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Credit loans provided for electricity projects

A credit contract worth 820 billion VND for two 500kV and 220 kV power transmission projects was signed on March 12 in the central city of Da Nang.

According to National Power Transmission (NPT), signatories were the Vietnam Development Bank (VDB), Da Nang branch and the Management Board of Central Power Projects (AMT).

Under the contract, VDB will provide the 500kV Pleiku-My Phuoc – Cau Bong project with 720 million VND and the 220 kV Dak Nong-Phuoc Long-Binh Long project with 100 billion VND, to pay for compensation and resettlement in the project area.

The two projects were also funded by Asia Development Bank (ADB), the Vietnam Bank for Industry and Trade (Vietinbank) and Bank for Investment and Development of Vietnam (BIDV), for other construction works.

Invested by NPT and spreading across the provinces of Gia Lai, Dak Lak, Dak Nong, Binh Phuoc, Binh Duong and Ho Chi Minh City , the projects aim to reduce power losses and ensure maximum generating capacity of power stations and safe and stable electricity supply for southern areas and the country in general.

NPT said the provision of credit loans from State banks for these projects is part of the Government’s measures to speed up the implementation of urgent power planning toward electric transmission grid development.

Fuel price rises hit coal electricity producers

Electricity and coal producers are preparing to deal with a sharp increase in production costs as a result of the latest fuel price hike.

The increase in petroleum prices that took effect on March 7, of between VND600 and 2,100 per litre, will have significant impact on most industries, particularly power and coal production, industry insiders say.

Nguyen Van Bien, deputy director of the Viet Nam National Coal and Mineral Industries Group (Vinacomin), said the corporation's production costs would increase by VND390 billion (US$18.73 million) as diesel prices have increased by VND1,000 from VND20,400 to VND21,400 per litre.

It would create a big burden on the coal industry particularly in the production of coal for power generation, Bien said.

The latest adjustment in coal prices for electricity production, which was done in March 2011 with an increase of 5 per cent, had helped Vinacomin collect an additional VND200 billion from selling about 11 million tonnes of coal to the electricity industry.

However, the adjusted coal prices accounted for only between 51 and 55 per cent of coal production costs, he said.

In February this year, Vinacomin proposed raising the coal price for power production to a level equal to production costs, but it has yet to receive a response from concerned agencies.

According to a Vinacomin official, the production cost of coal has now reached VND1 million per tonne, while coal is now sold to electricity generators for just VND600,000 per tonne.

A report by the Dau Tu (Investment) newspaper says that except for hydroelectricity plants that are not affected by the fuel price hikes because they use water for running their turbines, all other kinds of electricity generation will suffer direct or indirect impacts of the fuel rate changes.

For instance, the Ca Mau 1 and Ca Mau 2 gas-fired thermal power plants, which have a combined annual capacity of 1,500 MW, will be heavily affected by the fuel price hikes as the gas price is based on world prices of furnace oil (FO).

The Electricity of Viet Nam estimates that power production costs in the remaining months of 2012 will increase by about VND300 billion.

This suggests a possibility of electricity price hikes in the near future, since the fuel price is one of three main factors in adjusting power prices. The Prime Minister's Decision No 24/QD-TTg dated April 15, 2011 says electricity selling prices would be adjusted according to market mechanisms.

Perfume River tributaries to be dredged, beautified

The provincial authority of Thua Thien - Hue has approved investments of over VND265 billion (US$12.7 million) for projects to dredge and beautify two tributaries of the Huong (Perfume) River in the ancient city of Hue.

The first project will revive the 1.5km long Lap Tributary which links the famed Huong River with the Ke Van Canal as it flows through the Kim Long Village.

With an investment of VND99.2 billion ($4.75 million), the project will dredge the bed of the currently-blocked tributary, build embankments and roads, and plant trees along its banks.

An investment of VND166 billion ($7.95 million) will be made to renovate the 2.5km long Ke Van Canal, which was dug centuries ago as part of an outside canal network to protect the Royal Citadel of Hue.

This project will dredge the canal bed, build roads and install lighting systems.

Work on these two projects, scheduled for completion by March 2016, aims to facilitate waterway transport, curb flooding and help develop river tourism in the ancient city, city authorities said.

Belgium funds irrigation work

A Belgian delegation led by Brussels's Minister of Economy and Foreign Trade Benoit Cerexhe arrived in the northern province of Ha Nam yesterday.

Ha Nam is one of the localities of Viet Nam that benefits from the Belgian government's Official Development Assistance.

A Belgian-funded drainage system and wastewater treatment project in Phu Ly City is expected to be completed in the second quarter of this year.

The provincial People's Committee Chairman Mai Tien Dung expressed the desire that the Belgian government would continue providing ODA capital for the province to support environmental pollution treatment on Nhue River and wastewater and rubbish treatment in industrial parks and trade villages.

Benoit Cerexhe said he was impressed by the locality's economic development, adding that the meeting helped the delegation to learn more about projects being implemented by Belgian businesses in Ha Nam Province.

In the framework of the meeting, the two sides signed a memorandum of understanding on provision of ODA capital worth 10 million EUR (US$13 million) for a project to build and improve sewage pumping stations in Phu Ly City.

Travel firms with collateral allowed to negotiate rates

The Viet Nam Administration of Tourism (VNAT) has agreed with the State Bank of Viet Nam to allow travel firms with collateral deposits at banks to negotiate interest rates directly.

The statement was made by Deputy Director of the Travel Agent Department Pham Le Thao.

Under the current regulation, travel firms can receive only non-term interest rates for their collateral deposits kept at banks and used as compensation for tourists when agents violate contracts or deal with risks.

The change comes under a draft decree on revising the Law on Tourism compiled by the VNAT and to be submitted to the Prime Minister for approval later this month.

Under the draft decree, travel agents offering outbound services will be also required to double their collateral deposit to VND500 million (US$23,800) against the current rate.

Current regulations set collateral deposits at VND250 million for both outbound and inbound tourism. The draft leaves the deposit for travel firms with inbound services unchanged, but doubles the rate for firms offering only outbound or both services.

Travel agents were concerned that the draft could cause them difficulties if approved. They said that since most travel agencies were small- and medium-sized enterprises, new capital regulations could place strain on operations.

However, Thao said, the increase was reasonable as the deposit of VND250 million had been regulated since 1995.

Moreover, deposits would act as a sanction to protect tourist interests, Thao said, adding that the tourism administration had consulted many relevant ministries and bodies before making the proposal to increase collateral deposits.

Thao said that next time, the administration might also ask relevant ministries to raise the insurance premium for tourists as current regulations did not detail such rates.

Mekong Delta fails to lure FDI

Stronger governmental linkages must be created among the Cuu Long (Mekong) Delta's 12 provinces and the region's major city, Can Tho, to attract more foreign direct investment, officials have urged.

In the first two months of this year, only two regional provinces, Long An and Tien Giang, attracted three foreign-invested projects, with a total registered capital of only US$1.63 million.

The region's unsatisfactory performance has been attributed to poor strategies to attract investment, which has resulted in competition among provinces and a lack of co-ordinated investment promotion, according to Tran Huu Hiep, head of the Southeastern Steering Committee's socio-economic department.

FDI has also been hindered by insufficient infrastructure and a shortage of skilled workers.

He called for tighter linkages among provinces to exploit the region's advantages, particularly in infrastructure and agriculture, and asked provincial authorities to take steps to enhance the number and quality of labourers.

In addition, he recommended creating a regional linkage mechanism, a trade-tourism-investment promotion plan until 2015, and a co-operative strategy between the region and national and international organisations.

Speaking at a seminar on the Provincial Competitiveness Index held in Can Tho on Tuesday, Dau Anh Tuan of the Viet Nam Chamber of Commerce and Industry said the Mekong Delta had not fulfilled its potential as an attractive destination for local and foreign investors.

The amount of investment, which is mostly from domestic companies, is low compared to Da Nang and Binh Duong Province.

Only a few foreign-invested businesses have chosen to invest in the region, with only six foreign-invested projects in Long An Province and four in Can Tho City being launched last year.

Furniture exports face new norms

Furniture producers should be fully aware of US safety regulations and standards when exporting to that country, a HCM City wood products industry official has said.

Tran Quoc Manh, deputy chairman of the Handicraft and Wood Industry Association of HCM City (Hawa), told a conference in HCM City on Monday that the US was the largest market for Vietnamese furniture for many years now with export value reaching US$1.42 billion last year – and would remain a key market.

But it had increasingly strict safety regulations and standards to prevent risk of injuries associated with consumer products.

For instance, the US Consumer Product Safety Commission (CPCS) used to allow baby cribs to have a drop-side to put children in and get them out, but no longer.

Producers therefore had to thoroughly understand such regulations and standards and keep a close eye on changes to avoid risks when exporting their products.

John W Boja, a lead compliance officer in the CPSC's Office of Compliance and Field Operation, said the Consumer Product Safety Act and the Federal Hazardous Substances Act set new permissible levels for many items, including lead content in accessible components, paint, and surface coating in furniture.

Arlene I Flecha, CPSC's programme manager for Southeast Asia, said: "Failure to meet either a CPSC regulation or an industry consensus standard can result in a recall."

The consequences of a recall could lead to damage to a brand, a country's reputation and future business, and tougher regulations, she pointed out.

Producers must follow safety regulations to avoid these problems, she said.

Producers must carefully control their supply chain, including design and materials, to ensure that their products meet US safety requirements, she said.

Da Nang draws in $26m in FDI so far this year

The central city of Da Nang has attracted foreign investment worth US$26.4 million so far this year, including in five new projects.

The five include a 2.5MW solar energy plant costing $9.1 million to be built by Methis Environmental Viet Nam Ltd of Belgium, according to Le Canh Duong, deputy director of the Investment Promotion Centre.

Last week authorities permitted Korean company Daewon Engineering & Construction Co Ltd to increase its investment by $16 million in its Da Nang project.

The city now has 213 foreign-invested projects with investment of over $3.1 billion, mostly in the tourism, services, property, and manufacturing industries.

The investments have come from British Virgin Island, South Korea, the US, Hong Kong, Japan and 25 other countries and territories.

The biggest are the $325 million Capital Square Complex (the US); $250 million Da Phuoc Urban Area (South Korea); $116 million Hyatt Regency Da Nang Resort & Spa (the US); and $60 million Blooming Tower (South Korea).

Foreign firms export a combined $400 million annually, with their products shipped mainly to the US, the EU and northeast Asia.

Van Huu Chien, chairman of the city People's Committee, said the city had turned its investment focus from tourism and property — which appear saturated — to hi-tech industries and high-quality services.

Japanese firms had invested $240 million in 51 projects in these sectors.

The city also hoped to attract investment in the sectors from European and American firms.

Da Nang would focus on attracting FDI in the form of PPP (public-private partnership) investment in waste treatment and infrastructure development.

"We are enhancing our partnership with foreign investors with financial capacity and expertise such as ITG (the US), Vinacapital, Indochinacapital, Mabuchi, Metro, and Big C," Chien said.

The city had established external and economic relations with nearly 80 countries and territories around the world.

Businesses must join hands to increase competitiveness

Experts stressed the significant role of "business linkage" in helping enterprises cope with the global economic crisis at a conference announcing the "Viet Nam Business Annual Report 2011" in the capital yesterday.

The annual report has been drawn up by the Viet Nam Chamber of Commerce and Industry (VCCI) since 2006.

Vu Tien Loc, chairman of the VCCI, said: "Business linkage is key to sharpening competitive edge. The report points out the advantages and disadvantages of such linkage in assisting firms map out appropriate development strategies."

Five sectors were highlighted for survey in terms of business linkage and included food processing, leather and footwear, the auto industry, logistics and tourism.

Pham Thi Thu Hang, VCCI general secretary, said the five sectors were typical examples proving the importance of business linkage in bolstering industrial development.

She emphasised the important role of industrial associations in supporting, protecting as well as improving competitiveness amongst companies. However, she added that the linkage between producers, suppliers and distributors were still loose.

To better support enterprises, the VCCI set up the Sub-contracting and Partnership Exchange of Viet Nam (SXP) to build up data on support industries and link enterprises with one another via systematic supplying chains.

Vice President and General Secretary of the Viet Nam Retailers' Association, Dinh Thi My Loan mentioned three kinds of business linkage in the retail sector.

"Retailers share goods supply resources, hire retail space and have committed to rein in retail prices. This has helped enterprises cut costs."

Director of the World Bank Viet Nam Victoria Kwakwa said that the private sector played a key role in national economic development and the VCCI should continue promoting its role to become an effective bridge between the Government, ministries and businesses to help improve competitiveness.

Last year, local enterprises coped with a series of difficulties, including high inflation, high interest rates, higher costs in human resources, raw materials, machines and equipment and other impacts from the global economic crisis.

According to the report, in 2011, the number of newly registered companies reached only 77,500 with a total registered capital of VND513 trillion (US$23.3 billion), down 13 per cent in business number and 5.7 per cent in capital against the previous year. This brings the total of existing companies to 544,000 to date.

Some 7,600 companies dissolved last year.

Besides enterprise capacity and business linkage during 2011, the report also gave predictions about the Vietnamese economy for 2012.

Accordingly, the Government should ensure an appropriate adjustment in oil and power prices to help cut company input costs, extend or reduce corporate income taxes and warrantee a reasonable ratio of commercial loans for producers and small- and-medium sized enterprises.

Nguyen Van Phuc, deputy chairman of the National Assembly Economic Committee, said: "We have to take bold measures to restructure the economy as well as investment and State-owned enterprises to ensure long-term sustainable development."

More foreign investors keen on Vietnam: UK Financial Times

Vietnam is replacing China as a new alternative for foreign businesses thanks to its lower labour costs and good workers' skills, the UK’s Financial Times reported on March 14.

The paper cited some instances of UK, American and Danish businesses that operate in the country.

The UK electronic components manufacturer, XP Power, is among many enterprises seeking to diversify production beyond China to capitalize on lower wages and minimize the risks of concentrating in one location.

“Labour costs are cheaper in Vietnam but the workers’ skills are good,” the Financial Times quoted a Vietnamese engineer working for XP Power as saying.

The paper said unskilled workers in Vietnam are generally paid $100-150 per month while the corresponding figure for Chinese counterparts will be about $300.

S. Kesavan, the Vietnam head of the US Jabil Circuit electronics manufacturer, said “productivity in Vietnam is slightly behind China, but the recent escalation of costs in China is making us relocate in order to be competitive”.

Meanwhile, Stig Maasabol, Chief Executive of the Danish-owned ScanCom International, said his company is looking to double its output in Vietnam in the next two years by applying more advanced technology.

Maasabol affirmed that “if Vietnam’s attraction is only wages, companies will soon be looking to Cambodia and Myanmar”, according to the Financial Times.

Japanese food group enters Vietnamese market

Nichirei Foods, a subsidiary of Japan’s Nichirei Group, has joint-ventured with HCM City’s Cholimex Food JSC to penetrate the Vietnamese market.

Nichirei Foods has already bought 19 percent of the Vietnamese company’s stock, costing JPY500 million (US$6.25 million).

Cholimex is one of big companies in Vietnam, providing spicy products to domestic market and exporting frozen food to the Europe Union. It earns just US$25 million in revenue a year, but obtains an annual growth rate of 30 percent.

In the coming time, Nichirei Foods will send its technicians to Cholimex to transfer technology and diversify frozen food in Vietnam.

If the cooperation model succeeds, the Japanese company will increase its capital in Cholimex in the next two years to turn Vietnam into a key production base in the Southeast Asian region.

Earnings from Vietnam’s frozen food manufacturing fetch US$125 million, one third of Thailand’s figure (US$312 million), and far below Japan’s figure (US$10.3 billion).

Fitch lowers HAGL’s outlook to ‘negative’

Fitch Ratings has downgraded the outlook of Hoang Anh Gia Lai Joint Stock Company (HAGL) to ‘negative’ from ‘stable’.

Accordingly, the company’s long-term foreign and local currency issuer default ratings (IDRs) have been affirmed at ‘B’.

The rating agency has also lowered HAGL’s senior unsecured rating to ‘B-‘ from ‘B’.

Besides, the Recovery Rating of the company has been revised to ‘RR5’ from ‘RR4’.

Located in the Central Highland provicne of Gia Lai, the Vietnamese company specialises in such major fields as rubber plantation, mining, real estate, hydropower and wood product processing.

Fitch Ratings is a global rating agency dedicated to providing value beyond the rating through objective and balanced credit opinions, research and data.

Policy challenges for middle-income economy

Domestic and foreign economic and banking experts have shared their views on addressing and dealing with policy challenges in Vietnam’s transitional period to a middle-income economy.

Addressing a workshop in Hanoi on March 14, State Bank of Vietnam (SBV) Vice Governor Le Minh Hung said that Vietnam is facing inflation, a trade deficit, exchange rate fluctuations, public debt, along with difficulties in the economic structure of a new middle-income nation, and the middle-income trap.

In tandem with the Government’s strong macro-economic policies to curb inflation and maintain macro-economic stability and social welfare, the SBV has adopted a tight monetary policy, contributing to successfully implementing the set targets, he said.

The workshop, held by the State Bank of Vietnam and the International Monetary Fund (IMF), offered a forum for participants to share international experience on managing monetary policy, strengthening budget management and conducting the restructuring of financial areas and state-owned businesses.

On elements which impact on Vietnam’s inflation and monetary policy, IMF experts recommended that SBV should be given a clear and more independent role to pursue the goal of price stability. At the same time, the use of administrative management measures on interest rates, credit growth and grants should be gradually eliminated, and an interest corridor should be established as an important tool in monetary policy, they said.

Yin Sze Liew from Singapore’s monetary management agency expressed his concern about Vietnam’s inflation. He also pointed out shortcomings, such as low efficiency of policies, high dollarisation and ambitious targets for restructuring.

First LOSP timber processing factory debuts in Vietnam

Timbalink Vietnam Company on March 14 inaugurated a timber processing factory using light organic solvent preservatives (LOSP) and Tan E technology.

The factory, located in Bien Hoa City, Dong Nai province, will be officially put into operation in early April 2012.

LOSP-treated timber is produced in a dry state in its final form, and usually therefore the wood will not be cut, machined or further processed on site. Using LOSP technology increases the longevity of timber, reaching 25 years, by preventing rot and termite damage.

LOSP products are favoured in architecture and construction.

Timbalink Vietnam Company is a joint venture between Vietnam and New Zealand.

Annual Business Report 2011 announced

The Vietnam Chamber of Commerce and Industry (VCCI) made public the Vietnam Annual Business Report 2011 in Hanoi on March 14.

This is the 6th year VCCI has evaluated the development of Vietnamese businesses, changes in business environment and impact on business operations.

The report analyzes Vietnam’s business capacity based on the four fields of labour, finance, innovation and market access, while appraising business activities in accordance with the selected annual theme.

At the event, Vu Tien Loc, VCCI Chairman, said the report generalizes business operations and environment to show Vietnam’s business capacity. He suggested that Vietnamese enterprises should strengthen business links through participating in value chains, production networks, and the establishment of agricultural and industrial clusters.

These links will help businesses develop firmly and increase productivity and efficiency, he noted.

While Pham Thi Thu Hang, VCCI General Secretary, said the report not only shows the difficulties Vietnamese businesses met in 2011 but also forecasts new challenges facing the businesses in 2012.

VCCI also proposed that in the face of current economic difficulties, the Government apply measures to stabilize the macro-economy and curb inflation to create a favourable environment for businesses.

Enterprises should continue to restructure themselves in order to increase labour productivity and product quality so as to take full part in global production networks and value chains.

Euro football fans to taste Vietnamese coconuts

One million Vietnamese coconuts will be introduced at the final rounds of the 2012 European football championship (Euro 2012) in Poland and Ukraine, announced the European Coconut Import Export Trade Joint Stock Company (Eurococo) in Hanoi on March 14.

The programme aims to advertise Vietnam’s coconuts to the international community. Coconuts will be present in hotels, restaurants and outdoor areas to serve football fans.

Eurococo CEO Pham Quoc Toan said 700,000 of those coconuts will be sold, and the rest will be offered as gifts to sports officials and fans during 30-day Euro 2012.

Each coconut will carry a label saying “Come to Vietnam to explore its culture and products”, detailing the company’s telephone, website and email address.

Coconuts are expected to be sold at around US$2.50 each in Poland and Ukraine.

EVN’s monopoly main reason for high power prices: experts

The monopoly currently held by the Electricity Group of Vietnam (EVN) in the country’s power sector should be completely broken to free consumers from high prices and create a healthier power price management system, a conference heard Wednesday.

“There is a loophole in directive no 24, which allows EVN to hike power prices by a maximum 5 percent” said Vu Xuan Thuyen, a senior expert from the Ministry of Planning and Investment at the conference on power price management in accordance with market forces held by the Institute of Finance.

This means the power selling price can be as high as 10 cents a kWh, while EVN has only paid power generating plants 2 – 4 cents a kWh, added Thuyen.

He said EVN has monopolized the market by buying power at lower prices and selling at far higher rates.

“Inspections should be conducted into the buying prices EVN has made with other power suppliers,” urged Thuyen.

Thuyen continued, revealing that in 2006 EVN reaped VND18 trillion (US$864 million) in revenue by announcing a price increase.

But the entire sum has been sunk in non-core investments, he said.

“If power production grows by 20 percent a year, power prices can be cut by 2 percent,” said Pham Minh Thuy, an official from the Institute of Finance and Economics under the Ministry of Finance, citing figures from a recent study.

Thuy added that many power generators have faced difficulties in negotiating selling prices with EVN.

In response, Dang Huy Cuong, head of the Electricity Regulatory Agency under the Ministry of Industry and Trade, said the current power price is only 6.5 cent a kWh, not 10 cents, as claimed by Thuyen of the Ministry of Planning and Investment.

“It is said that hydropower has a low price, while it has in fact amounted to 4.5 cent a kWh,” said Cuong.

Regarding the troubled negotiations power generators reportedly encountered in dealing with EVN, Cuong said EVN has to demand a purchase price that will not cause it to lose money.

Meanwhile, Doctor Nguyen Thi Dieu Hien, former member of the government’s researcher board, said the power sector still provides large subsidies to the steel and cement manufacturing industries.

“While poor households only receive a monthly subsidy worth VND30,000, the figures granted to the two industries are as much as VND2.5 trillion,” she elaborated.

For his part, Cuong said that if power prices sold to the cement and steel sectors are hiked, the prices of the two commodities will also soar.

“A solution for this is to ban steel exports, or calculate a particular price scheme for steel and cement,” he said.

Thuyen said that while power price increases are inevitable, what should be done is to create a transparent and competitive power market.

“At present, EVN has its hands in all three sectors of the market -- generating, transmitting, and distributing,” said Thuyen.

“Some parts of EVN, such as the Power Selling and Purchasing Co, and the National Load Dispatch Centre, should be detached to be an independent body from EVN.”

As for a competitive power market, Thuyen said it is completely feasible, and can be done immediately.

For instance, the power distribution task should be assigned to non-EVN companies, which will have to win tenders to distribute power directly to households at competitive prices, he said.

Meanwhile Thuy, of the Institute of Finance and Economics, demanded that any power price hikes be approved by the Ministry of Finance, rather than the Ministry of Industry and Trade, which is EVN’s watchdog body.

“Moreover, the Electricity Regulatory Agency should also be separated from EVN,” he added.

Bank loans remain unattractive to businesses

Many local banks are still struggling to attract corporate borrowers because of high lending rates.

A senior executive of a small bank said his bank had set aside a VND1-trillion credit line for enterprises with an annual rate ranging from 18 percent to 20 percent.

However, the banker said, the number of firms asking for loans from his bank has remained inconsiderable over the past month.

With the above lending rates, his institution cannot compete with state-owned or foreign-invested banks in inviting good corporate borrowers.

A HCMC-based executive of Vietnam International Bank (VIB) stated his bank was trying to disburse capital for customers. The problem is that VIB finds it difficult to look for qualified businesses to prevent overdue debts from rising.

For the time being, VIB is offering exporters and importers loans with lending rates 1.5 percentage points lower than normal levels.

Similarly, Oriental Commercial Bank (OCB) since the start of this month has tried to attract clients by slashing interest rates to 18 percent per annum for all loans within a year.

The lender would be more cautious about giving out credits to minimize bad debts since it was now difficult to have debts settled by customers on schedule.

Meanwhile, Ocean Commercial Bank (OceanBank) has announced a special program targeting clients in fields such as agriculture, fishery and forestry, with a yearly preferential rate 2-3 percentage points lower than those for other loans.

Moreover, the Hanoi-based lender has decided to set aside VND500-billion in credit with the rate of 17 percent for companies in the southern region.

Speaking to the Daily, Le Xuan Nghia, vice chairman of the National Financial Supervisory Commission, pointed out the glut of capital at local banks given the limited number of borrowers.

This has prompted a large number of banks to buy Government bonds with less than 5-year terms to net a coupon of around 11 percent a year, Nghia said.

As of last Friday, the total transaction volume of the whole bond market amounted to VND47.575 trillion while the figure only reached over VND73 trillion in all of 2011, according to Bao Viet Securities Co.

Central bank governor Nguyen Van Binh in a press briefing on Monday also said the credit growth rate as of last Thursday had dropped by 1.27 percent compared to the end of last year.

The governor cited the long Lunar New Year holiday coupled with the slackened capital demand as the 2 reasons for the lower rate.

At a seminar on accessibility to bank loans in HCMC on Monday, local companies attributed the slowing capital demand to high lending rates.

Most of them shared the view that the lowering of lending rates by 1-2 percentage points was still of little significance.

More brands lose high-quality tags

Many big brands this year have lost High-Quality Vietnamese Products title for failing to win consumer confidence while some others that are still favored by customers at home have been forced to dissolve.

According to the final list of high-quality Vietnamese goods makers announced on Tuesday, a total of 419 enterprises in 38 different areas in 36 provinces and cities won the title. There are 23 firms honored for the first time and 41 others getting back the title after a couple of years.

The result showed up to 171 businesses had been eliminated from the list, including prestigious names like Tan Hiep Phat Group and Thai Tuan Textile and Garment Co. The annual selection is conducted by polling consumers around the country.

Apart from products’ quality assessed by consumers, nominated firms must fulfill other requirements including environmental protection and labor issues under the supervision of local relevant authorities, said Vu Kim Hanh, chairwoman of the Association for High-Quality Vietnamese Products. Certain companies were not put into the list as they had polluted the environment or were disgraced by local buyers, she noted.

Specially, statistics by the organizers showed that five enterprises that won the title in previous years had shut down business due to the current tough economic conditions.

Regarding the above figure, Hanh commented it was small compared to 700 companies nominated by consumers. However, she admitted several winners were facing difficulties, with some of them having no choice but to lay off workers and scale down production as a result.

The selection of High-Quality Vietnamese Products is used to recognize the success of local firms whose commodities are popular among local consumers. The survey is conducted by the Association for High-Quality Vietnamese Products in collaboration with Sai Gon Tiep Thi newspaper.

Up to 716 businesses were voted by local people and the organizers named 419 winners after screening them through other criteria such as environmental protection and labor responsibility.

These winners are active in various industries like non-alcoholic beverage, pharmacy, spicy sauce, dry or instant food. Of these, joint stock enterprises account for 41.8%, limited liability companies for 31.7%, foreign-invested firms for 8.8% and small businesses for 5%.

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