Thirst for dollar, banks raise rate past 2% cap

US dollar deposit rate at some commercial banks have exceeded the cap of 2 percent per annum, newswire Gafin reported, citing a report on VTV1 channel without naming the lenders.

The cap break may be attributed to the fact that many banks have recently faced dollar shortage on lending up to 140-150 percent of total dollar deposits, the local newswire said.

In addition, the negotiable dong deposit interest rate is now standing at 18-20 percent per annum while that for dollar is capped at 2 percent per annum, encouraging customers now prefer depositing the dong to dollars.

Newswire StoxPlus has just named some doing so.

Sai Gon Commercial Bank on Monday launched a preferential program to purchase dollars at 0.1-0.3 percent higher than listed prices, applying for those who sell dollars to deposit dong for at least one month at the bank, said the lender on its website.

The listed bank also offered to buy gold at 0.2-0.6 percent higher than prices listed at transaction time.

Earlier in June, Kien Long Bank and Dai A Bank also announced to buy dollars at above listed bids to encourage the public to sell dollars and deposit the dong to the banks, said StoxPlus.

"This product is in line with the State Bank of Vietnam (SBV)'s policies to reduce the public and organizations’ dollar holdings and put dollars to the banking system. They will also benefit from depositing dong rather than dollars on higher interest rates", Kien Long Bank spokesman said.

As of June 20, dollar deposits fell 3.62 percent from late May and only edged up 8.94 percent from the end of 2010, while dollar credit rose 2.43 percent on month and increased 23.47 percent from the end of 2010, said Gafin, citing a government report on June 29.

The fall of 3.62 percent in dollar deposits reflected partly the unattractiveness of the dollar saving cap of 2 percent per annum to depositors and 0.5 percent to organizations as well as showed the capital switching tendency from dollar into dong with large interest rate difference.

But the 23.47 percent rise in dollar lending also give a warning on liquidity on the loans’ due date.

The Circular No 13 issued on May 31, 2011 asking state-own enterprises (SOEs), including state-run conglomerates and their subsidiaries, to sell dollar to the banks took effect as of July 1.

Though many specialists had forecasted that a huge amount of dollar will pour into the banks in the upcoming time, what Tuoi Tre and VTV1 has just found out is far from those optimistic expectation.

Many banks told Tuoi Tre that as of Tuesday, the total greenbacks sold by those SOEs has just amounted some tens of millions of dollars.

A general director of a Hanoi-based commercial bank told Tuoi Tre that those SOEs are allotted five working days starting July 1 to calculate the amount of dollars they need for the whole month, and the remaining will be set aside for selling to banks.

They have yet finished the calculation, he added.

According to VTV1, however, many banks said the dollars they can buy from SOEs will not be as abundant as expected.

SHB Bank, no need to wait until the provisions of Circular 13 taking effect, was doing so a month earlier. Specifically, the amount of foreign currency purchased from SOEs in Q2 has doubled that in Q1.

Therefore, foreign currency deposits of SOEs at are not much. Therefore, the amount of foreign currency that it can buy from SOEs this will be negligible.

Le Dang Khoa, Deputy Director of SHB Bank said the remaining of dollar deposits of SOEs at the bank starting July is around 10-15 percent of total dollar deposits in SHB.

So, after deducting the payment obligation, or payment plan, the amount of foreign currency that can be sold to the bank is only 4-5 percent.

SHB is in fact the general situation in other commercial banks. Thus, overlooking the entire system, the amount of foreign currency that can be purchased from SOEs are also expected to be not very abundant, said VTV1.

The State Bank of Vietnam in March irregularly required commercial banks to report about dollar deposits of 78 SOEs only to obtain the number of $1.6 billion by the end of Q2/2011. And, all of the deposit will not be sold all to bank.

Can Van Luc, Senior Advisor, Chairman of BIDV said $1.6 billion is not much because they are not required to sell all of the amount since under the provisions of Circular 13, are allowed holding a part of it after balancing their short term needs.

“I'm expected to have about 20-25 percent, around $1.2-1.3 billion, to be sold to banks," he added.

This is a figure not much, even as little as only one sixth compared to the trade deficit in the first half of this year.

Vietnam in H1/2011 incurred a trade gap of $6.65 billion. The government has projected Vietnam's trade deficit this year will widen to between $14 billion and $14.5 billion, up more than 10 percent from 2010, despite stronger-than-expected growth in export revenues, said Reuters.

That is not to consider the figure $1.6 billion will be reduced when the trend moving from dollar deposit to Vietnam dong with dollar deposit rate applicable to most organizations is only a 0.5 percent.

Therefore, the amount of dollars that SOEs depositing in banks would no longer be abundant as expectation.

Skills the main concern for business
 
Vietnamese businesses are more concerned now about access to a skilled workforce rather than capital, according to survey results released yesterday by auditing and consulting firm Grant Thornton.

Its International Business Report (IBR) on business optimism in the second quarter also said the Vietnamese businesses were worried about a fall in the number of orders and the continuing problem of inadequate infrastructure.

"Despite these worries, Viet Nam is more confident about the future than some of the other ASEAN countries," the report said.

Among Southeast Asian countries, the Philippines leads the confidence index at 76 per cent, followed by Singapore at 64 per cent, Viet Nam at 54 per cent, Thailand at 48 per cent and Malaysia at 16 per cent.

Kenneth Atkinson, Managing Partner of Grant Thornton Viet Nam, said, "As with some other countries, inflation is a major worry. The Government has reacted positively to help the availability and flow of finance plus it is keeping a close watch on the performance of the currency. If their plans are successful we should see inflation under control and a growth in confidence return later in the year."

On global scale, the IBR revealed that previously recovering levels of business optimism hit a wall in the second quarter of 2011, with sentiment dipping in the wake of natural disasters, political unrest and economic volatility. With the impact of sovereign debt issues in the eurozone still to be felt, the outlook for business remains uncertain.

The research, conducted in May/June covering 39 economies, showed that across many regions there has been a dramatic quarter on quarter decline in levels of business optimism.

Although optimism levels remain higher now than a year ago, the revival has stuttered badly in the second quarter of 2011, the report said.

Globally, business optimism has fallen by 3 per cent from the previous quarter although it is 4 per cent higher over the year, the report said.

Ed Nusbaum, CEO of Grant Thornton International, said: "In global terms the past three months have been challenging and business optimism has been hit hard. Companies are feeling the effects of the unrest in the Middle East and the subsequent volatility in oil and commodity prices, which recently led western nations to release large stocks of oil. In addition, the earthquake and nuclear disaster in Japan caused huge disruption to supply chains.

Vietnam sees 2011 trade gap at $14-14.5 bln

Vietnam's trade deficit this year will widen to between US$14 billion and $14.5 billion, up more than 10 percent from 2010, despite stronger-than-expected growth in export revenues, the government said.

Exports would jump 17-18.4 percent from last year to between $84.5 billion and $85.5 billion, following strong growth in the first half of the year, the government said in a statement issued late on Monday.

Imports for the whole of 2011 could reach an estimated $99 billion, leaving the annual trade deficit at around 16 percent of the country's exports, in line with a government target for 2011 approved by the National Assembly, the statement said.

Exports in the first six months jumped 30.3 percent from a year ago to $42.3 billion, while January-June imports rose 25.8 percent to $48.99 billion, the government said last month.

The government released the revised annual trade projections after a trade ministry meeting on Monday to review performance in the first half of 2011.

Vietnam had previously projected the annual trade deficit for 2011 at $14 billion, with exports and imports both rising 10 percent.

Vietnam has been facing a trade deficit every month since April 2009, after recording monthly trade surplus each month in the first quarter of 2009.

The trade gap last month estimated at $400 million is the smallest since March 2009's surplus, government data show.

Vietnam's economy is expected to quicken its growth next year to 6.5 percent from a projected 6 percent in 2011, with exports rising to between $95.2 billion to $97 billion, the Planning and Investment Ministry said in a report last month.

Vietnam is the world's second-largest producer of coffee after Brazil. It also ranks the second-biggest exporter of rice after Thailand.

Rice exports this year are expected to rise to 7 million tonnes, a Vietnam Food Association representative was quoted by Tuesday's official Vietnam Economic Times newspaper as speaking at the trade ministry meeting on Monday.

Last year Vietnam exported a record high of 6.83 million tonnes of rice.

Higher charter capital required for airlines to operate

A draft decree on aviation regulations is currently being considered by the Civil Aviation Administration of Viet Nam.

Under the draft, organisations and individuals with a fleet of up to 10 aircraft would be required to have a minimum of VND300 billion (US$15 million) in charter capital to operate domestic flights and VND800 billion ($40 million) to operate international flights.

The draft to amend Government Decree 76 on aviation regulations would require companies planning to operate more than 10 aircraft to have a minimum charter capital of VND1 trillion ($50 million) in comparison with the current VND800 billion ($40 million).

If the draft is approved, the tenure of each carrier's business licence would be cut from 24 months to 18 months.

A number of stringent new regulations have been included in the draft which is expected to be submitted to the Government for approval by the fourth quarter.

Diageo offers to buy 1 million Halico shares at high price

Streetcar Investment Holding, a Singapore-based subsidiary of UK drinks maker Diageo, has sent tender offer documents offering VND213.6 billion for 1 million shares of the OTC-listed Hanoi Alcohol Joint Stock Co (Halico).

Halico share is traded at VND99,000 per share.

If the trade succeeds, Streetcar will raise its holding shares and holding percentage in Halico from 4,986,711 shares to 6 million shares and from 24.93 percent to 30 percent respectively.

According to regulations, Streetcar will have to initiate an official tender offer to increase holding rate of over 25 percent.

The transaction, expected to last from July 21 to August 19, will be traded Kim Long Securities.

This is the final offer for purchase in the third phase of Diageo bid to increase the percentage of ownership in Halico up 30 percent.

Bid price of all 3 phases are at VND213,600 per share.

After three purchases, the total investment of Diageo in Halico is about $ 62 million and capitalized value of Halico is estimated at $207 million in accordance with the selling price for Diageo.

Previously, VOF, the largest fund of VinaCapital, sold 23.6 percent stake holding in Halico to Diageo for $51.6 million.

Diageo is the owner of well-known brands of alcoholic drinks including Johnnie Walker, Guinness, Smirnoff, Bailey, and Tanqueray.

Hanoi-based wine producers Halico is a member of the Hanoi Alcohol Beverage Corp.

Fruit, vegetable exports up by a third
 
Viet Nam exported US$302 million worth of vegetables and fruits in the first six months of the year, up 32.5 per cent against the same period last year, according to the General Statistics Office.

In June alone, exports reached $50 million.

The demand for Vietnamese vegetables and fruits in regional markets like China and Indonesia has increased sharply this year.

Even markets that have strict import standards like the US, South Korea and Japan have been buying more kinds of fruits from Viet Nam since the beginning of this year.

Local experts say this is because the quality of Vietnamese fruits has improved.

The US has allowed the import of rambutan while South Korea has opened its doors to Vietnamese dragon fruit.

Recently, a group of experts from New Zealand visited Viet Nam to inspect preparations for exporting fresh mango early next year onwards.

Taiwan is expected to resume imports of Vietnamese dragon fruit in the near future, according to the Plant Protection Department.

Viet Nam has exported 750 tonnes of dragon fruit to the US so far this year, which is 90 per cent of the annual figure for last year.

Japan imported 200 tonnes of dragon fruit from Viet Nam in the first six months of the year, up 70 per cent against the same period last year.

Vietnamese exporters have also exported 40 tonnes of dragon fruits to South Korea this year.

Dragon fruit exports to the US, Japan and South Korea are expected to reach a total of 2,600 tonnes this year, double that of last year.

Besides the increase in volume, fruit exports have also increased in value.

The export price of rambutan fruits to France is now $6.1 a kg, up $0.1 per kg against the same period last year.

The export price of dried coconut has also increased by $100-180 a tonne to $2,500-2,800 a tonne.

Exports of fruits and vegetables are estimated to increase strongly in the third quarter of this year as it is the harvest time of many fruits and vegetables, according to exporters.

The Ministry of Industry and Trade estimates that export of vegetables and fruits could reach $500-550 million this year.

During the first six months of 2011, Viet Nam also imported $122 million of vegetables and fruits, a decline of 5.8 per cent against the same period last year.
 
Vital assembly line technology to be tax free from August

From August 18, imports of equipment and machinery for technology assembly lines that are not made by domestic producers will be given import tax exemption, as part of a Government plan to enhance support industry development, the Ministry of Finance has announced.

Circular 96/2011/TT-BTC, issued by the ministry earlier this week, will modify soft financial policies specified in Government Decision 12/2011/QD-TTg issued in February to encourage support industry development in the machinery and manufacturing, electronics and information technology, automobile assembly and production, textile-garment and leather shoes sectors.

According to the circular, projects that support high-tech products will also be given income tax breaks in accordance with the Law on Corporate Income Tax.

Construction materials and materials used for software production that are unable to be produced inside the country will also enjoy tax exemption.

Imported commodities – including magazines and textbooks which are used in high technology research and development – will not attract tax.

Several projects invested in remote areas will benefit from a zero tax rate on imported materials that are not made domestically, excluding the manufacturing of motorbikes, air conditioners, electric heaters, refrigerators, washing machines, fans, dish washers and kettles.

Home price still out of reach, says official  

Ho Chi Minh City was among the world’s 10 most expensive cities for residential buyers in the last five years, but actually the city’s property prices are well beyond their true value, says the city People’s Committee chairman Le Hoang Quan.  

Therefore, the HCMC real estate market needs to be stabilized in the upcoming time, Quan proposed.

Nguyen Manh Ha, head of Housing and Real Estate Management Department, said rapid urbanization combined with soaring population have piled up pressures on the country’s housing.

As Vietnam’s home price to income ratio remains very high compared to other countries’, local salary earners are unable to purchase property, Ha said.

“Vietnam’s ratio is around 24.5-27 compared to Southeast Asian region’s 6.25, South Asian region’s 4.14 and Europe’s 6.25,” he said.

In the period of 2006 and 2010, HCMC designated an area of 103 million square meters for building living accommodations, raising the housing space per capita to 14.3 square meters per person.

However, the deficit between supply and demand remains significantly large, analysts say.

The HCMC People’s Committee has set a target of raising the gross floor area and the ratio of living space per capita to 39 million square meters and 17 square meters respectively in the period between 2011 and 2015.

The city’s authority is also set to relocate 13,000 households living in slumped houses at canals before the period.

Vu Van Hoa, head of the HCMC Export Processing and Industrial Zones Authority, said just a few of construction firms were eager to build houses for workers due to unattractive policies.

The city authorities offer builders carrying out worker housing construction projects exemption from personal income tax.

However, only builders granted project license in 2009 could achieve the tax exemption.

Property firms also found worker housing projects with low return rate and long payback period are not good deals.

Statistics show 143 out of 404 housing projects in HCMC have been put in use, an equivalent of nearly 35,200 apartments and 2,200 villas. Of the amount of the apartments, 36 percent are luxury.

Nguyen Tan Ben, director of the HCMC Department of Construction, said city people still struggled to purchase property although housing price declined slightly on the government’s tight monetary this year.

“Medium-cost houses are sold at the average of VND19.3 million (US$965) per square meter, while low-cost houses are offered at the rate of VND14 million per square meter,” Ben said.

“Middle-income earners definitely cannot afford a house with that price. They also dare not to borrow from banks due to high lending rates.”
 
Ministry backs purchase of Airbus A380  

The Ministry of Transport has said it supports Vietnam Airlines' purchase of Airbus A380 aircraft as part of the national flag carrier's fleet expansion plan by 2020.  

In a report submitted to the Government for approval, the ministry said Vietnam Airlines must analyze and assess the capacity of the local aviation technical infrastructure for the Airbus A380, the world’s largest jet for commercial use so far.
 
The national flag carrier was also asked to study the market and make effective plans for an investment in the aircrafts to generate profits.
 
The ministry requested the corporation to analyze in detail the time period required to recover investment capital, especially the amount of about US$8.4 billion that will be invested in air-crew and also offer a plan for paying back debts.

Ministry cuts public investments  

Since early this year, the Ministry of Construction has slashed VND11 trillion (US$524 million) from projects that are still to be developed.  

The ministry is following Government policy on reducing public investments and curbing on overspending of the State budget. It has ordered its groups and corporations to concentrate on trading and manufacturing instead.

Businesses run under the Ministry have been instructed to halt groundbreaking on four new projects with a total capital of VND30.5 billion (US$1.5 million). The money will now be transferred to ongoing projects under construction, to speed up their execution progress.

The ministry intends to curb budget expenses by 10 percent from a total fund of over VND11 billion (US$524,000) in the coming months of the year.

Phu Yen hosts int’l trade fair

The International Trade Fair Central Highlands will be held in Phu Yen province from September 1-6.

This is an important event under the framework of the National Tourism Year and on the occasion of marking the 400th anniversary of the establishment and development of Phu Yen province.

On display at the fair will be products in such fields as goods, services, industrial development investment projects, tourism and craft villages.

Diverse activities will be held during the fair to promote investment and trade, strengthen economic cooperation, and expand markets for Vietnamese businesses in general and businesses in the central and central highland regions in particular.

Currently, more than 200 local and foreign businesses have registered for the event. Localities have also taken urgent actions for land clearance to prepare for the event.

Pham Dinh Cu, Chairman of Phu Yen province’s People’s Committee said that the organizing board of the Phu Yen International Trade Fair invited Laos, Cambodia, China, the Republic of Korea and neighbouring provinces to participate in the event. It also called on some factories to bring goods to Phu Yen province to showcase at the event.

Vietnam joins Creative Product Week in Indonesia

Vietnamese goods are being showcased at the 5th Creative Product Week (CPW), which is launched in Jakarta, Indonesia from July 6-10.

Vietnam’s pavilion attracts many visitors to a wide range of handicraft products and cultural and art works.

Also on display are creative products of about 800 businesses from the Association of Southeast Asian Nations (ASEAN).

The 5th CPW is focused on information technology such as animation, software, publishing, printing, packaging and advertising, music and film, and fashion products.


This year’s event is expected to earn US$6 million in revenue from trade transactions (up about nearly US$1 million compared to last year).

Indonesia’s exports of creative goods reached Rp 104.71 trillion, or 7.5 percent of the country’s total exports in 2009, representing an average increase of 2.9 percent during the 2006-2009 period.

Sacomreal plans second residential project in Dist. 7

Sai Gon Thuong Tin Real Estate Joint Stock Company, better known as Sacomreal, will start developing another residential project in HCMC’s District 7 soon after being allocated land for the project from the city government on Tuesday.

The approval allows Sacomreal to turn a 10-hectare site in the district into a residential complex comprising condos, villas and row houses, and a section for a school and other serviced facilities.

The project will have a construction density ratio of 35% over the total area, and the height is limited to 45 levels.

Sacomreal says it has almost completed the project’s compensation and site clearance, and plans to start building the residential project next quarter.

This is the second housing project by Sacomreal in District 7, behind the condo project named Belleza that covers some three hectares at Phu My Ward in the district.

When in place, the ongoing development condo project will have 968 apartments targeting mid-income earners in the city.

Earlier, Sacomreal has established a joint venture with the Malaysian property company Gamuda Land to develop an 82-hectare township named Celadon City in HCMC’s Tan Phu District.

The project will provide the market with some 7,000 high-end apartments. Besides, it has other facilities such as office space for lease, shops and supermarket and cultural and sport facilities.

In related news, local property developer Gia Phu Land Company says it will start building its second condo project in the outlying district of Thu Duc in the third quarter of this year.

Nguyen Hung Nghiem, deputy director of Gia Phu Land, says the second condo development, Gia Phu Land II, will include two blocks of 18-storey buildings with some 200 apartments from 50 to 74 square meters each.

The developer was developing its first low-cost condo project with the same name on Le Van Chi Street in Thu Duc District. It includes a 14-story building with 156 apartments from 53 to 79 square meters each.

Nghiem says the Government’s current credit tightening policy in the property sector has significantly impacted the market.

The company, however, has seen its housing projects sell well thanks to targeting the affordable segment with the average selling price at around VND12 million per square meter besides offering flexible payment.

Nghiem says some 80% of the total number of apartments of the first project are sold, and the remaining 20% is on offer. That encourages the company to develop the second project Gia Phu Land II, which is scheduled for completion in late 2012.
 
Vietnam exports high-pressure vessel to Singapore

The Chemical Processing Equipment Plant (CPE) under Doosan Heavy Industries Vietnam Company Limited (Doosan Vina) on July 5 exported a batch of high-pressure vessels worth 500,000 USD to the Tembusu Biomass Co-firing Cogeneration Plant in Singapore (TBS Steam Drum project).

Once installed and put into operation, the vessel will be responsible for transmitting high-pressure steam in the Plant.

The TBS Steam Drum project was signed by the Dossan E&C Mecatec Business Group and the Sumitomo Heavy Industries ( Japan ) last year.

This is CPE’s second batch to the world market. It is scheduled to export four batches to the Philipines and Australia during this year./.

74,000 foreign employees work in Vietnam

More than 74,000 foreign employees from 65 countries are living and working in Vietnam , according to the Ministry of Labour, Invalids and Social Affairs.

At least 58 percent of them are from Asian countries and 28.5 percent from EU countries.

Nguyen Dai Dong, director of the ministry's Employment Department, said starting from August 1 organisations that have demand for foreign workers must register their recruitment demand with the local Department of Labour, Invalids and Social Affairs so that localities will be able to manage the workers.

Nearly 46,000 workers go overseas in first half

Vietnam sent over 45,860 guest workers overseas in the first six months of this year, representing a year-on-year increase of nearly 24 percent.

Vietnam’s major labour markets included Taiwan, the Republic of Korea, Malaysia, Japan and Saudi Arabia.

This was a positive signal in the context where more than 10,000 Vietnamese guest workers in Libya had to return home to escape from political instability.

Meanwhile, the March 11 earthquake and tsunami in Japan exerted impacts on many Vietnamese guest workers and the Israeli government decided to halt its policy of receiving Vietnamese labourers from March, 2011.

To fulfill this year’s target of sending 87,000 Vietnamese workers overseas, apart from maintaining traditional markets, the Ministry of Labour, War Invalids and Social Affairs was stepping up negotiations with the Israeli government to promptly complete a draft agreement on labour cooperation, reopening the market where a worker can carn 1,500 USD or average a month.

The department and the Japanese government were weighing a plan to send Vietnamese nurses and caregivers to Japan.

The department was also working with businesses and vocational schools to improve the quality of guest workers./.

WB finances Vietnam’s national energy programme

The World Bank on July 5 approved a 2.37 million USD effective energy use and clean production for Vietnam to be funded by the Global Environment Fund.

The project will help improve the capability of the government and Vietnamese partners in implementing the national energy programme in order to improve the efficiency of energy utilisation and the reduction of green house gas emission.

The three-phase project will also map out an action plan to promote the effective use of energy in key industries and develop energy service suppliers./.

FPT to cooperate with Nigerian business

The FPT Group and the 21 st Century Technologies Inc (21 CT) of Nigeria on July 5 signed a memorandum of understanding (MoU) on strategic cooperation between the two sides.

Under the MoU, FPT will cooperate with 21CT in the fields of telecommunications, education and equipment production.

FPT also plans to seek opportunities in broadband and digital content services along with providing consultancy, developing infrastructure and offering service for the Nigerian company.

Falling prices hurt dragon fruit growers

The hefty fall in dragon fruit prices has left heavy impact on farmers in Binh Thuan Province, a key dragon fruit growing area in the country.

The fruit has come down to between VND1,000 or VND3,000 per kilo from the VND10,000 a few months ago.

Nguyen Ngoc Hai, director of the province’s Department of Agriculture and Rural Development, told the Daily on Tuesday that despite the low prices, sales have remained poor in recent days.

Dragon fruit farmers in the province have been hard hit by low prices and slow consumption both at home and in China that normally consumes 70% of the province’s dragon fruit output.

However, he said, farmers in the province can rely on European countries and the U.S. as lifelines since prices remain high in those foreign markets.

The province exports to Europe and the U.S. hundreds of tons of dragon fruit a month at between US$5-6 per kilo.

Hai said the province had yet to adopt measures to help the farmers get out of the vicious circle often referred to as “good crop, poor price”.
 
Few State-owned companies sell dollars to banks

Few State-owned firms have sold the U.S. dollar to banks though the central bank has ordered them to sell most of their foreign currencies in the first few days of each month beginning from July, a banking executive said.

In its Circular 13, the central bank asks that State-owned corporations after deducting the amount of foreign currencies needed in the month sell all dollars to banks in the first seven days of July and the first five days of each subsequent month.

An executive from the Bank for Investment and Development of Vietnam (BIDV) told the Daily on Tuesday that State-owned companies have seemingly defied the central State Bank of Vietnam’s order.

“There are only two days left for them to sell the dollar, but I haven’t seen any surge in the mount of greenback sold to the bank in past several days,” the source said.

BIDV is one of the biggest State-owned banks that serve many State-owned groups and corporations.

The source said State corporations have big demand for dollars for business this month so the amount sold to the bank is sporadic of late.

The State Bank of Vietnam earlier had expected the total amount of dollars sold by State corporations to banks in July would be US$1.7 billion, meaning at least US$170 million must be sold to banks in each of the past days, he said.

“However, from our observation, the amount of dollars sold to banks is much lower than the expected number,” he said. He also said that the demand for dollars among enterprises had inched up nowadays but that is not enough to create pressure on the forex rate.

The demand will strongly increase early in the fourth quarter when enterprises enter the peak season importing materials for the Tet season and many loans in the U.S. dollar will be matured by then. At that time, pressure might pile up on the forex rate.  

Circular 13 asks that all State-owned corporations including firms having a State ownership higher than 50%, sell all non-term or term deposits in foreign currencies at banks to credit institutions beginning July 1. Those enterprises later can register to buy dollars to meet their legitimate demand for business.

The U.S. dollar at banks has been selling for a stable VND20,620 recently while the central bank’s inter-bank forex rate has been maintained at VND20,613 since July 2.
 
German investors interested in Metro Line No.2 project

Several German investors showed strong interest in the project to construct Metro Line No. 2 in HCMC, stretching from Ben Thanh to Tham Luong.

Nguyen Van Quoc, vice chairman of the HCMC Management Authority for Urban Railways (MAUR), said at the two-day pre-bidding seminar ending on Tuesday that several investors from Germany had come to Vietnam to find out about the project.

“The management board has started receiving bidding documents, and August 19 will be the deadline. To make it more convenient for investors, we will receive documents in both HCMC and Germany’s Berlin,” he said.

Quoc said that after deadline would come the selection, and the winning bidder would be named soon before the signing ceremony scheduled for November. The construction will start in early 2012, he said.  

According to the management broad, an imperative condition is that bidders must have experiences in building at least three projects of urban railway during 15 years.

Tham Luong depot of Metro Line No. 2 project started construction in District 12 in late August, 2010.

As planned, the route will link Tay Ninh bus station and the downtown center, and later extended to Thu Thiem New Urban Town.

The first stage of Ben Thanh – Tham Luong metro route will have a length of 11.3 kilometers.

The total investment for the project was initially estimated at US$1,247 billion funded by the Asian Development Bank (ADB), the European Investment Bank (EIB), the German Development Bank (kfW) and counterpart fund from Vietnam.
 
TV companies to bear responsibility for false ads

Television companies must jointly bear responsibly for broadcasting misleading advertisements on their channels that entice consumers to buy fake or substandard products, said the HCMC Consumer Rights Protection Association.

Phan Thi Viet Thu, general secretary of the association, said this is part of Vietnam’s new Consumer Rights Protection Law that took effect from July 1.

If disputes occur, the association in the future will invite consumers, enterprises and television companies to work together to resolve the issue.

TV companies will have to prove that products follow the Law on Advertising, are being sold on the market and are registered for quality standards. They also have to bear responsibility if product quality is not as advertised.

TV companies must also check the sincerity of advertisements before broadcasting them, Thu added.

However, Thu said the new law has yet to regulate levels of responsibility or compensation. So, it would be difficult to force the companies to bear responsibility at the moment.

In the past there have been a number of companies advertising fake or sub-quality products on Vietnamese TV channels such as Happy Shopping and Viet An Trade. Most of the products are from China.

In related news, mobile service operators will also be responsible for contents of advertising messages sent to subscribers under the new Consumer Rights Protection Law, said Lawyer Nguyen Van Hau of the HCMC Bar Association.

Hau, head of the propaganda division under the bar association, told the Daily that telcos were responsible for ensuring that such messages caused no disturbance to subscribers and preventing spam messages.

“If advertising messages are to cause disturbance or harass subscribers, mobile service operators must refuse to carry the messages and must take measures to prevent such messages from being sent to subscribers,” Hau said.

Although other legal documents guiding the implementation of the new law have not been issued, the new law itself dictates that telcos must be prudent in transmitting advertising messages, he added.