final report — topic trading and merge acquisition

VIETNAM NATIONAL UNIVERSITY - HO CHI MINH CITYINTERNATIONAL UNIVERSITYSCHOOL OF ECONOMICS, FINANCE AND ACCOUNTINGFINAL REPORT— Topic: Trading and Merge & Acquisition —Course: Workshop 2

VIETNAM NATIONAL UNIVERSITY - HO CHI MINH CITYINTERNATIONAL UNIVERSITY

SCHOOL OF ECONOMICS, FINANCE AND ACCOUNTING

FINAL REPORT

— Topic: Trading and Merge & Acquisition —Course: Workshop 2 on Financial (BA257IU)

Group Members’ Name:

1 Summary the presentation of guest speaker: 22 What did we like most about the topic 43 How this topic is relevant to our future career 4

1 Summary the presentation of guest speaker 6

2.1 LVMH to take control of Christian Dior in $13.1 billion deal 8

As a student in the Business Administration field, beside the knowledge that we have learntin university, having the significant insight of the major is also a crucial target Throughoutfive interesting workshops of Workshop 2 on Financial courses we had opportunities to meetthe staff, the leaders of many corporations, financial intermediations and to discuss realityknowledge, case study In particular, we found two topics: Trading and Merge & Acquisitionthat impressed us the most.

1 Summary the presentation of guest speaker:

One of the two topics our group chose was the Trading topic presented by speaker Tran LamBinh Before providing an overview of the Trading presentation that day, provide us with abrief introduction of speaker Tran Lam Binh, who offered his expertise and insights andfinished training in corporate finance, investment management, as well as an informationtechnology and economics degree In addition, Mr Binh is presently employed as a stockinvestment consultant at VPS Securities Company and has experience in both real estate andforeign direct investment (FDI) advising, with a focus on mergers and acquisitions.

Education's stock investment education program.

Besides, Mr Binh offers expertise, comprehension, and guidance on financial solutions forboth individuals and businesses NWE aspires to improve the community, and one of its maingoals is to fulfill its vision and mission In addition, speaker Binh shared practical experienceand financial knowledge with a wider range of Vietnamese audiences, including workingpeople, students ranging from first to final year, and large businessmen The ultimate goalwas to improve everyone's comprehension and vision for Vietnam's financial literacy.Additionally, it can provide pupils with the most accessibility and connection.Furthermore, the guest speaker also tell about analyzing the fundamentals of technicalanalysis include: Inner Price, Trend, Repeat History Additionally, he also updatedcontinuously and accurately, close to the Forex market, assuming technical analysis alwaysfollows the trend.

Moreover, in order to aid students in comprehending and approaching business and tradingappropriately, Mr Binh presented the 5 Pillars Of Technical Analysis, which are Price Action,Chart Templates, Indicators, Trend, Entry & Exit To further assist students in visualizing thestages and thinking strategically in a clear and understandable manner, Mr Binh alsoprovides detailed explanations and numerous illustrative graphics in each segment The charttemplate, in particular, enumerates the majority of realistic scenarios and cases to ascertain.The next section that the speaker mentions is Advanced Tools & Techniques In hisdiscussion of trading strategies, Mr Binh highlighted four tools and techniques: Reversalcandle pattern, Fibonacci, Divergency, and Price & Volume Analysis Finally, the speakerpresented about the strategy of trading and some books about trading strategies such as PriceAction by Bob Volman and Nicolas Darvas’ Trading Secrets in the last section.

From the items proposed by NWE, we can see that NWE is a scientific environment, trainingexperts, consultants, economic consultants on professional economic markets and on a globalscale Bringing economic thinking and experience to businesses and citizens to developlong-term economic knowledge and develop themselves nationally and globally is thepurpose of NWE.

2 What did we like most about the topic

Technical analysis is a fascinating aspect of trading, particularly because it provides astructured framework for interpreting market behavior The part of the presentation thatdelved into technical analysis resonated deeply with me It's intriguing how it encapsulatesessential principles like the 5 pillars that serve as the bedrock of understanding marketmovements One of the standout concepts that grabbed my attention was the idea of historyrepeating itself within the Forex market This echoes the belief that past price movementsoften foreshadow future trends, a principle that traders frequently leverage to anticipatemarket behavior.

Moreover, the concept of "Price In" is compelling—it underscores the notion that all pertinentinformation about a currency pair is already reflected in its price This insight not onlysimplifies decision-making but also emphasizes the importance of analyzing existing datacomprehensively.The emphasis on identifying trends using tools such as chart patterns andindicators resonated strongly In particular, the mention of overlay indicators like BollingerBands, Moving Averages, and Ichimoku, alongside oscillators such as MACD, RSI,Stochastic, and OBV, truly encapsulates the diversity of tools available for traders to analyzemarket dynamics.

I found the reference to the Dow Theory quite intriguing as well, especially its roots in WallStreet and its ongoing relevance in financial modeling It's remarkable how this theory, basedon paradigms developed over time, continues to offer valuable insights into market trends andprice movements.In summary, the depth and breadth of technical analysis, especially the 5pillars, highlight the multifaceted nature of trading It's a mosaic of historical trends, real-timedata interpretation, and strategic use of indicators—a fascinating blend that forms thecornerstone of successful trading strategies.

3 How this topic is relevant to our future career

The study of trading, particularly the intricate facets of technical analysis, presents profoundimplications for my future trajectory in Finance and Banking Delving into these principlesprovides a comprehensive understanding crucial for navigating the complexities of financialmarkets It equips me with the prowess to interpret market trends, scrutinize price actions,and gauge market sentiment—skills pivotal in making astute investment decisions andmanaging diverse portfolios effectively.

indispensable This skill set not only prepares me for roles centered around risk assessmentand management but also cultivates a critical mindset essential for sound decision-making inhigh-stakes financial scenarios The knowledge gleaned from comprehending technicalanalysis serves as a cornerstone for client advisory services Being adept at communicatingnuanced market insights and formulating resilient investment strategies becomes secondnature This expertise fosters trust and credibility, essential for establishing lastingrelationships with clients in a competitive financial landscape Considering the burgeoningintegration of technology into finance, an understanding of trading strategies and technicalanalysis takes on added significance It becomes a linchpin in fields such as algorithmictrading and quantitative finance, where data-driven decision-making is paramount Theability to leverage these insights for algorithm design and model development becomes apowerful asset in navigating the modern financial landscape.

This understanding of trading strategies fosters adaptability, a vital trait in navigating theever-changing financial landscape It grants the agility to navigate diverse market conditions,anticipate fluctuations, and embrace innovations With this knowledge, I am ready to chart asuccessful journey in Finance and Banking, armed not just with technical expertise but alsowith a strategic mindset crucial for thriving in this dynamic industry.

II.Merge and Acquisition:

1 Summary the presentation of guest speaker

After participating in the M&A workshop of Mr Loc from CJ Group, we have gained theunderstanding of M&A basic knowledge, M&A in the real world and how to build up ourcareer path.

1.1 M&A in Vietnam:

Prior to the year 2007, the total number of M&A transactions did not exceed 50 eachyear However, from 2008 to 2013, both the quantity and the value of M&A deals haveincreased remarkably The market saw 1,184 M&A deals have been carried out with the totalvalue of 17.4 billion USD in this six-year period.

Foreign M&A accounted for 70% of the total number of deals that occurred in 2013(Stoxplus, 2013), while this number was just 45% in 2009 (PricewaterhouseCoopers, 2010).Moreover, Vietnam is the leading country in ASEAN having the largest number of M&Atransactions with Japanese corporations, about 69 deals since 2010 (M&A Forum, 2014).

1.2 M&A Introduction:

Merger and Acquisitions (M&A) can be defined as following:

- Merger: one or several enterprises transfer all of its/their properties, rights, obligationsand legitimate interests to another enterprise and at the same time terminate theexistence of the merged enterprise(s).

- Acquisitions: an enterprise acquires the whole or part of property of another enterprisesufficient to control or dominate all or one of the trades of the acquired enterprise.There are 4 types of M&A:

- Vertical:Vertical transaction involves consolidating firms at different level ofproduction and operation, reducing the risk and transaction costs in forward orbackward production chain, typically the relationship between suppliers andproducers.

- Horizontal:Horizontal transaction occurs between two firms operating in the sameindustry with an aim to gain synergies and enhance the market power by combiningresources.

- Conglomerate:Conglomerate transaction involves firms operating in unrelatedindustries which seek to get advantages from economies of scope and riskdiversification.

- Concentric:Concentric transaction involves consolidation firms at different levels ofproduction and operation but they are in the same industry.

While M&A offers some advantages, there are still some various disadvantages associatedwith these transactions.

1.3 M&A Process:

1.4 Experiences and Risks:

- AttentioninM&Aingeneral:unrealistic timetable, lack of understanding of thebusiness, quality control data room, lack of financial data/ explanation and inadequateresourcing/ poor project management.

- RisksinM&A:laws, DD, information, valuation, PMI and others.

- Auditfirm:Advisory/ Valuation/ Assurance

- IB/SecurityCompanies:Advisory/ Valuation/ Research…- Bank:Banking transaction…

- Company:Finance/Accounting/BD…

2 Analyze real M&A Case Study:

2.1 LVMH to take control of Christian Dior in $13.1 billion deal

The LVMH Moët Hennessy Louis Vuitton luxury empire - the world’s biggest luxury groupby revenue has taken over Christian Dior in a $13.1 billion deal to consolidate control overthe 70-year-old Parisian fashion house from 2017 At that point of time, LVMH alreadyowned Parfums Christian Dior, and the deal would give it ownership of the Christian Diorhaute couture, leather, men’s and women’s ready-to-wear, and shoe businesses The boards ofChristian Dior and LVMH are unanimously in favor of the deals By buying out minorityshareholders, the transaction would simplify LVMH’s relationship with Christian Dior Thedeal is projected to increase LVMH’s earnings per share within the first year of itscompletion.

From 2012 to 2017, revenue at Christian Dior has doubled and profitability has improved.The brand reported revenue in excess of €2 billion and profit from recurring operations of€270 million for the 12 months ended March 3, 2017.

LVMH continues to outperform the wider luxury market, which has faltered in years in theface of fears of geopolitical conflict and currency fluctuations In March 2017, reboundingdemand for luxury goods in China and Europe pushed its first-quarter sales to €9.88 billion, a15 percent increase over the same period a year earlier and far beyond estimates “Thecorresponding transactions will allow the simplification of the structures, long requested bythe market, and the strengthening of LVMH’s fashion and leather goods division,” Mr.Arnault said in a statement He added that the deal “illustrated the commitment of my familygroup and emphasizes its confidence” in LVMH’s long-term prospects.

As part of the proposal, one of the largest for the luxury goods conglomerate, the Arnaultfamily offered to buy the 25.9 percent of Dior it does not already own The family wouldhand over a mix of cash and Hermès shares The LVMH fashion and leather goods divisionwould then buy Christian Dior Couture for an enterprise value of €6.5 billion LVMH’s offer

The company called Christian Dior, which owns the brand’s couture business, will continueto exist and will own 41 percent of the share capital in LVMH, plus 56.8 percent of votingrights, making it the conglomerate’s controlling shareholder The Arnaults’ decision tooffload Hermès shares comes nearly three years after the family received stock in theParis-based luxury leather goods house after an effort by LVMH to build a stake in thecompany.

2.2 Alibaba take control Lazada:

In Southeast Asia, Alibaba and Lazada are well-known examples of mergers and acquisitions.China's largest e-commerce company revealed shocking news: it is investing US$1 billion toacquire a sizable share in an online store that is sometimes compared to an Amazon clone forSoutheast Asia.

Lazada was launched by Germany’s Rocket Internet in 2012 Like many of the ventures fromRocket, it was simply taking a proven idea from an established market (Amazon in the US)and applying it to a very nascent market In Lazada’s case, it was going where neitherAmazon nor Alibaba dared to venture: into a handful of Southeast Asia’s most promisingcountries There are 3 main reasons for Alibaba's acquisition of Lazada.

Firstly, Southeast Asia is an attractive market for global corporations and local companies inthe electronics sector The number of Internet users in Southeast Asia, especially the 6 largestASEAN countries, has contributed to creating a potential e-commerce market with manyopportunities to exploit The rapid development of technological infrastructure and risingincome levels of countries will facilitate the expansion of the E-commerce sector, andSoutheast Asia is expected to bring increased potential.

in the region Lazada's shoppers spent $433 million in the first six months of 2015 It has 5.7million active customers, up four times from 1.4 million in mid-2014 Those numbers aresmall compared to Alibaba's China market, but that predicts more growth to come as Lazadapositions itself in the region.

Lastly, Alibaba is Expanding into Southeast Asia's rapidly growing e-commerce market, andLazada is already a leader in the region, which will give Alibaba a strong foothold Alibabacan provide Lazada with access to its technology, logistics infrastructure and humanresources On the other hand, Lazada will gain access to Alibaba's capital and resources Thiswill allow Lazada to invest in growth and compete more effectively with regional rivals.Additionally, Lazada will benefit from Alibaba's expertise Alibaba's experience ine-commerce can help Lazada improve its operations and marketing.

Besides, there are potential challenges to this merger and acquisition Integrating two largecompanies with different cultures and operating models can be complicated Alibaba hasfaced scrutiny from regulators in several Southeast Asian countries due to its dominantmarket position The e-commerce landscape in Southeast Asia is becoming more competitivewith the constant emergence of new competitors.