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Shares rebound on sluggish volume
Viet Nam's stock market rebounded this morning on both of the nation's stock
exchanges after two consecutive days of losses, while trading volume remained
sluggish.
On the HCM City Stock Exchange, the VN-Index rose by 0.41 per cent over
yesterday's value to close at 451.26.
Both market volume and value declined, with more than 25.4 million shares worth
almost VND621 billion (US$29.6 million) exchanged - a 39.4 per cent decrease in
volume and 44 per cent drop in value.
Decliners outnumbered advancers by 109-89.
Many blue chips rallied. Phu My Fertiliser (DPM) climbed 2.3 per cent, Ocean
Group (OGC) increased 1.66 per cent, software giant FPT Corp (FPT) rose 1.36 per
cent, and property developer Hoang Anh Gia Lai (HAG) rose 0.6 per cent.
Financial and securities shares tumbled. Vietinbank (CTG) fell 0.52 per cent,
Sacombank (STB) declined 1.3 per cent, HCM City Securities (HCM) decreased 0.4
per cent, and Saigon Securities Inc (SSI) fell 0.82 per cent, with the latter
becoming the most active stock after 1.25 million shares changed hands.
On the Ha Noi Stock Exchange, the HNX-Index increased by 0.33 per cent to close
today's session at 107.18. However, the bourse's market volume fell 13 per cent
to 22.6 million shares worth more than VND363.9 billion ($17.3 million).
Gainers narrowly outnumbered losers by 132-121.
PetroVietnam Construction (PVX) continued to be the most heavily-traded shares
nationwide, with 1.85 million shares changing hands. PVX closed unchanged with
an average share priced at VND20,900 ($0.99).
Companies receive gold quotas
Gold prices fell to VND36.55 million (US$1,724) per tael after traders and
commercial banks received their import quotas for precious metals this morning.
Eligible gold importers include Asia Commercial Bank, Sacombank, Eximbank, Viet
A Bank, Sai Gon Jewellery Co and Phu Nhuan Jewellery Co, however, these
enterprises were unable to disclose details about their quotas.
This is the third time the State Bank of Viet Nam has allowed gold to be
imported into the country this year. In August and October, 10 tonnes of gold
were imported, which did little to quell the market's demand for gold.
By 10AM this morning, Sai Gon Jewellery Co, the Sacombank Jewellery Co, Bao Tin
Minh Chau, Agribank Jewellery Co and Phu Nhuaân Jewellery Co were selling gold
at VND36.60-36.69 million per tael.
The central bank's decision to allow gold to be imported into the country
lowered gold prices from VND38.8 million ($1,830) to VND36.42 million ($1,716)
per tael at shops in Ha Noi and HCM City.
The US dollar depreciated in value from VND21,300 late yesterday to about
VND21,000-21,150 today.
Industry, retail recover, but currency woes
remain
However, the inflation and exchange rates remained major concerns.
In October prices rose by 1.05 per cent, taking year-to-date inflation to 7.58
per cent, showing no clear signs of slowing down despite the Government's
increased efforts to control prices after their sudden sharp rise in September.
Given the last few months of the year usually experienced high festive-season
inflation, which would possibly be worsened by the worst floods in the last 60
years in central provinces, consensus estimates were at 9-10 per cent inflation
this year, well above the Government's target of 8 per cent.
Another issue was the rising divergence between official and unofficial foreign
exchange rates.
Gold shops were selling the dollar at VND20,160, 3.4 per cent higher than at
commercial banks.
The rise in the free market was mainly attributable to a strong increase in
demand for the greenback.
There were some vital reasons for the surge: importers paying for purchases made
in preparation for the high year-end consumption; businesses repaying dollar
loans falling due; businesses importing gold to re-sell in Viet Nam to arbitrage
the difference in domestic and world gold prices; and individuals hoarding the
dollar and gold.
The last was considered the most challenging to deal with since hoarding assets
was a deep-rooted habit among the Vietnamese, especially in times of high
inflation and exchange-rate volatility.
In an attempt to ease the downward pressure off the dong, on 29 October the
State Bank of Viet Nam had prohibited banks from selling gold deposited by
customers and using the proceeds for lending or buying foreign currencies.
However, the SBV should take stronger measures to revive people's confidence in
the dong. Some measures that were spoken about included a further devaluation of
the dong towards year-end, which policy makers did not favour, the SBV injecting
dollars into the market from its reserves, removing the interest-rate cap on
dong loans.
All these indicated a tightening of monetary policy by the government and the
SBV in the coming months.
Manufacturing, exports set to surpass targets
This year's industrial production and export targets are likely to be surpassed,
according to the Ministry of Industry and Trade.
Industrial production reached VND645.7 trillion (US$33.9 billion) in the first
10 months of the year, up 13.7 per cent over the same period last year. The
growth target for the whole year is 13.5 per cent.
The targeted export value of $70 billion for this year is also likely to be met,
the ministry said in a regular online meeting held on Monday.
Deputy Minister of Industry and Trade Le Danh Vinh asked companies and relevant
agencies to focus on production, invest in basic construction and boost exports
in the remaining months of the year.
He also asked the industrial and trade sectors to closely monitor the demand and
supply of goods, secure enough supply and stabilise prices. The power sector
should make sure that there is sufficient electricity supply for production
until the end of the year, he said.
The ministry's Market Management Department, in co-operation with the Ministry
of Finance's Price Management Department, will strengthen their oversight and
strictly penalise activities of speculation and hoarding of goods, trade fraud,
as well as violations relating to pricing, quality and food safety and hygiene
during the remaining months of this year and early 2011.
Vinh also called for stronger trade promotion programmes in the domestic market
that also takes further the campaign for Vietnamese people to give priority to
using Vietnamese goods. More locally produced goods should reach rural and
remote areas.
Many participants at the meeting raised their concern over the increase in
prices of essential goods including rice, foodstuff, petrol and fertiliser
products. With demand for these goods higher towards the year-end, low income
people could suffer, they noted.
The price increase will also have an adverse impact on efforts to keep the
consumer price index to a single digit this year.
Nguyen Xuan Chien of the ministry's Domestic Market Department said the Tet
(Lunar New Year) festival falls in January next year so enterprises must prepare
goods earlier to meet the rising demand.
The increase in prices for the coming festival is not because of a shortage of
goods, but because enterprises are buying more goods for exports and for
reserves in cases of floods, not to mention the depreciation of the dong against
the US dollar, Chien said.
Other participants at the meeting said many rice exporters have begun buying
more rice to meet export contracts, and the recent floods and storms have
obstructed transport of food to many regions. These have significantly increased
food prices in several areas, including the central region and the Cuu Long
(Mekong) Delta, they said.
Several foreign-invested enterprises were focusing on importing goods and
selling them in the local market for profit instead of making goods for the
local market as well as export, said the head of the Import-Export Department
under the Ministry of Trade and Industry, Phan Van Chinh.
He said that in the first 10 months of 2010, the value of goods imported by
foreign-invested enterprises increased by 40 per cent while imports by local
enterprises rose just 20 per cent.
Chinh said the high import figures would affect trade deficit and worsen the
threat of higher inflation facing the country's economy.
He asked relevant agencies to place the import and sale of imported goods by
foreign-invested enterprises under stricter management.
Vietsovpetro hits $3b in earnings
Vietsovpetro - a petroleum joint venture between Viet Nam and Russia - reported
total revenue of more than US$3 billion in the first 10 months of this year,
around 5 per cent higher than earlier expectations.
As a result, Vietsovpetro paid $1.68 billion to the State budget during the
period.
Although the joint venture met with difficulties over the past 10 months, it
managed to put into operation a number of oil and gas exploitation projects,
including oil rigs RC-4 and RC-Doi Moi in the Nam Rong - Doi Moi Oil-field and
RC-5, BK 15 and BK 19, said Nguyen Huu Tuyen, Vietsovpetro director general.
"The joint venture produced more than 120,000 barrels of crude oil during the
period," he said.
In the two remaining months of the year, Vietsovpetro would strive to reach the
200,000 barrel mark with an estimated turnover of around $4 billion, he added.
Last year, it churned out roughly 190,000 barrels, accounting for 40 per cent of
the sector's output. It also produced roughly 1.4 billion cubic metres of gas.
Vietsovpetro earned nearly $3.2 billion from crude oil exports and paid $1.96
billion in taxes last year.
Minimum wage to increase
The Government issued Decree No 107/2010/ND-CP on October 29 setting the minimum
wage for Vietnamese workers working for foreign-invested enterprises, foreign
organisations, ternational organisations and foreigners in Viet Nam.
The minimum wage is staggered according to zones, with the minimum wage of
VND1.55 million (US$80) per month applicable to employees located in the inner
districts of Ha Noi and HCM City (Zone I).
A minimum wage of VND1.35 million ($69) per month is applicable to suburban
districts of Ha Noi and HCM City, inner districts of the cities of Hai Phong, Ha
Long, and Bien Hoa and certain districts in the provinces of Binh Duong, Dong
Nai, Ba Ria-Vung Tau (Zone II).
A VND1.17 million ($60) per month minimum wage must be paid by employers located
in suburban Ha Noi and HCM City as well as all towns within provinces (Zone
III). The basic minimum wage of VND1.1 million ($55) is applicable to all other
areas (Zone IV).
Wage scale and other allowances set forth by enterprises should base on the
minimum wage.
The wage paid to a vocational trainee must exceed the minimum wage for the zone
by at least 7 per cent, and lawmakers encourage enterprises to pay wages higher
than the minimum wage wherever possible.
The basic minimum wage takes effect on January 1, 2011, while the adjusted
zone-based wages will apply from next July 1.
New regulations set for unemployment insurance
The Ministry of Labour, Invalids and Social Affairs has issued Circular No
32/2010/TT-BLDTBXH, detailing a number of provisions in Decree No 127/2008/ND-CP
of December 12, 2008, on unemployment insurance.
The new circular replaces Circular No 04/2009/TT-BLDTBXH of January 2009 and
regulates in greater detail the conditions for receiving unemployment insurance.
Accordingly, the unemployed worker shall be entitled to unemployment insurance
if he or she meets three conditions: (1) has participated in the unemployment
insurance programme for at least 12 months continuously during the previous 24
months prior to unemployment; (2) has registered with a job introduction centre
under the provincial Labour and Social Welfare Service once unemployed; and (3)
remains unemployed for at least 15 working days following such registration.
The new circular also provides for unemployment allowance levels and the period
of receiving unemployment allowance. This circular takes effect 45 days from the
date promulgated.
Source: VNS
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