v 93754 t ng cho k hn 182 ngy (vi li tc khng i 7,20%). Tn phiu Kho bc pht hnh qua NHNN cng c 1 phin thnh cng pht hnh vo ngy 26/2/2013, vi lng pht hnh l 2 ngn t ng v li tc l 7,85% cho k hn 364 ngy.
Indicative deposit rates VND Corporate Flexible Time Deposits 1 Month 3 Months 6 Months 9 Months 1 Year 0.10 4.25 5.35 5.73 6.17 6.76 0.09 0.16 0.40 0,90 1.12 USD retail USD Corporate 0.00 0.04

Source: HSBC as at 05 February 2013

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