Vietnam Gold Market

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Vietnam Gold Market

Vietnam Gold Market

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  • http://www.dztimes.net/post/business/gold-assoc-suggests-tighter-gold-trade-not-ban.aspx
  • http://english.thesaigontimes.vn/Home/business/other/16240/

Transcript

  • 1. VIETNAM GOLD MARKET International Finance - Group 2 Tran Cong Tuong Le Xuan Long April - 2011
  • 2. AGENDA
    • Overview of Vietnam gold market
    • Gold in eyes of government
    • Gold in eyes of producers
    • Gold in eyes of consumers (Vietnamese people)
    • Gold in eyes of investors
    • Gold in eyes of lovers
  • 3. Overview of Vietnam Gold Market
  • 4. Gold Demand of Vietnam
    • Demand in 2010 * : 81.4 tons ($ 3.232 million)
      • Bar: 67.0 tons ($ 2.674 million)
      • Jewelry: 14.4 tons ($ 558 million)
    • Gold kept among Vietnamese: around 500 tons ($ 19.852 million) (unofficial data)
    • World’s largest gold consumer (in term of per capita income)
      • India and China: world's largest gold consuming (in term of value)
    • * Source: GFMS, WGC
  • 5. Gold Bar Demand ( Q4 2010 vs Q4 2009)
  • 6. Jewelry Demand (Q4 2010 & Q3 2010)
  • 7. Import & Export
    • Strictly control by SBV
      • Need official permits
      • Quota
      • Only for big gold firms
    • Official statistic: 1998 – Sep. 2010
      • Export: 268.86 tons (22.4 tons per year)
      • Import: 339.86 tons (28.3 tons per year)
    • Illegal import of gold (smuggling): 20-40 tons per year (unofficial data)
  • 8. Vietnam Gold Price (04/2010 – 04/2011)
  • 9. Vietnam Gold Price in Ten Years
  • 10. World Gold Price in Ten Years
  • 11. Return on Investment – Feb/2011 (monthly)
  • 12. Gold in Eyes of Government
  • 13. Regulating Gold Market - Objectives
    • Stabilize macro-economy (inflation)
    • Utilize gold kept among Vietnamese
    • Eliminate gold as a means of payment in the economy
    • Control and stabilize gold market
    • Prevent gold smuggling
  • 14. Current Management in Gold Market
    • Shut down local gold exchanges
    • Ban gold trading on foreign accounts
    • Strictly control import/export gold
  • 15. Government's Resolution for Gold Market (Resolution 11/NQ-CP)
    • Stopping gold mobilizing and lending by credit institutions
      • Still lend gold for producing jewelries
    • Strictly controlling the gold market
    • Closely monitoring & forecasting fluctuations of international gold price, gold supply & demand in domestic market
    • Submitting Decree on gold management and trading for certain major gold importers
  • 16. Government's Resolution for Gold Market (cnt.) (Resolution 11/NQ-CP)
    • Prohibiting gold bar trading
    • Inspecting speculation, hoarding and manipulation in gold market
    • Revising the regime of administrative penalties against violations in gold trading
    • Enhancing supervision and dealing with violations of gold trading of institutions and individuals
  • 17. Gold in Eyes of Producers
  • 18. Gold Producers
    • Gold companies
      • About 20 big firms: SJC , PNJ, SBJ, AJC…
    • Gold shops
      • Thousands of gold shops in Vietnam
  • 19. Gold Products
    • Gold bar
    • Jewelry
      • Ring
      • Earrings
      • Bracelet
      • Pendant
      • Chain
      • Necklace
  • 20. Gold Bars
  • 21. Gold Jewelry
  • 22. Suggestions for Gold Management *
    • Not forbid the gold bar trading, just tough conditions
      • Charter capital: 30 billion VND
      • Annual revenue: 500 billion VND
    • Physical gold bar trading to be limited, gold trade on account
    • Establish national gold exchange
    • Gold trade account in foreign countries
    • Raise import tax (0%->0.5%), decline export tax (10%->0.5%)
    • * Source: Vietnam Gold Traders Association
  • 23. Suggestions for Gold Management (cnt.)
    • Create new forms of gold trading
      • Physical gold trading (current)
      • Exchange-traded funds (ETFs),
      • Investments through accounts
      • Gold derivatives
    • Sustainable and long-term policies for gold market
  • 24. Gold in Eyes of Consumers
  • 25. In Eyes of Vietnamese People
    • Gold is very special to Vietnamese people
    • Any precious thing is considered as gold (quí như vàng)
      • Silent is gold (Im lặng là vàng)
      • Girl’s virgin is considered as gold (Mất cái ngàn vàng )
    • Gold jewelries are used in special occasions:
      • Gifts for wedding
      • Tet holiday
  • 26. In Eyes of Vietnamese People (cnt.)
    • Gold was a common unit of price
      • Real estate transaction
      • Motorbike transaction
    • Gold is a great stored of value
    • They keep track of gold price so closely
  • 27. Why Does Vietnamese Keep Gold?
    • Gold price tends to rise over time (a stored of value)
    • Gold divided into extremely small portions, easily transported & kept for a long time
    • Gold purchased & exchanged easily
    • Dong devaluation
  • 28. Gold in Eyes of Investors
  • 29. Who are Gold Investors?
    • Central banks
    • Gold speculators
    • Financial institutional organizations
    • Gold producers
    • Private investors
  • 30. Why Do We Invest in Gold?
    • Gold as portfolio diversifier
    • Gold as an inflation hedge
    • Gold as dollar / VND hedge
    • Gold as safe haven asset
  • 31. Investment Vehicles in Gold Market
    • Gold bars / coins
    • Gold exchange-traded products
    • Gold accounts
    • Gold certificates
    • Gold futures and options
    • 2, 3, 4 and 5 are forbidden, 1 is going to be prohibited in Vietnam
  • 32. Factors Influenced Gold Price
    • Central banks’ decisions
    • Inflation
    • Interest rates of USD, EUR
    • US economy
    • Oil price
    • Crisis
    • Demand & Supply
    • Investor’s psychology
  • 33. Investor’s Psychology - Crazy for Gold
    • Crazy for buying / selling gold
  • 34. Investor’s Psychology - Crazy for Gold (cnt.)
  • 35. Gold Investment Strategies
    • Fundamental analysis
    • Technical analysis
    • Gold versus stocks
  • 36. Risks Associated with Investing in Gold
    • Market risk
    • Legal risk
      • Changed policy
      • Foreign gold account
    • Risks related to quality of gold
  • 37. Gold in Eyes of Lovers
  • 38. Lovers’ Conversation
    • Male: Will you marry me?
    • Female:
    How much gold do you have?
  • 39. Q & A
  • 40. Preferences
    • World Gold Council, http:// www.gold.org /
    • http:// www.kitko.com
    • http:// www.sjc.com.vn /
    • Saigon times http://www.thesaigontimes.vn