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 CITY

INTERNATIONAL UNIVERSITY

SCHOOL OF ECONOMICS, FINANCE AND ACCOUNTING

FINAL REPORT

— Topic: Trading and Merge & Acquisition —

Course: Workshop 2 on Financial (BA257IU)

Group Members’ Name:

Lecturer: Võ Xuân Hồng

Ho Chi Minh, Vietnam 2023

1 Summary the presentation of guest speaker: 2

2 What did we like most about the topic 4

3 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 learnt

in university, having the significant insight of the major is also a crucial target Throughout five interesting workshops of Workshop 2 on Financial courses we had opportunities to meet the staff, the leaders of many corporations, financial intermediations and to discuss reality knowledge, case study In particular, we found two topics: Trading and Merge & Acquisition that impressed us the most

I Trading:

1 Summary the presentation of guest speaker:

One of the two topics our group chose was the Trading topic presented by speaker Tran Lam Binh Before providing an overview of the Trading presentation that day, provide us with a brief introduction of speaker Tran Lam Binh, who offered his expertise and insights and finished training in corporate finance, investment management, as well as an information technology and economics degree In addition, Mr Binh is presently employed as a stock investment consultant at VPS Securities Company and has experience in both real estate and foreign 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 for both individuals and businesses NWE aspires to improve the community, and one of its main goals is to fulfill its vision and mission In addition, speaker Binh shared practical experience and financial knowledge with a wider range of Vietnamese audiences, including working people, students ranging from first to final year, and large businessmen The ultimate goal was 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 technical analysis include: Inner Price, Trend, Repeat History Additionally, he also updated

continuously and accurately, close to the Forex market, assuming technical analysis always follows the trend

Moreover, in order to aid students in comprehending and approaching business and trading appropriately, 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 the stages and thinking strategically in a clear and understandable manner, Mr Binh also provides detailed explanations and numerous illustrative graphics in each segment The chart template, in particular, enumerates the majority of realistic scenarios and cases to ascertain The next section that the speaker mentions is Advanced Tools & Techniques In his discussion of trading strategies, Mr Binh highlighted four tools and techniques: Reversal candle pattern, Fibonacci, Divergency, and Price & Volume Analysis Finally, the speaker presented about the strategy of trading and some books about trading strategies such as Price Action 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, training experts, consultants, economic consultants on professional economic markets and on a global scale Bringing economic thinking and experience to businesses and citizens to develop long-term economic knowledge and develop themselves nationally and globally is the purpose of NWE

2 What did we like most about the topic

Technical analysis is a fascinating aspect of trading, particularly because it provides a structured framework for interpreting market behavior The part of the presentation that delved into technical analysis resonated deeply with me It's intriguing how it encapsulates essential principles like the 5 pillars that serve as the bedrock of understanding market movements One of the standout concepts that grabbed my attention was the idea of history repeating itself within the Forex market This echoes the belief that past price movements often foreshadow future trends, a principle that traders frequently leverage to anticipate market behavior

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

I found the reference to the Dow Theory quite intriguing as well, especially its roots in Wall Street and its ongoing relevance in financial modeling It's remarkable how this theory, based

on paradigms developed over time, continues to offer valuable insights into market trends and price movements.In summary, the depth and breadth of technical analysis, especially the 5 pillars, highlight the multifaceted nature of trading It's a mosaic of historical trends, real-time data interpretation, and strategic use of indicators—a fascinating blend that forms the cornerstone 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 profound implications for my future trajectory in Finance and Banking Delving into these principles provides a comprehensive understanding crucial for navigating the complexities of financial markets It equips me with the prowess to interpret market trends, scrutinize price actions, and gauge market sentiment—skills pivotal in making astute investment decisions and managing diverse portfolios effectively

indispensable This skill set not only prepares me for roles centered around risk assessment and management but also cultivates a critical mindset essential for sound decision-making in high-stakes financial scenarios The knowledge gleaned from comprehending technical analysis serves as a cornerstone for client advisory services Being adept at communicating nuanced market insights and formulating resilient investment strategies becomes second nature This expertise fosters trust and credibility, essential for establishing lasting

relationships with clients in a competitive financial landscape Considering the burgeoning integration of technology into finance, an understanding of trading strategies and technical analysis takes on added significance It becomes a linchpin in fields such as algorithmic trading and quantitative finance, where data-driven decision-making is paramount The ability to leverage these insights for algorithm design and model development becomes a powerful asset in navigating the modern financial landscape

This understanding of trading strategies fosters adaptability, a vital trait in navigating the ever-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 a successful journey in Finance and Banking, armed not just with technical expertise but also with 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 the understanding of M&A basic knowledge, M&A in the real world and how to build up our career path

1.1 M&A in Vietnam:

Prior to the year 2007, the total number of M&A transactions did not exceed 50 each year However, from 2008 to 2013, both the quantity and the value of M&A deals have increased remarkably The market saw 1,184 M&A deals have been carried out with the total value 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&A transactions 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, obligations and legitimate interests to another enterprise and at the same time terminate the existence of the merged enterprise(s)

- Acquisitions: an enterprise acquires the whole or part of property of another enterprise sufficient 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 of production and operation, reducing the risk and transaction costs in forward or backward production chain, typically the relationship between suppliers and producers

- Horizontal:Horizontal transaction occurs between two firms operating in the same industry with an aim to gain synergies and enhance the market power by combining resources

- Conglomerate:Conglomerate transaction involves firms operating in unrelated industries which seek to get advantages from economies of scope and risk

diversification

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

While M&A offers some advantages, there are still some various disadvantages associated with these transactions

1.3 M&A Process:

1.4 Experiences and Risks:

- AttentioninM&Aingeneral:unrealistic timetable, lack of understanding of the business, quality control data room, lack of financial data/ explanation and inadequate resourcing/ 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 group

by revenue has taken over Christian Dior in a $13.1 billion deal to consolidate control over the 70-year-old Parisian fashion house from 2017 At that point of time, LVMH already owned Parfums Christian Dior, and the deal would give it ownership of the Christian Dior haute couture, leather, men’s and women’s ready-to-wear, and shoe businesses The boards of Christian Dior and LVMH are unanimously in favor of the deals By buying out minority shareholders, the transaction would simplify LVMH’s relationship with Christian Dior The deal is projected to increase LVMH’s earnings per share within the first year of its

completion

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 the face of fears of geopolitical conflict and currency fluctuations In March 2017, rebounding demand for luxury goods in China and Europe pushed its first-quarter sales to €9.88 billion, a

15 percent increase over the same period a year earlier and far beyond estimates “The corresponding transactions will allow the simplification of the structures, long requested by the 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 family group 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 Arnault family offered to buy the 25.9 percent of Dior it does not already own The family would hand over a mix of cash and Hermès shares The LVMH fashion and leather goods division would 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 continue

to exist and will own 41 percent of the share capital in LVMH, plus 56.8 percent of voting rights, making it the conglomerate’s controlling shareholder The Arnaults’ decision to offload Hermès shares comes nearly three years after the family received stock in the Paris-based luxury leather goods house after an effort by LVMH to build a stake in the company

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 to acquire a sizable share in an online store that is sometimes compared to an Amazon clone for Southeast Asia

Lazada was launched by Germany’s Rocket Internet in 2012 Like many of the ventures from Rocket, 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 neither Amazon nor Alibaba dared to venture: into a handful of Southeast Asia’s most promising countries There are 3 main reasons for Alibaba's acquisition of Lazada

Firstly, Southeast Asia is an attractive market for global corporations and local companies in the electronics sector The number of Internet users in Southeast Asia, especially the 6 largest ASEAN countries, has contributed to creating a potential e-commerce market with many opportunities to exploit The rapid development of technological infrastructure and rising income levels of countries will facilitate the expansion of the E-commerce sector, and Southeast 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 5.7 million active customers, up four times from 1.4 million in mid-2014 Those numbers are small compared to Alibaba's China market, but that predicts more growth to come as Lazada positions itself in the region

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

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