Several add-on fees hike retail car prices  

Since early this year, several added costs and fees on cars have plagued the retail car industry, with sales dropping substantially.  

The Vietnam Automobile Manufacturers Association sold nearly 15,000 cars in the first quarter of this year, a drop of 13,000 cars over the same period last year.

In March, the association sales tumbled by 50 per cent due to the proposed private vehicle ownership fee issued by the Ministry of Transport.

If sales reduce by 25 per cent as they did in February, March sales might total only 7,000 cars.

This means losing at least 2,000 customers. If each car costs an average US$25,000 plus 40-60 per cent tax, the State budget faces the menace to lose about $20-30 million in March alone.

After the Ministry of Transport brings into effect the road maintenance fee from June 1, the total number of fees imposed on car sales will amount to six. These include a registration fee, number plate fee, insurance fee, fuel fee and a petrol subsidy fee.

The Ministry of Finance has further increased registration fee on cars by 20 per cent in Hanoi and 15 per cent in Ho Chi Minh City. The number plate fee has also gone up ten times, to VND20 million.

Besides all these pile up of fees, each car imported into Vietnam will be charged import tax, special consumer tax and a value added tax.

Consumers will now pay four times more than original price to own an imported Toyota Yaris.

For instance, if an imported car costs a basic VND210 million, consumers will pay an extra 72 per cent in import tax, 50 per cent in consumer tax and 10 per cent in value added tax.

The car can then retail for VND658 million. When buying, consumers will pay VND132 million in registration fee, VND20 million to buy a number plate, and VND379,000 for insurance.

The total price of the car will then cost upto VND810 million, which does not include road maintenance fee, private vehicle ownership fee, fee to ply in the city centre and daily running costs.

According to the association, if Vietnam does not develop a car industry of its own, the country will have to spend $12 billion each year to import cars.

Shares rise on rate cut decision

Shares rose on both national stock exchanges with investors upbeat on news that the central bank yesterday cut the deposit interest rate ceiling from 13 to 12 per cent per annum.

On the HCM City Stock Exchange, the VN-Index closed this morning's session higher at 454.39 points, up 0.79 per cent from yesterday.

Market value stood high at more than VND1 trillion (US$47.6 million) on a volume of 64.3 million shares.

Advancers outnumbered decliners by 163-41, of which 52 hit the daily limit of a 5 per cent rise.

Despite sluggish trading on blue chips, 17 of the 30 leading stocks by market value and liquidity rallied, pushing the VN30 Index up 0.88 per cent to nearly 522 points. Only seafood company Hung Vuong Co (HVG) declined 3.3 per cent while others closed unchanged.

SACOM Development and Investment (SAM), traded at the ceiling price of VND7,300, was temporarily leading trades on the southern bourse with 3.8 million shares changing hands.

On the Ha Noi Stock Exchange, the HNX-Index rose 1.31 per cent to close this morning at 76.40 points.

Trading value reached VND539.8 billion ($25.7 million) as 54.5 million shares were traded.

Gainers more than tripled losers, with Habubank (HBB) still being the most heavily traded stock nationwide on a volume of nearly 6.5 million shares. HBB finished this morning up 1.5 per cent at VND6,900.

VN-Index gains despite wariness

The VN-Index closed at 450.85 points on April 10 up just 0.03 percent from the previous day, with investors unsure about predictions of an uptrend.

On the HCM Stock Exchange, market value climbed 44.5 percent from the previous session to over 1.31 trillion VND (62.4 million USD), while the volume of shares traded increased 32.3 percent to 87.7 million.

Blue chips were mixed. Seventeen of the 30 leading shares by market value and liquidity rallied while 11 declined, lifting the VN30 Index by 0.34 percent to stand at 517.40 points.

Gainers included food processor Masan Group (MSN) and Sacombank (STB), both up over 2.5 percent, while Vietcombank (VCB) and Phu My Feritiser edged up over 1 percent.

On the Hanoi Stock Exchange, the HNX-Index slumped 2.13 percent to end on April 10 at 76.28 points, but both market volume and value rose over 22 percent, totalling 87.7 million shares worth 868.4 million VND (41.4 million USD).

Losers outnumberd gainers by 151-88, with eight of the 10 leading shares by market capitalization losing ground.

Habubank (HBB) continued to lead trading nationwide with 9.46 million shares changing hands, but closed down 2.86 percent at 6,800 VND.

The market is unlikely to drop sharply as purchasing power is increasing, encouraging investors to book at lower valued shares, according to FPT Securities Co analysts.

They said there was a high possibility that cash flow would shift from the gold market to the stock market in the near future when a new decree that tightens control over the market takes effect in May.

“Accompanied by the increasing net buys of foreigners in recent weeks time, we believe the prospect of an uptrend is much higher than in the previous week’s trading,” they wrote in market report.
 
Banks take different paths to survival

Banks have adopted diverse tactics to keep their heads above water amid a flood of economic difficulties.

Dong A Bank’s 2012 annual shareholder meeting took place last month and envisaged a plan to sell VND900 billion ($42.8 million) stake of its commitment to hike chartered capital to VND6 trillion ($285.7 million). But it could be delayed to avoid hurting shareholders since bank shares in the over the counter market (OTC) sunk to lower than the face value of VND10,000 per share.

“Dong A Bank will list on the stock market after finding a suitable strategic partner. The board will be in charge of handling and monitoring the process of finding the strategic partner matching the bank’s development vision, strategy and culture,” according to a bank statement.

Southern Bank was just told by the State Bank to confirm its commitment to offload shares within one year after finishing its initial public offering (IPO) when it sought to hike chartered capital from over VND3.212 trillion ($153 million) to VND4 trillion ($190.4 million).

Unlike Dong A Bank, Southern Bank has founded foreign strategic partner Singapore-based United Overseas Bank Limited (UOB) which has a 20 per cent stake.

“Our bank may make its debut in the Ho Chi Minh Stock Exchange this year and further evolve capitalised on our own strength. We surely will not team up with any other units in the banking sector,” said Nam A Bank chairwoman Nguyen Thi Xuan Loan.

“Nam A Bank remained steadfast and did not experience a liquidity drought in 2011 which was a challenging year for the business community. We will stay outside current vibrant trend for mergers and acquisitions (M&A) and consolidations in local banking sector,” Loan confirmed.

At this point of time Vietnam’s two major stock exchanges accommodates nine banking entities, namely VCB, CTG, EIB, ACB, STB, SHB, MB, HBB and NVB, of which six have partnered with foreign players. Industry experts view M&A as the right move for banks to fortify themselves.

Foreign investment up in feed industry

Foreign invested firms have been pouring money into and expanding animal feed production, according to the Vietnam Animal Feed Association.

The domestic animal feed market is expected to see demand of 18-20 million tonnes by 2015 and 25-26 million tonnes by 2020.

US-invested Cargill Vietnam in March added two factories to its nine existing feed production facilities, increasing total capacity to 1 million tonnes per year, accounting for 10 per cent of the local market.

"Recent investment in animal nutrition is a sign of our continued commitment to fostering the economic growth of Vietnam ," said Cargill CEO Greg Page.

Last year, CP, a Chinese animal feed producer operating in Vietnam , announced it would build six additional factories by 2014 while another Chinese firm, New Hope , confirmed it would construct six more.

The association said foreign investment increase in animal feed production was due to high domestic demand as well as advantages in capital and tax during the production process.

Meanwhile, local animal feed producers have faced many challenges, including high interest rates on loans and low competitiveness.

Association Chairman Le Ba Lich admitted supporting capital to poor local producers is yet to become reality.

Lich suggested the Government better regulate the animal feed market, encouraging foreign invested firms to produce mixed feed materials using advanced technology.

The state should offer investment incentives to local feed producers such as capital and warehouse facilities at ports, Lich added.

Vietnam currently has 59 foreign-invested firms and joint ventures which hold 70 per cent of the domestic market share while 180 local firms retain the remaining 30 per cent.

Local firms face the risk of losing their market share to foreign rivals due to increased foreign investment into the feed industry, Lich noted.

Cbank buys $6.23 bln for national reserve

The State Bank of Vietnam has used around VND130 trillion to buy $6.23 billion worth of foreign currencies from banking systems for the national reserve.

The central bank has also sold some $100 million for the banking system, SBV Governor Nguyen Van Binh said at a recent meeting with the chairpersons and general directors of 14 Vietnamese commercial banks.

Vietnam’s foreign exchange reserves as of mid-March jumped 25-27 percent over the end of last year, said the central bank governor in a press conference early last month. Governor Binh then said the forex reserve surged 50 percent in 2011 over 2010.

Vietnam’s forex reserve was at $13.5 billion, equivalent to the payments for six weeks of imports following the International Monetary Fund’s norm, in the middle of last year, according to the IMF’s data.

The reserve had shrunk to about $10 billion by the end of 2010, said then Minister of Planning and Investment Vo Hong Phuc.

The SBV today held the benchmark rate at VND20,828 a dollar for the 15th week in a row, the longest streak of keeping the rate unchanged this year.

The liquidity situation of banks has significantly improved over the end of 2011, said Binh at the meeting.

Interest rates on the interbank market have declined dramatically, with the overnight rate dropping to 6 percent a year.

This is the basis for the expected downward trend of interest rates in the coming months, he told Sai Gon Dau Tu Tai Chinh newspaper.

At the meeting, the central bank also required commercial banks to announce packages for the lowering of interest rates and report the situation to the Monetary Policy Department before April 12.

To facilitate lending, SBV will consider delisting some content to reduce certain restrictions for non-preferable lending, including real estate and consumer loans.

The central bank has also planned to reduce the risk ratio for property-backed and securities-backed lending from 250 percent to 150 percent and raise the loan/deposit of banks from 80 percent to 90 percent, and of financial firms from 85 percent to 100 percent.

This was one important aspect of the draft to amend and supplement some clauses of Circular No 13/2010/TT-NHNN dated back to May 20, 2010. As scheduled, the amended circular will be effective from June 1, 2012.

The Central bank will soon issue the document to expand lending activities of commercial banks and anti-unfair competition, and encourage banks to detect cases of offering depositing rates over the ceiling of 13 percent, pledging to handle those cases seriously.

The central bank will continue maintaining the interest rate cap, while considering the abolishment of the interest rate ceiling if objective conditions are met in the end of Q2 or the beginning of Q3.

It had previously planned to reduce benchmark interest rates by 1 percent every quarter, expecting rates to ease to 10 percent by year-end, according to newswire VnExpress.

SBV will lower the deposit interest rate cap by another 1 percent to 12 percent thanks to more stable macroeconomic indicators, slowing inflation, and improved bank liquidity, VnExpress quoted Do Thi Nhung, deputy head of the SBV's Monetary Policy Department, as saying.

Vietnam's credit growth as of March 20, 2012 was negative 2.13 percent, according to the report of Vietnam National Financial Supervisory Commission (NFSC).

VN’s first green power plant to operate soon

Chiem Hoa hydropower station, the nation’s first run-of-the- river (RoR) hydro power plant, will soon become operational with its first turbine going into operation later this month, after nearly three years of construction, announced the project’s management board on Apr. 9.

Built at a cost of over 1.7 trillion VND, the plant, located on the Gam River , has the capacity to produce 45MW.

This is the first hydro power plant in Vietnam , which is river powered, a type of hydroelectric generation where little or no water storage is provided.

The plant is dramatically different in design and appearance from conventional hydroelectric projects. Traditional hydro dams store enormous quantities of water in reservoirs, necessitating the flooding of large tracts of land. In contrast, RoR projects do not require a large reservoir of water, which is the main reason why such projects are often referred to as environmentally-friendly, or "green power."

The project’s management board said that about 90 percent of the construction work has been completed. The plant’s third and last turbine will go into operation in October this year.

Dutch ING Bank to open Vietnam rep office in May

ING Bank announced April 10 it would open a Vietnam representative office in Hanoi on May 7, 2012 to strengthen its cross-border commercial banking services.

The new office is part of a drive by the global financial institution of Dutch origin to boost its commercial banking network to cover 14 markets in Asia.

ING said the Hanoi office would promote its projects in Vietnam and oversee the implementation of the bank’s agreements with Vietnamese companies and credit organizations.

“Our Hanoi office will help to address the rising demand from our European clients as they expand their businesses in this region, as well as Asian companies looking to build an international business,” Vaughn Richtor, CEO of ING Bank in Asia, said in the announcement.

ING Bank has appointed Remco Gaanderse as chief representative of ING Bank Vietnam.

ING Bank was a bookrunning mandated lead arranger for the recent $1.5 billion project financing for Mong Duong 2, Vietnam’s largest-ever private-sector thermo power project.
ING Commercial Banking Asia is present in 14 economies namely China, Hong Kong, India, Indonesia, Japan, Malaysia, Mongolia, the Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam, and Australia.

BMW recalls 180 autos in Vietnam

Euro Auto, the authorized dealer of BMW in Vietnam, is recalling 178 BMW 5- and 6-series cars in Vietnam for repair due to the problems with the battery-cable cover that was incorrectly installed.

The decision was part of BMW worldwide campaign initiated in late March to recall its autos for the same reason.

The defect “can result in the electrical system malfunctioning, the vehicle failing to start and, in some cases, to charring or fire,” the WSJ quoted BMW as saying in a statement to announce the recall that affects 290,000 cars in Germany and 1.3 million worldwide.

In Vietnam, Euro Auto has reported the recall to Vietnam Registry, the government agency responsible for vehicle safety.

Owners of the BMW series 5 and 6 from the 2003 to 2010 model years across Vietnam will be notified by letter, and the repair will take around 45 minutes, Euro Auto said.

Banks mull collecting on-us transactions fees

The Vietnam Bank Card Association (VNBC) will lodge a petition to the State Bank of Vietnam (SBV) to be allowed to collect fees on the ATM on-us transactions, saying it will enable them to expand, modernize and maintain the ATM networks.

The decision has received consensus from commercial banks under the association.

Meanwhile, as recently as earlier this month, Vietcombank, one of the banks with the largest number of ATM cards issued, announced that it will collect a VND3,300 month fee on managing ATM card accounts, and the same rate will be slapped on money transferring transactions made amongst Vietcombank cardholders.

“With 6 million ATM cards issued, Vietcomank expects to reap around VND200 million a year to invest in the ATM network,” said Trinh Thuong Thuc, head of the Vietcombank plastic department.

ATM cardholders of most banks currently only have to pay fees for interbank transactions, including both money withdrawal and transfer.

The idea of collecting fees for on-us transactions was proposed by the VNBC bank members, and the Bank for Agriculture and Rural Development, or Agribank, will be in charge of drafting the plan for fee collection, VNBC said in a recent meeting.

“ATM transaction fees do not only include money withdrawals, but also transfers,” said a VNBC representative.

Several VNBC bank members told Tuoi Tre that on-us ATM transaction fees must be collected, since most banks have incurred losses from maintaining their ATM networks over the last few years.

“Expenses for the machines, as well as for renting the places to install them, have constantly risen,” the banks said.

It costs some dozens of millions of dong to hire a place for the ATM booths, and VND500 million a year for repair and maintenance.

There are also different expenses for leasing network cables and paying employees to put money into the machines, the banks added.

Meanwhile, it is unlikely that banks can earn interest from the non-term deposit money in ATM plastics, since Vietnamese cardholders have yet to develop a habit of paying via cards.

Most card holders withdraw their money for spending right after receiving it. Meanwhile, banks are required to keep at least VND400 million in each ATM booth.

This means banks with large networks consisting of thousands of ATM booths have to sink up to VND600 billion into the booths, which will yield no interest.

Ha, a worker at Pungkook Co, said that if the on-us transaction fees are collected, she will turn to withdrawing all of her salary for use, rather than making on-machine transferring.

“The fee of VND3,300 for each transaction is trivial to some people, but for low-income workers like us, it is more expensive than buying an egg,” said Ha.

Other workers said that while they used to withdraw only a part of their wages to use within a week, they will also switch to drawing all of their funds to avoid paying the withdrawal fees.

“We can withdraw the money without paying fees at the banks’ transaction offices, but how can workers get out of the factories during office hours to do so?” T., who works for Hansoll Co, wondered.

Japan helps Vietnam develop e-customs

Japan will provide US$6.58 million to support modern technology application for Vietnam’s customs sector.

A project to this effect was signed in Hanoi on April 9 between the Vietnamese General Department of Customs and the Japan International Cooperation Agency (JICA).

The project aims to amend the current legal frameworks, create a viable strategy for information and technology, and human resources development, as well as to deploy the Vietnam Automated Cargo Clearance System (VNACCS) and the Vietnam Customs Information System (VCIS).

Nguyen Ngoc Tuc, Head of General Department of Vietnam Customs, says the project will greatly improve efficiency and contribute to reforming and modernizing the customs sector following the guidelines of the Government and the Ministry of Finance.

Vietnam needs to reopen its National Gold Exchange

Five commercial banks and Saigon Jewelry Company (SJC) have been asked to sold out gold to stabilise the market after domestic prices rose by VND3 million –VND4 million per tael over the world price in early September last year.

The gap in prices was immediately reduced but it was then gradually extended.

Following the Government Decree’s No.24 on the management of gold trading many experts insisted that the National Gold Exchange should be reopened.

Tran Thanh Hai, Director of the Vietnam Gold Business Corporation (VGB), said the reopening of the gold exchange will help iron out snags.

First, gold trading is usually thought to have a negative impact on the exchange rates. Actually, the exchange rate of the US dollar will only be affected by gold imports, not by gold trading that requires small amount of dollars.

Second, gold trading will contribute to stablising the gold market.

He cited lack of experience, technical tools and unreasonable rates of margin purchase as the main reasons for the recent closure of the gold exchange, he said.

For example, when purchasing a certain amount of gold, customers were only required to pay 7 percent of the total money in advance. However, if the gold price changed remarkably overnight, the customers might lose all of their money.

To prevent the situation, the Commodity Market Exchange (CME) in Chicago has often raised the rate of margin purchase by 20-30 percent when gold prices vary greatly. It is normal to see the rate being adjusted twice a month in the US, Hai said.

Rubber industry to focus on processing

Prime Minister Nguyen Tan Dung attended a ceremony to honour the Vietnam Rubber Group (VRG) with the Gold Star Order for its contributions to the industry in Ho Chi Minh City on April 8.

He urged the group to further invest in the rubber processing industry and science and technology, and develop infrastructure projects.

The VRG has developed 300,000ha of rubber plantations in Vietnam and more than 200,000 ha overseas, compared to just 40,000ha after the war.

Its production has continued to increase despite the global economic downturn with an average annual rise of 6 percent in area and 10 percent in productivity from 2001- 2010.

Export turnover has risen by more than 30 percent per year and hit nearly US$3 billion last year.

The PM asked the industry to expand the country’s rubber area to 1 million ha by 2015, of which the group would account for nearly half.

He also urged the VRG to improve the quality of Vietnamese rubber, promote exports and expand its markets.

VRG general director Tran Ngoc Thuan said they will focus on restructuring to improve effectiveness and raise their rubber plantation scale to 500,000ha to provide jobs for 175,000 workers.

Seminar looks at better cash aid programmes

The Ministry of Labour, Invalids and Social Affairs (MOLISA) in coordination with the World Bank and UNICEF hosted a seminar on April 9 in the Central Highland province of Lam Dong, to share their experiences in implementing programmes to provide money to poor children.

The seminar attracted representatives from eight provinces that have similar programmes, including Lam Dong, Gia Lai, Kon Tum, Quang Nam, Quang Ngai, Tra Vinh, Ha Giang and Lao Cai.

According to the organising board, besides sharing their experiences, reviewing and evaluating the implementation of policies related to funding in Vietnam and in particular provinces, they aim to create effective funding programmes for children, which is the main purpose of the seminar.

Participants at the seminar discussed and recommended measures such as ways of identifying programmes’ subjects, updating and managing lists of children in need, specific methods of assistance and the best way of assisting poor children, particularly those from minority ethnic groups.

MOLISA Deputy Minister Nguyen Trong Dam said that the ministry has applied many social welfare policies to support poor people in the past, however, they have not been effective enough.

He said overlapping policies, plus shortcomings in implementing processes are among the main reasons for the poor results, which need changing dramatically.

Recently, the Prime Minister ratified a cash aid project for children under 16 with ODA funds in the eight aforementioned provinces for 2013-2015, therefore the seminar should help the province to carry out the project more effectively.

Steel, cement makers suffer massive unsold stocks

With demand for steel and cement still in a steep decline, manufacturers, distributors and dealers of these two commodities are struggling to survive due to huge unsold inventories.

“Though it is the high season for construction, demand still dropped by 40 percent compared to last year, resulting in a bigger loss,” lamented S., who runs a large steel distributing facility on Ho Chi Minh City’s Ly Thuong Kiet Street.

The distributor used to stockpile thousands of tons of steel, but the figure is now only some 100 tons, she said.

“Of the 15-person workforce that loads the products, only three remain,” added Khang, who manages the 300-square-meter warehouse of the facility.

“In 20 years of working here, this is the gloomiest time I have experienced.”

Similarly, steel dealers and retailers on Bach Dang, To Hien Thanh, and Phan Xich Long streets also said they have sold almost no products over the last few weeks.

“The steel stocked in the warehouses has all become rusty,” said Yen, owner of Thanh Thien store on Ly Thuong Kiet Street.

Meanwhile, the company that transports the goods said they only have to work once or twice a week, while the figure used to be three times daily.

Meanwhile, dealers and distributors of certain cement manufacturers such as Ha Tieng 1, Song Gianh, Holcim, Nghi Son, and Cam Pha are also suffering from low consumption.

“I used to sell up to 800 cartons a week at this time last year,” said Mai, whose cement dealer is located on Van Kiep Street.

“But selling 40 cartons a week is now the best I can do.”

The warehouse, which is large enough to stockpile 2,000 cartons of cement, now has plenty of empty space, since goods are only stocked when manufacturers cut prices or offer discounts, said Mai.

Similarly Phuong, owner of the Loan Phuong construction material store, said her trucks have sat unused for several months.

“How could the business survive when demand has dropped by 40 percent compared to the same period last year, when the market was already sluggish?” Phuong said sadly.

There are several dozen steel manufacturers under the Vietnam Steel Association (VSA) with unsold inventories ranging from a dozen to hundreds of thousands of tons, according to figures obtained by Tuoi Tre.

Sold products have been on a steady decline since the beginning of this year, forcing some businesses to operate at only 60 percent of their design capacity.

Six manufacturers have even ceased production due to the slowed consumption.

D, chairman of a major HCMC-based steel maker, admitted that the unsold stock of his company is around 200,000 tons.

“Given a normal market development, such an inventory would be acceptable,” said D.

“However, amid this economic slowdown, businesses cannot survive with the figure.”

D said the unsold stockpile is worth some US$100 million, with each ton of steel fetching $470.

“With this huge sum, plus the bank interest, and transport and labor cost, I lose dozens of billions of dong every day,” lamented D.

Meanwhile, the CEO of another cement maker said that players in the cement manufacturing market have been fighting each other for survival, since “all are on the verge of bankruptcy.”

The chief, who wants to remain anonymous, said manufacturers have been offering unprecedentedly high commissions, plus a series of promotional programs to attract dealers and buyers.

“Buyers will get 9 to 13 cartons of cement free of charge for each order of 100 cartons, but consumption is still low,” he shared.

Figures from the Vietnam Cement Industry Corporation (VICEM) show that consumption has slumped by 26 percent year on year.

Unofficial statistics show that many producers have incurred losses worth thousands of billions dong, VICEM said.

“Those with the steepest losses are manufacturers who have used bank loans to install new production lines.”

Proposal to deregulate land prices

The Government has approved a proposal by the ministries of Finance and Natural Resources and Environment to reform out-of-date land prices structures and bring them more into conformity with market values.

The proposal will require final approval by the Nation Assembly, as land uses are governed by the Land Law.

Under the law, as amended in 2003, the Government sets a general land price frame-work for every city and province nationwide. Based on the framework, municipal and provincial People’s Committees are authorized to decide land prices within their jurisdiction, but the prices may not exceed ceiling price set in within the Government’s land price framework by over 20 percent.

However, due to the out-of-date land price framework, a square metre of urban land in Hanoi and HCM City is currently not allowed to exceed VND81 million (US$3,850), equal to only 30-60 percent of the actual maket value of the land, said the director of the Ministry of Finance’s public asset management department, Pham Dinh Cuong.

The situation was costing huge losses to the State budget in terms of land use fee revenue and was contributing to a rise in legal wrangling related land clearance and settlement, Cuong said.

After removing the current framework, the Government proposal would regulate only methods and principles for determining land value while local People’s Committees would set prices based on market principles. Higher values would result in higher land user revenues to the State Budget and would also allow authorities to pay higher settlements to persons whose land use rights were reveled, Cuong said.

He said that the ministry had also proposed that the clearance processes, promote and auctions and ensure greater transparency in the allocation of land use rights.

APEC telecom group meets in Da Nang City

The 45th meeting of the Asia-Pacific Economic Cooperation Telecommunications and Information Working Group (APEC TEL 45) opened in central Da Nang City yesterday.

Over 200 deputies from 21 countries and international organisations have participated in a series of seminars aimed to improve telecommunications and information infrastructure in the Asia-Pacific region by developing and implementing appropriate policies.

Speaking at the opening ceremony, Deputy Minister of Information and Communications Nguyen Thanh Hung said, "In connection with the 44th APEC TEL meeting, member economies will continue to address a wide range of issues such as green information and communications technology (ICT) for sustainable growth, Domain Name System Security, ICT in disaster management, internet usage, consumer protection and Cybercrime." He also said the working group played an important role in sharing information and exchanging views as well as experience on a wide range of regulatory issues.

The biannual meeting, which will close on Wednesday, is part of preparations for the 9th APEC Ministerial Meeting on Telecommunication and Information Industry to be held in St. Petersburg, Russia, on August 6-8.

Settlement period to be delayed

A shorter settlement period of two days following the initial share transaction cannot be implemented at this time, Viet Nam Securities Depository Centre general director Phuong Hoang Lan Huong said at a meeting last week.

Huong acknowledged, however, the need to gradually reduce settlement times as a method to increase stock market liquidity.

She said that implementation of the shorter settlement periods had to be delayed due to the poor financial status of securities companies, many of which lacked the capital resources or risk management mechanisms needed to carry out so-called T+2 settlements.

The centre was already helping many brokerages financially bridge themselves over the current T+4 period, she noted.

Huong held open the posibility for buyers to sell their securities on the T+3 date, but only if securities firms settled the transaction prior to 4pm on the T+2 date.

Saigon Securities Inc chairman Nguyen Duy Hung argued that "brokerages need regulations loose enough to boost investment."

If policies hindered investment, brokerages would be discouraged to raise funds, Hung said.

Economic zones to try harder
 
Deputy Prime Minister Hoang Trung Hai has called on the nation's key economic zones (KEZs) to become a driving force in sustainable development and take Viet Nam to the level of other industrialised nations.

He made the call while addressing a conference held last Saturday in Can Tho City to review socio-economic development of KEZs nation-wide and make plans for this year and the years to come.

Hai lauded the achievements of the KEZs in the 2006-2010 period but stressed much more remains to be done.

Between now and 2015, KEZs need to better deploy all their strengths to develop in a sustainable and environmentally – friendly manner, he said.

The deputy PM mentioned some targets that he said KEZs should strive for in the coming time.

The average per-capita income at KEZs should reach US$3000 per year, 1.5 per cent higher than the national level, he said. Their import-export turnover should increase by between 14 and 14.5 per cent annually, and contributions to the State Budget should account for 90 per cent of the total, he added.

To realise these goals, ministries, branches and localities need to work together to restructure investment in ways that reduces the use of State budget resources and mobilises more capital from the society at large, he said. He urged relevant ministries and branches to complete soon an overall development plan for KEZs that responds to the needs of new situations.

The deputy PM also outlined other tasks and solutions for the zones, saying they needed to develop high-tech industries and high-quality services in information technology, and focus on production of new materials.

The country now has four KEZs: the Northern Economic Zone, Central Economic Zone, Southern Economic Zone and the Cuu Long (Mekong) Delta Economic Zone.

These zones have many big clusters of ports like Hai Phong, Cai Lan, Da Nang, Thi Vai-Cai Mep, Cat Lai and Hiep Phuoc, and international airports like Noi Bai, Da Nang, Tan Son Nhat and Can Tho.

In the 2006-2010 period, the KEZs achieved an annual Gross Domestic Product (GDP) growth rate of 10.8 per cent, with average per-capita income of VND34.6 million (US$1,662), significantly higher than the national figures, the conference heard.

The total import and export value of KEZs during the same five-year period was US$602 billion, of which US$280 billion came from exports, accounting for 89 per cent of the country's total.

They attracted 12,478 foreign-invested projects worth US$162 billion, accounting for 91.32 per cent of the country's total, the conference heard.

The KEZs also contributed 88.6 per cent of State Budget revenues during the 2006-2010 period.

Speakers at the conference also highlighted several limitations that have been seen in KEZs development over the past several years.

They said due attention has not been paid to improving competitiveness and the use of land and labour was still ineffective.

While there have been improvements in physical infrastructure, these have not happened in a synchronous manner, limiting growth potential.

The KEZs have also failed to come up with innovative products in the knowledge-based economy, some speakers pointed out.

Others said environment pollution in the KEZs has worsened in recent years.

Deputy PM Hai said all the problems at the KEZs need to be addressed urgently to ensure sustainable development of KEZs in particular and the country in general.

Economist claims bankruptcy means better chance for enterprises

The Government should set up a fund that could take over the bad debts of bankrupted enterprises to help survive them in difficult situations, an economist said.  

Economist Dr. Le Dang Doanh said the Government could sell their stakes in these enterprises to new employers when the firms overcome their challenging period.

While many people are worried about the prospect for Vietnamese enterprises after nearly 12,000 enterprises filed for bankruptcy in the first quarter of this year, Doanh had another viewpoint of the situation.

“It’s undoubtedly the case many of these enterprises went bankrupt due to incompetence and bad business decisions,” he noted.

In terms of the economy, according to him, bankruptcies offer a better chance for the development of enterprises as it means the same labour force, factories and facilities exist but with better management and more investment. In fact, a bankruptcy indicates a change in the enterprise’s leadership that could help it revive and develop more, he emphasised.

“One of the main weaknesses of Vietnamese enterprises is their lack of professionalism that results in unstrategic investment decisions,” he accessed.

He attributed the current large number of enterprises to the uncontrollable licensing process following the country’s entry to the World Trade Organisation (WTO). Many of them find it hard to survive in current difficult situation due to basic incompetence.

Some of the bankrupt businesses had operated efficiency, but fallen into their problems as a result of the decrease in purchasing power and export orders. Doanh suggested that the Government as well as banks should study measures to support enterprises in such a situation.

He said that it would not be a good solution to providing these enterprises with capital just to maintain their operations amid huge inventories.

“The Government has recently made policies to switch to using cement for the construction of transportation projects instead of asphalt in order to boost the consumption of locally made cement and steel and lower their inventories. The same move should be taken for other good items,” he recommended.

He emphasised the need to set up a fund to buy bad debts left by bankrupted enterprises for two to three years to help them survive their most challenging period.

“This policy has been applied in several other countries in the world as it facilitates such enterprises to continue to get bank loans and maintain their operations. The Government could privatise such firms and sell their stakes upon their revival,” he attributed.

He noted that careful consideration should be made during the process in order to ensure transparency and efficiency.

CSR should be part of development strategies

Corporate social responsibility (CSR) has increasingly caught attention of local enterprises who agree that this voluntary activity should be also treated as part of corporate development strategies, according to a seminar last Friday.

CSR activities have become popular among the local business community and have been continuously growing, said Pham Phu Ngoc Trai, chairman of Global Integration Business Consultants (GIBC), at the seminar co-organized by the Saigon Times Foundation (STF) under the Saigon Times Group and GIBC to mark STF’s tenth anniversary.

In many nations, the public has increasingly showed keen interest in responsibilities, duties and transparency of big brands. Recent studies indicated the reputation, business activities and social commitments of producers are decisive factors affecting consumer behaviors.

“CSR is not only a voluntary activity but also an indispensable part to business strategies for the sustainability of a company,” said Trai, who also serves as chair of STF Sponsorship Council.

Such thinking has been seen in local firms, with ‘Den Dom Dom’ by Dutch Lady, ‘Six Million Milk Glasses for Vietnamese Children’ by Vinamilk and VinaCapital’s sponsorship for poor children’s heart surgeries.

According to chief executive officer and co-founder Don Lam of VinaCapital, his company annually sets aside VND20-22 billion for health care and education support for poor children. The fund encourages its corporate investors to join social activities as well, he reckoned.

For the community’s benefits, STF has actively supported local firms in realizing their social responsibilities via scholarship programs for needy students besides other programs. As of late last year, the non-profit organization financed students nationwide with about VND2.5 billion contributed from enterprises.

Most participants in the seminar shared the view that CSR considerably supported companies in establishing deep-rooted relationships with the society, thus promoting their brands and helping them attract human resources easily.

Ngo Thi Hong Thu, deputy general director of wood processor Truong Thanh Furniture Corporation supposed that enterprises consider CSR their long-term investment. This means they need to pursue CSR activities as part of their own strategies and management rules, she added.

Vietinbank establishes subsidiary bank in Germany

The State Bank of Vietnam (SBV) has agreed in principle to allow the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) to set up a subsidiary bank in Germany.

The Vietinbank (Europe) Ltd is located at No. 44 on Reuterweg street in Frankfurt am Main city, with an estimated capitalization of Euro 50 million.

Before operating with its charter capital of Euro 25 million, it will have to complete legal procedures in line with Germany’s regulations in 24 months dating from April 9.

Agriculture and trade fair at Khanh Binh border gate

An agriculture and trade fair opened at the Khanh Binh border gate in the Mekong Delta province of An Giang on April 9, attracting 120 Vietnamese and Cambodian businesses.

On display are agricultural machinery, processed food products, plant seeds, electricity household appliances, clothes and interior decoration.

The event will last until April 15, providing a good chance for enterprises in the agricultural sector to exchange experience in production, environmental protection, and export business.

PepsiCo to export Vietnamese snacks

PepsiCo Vietnam plans to export some kinds of Vietnamese nosh like rice crust, prawn crackers and cassava chips to Southeast Asian countries.  

This was announced by its Vietnam Snacks Chief Operating Officer, Richard Kaiser, on April 9.

He said the company will purchase about 1,200 tonnes of cassava from Vietnamese farmers for its production line.