Report subject money and capital markets

In addition, a series of companies the stock market has increased its capital with a total capital increase of 26.4 trillion VND as of the first nine months of the year which has brought

VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY

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ĐẠI HỌC TÔN ĐỨC THẮNG

REPORT SUBJECT: MONEY AND CAPITAL MARKETS

Group ID:

Lecturer: Dr Lé Bao Thy

Ho Chi Minh City, .

MEMORANDUM

FORMAT OF REPORT (When submitting the report, please remove this item)

2 Font: Times New Roman size 13 for all pages

3 Page number: bottom right

4 For cover page size 22:

5 Headings in bold

6 Spacing between lines: 1.5 lines paragraph

CONTENTS

A INTRODUCTION

Abbreviation: ACB Head office address:

I Founding

Asia Commercial Joint Stock Bank (ACB) was established under License No 0032/NH-GP issued by the State Bank of Vietnam on April 24, 1993, and License No 533/GPUB issued by the People's Committee of Vietnam City Ho Chi Minh City issued on May 13, 1993 On June

4, 1993, ACB officially came into operation

Il Field of activity

The main activities of ACB and its subsidiaries (the Bank and its subsidiaries collectively referred to as the Group) are mobilizing short, medium and long-term capital in the form of savings deposits, payment deposits, securities deposit only; receive investment trust capital; receive capital from domestic and foreign credit institutions; short, medium and long term loans; discount commercial papers, bonds and valuable papers; invest in securities and economic institutions; do payment services between customers; trading foreign currency, gold and silver; international payment, factoring, brokerage and securities investment consulting; depository, corporate financial advice and underwriting; provides services on investment, debt management and asset exploitation, financial leasing and other banking services

Ill List price

ACB was listed at the Hanoi Stock Exchange Center (now the Hanoi Stock Exchange) under Decision No 21/QD-TTGDHN dated October 31, 2006 ACB shares started trading on 11/21/2006

Type of Stock Common stock Stock Symbols ACB Price 10.000 VND/Stock

In 2006:

* Quantity of listed securities 935.849.684 stocks

* Quantity of shares outstanding 937.696.506 stocks

In 2021

¢ Number of shares outstanding

stocks

® Number of treasury shares 0

¢ Number of shares freely transferable 2.546.897.909 stocks

¢ Limited number of share transferable 155.050.166 stocks

IV Shareholders

a) The number of ownership

Figure 1 The number of ownership

b) The individual and Organization

= Major Shareholders

= Small Shareholers

d) Detailed information about domestic and foreign owners:

The tlomestic pwners

V Achievements

Year Achievements Organization

¢ Best Retail Bank - The Asian Banker

¢ Best banking Vietnam - Euromoney

2007 ¢ Leadership achievements in the - The Asian Banker

banking industry

¢ The best ASEAN enterprise in the - Business Analysis field of labor force Training Center

(BAC)

¢ Best banking Vietnam - Euromoney

2009 ¢ Best banking Vietnam - FinanceAsia,

Asiamoney, Global

Finance,

Euromoney, The Banker, and The

Asset

¢ The strongest bank in Vietnam - _ The Asian Banker

2017 ¢ Best Bank for corporate social - Asiamoney

responsibility for Vietnam

¢ Best Domestic Bank for Vietnam

© Deposit Product of the Year - The Asian Banker

¢ Best Innovation in Retail Banking - International

Vietnam Banker

2019 ¢ Bank of the year in Vietnam 2019 - The banker

2020 ® Corporate Excellence Award - Enterprise Asia

¢ Inspirational Brand

2021 ¢ Best Companies To Work For In Asia - HRAsia

¢ Top 10 Prestigious Commercial Joint - Vietnam Report Stock Bank

¢ Top 50 Prestigious & Effective Public

Companies

2022 ¢ Inspirational Brand Award - APEA

¢ Corporate Excellence Award

Table 5 General achievements

B Stock market analysis

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L In 2021

Vietnam's stock market is ranked 7th among the highest growth stock markets in the

world, along with Abu Dhabi, Argentina, Iceland, Austria and the Czech Republic The VN-

Index grew strongly by 33.7% from 1,120.5 points at the end of 2020, and by the end of 2021

it reached 1,498.3 points Compared to neighboring countries in the region, Vietnam's stock market achieved the highest growth rate, followed by Taiwan's market with an increase of 22.3%

Figure 5 the stock market in 2021

2021 will see a spike in market liquidity along with 1.5 million newly opened

securities accounts, most of which are domestic individual accounts

Measures to support the economy including lowering interest rates as well as new regulations to tighten corporate bond issuance have helped increase stock market liquidity In addition, a series of companies the stock market has increased its capital with a total capital increase of 26.4 trillion VND (as of the first nine months of the year) which has brought a large amount of capital into the stock market From a total outstanding loan of 85 trillion VND at the end of 2020, the total outstanding loan of the whole market has doubled to over

160 trillion VND by the end of 2021 Proprietary trading activities of securities companies also contribute to the market The stock market was more exciting with a total transaction volume of 214 billion dong in 2021 (compared to 103 billion dong in 2021)

Besides securities companies, other listed companies also simultaneously increased capital According to SSC statistics, 147 listed companies registered to increase their charter capital fourfold, reaching 102.6 trillion dong Since then, the total capitalization of Vietnam's stock market has increased by 46% in the same period last year, reaching 7,729 trillion VND and equivalent to 122.8 percent of GDP

Much of the stock market boom in 2021 was supported by domestic investors Foreign investors net sold $2,748.5 million in 2021

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Figure 6 Foreign Transaction

The Vietnam Stock Exchange (VNX) was officially launched on December 11, 2021, unifying the mechanism, organization, policies and technology infrastructure of the Vietnamese stock market; help unify scattered segments, improve product quality and diversification, attract domestic and foreign investment capital flows, and gradually bring Vietnam's stock market to

IL In 2022

2022 is a challenging year for all markets in general and the stock market in particular due to the post-covid crisis and the war between Russia and Ukraine It is easy to see stock market movements through VNINDEX's chart to August 2022

~1.00

7 -2.00 son

Figure 8 Index in the first 9 months in 2022

2022 is a challenging year for all markets in general and the stock market in particular due to the post-covid crisis and the war between Russia and Ukraine It is easy to see stock market movements through VNINDEX's chart to August 2022

From the chart above, it is easy to see that the trend of the stock market to the

second quarter of 2022 is on a downward trend The two consecutive and strongest periods of decline from March to May and from September to present In addition, the market still has some positive increases although it has not yet recovered as strongly

as at the end of 2021

However, the stock investment channel is still an investment with potential for

development in 2022:

With the current average trading value of shares as of the first 6 months of 2022 is

21.36 thousand VND/share, nearly 4.6 times higher than in 2020 and slightly decreased by

0.23 thousand VND compared to 2021 The Covid-19 pandemic has turned the stock market into a popular investment channel Since then, it has created a driving force for the

development of the stock investment market

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The average stock price

The amount of new listed companies and their

In addition, the value of foreign transactions has increased sharply in recent years, showing that Vietnam's stock market is currently developing and has a lot of potential for strong growth in the future In addition, the foreign transaction value also shows investors’ evaluation of the Vietnamese economy through indirect investment channels such as the stock market Especially in 2021, the total value of foreign transactions (selling) reached 430.62 trillion VND, higher than the same period last year by more than 200 trillion VND

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The rate and amount of foreign

transaction value

Gams foreign transaction value (Buying) Gas foreign transaction value (Sell)

foreign transaction value (Net buying)

CURRENCY UNIT: TRILLIONS VND

At that time, the number foreign transaction value (buying) was 368.19 trillions VND, higher than in 2020 by more 2 times However, the net selling transaction value of foreign investors in 2021 is the highest That shows, the Vietnamese economy in the eyes of these

investors is still risky So when a crisis occurs, investors start to withdraw from the market

while venture capitalists tend to enter and boost the market In 2022, Vietnam with many successes in the political field such as voting the moon in the war between Russia and Ukraine has demonstrated stability in politics and the development path of the state From there, creating safety in Vietnam's investment for foreign investors Therefore, the buying rate

in the first six months of 2022 has become stable and there is almost no difference in the amount of foreign investors buying and selling

Tl Conclusion

Currently, Vietnam's stock market is still a safe investment channel and has great potential for growth in the future With political stability and appropriate policies from the state, the stock market will continue to grow strongly and gradually become a reliable investment channel for citizens and foreign investors

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C Banking industry and ACB bank analysis

1 Banking industry

According to analysts, lending rates of banks may remain similar to current levels, or only increase slightly Therefore, the net profit margin (NIM) of the whole industry in 2022 is likely to decrease slightly compared to the same period last year

Banks may record high profits in the last 6 months of 2022, as the State Bank is likely to increase credit growth and stable NIM compared to 2021

Commenting on NIM - a measure of the efficiency as well as "profitability" of banks, an expert from Yuanta Securities Vietnam Company Limited (YSVN) said that this ratio will decrease in the near future in the context of increasing capital mobilization costs and a decrease in the proportion of short-term capital used for medium and long-term loans Liquidity showed signs of narrowing and interbank interest rates rose sharply in the past month In the view of YSVN, the State Bank is making efforts to strengthen the value of the Vietnamese Dong (VND) in the context of the US Federal Reserve (Fed) tightening monetary policy and the USD strongly increasing against the begin of the year

These events increase banks' funding costs, and this trend is likely to continue at least until

the end of the year Meanwhile, banks will continue to support borrowers according to the policy of the State Bank to promote economic development Therefore, in YS VN's opinion, lending rates may remain similar to current levels, or may only increase slightly

However, the impact for each bank will be different YSVN believes that banks with low LDR (lending/mobilizing) ratio such as Ho Chi Minh City Development Joint Stock Commercial Bank - HDBank (stock code: HDB), Joint Stock Commercial Bank Maritime Vietnam (stock code: MSB), Vietnam International Commercial Joint Stock Bank (stock code: VIB) and Vietnam Prosperity Commercial Joint Stock Bank - VPBank (stock code: VPB) will less pressured to raise capital costs compared to banks with high LDR ratios

YSVN believes that banks with a high ratio of CASA (term deposit) such as Vietnam Technological and Commercial Joint Stock Bank - Techcombank (stock code: TCB), Military Commercial Joint Stock Bank - MB (stock code: TCB) stock code: MBB) and Joint Stock Commercial Bank for Foreign Trade of Vietnam - Vietcombank (stock code: VCB), these banks have the ability to effectively limit the negative impacts on NIM when it comes to mobilization costs capital increases

Most banks have announced lower CASA ratios in the second quarter of 2022, which is due to the tight credit this quarter, when banks have used up their original credit lines As a result, banks cannot disburse and borrowers will have to withdraw CASA deposits to pay or allocate

to investment channels such as real estate or securities

According to analyst from YSVN Tran Tanh, CASA will bounce back when the credit limit is increased and this will happen at the end of the third quarter of 2022

The reduction in the ratio of short-term funds used for medium and long-term loans will also affect the NIM ratio of banks The State Bank of Vietnam is expected to reduce the proportion

of short-term funds used for medium and long-term loans from 37% to 34% by October 2022 Therefore, banks with this ratio at a high level will have to reduce it, or they may not have

much room to increase this ratio and improve NIM On the other hand, banks with a low ratio

of short-term capital used for medium and long-term loans such as Asia Commercial Joint

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Stock Bank (stock code: ACB), HDBank, Vietnam Maritime Commercial Joint Stock Bank

(stock code: MSB) and VPBank still have room to lend and thereby increase NIM

In terms of business activities, the total profit after tax of shareholders of the parent company

of 27 listed banks in the second quarter of 2022 reached 51 trillion VND, down 7% compared

to the first quarter, but still up 37% over the same period last year

Net interest income of the entire banking industry increased 16% year-on-year to VND106 trillion Outstanding loans to customers of 27 listed banks increased by 10.2% from the beginning of the year to the end of the second quarter of 2022

NIM in the second quarter of 2022 of the whole industry in terms of total assets was 3.64%,

an increase of 12 percentage points compared to the first quarter of 2022 but a decrease of 8 percentage points compared to the same period last year

Total provision of listed banks was 29 trillion VND, up 15% q-o-q, but down 14% y-o-y increase over the same period in 2021

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