Vietnam Economics & Strategy

Global Research
Economics: GDP growth is on a steady path. But
trade deficit and inflation problems will persist. We expect the central bank will tighten throughout 2010 to deliver total rate hikes of as much as 4%.

Vietnam Monitor (Issue 27)
Inflation and trade deficit concerns overcast Vietnam

Equity Strategy: The HCM Index continues to
underperform. Although the foreign sell-off has stabilized and valuation is cheap, it is still too early to call it a turnaround yet due to falling liquidity.

FX Strategy: Illiquidity in the FX market and lack
of confidence in VND will continue to exert depreciation pressure on VND. We expect VND will reach 18,400 at year-end.
Trade deficit remains a gaping concern
10 8 6 4 2 0 -2 -4 2005 2006 2007 2008 Ex port 2009 2 010 Import USD bn

8 February 2010
Jacqueline Tse* Equity Strategist The Hongkong and Shanghai Banking Corporation Limited +852 2996 6602 Daniel Hui* FX Strategist The Hongkong and Shanghai Banking Corporation Limited +852 2822 4340 Wellian Wiranto* Economist The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch +65 6230 2879

Trade ba lance
Source: HSBC, CEIC

Inflation pressures likely to intensify

40 30 20 10 0 -1 0


View HSBC Global Research at: *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to NYSE and/or NASD regulations Issuer of report: The Hongkong and Shanghai Banking Corporation Limited



200 5 2006





Source: HSBC, CEIC

3m-on-3m annualized

Disclaimer & Disclosures This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it

Vietnam Economics & Strategy 8 February 2010


GDP growth is gathering pace and should remain strong in 2010 However, the strong growth has translated into trade deficit and inflation problems More aggressive tightening actions are expected to rectify the situation, but policymakers are likely to only act in March at the earliest

Growth spurt continues
The Vietnamese economy appears to have recovered firmly throughout the course of 2009. It finished the year with a strong 7.7% year-on-year growth in Q4. This growth rate is a huge uplift from the 3.1% increase registered at the beginning of the year and it is significantly stronger than the 4.4% and 5.2% seen in Q2 and Q3.
1. Construction remains strong and manufacturing is turning % YoY 20 16 12 8 4 0 -4 2001 2 002 2003 2004 200 5 200 6 2007 2008 2009 Manufacturin g
Source: CEIC

grew by 14.0% y-o-y and contributed 1.6 percentage points to the overall GDP growth. Most of the other sectors within the economy are starting to show some signs of recovery as well. The services sector, which accounts for over 40% of the economy, is starting to inch closer to its long-term rate of contribution to overall growth. In Q4, the sector contributed 2.7ppt to growth – compared to its long-run average of around 3ppt. The manufacturing sector, which constitutes about a quarter of the economy, has started to pick itself up from the doldrums it found itself in at the beginning of the year. The sector posted 5.7% year-on-year growth in Q4, as compared to 0.5% in Q1 of 2009. Although there is still some way to go before Vietnam’s manufacturing returns to its long-run average growth rate of 9.5%, its recent trend is pointing towards the right direction. The recovery in manufacturing is tied to the recent uptick in the country’s exports, just as its earlier slump corresponded to the decline in exports. In keeping with our pan-Asian view of a virtuous cycle of growth in the region whereby exports pick up in response to a policy-led

Construc tion

The construction sector – spurred on by the government’s USD8bn stimulus package last year that is heavily tilted towards infrastructure spending – has contributed greatly to the turn in GDP growth. With an 8-9% share of the economy, construction


Vietnam Economics & Strategy 8 February 2010


demand recovery, Vietnam’s exports are bouncing back substantially.
2. Vietnam's exports are recovering firmly
80 60 40 20 0 -2 0 -4 0 2001 2002 2 003 2004 2005 2006 2007 20 08 2009 2010 % YoY

caused indirectly by the government’s growthboosting policies of 2009. Take automobile imports, for instance. Courtesy of the effects of a temporary VAT reduction as well as the 4ppt interest subsidy scheme on loans that was given by the government last year, automobile imports have skyrocketed, helping to push up the country’s import bills in 2009.
4. 2009: The best year ever - for car imports Unit th 15 12 9 6 USD m n 500 400 300 200 100 0

Source: CEIC

Ex -Oil

Apart from exports, we expect the economy to gain its strength from domestic consumption and an improvement in investments. Together, these factors should allow the GDP to grow by 6.8% in 2010.

3 0

Jan-07 Jul-07 Jan -08 J ul-08 Jan-09 Jul-09 Jan-10 Volume
Source: CEIC

Value - RHS

Worry #1: Trade deficit
While the recovery in exports has only started to gather pace near the end of 2009, imports started galloping rather earlier. This gap has resulted in a widening trade deficit of USD1-2bn per month since April and the trend has continued until the last reading of USD1.3bn in January of this year.
3. Trade deficits remain a gaping concern
10 8 6 4 2 0 -2 -4 2005 2006 2007 2008 Ex port 20 09 2010 Imp ort USD bn

In fact, monthly car imports registered the highest level ever in both value and volume terms by the end of last year, as consumers rushed to procure their choice vehicles before the scheduled withdrawal of these friendly measures at the end of the year. It is no coincidence that a major vehicle supplier we spoke to this week told us that 2009 was their best year ever in terms of sales. However, as these temporary measures are no longer applicable at the start of this year, automobile imports have come down dramatically. These temporary factors aside, there remains an inherent imbalance in the economy that will continue to result in strong imports which, more often than not, outpace exports. For one, a developing country like Vietnam requires a higher level of infrastructure investments, which are necessary to unlock the potential of the economy in the long term. In the immediate period, however, such investments translate into import bills for items

Trade balance
Source: CEIC

To some extent, the deepening of the trade deficit recently has to do with some one-off factors


Vietnam Economics & Strategy 8 February 2010


ranging from construction steel to heavy machineries. The stimulus-driven increase in infrastructure spending could not help but exacerbate this further. Moreover, as the country continues to position itself to attract FDI investors, it is worth noting that the capital expenditure involved in setting up production facilities for FDI investments would result in higher imports for capital goods, etc. The hope is that, eventually, these investments would turn around and become foreign exchange earners through exports. The breakeven point remains to be seen, however. All in all, due to the structural dynamics painted above, we expect the trade deficit to remain an issue in the near term. However, we think that we might have witnessed the worst parts of the trade deficit problem, as the one-off factors resulting from growth-boosting policies of 2009 get phased out. For their part, the government is addressing the trade deficit problem by trying to limit the imports of “unnecessary” consumption items such as luxury cars and electrical appliances. It remains an open question as to how effective such administrative measures will prove to be.

price rises. In 3m-on-3m seasonally adjusted terms, January’s inflation rose by an annualized rate of 16.2%, pointing towards further increase in inflation rates in the months ahead.
5. Inflationary pressures continue to build up 40 30 20 10 0 -1 0 2003 2004 200 5 2006 2007 2008 2009 2010 %

Source: CEIC, HSBC

3m-on-3m annualized

We project headline inflation to hit double-digit by the end of Q1 and peak at 13% by the end of Q2. By the second half, however, we expect to see inflation coming down somewhat around 8% by the end of 2010, as the adverse base effect of commodity prices filters off. The central bank is expected to react to the incipient inflationary pressures by raising rates incrementally throughout the year. They have taken a step in the right direction by hiking the policy rates by 1% point late last year, but we expect another 400bps increase this year. It is likely that the next rate hike will come in March. In the last rates announcement from the central bank in late January, they decided to hold the policy rates steady at 8%. We believe this decision has been prompted by the fact that the central bank is cognizant that any tightening at this time of the year will further exacerbate the seasonally tight liquidity around the Tet festive period, which falls in mid-February. Wellian Wiranto

Worry #2: Inflation
Vietnam’s CPI rose by 7.6% in January, reaffirming our concerns that demand and prices will continue firming in 2010. In sequential terms, January’s number went up by 1.3% m-o-m sa, the fifth month in which prices have increased by more than 1% in comparable terms. Apart from the rise in prices that has been driven by the overall strength in the economy, there are signs that the infrastructure spending as part of the government’s stimulus measures has resulted in price pressure in items such as construction materials – whose prices rose by nearly 14% y-o-y in January. We believe that inflationary pressures will continue to build up, as suggested by the recent sequential


Vietnam Economics & Strategy 8 February 2010


Equity Strategy
HCM Index down 8% in 3 months, worst performer in Asia Foreign sell-off eased but liquidity remains low At 12M fwd PE of 11x, value emerging but not time to get in yet

Worst performer in Asia
HCM Index down 8% in 3 months
Vietnam equity was the worst performer in Asia over the last three months, with the HCM Index down 8% vs the 3% rise in the MSCI Asia exJapan (Chart 1).
1. Vietnam stock index vs MSCI Asia ex-Japan

2. Daily trading value on HCM and Hanoi exchanges (20DMA)

250 200 USDm 150 100 50 0



250 200

Source: HSBC, Bloomberg

150 100 VNINDEX 50 0 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 MSCI AEJ

Foreign ownership stabilized
Due to the recent stock market correction, the number of companies with market capitalization over USD200m has dropped to 24 compared to 32 recorded in November 2009 (see table 6 for details). But foreign investors have been net buyers since December 2009, which was coincidentally after the well-attended Euromoney conference in Hanoi. Of the 600 participants at the conference, 400 were from overseas, which is an indication of renewed interest in Vietnam among foreign investors. Foreign investor ownership has stabilized at 15% and the foreign share of turnover is levelling off at around 8%. It will be hard to go much lower from the current levels. The number of stocks that have reached their foreign limit also increased to five (Vietnam Export-Import Commercial JSC, Saigon Thuong Tin Commerical JS Bank, Sieu Thanh JSC,

Source: HSBC, Bloomberg

Turnover shrank 58%
Turnover also fell off as anticipated. The 20-day moving average of the HCM Index declined to USD91m, a 58% drop from the November 2009 average. Hanoi saw a drop of a similar magnitude to reach a 20-day moving average of USD44m as of 3 February 2010 (Chart 2).

Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10


Vietnam Economics & Strategy 8 February 2010


3. Foreign net buying of Vietnamese equities (USD mn)

4. Foreign share of turnover, HCM Exchange

100 50 USD m 0 -50 -100 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2007



Source: HSBC, Bloomberg (Up to Feb 2, 2010)

Source: HSBC, Bloomberg (Up to Feb 2, 2010)

Toro, and Tung Kuang Industrial JSC). We expect the Vietnamese market will stabilize, but it is too early to call a turnaround yet.
5. Key stock market data HCM
Market cap (USDm) No. of stocks Stocks with mkt cap >USD1bn Stocks with mkt cap >USD500m Stocks with mkt cap >USD200m Stocks that hit foreign limit Daily turnover (USDmn, 1mth ave) Foreign ownership PE (2008) x ROE (%) DY (%)
Source: HSBC, Bloomberg (Up to Feb 2, 2010)

to be a concern for foreign investors. The following negative factors also cloud the market’s outlook:

Monetary policy uncertainty Inflation soared to 6.5% in December 2009, driven by rising food and commodity prices. The central bank, SBV, expects loan growth to reach 25% in 2010, after strong growth of 28% in 2009. Regulators are closely monitoring the potential risk of overheating in the economy. In the meantime, the VND continues to trade materially above the official rate of VND18,500/USD in the NDF market (see the FX section). Therefore, we expect SBV will continue to tighten policy in the coming months.



27,258 207 7 16 23 3 91 16% 13.7 20.5 1.2

2,032 29,291 265 472 1 8 2 18 5 28 2 5 44 135 8% 15% 21.5 14.2 60.9 23.3 2.4 1.2

Valuation lower…
After underperforming for the past two quarters, the valuation of Vietnam’s stock market has now returned to a much more reasonable level. The HCM Index now trades on 13.7x 2008 earnings. Based on our forecast of 20% earnings growth for 2009 and 2010, 12-month forward PE would drop to 11x, placing Vietnam at the low end of the Asian peer group, just above Korea’s 10.1x and roughly in line with Thailand’s 11.2x.

Discontinuation of loan subsidies The successful loan subsidy program expired at the end of 2009. It was replaced with a scaled down version of the loan program that offers a 2% interest rate for medium- and long-term loans to companies that facilitate agricultural production. Therefore, some subsidised loans taken out in 2009 will gradually come due and require refinancing at a higher market rate (~8% or higher). This will further tighten liquidity and erode firms’ margins.

…but outlook still bearish
Although there seems to be an easing of foreign sell-off and value is starting to emerge in Vietnam, low and still falling turnover continues


Vietnam Economics & Strategy 8 February 2010



Stagnant foreign investments In 2009, foreign direct investment (FDI) inflow dropped to USD22bn from the record high of USD64bn in 2008. This can be only partially explained by the global downturn. More importantly, the structural problems in Vietnam are a deterrent to significant FDI growth. For example, infrastructure is in poor condition, roads are of low quality, urban planning is lacking, the electricity system is unreliable, and regulations are ambiguous. The government has plans to upgrade infrastructure but implementation at the local level is extremely slow due to complicated administrative procedures. Therefore, the official FDI forecast for 2010 is only USD19bn. The actual disbursement amount is even more important and is estimated to be flat from last year at USD10bn.

There are two key risks to our bearish view. Firstly, the government could speed up privatization of state owned enterprises and streamline IPO procedures so more companies will be listed. But even if this happens, liquidity will not pick up immediately as in most other markets because the stocks are usually traded on OTC markets rather than the stock exchange after they are listed. Secondly, the Hanoi Stock Exchange is pilot testing an online trading system. 44 out of 63 companies are in the first batch that are qualified for online transactions. The online system will facilitate the exchange of paperwork between brokers and the exchange and increase transparency. However, the small sample size of companies participating in the official launch on 8 February 8 is unlikely to boost liquidity meaningfully in our view. Therefore, we maintain our bearish stance on Vietnam equities until we see foreign buying pick up to support turnover above USD100m. Jacqueline Tse



6. Key valuation data for the largest listed Vietnamese stocks (market cap > USD 200mn) Code

Vietnam Economics & Strategy 8 February 2010


Industry Subgroup
Commer Banks Non-US Commer Banks Non-US Food-Dairy Products Commer Banks Non-US Multi-line Insurance Real Estate Oper/Develop Commer Banks Non-US Real Estate Oper/Develop Investment Companies Non-Ferrous Metals Finance-Invest Bnkr/Brkr Commer Banks Non-US Finance-Invest Bnkr/Brkr Miscellaneous Manufactur Oil-Field Services Telecommunication Equip Chemicals-Diversified Real Estate Oper/Develop Building&Construct-Misc Building&Construct-Misc Building&Construct-Misc Real Estate Oper/Develop Transport-Services Electric-Generation Food-Baking Commer Banks Non-US Resorts/Theme Parks Transport-Services

Exchange Mkt cap (USDm) Ave daily t/over (USDm) Foreign ownership (%) Foreign limit (%) Room for foreign buying (USDm)
HCM HCM HCM Hanoi HCM HCM HCM HCM HCM Hanoi HCM HCM HCM HCM HCM HCM HCM HCM Hanoi HCM HCM HCM Hanoi HCM HCM Hanoi HCM HCM 2,855.1 1,696.8 1,638.4 1,491.8 1,291.7 1,171.4 1,097.8 1,027.8 953.5 829.9 819.0 810.4 698.5 687.0 673.6 659.2 649.6 602.5 484.9 423.1 377.0 364.8 332.1 329.8 281.1 233.2 223.5 203.5 1.5 0.5 1.5 2.8 0.4 3.4 3.6 0.6 na na 0.9 4.3 8.9 2.8 1.3 0.9 0.9 na 6.1 3.9 2.9 2.0 0.7 0.9 1.0 1.3 0.1 4.0 24.1 7.8 44.4 30.1 14.2 22.6 30.0 3.9 14.7 7.9 13.3 30.0 44.8 31.1 27.5 39.2 20.2 15.7 3.4 23.5 17.0 28.0 12.7 17.4 25.9 2.6 16.2 25.0 100 100 46 49 49 49 30 29 49 49 30 30 49 49 49 49 49 49 49 49 49 49 49 49 49 49 49 49 216,744.4 156,480.7 2,620.0 28,148.4 44,894.2 30,886.7 na 25,770.7 32,659.6 34,105.5 13,704.5 2,956.7 12,307.6 14,473.7 6,459.9 18,723.4 20,057.2 22,115.2 10,805.2 12,050.6 7,664.1 12,040.6 10,412.0 6,497.2 10,818.8 7,326.7 4,890.1

PE Chg 3M
na na 8.3 9.2 na 13.0 17.7 19.4 47.4 593.0 299.1 8.0 15.6 9.9 11.3 11.3 8.9 18.2 18.3 4.9 14.1 23.1 8.6 6.8 7.8 22.1 74.9 (21.2) -16% -12% 6% -16% 13% 10% -13% 25% na na -14% -22% -3% -9% -6% 4% -21% -13% 10% -11% -17% -16% -22% 4% -16% -39% -2%

Source: HSBC, Bloomberg (as of Feb 2, 2010)


Vietnam Economics & Strategy 8 February 2010


FX Strategy
The VND has stabilized but USD’s remain scarce; with poor liquidity, USD hoarding will continue Rising inflation in 1H this year will continue to weigh on sentiment, even as the trade balance stabilizes Expect depreciation pressure to persist for some time

Following a series of stabilization measures announced at the end of last year (see Vietnam starts, 25 November 2009 and VND stabilization, 4 December 2009), early this year the authorities took additional steps, ordering the close of gold trading floors, and asking the state owned firms to sell their excess stock of USD. Depreciation pressure has since eased, though not disappeared. The NDF fix, our preferred measure of the USD-VND market clearing rate, has fallen to within 0.4% of the official spot rate, which has been persistently constrained at the ceiling of the trading band. This is the narrowest NDF premium the market has seen since April 2009. However, that there remains a premium in the NDF fix belies an ongoing lack of confidence in the

VND, a shortage of USD in the market, and an ongoing expectation of future official depreciation (through the band mechanism either through an adjustment of the mid-point or the width of the band). This is due in-part to the ongoing rationing of USD by the central bank, a practice we had earlier expected to end alongside the package of measures announced in early December (see VND stabilization, 4 December 2009). Without further proactive policy moves and without fundamental FX regime reform, the VND will likely face ongoing depreciation pressure. Sentiment will continue to be weighed down by rising year-on-year inflation rates, which we expect to reach double-digits by 2Q. Meanwhile

1. USD-VND, trading band, and NDF fix

2. Trade deficit
USD bn 2. 0 1. 0 0. 0 -1. 0 -2. 0 -3. 0 -4. 0

19600 19200 18800 18400 18000 17600 17200 16800 Mar-09 Jun-09 Official Mid Ceiling
Source: Bloomberg, Reuters, HSBC


Dec-09 USD/VND NDF Fix







Source: HSBC, CEIC


Vietnam Economics & Strategy 8 February 2010


the trade deficit is expected to remain large, though more stable (see the Economics section for more details on our inflation and trade balance views). Given the interaction between the widening trade deficit, rising inflation, and currency depreciation in the last cycle in early 2008, sentiment is unlikely to improve until inflation rates subside and the trade account improves, something that is unlikely until at least the second half of this year. Going forward, we expect the official USD-VND rate to remain more stable around current levels, with our year-end forecast remaining at 18,400. Depreciation pressure will likely continue to manifest itself as market illiquidity, and in an ongoing premium in the NDF fix above the official spot rate.

Ultimately, we continue to believe that USD hoarding and market illiquidity will need to be addressed with reform of the exchange rate regime. Without it, exchange rate market illiquidity will persist and result in more permanent spill-over effects into the rest of the economy. For example, recent discussions with foreign invested enterprises suggest growing frustration at the inability to conduct cross-border transactions. This effectively raises the implicit cost of operating in Vietnam, and could discourage future FDI. By allowing the exchange rate to fully clear, rather than determined through a system of de-facto price-setting and FX rationing, expectations can be better anchored and USD hoarding will subside, allowing the return of de-dollarization and a better outlook for the VND. Daniel Hui


Vietnam Economics & Strategy 8 February 2010


Disclosure appendix
Analyst Certification
Each analyst whose name appears as author of an individual chapter or individual chapters of this report certifies that the views about the subject security(ies) or issuer(s) or any other views or forecasts expressed in the chapter(s) of which (s)he is author accurately reflect his/her personal views and that no part of his/her compensation was, is or will be directly or indirectly related to the specific recommendation(s) or view(s) contained therein.

Important disclosures
Stock ratings and basis for financial analysis

HSBC believes that investors utilise various disciplines and investment horizons when making investment decisions, which depend largely on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations. Given these differences, HSBC has two principal aims in its equity research: 1) to identify long-term investment opportunities based on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon; and 2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative, technical or event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating. HSBC has assigned ratings for its long-term investment opportunities as described below. This report addresses only the long-term investment opportunities of the companies referred to in the report. As and when HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at Details of these short-term investment opportunities can be found under the Reports section of this website. HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each research report. In addition, because research reports contain more complete information concerning the analysts' views, investors should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not be used or relied on in isolation as investment advice.

Rating definitions for long-term investment opportunities
Stock ratings

HSBC assigns ratings to its stocks in this sector on the following basis: For each stock we set a required rate of return calculated from the risk free rate for that stock's domestic, or as appropriate, regional market and the relevant equity risk premium established by our strategy team. The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the implied return must exceed the required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands are classified as Neutral. Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation of coverage, change of volatility status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review, expected returns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarily triggering a rating change. *A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12 months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However,


Vietnam Economics & Strategy 8 February 2010


stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change. Prior to this, from 7 June 2005 HSBC applied a ratings structure which ranked the stocks according to their notional target price vs current market price and then categorised (approximately) the top 40% as Overweight, the next 40% as Neutral and the last 20% as Underweight. The performance horizon is 2 years. The notional target price was defined as the mid-point of the analysts' valuation for a stock. From 15 November 2004 to 7 June 2005, HSBC carried no ratings and concentrated on long-term thematic reports which identified themes and trends in industries, but did not make a conclusion as to the investment action that potential investors should take. Prior to 15 November 2004, HSBC's ratings system was based upon a two-stage recommendation structure: a combination of the analysts' view on the stock relative to its sector and the sector call relative to the market, together giving a view on the stock relative to the market. The sector call was the responsibility of the strategy team, set in co-operation with the analysts. For other companies, HSBC showed a recommendation relative to the market. The performance horizon was 6-12 months. The target price was the level the stock should have traded at if the market accepted the analysts' view of the stock.

Rating distribution for long-term investment opportunities
As of 08 February 2010, the distribution of all ratings published is as follows: Overweight (Buy) 46% (12% of these provided with Investment Banking Services) Neutral (Hold) Underweight (Sell) 37% 17% (12% of these provided with Investment Banking Services) (11% of these provided with Investment Banking Services)

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Additional disclosures
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Vietnam Economics & Strategy 8 February 2010


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GEMs Research Team
Global Philip Poole Global Head of Emerging Markets Research +44 20 7991 5641

Europe Will Manuel Head of CEEMEA Company Research +44 20 7992 3602 John Lomax Head of Equity Strategy, GEMs +44 20 7992 3712 Herve Drouet +44 20 7991 6827 Sergey Fedoseev +44 20 7991 6831 Veronika Lyssogorskaya +44 20 7992 3684 Wietse Nijenhuis +44 20 7992 3680 Anisa Redman +44 20 7991 6822 Sub-Saharan Africa Umulinga Karangwa +44 20 7992 3685 Marcel Mballa-Ekobena +44 20 7991 6809 Turkey Cenk Orcan Co-Head of Turkey Equity Research +90 212 376 4614 Bulent Yurdagul Co-Head of Turkey Equity Research +90 212 376 4612 Levent Bayar +90 212 376 4617 Erol Hullu +90 212 376 4616 Israel Avshalom Shimei +972 3 710 1197 Yonah Weisz +972 3 710 1198 United Arab Emirates Kunal Bajaj +971 4 507 7458 David Lepper +971 4 423 6932 Ankur Khetawat +971 4 423 6930 David Kinsey +971 4 423 6928 Vikram Viswanathan +971 4 423 6931 Egypt Ahmed Hafez Saad +202 2529 8436 Alia El Mehelmy +202 2529 8438 Shirin Panicker +202 2529 8439 Saudi Arabia Tareq Alarifi +966 1 299 2105 Aybek Islamov +966 1 299 2102 Raj Sinha +966 1 299 2100 Aleksandar Stojanovski +966 1 299 2104

Latin America Jonathan Heath Chief Economist, Latin America +52 55 5721 2176 Ramiro D Blazquez +54 11 4348 5759 Lorena Dominguez +52 55 5721 2172 Javier Finkman +54 11 4344 8144 Tatiana G Gomes +55 11 33718183 Andre Loes +55 11 3371 8184 Sergio Martin +52 55 5721 2164 Jorge Morgenstern +54 11 4130 9229 Asia Qu Hongbin +852 2822 2025 Frederic Neumann +852 2822 4556 Robert Prior-Wandesforde +65 6239 0840 Janus Chan +852 2996 6975 Seiji Shiraishi +886 81 5203 3802 Christopher Wong +852 2996 6917 CEEMEA Kubilay Ozturk +44 20 7991 6045 Alexander Morozov +7 49 5721 1577 Murat Ulgen +90 212 376 4619 Simon Williams +971 4 423 6925

Dilip Shahani +852 2822 4520 Keith Chan +852 2822 4522 Sheldon Chan +852 2822 3232 Olga Fedotova +44 20 7992 3707 Devendran Mahendran +852 2822 4521 Mary Ellen Olson +852 2822 4524 Zhiming Zhang +852 2822 4523 Keerthi Angammana, CFA +44 20 7991 5431

Marjorie Hernandez +1 212 525 4109 Daniel Hui +852 2822 4340 Perry Kojodjojo +852 2996 6568 Clyde Wardle +1 212 525 3345 Richard Yetsenga +852 2996 6565

Research Management Chris Georgs +852 2996 6753 Herald van der Linde +852 2996 6575 Real Estate Louisa Fok +852 2996 6629 Michelle Kwok +852 2996 6918 Ashutosh Narkar +91 22 3023 1474 Alvin Wong +852 2996 6621

Fixed Income
Pieter Van Der Schaft +852 2822 4277 Virgil Esguerra +852 2822 4665 Pablo Goldberg Head of Latin America Fixed Income Strategy +1 212 525 8729 Gordian Kemen +1 212 525 4326 Alejandro Mártinez-Cruz +52 55 5721 2380 Hernan M Yellati +1 212 525 6787



GEMs Research Team (continued)
Banks Todd Dunivant Head of Banks, Asia-Pacific +852 2996 6599 Sarah Hung +886 2 8725 6026 Kathy Park +82 2 3706 8755 York Pun +852 2822 4396 Shary Wu +852 2996 6585 China Ken Ho +852 2996 6593 Elaine Lam +852 2822 4398 Insurance John Russell +852 2822 `4321 Industrials Sumeet Agrawal +91 22 2268 1243 Transport / Conglomerates Mark Webb +852 2996 6574 Sachin Gupta +91 22 2268 1079 Parash Jain +852 2996 6717 Eric Lin +852 2996 6570 Azura Shahrim +852 2996 6976 Natural Resources Daniel Kang +852 2996 6669 Chris Chan +852 2996 6619 Gary Chiu +852 2822 4297 Steven Hong Xing Li +852 2996 6941 Sarah Mak +852 2822 4551 Scully Tsoi +852 2996 6620 Consumer & Retail Jessie Guo +852 2996 6572 Percy Panthaki +91 22 2268 1240 Sean Yang +852 2822 4342 TMT Tucker Grinnan +852 2822 4686 Steven C Pelayo +852 2822 4391 Yogesh Aggarwal +91 22 2268 1246 Neale Anderason +886 813 5203 3826 Nam Park +852 2822 6591 Rajiv Sharma +91 22 2268 1239 Walden Shing +852 2996 6751 Frank Su +8862 8725 6025 Shishir Singh +852 2822 4292 Wanli Wang +8862 8725 6020 Tse-yong Yao +852 2822 4397 Small & Mid-cap Suman Guliani +91 80 3001 3747 Sandeep Somani +91 22 2268 1245 Latin America Patrick Boucher Head of Research, Americas +1 212 525 7632 Alexandre Gartner Head of Equity Research, Brazil +55 11 3371 8181 Juan Carlos Mateos Head of Equity Research, Mexico +52 55 5721 3607 Consumer Brands & Retail Manisha A Chaudhry +1 212 525 3035 Francisco J Chevez +1 212 525 5350 Pedro Herrera +1 212 525 5126 Diego Maia +55 11 33718192 Lauren Torres +1 212 525 6972 James Watson +1 212 525 4905 Financials Victor Galliano +1 212 525 5253 Mariel Santiago +1 212 525 5418 Transportation & Logistics Vanessa Ferraz +55 11 3371 8190 Murilo Freiberger +55 11 3371 8197 Natural Resources and Energy Jordi Dominguez +1 212 525 3460 Lucia Marquez +1 212 525 7669 Reginaldo Pereira +55 11 3371 8203 Anisa Redman +44 20 7991 6822 Telecoms, Media & Technology Richard Dineen +1 212 525 6707 Equity Strategy Garry Evans Global Head of Equity Strategy +852 2996 6916 Vivek Misra +91 80 3001 3699 Steven Sun +852 2822 4298 Jacqueline Tse +852 2996 6602


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