Entrepreneurs are rushing to establish new banks, lured by the prospect of high returns on investment, though analysts warn the financial sector has its own hidden pitfalls.
The State Bank of Viet Nam has so far this year received more than 20 applications to open a new bank, but regulators are taking their time, scrutinising every line of the submitted documents.
Central bank officials are worried that investors are focusing too much on profits and capital generated via the stock market, and not enough on the risks. To date, 17 institutes have closed due to huge losses and impending bankruptcy.
Experts warn that competition is only going to get tougher with more foreign players entering the market over the next for years under World Trade Organisation commitments.
Ly Xuan Hai, general director of Asia Commercial Bank, admits corporate and consumer clients are more eager to bank with foreign financial institutes because they offer better services.
Newly established domestic banks will be the most vulnerable to these bigger companies, which can attract the best managers via competitive salaries, invest in the best technology and offer the best training opportunities, said Hai.
Nguyen Trong Nghia, general secretary of the Viet Nam Bankers’ Association, said domestic players do hold some advantages: better understanding of Vietnamese consumers and the ability to tap rural markets.
However, only the Bank for Agriculture and Rural Development (Agribank) has taken advantage of this latter point, because of credit risks associated with this segment of the market.
In addition, most commercial banks have focused on key markets like Ha Noi and HCM City, causing redundancy and tougher regionalised competition, said Nghia. Again, this is a problem for startups who need to attract customers quickly in order to stay afloat.
Experts also warn of overly aggressive measures to raise charter capital, which often results in banks cutting profit margins.
Source: VNA
Thursday, May 31, 2007
Excess of steel production capacity drawing near
Investors seem to consider Vietnam an ideal place for steel mill projects, which explains why they have brought big projects worth several billion dollars each to Vietnam. However, experts have warned that too many steel mills will lead to waste.
According to the Vietnam Steel Association (VSA), Vietnam now has to import 3.5mil tonnes of steel a year. It is estimated that the total demand for plate steel will be some 4.7mil tonnes by 2010, 7.2mil tonnes by 2015, and 10.2mil tonnes by 2020. The demand for plate steel accounts for 50% of the total demand in Vietnam.
If counting the demand for construction steel, which is expected to see the same growth rate in demand as plate steel, Vietnam will need 10mil tonnes of steel of different kinds by 2010, 15mil tonnes by 2015 and 20mil tonnes by 2020.
Such a big demand can be seen as a big opportunity for investors and the steel industry, which explains why foreign investors are rushing to set up steel mills in Vietnam. However, experts have warned that too heavy of investment in the steel industry will cause waste as supply will exceed demand.
The Vietnam Steel Corporation (VSC) on May 29 signed a memorandum of understanding on the implementation of the $3.5-4bil Ha Tinh steel complex project with India’s Tata group, the sixth-biggest steel group in the world. Once operational, the steel mill will churn out 4.5-5mil tonnes a year.
Another big steel project is waiting for licencing – the one to be run by the joint venture between Korea’s Posco and Vietnam’s Vinashin. The $5bil steel project, expected to be located in Khanh Hoa province, will put out 5mil tonnes a year.
The two projects alone will have the total capacity of 10mil tonnes a year by 2015. If considering the current capacity of 6mil tonnes a year of operational steel mills, and another 6mil tonnes able to be produced by that time, Vietnam will be able to produce 20mil tonnes of steel of different kinds by 2015.
Other big steel projects are to be kicked off in some days. These include the one invested in by Tycoons Group International ($1bil), which was licenced in September 2006. The 2mil tonne/year steel mill invested in by India’s Essar and VSC in Ba Ria-Vung Tau is awaiting a licence. The construction of a series of smaller projects, capitalised at $30-60mil, is to start in some days
Source: VNE
According to the Vietnam Steel Association (VSA), Vietnam now has to import 3.5mil tonnes of steel a year. It is estimated that the total demand for plate steel will be some 4.7mil tonnes by 2010, 7.2mil tonnes by 2015, and 10.2mil tonnes by 2020. The demand for plate steel accounts for 50% of the total demand in Vietnam.
If counting the demand for construction steel, which is expected to see the same growth rate in demand as plate steel, Vietnam will need 10mil tonnes of steel of different kinds by 2010, 15mil tonnes by 2015 and 20mil tonnes by 2020.
Such a big demand can be seen as a big opportunity for investors and the steel industry, which explains why foreign investors are rushing to set up steel mills in Vietnam. However, experts have warned that too heavy of investment in the steel industry will cause waste as supply will exceed demand.
The Vietnam Steel Corporation (VSC) on May 29 signed a memorandum of understanding on the implementation of the $3.5-4bil Ha Tinh steel complex project with India’s Tata group, the sixth-biggest steel group in the world. Once operational, the steel mill will churn out 4.5-5mil tonnes a year.
Another big steel project is waiting for licencing – the one to be run by the joint venture between Korea’s Posco and Vietnam’s Vinashin. The $5bil steel project, expected to be located in Khanh Hoa province, will put out 5mil tonnes a year.
The two projects alone will have the total capacity of 10mil tonnes a year by 2015. If considering the current capacity of 6mil tonnes a year of operational steel mills, and another 6mil tonnes able to be produced by that time, Vietnam will be able to produce 20mil tonnes of steel of different kinds by 2015.
Other big steel projects are to be kicked off in some days. These include the one invested in by Tycoons Group International ($1bil), which was licenced in September 2006. The 2mil tonne/year steel mill invested in by India’s Essar and VSC in Ba Ria-Vung Tau is awaiting a licence. The construction of a series of smaller projects, capitalised at $30-60mil, is to start in some days
Source: VNE
Vietnam sees 2007 inflation up to 7.5%
Vietnam's central bank expects inflation for 2007 to be between 7% and 7.5%, governor Le Duc Thuy said on state-run Voice of Vietnam radio on Thursday, higher than earlier government projections.
"There are signs showing the consumer prices are rising high," Thuy said on a radio broadcast. "We needed to look back at our inflation estimates made early this year and now to give a figure. It's forecast at 7% to 7.5%."
Vietnam's consumer price inflation in May accelerated to 7.31% from a year earlier on higher fuel and food costs, up from 7.16% in April, government figures showed.
The rise is above a government target to keep full-year inflation at less than 7% while it strives for economic growth of 8.5% this year, after an expansion of 8.17% in 2006.
Raising the reserve ratios banks must keep at the central bank would be one of the measures to help cap the price rise, Thuy said in the broadcast, a day before a central bank ruling forcing banks to keep more reserves comes into effect.
From Friday, banks must keep reserves of 10% on dong deposits with terms of up to 12 months, from 5% earlier. The reserve level for dong deposits of between 12 months and 24 months will also be doubled to 4%, a central bank directive has said.
Deputy Governor Nguyen Dong Tien who signed the directive also raised reserves against banks' foreign currency deposits of less than 12 months to 10% from 8%.
The new requirement for reserves on foreign currency deposits of between 12 months and 24 months will be doubled to 4%.
"Doing so would affect the working capital of banks which could lead to a higher cost of loans, but at present usable funds are ample so raising the compulsory reserves will not have an impact on interests," governor Thuy said on the radio.
Source: Reuters
"There are signs showing the consumer prices are rising high," Thuy said on a radio broadcast. "We needed to look back at our inflation estimates made early this year and now to give a figure. It's forecast at 7% to 7.5%."
Vietnam's consumer price inflation in May accelerated to 7.31% from a year earlier on higher fuel and food costs, up from 7.16% in April, government figures showed.
The rise is above a government target to keep full-year inflation at less than 7% while it strives for economic growth of 8.5% this year, after an expansion of 8.17% in 2006.
Raising the reserve ratios banks must keep at the central bank would be one of the measures to help cap the price rise, Thuy said in the broadcast, a day before a central bank ruling forcing banks to keep more reserves comes into effect.
From Friday, banks must keep reserves of 10% on dong deposits with terms of up to 12 months, from 5% earlier. The reserve level for dong deposits of between 12 months and 24 months will also be doubled to 4%, a central bank directive has said.
Deputy Governor Nguyen Dong Tien who signed the directive also raised reserves against banks' foreign currency deposits of less than 12 months to 10% from 8%.
The new requirement for reserves on foreign currency deposits of between 12 months and 24 months will be doubled to 4%.
"Doing so would affect the working capital of banks which could lead to a higher cost of loans, but at present usable funds are ample so raising the compulsory reserves will not have an impact on interests," governor Thuy said on the radio.
Source: Reuters
VIS acted lawfully, but action not to be encouraged
The fact that VIS ordered a Chinese steel mill to make steel under the VIS trademark does not violate the law, but this should not be encouraged, the Prime Minister has concluded.
The Government’s office on May 29 released dispatch No 2909, announcing the Prime Minister’s conclusion on the VIS case, responding to the appeal of the Vietnam Steel Association (VSA) about the case.
The Prime Minister said that VIS’s move did not violate the law. However, in the current context, when the steel supply has exceeded the demand, the move has had bad impacts on local production. The Government does not encourage enterprises to follow VIS’s move.
The conclusion by the Prime Minister has put an end to the prolonged dispute on whether VIS violated the law. VIS’s move has been facing strong opposition from local steel producers, who said that the move would kill local production. If all steel producers ordered foreign steel mills to make steel under their trademarks there would be no more steel producers in Vietnam.
Before the Prime Minister gave the final conclusion about the case, the Ministry of Trade and the National Office of Intellectual Property (NOIP) had expressed their viewpoints that VIS’s move was legal. However, VSA, which represents many domestically owned and foreign invested enterprises, did not accept the ministries’ viewpoints, and decided to lodge an appeal directly with the Prime Minister. VSA’s members said that if VIS’s move was tolerated, no investor would inject money in steel projects any more.
The Prime Minister has asked the Ministries of Trade and Finance to consider adjusting taxes on steel in case the overly high imports caused bad influences on local production. The two ministries have also been asked to consider measures to prevent steel dumping, which may affect local production, and prevent price escalation, which is unbeneficial to customers.
The Prime Minister has asked the Ministry of Science and Technologies to instruct the Vietnam Directorate for Standards and Quality (Stameq) to keep strict control over imported steel to ensure the quality of imports.
The General Department of Customs (GDC) has to examine the quality of steel imports at border gates. As for the import of steel which bears Vietnamese trademarks but is produced in other countries, importers will have to show a certificate of product quality granted by competent agencies of these countries.
The Ministry of Trade will be responsible for inspecting the labeling of imported products before they are circulated on the market.
Source: VNE
The Government’s office on May 29 released dispatch No 2909, announcing the Prime Minister’s conclusion on the VIS case, responding to the appeal of the Vietnam Steel Association (VSA) about the case.
The Prime Minister said that VIS’s move did not violate the law. However, in the current context, when the steel supply has exceeded the demand, the move has had bad impacts on local production. The Government does not encourage enterprises to follow VIS’s move.
The conclusion by the Prime Minister has put an end to the prolonged dispute on whether VIS violated the law. VIS’s move has been facing strong opposition from local steel producers, who said that the move would kill local production. If all steel producers ordered foreign steel mills to make steel under their trademarks there would be no more steel producers in Vietnam.
Before the Prime Minister gave the final conclusion about the case, the Ministry of Trade and the National Office of Intellectual Property (NOIP) had expressed their viewpoints that VIS’s move was legal. However, VSA, which represents many domestically owned and foreign invested enterprises, did not accept the ministries’ viewpoints, and decided to lodge an appeal directly with the Prime Minister. VSA’s members said that if VIS’s move was tolerated, no investor would inject money in steel projects any more.
The Prime Minister has asked the Ministries of Trade and Finance to consider adjusting taxes on steel in case the overly high imports caused bad influences on local production. The two ministries have also been asked to consider measures to prevent steel dumping, which may affect local production, and prevent price escalation, which is unbeneficial to customers.
The Prime Minister has asked the Ministry of Science and Technologies to instruct the Vietnam Directorate for Standards and Quality (Stameq) to keep strict control over imported steel to ensure the quality of imports.
The General Department of Customs (GDC) has to examine the quality of steel imports at border gates. As for the import of steel which bears Vietnamese trademarks but is produced in other countries, importers will have to show a certificate of product quality granted by competent agencies of these countries.
The Ministry of Trade will be responsible for inspecting the labeling of imported products before they are circulated on the market.
Source: VNE
First Vietnam rice firm IPO raises $1.3 mln
A small Vietnamese rice exporter raised $1.3 million on Wednesday from selling more than 1.6 million shares to outside investors, the first rice company in the country to go public, the stock market said.
Vinh Long Import-Export Company, or Imexcuulong, sold 1,668,500 shares, or 37.08% of its total shares, at an average price of 12,122 dong (US 75 cents) each, the Ho Chi Minh Stock Exchange said in a statement.
The company had expected to raise $1 million from the sale.
The state will retain a 51% stake while the remaining 11.92% would be sold to employees, Acting Director Le Tuan said earlier this month.
Imexcuulong, based in the Mekong delta province of Vinh Long, is valued at $3.4 million, based on the average price at the auction. The firm has not said when it plans to list its shares.
Vietnam is the world's second-largest rice exporter after Thailand.
Imexcuulong ships around 100,000 tonnes of rice annually to the Philippines, Indonesia, Africa and the Middle East. The volume is small when compared with 4.75 million tonnes Vietnam exported in 2006 and its target for 2007 of 5 million tonnes.
Imexcuulong has forecast it will nearly double its net profit to 4.32 billion dong ($268,000) this year from 2.3 billion dong ($143,000) in 2006 after running in the red in both 2004 and 2005.
Source: Reuters
Vinh Long Import-Export Company, or Imexcuulong, sold 1,668,500 shares, or 37.08% of its total shares, at an average price of 12,122 dong (US 75 cents) each, the Ho Chi Minh Stock Exchange said in a statement.
The company had expected to raise $1 million from the sale.
The state will retain a 51% stake while the remaining 11.92% would be sold to employees, Acting Director Le Tuan said earlier this month.
Imexcuulong, based in the Mekong delta province of Vinh Long, is valued at $3.4 million, based on the average price at the auction. The firm has not said when it plans to list its shares.
Vietnam is the world's second-largest rice exporter after Thailand.
Imexcuulong ships around 100,000 tonnes of rice annually to the Philippines, Indonesia, Africa and the Middle East. The volume is small when compared with 4.75 million tonnes Vietnam exported in 2006 and its target for 2007 of 5 million tonnes.
Imexcuulong has forecast it will nearly double its net profit to 4.32 billion dong ($268,000) this year from 2.3 billion dong ($143,000) in 2006 after running in the red in both 2004 and 2005.
Source: Reuters
Vietnam central bank warns lending should be prudent
The Vietnamese central bank has told commercial banks and financial institutions to improve credit quality and go easy on loans against securities in a bid to keep inflation in check.
In a dispatch Monday the State Bank of Vietnam (SBV) told financial institutions to keep loans against securities to below 3% of total outstanding loans.
It also directed them to tighten control on consumption loans and lending for business and production, and to crack down on businesses misusing loans to but securities.
The SBV urged state-run banks to improve reporting of foreign exchange transactions to monitor foreign portfolio investment inflows into the country.
It told them to improve risk management and earmark reserves for lending against stocks.
An SBV official said banks often lent up to 50% of the value of a share pledged as collateral which was too high. Banks claim they fully evaluate the risks before lending against stocks and that the risk is manageable. An official said banks did not loan more than 50% of a stock’s market value.
Source: Thanh Nien
In a dispatch Monday the State Bank of Vietnam (SBV) told financial institutions to keep loans against securities to below 3% of total outstanding loans.
It also directed them to tighten control on consumption loans and lending for business and production, and to crack down on businesses misusing loans to but securities.
The SBV urged state-run banks to improve reporting of foreign exchange transactions to monitor foreign portfolio investment inflows into the country.
It told them to improve risk management and earmark reserves for lending against stocks.
An SBV official said banks often lent up to 50% of the value of a share pledged as collateral which was too high. Banks claim they fully evaluate the risks before lending against stocks and that the risk is manageable. An official said banks did not loan more than 50% of a stock’s market value.
Source: Thanh Nien
Wednesday, May 30, 2007
VN-Index and HaSTC-Index down
The VN-Index at the Ho Chi Minh Securities Trading Centre dropped 15.89 points to close at 1077.88 points by the end of the May 30 trading session, down 1.5 percent from the previous days trading.
More than 5.1 million shares worth over 612.3 billion VND were traded on the country's largest bourse.
Seventy-three shares fell with t he HCM City-based confectioner Kinh Do Corp (KDC) and Song Da Infrastructure Developer (SJS) su ffering the sharpest declines.
For the gains, it was Binh Dinh Mining Company (BMC) that again led the charge up the ladder by tacking on 18,000 VND to its listed price. Hoa Binh Construction and Real Estate (HBC), Hang Xanh Motors Service (HAX) and the Financing and Promoting Technology Corporation (FPT) were also strong on the day.
The HaSTC-Index at the Ha Noi Securities Trading Centre slid 4.91 points from its last session to close at 335.84 points.
Blue chip securities firms Bao Viet Securities (BVS) and Sai Gon Securities (SSI) were among the 58 shares that recorded losses.
A total of 1.68 million shares, worth more than 187.2 billion VND, changed hands during the course of the session.
Despite fluctuations over the past two weeks, the VN-Index has surpassed 1070 points and is expected to continue its upward trend, securities experts said.
Source: VNA
More than 5.1 million shares worth over 612.3 billion VND were traded on the country's largest bourse.
Seventy-three shares fell with t he HCM City-based confectioner Kinh Do Corp (KDC) and Song Da Infrastructure Developer (SJS) su ffering the sharpest declines.
For the gains, it was Binh Dinh Mining Company (BMC) that again led the charge up the ladder by tacking on 18,000 VND to its listed price. Hoa Binh Construction and Real Estate (HBC), Hang Xanh Motors Service (HAX) and the Financing and Promoting Technology Corporation (FPT) were also strong on the day.
The HaSTC-Index at the Ha Noi Securities Trading Centre slid 4.91 points from its last session to close at 335.84 points.
Blue chip securities firms Bao Viet Securities (BVS) and Sai Gon Securities (SSI) were among the 58 shares that recorded losses.
A total of 1.68 million shares, worth more than 187.2 billion VND, changed hands during the course of the session.
Despite fluctuations over the past two weeks, the VN-Index has surpassed 1070 points and is expected to continue its upward trend, securities experts said.
Source: VNA
Vietnam to double bank reserve requirements
Vietnam will double the levels of compulsory reserves that foreign and domestic banks must keep with the central bank in dong from June 1, a move aimed at reining in inflation, the central bank said.
A central bank directive signed on Monday boosted reserve requirements to 10% on deposits with terms of up to 12 months, from 5% that had been in effect since July 1, 2004.
Vietnam's consumer price inflation in May accelerated to 7.31% from a year earlier on higher fuel and food costs, up from 7.16% in April, the government said last week.
The rise is above a government target to keep annual inflation this year at less than 7 percent. The central bank's reserve requirement forces commercial banks to set aside more dong, reducing the cash that could otherwise be loaned, bankers said.
"The move will reduce banks' liquidity but interest rates would not change as banks still have funds in surplus," a dealer at a foreign bank branch in Ho Chi Minh City said.
Four state-run banks offered their overnight dong loans at 3.5-4% on Wednesday, unchanged in the past 10 days. Bankers said steady rates suggested funds in the banking system remained at a healthy level.
Vietnam has more than 40 commercial banks, but five state-run banks control more than 70 percent of lending. Besides, branches of 35 foreign banks and six joint venture banks operate in the country.
Source: Reuters
A central bank directive signed on Monday boosted reserve requirements to 10% on deposits with terms of up to 12 months, from 5% that had been in effect since July 1, 2004.
Vietnam's consumer price inflation in May accelerated to 7.31% from a year earlier on higher fuel and food costs, up from 7.16% in April, the government said last week.
The rise is above a government target to keep annual inflation this year at less than 7 percent. The central bank's reserve requirement forces commercial banks to set aside more dong, reducing the cash that could otherwise be loaned, bankers said.
"The move will reduce banks' liquidity but interest rates would not change as banks still have funds in surplus," a dealer at a foreign bank branch in Ho Chi Minh City said.
Four state-run banks offered their overnight dong loans at 3.5-4% on Wednesday, unchanged in the past 10 days. Bankers said steady rates suggested funds in the banking system remained at a healthy level.
Vietnam has more than 40 commercial banks, but five state-run banks control more than 70 percent of lending. Besides, branches of 35 foreign banks and six joint venture banks operate in the country.
Source: Reuters
Real estate firm Cholonres to list on June 14
Vietnam's Cho Lon Real Estate Company will float its shares on the Hanoi stock market next month, making it the 87th stock to trade on the over-the-counter market, a company executive said on Wednesday.
The Ho Chi Minh City-based company, also known as Cholonres, will list all its 1.5 million shares on June 14, chairman Tran Van Chau said in a statement.
Shares of Cholonres were traded at between 90,000 and 92,000 dong ($5.59-$5.71) late last month on the unofficial, unregulated markets, which valued the firm at up to $8.6 million.
The company builds residential houses and public projects.
The construction industry, along with the industrial and service sectors, are key drivers of Vietnam's economy, one of the world's fastest growing.
Cholonres' debut on the Hanoi stock market would be the first in Vietnam so far this year after a wave of new listings on the country's two exchanges late last year as companies rushed before a government tax relief for listed firms expired on Dec. 31.
Source: Reuters
The Ho Chi Minh City-based company, also known as Cholonres, will list all its 1.5 million shares on June 14, chairman Tran Van Chau said in a statement.
Shares of Cholonres were traded at between 90,000 and 92,000 dong ($5.59-$5.71) late last month on the unofficial, unregulated markets, which valued the firm at up to $8.6 million.
The company builds residential houses and public projects.
The construction industry, along with the industrial and service sectors, are key drivers of Vietnam's economy, one of the world's fastest growing.
Cholonres' debut on the Hanoi stock market would be the first in Vietnam so far this year after a wave of new listings on the country's two exchanges late last year as companies rushed before a government tax relief for listed firms expired on Dec. 31.
Source: Reuters
EVN to raise capital via new subsidiaries
State-utility Electricity of Viet Nam Group (EVN) will create 10 joint stock companies this year in a move to raise capital for the construction of Government-approved energy projects.
The Director of EVN’s Equitisation and Securities Division, Dang Phan Tuong, said with an investment of over 30 trillion VND (1.8 billion USD), EVN will be the dominant shareholder in the 10 companies.
Eight of the companies will be responsible for building and operating eight hydro and thermo-electric power plants, namely: the Song Tranh, Song Bung 2, Song Ba Ha, Huoi Quang, Ban Chat, Ban Ve, Se San 4 and Lai Chau.
The two remaining subsidiaries will be dedicated to the Lao and Cambodian markets.
Tuong said in the first phase of the plan, EVN will seek strategic investors among the other State-owned enterprises and foreign companies to take major stakes in the 10 companies.
In the second phase, the 10 subsidiaries will hold initial public offerings to mobilise additional capital.
The companies will also be allowed to conduct business outside the energy industry, Tuong said.
EVN is currently the majority shareholder of five other joint stock companies specialising in the construction of electricity works.
Analysts have voiced support of EVN’s decision to set up new companies and equitise in order to mobilise capital, instead of relying simply on loans. It also gives investors an opportunity to partake in the country’s lucrative energy industry, said analysts
Source: VNA
The Director of EVN’s Equitisation and Securities Division, Dang Phan Tuong, said with an investment of over 30 trillion VND (1.8 billion USD), EVN will be the dominant shareholder in the 10 companies.
Eight of the companies will be responsible for building and operating eight hydro and thermo-electric power plants, namely: the Song Tranh, Song Bung 2, Song Ba Ha, Huoi Quang, Ban Chat, Ban Ve, Se San 4 and Lai Chau.
The two remaining subsidiaries will be dedicated to the Lao and Cambodian markets.
Tuong said in the first phase of the plan, EVN will seek strategic investors among the other State-owned enterprises and foreign companies to take major stakes in the 10 companies.
In the second phase, the 10 subsidiaries will hold initial public offerings to mobilise additional capital.
The companies will also be allowed to conduct business outside the energy industry, Tuong said.
EVN is currently the majority shareholder of five other joint stock companies specialising in the construction of electricity works.
Analysts have voiced support of EVN’s decision to set up new companies and equitise in order to mobilise capital, instead of relying simply on loans. It also gives investors an opportunity to partake in the country’s lucrative energy industry, said analysts
Source: VNA
Vietnam's Jan-May GDP growth nears 8%
Vietnam's economy is estimated to have grown nearly 7.9% in the January to May period from a year earlier, a government minister said on Wednesday.
"Vietnam's economy in the first five months of 2007 continues its high growth, GDP is estimated to rise nearly 7.9% from the same period in 2006, the highest rate compared to many past years," Planning and Investment Minister Vo Hong Phuc said.
January to May's exports grew 18.4% from a year earlier to $18.12 billion and industrial output also expanded 16.8% during the five-month period, Phuc said in his opening remarks to the Vietnam Business Forum in Hanoi.
Foreign investment so far this year, including new pledges and increased funds for existing projects, rose 18.7% from a year earlier period to $4.37 billion, he said.
The government aimed "to speed economic growth, raising effectiveness, sustainability and quality of growth and the economy's competitiveness, striving for growth of 8.2% to 8.5%," Phuc said.
On Tuesday the World Bank estimated Vietnam's economic growth this year would reach between 8% and 8.5%, compared with 8.17% in 2006.
The half-day meeting, held before Vietnam donors convene on Friday to review the implementation of government commitments so far this year, is an annual dialogue between government officials and the business community over the investment environment.
Martin Rama, acting director of the World Bank in Vietnam, said Vietnam is now entering "the second generation of reform", which involves not only competition and opening up to the world but also dealing with complex issues in implementing WTO commitments.
Vietnam, which has one of the world's fastest growing economies, joined the World Trade Organisation in January.
Source: Reuters
"Vietnam's economy in the first five months of 2007 continues its high growth, GDP is estimated to rise nearly 7.9% from the same period in 2006, the highest rate compared to many past years," Planning and Investment Minister Vo Hong Phuc said.
January to May's exports grew 18.4% from a year earlier to $18.12 billion and industrial output also expanded 16.8% during the five-month period, Phuc said in his opening remarks to the Vietnam Business Forum in Hanoi.
Foreign investment so far this year, including new pledges and increased funds for existing projects, rose 18.7% from a year earlier period to $4.37 billion, he said.
The government aimed "to speed economic growth, raising effectiveness, sustainability and quality of growth and the economy's competitiveness, striving for growth of 8.2% to 8.5%," Phuc said.
On Tuesday the World Bank estimated Vietnam's economic growth this year would reach between 8% and 8.5%, compared with 8.17% in 2006.
The half-day meeting, held before Vietnam donors convene on Friday to review the implementation of government commitments so far this year, is an annual dialogue between government officials and the business community over the investment environment.
Martin Rama, acting director of the World Bank in Vietnam, said Vietnam is now entering "the second generation of reform", which involves not only competition and opening up to the world but also dealing with complex issues in implementing WTO commitments.
Vietnam, which has one of the world's fastest growing economies, joined the World Trade Organisation in January.
Source: Reuters
Industrial production up 16.8% in five months
Falling inline with Viet Nam's rapidly expanding economy, industrial production value for the first five months of the year surged to nearly 225.78 trillion VND (14.1 billion USD), a year-on-year increase of 16.8%.
The non-State sector led the charge by posting growth of 20.4%, followed by the foreign-invested sector with 19.3%, the Ministry of Industry reported.
The State-owned sector lagged behind, recording a more modest increase of 7.9%.
May alone saw industrial production value registered at around 48.68 trillion VND (3 billion USD), a surge of 2.7% over the previous month.
Market experts have pointed to successes in the industries of steel, electric engines, machine tools, electric fans, pesticides, plastics, clothes and motorbike and automobile spare parts as key drivers for the increased output.
The Ministry of Industry did however urge the Electricity of Viet Nam (EVN) Group to ensure power is maintained to allow for sufficient supply for production to remain in high gear.
Source: VNA
The non-State sector led the charge by posting growth of 20.4%, followed by the foreign-invested sector with 19.3%, the Ministry of Industry reported.
The State-owned sector lagged behind, recording a more modest increase of 7.9%.
May alone saw industrial production value registered at around 48.68 trillion VND (3 billion USD), a surge of 2.7% over the previous month.
Market experts have pointed to successes in the industries of steel, electric engines, machine tools, electric fans, pesticides, plastics, clothes and motorbike and automobile spare parts as key drivers for the increased output.
The Ministry of Industry did however urge the Electricity of Viet Nam (EVN) Group to ensure power is maintained to allow for sufficient supply for production to remain in high gear.
Source: VNA
Banks want to trade gold via accounts
Commercial banks are trying to persuade the State Bank of Vietnam to allow them to make payments for gold trading in the domestic market via accounts instead of paying in cash and real gold as at present.
Gold trading has become one of the most lucrative businesses, which explains why more and more commercial banks are getting involved in this kind of business.
Banks now want to make payments for trading deals through accounts instead of cash, and trade virtual gold (gold on account) instead of real gold. The banks say this will help prevent risks for both sellers and buyers, while the State can control the money flow on the gold market.
Currently, gold trading deals all are being carried out in material gold and payments are not made through banks; therefore, no management authorities can control the trading volume. Gold traders may take unfair advantage of the loopholes in the law to evade tax, while the profit from gold trading proves to be very big.
Moreover, transactions with actual gold prove to be inconvenient for both sellers and buyers, and can lead to risks during the transportation process.
The Saigon Jewellery Company (SJC) has been allowed by the central bank to trade gold with foreign partners through offshore accounts. However, in Vietnam, SJC, which has its head office just several tens of metres from Vietcombank, cannot make payments through accounts when dealing with clients.
“It is illogical that gold is considered a kind of currency, but transactions via accounts are not allowed,” an official said.
SJC said that the company might apply to open transaction accounts at two banks, ACB and Eximbank, which will serve the company’s gold trading. However, one of the two banks said that it had not got permission from the central bank to accept SJC’s account.
Commercial banks insist that paying through accounts will benefit both banks and State management authorities. This will provide a tool which can ensure safety in trading deals, while the central bank can easily control the money flow.
However, financiers have warned that private gold trading companies may protest the plan to make payments via accounts. If the scheme on making payments via accounts is applied, the companies will have no way to evade tax.
Source: VNE
Gold trading has become one of the most lucrative businesses, which explains why more and more commercial banks are getting involved in this kind of business.
Banks now want to make payments for trading deals through accounts instead of cash, and trade virtual gold (gold on account) instead of real gold. The banks say this will help prevent risks for both sellers and buyers, while the State can control the money flow on the gold market.
Currently, gold trading deals all are being carried out in material gold and payments are not made through banks; therefore, no management authorities can control the trading volume. Gold traders may take unfair advantage of the loopholes in the law to evade tax, while the profit from gold trading proves to be very big.
Moreover, transactions with actual gold prove to be inconvenient for both sellers and buyers, and can lead to risks during the transportation process.
The Saigon Jewellery Company (SJC) has been allowed by the central bank to trade gold with foreign partners through offshore accounts. However, in Vietnam, SJC, which has its head office just several tens of metres from Vietcombank, cannot make payments through accounts when dealing with clients.
“It is illogical that gold is considered a kind of currency, but transactions via accounts are not allowed,” an official said.
SJC said that the company might apply to open transaction accounts at two banks, ACB and Eximbank, which will serve the company’s gold trading. However, one of the two banks said that it had not got permission from the central bank to accept SJC’s account.
Commercial banks insist that paying through accounts will benefit both banks and State management authorities. This will provide a tool which can ensure safety in trading deals, while the central bank can easily control the money flow.
However, financiers have warned that private gold trading companies may protest the plan to make payments via accounts. If the scheme on making payments via accounts is applied, the companies will have no way to evade tax.
Source: VNE
Vietnam's seafood industry may lose traditional export markets
Seafood exports to Japan, which consumes 40% of Vietnam’s total exports every year, have been decreasing dramatically this year, and now stand at 29%.
Analysts said that the dramatic drop of seafood exports to Japan should be seen as a worrying sign. In the past two months, seafood exports to Japan have been routinely found as containing prohibited substances, and that is the problem. As a result, Japanese authorities have decided to impose an examination scheme on imports from Vietnam.
Nguyen Pham Minh, Director General of the Minh Sang Seafood Processing and Export Company, complained that the examination of 100% of exports to Japan had led to higher production costs. Meanwhile, many consignments of exports get stuck at ports as it takes time for the examinations. In general, exporters have to spend $1,000 for every examination; moreover, they also have to spend money for examinations in Vietnam before shipping.
Vietnam-sourced tra and basa fish are also finding it difficult to swim to the EU market, especially to Russia. According to Truong Dinh Hoe, Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), troubles have occurred continuously so far this year with Russia, the market that imports $100mil worth of tra and basa every year from Vietnam. Several consignments of seafood sent to Russia were discovered as being infected with prohibited antibiotics. Subsequently, Russian authorities imposed stricter policies on inspecting imports from Vietnam, which has installed barriers for Vietnam-sourced products.
What have State management authorities done to deal with the quality problem? The National Fisheries Quality and Veterinary Directorate (Nafiqaved) has sent documents to the General Department of Customs instructing them to strike the enterprises that have sent unsafe exports to Japan from the list of companies exempted from quality inspections before export.
In the next step, Nafiqaved promulgated regulations on shrimp quality control, which said that shrimp exporters must get certificates stating that their products were free of Chloramphenicol, AOZ, SEM from Nafiqaved to be eligible to export shrimp products.
However, the moves taken by VASEP and Nafiqaved have not satisfied enterprises, which say that the moves cannot help prevent unsafe seafood exports. They said that actions should be taken to prevent the industry from using prohibited antibiotics and substances during aquaculture and processing. Currently, fish farmers, processors and State management units are blaming each other for the problems with seafood hygiene.
On April 10, Japan discovered six consignments of dried shrimp, salted shredded meat and seafood spring rolls as containing the prohibited Semicarbazide (SEM).
On May 8, the Ministry of Health, Labour and Welfare of Japan announced that the shrimp imports from Viet Phu Foods and Fish Co., Ltd; Agrex Saigon; CaMau Seafood Processing and Service Jointstock Corporation; Amanda Foods VietNam Ltd; Binh Them Co., Ltd; Khanh Hoa Seafish Co., Ltd were found as containing chloramphenicol, AOZ and Semicarbazide.
On May 15, the exports of four more Vietnamese companies were discovered as containing prohibited antibiotics: the workshop on dried product processing under the Nha Trang Seafood Processing Company, HCM City-based Vietnam Northern Viking Technologies, Dong Nai-based AMADA, and the My An workshop on dried product processing under the Da Nang-based Phuoc Tien General Trading Company.
Source: VNE
Analysts said that the dramatic drop of seafood exports to Japan should be seen as a worrying sign. In the past two months, seafood exports to Japan have been routinely found as containing prohibited substances, and that is the problem. As a result, Japanese authorities have decided to impose an examination scheme on imports from Vietnam.
Nguyen Pham Minh, Director General of the Minh Sang Seafood Processing and Export Company, complained that the examination of 100% of exports to Japan had led to higher production costs. Meanwhile, many consignments of exports get stuck at ports as it takes time for the examinations. In general, exporters have to spend $1,000 for every examination; moreover, they also have to spend money for examinations in Vietnam before shipping.
Vietnam-sourced tra and basa fish are also finding it difficult to swim to the EU market, especially to Russia. According to Truong Dinh Hoe, Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), troubles have occurred continuously so far this year with Russia, the market that imports $100mil worth of tra and basa every year from Vietnam. Several consignments of seafood sent to Russia were discovered as being infected with prohibited antibiotics. Subsequently, Russian authorities imposed stricter policies on inspecting imports from Vietnam, which has installed barriers for Vietnam-sourced products.
What have State management authorities done to deal with the quality problem? The National Fisheries Quality and Veterinary Directorate (Nafiqaved) has sent documents to the General Department of Customs instructing them to strike the enterprises that have sent unsafe exports to Japan from the list of companies exempted from quality inspections before export.
In the next step, Nafiqaved promulgated regulations on shrimp quality control, which said that shrimp exporters must get certificates stating that their products were free of Chloramphenicol, AOZ, SEM from Nafiqaved to be eligible to export shrimp products.
However, the moves taken by VASEP and Nafiqaved have not satisfied enterprises, which say that the moves cannot help prevent unsafe seafood exports. They said that actions should be taken to prevent the industry from using prohibited antibiotics and substances during aquaculture and processing. Currently, fish farmers, processors and State management units are blaming each other for the problems with seafood hygiene.
On April 10, Japan discovered six consignments of dried shrimp, salted shredded meat and seafood spring rolls as containing the prohibited Semicarbazide (SEM).
On May 8, the Ministry of Health, Labour and Welfare of Japan announced that the shrimp imports from Viet Phu Foods and Fish Co., Ltd; Agrex Saigon; CaMau Seafood Processing and Service Jointstock Corporation; Amanda Foods VietNam Ltd; Binh Them Co., Ltd; Khanh Hoa Seafish Co., Ltd were found as containing chloramphenicol, AOZ and Semicarbazide.
On May 15, the exports of four more Vietnamese companies were discovered as containing prohibited antibiotics: the workshop on dried product processing under the Nha Trang Seafood Processing Company, HCM City-based Vietnam Northern Viking Technologies, Dong Nai-based AMADA, and the My An workshop on dried product processing under the Da Nang-based Phuoc Tien General Trading Company.
Source: VNE
State tries to recover accrued earnings from PVFC equitisation
The Ministry of Finance chose the final day of PetroVietnam Fertiliser and Chemical Co's IPO last week to propose recovering VND1tril (US$65mil) in accrued earnings from the company.
The ministry claimed the earnings, accrued when PVFCCo was a State-owned entity during 2004-06, represented windfall profits earned when the State subsidised its energy costs.
The timing of the ministry proposal, made on the day set as the deadline for winning bidders in the IPO to either purchase the shares or withdraw their offers, has disturbed many who participated in the bidding.
Investor Nguyen Thi Thu worries that the market value of the shares she bought during the IPO will plummet if the ministry acts on its proposal.
"I bought 5,000 shares," she said, "but now I am wondering whether the collection of VND1tril ($62.5mil) from the company's profits will affect my shares."
A securities broker reported that on Friday, May 25, shares of PVFCCo stood at VND74,000 ($4.60) each, but the price was likely to react negatively as news of the ministry action spreads.
PVFCCo general director, Trinh Thanh Binh has tried to soothe the fears of investors, saying that the profits the company earned during 2004-06 as a State-owned company are not included in the company's VND3.8tril ($237.5mil) worth of charter capital.
Shares sold during the IPO represented 40% of this charter capital, so investors who bought shares during the IPO will not suffer any loss.
The profits belonged to PetroVietnam, the parent company of PVFCCo, Binh explained, and were not included in the financial reports issued when the company equitised.
Securities expert Huy Nam agreed saying that the accrued earnings were not part of PVFC's auction of shares and were not accrued to the benefit of the investors during the company's equitisation.
According to the Ministry of Finance, total profits of over VND2tril made during 2004-06 represented something of a windfall due to the low price of gas which the company enjoyed as a State-owned entity.
Prior to its IPO, the company bought thermal units at US$1.30 per one million British thermal unit (BTU), far lower than the price paid by other companies.
A member of PetroVietnam's management board, Phan Thi Hoa, affirmed that the company's input costs for gas would climb to $2.20-3.60 per one million BTU now that the company has equitised.
"The new price was approved by the Ministry of Industry and disclosed in the financial reports [prior to the IPO]," said Binh. "The investors do not therefore need worry about the profit potential of the company."
Meanwhile, according to the ministry, preferential costs of thermal input for State-owned enterprises would now be contrary to the nation's WTO commitments, making recovery of the windfall profits the correct action.
Deputy Minister of Planning and Investment Truong Van Doan disagreed, however, saying, "Whether to collect the profits or not should take into account PVFCCo's ability to ensure its profit potential in the future when input sources become more scare and fertiliser prices on the market become depressed."
Source: VNE
The ministry claimed the earnings, accrued when PVFCCo was a State-owned entity during 2004-06, represented windfall profits earned when the State subsidised its energy costs.
The timing of the ministry proposal, made on the day set as the deadline for winning bidders in the IPO to either purchase the shares or withdraw their offers, has disturbed many who participated in the bidding.
Investor Nguyen Thi Thu worries that the market value of the shares she bought during the IPO will plummet if the ministry acts on its proposal.
"I bought 5,000 shares," she said, "but now I am wondering whether the collection of VND1tril ($62.5mil) from the company's profits will affect my shares."
A securities broker reported that on Friday, May 25, shares of PVFCCo stood at VND74,000 ($4.60) each, but the price was likely to react negatively as news of the ministry action spreads.
PVFCCo general director, Trinh Thanh Binh has tried to soothe the fears of investors, saying that the profits the company earned during 2004-06 as a State-owned company are not included in the company's VND3.8tril ($237.5mil) worth of charter capital.
Shares sold during the IPO represented 40% of this charter capital, so investors who bought shares during the IPO will not suffer any loss.
The profits belonged to PetroVietnam, the parent company of PVFCCo, Binh explained, and were not included in the financial reports issued when the company equitised.
Securities expert Huy Nam agreed saying that the accrued earnings were not part of PVFC's auction of shares and were not accrued to the benefit of the investors during the company's equitisation.
According to the Ministry of Finance, total profits of over VND2tril made during 2004-06 represented something of a windfall due to the low price of gas which the company enjoyed as a State-owned entity.
Prior to its IPO, the company bought thermal units at US$1.30 per one million British thermal unit (BTU), far lower than the price paid by other companies.
A member of PetroVietnam's management board, Phan Thi Hoa, affirmed that the company's input costs for gas would climb to $2.20-3.60 per one million BTU now that the company has equitised.
"The new price was approved by the Ministry of Industry and disclosed in the financial reports [prior to the IPO]," said Binh. "The investors do not therefore need worry about the profit potential of the company."
Meanwhile, according to the ministry, preferential costs of thermal input for State-owned enterprises would now be contrary to the nation's WTO commitments, making recovery of the windfall profits the correct action.
Deputy Minister of Planning and Investment Truong Van Doan disagreed, however, saying, "Whether to collect the profits or not should take into account PVFCCo's ability to ensure its profit potential in the future when input sources become more scare and fertiliser prices on the market become depressed."
Source: VNE
Tuesday, May 29, 2007
Vietnam indices decline modestly
Both the VN-Index and HaSTC recorded modest declines by the end of trading on May 29.
The VN-Index at the Ho Chi Minh Securities Trading Centre dropped 4.87 points to close at 1,093.77 points, while the HaSTC Index at the Ha Noi Securities Trading Centre finished at 340.75 points, down 3.11 points against the previous trading session.
At the HCM City's bourse, more than 6.58 million shares worth a total 850.722 billion VND, were traded on the day, 23 listed shares recorded increases, 25 were unchanged and 60 stocks were in decline.
Over 1.92 million shares worth 204.9 billion VND changed hands at the Ha Noi exchange.
Source: VNA
The VN-Index at the Ho Chi Minh Securities Trading Centre dropped 4.87 points to close at 1,093.77 points, while the HaSTC Index at the Ha Noi Securities Trading Centre finished at 340.75 points, down 3.11 points against the previous trading session.
At the HCM City's bourse, more than 6.58 million shares worth a total 850.722 billion VND, were traded on the day, 23 listed shares recorded increases, 25 were unchanged and 60 stocks were in decline.
Over 1.92 million shares worth 204.9 billion VND changed hands at the Ha Noi exchange.
Source: VNA
Tata takes major stake in Vietnam steel plant
India's Tata Steel Ltd. (TISC.BO: Quote, Profile , Research), the world's sixth-largest steel maker, will join forces with state-run Vietnam Steel Corp. (VSC) to build parts of a steel complex with a total $3.5 billion in investment.
Tata will take a stake of up to 65 percent in a steel plant venture with Vietnam and a 30 percent stake in a nearby iron ore mine. Both are part of the complex that Tata will build with VSC, the country's top steel maker.
Tata signed a memorandum of understanding with VSC to conduct a feasibility study by September 2008 on a complex with capacity for 4.5 million tonnes of steel products by 2018.
"The project aims to optimise the resources from Thach Khe iron ore mine in Ha Tinh province to turn out steel products to meet economic demand," VSC Chief Executive Dau Van Hung said.
Hung was referring to the central coastal province of Ha Tinh, 340 km (210 miles) south of Hanoi. The Thach Khe mine is 12 km east of the north-south Highway One, close to the sea.
Its iron ore reserves are estimated at more than 500 million tonnes, which are located deep below sea level, of which around 300 million tonnes would be recoverable, said Pham Chi Cuong, chairman of the Vietnam Steel Association.
"The size of the mine is average, but the ore has a high iron content of more than 60 percent," Cuong told Reuters.
Cuong said the complex would produce steel plate and sheet, which have not been manufactured in Vietnam, one of the world's fastest growing economies but which has to import half its steel product demand, mainly from China.
"The project will serve as the backbone for Vietnam's steel industry during 2015-2020," he said.
Tata Managing Director B. Muthuraman estimated Vietnam's steel product demand at 7 million tonnes a year.
But January to May's imports of steel and billets into Vietnam have already jumped 39.5 percent from a year earlier to 3 million tonnes, government statistics showed.
"The proposed joint venture with Tata Steel for the steel plant shall further strengthen the domestic production of primary steel and lower the dependence of Vietnam on imported billets and slabs," Muthuraman said.
VSC has been running 12 subsidiaries and 14 joint ventures with foreign companies in the industry. It said its total capacity stood at 5 million tonnes of products per year, including the output of its ventures.
In March it secured an investment licence to develop a $527 million hot-rolled steel mill in the southern province of Ba Ria-Vung Tau with India's Essar group and the Vietnam General Rubber group.
Source: Reuters
Tata will take a stake of up to 65 percent in a steel plant venture with Vietnam and a 30 percent stake in a nearby iron ore mine. Both are part of the complex that Tata will build with VSC, the country's top steel maker.
Tata signed a memorandum of understanding with VSC to conduct a feasibility study by September 2008 on a complex with capacity for 4.5 million tonnes of steel products by 2018.
"The project aims to optimise the resources from Thach Khe iron ore mine in Ha Tinh province to turn out steel products to meet economic demand," VSC Chief Executive Dau Van Hung said.
Hung was referring to the central coastal province of Ha Tinh, 340 km (210 miles) south of Hanoi. The Thach Khe mine is 12 km east of the north-south Highway One, close to the sea.
Its iron ore reserves are estimated at more than 500 million tonnes, which are located deep below sea level, of which around 300 million tonnes would be recoverable, said Pham Chi Cuong, chairman of the Vietnam Steel Association.
"The size of the mine is average, but the ore has a high iron content of more than 60 percent," Cuong told Reuters.
Cuong said the complex would produce steel plate and sheet, which have not been manufactured in Vietnam, one of the world's fastest growing economies but which has to import half its steel product demand, mainly from China.
"The project will serve as the backbone for Vietnam's steel industry during 2015-2020," he said.
Tata Managing Director B. Muthuraman estimated Vietnam's steel product demand at 7 million tonnes a year.
But January to May's imports of steel and billets into Vietnam have already jumped 39.5 percent from a year earlier to 3 million tonnes, government statistics showed.
"The proposed joint venture with Tata Steel for the steel plant shall further strengthen the domestic production of primary steel and lower the dependence of Vietnam on imported billets and slabs," Muthuraman said.
VSC has been running 12 subsidiaries and 14 joint ventures with foreign companies in the industry. It said its total capacity stood at 5 million tonnes of products per year, including the output of its ventures.
In March it secured an investment licence to develop a $527 million hot-rolled steel mill in the southern province of Ba Ria-Vung Tau with India's Essar group and the Vietnam General Rubber group.
Source: Reuters
Automaker Truong Hai to list shares
Shareholders of the automobile assembling and trading firm Truong Hai agreed on a plan to list on the stock exchange at their annual meeting on May 26.
To boost capital and join the Ho Chi Minh City Securities Trading Centre in the first quarter of 2008, Truong Hai will issue 23 million shares, aiming to increase equity capital to 630 billion VND (39.5 million USD) from the current 450 billion VND.
For every three shares they own, existing shareholders will have the right to buy one new share at face value price of 10,000 VND. Employees will be allowed to purchase around 900,000 shares at the same price.
The remaining shares will be sold to strategic partners and outsiders at negotiated prices.
Company chairman Tran Ba Duong said he expects Truong Hai to collect 656 billion VND from the sale.
The company will issue the money to invest in various projects including a new car assembly company, branch network expansion and a showroom-office building in Ho Chi Minh City.
Last year, the company netted more than 40 billion VND in profits and the figure is expected to rise to around 140 billion VND in 2007. Truong Hai plans to pay a 20 percent-dividend this year.
Source: VNA
To boost capital and join the Ho Chi Minh City Securities Trading Centre in the first quarter of 2008, Truong Hai will issue 23 million shares, aiming to increase equity capital to 630 billion VND (39.5 million USD) from the current 450 billion VND.
For every three shares they own, existing shareholders will have the right to buy one new share at face value price of 10,000 VND. Employees will be allowed to purchase around 900,000 shares at the same price.
The remaining shares will be sold to strategic partners and outsiders at negotiated prices.
Company chairman Tran Ba Duong said he expects Truong Hai to collect 656 billion VND from the sale.
The company will issue the money to invest in various projects including a new car assembly company, branch network expansion and a showroom-office building in Ho Chi Minh City.
Last year, the company netted more than 40 billion VND in profits and the figure is expected to rise to around 140 billion VND in 2007. Truong Hai plans to pay a 20 percent-dividend this year.
Source: VNA
Singapore firm clinches $191mln deal for Vietnam oil rig
Singapore’s Keppel FELS Ltd has won a US$191 million bid to build a jack-up oil rig for state-run PetroVietnam’s recently established arm PetroVietnam Drilling Investment Corporation (PVD Invest).
Poor tax and land policies are stymieing the growth of private enterprises in Vietnam, a conference in Under a contract signed Monday the jack-up rig B299 or PV Drilling II will be customized for PVD Invest’s requirements of operating in water depths of up to 114 meters, deep drilling of down to 9,144 meters, and accommodating over 100 men.
It would be completed in October 2009 and deployed in Vietnam’s territorial waters as well as overseas, the local firm said.
The rig with retractable legs is the second offshore platform contract between the two firms.
Earlier this year Keppel FELS handed over to PetroVietnam Drilling & Well Services Co. (PV Drilling) a $110 million jack-up oil rig that is now operating in Ca Ngu Vang oil field off Vietnam.
PVD Invest’s primary business is investing in oil rigs, equipment, and tools which it leases out.
Keppel FELS Ltd, a wholly-owned subsidiary of Keppel Corp, has, since 1984, built all the major offshore platforms for Vietnam’s oil and gas industry.
One of the world’s leading designers and builders of jack-up rigs, Keppel had 60 percent of the global market in the last decade.
In Vietnam, which has proven oil reserves of over 600 million barrels, some 300 oil wells are likely to be drilled over the next five years.
PetroVietnam said there was an ongoing feasibility study to open up deepwater exploration and production.
Source: Thanh Nien
Poor tax and land policies are stymieing the growth of private enterprises in Vietnam, a conference in Under a contract signed Monday the jack-up rig B299 or PV Drilling II will be customized for PVD Invest’s requirements of operating in water depths of up to 114 meters, deep drilling of down to 9,144 meters, and accommodating over 100 men.
It would be completed in October 2009 and deployed in Vietnam’s territorial waters as well as overseas, the local firm said.
The rig with retractable legs is the second offshore platform contract between the two firms.
Earlier this year Keppel FELS handed over to PetroVietnam Drilling & Well Services Co. (PV Drilling) a $110 million jack-up oil rig that is now operating in Ca Ngu Vang oil field off Vietnam.
PVD Invest’s primary business is investing in oil rigs, equipment, and tools which it leases out.
Keppel FELS Ltd, a wholly-owned subsidiary of Keppel Corp, has, since 1984, built all the major offshore platforms for Vietnam’s oil and gas industry.
One of the world’s leading designers and builders of jack-up rigs, Keppel had 60 percent of the global market in the last decade.
In Vietnam, which has proven oil reserves of over 600 million barrels, some 300 oil wells are likely to be drilled over the next five years.
PetroVietnam said there was an ongoing feasibility study to open up deepwater exploration and production.
Source: Thanh Nien
Economist and entrepreneurs name shortcomings
Poor tax and land policies are stymieing the growth of private enterprises in Vietnam, a conference in Ho Chi Minh City heard Monday.
At the meeting attended by economists and entrepreneurs, Huynh Thi Kim Huong, director of the city-based ISC, a commodities distributor, said the opaque tax policies caused many difficulties for companies.
Her company, for instance, paid 3 percent, 10 percent, and 20 percent import tax on shuttlecock but on an ad hoc basis; there were no fixed tariffs.
Initially ISC had paid 5 percent. Later the rate had been raised to 10 percent without any explanation from customs. If her company contested the arbitrariness, it was slapped with a 20 percent rate.
The opaque tax regime enabled customs officials to get bribes.
Dinh Van An, head of the Central Economic Management Research Institute, concurred saying the tax policies were vague.
There were 14 kinds of tax-deductible fees but they did not include commission and brokerage, causing confusion.
The government intervened too much in businesses’ activities: For instance, salaries paid by the private sector could not exceed those paid by state firms in the same sector.
It was necessary to have an open financial mechanism to provide private firms more rights in determining their financial activities.
Chen Li Hsun, chairman of Taiwanese-owned Full Power Joint Stock Company, said inappropriate land policies caused problems for real estate firms.
Official rates set by the government were too much at variance with market rates.
Another problem was that state agencies wanted firms to submit firm proposals before fixing the land price. But investors needed to know the price to finalize their plans.
Tran Ngoc Lan, deputy head of the National Committee for Ideology and Culture in the south, admitted that non-state firms were yet to get tax, finance, and land use privileges because to red tape.
Foreign experts said commercial banks ignored private firms, particularly small and medium ones, since they mostly targeted big companies.
Source: VNA
At the meeting attended by economists and entrepreneurs, Huynh Thi Kim Huong, director of the city-based ISC, a commodities distributor, said the opaque tax policies caused many difficulties for companies.
Her company, for instance, paid 3 percent, 10 percent, and 20 percent import tax on shuttlecock but on an ad hoc basis; there were no fixed tariffs.
Initially ISC had paid 5 percent. Later the rate had been raised to 10 percent without any explanation from customs. If her company contested the arbitrariness, it was slapped with a 20 percent rate.
The opaque tax regime enabled customs officials to get bribes.
Dinh Van An, head of the Central Economic Management Research Institute, concurred saying the tax policies were vague.
There were 14 kinds of tax-deductible fees but they did not include commission and brokerage, causing confusion.
The government intervened too much in businesses’ activities: For instance, salaries paid by the private sector could not exceed those paid by state firms in the same sector.
It was necessary to have an open financial mechanism to provide private firms more rights in determining their financial activities.
Chen Li Hsun, chairman of Taiwanese-owned Full Power Joint Stock Company, said inappropriate land policies caused problems for real estate firms.
Official rates set by the government were too much at variance with market rates.
Another problem was that state agencies wanted firms to submit firm proposals before fixing the land price. But investors needed to know the price to finalize their plans.
Tran Ngoc Lan, deputy head of the National Committee for Ideology and Culture in the south, admitted that non-state firms were yet to get tax, finance, and land use privileges because to red tape.
Foreign experts said commercial banks ignored private firms, particularly small and medium ones, since they mostly targeted big companies.
Source: VNA
4 more seafood companies seek listing
Four more seafood companies have registered with the State Securities Commission (SSC) to list on the stock exchange, according to the Viet Nam Association of Seafood Exporters and Producers.
The registering firms are Sea Minh Hai and Girimex from Mekong Delta's Bac Lieu province, Seapriexco No. 4 in Ho Chi Minh City and Seaprodex Da Nang from Da Nang city.
As of May 28, the SSC had welcomed 11 seafood companies as publicly traded firms.
Viet Nam 's seafood industry has been a high flyer in the country's turning economic fortunes, with exports fetching 1.335 billion USD in the first five months of the year, to which May's export value contributed 320 million USD, a year-on-year rise of 22 percent.
Source: VNA
The registering firms are Sea Minh Hai and Girimex from Mekong Delta's Bac Lieu province, Seapriexco No. 4 in Ho Chi Minh City and Seaprodex Da Nang from Da Nang city.
As of May 28, the SSC had welcomed 11 seafood companies as publicly traded firms.
Viet Nam 's seafood industry has been a high flyer in the country's turning economic fortunes, with exports fetching 1.335 billion USD in the first five months of the year, to which May's export value contributed 320 million USD, a year-on-year rise of 22 percent.
Source: VNA
Seafood industry netting big profits
Viet Nam's seafood industry was again setting records for all the right reasons as the nation’s seafood export turnover for the first five months of the year was estimated to come in at 320 million USD.
Total five-month export revenues also accounted for more than 1.3 billion USD, a 21.87% increase year on year, said the Ministry of Fisheries.
Market observers pointed to an increase in orders of frozen fish, cuttlefish and dried fish to France, Japan, the Republic of Korea, Taiwan and Australia as primary reasons for the spike in turnover.
In an effort to ensure the country's brand recognition, the Fisheries Ministry asked the National Fisheries Quality Assurance and Veterinary Directorate (Nafiqaved) to increase inspections of chemical residues in seafood, particularly those exported to Russia, Australia and Japan.-
Source: VNA
Total five-month export revenues also accounted for more than 1.3 billion USD, a 21.87% increase year on year, said the Ministry of Fisheries.
Market observers pointed to an increase in orders of frozen fish, cuttlefish and dried fish to France, Japan, the Republic of Korea, Taiwan and Australia as primary reasons for the spike in turnover.
In an effort to ensure the country's brand recognition, the Fisheries Ministry asked the National Fisheries Quality Assurance and Veterinary Directorate (Nafiqaved) to increase inspections of chemical residues in seafood, particularly those exported to Russia, Australia and Japan.-
Source: VNA
Sacombank to issue new shares
Saigon Thuong Tin Commercial Bank (STB), Vietnam's sixth-largest, said it would issue more than 236 million shares to raise at least $212 million for investing in the credit card business and new subsidiaries.
Sacombank would sell the shares to existing shareholders and key staff at 15,000 dong ($0.93) from June 26 to July 23, Deputy General Director Nguyen Quang Trung said in a statement.
The proceeds would be used to more than double the bank's registered capital to $276 million, construct its new offices in Ho Chi Minh City, upgrade its information technology and open a credit card business.
The funds would also go to existing subsidiaries and newly established subsidiaries, Trung said without elaboration.
Shares in Sacombank closed flat at 166,000 dong ($10.3) on Monday, valuing it at $2.2 billion. Listing of the new shares is scheduled for August 23.
In March, Scombank said it would establish a credit card venture with shareholder ANZ Bank in 2007. It also aims to open 14 branches in Vietnam this year and establish offices in China, Laos and Cambodia.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 26.3 percent of Sacombank, which reported a near tripling of gross profit in the first four months of this year from the same period of 2006 to 413 billion dong ($25.6 million).
Source: Reuters
Sacombank would sell the shares to existing shareholders and key staff at 15,000 dong ($0.93) from June 26 to July 23, Deputy General Director Nguyen Quang Trung said in a statement.
The proceeds would be used to more than double the bank's registered capital to $276 million, construct its new offices in Ho Chi Minh City, upgrade its information technology and open a credit card business.
The funds would also go to existing subsidiaries and newly established subsidiaries, Trung said without elaboration.
Shares in Sacombank closed flat at 166,000 dong ($10.3) on Monday, valuing it at $2.2 billion. Listing of the new shares is scheduled for August 23.
In March, Scombank said it would establish a credit card venture with shareholder ANZ Bank in 2007. It also aims to open 14 branches in Vietnam this year and establish offices in China, Laos and Cambodia.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 26.3 percent of Sacombank, which reported a near tripling of gross profit in the first four months of this year from the same period of 2006 to 413 billion dong ($25.6 million).
Source: Reuters
ABBank increases capital
An Binh Commercial Joint Stock Bank, or AB Bank continues to seek the nod from the State Bank of Vietnam (SBV) for a new capital injection plan after being rejected mid-month due to a reportedly opaque dossier.
The bank’s spokesman said it had given a clear explanation to the central bank about the plan to more than triple its chartered capital to VND5 trillion from VND1.13 trillion this year via a share issue.
He added that the bank would not lower the set capital increase.
Capital expansion should be carried out in phases and approval for any capital increase phase must be based on the efficiency of the preceding phase, the central bank said.
The bank said in 2007-10 it could see growth of 250 percent to 300 percent in outstanding loans and profit, as well as open 20 to 30 units nationwide, which would require a massive capital injection.
AB Bank had earlier submitted an application to the HCMC branch of the SBV for a convertible bond issue worth VND5 trillion this year and next.
The bonds, at a face value of VND100,000, are to have two terms of 12 and 18 months, and will be converted into maturity shares.
Mobilized funds from the bond issue will be used to invest in the power sector and AB Bank.
It plans to scale up its chartered capital to VND7.5 trillion by late 2008 and VND10 trillion by late 2009 from the convertible bonds.
Source: Thanh Nien
The bank’s spokesman said it had given a clear explanation to the central bank about the plan to more than triple its chartered capital to VND5 trillion from VND1.13 trillion this year via a share issue.
He added that the bank would not lower the set capital increase.
Capital expansion should be carried out in phases and approval for any capital increase phase must be based on the efficiency of the preceding phase, the central bank said.
The bank said in 2007-10 it could see growth of 250 percent to 300 percent in outstanding loans and profit, as well as open 20 to 30 units nationwide, which would require a massive capital injection.
AB Bank had earlier submitted an application to the HCMC branch of the SBV for a convertible bond issue worth VND5 trillion this year and next.
The bonds, at a face value of VND100,000, are to have two terms of 12 and 18 months, and will be converted into maturity shares.
Mobilized funds from the bond issue will be used to invest in the power sector and AB Bank.
It plans to scale up its chartered capital to VND7.5 trillion by late 2008 and VND10 trillion by late 2009 from the convertible bonds.
Source: Thanh Nien
Monday, May 28, 2007
Vietnamese bond yield ease slightly
Vietnam sold 700 billion dong ($43.5 million) of five-year government bonds on Monday at a yield of 7.05%, down slightly from 7.1% at an auction earlier this month, a stock market statement said.
The over-the-counter market sold all the debt on offer to three bidders after investors had sought to buy the bonds at between 7% and 8.5%, the statement said.
The bond, with a face value of 100,000 dong, will be issued on May 30 and mature on May 30, 2012.
On May 15 the Hanoi market sold 400 billion dong of five-year government bonds at a yield of 7.1%, down from 7.15% at last month's auction.
The Hanoi stock market has sold 5.96 trillion dong ($370 million) of government bonds so far this year.
The Finance Ministry is aiming to sell 22 trillion dong ($1.37 billion) of government bonds between March and the end of this year to invest in transport and irrigation projects.
In March Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It has a Ba3 rating on the country's dong debt.
Source: Reuters
The over-the-counter market sold all the debt on offer to three bidders after investors had sought to buy the bonds at between 7% and 8.5%, the statement said.
The bond, with a face value of 100,000 dong, will be issued on May 30 and mature on May 30, 2012.
On May 15 the Hanoi market sold 400 billion dong of five-year government bonds at a yield of 7.1%, down from 7.15% at last month's auction.
The Hanoi stock market has sold 5.96 trillion dong ($370 million) of government bonds so far this year.
The Finance Ministry is aiming to sell 22 trillion dong ($1.37 billion) of government bonds between March and the end of this year to invest in transport and irrigation projects.
In March Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It has a Ba3 rating on the country's dong debt.
Source: Reuters
70 investment funds queue to enter Vietnam
Vietnam’s stock market can bring super profit, and that explains why foreign investment funds are pouring their money into Vietnam’s stocks.
Investors whisper in each other’s ears that investment funds earned super profit in Vietnam last year. Two funds gave investors the profit of 140%. Another fund, which injected money in real estate, did not gain such a fat profit, but the profit proved to be also very encouraging, at 60%.
The fat profit Vietnam can bring to investors has encouraged them to come to Vietnam. The figure released at a workshop late last week may shock everyone: 70 foreign investment funds are waiting to join the market.
There is no exact figure about portfolio investment in Vietnam, as the OTC market is out of the State’s control. However, it is clear that the three biggest investment funds on the market now hold nearly $4bil. Dragon Capital is managing some $1.5bil, VinaCapital $1.3bil and Indochina Capital $1bil. VinaCapital has wrapped up a visit to the world’s financial centres to raise $250-300mil.
A series of domestic based funds have also been set up recently. The Phu Lan Fund Management Company has set up a new fund, called Lion Capital. Louis Nguyen, Phu Lan director, said that the company was planning to raise $200mil of funds from domestic and foreign investors in America, Asia and Europe, which will be injected in 10 projects.
The beyond-expectation growth of the three funds has promoted other investment funds to join Vietnam’s market. Mekong Capital has wrapped up the raising of $100mil for its third fund, called Azalea Fund. Mekong’s first fund had only $18.5mil in capital, while the second had $50mil, and the third is two times bigger than the second one.
In the last few years, an investment deal of Mekong Capital was just valued at several hundred thousands dollars, but now the fund has to inject 5-6mil in every deal. The fast developing stock market has made the value of private enterprises skyrocket, and Mekong Capital has to pay high to be eligible to become a strategic shareholder in local companies.
After Azalea Fund, a series of funds are waiting for operation licences from the State Securities Commission. These include one Japanese owned fund, estimated to have $200mil in capital. Chinese and Hong Kong financial institutions have landed in Vietnam, setting up financial consultation firms.
Investment funds are all getting ready for the auctions of big companies’ shares to be held with their equitisation in the coming time. It is expected that some $2bil more will be injected in Vietnam in 2007.
Director of a fund management company said that most investment funds were making investment in shares of listing companies and OTC shares. Meanwhile, injecting money in the real estate sector proves to be the second choice of investment funds, though this is a long-term investment.
BankInvest, which only injects money in private enterprises, has announced investment in two initial projects, AAA insurance and Duc Thanh Wood Processing Company.
Having been present in Vietnam for a long time, Mekong Capital has invested in 12 companies, including big names like Tan Dai Hung plastics, Ngo Han electromagnetic wire, Minh Hoang garment, Saigon Gas, Lac Viet IT. Especially, Ngo Han two times has received investment, once in April 2005 ($1.85mil), and once in January 2007 ($1.91mil).
Source: VNE
Investors whisper in each other’s ears that investment funds earned super profit in Vietnam last year. Two funds gave investors the profit of 140%. Another fund, which injected money in real estate, did not gain such a fat profit, but the profit proved to be also very encouraging, at 60%.
The fat profit Vietnam can bring to investors has encouraged them to come to Vietnam. The figure released at a workshop late last week may shock everyone: 70 foreign investment funds are waiting to join the market.
There is no exact figure about portfolio investment in Vietnam, as the OTC market is out of the State’s control. However, it is clear that the three biggest investment funds on the market now hold nearly $4bil. Dragon Capital is managing some $1.5bil, VinaCapital $1.3bil and Indochina Capital $1bil. VinaCapital has wrapped up a visit to the world’s financial centres to raise $250-300mil.
A series of domestic based funds have also been set up recently. The Phu Lan Fund Management Company has set up a new fund, called Lion Capital. Louis Nguyen, Phu Lan director, said that the company was planning to raise $200mil of funds from domestic and foreign investors in America, Asia and Europe, which will be injected in 10 projects.
The beyond-expectation growth of the three funds has promoted other investment funds to join Vietnam’s market. Mekong Capital has wrapped up the raising of $100mil for its third fund, called Azalea Fund. Mekong’s first fund had only $18.5mil in capital, while the second had $50mil, and the third is two times bigger than the second one.
In the last few years, an investment deal of Mekong Capital was just valued at several hundred thousands dollars, but now the fund has to inject 5-6mil in every deal. The fast developing stock market has made the value of private enterprises skyrocket, and Mekong Capital has to pay high to be eligible to become a strategic shareholder in local companies.
After Azalea Fund, a series of funds are waiting for operation licences from the State Securities Commission. These include one Japanese owned fund, estimated to have $200mil in capital. Chinese and Hong Kong financial institutions have landed in Vietnam, setting up financial consultation firms.
Investment funds are all getting ready for the auctions of big companies’ shares to be held with their equitisation in the coming time. It is expected that some $2bil more will be injected in Vietnam in 2007.
Director of a fund management company said that most investment funds were making investment in shares of listing companies and OTC shares. Meanwhile, injecting money in the real estate sector proves to be the second choice of investment funds, though this is a long-term investment.
BankInvest, which only injects money in private enterprises, has announced investment in two initial projects, AAA insurance and Duc Thanh Wood Processing Company.
Having been present in Vietnam for a long time, Mekong Capital has invested in 12 companies, including big names like Tan Dai Hung plastics, Ngo Han electromagnetic wire, Minh Hoang garment, Saigon Gas, Lac Viet IT. Especially, Ngo Han two times has received investment, once in April 2005 ($1.85mil), and once in January 2007 ($1.91mil).
Source: VNE
Deutsche Bank to advise Mekong Housing Bank in IPO
German-based Deutsche AG Bank’s arm in Singapore has entered into a deal with a Vietnamese state-run bank MHB to offer consulting services for the local bank’s share auction set for this year. Under the deal signed last Friday, Deutsche Bank AG Singapore and its sub-contractors will consult MHB – the Housing Bank of Mekong Delta – with evaluation for their initial public offering (IPO) and listings on the local stock exchange.
The consultation is expected to be completed in October, paving the way for the bank to launch its IPO.
Mekong Delta Housing Development Bank had assets of VND18.8 trillion ($1.2 billion) by the end of last year.
It has opened its branches in Vietnam since 1992 and is now waiting for approval from the Vietnamese central bank to buy a 20 percent stake in the Hanoi-based bank.
MHB provides financial services for home buyers and small-to-medium sized enterprises with 140 branches in over 32 provinces in Vietnam.
Last year, the bank posted total capital of VND19 trillion (US$1.2 billion) with an annual growth of 50-60%.
Source: Thanh Nien
The consultation is expected to be completed in October, paving the way for the bank to launch its IPO.
Mekong Delta Housing Development Bank had assets of VND18.8 trillion ($1.2 billion) by the end of last year.
It has opened its branches in Vietnam since 1992 and is now waiting for approval from the Vietnamese central bank to buy a 20 percent stake in the Hanoi-based bank.
MHB provides financial services for home buyers and small-to-medium sized enterprises with 140 branches in over 32 provinces in Vietnam.
Last year, the bank posted total capital of VND19 trillion (US$1.2 billion) with an annual growth of 50-60%.
Source: Thanh Nien
High internet penetration in Vietnam
Vietnam has entered the top 20 nations with the highest internet penetration paving the way for increasing broadband subscribers to 2010. The country ranked 17th out of 20 countries with the highest internet usage with 15.5 million internet users in March.Minister of Post and Telematics Do Trung Ta said Vietnam had set its sights on Malaysia and Singapore which have 36.6% and 56.3% ratios respectively.
“With this background, we can step up internet user penetration during 2007-2010,” said Ta.Vietnam hopes to have a 35-40% internet penetration rate in 2010, equivalent to 13-14 internet accounts per 100 people.Among internet users to 2010, 30% will be broadband internet subscribers including all state agencies, high schools, institutes and universities.
VNPT Group’s Vietnam DataCommunication Company (VDC) director Vu Hoang Lien said the group’s number of internet subscribers would account for a half of the country’s total by 2010, the bulk of them being broadband internet users.“The number of dial-up users has kept falling but is steady in rural and mountainous areas. However, once broadband internet reaches these areas, dial-up services will automatically disappear,” said Lien.Dial-up revenue accounted for 20% of VDC’s revenue at the beginning of this year and halved in April.
The group plans to hook all provinces up with broadband connections and networks including the next generation network (NGN), metropolitan area network (MAN) Ethernet and wireless Wifi and Wimax to boost the number of ADSL subscribers.
The current number of broadband users in Vietnam is less than 1% of the country’s population. Viettel deputy general director Nguyen Manh Hung said all operators should use mobile networks for developing broadband internet users once networks offered 3G services.
“Vietnam will have done a big job if total internet broadband penetration is 10% by 2010 and it needs support from mobile services, which have a 35% penetration rate,” said Hung.
He said in order to boost the number of internet broadband users, carriers should cut rentals for international channels for operators in order to reduce usage costs for end-users and promote content for domestic usage. International channel rentals make up 30% of $15 of production cost for an ADSL user.
The international channel still accounts for around 30% of production cost for an ADSL subscriber, while users often surf outside Vietnam due to a lack of Vietnamese content.
“The mobile network has a high number of stations and may offer broadband services once the network is redundant for providing mobile services,” Hung said.
Source: VIR
“With this background, we can step up internet user penetration during 2007-2010,” said Ta.Vietnam hopes to have a 35-40% internet penetration rate in 2010, equivalent to 13-14 internet accounts per 100 people.Among internet users to 2010, 30% will be broadband internet subscribers including all state agencies, high schools, institutes and universities.
VNPT Group’s Vietnam DataCommunication Company (VDC) director Vu Hoang Lien said the group’s number of internet subscribers would account for a half of the country’s total by 2010, the bulk of them being broadband internet users.“The number of dial-up users has kept falling but is steady in rural and mountainous areas. However, once broadband internet reaches these areas, dial-up services will automatically disappear,” said Lien.Dial-up revenue accounted for 20% of VDC’s revenue at the beginning of this year and halved in April.
The group plans to hook all provinces up with broadband connections and networks including the next generation network (NGN), metropolitan area network (MAN) Ethernet and wireless Wifi and Wimax to boost the number of ADSL subscribers.
The current number of broadband users in Vietnam is less than 1% of the country’s population. Viettel deputy general director Nguyen Manh Hung said all operators should use mobile networks for developing broadband internet users once networks offered 3G services.
“Vietnam will have done a big job if total internet broadband penetration is 10% by 2010 and it needs support from mobile services, which have a 35% penetration rate,” said Hung.
He said in order to boost the number of internet broadband users, carriers should cut rentals for international channels for operators in order to reduce usage costs for end-users and promote content for domestic usage. International channel rentals make up 30% of $15 of production cost for an ADSL user.
The international channel still accounts for around 30% of production cost for an ADSL subscriber, while users often surf outside Vietnam due to a lack of Vietnamese content.
“The mobile network has a high number of stations and may offer broadband services once the network is redundant for providing mobile services,” Hung said.
Source: VIR
Vietnam's development in a regional context
Vietnam has experienced a baby boom since the early 1980s. Present growth rates determine that Vietnam’s population is growing at 1.2% per year, while mortality rates are on the decline. However, Vietnam is not the leader in population growth rate in Asia. The Philippines (1.8% annual growth rate), leads the population explosion followed closely by Malaysia, Singapore, Indonesia and India. Though most businesses are always attracted to the big population markets, sustainability and stability are key factors when deciding whether to invest in a market or not. Hence, Vietnam’s growth rate seems manageable and economically viable as well. Countries such as Malaysia and Singapore, with their rather modest populations, can certainly afford a few more mouths to feed. In contrast, India must be able to support a population of over 1.1 billion people with a growth rate of 1.38% annually, making one wonder about the long term viability of its recent spate of successes.
Without a doubt, China and India are worlds apart from the rest of Asia in terms of consumption capabilities. China (a 1.3 billion population) has several provinces bigger than Vietnam’s entire population, making it easy to understand why so many investors are attracted to the Middle Kingdom. However, when considering the age profiles of Asia, it is predominantly the Southeast Asian countries, with India being the exception, that has the youngest populations and henceforth the highest potential for growth. The Philippines, followed closely by Vietnam bare host to Asia’s youngest populations, both of which have 57% of their respective populations under the age of 25, meaning that both countries have their consumption years ahead of them. In contrast, Japan has only 31% of its population within the same profile and has a paltry growth rate of 0.02% annually.
Two other important population statistics, which need to be considered when comparing Vietnam’s future to the rest of Asia, is family size and the ultra-important, urban versus rural split. Not surprisingly, again the Philippines and Vietnam have the largest family sizes with an average of 56% and 43% of families exceeding five household members. When looking at other Asian countries, it becomes clear that family sizes will become smaller, creating a larger consumer base. The Philippines may be the exception to the rule due to the countries strong Roman Catholic influences, but Vietnam should, and will follow suite in the next decade, creating an expanded consumer base, within a manageable social structure.
The single most important factor which should spur economic growth in Vietnam from a population perspective is the migration of rural Vietnamese into the commercially more prosperous urban centres, such as Hanoi and Ho Chi Minh City. Vietnam today holds Asia’s largest per capita rural population, representing more that 73% of the 83 million inhabitants.
Next closest in terms of rural populations are Thailand and India (71%). Compared to China, which today already has an urban population of 43% and looking at recent migration figures within Vietnam, it stands to reason that Vietnam’s urban population will roughly reflect that of China in the next 10 to 15 years, meaning that housing, transportation, communications, other infrastructure and consumerism are going to experience record growth in Asia.
If one were to make decisions on investing in Vietnam purely on population statistics and comparatives to other Asian nations, only a partial picture of the realities for Vietnam would emerge. There are several cultural nuances which need to be mixed into the equation to gain a clearer vision of Vietnam’s economic and consumption future. Unlike the Philippines, which is so influenced by religion, Vietnam has a dichotomous religious landscape. More important to Vietnamese are Family, Fatherland and Future success, which have a huge impact on how Vietnam’s population will react to the future. Using the “World Value Survey” data for 2006, we note that Vietnam had the second highest score amongst some 10 Asian nations survey scores regarding national pride, indicating a fierce national pride in being Vietnamese. The survey also highlighted that work was very important in their lives, while family seemed less important in contrast to other Asian nation, indicating that sacrifices to family may be in the cards to achieve work happiness and success.
Interestingly, when asked about issues such a women’s rights “Voice of the People” survey, Vietnamese responded in quite a liberal fashion, identifying a possible practical approach to the future, in terms of multiple breadwinners and equality at home and at the work place.
There are many ifs, buts and assumptions required to gain an accurate understanding of Vietnam in comparison to the rest of Asia and how Vietnam’s future will evolve. Having looked at population trends and attitudes, there is reason to believe that Vietnam will in many aspects resemble China and India, but to a lesser and perhaps, more healthy extent.
So let’s conclude by comparing fact with fact. In 2006, Vietnam experienced the highest media spend growth in all of Asia, a whopping 40%, compared to India, 23% and China 18%. As the media industry is still in its infancy, these growth numbers will indeed slow down, but probably not for another few years. When comparing Vietnam FMCG (Fast Moving Consumer Goods) growth to the rest of Asia, again Vietnam leads the list at 20% growth compared to China at 11% and our similar sister nation the Philippines, experiencing declining growth of -8% in 2006.
Internet growth rates have been in a steady growth clip of around 30% per year in Asia, while Vietnam is again exceeding such growth rates at around 35% per annum over the past few years. Another key indicator is the growth of the mobile phone market. Though growing slower than other key indicators, 2004 to 2006 experienced a mild increase of 5%, while projections for 2007, indicate double digit growth in mobile phone ownership.
Considering Vietnam’s stable population growth, young population, increasing urbanisation, liberal, practical and determined attitudes and the fact that Vietnam is beginning to outgrow other Asian nations. It stands to reason that Vietnam will become the next big consumer market in Asia by 2020.
Source: VIR
Without a doubt, China and India are worlds apart from the rest of Asia in terms of consumption capabilities. China (a 1.3 billion population) has several provinces bigger than Vietnam’s entire population, making it easy to understand why so many investors are attracted to the Middle Kingdom. However, when considering the age profiles of Asia, it is predominantly the Southeast Asian countries, with India being the exception, that has the youngest populations and henceforth the highest potential for growth. The Philippines, followed closely by Vietnam bare host to Asia’s youngest populations, both of which have 57% of their respective populations under the age of 25, meaning that both countries have their consumption years ahead of them. In contrast, Japan has only 31% of its population within the same profile and has a paltry growth rate of 0.02% annually.
Two other important population statistics, which need to be considered when comparing Vietnam’s future to the rest of Asia, is family size and the ultra-important, urban versus rural split. Not surprisingly, again the Philippines and Vietnam have the largest family sizes with an average of 56% and 43% of families exceeding five household members. When looking at other Asian countries, it becomes clear that family sizes will become smaller, creating a larger consumer base. The Philippines may be the exception to the rule due to the countries strong Roman Catholic influences, but Vietnam should, and will follow suite in the next decade, creating an expanded consumer base, within a manageable social structure.
The single most important factor which should spur economic growth in Vietnam from a population perspective is the migration of rural Vietnamese into the commercially more prosperous urban centres, such as Hanoi and Ho Chi Minh City. Vietnam today holds Asia’s largest per capita rural population, representing more that 73% of the 83 million inhabitants.
Next closest in terms of rural populations are Thailand and India (71%). Compared to China, which today already has an urban population of 43% and looking at recent migration figures within Vietnam, it stands to reason that Vietnam’s urban population will roughly reflect that of China in the next 10 to 15 years, meaning that housing, transportation, communications, other infrastructure and consumerism are going to experience record growth in Asia.
If one were to make decisions on investing in Vietnam purely on population statistics and comparatives to other Asian nations, only a partial picture of the realities for Vietnam would emerge. There are several cultural nuances which need to be mixed into the equation to gain a clearer vision of Vietnam’s economic and consumption future. Unlike the Philippines, which is so influenced by religion, Vietnam has a dichotomous religious landscape. More important to Vietnamese are Family, Fatherland and Future success, which have a huge impact on how Vietnam’s population will react to the future. Using the “World Value Survey” data for 2006, we note that Vietnam had the second highest score amongst some 10 Asian nations survey scores regarding national pride, indicating a fierce national pride in being Vietnamese. The survey also highlighted that work was very important in their lives, while family seemed less important in contrast to other Asian nation, indicating that sacrifices to family may be in the cards to achieve work happiness and success.
Interestingly, when asked about issues such a women’s rights “Voice of the People” survey, Vietnamese responded in quite a liberal fashion, identifying a possible practical approach to the future, in terms of multiple breadwinners and equality at home and at the work place.
There are many ifs, buts and assumptions required to gain an accurate understanding of Vietnam in comparison to the rest of Asia and how Vietnam’s future will evolve. Having looked at population trends and attitudes, there is reason to believe that Vietnam will in many aspects resemble China and India, but to a lesser and perhaps, more healthy extent.
So let’s conclude by comparing fact with fact. In 2006, Vietnam experienced the highest media spend growth in all of Asia, a whopping 40%, compared to India, 23% and China 18%. As the media industry is still in its infancy, these growth numbers will indeed slow down, but probably not for another few years. When comparing Vietnam FMCG (Fast Moving Consumer Goods) growth to the rest of Asia, again Vietnam leads the list at 20% growth compared to China at 11% and our similar sister nation the Philippines, experiencing declining growth of -8% in 2006.
Internet growth rates have been in a steady growth clip of around 30% per year in Asia, while Vietnam is again exceeding such growth rates at around 35% per annum over the past few years. Another key indicator is the growth of the mobile phone market. Though growing slower than other key indicators, 2004 to 2006 experienced a mild increase of 5%, while projections for 2007, indicate double digit growth in mobile phone ownership.
Considering Vietnam’s stable population growth, young population, increasing urbanisation, liberal, practical and determined attitudes and the fact that Vietnam is beginning to outgrow other Asian nations. It stands to reason that Vietnam will become the next big consumer market in Asia by 2020.
Source: VIR
Power investors wait for approval of strategy
Foreign power investors need to wait until the prime minister approves Vietnam’s new power development strategy towards 2015 for information about future investment opportunities.
A senior official from the Ministry of Industry (MoI) said a project wish list would be issued when the strategy is published. MoI submitted the strategy proposal to the government for final approval in April this year. “In a bid to satisfy the nation’s rising power demand, the MoI has planned to open power projects with combined 10,000 MW of generation capacity, mainly located in the central and southern parts of Vietnam. Huge investment potential and advanced technology will be two requirements deciding eligible investors,” said an MoI source.
MoI also suggested that in cases where more than one foreign investor takes an interest in the same power plant, an open bidding competition should be undertaken. Bid winners should be firms which offer the best price to the nation’s current wholesale buyer, Electricity of Vietnam.
Under the government’s current pricing regulations, EVN’s reselling electricity price is set at an average of VND842 (5.26 cent) per kWh.
The investment wish list of projects in Vietnam’s power sector is said to be greatly anticipated by foreign firms who are studying cases to build thermal power plants across the nation. Interested organisations include Japan’s Sumitomo, J-Power and Sojitz, the UK’s BP, Taiwan’s Tae Kwang Vina Industrial, Singapore’s Boustead and China’s Southern Grid Corporation. More recently, France’s leading power firm EDF told Deputy Minister of Planning and Investment Cao Viet Sinh about its desire to build a large-scale thermal power plant in the south of Vietnam.
Luc Jacquet, vice president of EDF Southeast Asia Division, unveiled that EDF would soon select the final location of the proposed plant, which the company wanted to start in 2012. The location should be close to a deep seaport to facilitate the import of coal to fuel the new power plant.
“EDF has an ambitious plans to develop power plants of combined 10,000 megawatts within the next 10 years,” Jacquet said.
EDF is a co-investor alongside Japan’s Sumitomo and Vietnam’s Tepco in the $480 million gas-fuelled Phu My 2.2 power plant in the southern Ba Ria-Vung Tau province. The 720 megawatt plant, which is one of two foreign investment power projects in Vietnam, began operating two years ago. MPI deputy minister Cao Viet Sinh admitted that rapid development of power plants in Vietnam was vital because of a sharp increase in electricity demand.
There is a potentially serious power shortage during the country’s dry reason which is caused by the current generation mix where electricity production is highly dependent on hydropower generation.
Sinh said that Vietnam’s current power generation capacity is rated at 11,200 megawatt and the supply is set to double by 2010.
Source: VIR
A senior official from the Ministry of Industry (MoI) said a project wish list would be issued when the strategy is published. MoI submitted the strategy proposal to the government for final approval in April this year. “In a bid to satisfy the nation’s rising power demand, the MoI has planned to open power projects with combined 10,000 MW of generation capacity, mainly located in the central and southern parts of Vietnam. Huge investment potential and advanced technology will be two requirements deciding eligible investors,” said an MoI source.
MoI also suggested that in cases where more than one foreign investor takes an interest in the same power plant, an open bidding competition should be undertaken. Bid winners should be firms which offer the best price to the nation’s current wholesale buyer, Electricity of Vietnam.
Under the government’s current pricing regulations, EVN’s reselling electricity price is set at an average of VND842 (5.26 cent) per kWh.
The investment wish list of projects in Vietnam’s power sector is said to be greatly anticipated by foreign firms who are studying cases to build thermal power plants across the nation. Interested organisations include Japan’s Sumitomo, J-Power and Sojitz, the UK’s BP, Taiwan’s Tae Kwang Vina Industrial, Singapore’s Boustead and China’s Southern Grid Corporation. More recently, France’s leading power firm EDF told Deputy Minister of Planning and Investment Cao Viet Sinh about its desire to build a large-scale thermal power plant in the south of Vietnam.
Luc Jacquet, vice president of EDF Southeast Asia Division, unveiled that EDF would soon select the final location of the proposed plant, which the company wanted to start in 2012. The location should be close to a deep seaport to facilitate the import of coal to fuel the new power plant.
“EDF has an ambitious plans to develop power plants of combined 10,000 megawatts within the next 10 years,” Jacquet said.
EDF is a co-investor alongside Japan’s Sumitomo and Vietnam’s Tepco in the $480 million gas-fuelled Phu My 2.2 power plant in the southern Ba Ria-Vung Tau province. The 720 megawatt plant, which is one of two foreign investment power projects in Vietnam, began operating two years ago. MPI deputy minister Cao Viet Sinh admitted that rapid development of power plants in Vietnam was vital because of a sharp increase in electricity demand.
There is a potentially serious power shortage during the country’s dry reason which is caused by the current generation mix where electricity production is highly dependent on hydropower generation.
Sinh said that Vietnam’s current power generation capacity is rated at 11,200 megawatt and the supply is set to double by 2010.
Source: VIR
Draft of implementations of WTO commitments: improving environment for foreign investments?
The Ministry of Planning and Investment has completed the first draft decree offering guidelines for the implementation of some of Vietnam’s commitments to the WTO.
It is seen as an important legal framework highly anticipated by the foreign business community. The draft decree, however, caused much debate as it still fails to satisfy mandatory WTO rules and enhance Vietnam’s competitiveness in a new global context.
Fred Burke, leader of Vietnam’s Business Forum’s Manufacturing and Distribution Working Group, has compiled 28 pages of comments on the draft decree, with inputs from several business chambers, law firms and the STAR project. The length of his comments is even five pages longer than the draft decree, which he received from MPI legal officials.
“In the absence of clear guidance, it seems most officials will tend to take the narrowest interpretation of the rules, which in many cases means the current environment for foreign investment has become more difficult than it was before WTO accession,” Burke said.
“This was certainly not anyone’s expectation or plan, so it is important that clearer guidance is provided to encourage faithful implementation of Vietnam’s WTO commitments,” he said.
Burke, who is Baker & McKenzie’s managing partner in Vietnam, said most of the draft decree’s articles had not provided proper responses to the business community’s requirements.
He said the definition of economic needs tests (ENT) given in Article 2 of the draft decree resulted in the commentator’s confusion. This term is important because the General
Agreement on Trade in Services (GATS) prohibits any form of “economic needs test” as a criterion for licensing foreign service suppliers. However, in Vietnam’s case there is an unusual exception in its commitments in specific service sectors for foreign-owned retail establishments.
Specifically, according to the draft decree, Vietnam reserves the right to subject foreign-owned retail establishments, after the first one, to an economic needs test.
“If the term ‘economic needs test’ in the draft decree is intended to refer to retail service establishments only, which we believe it is, then the definition should not be different from what Vietnam has agreed to in the services schedule,” Burke said.
“Given that the concept of economic need may be subjective, and no governmental authority is omniscient, we therefore suggest that a finding of ‘economic needs’ for the purpose of this test should be able to be produced for any ministry or ministerial level organisation relevant to the proposed retail establishment.”Trading rights is another concern as the draft decree defines trading rights as “the right to import and export by foreign businesspersons, [and] enterprises with foreign invested capital in Vietnam”.
The definition also left an EU delegation representative confused.
“We understand that trading rights include the right to import goods. Can the government confirm if once the goods are imported, the importer can sell to only one local distributor, or can it be sold to more and does this distributor need to be a wholesaler or can it be a retail distributor,” said the EU representative.
Burke criticised the limitations of trading and distribution rights of Vietnamese enterprises with foreign investment, which are clarified in the Article 8 and 10 of the draft decree.
According to the Article 8, foreign investors are not permitted to make capital contributions or purchase shares in a Vietnamese enterprise involved in:
(i) Import of crude oil, petroleum, aircraft, aircraft parts and aviation means and equipment, feature films, newspapers, cigarettes, cigars and other processed cigarette products;
(ii) distribution of cigarette, cigars, books, newspapers, magazines, articles with recorded images, precious metals, precious germs, pharmaceutical products (except for non-pharmacy nutrition products in forms of tablets, capsules or powder), explosives, crude oil and processed oil, rice, sugar made from sugar canes and from beet;
(iii) supply of mining-related services including: provision of supplies, equipment chemicals, base services, ship services, livelihood services, flight services to serve petroleum activities, and
(iv) other service sectors/sub sectors stipulated in the Schedule for Commitments on Services that Vietnam is permitted to apply restriction measures due to national security and social order reasons.
“This article prohibits foreign investors from buying into certain protected industries at all. This will give rise to some problems for ongoing and planning projects if the rule is not cast more flexibly.” “For example, import of aircraft and aircraft parts are prohibited for enterprises with any foreign investment at all. This means that if a foreign investor were to buy say 30 per cent of Pacific Airlines, then that airline would henceforth be prohibited from importing its own aircraft and aircraft parts. That may be a significant disincentive to the investment for both parties,” Burke said.
Tran Tuan Phong, a lawyer with Vilaf Hong Duc law firm, shared similar sentiments. He said that foreign investors had been waiting a long time for guidance documents of the Decree 23/2007/ND-CP stipulating in detail the Commercial Law in direct relation to the trading rights of foreign-invested companies in Vietnam.
“We came to work but nobody did anything as they had to wait for guidelines on that law. It is evident that congestion will take place when the number of investors having to wait increases. This modus operandi is very inefficient and will discourage investors,” he said.
Phong was also concerned that several changes included those for strict application of commitments, which had been announced, or application of these rules in accordance with Vietnamese laws, or application of the practical cases.
“The reason for differing views is because of time it took for Vietnam to negotiate WTO admission was too long - about a decade. During this period of time, there were many changes in Vietnamese policies and conditions,” he said.
Source: VIR
It is seen as an important legal framework highly anticipated by the foreign business community. The draft decree, however, caused much debate as it still fails to satisfy mandatory WTO rules and enhance Vietnam’s competitiveness in a new global context.
Fred Burke, leader of Vietnam’s Business Forum’s Manufacturing and Distribution Working Group, has compiled 28 pages of comments on the draft decree, with inputs from several business chambers, law firms and the STAR project. The length of his comments is even five pages longer than the draft decree, which he received from MPI legal officials.
“In the absence of clear guidance, it seems most officials will tend to take the narrowest interpretation of the rules, which in many cases means the current environment for foreign investment has become more difficult than it was before WTO accession,” Burke said.
“This was certainly not anyone’s expectation or plan, so it is important that clearer guidance is provided to encourage faithful implementation of Vietnam’s WTO commitments,” he said.
Burke, who is Baker & McKenzie’s managing partner in Vietnam, said most of the draft decree’s articles had not provided proper responses to the business community’s requirements.
He said the definition of economic needs tests (ENT) given in Article 2 of the draft decree resulted in the commentator’s confusion. This term is important because the General
Agreement on Trade in Services (GATS) prohibits any form of “economic needs test” as a criterion for licensing foreign service suppliers. However, in Vietnam’s case there is an unusual exception in its commitments in specific service sectors for foreign-owned retail establishments.
Specifically, according to the draft decree, Vietnam reserves the right to subject foreign-owned retail establishments, after the first one, to an economic needs test.
“If the term ‘economic needs test’ in the draft decree is intended to refer to retail service establishments only, which we believe it is, then the definition should not be different from what Vietnam has agreed to in the services schedule,” Burke said.
“Given that the concept of economic need may be subjective, and no governmental authority is omniscient, we therefore suggest that a finding of ‘economic needs’ for the purpose of this test should be able to be produced for any ministry or ministerial level organisation relevant to the proposed retail establishment.”Trading rights is another concern as the draft decree defines trading rights as “the right to import and export by foreign businesspersons, [and] enterprises with foreign invested capital in Vietnam”.
The definition also left an EU delegation representative confused.
“We understand that trading rights include the right to import goods. Can the government confirm if once the goods are imported, the importer can sell to only one local distributor, or can it be sold to more and does this distributor need to be a wholesaler or can it be a retail distributor,” said the EU representative.
Burke criticised the limitations of trading and distribution rights of Vietnamese enterprises with foreign investment, which are clarified in the Article 8 and 10 of the draft decree.
According to the Article 8, foreign investors are not permitted to make capital contributions or purchase shares in a Vietnamese enterprise involved in:
(i) Import of crude oil, petroleum, aircraft, aircraft parts and aviation means and equipment, feature films, newspapers, cigarettes, cigars and other processed cigarette products;
(ii) distribution of cigarette, cigars, books, newspapers, magazines, articles with recorded images, precious metals, precious germs, pharmaceutical products (except for non-pharmacy nutrition products in forms of tablets, capsules or powder), explosives, crude oil and processed oil, rice, sugar made from sugar canes and from beet;
(iii) supply of mining-related services including: provision of supplies, equipment chemicals, base services, ship services, livelihood services, flight services to serve petroleum activities, and
(iv) other service sectors/sub sectors stipulated in the Schedule for Commitments on Services that Vietnam is permitted to apply restriction measures due to national security and social order reasons.
“This article prohibits foreign investors from buying into certain protected industries at all. This will give rise to some problems for ongoing and planning projects if the rule is not cast more flexibly.” “For example, import of aircraft and aircraft parts are prohibited for enterprises with any foreign investment at all. This means that if a foreign investor were to buy say 30 per cent of Pacific Airlines, then that airline would henceforth be prohibited from importing its own aircraft and aircraft parts. That may be a significant disincentive to the investment for both parties,” Burke said.
Tran Tuan Phong, a lawyer with Vilaf Hong Duc law firm, shared similar sentiments. He said that foreign investors had been waiting a long time for guidance documents of the Decree 23/2007/ND-CP stipulating in detail the Commercial Law in direct relation to the trading rights of foreign-invested companies in Vietnam.
“We came to work but nobody did anything as they had to wait for guidelines on that law. It is evident that congestion will take place when the number of investors having to wait increases. This modus operandi is very inefficient and will discourage investors,” he said.
Phong was also concerned that several changes included those for strict application of commitments, which had been announced, or application of these rules in accordance with Vietnamese laws, or application of the practical cases.
“The reason for differing views is because of time it took for Vietnam to negotiate WTO admission was too long - about a decade. During this period of time, there were many changes in Vietnamese policies and conditions,” he said.
Source: VIR
Saturday, May 26, 2007
Mekong Delta enlarges fish breeding area
The Mekong Delta plans to enlarge its tra and basa catfish breeding area to 10,200 ha with 1,900 fish cages by 2010.
The output of tra and basa catfish will be over 860,000 tonnes by 2010, earning 12.112 trillion VND (757 million USD).
For the long term, Mekong Delta provinces intends to increase its farming area for tra and basa catfish to 16,600 ha by 2020, with 3,900 fish cages, which will provide an output of 1.9 million tones and generate an income of 34.572 trillion VND (2.16 billion USD).
To fulfill these set targets, the region will develop 2,100 establishments producing 2.7 billion of fry by 2010 and 6.7 billion by 2020.
The cost of the project on raising tra and basa catfish is 6.474 trillion VND (404.6 million USD), 2.3 percent of which will be sourced from local budget.
In terms of processing capacity, the provinces aims to have 68 factories, capable of turning out 534,000 tonnes of products per year, and 130 factories with annual output of over 1 million tonnes by 2020.
Export targets include 230,000 tonnes of tra and basa catfish fillet, earning 600 million USD by 2010 and 460,000 tonnes with a turnover of 1.2 billion USD by 2020.
In 2006, tra and basa catfish exports in Mekong Delta reached 500 million USD. This year's figure is expected to reach 750,000 million USD.
Source: VNA
The output of tra and basa catfish will be over 860,000 tonnes by 2010, earning 12.112 trillion VND (757 million USD).
For the long term, Mekong Delta provinces intends to increase its farming area for tra and basa catfish to 16,600 ha by 2020, with 3,900 fish cages, which will provide an output of 1.9 million tones and generate an income of 34.572 trillion VND (2.16 billion USD).
To fulfill these set targets, the region will develop 2,100 establishments producing 2.7 billion of fry by 2010 and 6.7 billion by 2020.
The cost of the project on raising tra and basa catfish is 6.474 trillion VND (404.6 million USD), 2.3 percent of which will be sourced from local budget.
In terms of processing capacity, the provinces aims to have 68 factories, capable of turning out 534,000 tonnes of products per year, and 130 factories with annual output of over 1 million tonnes by 2020.
Export targets include 230,000 tonnes of tra and basa catfish fillet, earning 600 million USD by 2010 and 460,000 tonnes with a turnover of 1.2 billion USD by 2020.
In 2006, tra and basa catfish exports in Mekong Delta reached 500 million USD. This year's figure is expected to reach 750,000 million USD.
Source: VNA
Vietnam Cement Associations presents ambitious plans
Viet Nam will become the leading cement producer in ASEAN by 2010, with a predicted output of 60 million tonnes per year, according to the Viet Nam Cement Association.
Nguyen Quang Cung, director of the Ministry of Construction's Department of Building Materials, said that 30 new cement plants were currently in progress nationwide, in addition to 17 existing plants that were in the process of expanding their capacity to reach a total of 48 million tonnes per year.
Tran Quang Tuan of Viet Nam Cement Corporation, said that the corporation had nearly completed construction of such major cement plants as the Bim Son plant, a second production facility at the But Son plant, and a third production facility at the Hoang Thach plant.
The Cement Corporation's Nguyen Van Diep said that Viet Nam would have a surplus of clinker, a major ingredient of cement, by 2009.
However, the Cement Association has warned against the development of too much capacity, noting that supply by 2010 could exceed demand by 12 million tonnes. Exports could provide a solution to redundancy, but competition with Thai and Chinese cement producers was stiff.
Most of the increased capacity was being developed in the northern region, noted Cement Association chairman Nguyen Van Thien, which could add high transportation costs of about 200,000 VND per tonne to serve markets in the south.
Thien advised investors and enterprises in the cement sector to take care in choosing locations for plants.
Meanwhile, the Ministry of Construction has asked the Prime Minister to restrict the spread of investment in cement projects for the time being, especially smaller projects.
Domestic cement consumption in April reached 3.5 million tonnes, an increase of about 900,000 tonnes over March, bringing total consumption in the first four months of this year to 11.8 million tonnes.
The Cement Corporation predicted that, in the second quarter of this year, consumption would continue climbing, with high demand driven by an upswing in construction activity.
Source: VNA
Nguyen Quang Cung, director of the Ministry of Construction's Department of Building Materials, said that 30 new cement plants were currently in progress nationwide, in addition to 17 existing plants that were in the process of expanding their capacity to reach a total of 48 million tonnes per year.
Tran Quang Tuan of Viet Nam Cement Corporation, said that the corporation had nearly completed construction of such major cement plants as the Bim Son plant, a second production facility at the But Son plant, and a third production facility at the Hoang Thach plant.
The Cement Corporation's Nguyen Van Diep said that Viet Nam would have a surplus of clinker, a major ingredient of cement, by 2009.
However, the Cement Association has warned against the development of too much capacity, noting that supply by 2010 could exceed demand by 12 million tonnes. Exports could provide a solution to redundancy, but competition with Thai and Chinese cement producers was stiff.
Most of the increased capacity was being developed in the northern region, noted Cement Association chairman Nguyen Van Thien, which could add high transportation costs of about 200,000 VND per tonne to serve markets in the south.
Thien advised investors and enterprises in the cement sector to take care in choosing locations for plants.
Meanwhile, the Ministry of Construction has asked the Prime Minister to restrict the spread of investment in cement projects for the time being, especially smaller projects.
Domestic cement consumption in April reached 3.5 million tonnes, an increase of about 900,000 tonnes over March, bringing total consumption in the first four months of this year to 11.8 million tonnes.
The Cement Corporation predicted that, in the second quarter of this year, consumption would continue climbing, with high demand driven by an upswing in construction activity.
Source: VNA
ABBank to finance power plant
An Binh Bank (ABBank) will finance construction of Power Co No 2's Central Hydroelectric Project to the tune of 150 billion VND (9.37 million USD), under an agreement signed on May 24.
ABBank will also provide financial services for Power Co No 2 (PC2) and its employees. In return, PC2 would assist the bank in its marketing services to the PC2 customer base of 3 million households as well as commit to create favourable conditions for further expanding the bank's network nationwide.
In the later part of this year, the bank plans to open 15 transaction offices in southern provinces served by PC2's network.
"I think that the agreement is an initial step toward further cooperation," said ABBank general director Luu Duc Khanh. "The agreement not only opens more investment opportunities for us but also improves and confirms our competitive position in the market."
Source: VNA
ABBank will also provide financial services for Power Co No 2 (PC2) and its employees. In return, PC2 would assist the bank in its marketing services to the PC2 customer base of 3 million households as well as commit to create favourable conditions for further expanding the bank's network nationwide.
In the later part of this year, the bank plans to open 15 transaction offices in southern provinces served by PC2's network.
"I think that the agreement is an initial step toward further cooperation," said ABBank general director Luu Duc Khanh. "The agreement not only opens more investment opportunities for us but also improves and confirms our competitive position in the market."
Source: VNA
Vietnam Steel and Tata join for venture
State-run Vietnam Steel Corp. (VSC) is to sign an agreement on May 29 with India's Tata Steel Ltd. for a steel complex, a VSC executive said on Friday.
The government said the total investment would be $3.5 billion.
VSC Chairman Mai Van Tinh said in an invitation sent to Reuters that the Vietnamese firm would sign a memorandum of understanding with Tata on Tuesday in Hanoi, following government approval granted on May 18.
The steel complex, to be built in the central province of Ha Tinh, 340 km (210 miles) south of Hanoi, would refine iron ore from Thach Khe mine to produce 4.5 million tonnes of steel products per year, the government has said.
It was not clear how much of investment each side would contribute to build the complex but the major steel project, along with those planned by South Korea's POSCO, could help Vietnam reduce its reliance on steel imports.
The Hanoi-based unlisted VSC has been running several ventures with foreign companies to expand domestic production.
In March VSC won an investment licence to develop a $527 million hot-rolled steel mill in the southern province of Ba Ria-Vung Tau with India's Essar group and the Vietnam General Rubber group.
Steel and billets imported to Vietnam mainly come from China. Last year Vietnam's imports of the products edged up 1.8 percent from 2005 to 5.62 million tonnes, government statistics said.
However, a robust demand of the construction sector has prompted January-to-May's imports of steel and billets to jump 39.5 percent from a year earlier to 3 million tonnes, the General Statistics Office said on Friday.
The import value would also soar 64.7 percent to $1.7 billion, the office said in its monthly report.
Source: Reuters
The government said the total investment would be $3.5 billion.
VSC Chairman Mai Van Tinh said in an invitation sent to Reuters that the Vietnamese firm would sign a memorandum of understanding with Tata on Tuesday in Hanoi, following government approval granted on May 18.
The steel complex, to be built in the central province of Ha Tinh, 340 km (210 miles) south of Hanoi, would refine iron ore from Thach Khe mine to produce 4.5 million tonnes of steel products per year, the government has said.
It was not clear how much of investment each side would contribute to build the complex but the major steel project, along with those planned by South Korea's POSCO, could help Vietnam reduce its reliance on steel imports.
The Hanoi-based unlisted VSC has been running several ventures with foreign companies to expand domestic production.
In March VSC won an investment licence to develop a $527 million hot-rolled steel mill in the southern province of Ba Ria-Vung Tau with India's Essar group and the Vietnam General Rubber group.
Steel and billets imported to Vietnam mainly come from China. Last year Vietnam's imports of the products edged up 1.8 percent from 2005 to 5.62 million tonnes, government statistics said.
However, a robust demand of the construction sector has prompted January-to-May's imports of steel and billets to jump 39.5 percent from a year earlier to 3 million tonnes, the General Statistics Office said on Friday.
The import value would also soar 64.7 percent to $1.7 billion, the office said in its monthly report.
Source: Reuters
Military bonds to hit market
The Hanoi-based Military Commercial Bank has obtained the nod from the central bank to mobilize VND1 trillion ($62 million) through the sale of one million convertible bonds at par at a face value of VND1 million.
The bonds, to be issued in two phases, carry an annual coupon of 8%.
In the first phase 420,000 bonds will be sold to existing shareholders by June 20.
The bonds will be converted into common shares after two years at a 1:1 ratio.
The 580,000 bonds to be sold in the second phase will be converted in 2010 but the schedule is not known.
The bank will use the proceeds from the sale and also issue 954,800 new shares to nearly double its registered capital to VND2 trillion this year.
Military Bank, with more than 4,000 institutional and individual investors, has not said when it plans to list on the stock market.
Its shares gained by 2.3% Friday to VND107,000 on the unofficial market.
The bank's audited net profit figure nearly doubled last year to VND211.4 billion, while total assets jumped 58% to VND13.81 trillion.
Source: Thanh Nien
The bonds, to be issued in two phases, carry an annual coupon of 8%.
In the first phase 420,000 bonds will be sold to existing shareholders by June 20.
The bonds will be converted into common shares after two years at a 1:1 ratio.
The 580,000 bonds to be sold in the second phase will be converted in 2010 but the schedule is not known.
The bank will use the proceeds from the sale and also issue 954,800 new shares to nearly double its registered capital to VND2 trillion this year.
Military Bank, with more than 4,000 institutional and individual investors, has not said when it plans to list on the stock market.
Its shares gained by 2.3% Friday to VND107,000 on the unofficial market.
The bank's audited net profit figure nearly doubled last year to VND211.4 billion, while total assets jumped 58% to VND13.81 trillion.
Source: Thanh Nien
Mekong Capital invests in Mobile Phone World
Mekong Capital will pump 4.5 million USD into national retail chain Mobile Phone World, announced Mekong Capital General Director Chris Freund, on May 25.
“We are pleased to utilise our Mekong Enterprise Fund II to invest in Mobile Phone World. This is one of the most impressive companies that we have had contact with in Viet Nam, based on the strategic vision of their management staff and their capacity to implement its plan,” said General Director Chris Freund.
The 50 million USD Mekong Enterprise Fund II was established to scout out unlisted companies and well run private companies that retain a high potential for growth.
Director of Mobile Phone World Nguyen Duc Tai said the company has been able to create a supermarket system after two years of operations that has seen the firm record the highest cell phone unit sales in the country.
Source: VNA
“We are pleased to utilise our Mekong Enterprise Fund II to invest in Mobile Phone World. This is one of the most impressive companies that we have had contact with in Viet Nam, based on the strategic vision of their management staff and their capacity to implement its plan,” said General Director Chris Freund.
The 50 million USD Mekong Enterprise Fund II was established to scout out unlisted companies and well run private companies that retain a high potential for growth.
Director of Mobile Phone World Nguyen Duc Tai said the company has been able to create a supermarket system after two years of operations that has seen the firm record the highest cell phone unit sales in the country.
Source: VNA
Banks becoming multi-purpose financial groups
Many of the country's formerly state owned banks have been working hard to diversify their financial products and services range after completing their equitisation process.
Two in particular, the Bank for Foreign Trade of Viet Nam (Vietcombank) and the Bank for Investment and Development of Viet Nam (BIDV) have been aggressive in seeking out local strategic partnerships and investments in a multitude of areas, including large-scale infrastructure projects.
As a first step into infrastructure investment, Vietcombank - one of the largest commercial banks in the country - has followed suit by announcing that it would invest in the multi-billion USD Ha Noi-Hai Phong expressway project.
The bank has publicly stated that along with partners more cooperative agreements worth billions of USD are on the way.
BIDV has also found itself to be a major player by coming onboard with the Dak Drinh Hydro-electric Power Company, Sai Gon-Long Thanh-Dau Giay highway and Viet Nam-Laos hydroelectric plant projects.
Scheduled to be equitised by August 2008, the Bank for Agriculture and Rural Development (Agribank) has now completed all needed procedures to turn itself into a multi-ownership financial group.
Agribank is planning to become a holding firm with at least 11 subordinate joint stock companies that will operate in the fields of insurance, securities, finance leasing, trade services, financial investment, real estate and jewellery trading.
However, experts from the State Bank of Viet Nam have warned that it is imperative that the banks rapid expansion be met by increased managerial professionalism.
Source: VNA
Two in particular, the Bank for Foreign Trade of Viet Nam (Vietcombank) and the Bank for Investment and Development of Viet Nam (BIDV) have been aggressive in seeking out local strategic partnerships and investments in a multitude of areas, including large-scale infrastructure projects.
As a first step into infrastructure investment, Vietcombank - one of the largest commercial banks in the country - has followed suit by announcing that it would invest in the multi-billion USD Ha Noi-Hai Phong expressway project.
The bank has publicly stated that along with partners more cooperative agreements worth billions of USD are on the way.
BIDV has also found itself to be a major player by coming onboard with the Dak Drinh Hydro-electric Power Company, Sai Gon-Long Thanh-Dau Giay highway and Viet Nam-Laos hydroelectric plant projects.
Scheduled to be equitised by August 2008, the Bank for Agriculture and Rural Development (Agribank) has now completed all needed procedures to turn itself into a multi-ownership financial group.
Agribank is planning to become a holding firm with at least 11 subordinate joint stock companies that will operate in the fields of insurance, securities, finance leasing, trade services, financial investment, real estate and jewellery trading.
However, experts from the State Bank of Viet Nam have warned that it is imperative that the banks rapid expansion be met by increased managerial professionalism.
Source: VNA
PV Trans to pour 1.1 billion USD into projects
PetroVietnam Transportation, a subsidiary of State owned oil giant PetroVietnam Group, has announced plans it will invest more than 1.1 billion USD into major projects between 2007-2010, according to CEO Bui Tho Manh.
PV Trans, which is charged with facilitating all of PetroVietnam Group's transportation solutions, is set to build three 105,000-tonne oil tankers and seven freighters at a cost of close to 454 million USD.
An additional 152 million USD will be poured into the construction of a services complex at the Dung Quat economic zone, apart from several other properties development projects.
The company has in large part generated the needed capital for its expansion from a successful public share issuance it held on December 28, 2006.
Source: VNA
PV Trans, which is charged with facilitating all of PetroVietnam Group's transportation solutions, is set to build three 105,000-tonne oil tankers and seven freighters at a cost of close to 454 million USD.
An additional 152 million USD will be poured into the construction of a services complex at the Dung Quat economic zone, apart from several other properties development projects.
The company has in large part generated the needed capital for its expansion from a successful public share issuance it held on December 28, 2006.
Source: VNA
VinaCapital arm gets nod for $11 mln HCMC apartment project
Proforma Asia Limited, a subsidiary of the UK-listed VinaCapital, has announced plans for two residential projects in Ho Chi Minh City.
VinaCapital Phuoc Dien, Co., Ltd, joint venture between the British Virgin Islands-registered Proforma Asia Limited and the local Dien Phuoc Long Real Estate Trading Company, will build 55 villas and a 12-storey apartment block for sale and lease in district 9 at a cost of US$11.2 million.
It has also received the license from the city government for the purpose.
Another JV Proforma has formed with a local partner, International Consultant Company, has got the nod in principle to build an apartment complex project in Phu Huu Ward also in district 9.
To comprise three 12-storey blocks with 440 apartments in all and space for shopping malls, it is estimated to cost $15.6 million. The foreign partner will contribute 84% and the local firm the rest in terms of land.
The two projects are expected to begin soon.
Established in 2003, VinaCapital now manages three funds with a total corpus of $1.4 billion: the $800 million VOF and the $600 million Vinaland – both listed on London Stock Exchange – and the $50 million DFJ VinaCapital L.P., which invests in information and communication technology firms.
It is beefing up investment in real estate via Vietnam-focused funds and overseas subsidiaries.
It is also launching a new fund for investment in Vietnam's rapidly growing infrastructure sector, seeking to raise US$200 million in the first fundraising exercise this month.
The Vietnam Infrastructure Limited will seek admission to the Alternative Investments Market on the London Stock Exchange.
VIL will invest in Vietnam's infrastructure framework through a portfolio of infrastructure assets in key economic regions. It will be Vietnam's first fund fully dedicated to investment in this rapidly growing asset class.
VIL will focus on four key industries: energy, transport, water and telecommunications.
Source: Thanh Nien
VinaCapital Phuoc Dien, Co., Ltd, joint venture between the British Virgin Islands-registered Proforma Asia Limited and the local Dien Phuoc Long Real Estate Trading Company, will build 55 villas and a 12-storey apartment block for sale and lease in district 9 at a cost of US$11.2 million.
It has also received the license from the city government for the purpose.
Another JV Proforma has formed with a local partner, International Consultant Company, has got the nod in principle to build an apartment complex project in Phu Huu Ward also in district 9.
To comprise three 12-storey blocks with 440 apartments in all and space for shopping malls, it is estimated to cost $15.6 million. The foreign partner will contribute 84% and the local firm the rest in terms of land.
The two projects are expected to begin soon.
Established in 2003, VinaCapital now manages three funds with a total corpus of $1.4 billion: the $800 million VOF and the $600 million Vinaland – both listed on London Stock Exchange – and the $50 million DFJ VinaCapital L.P., which invests in information and communication technology firms.
It is beefing up investment in real estate via Vietnam-focused funds and overseas subsidiaries.
It is also launching a new fund for investment in Vietnam's rapidly growing infrastructure sector, seeking to raise US$200 million in the first fundraising exercise this month.
The Vietnam Infrastructure Limited will seek admission to the Alternative Investments Market on the London Stock Exchange.
VIL will invest in Vietnam's infrastructure framework through a portfolio of infrastructure assets in key economic regions. It will be Vietnam's first fund fully dedicated to investment in this rapidly growing asset class.
VIL will focus on four key industries: energy, transport, water and telecommunications.
Source: Thanh Nien
Bao Viet shares at what cost?
A survey shows that the price of Bao Viet shares to be offered at the share auction slated for May 31 will not be very high. Though enjoying advantages in trademark, network, safety ratio, land use rights, Bao Viet still carries disadvantages of a State owned enterprise.
Investors said that the starting price of VND30,500/share Bao Viet has set proves to be a suitable level, if considering Bao Viet’s business performance and comparing the prices of shares of other insurers. Bao Viet’s total assets, as appraised by Credit Suisse, are nearly $1,900bil ($1.2bil).
Analysts said that the starting price of VND30,500 was set because of several reasons. Bao Viet’s business performance has not been very good, so the share price should not be set at an overly high level. Moreover, the insurer should learn lessons from the auctions of Cadivi, PVGas, and Thac Mo shares. At those auctions, investors initially offered very high price levels, but they then gave up on the auctions.
According to the prospectus, the post tax profit of the insurer is VND524,007bil ($32,750mil), meaning that the EPS (earnings per share) will be VND770.59.
Supposing that the average price of Bao Viet shares after the auction is VND50,000/share, the P/E index would be 64.89, if the share price is VND70,000/share, the P/E would be 90.84, and if the price is VND100,000, the P/E would be 129.77. The starting price of VND30,500/share proves to be reasonable, analysts say.
Though enjoying advantages in trademark, network, safety ratio, land use rights, Bao Viet still bears disadvantages of a State owned enterprise.
The disadvantages lie in the competitiveness in the fields of operation mechanism, ownership capital, human resources, products. While the business performance and financial indexes prove to be normal, the tentative dividends, however, prove to be not so attractive.
An investor said that this proves to be a bad business performance for such a big insurer like Bao Viet, which gained only VND318bil ($19.87mil) in post tax profit. The growth rate Bao Viet has witnessed in the last time proves to be lower than that obtained by other insurers, like BMI, VASS, PVI, PJICO and VNR.
Investors are forecast to not try to buy Bao Viet shares at any cost, because they will have many other choices when other big groups make IPO. They will only buy Bao Viet shares at ‘acceptable’ prices which can ensure profit. If they buy Bao Viet shares at abnormally high prices, they will have to ignore many other opportunities to be brought about by Vietcombank and BIDV’s IPOs.
It is expected that several investors will offer the auctioning prices of VND33-35,000/share. Investors who think that Bao Viet will obtain the growth rate of 4-5 times higher than in 2006, i.e. the post tax profit of VND1,200-1,600bil, will offer VND40-60,000. The most optimistic, who still consider Bao Viet the No 1 insurer in Vietnam, will pay VND80-100,000.
Source: VNE
Investors said that the starting price of VND30,500/share Bao Viet has set proves to be a suitable level, if considering Bao Viet’s business performance and comparing the prices of shares of other insurers. Bao Viet’s total assets, as appraised by Credit Suisse, are nearly $1,900bil ($1.2bil).
Analysts said that the starting price of VND30,500 was set because of several reasons. Bao Viet’s business performance has not been very good, so the share price should not be set at an overly high level. Moreover, the insurer should learn lessons from the auctions of Cadivi, PVGas, and Thac Mo shares. At those auctions, investors initially offered very high price levels, but they then gave up on the auctions.
According to the prospectus, the post tax profit of the insurer is VND524,007bil ($32,750mil), meaning that the EPS (earnings per share) will be VND770.59.
Supposing that the average price of Bao Viet shares after the auction is VND50,000/share, the P/E index would be 64.89, if the share price is VND70,000/share, the P/E would be 90.84, and if the price is VND100,000, the P/E would be 129.77. The starting price of VND30,500/share proves to be reasonable, analysts say.
Though enjoying advantages in trademark, network, safety ratio, land use rights, Bao Viet still bears disadvantages of a State owned enterprise.
The disadvantages lie in the competitiveness in the fields of operation mechanism, ownership capital, human resources, products. While the business performance and financial indexes prove to be normal, the tentative dividends, however, prove to be not so attractive.
An investor said that this proves to be a bad business performance for such a big insurer like Bao Viet, which gained only VND318bil ($19.87mil) in post tax profit. The growth rate Bao Viet has witnessed in the last time proves to be lower than that obtained by other insurers, like BMI, VASS, PVI, PJICO and VNR.
Investors are forecast to not try to buy Bao Viet shares at any cost, because they will have many other choices when other big groups make IPO. They will only buy Bao Viet shares at ‘acceptable’ prices which can ensure profit. If they buy Bao Viet shares at abnormally high prices, they will have to ignore many other opportunities to be brought about by Vietcombank and BIDV’s IPOs.
It is expected that several investors will offer the auctioning prices of VND33-35,000/share. Investors who think that Bao Viet will obtain the growth rate of 4-5 times higher than in 2006, i.e. the post tax profit of VND1,200-1,600bil, will offer VND40-60,000. The most optimistic, who still consider Bao Viet the No 1 insurer in Vietnam, will pay VND80-100,000.
Source: VNE
Foreign owned accounts at securities companies on the rise
More and more foreign investors have decided to make money on Vietnam’s stock market. Statistics show that the number of foreign owned accounts opened at securities companies is increasing.
According to the HCM City Securities Trading Centre (HSTC), nearly 5,000 foreign owned individual accounts have been opened at HSTC member securities companies. The owners of the accounts mostly are Japanese, Korean, Taiwanese and Singaporean. The largest number of foreign investors on Vietnam’s stock market proves to come from Japan.
Nguyen Hong Nam, Deputy Director General of the Saigon Securities Incorporated (SSI), said that some 2,000 foreigners’ accounts had been opened at SSI, 70% of which are Japanese owned.
BVSC, DVSC and Rong Viet all have reported an increased number of new foreign individual accounts, which account for 30% of the new accounts. Experts said that the new wave of foreign investment had been refreshing the stock market.
Vietnam’s stock market has become attractive in the eyes of foreign investors. Vietnam’s national economy is performing well, while the stock market is developing, which promises more profitable investment deals than developed markets.
In fact, the profit made by foreign securities investors in Vietnam has been increasing considerably. In his recent visit to Vietnam, John Stuttard, the Lord Mayor of the City of London, said that the gigantic development of the stock market had caught the special attention of British financial investors.
Nguyen Chi Trung, Director of the Brokerage Division under the Rong Viet Securities Company, said that if foreign investors kept trading as currently, the stock market would rally. Now, foreign investment funds are increasing their demand for securities, and they are especially targeting the IPOs of many big banks and corporations scheduled for the coming time.
VinaCapital said that it had estimated the sum of money to be disbursed, and has given a forecast about the auctioning price of Bao Viet shares. Mekong Capital has presented its third fund before the public, the $100mil Vietnam Azalea, which will focus on equitised companies in Vietnam. Mekong hopes to close the fund soon and begin the investment period, expected for the end of May.
Experts said that the demand of foreign investors was increasing. However, they will have to restructure their investment portfolios and look for new commodities, as there is no more room for foreign ownership in big companies like REE, SAM, STB and VNM.
Source: VNE
According to the HCM City Securities Trading Centre (HSTC), nearly 5,000 foreign owned individual accounts have been opened at HSTC member securities companies. The owners of the accounts mostly are Japanese, Korean, Taiwanese and Singaporean. The largest number of foreign investors on Vietnam’s stock market proves to come from Japan.
Nguyen Hong Nam, Deputy Director General of the Saigon Securities Incorporated (SSI), said that some 2,000 foreigners’ accounts had been opened at SSI, 70% of which are Japanese owned.
BVSC, DVSC and Rong Viet all have reported an increased number of new foreign individual accounts, which account for 30% of the new accounts. Experts said that the new wave of foreign investment had been refreshing the stock market.
Vietnam’s stock market has become attractive in the eyes of foreign investors. Vietnam’s national economy is performing well, while the stock market is developing, which promises more profitable investment deals than developed markets.
In fact, the profit made by foreign securities investors in Vietnam has been increasing considerably. In his recent visit to Vietnam, John Stuttard, the Lord Mayor of the City of London, said that the gigantic development of the stock market had caught the special attention of British financial investors.
Nguyen Chi Trung, Director of the Brokerage Division under the Rong Viet Securities Company, said that if foreign investors kept trading as currently, the stock market would rally. Now, foreign investment funds are increasing their demand for securities, and they are especially targeting the IPOs of many big banks and corporations scheduled for the coming time.
VinaCapital said that it had estimated the sum of money to be disbursed, and has given a forecast about the auctioning price of Bao Viet shares. Mekong Capital has presented its third fund before the public, the $100mil Vietnam Azalea, which will focus on equitised companies in Vietnam. Mekong hopes to close the fund soon and begin the investment period, expected for the end of May.
Experts said that the demand of foreign investors was increasing. However, they will have to restructure their investment portfolios and look for new commodities, as there is no more room for foreign ownership in big companies like REE, SAM, STB and VNM.
Source: VNE
Vietnam estimates May trade deficit at $700 mln
Vietnam estimated Friday its trade deficit in the first five months of the year more than doubled to $3.25 billion from a year earlier, due largely to a surge in imports for the construction of state projects.
In May alone the deficit was estimated at $700 million, up more than 27% from last month's shortfall, the General Statistics Office said.
In the first five months of 2006 the deficit stood at $1.54 billion. In May 2006 the office estimated that month's deficit at $400 million.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first $2.5 billion refinery and new power plants, rose 45% in the January-May period from a year earlier.
The imports of steel and steel ingots in the first five months were also expected to jump 64.7% from a year earlier to $1.7 billion on the back of robust demand from the construction sector.
The Trade Ministry has projected the trade deficit this year would reach $4.66 billion, with exports rising 22% from last year to $47.54 billion and imports hitting $52.2 billion.
Source: Thanh Nien
In May alone the deficit was estimated at $700 million, up more than 27% from last month's shortfall, the General Statistics Office said.
In the first five months of 2006 the deficit stood at $1.54 billion. In May 2006 the office estimated that month's deficit at $400 million.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first $2.5 billion refinery and new power plants, rose 45% in the January-May period from a year earlier.
The imports of steel and steel ingots in the first five months were also expected to jump 64.7% from a year earlier to $1.7 billion on the back of robust demand from the construction sector.
The Trade Ministry has projected the trade deficit this year would reach $4.66 billion, with exports rising 22% from last year to $47.54 billion and imports hitting $52.2 billion.
Source: Thanh Nien
Friday, May 25, 2007
Petrovietnam and Lilama to build hydroelectric power plant
Two State-owned giants, PetroVietnam and Lilama, will join forces to build the Hua Na hydroelectric facility in the central province of Nghe An, under an agreement signed on May 24.
Hua Na Hydropower Co Ltd will complete the joint venture, which will be formed with total capital of 1.2 trillion VND (75 million USD). PetroViet nam and Lilama shall each hold 14%, with addition stakes held by Military Bank, Sai Gon Securities Incorporation, Sai Gon Commercial Bank, Lilama 10 and Financial Investment and Consulting Co.
The combined facility and reservoir, covering a total area of 20.6sq.km, will be built at a cost of 4.3 trillion VND (270.8 million USD). Construction of the 180MW plant is expected to start in the first quarter of next year, with the plant to go on line in the first quarter of 2011.
Apart from the power project, the new joint venture will outfit other power plant and mining facilities and expand into real estate development.
The Do Luong Cement Plant is one project on the drawing board.
PetroVietnam and Lilama have also agreed to form a stronger strategic partnership. Lilama will become a supplier to Petro Vietnam construction projects, while PetroVietnam will provide financing and insurance services for the projects in which Lilama is a primary investor.
Source: VNA
Hua Na Hydropower Co Ltd will complete the joint venture, which will be formed with total capital of 1.2 trillion VND (75 million USD). PetroViet nam and Lilama shall each hold 14%, with addition stakes held by Military Bank, Sai Gon Securities Incorporation, Sai Gon Commercial Bank, Lilama 10 and Financial Investment and Consulting Co.
The combined facility and reservoir, covering a total area of 20.6sq.km, will be built at a cost of 4.3 trillion VND (270.8 million USD). Construction of the 180MW plant is expected to start in the first quarter of next year, with the plant to go on line in the first quarter of 2011.
Apart from the power project, the new joint venture will outfit other power plant and mining facilities and expand into real estate development.
The Do Luong Cement Plant is one project on the drawing board.
PetroVietnam and Lilama have also agreed to form a stronger strategic partnership. Lilama will become a supplier to Petro Vietnam construction projects, while PetroVietnam will provide financing and insurance services for the projects in which Lilama is a primary investor.
Source: VNA
Gold exchange debuts in Vietnam
Vietnam’s first gold trading market opened Friday in Ho Chi Minh City.
It is jointly initiated by the Asia Commercial Joint Stock Bank (ACB), the Vietnam Export-Import Bank, Saigon Commercial Bank, and Saigon Jewelry Holding Co.
The bourse, based in the ACB office in district 10, will have a maximum 12 institutional members, all banks or firms licensed to trade gold.
JSC gold will be used for trading in the initial stages. The minimum trading volume is 10 taels (1 tael = 37.5 gm) and price changes are capped at VND5,000 per tael.
Initially, it will be limited to Vietnamese investors who must pay a security deposit of 10 percent of transaction value.
Globally gold slumped to a 10-week low and finished down nearly $10 an ounce in heavy trade Thursday, as a rising US dollar prompted funds and central banks to sell.
Analysts said larger-than-usual gold sales by global banks, particularly the European Central Bank, also weighed on gold prices besides sparking off selling pressure from funds and institutional investors.
Gold futures for June delivery on the New York Mercantile Exchange settled down $9.3, or 1.4 percent, at $653.3 an ounce, after touching a session low of $651.5, the weakest level since March 15.
In Vietnam too the price fell marginally to close at VND12.9 million Thursday.
Earlier this year international gold traders had estimated that gold would end up averaging around $753 in 2007 due to geopolitical tensions and high energy prices. Gold is a traditional hedge.
Nguyen Thanh Truc, deputy chairman of the Vietnam Association of Gold Trading, said the domestic gold market had seen unexpected volatility since mid-April on the back of global movements.
He forecast the precious metal to tumble in the near term as the International Monetary Fund planned to sell 400 tons.
Another 250 tons would be injected into the market by September by EU central banks.
He warned investors to be prudent while investing in gold.
The association has asked the central bank set up a gold bank to keep the country’s gold market in tune with the international bullion business.
The bank would provide support and consultancy for local gold businesses
Vietnam’s demand for bullion, used to produce jewelry, and some other forms of gold, is estimated at some 60 tons this year, up 20 percent against last year.
The central bank has permitted a total of 13 local banks to date to open accounts based overseas for the sole purpose of trading in gold .
Many domestic banks have shown an interest in gold trading as a means to diversify their services to retain a competitive edge as foreign rivals increasingly enter the Vietnamese market.
Source: Thanh Nien
It is jointly initiated by the Asia Commercial Joint Stock Bank (ACB), the Vietnam Export-Import Bank, Saigon Commercial Bank, and Saigon Jewelry Holding Co.
The bourse, based in the ACB office in district 10, will have a maximum 12 institutional members, all banks or firms licensed to trade gold.
JSC gold will be used for trading in the initial stages. The minimum trading volume is 10 taels (1 tael = 37.5 gm) and price changes are capped at VND5,000 per tael.
Initially, it will be limited to Vietnamese investors who must pay a security deposit of 10 percent of transaction value.
Globally gold slumped to a 10-week low and finished down nearly $10 an ounce in heavy trade Thursday, as a rising US dollar prompted funds and central banks to sell.
Analysts said larger-than-usual gold sales by global banks, particularly the European Central Bank, also weighed on gold prices besides sparking off selling pressure from funds and institutional investors.
Gold futures for June delivery on the New York Mercantile Exchange settled down $9.3, or 1.4 percent, at $653.3 an ounce, after touching a session low of $651.5, the weakest level since March 15.
In Vietnam too the price fell marginally to close at VND12.9 million Thursday.
Earlier this year international gold traders had estimated that gold would end up averaging around $753 in 2007 due to geopolitical tensions and high energy prices. Gold is a traditional hedge.
Nguyen Thanh Truc, deputy chairman of the Vietnam Association of Gold Trading, said the domestic gold market had seen unexpected volatility since mid-April on the back of global movements.
He forecast the precious metal to tumble in the near term as the International Monetary Fund planned to sell 400 tons.
Another 250 tons would be injected into the market by September by EU central banks.
He warned investors to be prudent while investing in gold.
The association has asked the central bank set up a gold bank to keep the country’s gold market in tune with the international bullion business.
The bank would provide support and consultancy for local gold businesses
Vietnam’s demand for bullion, used to produce jewelry, and some other forms of gold, is estimated at some 60 tons this year, up 20 percent against last year.
The central bank has permitted a total of 13 local banks to date to open accounts based overseas for the sole purpose of trading in gold .
Many domestic banks have shown an interest in gold trading as a means to diversify their services to retain a competitive edge as foreign rivals increasingly enter the Vietnamese market.
Source: Thanh Nien
Vietcombank to raise $435 mln in 2007
Vietnam's central bank has allowed state-run Bank for Foreign Trade (Vietcombank) to raise 7 trillion dong ($435 million) this year, state media reported on Friday.
The unlisted bank, Vietnam's third-largest by assets, would issue long-term debt, the Lao Dong (Labour) newspaper quoted a central bank directive as saying.
Hanoi-based Vietcombank, which had assets of $10.7 billion at the end of March, is expected to offer shares to the public for the first time in July or August and list six to eight weeks later.
Source: Reuters
The unlisted bank, Vietnam's third-largest by assets, would issue long-term debt, the Lao Dong (Labour) newspaper quoted a central bank directive as saying.
Hanoi-based Vietcombank, which had assets of $10.7 billion at the end of March, is expected to offer shares to the public for the first time in July or August and list six to eight weeks later.
Source: Reuters
ACB more than doubles registered capital
Asia Commercial Bank (ACB), Vietnam's fifth-largest bank by assets, said on Friday it had more than doubled its registered capital to 2.53 trillion dong ($157 million).
The Ho Chi Minh City-based bank said the new capital came into effect from May 11 and raised its registered capital, which determines the size of the bank's loans and deposits, from 1.1 trillion dong.
ACB said last week it was due to open Vietnam's first gold trading floor in Ho Chi Minh City on Friday to boost and streamline transactions of the precious metal.
ACB shares closed down 0.53% at 167,500 dong on Friday with 56,300 shares changing hands.
Shares in the bank, Vietnam's second listed lender after Sacombank (STB), have been trading on the over-the-counter Hanoi stock market since November.
Standard Chartered Plc. owns 8.56% of ACB and three other foreign investors own smaller stakes.
Source: Reuters
The Ho Chi Minh City-based bank said the new capital came into effect from May 11 and raised its registered capital, which determines the size of the bank's loans and deposits, from 1.1 trillion dong.
ACB said last week it was due to open Vietnam's first gold trading floor in Ho Chi Minh City on Friday to boost and streamline transactions of the precious metal.
ACB shares closed down 0.53% at 167,500 dong on Friday with 56,300 shares changing hands.
Shares in the bank, Vietnam's second listed lender after Sacombank (STB), have been trading on the over-the-counter Hanoi stock market since November.
Standard Chartered Plc. owns 8.56% of ACB and three other foreign investors own smaller stakes.
Source: Reuters
FDI hits 4.37 billion USD mark after first five months
Almost 4.37 billion USD in foreign direct investment (FDI) was pumped into the red-hot Vietnamese economy in the first five months of the year, reported the Ministry of Planning and Investment’s Foreign Investment Department.
Over 3.7 billion USD was funnelled into an additional 372 new projects, while the remaining 577 million USD was used as additional investments in previously licensed or operating businesses. FDI investment capital recorded a 25% increase over the same period last year and the number of newly licensed initiatives surged by 32%.
Analysts said that the majority of the investments were finding their way into the agro-forestry and fisheries, industry and service sectors, in southern coastal Ba Ria-Vung Tau province, central Thua Thien-Hue province and Mekong delta Hau Giang province.
Topping the list of major projects to get off the ground were an Indian 527 million USD steel producing facility in Ba Ria-Vung Tau province, a 276 million USD deluxe resort in the Chan May economic zone in Thua Thien-Hue province and a 220 million USD paper and pulp mill financed by Thailand’s Kraf Vina, in southern Binh Duong province.
Market observers have pointed to Viet Nam’s improving business and investment environment and its adherence to international economic commitments as key drivers in attracting FDI into the country.
According to the Japan External Trade Organisation (JETRO), Viet Nam's business environment now ranks third in Asia, after China and Thailand.
Coupled with a highly productive low cost labour force, pundits have predicted that the South East Asian nation would surpass the 5.2 billion USD mark in the first half of the year, a year-on-year rise of 31%.
Source: VNA
Over 3.7 billion USD was funnelled into an additional 372 new projects, while the remaining 577 million USD was used as additional investments in previously licensed or operating businesses. FDI investment capital recorded a 25% increase over the same period last year and the number of newly licensed initiatives surged by 32%.
Analysts said that the majority of the investments were finding their way into the agro-forestry and fisheries, industry and service sectors, in southern coastal Ba Ria-Vung Tau province, central Thua Thien-Hue province and Mekong delta Hau Giang province.
Topping the list of major projects to get off the ground were an Indian 527 million USD steel producing facility in Ba Ria-Vung Tau province, a 276 million USD deluxe resort in the Chan May economic zone in Thua Thien-Hue province and a 220 million USD paper and pulp mill financed by Thailand’s Kraf Vina, in southern Binh Duong province.
Market observers have pointed to Viet Nam’s improving business and investment environment and its adherence to international economic commitments as key drivers in attracting FDI into the country.
According to the Japan External Trade Organisation (JETRO), Viet Nam's business environment now ranks third in Asia, after China and Thailand.
Coupled with a highly productive low cost labour force, pundits have predicted that the South East Asian nation would surpass the 5.2 billion USD mark in the first half of the year, a year-on-year rise of 31%.
Source: VNA
OTC market: investors make selective deals
Instead of buying any shares available on the market, investors on the OTC market are now keeping cautious about making deals, leading many share items to drop dramatically in price.
Analysts said that there were 1,230 share items available on the market, but only 40-50 share items were seeing regular transactions these days. Shares of enterprises in the fields of petroleum, banking, securities, insurance, real estate and rubber production prove to be the most wanted stocks.
Nguyen Ngoc Truong Chinh, Head of the OTC share brokerage division under ACB Securities Company, said that only 50 OTC share items had been witnessing successful transactions.
Huynh Hong Hanh, who has been acting as a securities broker for the last four years at the Nguyen Cong Tru market, gives investors a list of 100 OTC share items to choose from, saying that other items are not being traded any more.
Trinh Hoang Nam from the Saigon Securities Incorporated (SSI) said that many speculators had been crying as the shares they bought had become unsalable.
Phu My Fertiliser, Military Bank, Eximbank, EAB, Phuong Nam Bank, Dai Viet and Au Lac Securities, Dong Phu Rubber, and Saigon Thuong Tin real estate are all among the most wanted names in shares.
Many share items, which were once sold at very high levels, have seen their prices drop dramatically. Vinalogis shares are selling at VND25,000/share, Vinaconex 12 at VND25,000, Vietcom at VND18,000, Northwest Hydropower Plant at VND26,000, and Saigontel, VND12,000.
Dr Tran Hoang Ngan, Head of the Banking and Securities Faculty under the HCM City Economics University, said that this was a good sign for the stock market, as it showed that investors had more experience and knowledge when making investment decisions, and did not just make investments by ‘feeling’. Dr Ngan said that the companies issuing OTC shares must really be doing good business to make their shares salable.
Tran Cong Nam, a senior investor on SSI trading floor, said that the OTC market, though it had not been controlled strictly by management authorities, had its own rules of the game: bad quality commodities will be rejected.
Source: VNE
Analysts said that there were 1,230 share items available on the market, but only 40-50 share items were seeing regular transactions these days. Shares of enterprises in the fields of petroleum, banking, securities, insurance, real estate and rubber production prove to be the most wanted stocks.
Nguyen Ngoc Truong Chinh, Head of the OTC share brokerage division under ACB Securities Company, said that only 50 OTC share items had been witnessing successful transactions.
Huynh Hong Hanh, who has been acting as a securities broker for the last four years at the Nguyen Cong Tru market, gives investors a list of 100 OTC share items to choose from, saying that other items are not being traded any more.
Trinh Hoang Nam from the Saigon Securities Incorporated (SSI) said that many speculators had been crying as the shares they bought had become unsalable.
Phu My Fertiliser, Military Bank, Eximbank, EAB, Phuong Nam Bank, Dai Viet and Au Lac Securities, Dong Phu Rubber, and Saigon Thuong Tin real estate are all among the most wanted names in shares.
Many share items, which were once sold at very high levels, have seen their prices drop dramatically. Vinalogis shares are selling at VND25,000/share, Vinaconex 12 at VND25,000, Vietcom at VND18,000, Northwest Hydropower Plant at VND26,000, and Saigontel, VND12,000.
Dr Tran Hoang Ngan, Head of the Banking and Securities Faculty under the HCM City Economics University, said that this was a good sign for the stock market, as it showed that investors had more experience and knowledge when making investment decisions, and did not just make investments by ‘feeling’. Dr Ngan said that the companies issuing OTC shares must really be doing good business to make their shares salable.
Tran Cong Nam, a senior investor on SSI trading floor, said that the OTC market, though it had not been controlled strictly by management authorities, had its own rules of the game: bad quality commodities will be rejected.
Source: VNE
Thursday a gloomy one for Vietnam’s indices
Vietnamese stocks plummeted Thursday on a free fall that jilted both the Ho Chi Minh City and Hanoi indexes into nosedives, dimming investor hopes for a strong market recovery.
Vietnam’s main index in HCMC lost 27.89 points, or 2.51% to close at 1085.3. Hanoi’s HASTC-Index shed 4.46 points to close at 343.86.
Trading volume and turnover in HCMC were down 24.7% and 34.4% respectively to 6.4 million shares and VND721 billion (US$45 million).
The bourse scoreboard was awash with red digits, detailing the fates of 82 losers against only gainers out of 107 total stocks.
Market analysts attributed the sharp decline to massive profit taking by investors.
Many blue chips were among the losers including CII, FPT, REE, PVD, and VNM, all of which plunged by less than 4%. Of the losers two heavyweights SJS and KDC dropped to the floor price of 5%.
Aggressive interest and limited volume of small stock BMC pushed the security to hit the ceiling growth price of 5% to close at VND325,000.
STB continued to be the most trade in the market with 886,790 shares despite a sharp drop buying.
Foreign investors halved their buying volume to 1.1 million shares.
The two mutual funds PRUBF1 and VFMVF1 lost 1.44% and 2.54% respectively to close at VND13,700 and VND34,500.
It was also a gloomy day Thursday on the Hanoi market, closing the session with 1.5 million shares for VND176 billion, down 54% and 53.6% respectively.
In a related development, the State Securities Commission (SSC) said 134 enterprises are currently seeking the nod to become public companies.
Many of these firms are banks and big names like the Import-Export Bank of Vietnam (Eximbank), the Asia Joint Stock Commercial Bank (ACB) and the Hoa Phat Furniture Group, among others.
Under a regulation from the Ministry of Finance, joint stock companies are required to register to become public companies with the SSC before June 30. Strict penalties await those who fail to register in time.
The move targets to closely monitor company share issues on both the official and the over-the-counter markets.
The Securities Law specifies companies that have a chartered capital of at least VND10 billion and have listed their shares on the stock market or have at least 100 shareholders are eligible to register as public companies.
The number of applications is thought to be relatively small in comparison to the almost 200 businesses subject to the law listed on the HCMC and Ha Noi bourses.
Source: Thanh Nien
Vietnam’s main index in HCMC lost 27.89 points, or 2.51% to close at 1085.3. Hanoi’s HASTC-Index shed 4.46 points to close at 343.86.
Trading volume and turnover in HCMC were down 24.7% and 34.4% respectively to 6.4 million shares and VND721 billion (US$45 million).
The bourse scoreboard was awash with red digits, detailing the fates of 82 losers against only gainers out of 107 total stocks.
Market analysts attributed the sharp decline to massive profit taking by investors.
Many blue chips were among the losers including CII, FPT, REE, PVD, and VNM, all of which plunged by less than 4%. Of the losers two heavyweights SJS and KDC dropped to the floor price of 5%.
Aggressive interest and limited volume of small stock BMC pushed the security to hit the ceiling growth price of 5% to close at VND325,000.
STB continued to be the most trade in the market with 886,790 shares despite a sharp drop buying.
Foreign investors halved their buying volume to 1.1 million shares.
The two mutual funds PRUBF1 and VFMVF1 lost 1.44% and 2.54% respectively to close at VND13,700 and VND34,500.
It was also a gloomy day Thursday on the Hanoi market, closing the session with 1.5 million shares for VND176 billion, down 54% and 53.6% respectively.
In a related development, the State Securities Commission (SSC) said 134 enterprises are currently seeking the nod to become public companies.
Many of these firms are banks and big names like the Import-Export Bank of Vietnam (Eximbank), the Asia Joint Stock Commercial Bank (ACB) and the Hoa Phat Furniture Group, among others.
Under a regulation from the Ministry of Finance, joint stock companies are required to register to become public companies with the SSC before June 30. Strict penalties await those who fail to register in time.
The move targets to closely monitor company share issues on both the official and the over-the-counter markets.
The Securities Law specifies companies that have a chartered capital of at least VND10 billion and have listed their shares on the stock market or have at least 100 shareholders are eligible to register as public companies.
The number of applications is thought to be relatively small in comparison to the almost 200 businesses subject to the law listed on the HCMC and Ha Noi bourses.
Source: Thanh Nien
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