More than 30 percent of traders near the Tan Thanh Border Gate with China in the northern province of Lang Son have shut down recently after customers turned their back on Chinese products en masse.
The Dong Dang – Lang Son Border Gate management board said 343 out of 1,100 small traders had shut shop.
Nguyen Van Nhi, who has been selling electronic goods at Tan Thanh for 10 years, attributed the slump in sales to the narrowing gap in prices between Chinese and Vietnamese products.
Dinh Van Thu, another trader, said his sales had dropped by 40 percent this year.
Vi Thi Bich Ky, a trade expert at the Center for Tan Thanh Border Gate Development, said many domestic manufacturers were now strong enough to compete with the Chinese.
HSBC Vietnam named best foreign commercial bank
HSBC Bank (Vietnam) Ltd has been awarded the title of Best Foreign Commercial Bank in Vietnam by FinanceAsia, one of Asia's leading banking and finance publications, for the 6th time in a row.
Despite strong competition from other international players in an increasingly sophisticated finance and banking market, HSBC scooped the title with strong investment and efficient operations which has contributed to Vietnam's long-term economic growth.
Against many rising difficulties of the economy in general and the finance and banking market in particular in 2010, HSBC expanded its product offerings to SMEs and individuals and increased the number of credit cards in force by 99 percent over the previous year.
"HSBC, as the largest international bank operating in Vietnam, is committed to working with the State Bank of Vietnam to help the country's economy to develop. One of HSBC's key objectives is to support the evolving needs of our personal and corporate customers and HSBC is committed to doing this by introducing the highest quality products and services to the Vietnamese market" said Sumit Dutta, chief executive officer of HSBC Vietnam.
The bank has made a conscious decision to bank Vietnam's middle and large corporate segment, focusing on those actively involved in international trade.
Besides, HSBC has invested in the retail segment where a number of key personal banking products were launched in 2010 include more convenient Internet Banking solutions, HSBC's Premier Banking proposition and ongoing additions to HSBC's full suite of services.
New online library for social causes unveiled
Socialmarketing.vn, a non-profit website to promote social campaigns, has been launched to provide news and forums on social projects across Vietnam.
The online library aims to promote social causes and help to create at a better society by introducing 61 campaigns and projects from 30 agencies and organizations from 20 countries across nine categories.
They include education for development, public health, children rights, poverty eradication, family violation, HIV/AIDS and abortion, transportation issues, green marketing, and climate change.
Information about the projects will be updated on the website on a quarterly basis.
The projects are supported by experts, state agencies, corporate companies like Viet Kings, VietnamMarcom, red brand builders, NYF, Adfest, Pepsi, Prudential and other well-known branding and marketing agencies and individuals.
The online library's aim is to enable everyone in Vietnam who wants to contribute to society to do so.
"The red team looks for opportunities to 'give back' to the local community in meaningful ways. We believe our team's support in creating and developing www.socialmarketing.vn will not only help improve Vietnamese lives but also raise the standards in the branding and marketing industry across Vietnam," said Chris Elkin, managing director of Red Brand Builders.
Red Brand Builders, a branding consultancy and marketing agency specializing in building and marketing brands for some of the largest brands operating throughout Vietnam.
It has recently opened an office in Melbourne, Australia.
Red clients include Phu My Hung Corporation, Unilever, Coke, VinaCapital, Apollo Language School, FPT, VinaMilk, Dulux and Liberty Insurance.
Xpress Money in tie with Vietnamese lenders
Xpress Money has announced tie-ups with Vietnam International Bank (VIB) and DongA Commercial Joint Stock Bank.
The new agreement between VIB and Xpress Money will offer overseas workers the advantage of sending money to their dependants to 130 locations in Vietnam.
The beneficiaries can collect the money in US dollars.
The deal between DongA Commercial Joint Stock Bank and Xpress Money will bring about the special feature of home delivery of remittances in addition to the already existing counter pick up of instant money transfer services in Vietnam.
The beneficiaries also have a choice to collect the remittance in US dollars, Vietnamese dong or euro currency from any of the more than 200 locations in 61 cities and provinces of the bank in Vietnam.
The agreement with both VIB and DongA Commercial Bank is in line with the Xpress Money's goal to expand our network and build our strength via strategic tie-ups with big international financial organizations.
"Vietnam is a growing market with more than 4 million Vietnamese living and working across 100 countries worldwide. Our agreement with Vietnam International Bank and DongA Commercial Joint Stock Bank is part of our mission to bring instant money transfer service within the reach of every citizen on this planet," said Sudhesh Giriyan, vice president of Xpress Money.
Xpress Money Services Limited is the fastest growing instant money transfer company with a thriving presence in more than 90 countries across 80000 agent locations worldwide.
US firm appointed to sell Metroplex project
Vina Capital Real Estate, Vietnam’s largest real estate developer, has appointed Cushman & Wakefield to sell its Metroplex project in Phu My Hung Township in Ho Chi Minh City’s District 7.
The development site of the 9-floor Grade-A office building with 14,000 net square meters is located off Nguyen Luong Bang Boulevard, one of the main arterial road links through the township.
It site is located within a stone’s throw from key landmarks including the Parkson Department store, Saigon Exhibition and Convention Center and the Crescent Mall.
The building, the first of its kind in Vietnam being constructed to LEED certification - new standards in environmental and efficient design, will complete within 18 months of the building’s pre-sale, or alternatively when 40 percent of all floors the have been sold.
Vina Capital is seeking a buyer for the whole building, but will also consider selling individual floors.
“In recent years there has been a significant increase in office occupiers relocating from the District 1 & 3 to Phu My Hung to benefit from lower occupancy costs, reduced traffic congestion and the wealth of amenities which Phu My Hung has to offer,” said Robert Johnston, Associate Director of Cushman & Wakefield.
“Key examples of this trend include Unilever and Manulife who have relocated their headquarters to Phu My Hung during the last 3 years,” he added.
Cushman & Wakefield, founded in 1917, is the world's largest privately-held commercial real estate services firm with 234 offices in 61 countries and more than 13,000 employees worldwide.
Vietnam borrows $2.5 bln in H1: ministry
Twenty-two loan and aid agreements totaling more than $2.5 billion were signed and negotiated during the first half of this year in the field of electricity, transport, and hospital, according to the Ministry of Finance.
The ministry said as of June 18, Vietnam has signed 14 agreements with a total commitment value of over $1.26 billion, of which, the biggest agreement is the $420 million loan from Japan to build two expressways and then another $307 million loan to build Metro No.2 in Ho Chi Minh City.
The remaining 8 agreements are worth $1.25 billion, of which, the biggest was the $350 million loan from the World Bank (WB) to reform public investment in the second phase and followed by the $300 million agreement from Asian Development Bank (ADB) for Hanoi urban railway crossing Nhon-Hanoi Railway Station.
These loans are in the form of official development assistance (ODA) and preferential or commercial loans via non-government organizations (NGOs), investment funds or banks.
Also according to the ministry, till the end of June, there have been two more preferential agreements being negotiated and signed with China Eximbank for Mao Khe thermal power plant and Vinh Tan 2 thermal power project with a total value of nearly $750 million.
Some big preferential loan agreements are being negotiated including loans from Russia for Ninh Thuan nuclear power plant worth $7.7 billion and another loan agreement from Japan for nuclear power plant No.2.
Litchis sold dirt cheap due to Chinese dependence
The bumper litchi harvest in Luc Ngan District of the northern Bac Giang Province this year does not mean profits to farmers as prices have slumped due to farmers’ heavy dependence on Chinese traders for output.
Litchi nuts in Luc Ngan now fetch only VND5,000 a kg, a price which Le Thi Lieu, a farmer in Phuong Son Commune, said is only enough to buy two glasses of ice tea from the street vendors.
“The price has dramatically dropped from VND13,000 a kg last year,” she lamented.
With such throwaway price, some farmers have opted to dry their litchis and export them to China instead of selling the fresh fruits to traders, mostly Chinese.
Pham Van Tu of Hong Giang Commune has built a litchi drying facility in his garden which could produce one ton of dried litchis from 3 tons of the fresh fruits every day.
Besides using his own fruits, Tu has also bought fresh litchis from other farmers at VND4,000 a kg.
Since dried litchis cost VND25-30,000 a kg in China, Tu says he earns VND25-30 million everyday.
“After subtracting VND10-12 million for buying fresh litchis, I’m earning better with dried litchis than with the fresh one,” he said.
Chu Van Bao, head of the district’s Agriculture and Rural Development Office, said farmers in Luc Ngan heavily rely on the Chinese market for their litchi outputs.
He said Chinese traders would buy 60 percent of the 100,000 tons of litchi harvested in Luc Ngan this year.
They would come to buy directly from farmers at their gardens, and only choose the best products, he said.
Hai Bich, a mediator for Chinese traders, said that farmers cannot decide the price.
“The Chinese traders always bargain with farmers, and manage to buy at dirt cheap prices,” she said.
Petrolimex insurance arm sets July 29 share debut
Petrolimex Joint Stock Insurance Co, the insurance arm of Vietnam's top oil products importer Petrolimex, will make a domestic share debut late this month, the company said on Thursday.
The Hanoi-based firm, also known as Pjico, is the fourth largest non-life insurer by revenue in Vietnam, where insurance penetration rates are low and premiums are rising.
Pjico will list all of its 70.97 million shares representing its registered capital of VND709.74 billion (US$34.5 million) on the Ho Chi Minh Stock Exchange on July 29, it said in a statement.
It has set a starting price at VND12,800 ($0.62) each, which valued the firm at around $44 million.
Pjico's share debut will follow Petrolimex's initial public offering set for July 28, at which Pjico's parent firm aims to raise at least $20 million from selling nearly 27.43 million shares, or 2.56 percent of the firm's registered capital.
Share listings in Vietnam often follow initial public offerings of stock by months or even years.
Pjico, owned by eight investors including Petrolimex, Vietcombank, Vietnam Steel Corp and Vietnam National Reinsurance Corp, had an 8-percent share of Vietnam's insurance premiums in 2010.
Vietnam's top non-life insurers by market share are Bao Viet Holdings, Petrovietnam Insurance and Bao Minh, which together account for 65 percent of the country's insurance premiums, Pjico said in its prospectus.
Pjico's net profit jumped 40 percent in 2010 to VND63.18 billion as revenues rose 20.5 percent.
Pjico said its 2010 revenues rank the fourth on Vietnam's non-life insurance market comprising 29 companies, with domestic firms accounting for 95 percent of the market share and foreign insurers the remaining 5 percent.
Vietnam's insurance premiums in 2010 rose 48.5 percent from the previous year to VND31.5 trillion, making up only a tiny 1.7 percent penetration rate in the nation's gross domestic product.
It showed Vietnam's insurance market remains "an attractive market segment, promising a high growth," Pjico said.
Pjico has projected 63 percent jump in net profit this year to VND103 billion, but sees annual profit growth slowing to 7 percent in 2012.
"Due to the economic crisis in 2008, in the 2009-2012 Vietnam's insurance market is expected to get a significant hit," Pjico said. The market is expected to see revenue growth of 16.2 percent, with a penetration rate of 2.51 percent by 2012, it said. (US$1 = VND20,550)
6 banks escape State Bank of Vietnam sanctions
Six Ho Chi Minh City-based banks have narrowly escaped being sanctioned by the State Bank of Vietnam after managing to cut their outstanding loans to non-manufacturing sectors to 22 percent by June 30, Ho Huu Hanh, director of the central bank’s city branch, said.
The media cited a source from Mirea Asset Securities Co earlier this month as stating that the six banks that could fail to comply with this requirement were VietABank, Saigon-Hanoi Bank, Western Bank, VietBank, Saigon Commercial Bank, and TinNghiaBank.
Failure to cut the loan figure to 22 percent by June 30 would have required them to double their reserves with the central bank.
They would have had to set aside around VND5.2 trillion (US$252.9 million) for this besides being prohibited from expanding operations until the end of 2012, SBV governor Nguyen Van Giau said.
HCM City annual sale month in September
Ho Chi Minh City will celebrate its annual sale month from September 1 to 30 with more than 700 apparel, food, electronics, and other home appliances sellers taking part this year.
The number is around 10 percent up from 2010, with all of them offering discounts and other promotions.
Among them are the Coop-mart, Citimart, and Maximart supermarket chains, electronics showrooms like Nguyen Kim and Vien Thong A, and food producer Vissan.
Vietnamese, Chinese contractors ink tender contract
The Dak Drinh Hydropower Plant Joint Stock Company of Vietnam and the Dongfang Electric Corporation of China on July 13 signed a contract worth US$15.5 million on supplying equipment, materials and technical services for the Dak Drinh Hydropower Project.
Under the packaged contract, the Dongfang contractor will implement the tender within 30 months, ensuring progress of supply for the project.
With a total investment of VND3,423 billion ($166 million), the high priority electricity project is part of the national power development plan approved by the Prime Minister.
The project has seen construction in areas of Son Tay District of the central province of Quang Ngai and KonPlong District of the Central Highlands province of Kon Tum.
Once completed and put into full operation in December 2013, the plant with a capacity of 125 MW will provide the national grid with more than 540 million kWh per year, increasing supply sources of electricity in the central region and improving infrastructure in the two districts.
Since starting operations in Vietnam in 2003, the Dongfang Corp. had participated in the hydropower plants of Dak Mi, A Luoi, An Khe-Ka Nak, Ban Ve and Song Ba Ha in Vietnam.
Handicraft, wood industry to meet $4.2b export target despite hiccups
Despite many difficulties, the handicraft and wood industry has been making efforts to reach the Government's export target of US$4.2 billion for the year, an industry official has said.
Speaking at a seminar on the industry in HCM City yesterday, Huynh Van Hanh, deputy chairman of the Handicraft and Wood Association of HCM City (Hawa), said that as much as 70 per cent of enterprises involved in the wood processing industry were small, with investment capital of less than VND1 billion.
"They are very vulnerable to changes in macro-economic policies as well as fluctuations in the global economy," he said.
The current high bank loan interest rate and an increase in input costs have caused difficulties for enterprises in the sector, especially for small – and medium-sized ones, he said.
Hanh said the wood industry estimated to need roughly 10 million cubic metres of timber a year, of which domestic production could provide about 4.8-5 million cubic metres.
Thus, roughly 4-5 million cubic metres of timber should be imported to meet the sector's demand.
In the past few months, the cost of imported wood materials had surged 15 per cent. Imported chemicals used in wood processing have also gone up by 30-40 per cent, he said.
With export prices remaining the same while production costs were increasing, many wood product exporters had decided not to sign new export contracts.
Hanh said the cost of timber would also increase to obtain legal timber sources, under the EU's Forest Law Enforcement and Governance and the US's Lacey Act, which banned the import of any wood products made from illegally harvested timber.
Enterprises would take high risks since they were highly dependent on imported timber and plywood, he said, adding that they needed to know clearly about their timber sources.
Hanh said the Government should offer preferential interest rates on bank loans to support production enterprises.
During this difficult period, businesses should economise on the use of raw materials during their entire production process to cut costs, and to restructure to increase productivity, he said.
Viet Nam earned more than $3.4 billion from exporting handicraft, wood and wood products last year.
There are more than 2,500 wood processing firms employing 250,800 workers in the country, located mainly in HCM City and southern Binh Duong, Dong Nai and central Binh Dinh provinces.
The seminar was co-organised by the Viet Nam Chamber of Commerce and Industry in HCM City, Hawa and Dun&Bradstreet, a provider of global business information, tools and insight.
Retail space in downtown lucrative, say market consultancies
The real estate market consultancy CB Richard Ellis or CBRE says in a report that retail space in Hanoi was booming in the first six months of the year.
The area of retail space in the capital city increased nearly 31 percent, an equivalent of 129,300 square meters thanks to the debut of Pico Mall and the expansion of the Parkson Viet Tower.
The two shopping centers, which are both located in Dong Da District, contributed nearly 25,000 square meters to the total retail space area in Hanoi.
CBRE expects the capital’s retail space supply will soar on the debut of the shopping mall Hang Da Galleria in Hoan Kiem District, Landmark 72 in Cau Giay District, Savico Mega Mall and Vincom Center Long Bien in Long Bien District.
The total area of those shopping malls is expected to reach 206,400 square meters.
Despite the profuse supply, retail space rent in Hanoi is on a rise, increasing around 8 percent year-on-year to US$47 per square meter.
Survey conducted by another property market consultancy Savills Vietnam show the rent in Ho Chi Minh City followed a similar pattern in the second quarter, rising 5.8 percent to $109.35 per square meter.
There are 93 shopping centers with the total area of 630,000 square meters in HCMC, which is expected to extend by 500,000 square meters at yearend, according to Savills Vietnam.
The UK-based property consultancy predicts retail space demand in downtown of the southern hub looks set to soar on the fact that many foreign retailers are planning to enter the city.
Analysts say the demand is very high as the ratio of retail space per person in 24 districts of HCMC remains low.
CBRE Vietnam general director Marc Townsend says retail space area in downtown rose 10-15 percent from last year, making up 41 percent of the total area in the city.
Demand for retail space in downtown remains high in spite of expensive rent as the center areas of the town is very good for business, according to Townsend.
Vu Minh Phu, chairman of the Hanoi Supermarket Association, says a lucrative shopping mall requires a reasonable rent, attractive place for visitors and good customer services.
While retail spaces in downtown of cities are completely occupied, ones in suburb areas struggle to attract leaser.
The shopping center Grand Plaza in Hanoi’s Cau Giay District has just a few visitors daily after having opened for one year. Thus retailers hesitate to rent spaces at the mall despite its low monthly rent of $30-80 per square meter.
Efforts to attract customers have seen owners of the mall release many promotion packs, such as 50 percent rent reduction for the first year, 40 percent reduction for the second year and 30 percent for the third.
Lending rate remains high despite declining deposit rate
Lending interest rate has retreated slightly despite dropping depositing rate, leaving many businesses hesitating to borrow from banks.
High interest rate on dong deposits showed signs of cooling this month as inflation retreated and banks’ liquidity was getting better.
However, statistics show lending rate for businesses has edged down to around 20-22 percent per annum.
Banks with credit growth rate of below the central bank’s cap of 20 percent still charge individual borrowers at 25-28 percent per annum.
“The government retains the tight and cautious monetary policy in the last six months of the year. Therefore, interest rate will drop only on a declining consumer price index (CPI),” says Dr. Tran Du Lich, member of the National Advisory Council for Financial and Monetary Policies.
“Commercial banks look set to gradually cut expenses in order to reduce interest rate from this month. However, we cannot expect the rate to sharply decrease to 15-16 per annum.”
Many lenders have admitted that the lending rate relied on the open-market-operation (OMO), Lich notices.
Do Lam Dien, deputy director of Maritime Bank, says the lending rate will hardly drop instantly since the bank earlier paid depositors high interest rates.
However, the Hanoi-based lender will offer corporations loans with preferential rates from now on to the rest of the year, including unsecured loans and asset mortgages, Dien says.
DongA Bank is considering cutting lending interest rates offered to regular customers, says Nguyen Thi Ngoc Van, deputy general director of the HCMC-based bank.
Figures from the State Bank of Vietnam show credit to agriculture, rural development and export sectors were gradually rallying at the end of last month, rising to around 20 percent per year from 16.5-17 percent per year.
Financial experts say although the liquidity was improved, lenders will be unable to boost credit growth since they already reached the government’s cap.
Thus many banks, especially small-cap ones, are eager to offer long-term loans on the interbank market.
Small lenders are overtaking large ones to attract more depositors as they offer interest rates on negotiable basis, an official from Vietcombank, who wishes to be unnamed, discloses.
Depositors will hardly be attracted by depositing rate of 14-15 per annum as inflation reached 14 percent in the first six months, says Dr. Le Tham Duong from the HCMC Banking University.
The government has tightened monetary policy and set a series of targets to help stabilize an economy facing challenges including its struggling currency -- the dong -- and a trade deficit.
Among its goals, the government wants commercial banks to keep growth in credit, or loans, to below 20 percent this year.
Car importers face threat of closure
Car importers face an imminent threat of closing down their businesses, with the implementation of new stricter regulations on car imports, increase in import tariffs on used cars and the expected 20 percent rise in registration tax by August.
According to Circular 20 sent by the Ministry of Industry and Trade, for import of new cars, dealers must have either one of the following documents: authorization of a genuine manufacturer, authorized agent contract approved by Vietnamese diplomatic missions in related countries and warranty and maintenance certificates issued by the Ministry of Transport.
Many automobile importers having contracts signed before the regulatory date have sent requests to the Ministry of Industry and Trade with no response as yet. Nguyen Thanh Bien, deputy minister of the above Ministry said that officials are checking all related receipts and documents and hence unable to reply.
Nguyen Chi Trung, owner of a used car salon on Le Van Luong Street in Hanoi, said that additional papers required under Circular 20 were challenges as unauthorized car dealers cannot sell established brands like Mercedes-Benz, Audi, BMW, Toyota, Ford, Nissan, Hyundai and Kia who have their own official distributors in Vietnam. As a result, unauthorized car dealers may have to shut shop or declare bankruptcy, placing the market in the hands of local automobile assembly manufacturers.
The only market that unauthorized automobile dealers can function in is the used car market. Though this too does not seem practical since only a month ago the government decided to increase import tariffs on used cars, with the exception of two cylinder ones less than 1liter or 1.5 liter (taxed US$3,500 and US$8,000 respectively).
Accordingly, nine seater cars below 1.5-2.5 liter capacity are under the same import tariff as a new model with $5,000 tax. The 2.5 liter or more capacity car has an added $15,000 tax.
The luxury line of cars such as Maybach, Rolls Royce, Bentley, Audi, Lexus, BMW and Mercedes-Benz sell at a much higher and sometimes unacceptable price from $50,000-500,000 after tax.
Under the circumstances, unauthorized car dealers such as Nguyen Duc Nam, director of automobile salon Nhat Anh on Cau Giay Street in Hanoi has no option but to switch to used car selling which does not have a significant profit margin, after the tax rise expected on August 15.
Adding to the already problematic automobile market, the government has just announced a 20 percent rise in registration tax effective September 1.
Many customers are now concerned whether they can make a deal before September 1 or not and whether they will have to pay more.
Data from Vietnam Automobile Manufacturers’ Association on July 9 showed that the total number of cars sold in June was 7,611, only 50 cars fewer than in May. The numbers of MUV and tourist cars sold in June were 1,389 and 2,871 respectively, which are 107 and 666 cars more than in May.
According to the General Statistics Office of Vietnam, the total number of imported cars in June were 4,800 (worth US$225 million), 500 cars less than in May. However, the quantity of nine seater cars increased drastically as dealers raced to import cars before the closure date of June 26.
According to economic experts, from July onwards, the number of cars imported into Vietnam will decrease considerably due to the new Government rules and the increase in registration tax. Only towards the end of the year will the market become buoyant again.
Banks concerned US dollar supply not meet up demand
Many lenders are concerned about the gap of the US dollar supply and demand as they struggle to mobilize the greenback, while lending demand remains very high.
Financial experts say many people converted their dollar deposits to dong after the state bank cut the greenback rate cap to support the local currency.
The State Bank of Vietnam lowered the rate cap on dollar deposits by individuals to 2 percent from 3 percent, and cut the limit for institutions to 0.5 percent from 1 percent, starting June 2. Banks have also been ordered to set aside more dollars as reserves.
Figures from the central bank show dollar deposit growth of commercial banks last month declined 3.6 percent from May’s close and moved up slightly 9 percent year-on-year.
Phan Thanh Hai, an official from GiaDinh Bank, says dollar depositors favor short- and unfixed-term deposits, while no one deposits their money in the bank for six months or more.
Dollar lending growth, however, rose 2.4 percent from May’s close and sharply increased 23.5 percent year-on-year.
Many lenders have even loaned an amount, which makes up 140-150 percent of their total deposit. Others have paid dollar depositors interest rates on negotiable basis, which are higher than the government’s cap.
A Ho Chi Minh City-based bank offers depositors with short-term deposits worth more than US$10,000 interest rates, which are higher than the cap by 1-1.5 percent per annum, the director discloses to Dau Tu Tai Chinh Newspaper.
Interbank rates on dollar loans showed signs of slightly rising across the board last week, the central bank says in a report.
Overnight rate for interbank electronic payments edged up 0.16 percent to 0.85 percent per annum, while fixed rates ranged from 1.48 percent per annum to 3.3 percent per annum, according to the state bank.
Many banks say despite the slowing deposit growth, dollar lending demand of institutes remains very high as rate on dollar loans amounts to 6.5-8 percent per annum, which is more attractive than dong lending rate of 18-22 percent per annum.
Many businesses also favor greenback loans as they expect the dong-dollar exchange rate will be stable until the end of the year.
However, banks are encouraging dollar borrowers to convert their debt into the local currency in order to stabilize the greenback supply and demand.
Director of a joint-stock bank, who wishes to remain unnamed, says borrowers who want to convert their debts in dollar into dong will be offered a dong lending rate, which is lower than the common rate by 0.5-1.5 percent per annum.
Banks also raised buy rate of dollar last week in an effort to meet up the increasing demand for the greenback of institute borrowers, whose debts are coming due.
Mekong Delta to increase rice output
The Cultivation Department laid out its plans, at a conference hosted by the Ministry of Agriculture and Rural Development yesterday, to increase the rice output for the coming autumn-winter crop in the Mekong Delta Region of Vietnam.
The department is targeting 24.5 million tons this year, an increase of nearly one million tons over the last year.
At the same conference held in Can Tho City, the Plant Protection Department said that the current summer-autumn crop was plagued by brown grasshoppers, yellow dwarf and blast diseases that have increased compared to last year.
Bui Ba Bong, deputy Minister of Agriculture and Rural Development ordered the Mekong Delta to take measures to deal with the diseases affecting the rice crops and also reinforce the dyke system to ensure a bumper autumn-winter harvest.
He said that the health of the crops would determine the rice production targets. Rice must reach a target of 500,000 tons this year.
The Government has agreed to assist the Mekong Delta Region with funds to help increase its autumn-winter rice cultivation area.
Spain to fund building metro in HCMC
Spain will be supporting the construction of the first stage of a metro line from Bay Hien crossroad to Saigon Bridge in Binh Thanh District in HCMC.
Jose Carlos Garcia de Quevedo Ruiz, Director General for Trade and Investment in Spain stated this at a joint meeting with Nguyen Thanh Tai, Deputy Chairman of the People’s Committee of Ho Chi Minh City.
He said that Spain will also support the technical management of the metro line and help seek other foreign investors for the project.
The city’s urban railway system has six metro routes, of which metro line 1 runs from Ben Thanh Market in the city center to Suoi Tien in District 9, financed by the Japan Bank for International Cooperation. The other metro line 2 runs from Ben Thanh Market to An Suong Bus Station in Hoc Mon District and is funded by the German Reconstruction Credit Institute, the Asian Development Bank and the European Investment Bank.
August pork prices expected to slip
New pork prices are set to be introduced during the last five months of this year, according to the head of the Livestock Breeding Department, run by the Ministry of Agriculture and Rural Development.
Hoang Kim Giao, addressing a meeting in the capital yesterday, confirmed that, starting from the end of August, pork prices would slip by 10-15 per cent due to farmers having inefficient time to expand their pig herds.
In order to reach such a goal, Giao said that the ministry would establish a price stabilisation fund to support companies and farmers both financially and technologically.
At present, pork prices have been climbing by up to 70 per cent caused by high demand.
RoK businesses eye opportunities in Quang Ngai
A delegation of diplomats from the Republic of Korea (RoK) Embassy in Vietnam and businesses paid a working visit to the central province of Quang Ngai on July 14.
The delegation, led by Ambassador Ha Chan-ho met with provincial leaders to learn about the province’s socio-economic development and its major targets in the future.
The Chairman of the Quang Ngai Provincial People’s Committee Cao Khoa said the province attaches importance to industrial development, and is keen on attracting more RoK investors.
He spoke highly of contributions by RoK-invested Doosan Heavy Industries Company Vietnam (Doosan Vietnam) in generating jobs for local people, and for its charitable activities.
RoK Ambassador Ha Chan-ho, for his part, said the visit aims to explore the province’s policies on investment and foreign investors, especially those from the RoK.
Almost 2,000 RoK businesses are currently operating in Vietnam, with over 80 percent in Ho Chi Minh City and southern provinces, 20 percent in northern provinces and the central region, which employ a total of more than 500,000 Vietnamese workers, the diplomat said.
He said he was very impressed by the investment environment in central Vietnam, especially in Quang Ngai province. The RoK diplomat cited the robust growth of Doosan Vietnam as an example, which will contribute more to Quang Ngai’s socio-economic development.
Vietnam, Laos seek to cooperate in economic corridor
Lao Deputy Prime Minister Thoongloun Sisoulith on July 14 met with a Vietnamese delegation doing a survey on economic corridor in the Greater Mekong Sub-region.
At the meeting, Vietnamese Deputy Foreign Minister Doan Xuan Hung, who led the delegation, briefed his host on the trip’s outcomes.
During its stay in Laos, from July 7-14, the delegation worked with the Lao Foreign Ministry, the Committee of Water Resources and Environment, the Ministry of Planning and Investment, the Ministry of Energy and Mines and local authorities to study the country’s capacity for cooperation in the Greater Mekong Sub-region and to meet demand for further Vietnamese investment, Hung said.
Deputy PM Thoongloun Sisoulith, who is also Lao Foreign Minister, spoke highly of the mission’s results, saying they would serve investment cooperation between the two countries as well as regional development cooperation, contributing to boosting the comprehensive Vietnam-Laos cooperative ties.
Seminar held to assess ODA-funded projects in Vietnam
The Ministry of Planning and Investment (MPI), in coordination with the Japan International Cooperation Agency (JICA), organized a seminar on July 14 to strengthen capacity of assessing ODA-funded projects in order to promote the country’s economic development.
The seminar aimed to evaluate the efficiency of some projects, especially ODA-funded projects in 2010 in Vietnam.
Representatives from MPI and JICA also shared experiences in providing training courses to improve the capacity of assessing ODA-funded projects in Vietnam.
At the seminar, experts analysed the socio-economic efficiency of the project to build a new terminal at Tan Son Nhat airport.
Both sides also highlighted the efficiency of the project to build Dai Ninh Hydroelectric Power Plant in the southern province of Binh Thuan.
Cooperative programmes between the MPI and JICA have been implemented for four years with important projects such as Hai Van Tunnel, Hanoi drainage project and Ham Thuan-Da Mi Hydroelectric Power Plant project.
Conference to help Vietnamese exporters survive EU trade defense instruments
The Vietnam Chamber of Commerce and Industry and the Multilateral Trade Assistance Project held a conference themed “Updating on Trade Remedies and other Regulations in the EU Recommendations for Vietnamese Exporters” in Hanoi on July 14.
The conference aims to provide Vietnamese businesses with information about the possible changes in the application of trade defense instrument and other trade barriers of the European Union (EU) against impacts from foreign countries.
Experts at the event advised Vietnamese businesses on the measures to avoid and cope with related risks to protect themselves in their export activities.
The EU is now one of Vietnam’s most important markets with a population of 500 million, which imports Vietnam’s key export products such as textiles and garments, footwear, seafood, and wood products.
The EU has so far had 10 anti-dumping lawsuits against Vietnamese exports. The number of lawsuits indicates the high level of risk to be sued in the market, especially when the EU is likely to adjust its trade defense instruments which are considered to be more disadvantageous for Vietnamese exporters.
Vietnam-US Business Forum held in New York
A Vietnam-US Business Forum themed “Doing Business in Vietnam” was held in New York on July 13 by the Vietnam Chamber of Commerce and Industry and the US Chamber of Commerce.
The forum attracted 25 Vietnamese businesses and more than 30 US groups and companies in the fields of banking, finance, capital management, and consultant services.
The Vietnamese ambassador to the US, Nguyen Quoc Cuong introduced Vietnam’s political and socio-economic achievements in recent years and called on US businesses to continue to invest in Vietnam. He gave particular mention to investment in infrastructure development and the building of electric power plants, airports, seaports, highways and telecommunications facilities.
Carmela Mammas, director of the US import-export assistance centre under the Department of Commerce said the forum informed US businesses of many opportunities for potential investment in Vietnam, especially in information technology, insurance, environmental protection, medical equipment, electricity and energy. The US companies should cooperate closely with the centre and Vietnam’s partners to strengthen business activities, Mammas added.
US businesses showed their keen interest in human resource and infrastructure development in Vietnam in the future and praised the Vietnamese Government’s measures to curb inflation and stabilise macroeconomy.
Phung Tien Sy, Vice Director of the Import-Export International Cooperation and General Investment Corporation (GELEXIM), said Vietnamese businesses had a chance to meet with senior officials from the US Chamber of Commerce and introduce them to potential fields in Vietnam.
A similar forum will be held in Baltimore, Maryland in the US on July 14.
Encouraging agricultural cooperation between Vietnam and Sri Lanka
A talk between Vietnam and Sri Lanka was held in Hanoi on July 13, with the aim of reviewing the implementation of a Memorandum of Understanding (MoU) signed in November 2006 and discussing action plans for the next stage.
The event was co-presided over by Vietnam’s Minister of Agriculture and Rural Development, Cao Duc Phat, and Sri Lanka’s Minister of Agriculture, Mahinda Yapa Abeywardena.
Speaking at the talk, Minister Phat focused on the cooperation in tea processing technology, the usage of biological pesticides for plants and the gene exchange of rice, pepper and coffee.
The two sides agreed to promote trade ties, research, expert exchanges and cooperation among international organisations and state-owned and private businesses.
They also agreed to establish a joint agricultural cooperation committee, which will convene every two years to assess the set goals and propose solutions to overcome difficulties during implementing cooperation programmes.
Vietnam bankers confident on profit targets
Several domestic banks have posted positive earnings for the first half of the year and are confident of hitting their profit targets for the year.
HCM Stock Exchange-listed Sacombank, with total assets of 140 trillion VND (6.7 billion USD) as of June 30, posted a profit of over 1.5 trillion VND (72.78 million USD) for the period, representing 56 percent of the year's target. About 83 percent of profits were attributed to interest income on loans.
Sacombank general director Tran Xuan Huy vowed that Sacombank would be able to achieve and even exceed its profit target of 2.7 trillion VND (131 million USD) by the end of the year.
However, Vietcombank chairman Nguyen Hoa Binh said, "It's rather soon and risky to say anything about business results for the whole year." Vietcombank posted a 3 trillion VND (145.56 million USD) profit in the first six months out of the year, against a target of 5.65 trillion VND (274.19 million USD) for the year.
DongA Bank posted a profit of 675 billion VND (32.75 million USD) during the period, putting it on course to meet its target for the year and to pay a planned dividend of 15 percent. General Director Tran Phuong Binh also said that the credit growth of many banks remained well below the credit growth cap for the year, giving them room to expand business in the coming months.
However, An Binh Bank fell behind the pace it needed to maintain to meet its target, announcing a profit of 307.6 billion VND (14.92 million USD) in the first six months, an amount only a little over 46 percent of the year's target. General director Tran Thanh Hoa cautioned that banks needed to improve early forecasting and risk management to counter potential challenges in the tough months ahead.
During a difficult time for the economy, the return-on-equity (ROE) in the banking industry was much higher than in other sectors, said economist Le Tham Duong.
"The story of what banks do to share risks with enterprises should be discussed more seriously," Duong said. "Regulators must ensure economic policies benefit all entities in the economy, rather than grant privileges to the banking sector."
"Banks get many benefits from economic policy." said another HCM City-based economist who asked to remain anonymous. "The deposit interest rate cap, for example, is creating favourable conditions for banks to buy low and sell high."
Deposit interest rates are currently capped at 14 percent while lending interest rate are freely floating at around 19-20 percent./.
Jetstar to launch Singapore-Hanoi route
The Jetstar Asia Airways announced on July 14 that it will launch a new direct route between Hanoi and Singapore later this year.
The service will start on December 15,with a frequency of four flights per week.
From August 18, Jetstar will also increase its daily flights on the Singapore - Ho Chi Minh City route to three.
The Jetstar Asia Airways is a low-cost airlines headquartered in Singapore . It is the Asian offshoot of Qantas’ Jetstar Airways. It operates service to regional destinations./.
VN businesses fight anti-dumping cases in EU
New progress as well as the impacts and influences of anti-dumping and anti-subsidy policies on export goods to the European Union (EU) were discussed at a seminar in Hanoi on July 7.
The seminar was part of the Vietnam Chamber of Commerce and Industry (VCCI) international trade policy and business programme, within the framework of Phase III of the EU-Vietnam Multilateral Trade Assistance Project.
At the seminar, Dr Pieter Jan Kuijper, former Director of the External Relations and International Trade team of the Legal Service of the European Commission, said that the EU has been and is one of the most important export markets for Vietnamese goods.
Vietnam’s export businesses should closely monitor new EU policies and take logical and prompt measures to ensure sustainable development of Vietnam’s exports to the market, he said.
The EU has so far filed 10 anti-dumping lawsuits to take the lead in using this measure against Vietnam’s export goods, said the seminar.
The EU is likely to make considerable changes in regulations imposed on anti-dumping measures, in a complicated and long-term manner, said Kuijper.
It was likely to carry out dual investigations on anti-dumping and anti-subsidy against foreign goods, which, he said, was a new regulation.
At the event, the Trade Remedies Council under VCCI provided consultations to associations and businesses on risks and measures to cope with anti-dumping and anti-subsidy cases and defence overseas.
JICA helps improve project appraisal in Vietnam
Vietnamese agencies’ capacity in project appraisal has been improved markedly thanks to a cooperation progamme with the Japan International Cooperation Agency (JICA).
The evaluation was made at a seminar held in Hanoi on July 14 on strengthening capacity in project appraisal to boost economic development.
At the seminar, experts analysed the efficiency of the projects to build Tan Son Nhat Airport in Ho Chi Minh City and the project to build the 300MW Dai Ninh hydro-power plant in the central province of Binh Thuan .
The Tan Son Nhat airport project was ranked “A”, the highest in JICA’s ranking.
Participants at the seminar were reported that under the cooperation programme between the Ministry of Planning and Investment and JICA, 11 projects of importance to socio-economic development in Vietnam were evaluated, contributing to increasing the activeness in project management, raising the Vietnamese side’s mastery in each project and winning trust from ODA donor community.
Development in the south-west on track
The economic structure of south-western provinces has shifted positively and strongly, reported the region's Steering Committee at a conference on July 14 to review a 10-year development plan.
Deputy director of the committee, Nguyen Phong Quang, said industry and construction has increased from 18 percent in 2000 to 26 percent of the region's Gross Domestic Product (GDP) in 2010.
Services had increased from 28 percent to 35 percent in the last 10 years while agriculture, forestry and aqua-culture had dropped from 53.5 percent to 35 percent.
The region's GDP growth had also shown a positive figure of 11.7 percent per year, while export-import turnover was 6.83 billion USD in 2010, 9.1 percent of the total for the nation, according to Quang.
The development of the region had also been clearly reflected in people's average incomes, which had increased two-and-a-half times in the last 10 years, he said.
Deputy Minister of Planning and Investment Bui Quang Vinh said the most important achievement of the south-western region was to have agriculture, forestry and aqua-culture developed in a good balance and create specialising areas for specific product cultivation.
Vinh reported that in the last 10 years, production value of the sector had almost doubled from about 56 trillion VND to 101 trillion VND (2.67 billion USD to 4.8 billion USD) while the rice yield increased from 16 million tonnes to 21.6 million tonnes.
He said the value of industry had increased 18.8 percent per year and reached 156 trillion VND (7.4 billion USD) in 2010.
Social welfare was also emphasised by the authorities. In the last 10 years, more than 88,000 houses were built specifically for poor ethnic people and more than 10,000 jobs had been created.
Deputy Prime Minister Nguyen Sinh Hung, who chaired the conference, said the region had performed a great job by lowering the number of the poor by 13 percent in 10 years and improved living standards for local people, including 1.4 million ethnic people.
However, Hung said many problems will need to be resolved in the next few years such as the lack of smooth connection between policy and planning; the connections between provinces in the region.
Infrastructure development has not yet met the requirement to protect the region from climate change or pollution.
During the meeting, the committee set a target to develop the region over the next 10 years, concentrating on building infrastructure.
The region hopes to achieve a GDP growth of 12-13 percent. Agriculture, forestry and aquaculture will drop to 32 percent in the total economic structure while industry and construction will reach 34 percent and services will be at 36 percent by 2020.
The committee also decided to put more focus on infrastructure construction such as transportation, irrigation infrastructure, and roads that connect major provinces.
Prioritised projects in the next years include thermal power centres in O Mon of Can Tho City, Kien Luong of Kien Giang province, Duyen Hai of Tra Vinh province, Trung Luong-Can Tho Highway and Co Chien Bridge.
Phu Quoc Island will also be developed into an administration, economic and service centre of the region.
Education, health care, vocational training, and rural development are also among areas of focus in the 10 year plan.