Ministry mulls banning A83 gasoline production

A83 gasoline should be banned from being domestically produced, Minister of Industry and Trade Vu Huy Hoang proposed at a meeting yesterday

The proposal came after nearly a dozen fuel dealers in Ho Chi Minh City were caught selling substandard gasoline last week, most of which was made from mixing A83-grade gasoline with A92 or A95 grades to produce poor-quality products.

At the beginning of the meeting, Deputy Minister of Industry and Trade Nguyen Cam Tu also suggested that domestic A83 gasoline production should be halted.

“Since [A83 gasoline] is not widely used, allowing production of this commodity will open the door for trade frauds,” Tu said.

“The Ministry of Industry and Trade has proposed to halt A83 production, but failed to receive agreement from other ministries.”

Thus, Tu urged that the country must find a final solution for this issue.

Hoang concurred, saying that the fraudulent practice of mixing different grades of gasoline to make substandard products has severely affected consumers’ rights, as well as their vehicles’ engines.

Hoang said his ministry has petitioned the prohibition of A83 gasoline production many times, but wholesaler SaigonPetro is still running a facility capable of producing 200,000 tons of A83 gasoline a year.

Hoang thus called on the HCMC Department of Industry and Trade to submit a report to the municipal People’s Committee, clarifying exactly what SaigonPetro plans to do with such a huge amount of the fuel.

“We have to make it clear why they still continue to produce A83 gasoline while the market no longer has a use for it,” Hoang said.

Hoang also declared that the responsible agencies should impose strict penalties on the fuel dealers which sell substandard products.

The HCMC Department of Industry and Trade, for example, has proposed suspending violators for six months, but Hoang said the punishment can be even stricter: withdrawing their business licenses.

“The market management agencies should also strengthen their raids, and the wholesalers should keep a closer watch on their dealers to avoid trade frauds,” he urged.

For her part, Dam Thi Huyen, deputy CEO of Petrolimex, said that since low-quality A83 gasoline is still allowed to be put into circulation with other higher-grade products without strict enforcement from authorities on the distribution system, it will continue to be difficult to prevent frauds.

Huyen added that it is illogical for Vietnam to continue the production of A83 gasoline when the major fuel wholesalers no longer import the product, and most filling stations do not sell it.

“Inadequate attention and monitoring have been placed on the quality, as well as the quantity, of A83 gasoline circulated on the market,” she said.

D, head of the sales department of a fuel company, said he has stopped selling A83 gasoline due to the low demand.

“Most consumers do not choose A83 gasoline, since it is not good for the vehicle engines,” he said.

Meanwhile, Dang Vinh Sang, CEO of Saigon Petro, told Tuoi Tre that PetroVietnam Oil is also making the fuel with an even larger annual production.

“We have maintained production since there are still a small number of consumers who have a need for A83 gasoline,” Sang said.

“But if the government bans production, we will strictly follow their decree.”

Chinese goods faked Vietnamese brands to evade taxes

Local authorities have recently detected a number of international trade frauds in which products originating in China were falsely labeled as made-in-Vietnam and exported to other countries to evade the taxes and other technical barriers slapped on Chinese exports.

This new type of fraud will not only cause tax income losses for the countries which import the fake-labeled products, but also negatively impact the reputation of Vietnamese products.

In the latest case, anti-trafficking authorities in the southern province of Dong Nai caught SPC Tianhua Vietnam, a 100-percent Chinese-invested company based in the Nhon Trach Industrial Zone No 3, replacing Chinese labels with Vietnamese ones on chemical products due for export to the US.

The officials found a total of 100 tons of products worth VND4.5 billion (US$214,000) with counterfeit Vietnamese brands.

The products, used to treat water in swimming pools, were made entirely in China by Shijiazhuang Hwg Trade Co Ltd.

Tianhua CEO admitted to Tuoi Tre that all 100 tons of the product is expected to be exported directly to its US partner, BSW Chemical Co Ltd, without undergoing any additional production processes, such as being mixed with other chemicals.

Nguyen Phi Hung, head of the Anti-trafficking Agency of the General Customs Department, said the customs authorities have recently detected many Chinese traders and businesses exporting their products to Vietnam, placing fake Vietnamese-made labels on them, and exporting them again to other countries.

The illegal practice is conducted on various items, from chemicals to construction material, Hung said.

“Chinese products of such commodities attract high import tariffs in some countries,” he said.

“Moreover, Chinese exports are also facing strict technical barriers and have even had anti-dumping tariffs slapped on them.”

The customs agencies have also busted a business in the central city of Da Nang, and one in the southern province of Tay Ninh, for declaring their honey exports to be made-in-Vietnam.

Upon checking the exports, the officials found that hundreds of tons of honey were actually produced in China with the counterfeit Vietnamese origin labels.

Dinh Quyet Tam, chairman of the Vietnam Beekeepers Association, said Chinese honey has been repeatedly disguised as originating in Vietnam for export, seriously hurting the domestic beekeeping industry.

The fraudulent practice stems from the fact that Chinese honey is not favorable in some countries, since there are concerns regarding its quality and safety, Tam said.

Tam added that Chinese honey attracts a 221 percent tax in the US, including import, value-added, and anti-dumping tariffs, while its Vietnamese counterpart is taxed only 16 percent.

“Chinese exporters have to pay around US$6,000 in tax for a ton of honey, while the figure for Vietnamese exporters is only $450 a ton,” Tam said.

Huynh Thanh Binh, deputy head of the Dong Nai Customs Agency, also said the fake made-in-Vietnam labels help Chinese exports enjoy the preferential taxes granted to Vietnamese products under agreements reached when the country joined the World Trade Organization.

Insiders have expressed concerns that if Vietnam fails to crack down on these frauds, the country will also be subjected to the tightened import policies of its major markets.

A customs official agreed that the frauds can cause adverse impacts on Vietnamese exports.

The customs authorities will therefore closely monitor products prior to exports to curb the issue, he said.

“Those suspected of faking Vietnamese-originated labels will be inspected and banned from exporting if any violation is found,” he said.

Vietnam strengthens mineral cooperation with other ASEAN members

Ministers of ten Southeast Asian countries are gathering at the third ASEAN Ministerial Meeting on Minerals (AMMin 3) in Hanoi from December 6-10 to work out measures to boost mining work.

The event has drawn the participation of experts and senior officials from three countries, namely China, Japan and the Republic of Korea, offering Vietnam a good opportunity to seek closer ties with other ASEAN member countries in the field of mineral cooperation and enhance its role in the regional community and international arena.

Participants are discussing ways to support the industrialization process in regional countries and boost trade and investment in mineral exploration within the bloc.

They are expected to facilitate the building of incentive policies on geology and minerals and expand cooperation in this field.

The delegates are also focused on the sustainable development of mining industry to ensure the safety and efficiency of mineral exploration.

According to Dr. Nguyen Van Thuan, Head of the General Department of Geology and Minerals of Vietnam (DGMV), Vietnam has thousands of mines, and huge reserves of precious bauxite and titan.

The mining sector makes up 25 percent of the State budget each year. Since 2000, it has contributed 10-11 percent of the country’s total GDP, generated jobs for thousands of workers and helped ensure national energy security, he said.

The AMMin is organized every two years by each ASEAN member in rotation.

Rice exports reach US$3.29 billion

Vietnam has exported 6.735 million tonnes  of rice in the past 11 months, earning US$3.29 billion.  

These figures were released at a meeting held by the Vietnam Food Association (VFA) in the southern province of Tien Giang on December 5.

VFA Deputy Chairman Pham Van Bay said Thai and Vietnamese rice prices are listed at US$550-600 per tonne while it is being traded at US$440-450 per tonne in India and Pakistan. The large gap in export prices has caused importers to shift to the lower priced markets.

Vietnamese rice cannot compete against Indian and Pakistani rice, but it can replace Thai rice in the high quality segment of the market.

However, according to the VFA, Thailand will boost rice exports through official contracts to sell out its rice in stock, which will consequently have a negative impact on Vietnam.

In addition, Indonesia, one of Vietnam’s two main importers, has reached the quota limit for 2011 and will only import a small amount until next February. The country will normally resume its imports in August. Malaysia has also signed contracts with Vietnam but it will not buy more rice until next February.

Rice prices on the domestic market are falling but Vietnamese rice is still expected to be sold at US$50 higher than that from India and Pakistan thank to its higher quality.

Serviced apartments still hold potential

Vietnam’s serviced apartment segment still holds great potential, even when compared to other housing segments, a recent conference on the subject heard.

In the face of the entire real estate industry’s recession due to macroeconomic difficulties, the segment is facing many challenges, said Marc Townsend, managing director of CBRE Vietnam at the "Vietnam Serviced Apartment Investment Conference 2011”.

“They include falling rents and fewer tenants due to the worsening economic situation, as well as stiff competition from individuals buying apartments for sublease,” he said.

However, the serviced apartment segment has a great chance to grow as the inflow of foreign direct investment (FDI) returns as the local economy recovers, the rapid urbanization process in major cities continues, the growth of Vietnamese manufacturing industries holds steady, and the number of international travelers to Vietnam continues to rise.

There are many other factors that could boost the future development of the segment, including the growth of investors’ appetite for operating assets and the lack of existing products.

There are only 3,595 existing serviced apartment units in Ho Chi Minh City, while the number of work permits for foreigners in the city last year jumped to 6,700, excluding ‘grey’ expats, or those working without permits, Townsend added.

According to CBRE, HCMC still leads the country in the number of serviced apartments available with 3,595 units, followed by Hanoi with 2,300 units, and Da Nang with only 146 units.

CBRE believes that the number of serviced apartments on offer is too low to meet the needs of the foreigners and the nearly 81,000 overseas Vietnamese who work in Vietnam.

In the future, the number of foreigners working in Vietnam will rise, leading to increased demand for serviced apartments, but the existing supply is too limited for this expected upturn in demand, as are the plans to develop this potential market.

Ben Thanh Luxury project, one of only two projects in the center of HCMC where apartment buyers will be granted permanent ownership, will be invested and transferred into high-end hotels for lease, a form of investment in serviced apartments, said Nguyen Cao Tri, Chairman of Ben Thanh Real Estate Investment Joint Stock Co.

The capital recovery period is six years if investment is shifted into serviced apartments, a temporary solution while the real estate market is frozen, he added.

Cutting deposit rate requires care: former governor

Though the government has recently asked the State Bank of Vietnam (SBV) to reduce depositing and lending rates, the SBV has told the public that the rate reduction of 2 percent, from 14 percent to 12 percent, cannot be implemented immediately given the current macroeconomic situation.

However, the central bank is considering an appropriate time for a possible rate cut.

The central bank has to cut the depositing rate, which stands at 14 percent now, to 13 or even 12 percent, before it can reduce the lending rate, Cao Si Kiem, a member of the National Financial and Monetary Policy Advisory Council, told Tuoi Tre.

But the SBV must act with great care since inflation, represented by the consumer price index (CPI), still persists, said Kiem, a former central bank governor.

Though the CPI is cooling down, the pressure for it to rise again by the year-end due to seasonal factors, such as the upcoming New Year holiday, which traditionally boosts spending and consuming, is real.

Since the lending rate depends on the depositing rate, which in turn has a close relationship with the CPI, it cannot be cut right now.

Kiem added that cutting the depositing rate could hurt depositors who expect the rate to remain higher than the year-to-date inflation rate of around 17.5 percent, since they would be forced to put their money into banks, instead of other markets. If the deposit rate remains unchanged, depositors would be able to invest in sectors like real estate and the stock market.

But the national interest is the top priority, and with the current lending rate standing above 17-18 percent per year, domestic firms have no choice but to work under capacity or go bankrupt.

Since they cannot make a profit, they cannot pay salaries to their employees or produce more goods for the market, resulting in supply shortages and subsequent price hikes.

With limited incomes and rising prices, the people will not be ready to spend more, which, in turn, would slow down the whole economic engine, causing all of us to suffer, Kiem added.

Local businesses can only withstand a lending rate of 8-9 percent a year since all other costs are on the rise.

Some experts have recommended that the central bank pump more money into banks that are short on liquidity, instead of letting them borrow from other institutions at the high price seen on the interbank market.

However, Kiem said that pumping money is not a smart choice in the face of inflation, which is targeted at 8-9 percent next year, meaning any recklessly loosened monetary policy implemented now could have disastrous implications later.

The money may also be channeled into ineffective projects or dying firms, which would worsen the bad debt situation afflicting the whole banking system

Given the world economic picture for the next year, global inflation pressures still remain, since many countries are considering loosening their monetary policies.

Last week, economists said that if the SBV keeps tightening its monetary policies, a sharp fall in productivity will occur, something that could lead to the return of high inflation, according to Nguoi Lao Dong newspaper.

Vietnam's economy has shown signs of recovery in recent months, with the inflation rate decreasing to 0.36 percent in October and 0.35 percent in November.

The interest rates have tended to decrease, while the balance-of-payments witnessed a surplus of $3.5-4 billion, and the foreign currency reserves have increased to $14 billion.

Economists say that they can see problems in the monetary policies, and that now is the time to loosen financial restrictions.

As of November 30, 2011, the bad debts in the banking industry were estimated to have reached about VND40 trillion ($1.9 billion), SBV Governor Nguyen Van Binh said at a seminar in Ho Chi Minh City.

"We are not overly concerned about this issue, because banks have had to set risk provisioning for these bad debts," he said.

According to Binh, commercial banks themselves are most concerned about this issue. The higher their bad debt ratio is, the greater their risk provisioning is set, leading to smaller profits.

The Governor also admitted that in the past, possibly due to pressure on credit growth, many banks raced to achieve their target and created bad loans.

"But this year, the credit growth till December 31 will not exceed 15 percent. Therefore, there is no reason for banks to run for their growth targets again," Binh said.
 
VBF’s positive spin on dizzying times

The business community is doing its best to put a positive spin on the country’s prospects despite a range of challenging factors in the mix.

Business representatives attending the annual Vietnam Business Forum (VBF) in Hanoi last week raised the usual concerns over macroeconomic challenges and administrative burdens, but also expressed confidence in a brighter outlook in 2012 and beyond.

“While the gloomy image of macroeconomic instability, 20 per cent inflation and a weak currency in Vietnam is temporary, the medium to long-term outlook remains positive,” said Christopher Twomey, chairman of American Chamber of Commerce in Vietnam and chief executive officer of ACE Insurance Company in Vietnam.

A survey on business sentiment conducted by the VBF Secretariat during September-October this year among 240 firms found that business morale had fallen to a three-year low in 2011 and much lower than the levels recorded in 2010.

The survey, with 80 per cent of participants being domestic firms and the remaining 20 per cent having foreign investment, gave an average score of 2.04 on the ease of doing business in Vietnam for 2011 compared to 2.52 in 2010 and nearly 1.9 in 2008 when the global financial crisis first struck.

Under its definition, four meant very good, three signified good, two was acceptable and one poor.

However, the ratings for the favourableness and ease of doing business in Vietnam for 2012 and 2013 were rated at 2.45 and 2.88, respectively, by the respondents.

This indicates growing confidence among business community for the next two years and could be a result of faith in the government’s efforts to restructure the economy and implement a raft of measures to recover macroeconomic stability.

“Most respondents believe that sticking to this resolution, painful and difficult as it may be, is right and necessary to ensure the survival of the economy,” the survey report said.

The Vietnamese government would keep on pursuing tightened fiscal and monetary policy, Minister and Chairman of Government Office Vu Duc Dam affirmed in a governmental press conference last week.

Dam said the government would continue to create favourable conditions and remove barriers for private enterprises to develop next year. He added that he expected the private sector would be the key driver of economic growth targeted at 6 per cent.

“We are restructuring investment by reducing public investment. So if we don’t have policies to encourage private investment, our economic growth will not reach 6 per cent next year,” said Dam.

Meanwhile, the government would adopt specific plans to restructure the financial system and state-owned enterprises next month, according to the Ministry of Planning and Investment.

Twomey said if the government’s plans were strictly implemented, the business environment was bound to improve.

The VBF Secretariat survey revealed that 69 per cent of enterprises said they would be expanding their business in the next three years. The key reasons for the expansion were perceptions of local and regional market growth, better prospects of the local economy, and market opening and reform following Vietnam’s increased integration into the world economy.

Experts: Local firms lax on data protection

Information technology experts has warned that a number of Vietnamese enterprises don’t realize the importance of data protection, especially private business information, leading to an increase in the loss of data in most sectors.

Speaking at a seminar in HCMC last week, Nguyen Minh Trung, manager of the host service department of Sao Bac Dau Technologies Group, said data is the most crucial factor of an enterprise but that businesses usually make light of it.

Meanwhile, data loss may cause economic harm to enterprises and defame their image, Trung said.

Trung quoted a report of security software maker Symantec, which showed that around 69% of enterprises in Vietnam suffered data loss in 2010. They lost financial data, orders, contracts and customer information, which are vital to running a business.

There were many reasons for the problems with hardware faults accounting for 44%, human error 32%, software 14%, virus 7% and natural disasters 3%.

Subu Ramakrishnan, technical director of Hitachi Data Systems, said it is high time enterprises focused on data protection.

“The most suitable protection is to make data virtual based on cloud computing. Many companies in Japan and developed Asian countries have applied the solution and Vietnam should follow suit,” Ramakrishnan said.

The strong point of the cloud computing-based backup solution is automatic saving, allowing enterprises to access data anywhere they have an Internet connection.
 
Indochina Airlines license not yet revoked

Indochina Airlines has not yet lost its license as reported by local media because the Ministry of Transport has issued no decision on the matter even though this debt-laden airline has been unable to resume services since its suspension two years ago.

A deputy director general of the Civil Aviation Administration of Vietnam (CAAV) told the Daily about this last Saturday after news broke on online newspapers saying that the ministry had withdrawn the license of this airline, whose general director is Ha Hung Dung.

In early November, CAAV said that the ministry was considering repealing the license of Indochina Airlines this year as the first private airline in Vietnam had not met conditions for VND200 billion (around US$9.5 million) as chartered capital for an operator of domestic flights, debt payment for partners, and an air operator certificate (AOC).

Earlier this year, the HCMC People’s Court pronounced that Indochina Airlines would have to pay over US$1.3 million to Asia Commercial Bank (ACB) as the bank guaranteed a credit which the carrier took from a foreign bank. This airline still owes tens of billions of dong to services partners at airports in Vietnam, including Vietnam Air Petrol Co. (Vinapco).

According to civil aviation regulations, Indochina Airlines should have had its license revoked for it has suspended services for 12 consecutive months and has not obtained any AOC after two years of being licensed. Earlier this year, Indochina Airlines wrote to the Prime Minister, the transport ministry and CAAV seeking to keep its license throughout 2011 to have time to restructure its operations.  

Indochina Airlines was licensed by the transport ministry in mid-2008 and commenced its commercial flights with two leased Boeing 737-800 aircraft on November 25 in the same year. However, the carrier has been grounded since November 2009 due to financial constraints.
 
Business role stressed in Internet development policy

Business should play a part in the Internet development policy making process, Le Thai Hy, director of the HCMC Department of Information and Communications.

Most IT enterprises said at a seminar on Internet development organized last week by the Vietnam Internet Association (VIA) and ICT Partnership, a club under the Saigon Times Club, Internet services had failed to keep up with development of ICT and telecom infrastructure.

Pressing issues related to online payment, fake products, e-signature and shared ICT and telecom infrastructure look widespread. Therefore, the Government should make favorable policies to cope with these bottlenecks, according to participating companies.

Hy said enterprises in the sector should make policy proposals because they knew the crux of the issues involving IT development.

He praised a proposal by VietUnion general director Nguyen Hoang Ly to encourage residents to pay their electricity and water bills online and a proposal by Cisco technical director Phan Thanh Son to set up Internet-based service centers.

VIA figures show Vietnam will have 36 million Internet users, 12.8 million broadband subscribers and 48 million 3G users by 2015.

Tax incentives proposed to stimulate building low-income housing

The Vietnam Association of Financial Investors (VAFI) has proposed that the Government apply preferential policies for investors in low-income housing projects so that apartment prices could be reduced by 30-40%.
Accordingly, the investors would be exempt from the land ownership transfer tax and corporate income tax. People who buy low-income houses will also get a value-added tax and registration fee exemption.

Millions of low-income earners in cities cannot afford to buy homes.

According to VAFI, currently, millions of low-income earners in cities cannot afford to buy homes.

In recent years, lending interest rates fluctuated between 15% - 25%. This posed obvious challenges for families who are struggling. At the same time local land funds do not allocate the stipulated 20% to social housing projects.

Because of budget shortfalls, the state has been unable to carry out its plan to increase accommodation for those who earn the least, leaving many without adequate shelter.

Also, there continues to be a significant amount of red tape and administrative obstacles surrounding the purchase of such homes. Some people even take advantage of the system in order to sell them for higher prices.

In Hanoi the price of "low-income" apartments often remains too high to attract buyers.

The Construction Joint Stock Company No. 3 (Hanco 3) has only managed to sell 30 apartments out of 130 in one of their projects in Sai Dong, Gia Lam District, despite holding a second lottery to deal with the high number of potential customers.

Official prices for low-income earners currently stand at VND13 million (USD619) per square metre compared to common market prices of VND14-15 million per square metre.

VAFI said investors of low-income housing projects should be offered construction tax and fee exemptions, as well as preferential loans, in order to decrease prices by 30-40% to VND350-700 million (USD16,600-USD33,300) per home, with area from 35-70 square metres.

The association also recommended that a bank, in which the state has a majority share, should be assigned to provide these preferential loans. This has been done in the past in other developing countries such as Thailand and Indonesia, as well as in developed countries like the US, UK and France.

VAFI believed that these measures would attract more investors to develop affordable housing projects, and decrease the average price of an apartment to around USD20,000.

Merger proposed for airport management corporations

The Civil Aviation Administration of Vietnam (CAAV) said that it would submit a plan to merge three airports corporations to the Prime Minister for consideration this month.
    
According to Pham Quy Tieu, Deputy Minister of Transport and Head of the CAAV, the Northern Airports, Middle Airports and Southern Airports Corporations will be merged into one corporation, Vietnam Airports, which will be responsible for operating all domestic and international airports in the country.

Currently, many airports in Vietnam suffer from losses. According to the Northern Airports Corporation, five airports it manages incur losses every year of their operation, including Dong Hoi in Quang Binh, Vinh in Nghe An, Cat Bi in Haiphong and Na San in Son La and Dien Bien.

Average cost for each flight is estimated at VND12.8 million (USD609.5), while airports are only allowed to collect fees of each flight at VND3 million (USD142.8) on average, therefore, the corporation has to spend VND9.8 million (USD466.7) on average to offset losses for each flight flying from or to loss-making airports.

The province of Khanh Hoa has recently sent a proposal to transfer management of Cam Ranh International Airport to the Southern Airports Corporation. The airport is now under the management of the Middle Airports Corporation.

According to local authorities, the Middle Airports Corporation has not developed its infrastructure, despite receiving support from the province. As a result, the airport is unable to meet the air traffic demands of the province.

They said in terms of geographical position, Cam Ranh lies near the southern region, so it would be beneficial for the southern firm to take over the airport.

Cam Ranh International Airport now does not have clean water or a runway that can facilitate international flights. It also lacks safety services, such as fire trucks.

Deputy Transport Minister Pham Quy Tieu said, Khanh Hoa Province’s submission would be considered at a later date because the CAAV prioritises the plan to merge all three corporations.

Market hits three-month high

Nearly 300 stocks soared to their ceiling prices on Dec. 5 in surprising rallies on the nation's stock exchanges.

"The market has seen its highest growth in the past three months," said StoxPlus Financial Media Co's analyst Le Huu Quan. "Investor psychology found relief in the expectation of new Government measures to get banks to reduce their interest rates."

The domestic market management team has also projected that inflation in December could rise at a one-month rate of 0.5-0.6 percent.

"If December inflation does not exceed this limit, the Goverment will achieve its target for the year", said ACB Securities Co analyst Cao Tan Phat.

On the HCM Stock Exchange on Dec. 5, the VN-Index rose by 1.9 percent to reach 391.19 points, with 220 out of 290 listed codes posting gains.

The value of trades increased by 18 percent compared to the previous session on Dec. 2, totalling 494.4 billion VND (23.2 million USD) on a volume of nearly 35 million shares.

Many blue chips saw their prices soar to the top of the allowed daily trading range, including insurer Bao Viet Holdings (BVH); real estate developers Hoang Anh Gia Lai (HAG), Vincom (VIC) and Hoang Quan (HQC); steelmaker Hoa Phat (HPG); financial conglomerate Ocean Group (OGC); PetroVietnam Finance (PVF); industrial park developer Tan Tao (ITA); and Saigon Securities Inc (SSI). SSI was the most-active share, with around 1.85 million shares changing hands.

Of the 10 leading shares by capitalisation, only food processor Masan (MSN) and Sacombank (STB) lost value.

On the Hanoi Stock Exchange, the HNX-Index closed at 63.47 points, 2.9 percent higher than Friday's close. Both value and volume improved by over 80 percent, totalling 391.3 billion VND (18.4 million USD) on a volume of over 43 million shares. Advancers outnumbered decliners by 251-48.

With more than 6.4 million shares traded, Kim Long Securities Co (KLS) became the most-active share nationwide and hit its ceiling price on the day of 10,800 VND per share.

Despite renewed optimism among domestic investors, foreign investors continued to sell off shares on both exchanges on Dec. 5, unloading a combined net of 47.7 billion VND (2.24 million USD) worth of share – 63.5 percent more than during Dec. 2's session.

Foods, holiday season may push CPI up

December's Consumer Price Index is forecast to increase by 0.5 to 0.6 percent compared to the previous month due to the advent of Christmas and Tet holidays alongside flooding in several areas.

Accordingly, the price of a number of foods will increase due to demand.
Gas prices will also surge this month, following an increase in world prices, while steel, cement and other construction material will remain stable despite it being peak season.

The sugar price is forecast to fall slightly due to abundant supplies while salt prices go up because of decreased nationwide production.

According to the Ministry of Agriculture and Rural Development, in the first 11 months of the year, the nation had produced around 800,000 tonnes of salt, a significant decline of 32 percent in comparison with the same period last year.

However, the team said that the CPI increase would be slight thanks to price stabilisation programmes aimed at preventing dramatic price increases and essential goods shortages.
Many local supermarkets themselves have stocked up in preparation for the upcoming holiday period.

The Hanoi Trade Corporation (Hapro) has decided on spending around 905 billion VND (43 million USD), an increase of 15 percent compared with the previous Tet.

Vu Thi Hau, deputy general director of the Nhat Nam JSC, which owns the Fivimart chain, said that the company will mobilise around 250 billion VND (11.9 million USD) towards the coming Tet season, an increase of 30 to 35 percent.

Chairman of the Hanoi Supermarket Association, Vu Vinh Phu, said that business preparations are helpful in restraining inflation seeing as the city only has 400 billion VND in its price stabilisation fund./.

Coffee export earns 2.3 billion USD

Vietnam’s coffee export hit 1.06 million tonnes over the last 11 months, according to Vietnam Coffee and Cocoa Association.

This number is similar to the figure in the same period of 2010, however, it had brought home a turnover of 2.3 billion USD, up 1.5 fold. In November alone, Vietnam shipped abroad 30.000 tonnes of coffee, worth 70 million USD.

Vietnam is currently one of the largest coffee exporters in the world./.