Cautious investors keep powder dry after holiday
 
Prolonged investor wariness following the National Day holiday held the stock market in check, accompanied by weak trading volume and value on both bourses.

On the HCM City Stock Exchange, the VN-Index finished last Friday's session at 397.51 points, gaining 0.38 points over the course of the previous week, while the HNX-Index on the Ha Noi Stock Exchange declined by over 1 per cent to close the week at 60.39 points.

Trading was sluggish throughout the week, with the daily trading volume averaging just 29.4 million shares per session on the HCM City bourse and just 23.8 million shares per session on the Ha Noi bourse, down 16 per cent and 18 per cent, respectively, from the previous week's levels.

"The absence of positive macroeconomic information is hindering the market from recovering," wrote Nguyen Van Quy, a stock analyst of FPT Securities Co, in a research note.

"Under this trend, apprehension will dominate the market and drive liquidity lower in the near future. If cash flows don't improve, the market won't have a chance to recover and grow," Quy said, noting that gains of several bue chips were not convincing enough to draw stronger investment.

According to market insiders, investors are overly cautious now, particularly after the arrest of Duong Chi Dung, former director of Viet Nam Maritime Department and former chairman of Viet Nam National Shipping Lines (Vinalines).

"Recently, such information has had a very strong impact on the market," analysts commented on the financial website vietstock.vn.

Only three out of 24 stock groups posted gains over the week, led by rubber shares with an average gain of 2.72 per cent, while securities stocks were the biggest loser with an average loss of 4.23 per cent.

Vinacomin – Ha Tu Coal Co (THT) was the biggest gainer on the Ha Noi exchange with an increase of over 21 per cent. The increase of THT, as well as gains of other mining shares last week, were attributed to the potential increase in the price of coal later this year.

At the same time, shares of sugar producer Sucrerie De Bourbon Tay Ninh (SBT) were the biggest gainer on the HCM City exchange with an increase of more than 15 per cent. This was due to information revealing the share is set to be included in the FTSE Viet Nam Index from September 24.

Along with SBT, the FTSE also announced on Friday the inclusion metal producer Hoa Sen Group (HSG) and PetroVietnam Low Pressure Gas Distribution (PGD) to the FTSE Vietnam Index this month, while removing shares of confectionery company Kinh Do Corp (KDC), Pha Lai Thermal Power (PPC), logistics firm Gemandept (GMD) and Phu Nhuan Jewelry (PNJ).

Building a domestic trademark system

Most Vietnamese companies have paid little attention to registering their brand names on the domestic market and some well-known names have already been used by foreign enterprises on the international market.    

This is an undeniable fact, as admitted by many managers.

Nguyen Thi Thu Hang, General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI), refers to the results of a recent Asian trademarks survey based on four criteria: friendliness, utility, creativeness and breakthrough capacity. To develop sustainably and penetrate international markets, she says, companies must focus on building brand names overseas.

Although Vietnam has a wide range of products exported to different countries many brand names are not recognized internationally. For example, Vietnam currently ranks fifth in the world in terms of tea production volume and export value but the origin of its tea products is not widely known, Hang says.

Doan Anh Tuan, President of the Vietnam Tea Association, points out that this is one reason why Vietnamese tea is just half priced lower than it is worth, compared to the same product from Sri Lanka. Another reason is that 99 percent of Vietnamese tea exports remain in unprocessed form.

Tuan also emphasizes building brand names for all Vietnamese tea exporters as an urgent task. If not, they will find it very difficult to negotiate trade contracts.

Cao Sy Kiem, President of the Vietnam Small-and Medium-Sized Enterprise Association, says many domestic businesses have had to either let their products bear foreign brand names or simply export raw materials to be re-processed and exported through a third country.

Kiem says protecting trademarks is a decisive factor in making successful deals. Companies should build up their own brand names overseas by improving the quality, competitive value and distinct design of their products.

Other experts say for lack of due attention to developing strong trademarks, domestic companies often find themselves at a disadvantage, even on home turf. In the meantime, management authorities are not really involved in helping them protect their creative values.

Lawrence Chong, CEO of Singaporean trademark consultants Consulus, says Vietnamese companies do not have skills in building trademarks and nor they know how to develop modern business models in the process of international integration. After developing brand names for products and chain stores, several domestic companies quickly sold them to larger foreign ones.

The Singaporean market is flooded with handicrafts bearing Vietnamese brand names, but most of the goods are sold by local companies, which can make a profit five times higher than in Vietnam, Chong says.

Chong advises that when owning a strong brand name, Vietnamese companies should think of developing long-term strategies and applying international trading models to further promote their trademark and export business, instead of selling it straight to international M&A companies.

Lawrence Chong affirms that building successful trademarks is not just a matter of taking part in advertising campaigns, but business leaders must also find ways to profit more from value-added products.

Dang Le Nguyen Vu, CEO of Trung Nguyen Coffee Group, says that to build a domestic trademark system and gain a firm foothold against fierce competition, all companies should consider protecting national trademarks as important as ensuring the sustainable growth of the national economy. The State should also coordinate with businesses and economic and legal management agencies to devise a comprehensive mechanism for dealing with trademark infringements in a timely manner.

 TPP to help promote Vietnam-US trade ties

The US is keen to boost trade and investment cooperation with Vietnam by concluding negotiations on the Trans-Pacific Partnership Agreement (TPP) between the two countries and other partners as soon as possible.   

Trade relations between Vietnam and the US have made the great strides since their Bilateral Trade Agreement (BTA) was signed in 2000 and the agreement to conclude Vietnam-US negotiation on Vietnam’s entry to the World Trade Organization (WTO) was reached in 2006.

The US is now one of Vietnam’s biggest potential export markets.

According to the Vietnam General Department of Customs, total two-way trade turnover between Vietnam and the US reached more than US$18 billion in 2010, up 19.5 percent over the previous year.

Vietnam ranks 27th among exporters to the US, with export-import turnover rising to US$21.45 billion in 2011 and Vietnam enjoying an export surplus of US$12 billion.

By the end of July this year, bilateral trade turnover had increased to nearly US$14 billion with Vietnamese exports to the US reaching approximately US$11.14 billion.

Vietnam exports mainly traditional products to the US market such as garments and textiles, interior decor, wood furniture, footwear, machinery, equipment, spare parts and seafood.

However, these products are facing tough competition from the same type of goods produced by other countries.

High added value industrial products like machinery, equipment and spare parts are considered highly competitive exports for Vietnam in the future.

The low end of the import spectrum includes screens and projectors (0.001 percent), electrical circuits (0.003 percent), and automobile and motorbike spare parts (0.16 percent).

Economic experts say the US economy has recently shown signs of bouncing back, which could offer a good opportunity for Vietnam to boost exports.

However, Vietnamese businesses are still finding it difficult to achieve greater penetration into the US market due to its slow economic recovery, high unemployment rate, and fiercer competition from US domestic producers and exporters.

The US also continues to enforce strong measures and trade barriers, aiming to protect its domestic production. The US Farm Bill, Lacey Act and national export initiatives have prevented Vietnam from bringing its key export products to the lucrative market.

In a recent reception for US Trade Representative Ronald Kirk, State President Truong Tan Sang said both sides need to fully tap their great potential for trade cooperation and asked the US to recognize Vietnam’s full market economy status and grant the country the Generalized System of Preferences (GSP).

The two sides should continue coordinating closely in cooperation mechanisms for multilateral economic links, Mr Sang noted.

The Overseas Investment Department under the Ministry of Planning and Investment says the US was the biggest investor in Vietnam in 2009 with total registered capital of US$9.8 billion. Capital from US companies accounted for 45.6 percent of total foreign direct investment in Vietnam, making it the leader in FDI projects for tourism resorts and major hotels.

The US ranking for FDI has gradually fallen in recent years but it is still listed among the top ten biggest investors in Vietnam.

As of July this year, the US ranked eighth among 92 nations and territories with valid investment projects in Vietnam, recording 629 projects worth a total of US$10.46 billion.

According to the American Chamber of Commerce (AmCham) in Vietnam, US investment in the country is now entering the third stage, in which US businesses will pay more attention to the global market, especially after Vietnam joined the WTO and is accelerating its TPP negotiations with partners.

9 banks with highest credit index

An annual report on Credit Rating of Vietnam Index 2012 (CRV Index 2012) was announced in Hanoi on September 8 by the Vietnam Chamber of Commerce and Industry (VCCI) and the CRV Company.    

Accordingly, nine out of 32 banks are rated class A, 9 (class B), 11 (class C) and 3 (class D).

Group A includes Techcombank, Vietcombank, VietinBank, ACB, BIDV, DongA Bank, Eximbank, MB and Sacombank.

Group B consists of BacA Bank, HDBank, Maritime Bank, OCB, Saigonbank, Southern Bank, PG Bank, VIB and VietABank.

Group C comprises ABBank, Baoviet Bank, DaiABank, Habubank, Kienlong Bank, MHB, NamABank, Vavibank, OceanBank, SHB and VPBank.

Group D involves MDB, VietBank and Western Bank.

The rating is based on their annual financial reports which have been audited and reported at the shareholders’ meeting. Three criteria for the rating are market strength, business performance efficiency and financial capacity.

The report and rating results are related to 32 banks only while other members such as SCB, TienPhong Bank, LienVietPostBank, TrustBank, GP Bank are not listed because they lack part or whole necessary information for rating.

Vietnam learns from Argentina's agricultural development experiences

A Vietnamese delegation led by President of the Vietnam Farmers’ Association, Nguyen Quoc Cuong, has visited Argentina to learn from its experiences in agricultural development.    

During their time in Argentina, the delegation visited research centres under the National Institute of Agricultural Technology and Husbandry, a well known research agency in South America.

The agency makes important contributions to improving the competitiveness and added value of export products as well as ensuring sustainable agricultural development in Argentina.

During various working sessions, Cuong affirmed that Vietnam aims to become a modern industrialized country by 2020 and is dealing with a number of issues related to modernizing its agricultural production.

Cuong said that the visit opened more prospects for bilateral cooperation in agriculture between the two countries, helping his delegation learn Argentina’s experiences in increasing the scale of production and applying advanced technology.

Second Ben Thuy bridge to bolster transport links

An inauguration ceremony for the Ben Thuy Bridge No 2, which crosses the Lam River, was held in the central province of Ha Tinh yesterday in the presence of Nguyen Sinh Hung, Chairman of the National Assembly.

The bridge will serve as an important link between the provinces of Nghe An and Ha Tinh.

It was built by the Civil Engineering Construction Corporation No.4 (Cienco4). Construction started in early 2010 with a total cost of more than VND 1,250 billion (US$ 61million).

The bridge has four lanes for automobile vehicles and two lanes for rudimentary vehicles with a width of 25 meters.

The opening of the bridge is expected to lessen the burden on the Ben Thuy Bridge No 1, which is frequently overloaded.

The bridge will play a vital role in ensuring smooth traffic flow and promoting socio-economic development in the north-central region.

The same day, Cienco4 held a groundbreaking ceremony for the rehabilitation of the National Road 1A – the portion to the south of Ben Thuy Bridge No 2.

The project is built in the form of build-operate and transfer (BOT) with an investment of about VND2,434 billion ($118.8 million). The project is expected to be completed in 24 months.

Addressing participants at the ceremony, NA Chairman Hung expressed his conviction that the bridge would help to improve the investment environment and accelerate the socio-economic development of Nghe An and Ha Tinh provinces.

"The widening and rehabilitation of National Road No 1, the portion running through Ha Tinh, will contribute to the completion of the country's main artery and in turn help in the course of nation-building and socio-economic development," Hung said.

Trade with Africa, Mid-East gets boost at Ha Noi seminar
 
Viet Nam moved towards boosting trade and co-operation with countries in Africa and the Middle East by holding the Viet Nam-Africa-Middle East Business Forum in Ha Noi yesterday.

The seminar attracted the participation of embassies, 20 enterprises from African and Middle Eastern countries and 200 Vietnamese enterprises.

Speaking at the seminar, World Bank Country Director in Viet Nam Victoria Kwakwa said Europe's continued economic turmoil made it a good time for Viet Nam to embark on a new phase of development and accelerate co-operation with Africa and Middle East countries.

Business prospects remained good and the economic environment strong, she added.

The recent political changes in some parts of the regions partly held back the development of economic co-operation, said Deputy Minister of Foreign Affairs Bui Thanh Son, pointing out that more than 10,000 Vietnamese labourers in Lybia must return home.

However, the country was now in recovery, he said, adding that the economic growth rate of Viet Nam with Africa and the Middle East was about 4.5 per cent, closely following the Asia-Pacific region (around 5 per cent).

The Ministry of Industry and Trade's statistics showed that last year's two-way trades between Viet Nam and Africa and the Middle East were valued at US$4.77 billion and $5.17 billion, respectively.

The figures for the first eight months of this year were estimated at $1.81 billion and $3.95 billion.

"The potential would be much greater than this," said president of the Viet Nam Chamber of Commerce and Industry Vu Tien Loc.

Loc said that Viet Nam, Africa and the Middle East had complementary advantages for mutual development. Africa and the Middle East would be providers of raw material, fuel, chemicals, feed and fertilisers while Viet Nam would export labour, services, rice, garment, footwear and many other goods.

Middle East countries were also expanding co-operation with Viet Nam and needed more Vietnamese guest workers, he said.

However, the shortage of business information on both sides and the lack of consultancy and support were major challenges, according to Deputy Minister of Industry and Trade Ho Thi Kim Thoa, adding that the limited links among bank systems of Viet Nam, Africa and the Middle East also hindered economic co-operation.

Le Dang Dung, director of Viettel Group – one of the pioneer investors into the regions and also the head of the forum - proposed that support policies should be made in detail while administrative procedures should be simplified to encourage more investments.

Besides, trade promotion with the regions must also be enhanced for enterprises to exchange information and seek out business opportunities.

The Viet Nam-Africa and Middle East Business Forum would be a bridge connecting enterprises on both sides and providing necessary information, consultancy and supports.

Le Dang Dung also called for more support from embassies of African and the Middle East countries to tackle difficulties and seek better economic co-operation.

To date, Viet Nam has poured $2.04 million into 21 projects in Africa and the Middle East.

South Africa, Egypt, Algeria, Mozambique, Morocco, Turkey, Saudi Arabia, Iraq and Israel were major economic partners of Viet Nam.

Dung said that two-way trade was expected to reach $13 billion by the end of 2013 and the number of foreign direct investment projects was expected to double.

No IMF loan to solve bad debt

Deputy Governor of the State Bank of Vietnam Le Minh Hung on September 7 rejected a rumour that Vietnam has to ask for a loan from the International Monetary Fund (IMF) to deal with bad debts.  

Hung stated that the IMF and the Vietnamese Government have never discussed, nor intend to discuss access to the IMF's credit.

The Deputy Governor explained that the purpose of the IMF's loans is to assist countries with temporary difficulties, meeting their balance of payments and maintaining adequate foreign exchange reserves for the future.

Both the Vietnamese Government and the IMF have assessed that Vietnam's macro-economic situation has shown positive and stable signs. Trade balance, current accounts and overall balance have a high surplus, while the market and public remain confident of economic stability.

"With the above conditions, there is no reason that Vietnam needs access to an IMF's credit," said Hung.

Hung added that Alfred Schipke, the IMF's new mission chief to Vietnam, has just finished a two-day visit to the country.

The IMF has taken a positive view of Vietnam's current economy and acknowledged the achievements of the government in the past year, especially its monetary and foreign exchange policies plus its restructuring of the banking system.

The IMF reaffirmed that it was always ready to support Vietnam's financial and banking systems reforms through its regular policy dialogue programmes as well as technical assistance programmes such as the Financial Sector Assessment Programme (FSAP).

Malaysia invests more than US$5.8 billion in HCM City

Malaysia has been an important economic partner of Ho Chi Minh City in recent years, said Hua Ngoc Thuan, Vice Chairman of the municipal People’s Committee, on September 7 at a meeting to mark Malaysia's 55th National Day.
    
By June 2012, Malaysia had invested in 169 projects in HCMC worth US$5.8 billion, making it the biggest foreign investor in the city.

Thuan said the many Malaysian leaders and business delegations have visited the city to seek investment opportunities, adding that the direct air route between HCMC and Malaysia has facilitated bilateral exchanges and cooperation.

In 2011 alone, HCMC welcomed more than 174,000 Malaysian visitors.

Thuan said that education and tourism are potential fields for stronger cooperation between the two countries in the future.

At the meeting, Malaysian Ambassador Dato Azmil Mohd Zabidi said he was very pleased with the fine trade relationship between the two nations after nearly 40 years of diplomatic ties. Bilateral trade has grown steadily, reaching more than US$6.5 billion in 2011 and Malaysia is also one of the leading foreign investors in Vietnam.

US$40million for micro-economic development

The Asian Development Bank (ADB) has agreed to provide an incentive loan worth US$40million to help Vietnam develop a model of market-oriented micro-finance.

The agreement was signed in Hanoi on September 7 by Governor of the State Bank of Vietnam (SBV), Nguyen Van Binh, and ADB Country Director in Vietnam Tomoyuki Kimura.

Addressing the signing ceremony, Kimura said the agreement shows the strong commitment and joint efforts of the Vietnamese Government and ADB in developing a healthy and sustainable micro-finance sector.

The loan aims to narrow development gap and help poor people, especially those living in rural areas, gain easy access to social services.

ADB also approved a micro-finance development program attached with non-refundable technical aid for Vietnam to improve the inspection of micro-finance and infrastructure work in the financial sector, the protection of consumer rights, and the exchange of credit information.

Rice exports reach new levels

Vietnamese rice exports totalled more than 928,000 tonnes in August, a year-on-year surge of more than 33 per cent, according to Truong Thanh Phong, chairman of the Viet Nam Food Association (VFA).

Speaking at a meeting in HCM City yesterday, Phong said the figure was the highest level ever recorded for Vietnamese rice exports.

"It was up in August by more than 22 per cent against July," he said.

The record volume brought Viet Nam a free-on-board (FOB) export value of nearly US$399 million, up 23 per cent compared to July and 18 per cent rise against August last year.

In the first eight months of the year, total rice exports reached 5.1 million tonnes, a drop of 4 per cent compared with the same period last month.

The export volume was worth more than $2.2 billion, a year-on-year decline of 10 per cent.

According to the VFA, export volume and value this year fell slightly due to the slowdown in export activities during the first quarter.

However, the VFA said prices significantly increased in August, especially from the middle of the month. The average price for the entire month was $443 per tonne.

"The price has risen by $40-45 per tonne compared with the beginning of August because of the limited supply after the harvest of the summer-autumn crop," the VFA said.

The price of Vietnamese rice is now higher than that of rice from India and Pakistan.

With such figures, the target to export 7 million tonnes will likely be met, and if favourable conditions continue, Vietnamese companies will continue to increase their rice exports, according to Phong.

There will not be any prohibitions for rice exports, as there have been in the past, when the country wanted to build up rice reserves.

The VFA said that global market has remained quiet, and new factors were not strong enough to create a big change in global and domestic rice markets.

"Vietnamese rice exports will be stable in the next two months thanks to many contracts. However, it will then slow down due to high prices, lower competitiveness and limited supply," the VFA said.

In September, rice export value is expected to be 800,000 tonnes, according to the VFA.

In August, Vietnamese exporters continued to receive many orders from importers, mostly from China and Africa. Contracts from Africa alone called for more than 400,000 tonnes of rice.

The main import markets in the first eight months remained the same: mainland China, Africa, the Philippines, Malaysia, Indonesia and Cuba. Of these partners, China surprisingly became the biggest importer, with import value of 1.4 million tonnes in eight months.

The Ministry of Agriculture and Rural Development said that during this period export value and volume to China saw year-on-year surges of 4.4 times and 5.2 times, respectively.

Orders from China began to increase at the beginning of the year, and continue to do so. There is no sign of stoppage, either, according to the ministry.

Explaining China's surge in imports, the VFA explained that rice prices in China were now higher than those of Vietnamese rice.

Nguyen Dinh Bich, an expert from the Ministry of Industry and Trade, said that the price of rice in China had increased by 7-19 per cent compared to prices last year.

Vietnam boosts agricultural development cooperation

Vietnam is ready to share experience and boost cooperation with other countries in the field of agriculture and rural development, said Prime Minister Nguyen Tan Dung.   

He made the statement while attending the second Conference on Agriculture, Food Security and Climate Change in Hanoi on September 6.

He praised the conference’s theme, ‘Hunger for Action’, with its focus on discussing practical issues and defining suitable and effective strategies to develop eco-friendly agriculture as well as promoting sustainable development and green growth.

PM Dung emphasized the important role of agriculture in Vietnam’s 2011-2020 socio-economic development strategy.

Over the past years, he said, Vietnam’s agricultural sector has recorded many considerable achievements, especially in food and seafood production and industrial crop cultivation, he said, adding that the country has now become the world’s second largest rice exporter.

In the coming years, Vietnam will develop agriculture in a comprehensive, modern and sustainable manner, with high productivity, quality, efficiency and competitiveness to ensure national food security and meet domestic consumption and export demands, Mr Dung said.

Vietnam is forecast to be one of the countries to be hardest hit by climate change, especially rising sea levels, which pose a big threat to agricultural production. Therefore, to realise the above-mentioned target, Vietnam is actively restructuring its agricultural sector, focusing on well exploiting potential areas, speeding up scientific and technological research and application in production, processing and supplying chains, as well as strengthening environmental protection, he said.

“We are ready to cooperate with other countries and relevant international organisations in developing pilot models on green agriculture in Vietnam,” Dung stated.

Together with the mobilisation and effective use of domestic resources, Vietnam plans to step up international integration and cooperation in order to create a favourable environment for attracting overseas resources for development, he said.

The PM called for further assistance and closer cooperation from other countries and international organisations in the cause of national construction and development.

The conference was jointly organised by the Vietnamese Ministry of Agriculture and Rural Development, the Dutch Government, the World Bank and the UN Food and Agriculture Organisation (FAO). It has drawn the participation of over 500 delegates from 150 countries and more than 20 international organisations.

VN goes all out for Japanese investors

Viet Nam will focus on implementing infrastructure upgrades, administrative reforms and human resources improvement to attract more Japanese investors, including those of Aichi Prefecture, said Do Nhat Hoang, head of the Foreign Investment Agency, at a business conference on Thursday.

Organised by the Ministry of Planning and Investment, the forum aimed to update investors from Aichi in particular and Japan in general to Viet Nam's current investment climate, as well as to find solutions to difficulties facing the Japanese business community.

According to Yugo Nagata from a law firm in HCM City, Japanese businesses prefer to penetrate the Vietnamese market via mergers and acquisitions (M&A), however, insufficient regulations and unsynchronised business policies are confusing Japanese firms and investors.

Japan currently is Viet Nam's largest source of foreign investment with 1,729 projects worth a total of US$28.2 billion. Aichi Prefecture accounts for 96 projects, mainly in the fields of production and support industries.

In the first eight months alone, Japanese businesses registered to invest $3.6 billion into 174 projects in Viet Nam, accounting for 20 per cent of all projects and 66 per cent of all foreign investment registered to the country.

Vietnam Airlines offers 50pct airfare discounts

National carrier Vietnam Airlines will offer half price tickets on some of its international and domestic flight routes.    

According to the promotion, a single ticket for domestic flights will cost on average VND400,000 (US$19), and flights to Singapore, Malaysia, Thailand, Indonesia, the Republic of Korea, Japan, the UK and Indonesia will sell for an average of VND1.2 million (US$59) for a return ticket.

This is the Vietnam Airlines biggest promotional programme so far, with unlimited discounted tickets for international flights and 110,000 reduced rate tickets for domestic flights.

The promotions will apply to tickets bought from September 12 to 19 for international flights and from Sept 1 to October 10 for domestic flights.

Caravan visitors deeply impressed by Hue

An international caravan delegation left the former imperial city of Hue on September 7 after traveling through China, Laos, Thailand and Vietnam.    

The convoy of 30 caravans carrying 150 reporters, representatives of international travel agents and businesspeople started its trip from Nanning, China on August 18, and traversed through Laos, Thailand and the central region of Vietnam.

This is the biggest international caravan group to visit Hue since early this year.

They visited My Son, Hoi An, Danang and tourist sites in Hue on September 5-6, which they said left a deep impression on them. They were also very happy with their trip, going through a lot of beautiful scenery and discovered some new tourism sites.

Hue has received many caravan delegations in recent years, and more visitors are choosing this kind of tourism because they can stop and relax whenever and wherever they want.

Travel agents in Hue are preparing appropriate infrastructure and services for visitors during the peak tourist season that begins in October.

Nation in top ten for Asia-Pacific investment

Viet Nam will be among the Asia-Pacific region's most attractive destinations for investors in the next three to five years, according to a Price-waterhouseCoopers (PwC) survey released this week.

According to PwC's CEO APEC 2012 survey, Viet Nam will be ranked ninth among the most appealing investment destinations for companies which have their main headquarters in fast-growing economies in the next three to five years. The survey was conducted between June and August with the participation of 376 CEOs and experts in 40 countries.

According to the leading auditing firm's report, Viet Nam will also rank eleventh in terms of foreign direct investment during the next three to five years.

Asia-Pacific CEOs considered mainland China and the US their first choices for investment in the next three to five years. Natural resource-rich economies such as Russia, Indonesia and Australia and service hubs like Hong Kong and Japan would also attract their attention.

About 36 per cent of executives surveyed by PwC said they were optimistic about their short-term business growth, while up to 54 per cent believed they would achieve better long-term business performance in the next three to five years. The survey also indicated that the economic downturn in the US and the Euro-zone as well as China's slowdown in economic growth to below 7.5 per cent have affected CEO trust in the Asia Pacific region.

VPBank offers preferential loans for importers-exporters

The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has announced that it will offer preferential loans worth US$100 million to importers and exporters, effective immediately until the end of 2012.

Accordingly, import-export enterprises that make payments and foreign currency transactions through VPBank will be able to access soft loans at an annual interest rate of 4-5%, 2-3% lower than the regular rates.

VPBank’s new preferential lending programme, following its recent ‘VP Business’ and ‘SME Success’ lending packages for targeted customers, aims to provide import-export enterprises with suitable financial solutions for their business operations.

VFA optimistic of higher rice exports this year

At a meeting on September 7 in Ho Chi Minh City, the Vietnam Food Association (VFA) predicted that Vietnam may be able to export seven million tons of rice this year, after the country’s rice exports in August alone touched 928,000 tons, valued at US$398.5 million, the highest ever export of rice in one month.

During the first few months of this year, rice exports faced many difficulties with prices dropping sharply and contracts going for lower value than previous years.

Although rice export volumes in the last three months were rather high, exports in the first eight months only reached 5.1 million tons, valued at $2.2 billion, a decrease of 200,000 tons, or more than 4 percent in volume, and 10.2 percent in value compared to the same period last year.

The average export price fell by $30.9 a ton during the first eight months. However, rice prices rose significantly last month, especially around mid August, climbing $40-45 a ton compared to the beginning of the month.

The association explained that prices climbed because of unusual weather in the US and in the region of the Black Sea, said to also be a cause of a poor wheat crop, which indirectly affected rice prices.

However, the volume of summer-autumn rice crop in the Mekong Delta unexpectedly became scarcer than expected as the volume of rice smuggled out through the northern and western borders was rather huge.

Rice consignments to Cambodia moving through three border gates in Dong Thap and An Giang Provinces possibly reached upto 400,000 tons a day. Tinh Bien Border Gate in An Giang Province even saw 5,500 tons of rice being moved out of from Vietnam to Cambodia in a day. In the North, the volume of rice bought by Chinese traders was also significant.

According to Nguyen Van Tien, director of Angimex Company, rice volumes from Cambodia fell sharply and production of summer-autumn crop might also drop by 10-15 percent compared to the same period last year.

Currently, Vietnamese rice prices are higher than in India and Pakistan, from $10 per ton to double or more dollars per ton, especially on 10-percent broken rice and all broken rice.  Rice exports by collective contracts fell sharply to 17.8 percent while rice exports by commercial contracts were at 82.1 percent.

The association said that exports of high-quality rice such as 5 percent broken rice, fragrant rice, and sticky rice, accounted for 62 percent of total rice exports. It forecast that this year rice exports would be higher than the target of 7 million tons. The autumn-winter crop is expected to produce about 2.6 million tons, of which export rice would be around 300,000 tons.

Truong Thanh Phong, chairman of VFA, said that rice exporters should not rush to sign bigger contracts with foreigner buyers as local rice prices are   climbing faster than global prices. He suggested that under the current situation, firms should only sign contracts when they have enough rice in their warehouses to fulfill the contracts. Firms should also closely watch movements in domestic and global markets such as drought in the Black Sea region and the US which is expected to damage 50-60 percent of wheat production; high rice inventory in India; effects of El Nino in Indonesia; and actual demand from the Philippines.

As to the problem of Vietnamese rice being sold to Thailand via the Cambodian border, it is seen that Thai traders only stop buying Vietnamese rice when prices surge above VND9,000 per kilo.

Souvenir market still untapped in Mekong Delta

Vietnam is missing the chance to earn valuable foreign currency from tourism as many international holidaymakers earmark several hundred US dollars to buy gifts during their trip to Vietnam but go back disappointed with the local tourism industry failing to showcase attractive souvenirs for them to take back.

A large souvenir market is awaiting development in the Mekong Delta region as many foreigners visit the area but find little that attracts them to open their purse strings.

In fact, each province in the Mekong Delta region has capacity to develop its own souvenirs from local materials. According to  Tran Kim Dinh, director of Mekong Travel Agency, the southernmost province of Ca Mau has  pictures made from skin of malaleuca cajuputi; An Giang Province in the west has coconut palm pictures and brocade cloth made by Cham or Khmer ethnic minority people; Soc Trang Province also makes pictures from skin of fresh corn, besides other small wooden items such as betel nut trays and boats; Kien Giang Province sell items made from mother-of-pearl or tortoise-shell; Vinh Long Province has water hyacinth weed baskets and porcelain décor items.

However, Dinh said that the souvenir designs are so simple and monotonous and need further development. Many rich travelers can spend upto $400 a day on shopping, but there is little to choose from during their stay in the Mekong Delta provinces as all shops only sell souvenirs from Ho Chi Minh City, without any items bearing impressions of the locality.

Until July this year, around 13 million tourists had visited the Mekong Delta provinces, bringing revenues upto VND2.6 trillion (US$125million), an increase of 25 percent compared to the same period last year. For such a large volume, the souvenir market has still not been adequately developed, and the country is losing a valuable opportunity to earn more foreign currency and propagate the beauty and culture of its people abroad.

Western tourists are fond of lacquer ware, Japanese people are more interested in embroidered pictures, and American travelers prefer handicrafts made from wood, bamboo or rice straw. Vietnam has so far exported many such commodities in large numbers to these countries, but when the foreign visitors come to Vietnam, they do not want to buy these items, which is a real paradox.

Does Vietnam have so little experience in developing, preserving and marketing hand crafted souvenir items, which show the local culture?  Perhaps the country should study the Thai example of the One Tambon One Product (OTOP) Project it developed in 2001.

OTOP program encourages village communities to improve local product quality and marketing, select one superior product from each tambon to receive formal branding as a ‘starred OTOP product’ and provide a local and international stage for the promotion of the product. OTOP products cover a large array of local items such as handicrafts, cotton and silk garments, pottery, fashion accessories, household items, and foodstuffs.

Listed firms hold onto property
 
Nearly one-third of the assets of listed real estate companies on the stock exchanges in Ha Noi (HNX) and HCM City consist of unsold real estate worth VND55 trillion (US$2.6 billion) in the first half of this year alone.

Statistics show that the inventory assets of Viet Nam Housing Joint Stock Company (NVN) accounted for 90 per cent of its total assets or VND636 billion ($30.2 million), of which VND635 billion ($30 million) was money for buildings in progress.

NVN has implemented six projects this year. Its net turnover in the six-month period was VND37 billion, a 19 per cent decline over the same period last year. Its net profit for the period fell by 61 per cent.

Phat Dat Real Estate Investment and Development Corporation in HCM City, Hong Phat Construction Investment Joint Stock Company and Viet Nam Infrastructure Company also have a high inventory rate of 89 per cent.

More than 60 listed property companies on the exchanges confirmed that they had too much unsold real estate. Housing accounts for 46 per cent of the total assets of these enterprises.

Sixty nine per cent of all cash was in the hands of the six biggest companies. Revenues in the period were insufficient to cover interest, payments for contractors and other expenses.

Figures revealed that 11 out of 63 listed companies in the property sector reported total losses of VND179 billion ($$8.5 million) in the first six months of the year.

Kinh Bac City Development Corporation (KBC) reported the biggest loss of VND105 billion while its inventories was VND5.9 trillion, accounting for 52 per cent of its total assets.

Petrolimex Infrastructure Investment and Development Company (PTL) also reported loss of VND20 billion.

In order to reduce the inventories, the Ministry of Construction has asked constructions departments to report about the inventories at real estate companies to submit to the National Assembly at the fourth session.

The figures would be collected to the ministry before the September 15 aiming to review socio-economic development plan this year.

The property has been in stagnancy since April when the State Bank of Viet Nam tightened credits. Real estate firms and building material producers faced difficulties and even bankruptcy. The ministry has proposed solutions to untie the market several times.

Statistics from the Ha Noi Construction Department showed that 122 property trade floors out of 500 ones stopped their operation while 200 ones had not had successful transactions.

It also said that some property businesses have had inventories of 500 apartments with loans of VND1 trillion. Investors had to sell out their apartments to reduce financial pressure.