Tourism ministers of Vietnam, Laos, Cambodia and Myanmar will attend a tourism meeting in HCMC this September to discuss the next move to boost the tourism’s image “Four Countries-One Destination.”
Under the program approved by the Ministry of Culture, Sports and Tourism, the meeting will be an important part of the International Travel Expo 2012 in HCMC (ITE-HCMC 2012) taking place on September 13-15.
At the meeting, tourism ministers of the four countries will discuss the tourism cooperation plan for the 2012-2015 period.
Thailand will be invited to join the meeting to exploit tourism potentials and advantages, develop the image of “Five Countries-One Destination” and make the tourism in the Mekong River area more attractive to international tourists.
Together with the meeting, the organizers of ITE-HCMC 2012 are also under preparation for the meeting of mayors of the cities from the expanded Greater Mekong Sub-region, including Phnom Penh (Cambodia), Vientiane (Laos), Yangon (Myanmar), Kunming (China), Bangkok (Thailand), HCMC and Jeju and Busan in South Korea. This meeting will also focus on the tourism cooperation among the cities.
Discount trend continues in apartment market
The highlight of several update reports on Hanoi’s realty market in the second quarter is the discount trend in all apartment segments.
Particularly, the latest report of Knight Frank on the property market of Hanoi indicates a slight price fall in the low-end and mid-end apartment segments and a sharp drop in the high-end segment last quarter. Owners of the projects from above mid-grade to high-grade continued to pull down their selling prices by 6-19% to lure buyers.
Meanwhile, 12% was the average discount rate in the primary market, while the secondary market offered products at 11% lower prices, according to the data of CBRE.
The data of Savills Vietnam shows that apartment asking prices in the primary market ranged between VND16.5 million and VND64 million per square meter. The average secondary prices went down in all districts, in which Hoang Mai District saw a 7% price decline and prices in other districts dropped 4-6% against the preceding quarter.
Although the offering prices are said to be returning to the reasonable levels in all segments, the average absorption rate dwindled by 8% in the second quarter, staying at 15%, as the liquidity of most projects did not improve much.
A source from the market research division of Savills said the apartment market in Hanoi welcomed ten new projects last quarter, supplying an additional 4,200 units, taking the total supply to approximately 12,000, a rise of 23% on the first quarter.
As such, apartment supply is increasing, while homebuyers are more prudent in making trading decisions. This will exert a huge pressure on businesses.
Tran Nhu Trung, deputy director of Savills, noted the Government’s efforts to prop up the real estate market by credit supports and lending rate cuts had not significantly affect consumers’ home purchase.
He stated changes in macro-economic policies are only the necessary condition to draw more attention to the housing market. To improve the market trading situation, there must be many other factors.
Le Minh Dung, director of CBRE Vietnam, informed many project owners had cut losses and would continue to do so in the coming time to make investment in other segments. This might be the right time for consumers to buy houses.
However, the biggest difficulties in recovering the market are that consumers have yet to regain their confidence, buyers find it hard to access capital and project owners are still cautious with the market.
To improve the dreary trading situation since the previous quarters and attract buyers, project owners are trying to slash prices by offering discount packages and promotions as well as encouraging buyers to make payments ahead of schedules to enjoy higher discounts. In addition, homebuyers are given many options, such as receiving fully-furnished or bare houses, meeting their demand and financial capability.
The bright spot in the reports is project owners expect more optimistic trade volumes in the third quarter when macro-economic policies are put into practice.
Meanwhile, consumers hope to receive home loan supports from the Government. Hence, the property market will be able to improve after running into many problems over the past time.
Infrastructure investment still lags
Lawmakers, as well as economists and lawyers, have called for a better legal framework for Public-Private Partnerships (PPP) in Viet Nam, where demand for public infrastructure is high.
During a seminar yesterday held in HCM City and organised by the HCM City Institute for Development Studies, Dr Tran Du Lich, a member of the National Assembly, said the country needed a law with transparent and clear regulations on the PPP form of investment.
Without such a law, local and foreign enterprises believe it is too risky to invest in infrastructure and public-service projects.
The State budget is limited for such projects, which take up about 20 to 30 per cent of investment demand.
Lich said the country should develop a better policy to attract local and foreign investment in infrastructure facilities, especially urban transport systems.
HCM City has used PPP investment to build infrastructure, with several PPP projects carried out under the BOT (Build – Operate – Transfer) form. Interest-rate subsidies were also given as part of the PPP contractual agreements.
However, several issues about the relationship between State and private enterprises during the investment project, as well as details about preferential policies, need to be clarified and made more specific in regulations and laws.
Prime Minister Nguyen Tan Dung's Decision No. 71, which dealt with attracting PPP investment, was not enough to attract investors, according to Lich.
Before the decree was issued, about 100 projects under PPP, which were either BOT or BT (Build – Transfer), were not successful because there was an insufficient legal foundation, which easily discouraged investors.
Many seminar participants said the private sector should partner with the State in developing infrastructure, as the State budget for basic development was limited and funds from Official Development Assistance had decreased.
Investment demand, especially for the transport sector, is very high in HCM City and the country in general.
Between 2011 and 2025, the city needs about VND880 trillion (US$42 billion) for infrastructure development, while the entire country needs US$160 billion for building transport system from the 2010 – 2020 period.
Nguyen Trong Hoa, head of the HCM City Institute for Development Studies, said it was necessary to develop measures to attract investment funds from other sources, as the State budget and ODA funds were shrinking.
An expert at the institute, Hoang Thi Kim Chi, agreed, saying that the Government should develop a comprehensive legal framework as well as clear and appropriate policies to encourage investors.
Several public projects have been carried out under PPP in HCM City, including Binh An, BOO Thu Duc, Kenh Dong and Can Gio water treatment plants. The Phu My Bridge, Dau Giay – Phan Thiet Freeway and HCM City – Trung Luong Freeway projects were all public-private partnerships.
Vinachem sets high targets despite poor outlook
Viet Nam National Chemical (Vinachem) Group announced ambitious production and business targets for the end of the year despite the gloomy global economic outlook.
The group said it expected to gain VND23.5 trillion (US$1.11 billion) in production value in the second half of this year.
It also planned to make VND23.9 trillion ($1.13 billion) in turnover and VND1.8 trillion in profit during the period, the group said.
Chairman of Vinachem's management board Nguyen Anh Dung said that to reach those targets the group must better exploit export outlets while continuing to bolster sales in the domestic market and more effectively working with business partners.
Vinachem general director Nguyen Dinh Khang said the group's business affiliates and subsidiaries should take measures to reduce production costs by increasing the effectiveness of their co-operation.
Bui The Chuyen, head of Vinachem Business Planning Department, said that during the first half of this year, the group's production value rose by 10 per cent year-on-year to VND20 trillion ($952.38 million), while turnover rose by 15.5 per cent to VND22.6 trillion.
In the first six months, the group reached 45 per cent of its annual profit target of VND1.445 trillion, he said.
The group sold 2 million tonnes of fertiliser and 160,000 tonnes of chemical products in the domestic market during the first half of this year.
However, in the first six months, Vinachem's production growth lagged behind the national average, while some of its subsidiaries suffered from over-stocked inventories, according to the group.
Hotel project hits land clearance roadblock
Deputy Prime Minister Hoang Trung Hai has asked the People's Committee of southern Ba Ria- Vung Tau Province to make a report on the implementation of a huge tourism and entertainment complex in the province after receiving a call for help from the project's investor late last month.
Financed by Winvest Investment Viet Nam under the US Winvest LLC Group, the Saigon Atlantic Hotel project is one of largest in the southern coastal province.
The project had initial investment capital of US$300 million when the investment certificate was first granted in November, 2007. It was then allowed to increase capital to $4.1 billion in 2009, requiring an area of 307ha onshore and 610ha offshore.
However, the project is running behind schedule, largely due to challenges in land clearance resulting in a serious shortage of available land.
"Only 87ha of land had been handed over to us to date," an anonymous official from Winvest Investment Viet Nam Co told Viet Nam News over the phone yesterday.
"Local authorities told us that they did not have enough budget for the project's land clearance compensation," he said.
There was hardly a progress made in site clearance last year, Hoang Xuan Vinh, deputy head of the provincial Department of Planning and Investment's Foreign Co-operation and Investment Division told Dau Tu Online.
Winvest has already advanced VND98 billion ($4.6 million) while the province has spent more than VND100 billion ($4.76 million) in compensation so far.
But we still encountered many difficulties in site clearance, Vinh said.
Total site clearance costs for the project were estimated at more than VND600 billion ($28.6 million), and that was too much compared with the provincial budget, he said.
The Saigon Atlantic Hotel project is expected to comprise of 332 villas and over 16,100 high-end apartments, creating 15,000 local jobs.
ATM fees to be investigated
The State Bank of Viet Nam will check on ATM fees across Viet Nam after many commercial banks recently not only increased fees for cross-bank (extranet) services, but also started charging for the usually free intranet transactions.
This was allegedly done in secret by the banks who did not notify their card-holders of the changes, said the State Bank's deputy head of inspections, Nguyen Cong Duong.
Duong said the SBV and its branches were working hard to oversee if commercial banks had obeyed recent orders not to charge for intranet services - or adjust extranet fees, even if they want to lower them.
"Most banks are following our instructions," Duong said.
However, he added that the bank was able to oversee the situation throughout Viet Nam, but did not have enough inspectors to complete the task.
Duong advised card-holders to protect their rights by advising banks if they encountered any unrealistic ATM fees. Inspections could then be carried out.
He said some banks not only appeared to be doing what they wanted, but were also charging clients too many varieties of service charges.
Vo Huy from District 1, HCM City, said he has to pay Dong A Bank VND20,000 (US$0,95) for receiving text messages notifying balance changes and Internet banking, but the messages are often late.
Nguyen Thi Tuyet, a Vietcombank cardholder said she was charged a high VND16.500 for withdrawing VND1 million ($48) from a Techcombank ATM. The normal fee would be about VND3,300.
"Besides other strange service fees, I was charged up to VND1.650 (80 US cents) for checking my balance sheet, Tuyet said.
Vietcombank deputy general director Nguyen Thu Ha told Khampha.vn news website that ATM fees, including those for balance checks, had been operating for a long time.
She denied Vietcombank had charged intranet fees and had not adjusted extranet fees.
She also said that Vietcombank and other banks would collect intranet fees and adjust extranet ATM transaction fee when it received a new policy from the SBV. This was expected next year.
Ngo Ngoc Dong, CEO of Viet Nam National Financial Switching JSC, or Banknet, said that many banks complained of the high expenses of investing in ATM systems.
However, the central bank's view remains firm: fees can only be collected under the road map it has developed. This is to ensure a balance of interests between customers and the banks.
Associate Professor Nguyen Van Nam, former director of the Institute for International Economics, said ATM management and transaction services should be improved to boost usage across Viet Nam.
Retailers expand despite fall in demand
Despite a decrease in consumption demands and retail turnover, domestic retailers are continuing to open more outlets in the capital with an eye on industry potential.
The Son Ha Group, which specialises in stainless steel water tanks and construction, has recently opened its first store in the capital's Ha Dong District.
The group said that it would open two more outlets in Cau Giay and Tu Liem this year. It has also targeted to open 20 supermarkets nationwide in the next five years.
The Nhat Nam Joint Stock Company, owner of the Fivimart supermarket chain, opened its 14th supermarket last month on Ba Dinh's Doi Can Street.
The FLC real estate group also opened its first mart in Tu Liem District in May.
Existing retailers are still seeking good locations in crowded residential areas to open more outlets. In Ha Dong District, for example, there will be a Metro supermarket opened soon, although the area has two large Co.op Mart and Hiway outlets already.
Vu Thi Hau, head of the Fivimart supermarket chain, said that existing retailers planned to gain a firmer foothold in the local market before foreign retailers encroached.
Chairman of the Ha Noi Supermarket Association Vu Vinh Phu said that the retail turnover of supermarkets last month decreased 10-12 per cent over the same period last year, however, retailers and industry experts were still optimistic about the industry's prospects.
Retailers said there was no concern as the local retail industry had surged 20-30 per cent on average for the past 15 years. The proportion of the modern retail system, including supermarkets, accounted for only 20 per cent of the country's total retail industry, so there were still opportunities for the modern retail system to develop further.
Hoang Tho Xuan from the Ministry of Industry and Trade's Trade Research Institute said that Viet Nam's retail market still had a lot of potential as existing retailers were yet to meet the demands and tastes of local consumers.
Chairman of the Viet Nam Retailers Association Phan The Rue also said as the Government had taken measures to stabilise the macroeconomy and control inflation, it would be difficult for the local retail market to develop significantly, however, the difficulties were only temporary.
In the current context, only retailers, whose financial status, distribution and supply systems and corporate governance were good, had opportunities to develop, Rue said.
Laos calls for more HCM City investors
Laos is seeking investors from HCM City and other parts of Viet Nam for important projects to build railways, highways, airports and electricity systems in Vientiane and Champasak Province.
Vientiane has around 200 investment projects that need more than US$1 billion in total, according to Soukanh Mahalath, mayor of Vientiane, who spoke at a recent conference in HCM City on trade relations between the two countries.
He said that he hoped HCM City's investors would invest more in Laos in general and Vientiane in particular.
To increase trade opportunities, more large trade fairs will be organised in both Vientiane and HCM city to create priorities for HCM City investors.
The Champasak Province governor has also urged Vietnamese investors to visit his city to discover investment opportunities.
The province's governor, Sonsay Siphandon, said that HCM City investors played an important role in developing Champasak's economy.
He also confirmed that HCM City investors had invested in nine projects in his province.
Thongloun Sisoulith, deputy prime minister of Laos, said that investment doors in Laos, especially in Vientiane and Champasak, were always open for HCM City investors.
The chairman of HCM City's People's Committee, Le Hoang Quan, said at the conference that the investment and trade between the two countries should be enhanced.
The conference's 500 participants heard updated information on new policies and economic potential in Viet Nam and Laos as well as HCM City, Vientiane and Champasak.
This year, economic relations between HCM City and cities in Laos have further developed.
To date, about 35 HCM City companies have received investment licences for projects in Laos.
The deputy chairwoman of HCM City's People's Committee, Nguyen Thi Hong, said that Laos had not yet invested in projects in Viet Nam, but she expected that they would in the future, and that the city would create priorities for them.
Bilateral trade revenue last year between Laos and Viet Nam totalled US$734 million, up by 50 per cent over 2010.
In the first half of this year, it was $136 million, increasing year-on-year by 66.6 per cent.
The governments of the two countries have agreed to increase the figure to $1 billion this year and $2 billion in 2015.
Viet Nam is the second largest investor in Laos, with 424 projects, worth a total of $3.57 billion.
Investors may be asked to post completion bond
The Ministry of Planning and Investment has submitted to the Government a draft decree on investment which, if adopted, would make significant changes to investment regulations. It would require the investor's legal representative to register with the investment licensing authority a guarantee that it will implement the project by the date stated in the Investment Certificate. The investor has to then post a bond in the form of a deposit in an escrow account or a bank guaranty. The draft decree would also provide details on the documentation and procedures needed to convert an Investment Certificate into an Enterprise Registration Certificate for a domestic-owned enterprise.
Law bans marketing of cigarettes
The National Assembly passed the Law on Advertising on June 21, which will ban advertisement of cigarettes, alcoholic beverages of stronger than 15-proof, and baby formula products intended to replace mother's milk for children under 24 months. The law will also forbid advertising that makes direct comparisons of price, quality, or effectiveness of products to the same products and services of other individuals or organisations. The use of specific words such as "first", "only", "best", and "number one" or their equivalents without any legal proof in conformity with the regulations of the Ministry of Culture, Sports and Tourism will also be forbidden, as will be the placement of marketing materials on telephone poles, light posts and in public green spaces.
Under the law, foreign individuals and organisations operating in Viet Nam are entitled to advertise their own products and services in accordance with the law. They may co-operate with local marketing firms in the form of joint venture or business co-operation contracts (BCCs) pursuant to the Law on Investment. Foreign marketing enterprises are entitled to establish representative office in Viet Nam but are not directly entitled to offer marketing services.
The Law on Advertising takes effect next January 1, replacing the 2001 Ordinance on Advertising.
New law governs price control measures
The National Assembly passed the Law on Prices on June 20, designating a list of 11 types of goods subject to price stabilisation or subject to prices/rates set by the State, e.g., electricity and petrol and groundwater. Under the law, enterprises shall at their own discretion decide the price list, compete on prices, but still being controlled of the State. In comparison with the 2002 Ordinance on Pricing, the Law on Prices has extended the scope of price assessment. The law takes effect next January 1.
Quang Ngai salt factory to be sold
Dinh Thi Loan, vice chairperson of the central coastal province of Quang Ngai's People's Committee, has signed a decision to sell the Sa Huynh Salt Factory with a starting price level at VND3.2 billion (US$152,400).
The factory has total investment capital of VND5 billion ($238,000). In 2010, it had to halt operations due to inefficient activities.
Sales of PCs, refrigerators rise
Sales of electronic, refrigeration and computer products were up last month from May, according to retailers.
HCM City-based electronics retail chain Dienmay.com said sales of most of its products had increased in June, but that of electronic products doubled.
Other retailers said sales of electronic products increased by 20-30 per cent on the back of a spike in demand for TVs during the EURO 2012 football tournament.
Even large-size TVs of 50 inches and above, whose sales are usually modest, saw demand jump, according to a Ministry of Industry and Trade bulletin on the electrical, electronic, and computer sectors.
But TVs of less than 32 inches accounted for the lion's share.
Sales of refrigeration products increased by around 5 per cent, laptops by 5-10 per cent, and tablets by 20 per cent.
The iPad 2012 has appeared in Viet Nam and is a major factor in the increase in tablet sales.
Book promotes local investment
A book on investment promotion in Viet Nam's northern and central regions, written in 3 languages: Vietnamese, English and Japanese, has been released by the Viet Nam Invest Network JSC. The book focuses on the domestic and international investors community.
It provides information on infrastructure, human resources, the socio-economic situation and policies in Viet Nam's industrial and economic zones. More research is being conducted in the south for a complete look at the country's prospects.-
Shrimp exports surge in first half
Minh Phu Seafood Joint Stock Corporation (MPC), Viet Nam's biggest exporter of shrimp products, reported exports of 14.98 thousands tonne in the first half of the year worth US$179 million, marking a year-on-year increase of 33.8 and 33.3 per cent in volume and value terms respectively.
Of that, the US was the largest buyer with 32.22 per cent , followed by Japan and South Korea.
The corporation is also looking forward to developing the market in China. Its export turnover this year is estimated to reach $1.1 million.
Shrimp material prices in the Mekong Delta have fallen by VND30,000 - 40,000 ($1.4 - 2) to VND130,000 - 150,000 a kilogramme, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP), and demand is decreasing.-
Small enterprises lack voice in reform process
Although both national and foreign enterprises played a role in the economic reform in Viet Nam's provinces, small enterprises tended to be marginalised from the process.
This was one of the findings of research on the economic reform's drivers jointly conducted by the UK Institute of Development Studies and the Viet Nam Chamber of Commerce and Industry in four provinces of Bac Ninh, Hung Yen, Dong Thap and Ca Mau.
According to chamber general secretary Pham Thi Thu Hang, small enterprises found it difficult to engage in the reform process and felt government officials prioritised large enterprises.
The research found that small and medium-sized enterprises (SMEs) had very little influence on the reform process while big firms were influential but only over issues of their concern.
The situation could be clearly seen in Ca Mau Province whose authorities had a low opinion of the potential or actual role of the SMEs in the local economy.
Hang said one of the reason was that priority given to large enterprises would provide opportunities for complementing government officials' formal income with informal charges.
"This raises the question of whether personal enrichment is a hidden driver of economic reform," Hang said, stressing that the financial gain based on corruption ties would likely hinder the reform.
"Still, the evidence is not very clear in Viet Nam."
Hang said that most respondents of the research were reluctant to engage in discussions of this topic and those who were willing to answer admitted that the families of public officials often gained financially from large-sized firms.
The report also pointed out that the ignorance of SMEs among public officials was due to the weakness of business associations which drew little participation from large firms.
Participating in these associations was time consuming to large enterprises which found it easier to exert influence by contacting government officials directly and individually.
"Large firm bias and ignorance of SMEs were barriers slowing down the economic reform in provinces," Hang said.
Meanwhile, institute legal department deputy director Dau Anh Tuan said it was controversial that decentralising government was criticised for leading to wasteful public investment which would block the reform.
Most informants of the research said there was visible evidence of wasteful public investment with too many airports, seaports and industrial zones built in the country but with low utilisation and rice fields destroyed to be converted into golf courses.
A representative from Dong Thap Department of Investment and Planning also pointed out that seafood and feed processing were key industries of the provinces with 42 projects and a total investment of VND5.1 trillion (US$243 million). However, these projects operated at 50 per cent of their capacity only, causing a huge waste.
The researchers suggested the role of the private sector needed better attention in the economic reform process in Viet Nam's provinces, saying that reform happened fastest in places where government had a good understanding of the problems hitting the private sector as a whole without the division of large and small enterprises and was responsive to their needs.
The enhancement of government officials capacity and the private sector's organisation would contribute to the success of the economic reform, experts agreed, while still highlighting both formal and informal dialogue between the private sector and government.
Firms seek support to maintain export growth
"Drastic and comprehensive" measures are needed to solve difficulties faced by enterprises so that export growth can be maintained for the rest of this year, Deputy Industry and Trade Minister Nguyen Thanh Bien said yesterday.
He was speaking at a meeting held in HCM City to review export performance in the first half of the year and identify measures to boost it in the remaining six months.
Bien said the world economic downturn and EU debt crisis have adversely affected shipments of the nation's key export items. Many enterprises did not have enough export orders, especially long-term ones.
Importing countries have increasingly applied trade barriers on Vietnamese products, causing more difficulties for local firms that were already suffering from high interest rates and falling demand in export markets, he said.
Exporters will continue to face difficulties in the coming months, he said.
His ministry would petition the Government to fund trade promotion activities both in the domestic market and abroad to help enterprises find outlets for products that Viet Nam has had advantages in producing, Bien said.
He called for close co-operation among associations, industries, trade promotion agencies and Vietnamese trade offices abroad in carrying out trade promotion activities.
The country will continue to strengthen exports to the Asia-Pacific region, especially China, where there is high demand for many kind of agro-forestry and fisheries products.
The ministry has also drawn out measures to maintain exports of necessary products to the EU market despite the difficulties involved, he said.
Enterprises can now access loans at 11-12 per cent per year, much less than in previous months, Bien said, adding that more than 20 credit institutions that hold more than 90 per cent of market share have cut interest rates on old loans to 15 per cent per year as required by the State Bank of Viet Nam.
"I think this is one of the measures that will ease enterprises' financial difficulties in the remaining months of the year," he said.
However, he admitted that there were still enterprises facing difficulties in accessing bank loans.
Therefore, associations, industries, and localities should review the need for new loans or re-scheduling existing ones, and provide accurate information to banks so that the latter feel secure about providing loans to businesses, he said.
Le Phuoc Vu, chairman of the board of directors of the Hoa Sen Group, said that despite the reduction, interest rates were still high compared to other countries, affecting the competitiveness of local enterprises.
He felt that the Government should consider cutting interest rate further.
In addition, he also asked relevant agencies to strengthen checks on transfer pricing by foreign invested firms to avoid tax losses and ensure a fair business environment.
Delegates at the conference asked tax authorities to review value added tax (VAT) refund procedures.
Despite many difficulties in domestic and export markets, the country still posted encouraging results in the first half of the year, earning US$53.3 billion in export revenues, a year-on-year increase of 22.7 per cent, Bien said.
The country hopes to earn $109.5 billion from exports this year.
Later this month, his ministry will submit to the Government a proposal to support enterprises overcome difficulties in production and export in the remaining months of this year, Bien said.
State audit unearths $1 bln budget loss
State auditing authorities have detected wrongdoings worth an enormous VND21.7 trillion (roughly US$1 billion) from ministries, local authorities, and state-run enterprises, the State Audit Office of Vietnam said Wednesday.
The audit was conducted last year on the 2010 financial reports of 268 businesses under 21 state-owned groups and corporations, the agency said.
The office said the Electricity Group of Vietnam, or EVN, did not make records of a huge sum worth thousands of billions of dong in their financial report, meaning it was totally capable of cutting power prices.
Specifically, EVN ignored the revenues from leasing electricity poles and liquidating power-generating materials, worth VND400 billion, and profits from financial activities and joint-venture with other production sectors, which were valued at VND2.9 trillion.
Such revenues and profits should have been counted to reduce power prices by VND34 per kWh, said Le Minh Khai, deputy head of the State Audit Office.
Khai ordered EVN to review the said revenues and report to the Ministry of Finance.
The audit office also announced that most of the state-run groups of corporations have invested in non-core sectors.
Some have sunk more money into the non-core businesses than their registered capital, while the common ratio stands at 4 – 12 percent for those operating in the cement, shipping, power, and coal industries.
State auditors also found most of the state-owned enterprises as making inadequate contributions to the state budget.
“As of December 31, 2010, they have to pay an additional sum of VND7.5 trillion to the state budget,” the state audit office said.
The state audit report also pointed out that many ministries and departments have been collecting revenues that exceeded the required rates.
For instance, the Ministry of Industry and Trade’s tuition collection exceeded the required rate by VND146.5 billion, while the respective extra amount of the Ministry of Education and Training and the HCMC - National University are VND59.1 billion, and VND37 billion.
The state audit petitioned that the education ministry contribute an addition of VND53 billion to the state budget; HCMC National University, VND24 billion; Vietnam Television, VND12.8 billion; and Hanoi National University, VND7.3 billion.
Meanwhile, the audit also found that all the 34 audited localities have regularly exceeded spending, with 8 provinces and cities surpassing the limit by 25 percent.
The localities have misspent nearly VND800 billion.
The ministries, departments, and localities have inappropriately used their capital and have allocated capital for unqualified projects.
In conclusion, the audit office demanded that the VND21.,7 trillion budget loss be retrieved, and ordered relevant agencies to sanction those who committed violations.
RoK paper: Vietnam enters phase of recovery
Vietnam’s economic policy appears to be bringing about a recovery in growth, said The Korea Herald, one of the largest English-language newspapers of the Republic of Korea, in its July 17 edition.
The article says with monetary and fiscal tools, the Vietnamese economy performed well in the first half of 2012 while Asian economic growth was slow and European and US economies worsened by the day.
It cites several indices such as a 4.38 percent GDP growth in the first six months of 2012, while inflation was the lowest in three years at about 3 percent. Standard & Poor’s Credit Ratings raised its rating of Vietnam from negative to stable, saying that the government successfully took measures to tighten its finances.
The exchange rate is basically stable; the foreign currency liquidity system has been improved; there is an abundant supply of foreign currency from rising exports; the balance of international payments surplus is quite large; and foreign reserves are improved.
In the first six months of 2012, the total export turnover of Vietnam reached more than $53.1 billion, a 22.2 percent increase from the same period the previous year.
Economists also say there is good reason to believe that the Vietnamese economy is in recovery, not at a standstill like in 2011.
”The Vietnamese economy has stabilized. These developments have increased investors’ confidence in the Vietnamese market,” the paper said.
HSBC puts Vietnam insurance business up for sale: sources
HSBC Holdings has put its Vietnam insurance business on the block, sources said, in a deal that could fetch about US$400 million for Europe's biggest bank as it pushes to exit non-core operations globally.
HSBC is seeking buyers for its 18 percent stake in government-controlled Baoviet Holdings, the country's top insurer, and is in talks with Japan's Sumitomo Life for a potential deal, the sources, who had direct knowledge of the matter, told Reuters.
The stake has a market value of $250 million, but HSBC is expecting a hefty premium due to Baoviet's market position and the potential to raise the ownership level at a later stage, one of the sources added.
Unlisted Sumitomo Life is among Japan's four biggest life insurance companies. More bidders could emerge, the sources said, though the names of other potential suitors were not immediately known.
"A few suitors looked at it, though the minority stake makes it less attractive to some," one of the sources said.
HSBC and Sumitomo Life declined to comment.
HSBC has been pulling back from unprofitable markets and businesses as part of a three-year recovery plan. It has already sold 28 businesses, taken 15,000 staff off its payroll, and released about $55 billion in risk-weighted assets under the plan.
The planned exit from Vietnam comes four months after it sold its global general insurance business to AXA SA and Australia's QBE Insurance Group Ltd for $914 million.
Across Asia, HSBC owns and operates insurance businesses in India, Taiwan, Malaysia, South Korea, China, Singapore and Hong Kong, of which, Hong Kong is its biggest. It also owns a 16 percent stake in China's Ping An Insurance, valued at about $11 billion.
HSBC paid a total of $360 million to buy the 18 percent stake, which was acquired in two tranches in 2007 and 2009.
Under the deal struck in 2007, HSBC committed to hold its shares for a minimum period of five years during which it had the option to increase the stake to 25 percent.
Hanoi headquartered Baoviet had more than 5,200 employees, 30,000-plus consultants and more than 130 branches, according to a fact sheet dated March 2011 posted on its web site.
Vietnam's rapidly growing economy is attracting foreign insurers. In May, Canada's Sun Life Financial Inc formed a joint venture with Vietnam's PVI Holdings, allowing the Canadian insurer to sell insurance products.
Vietnam has 29 non-life insurers and 14 life insurers, according to an April report from insurance ratings agency A.M. Best. Total insurance revenue rose 21.6 percent to 37.5 trillion dong ($1.8 billion) in 2011, according to the report, which cited statistics from the Association of Vietnamese Insurers.
A combination of low insurance penetration – in both the life and non-life insurance markets in Vietnam penetration is less than 1 percent, according to the A.M. Best report – and a growing middle class could make it attractive to insurance companies forced to look outside of their home markets for growth.
Vietnam's real GDP grew by 5.9 percent in 2011, according to the International Monetary Fund. Its growth is forecast to ease a bit this year and then speed up again in 2013.
However, high inflation could hurt consumer spending and make it difficult for insurers to sell policies. Inflation in Vietnam, the highest in Asia last year, peaked at 23 percent in August, and the rate for all of 2011 was 18.58 percent, though it has moderated recently.
($1 = 20850.0000 Vietnam dong)
Yet another bank says no to Vietnam coins
Nguyen Thi Tuyet Mai, residing in Ho Chi Minh City’s District 3, Tuesday brought a handful of Vietnamese coins to a bank branch, hoping to exchange them into banknotes, but eventually had to go home with disappointment.
The Ban Co transaction office of the Bank for Agriculture and Rural Development, commonly known as Agribank, told Mai that the coins are no longer used in the markets, and redirected her to its headquarters for the exchange.
Mai said the coins are worth only several hundred dong, which is too small a sum. (VND100,000 = US$5)
“The coins were given to me as change by bookstores, supermarkets, and post offices, so why can’t the bank just accept them?” she told a Tuoi Tre reporter in anger.
But this is not the first time a coin holder has been turned down by a bank over their bid to exchange the metal into paper notes.
Earlier this month Bui Van Duc, a bus driver, was also rejected by a transaction office of Asia Commercial Bank as he attempted to pay part of his loan interest in coins.
The bank turned his metal payment down and told him to exchange them for paper banknotes at the State Bank of Vietnam, he told Tuoi Tre later.
Officials from the central bank asserted that Vietnamese coins are still eligible for circulation, and any refusal to receive payments in coins is against state regulation.
In late 2003 the government reinstated the coins in a bid to increase automatic payment for vending machines.
The new coins, in denominations of VND200, 500, 1,000, 2,000, and 5,000, initially captured local residents’ excitement for their reappearance after many years, but soon appeared to be troublesome as the metal easily drops out of pockets or becomes tarnished.
No new coins have been made since 2010 due to rising steel prices, which made it costlier to produce coins than polymer banknotes.
The coins today, especially those in denominations of VND200 and 500, are also of little use as consumer prices have soared.
In late May it was rumored that the central bank would recall the Vietnam dong coins and stop their circulation, a myth that was immediately dispelled by the central bank.