Experts suggest gold, bank deposits as viable channels

Experts at a seminar held in HCMC on Tuesday advised the public to put their money in gold and savings accounts at banks as more viable investment channels at a time of uncertainties now.

Le Tham Duong, dean of the Business Administration Faculty of the HCMC Banking University, told the seminar that “gold and bank deposits are the safe havens now for their money… and should not keep it in the U.S. dollar as the Government is seeking to put the foreign exchange under control.”

In the short term, gold is the safe haven which can generate profit at a time inflation in Vietnam as well as in the world is rising, he told the seminar “Investors – Where does the money go?” Meanwhile, bank deposits are also an agreeable channel as the interest rate is still positive after deducting inflation, he said.

However, the economic expert warned that gold investment is just appropriate for long-term investors, while those seeking quick bucks as well as market manipulators would face high risks if they want to “surf the price changes” at this time.

Duong also suggested investors to consider opportunities in the stock market, as macro-economic uncertainties have dragged stock prices to low levels. “Investors should take this chance to restructure their portfolios,” he said.

The real estate market also offers opportunities, according to Bui Phi Hung, an expert on real estate investment.

Hung noted that investors tend to preserve their capital by putting it in the real estate market, but they should have a long-term view on this market and devise a risk-hedging plan. There are many segments in the real estate market for them to consider, including the retail space, budget apartments, and land for industrial development.

As for the low-cost apartment segment, prices have softened substantially. HCMC saw about 7,200 apartments launched onto the market in the third quarter of this year alone, with 80% being low-cost condos priced at an average VND800 million each, according to the property consulting firm Savills.

Experts at the seminar advised investors not to “put all eggs in one basket,” and should place some 40% of their capital in banks or gold investment, some 20% in the stock market, 30% in the real estate market, and 10% in other channels.

VALC inks US$184-million deal to buy aircraft engines

Vietnam Aircraft Leasing Company (VALC) announced on Tuesday that it had clinched a US$184-million agreement to buy 20 V2500 SelectOne engines and receive support services from the International Aero Engines consortium (IAE).

IAE will supply the engines to Airbus to power the 10 Airbus A321-200s that the first aircraft leasing company in Vietnam has ordered from European aircraft manufacturer. VALC will take delivery of the Airbus A321-200s with the low-emission engines in 2012 and 2013 for leasing to national flagship carrier Vietnam Airlines in line with the contract the two sides have struck.

VALC’s total bills for the 10 aircrafts and 20 V2500 SelectOne engines were estimated at more than US$700 million. This engine is designed to improve fuel burn advantage and time-on-wing by up to 20%.

VALC has received four of the five ATR72-500 planes and expects to get the remaining one from French Avion de Transport Regional (ATR) later this month. All these aircraft worth over US$100 million are operated by Vietnam Airlines.

Earlier this year, Vietnam Airlines picked IAE as the supplier of V2500 engines made with fuel burn improvement and reduced carbon-dioxide emissions for the 36 Airbus A321s ordered by it and VALC. Vietnam Airlines owns 26 of the airplanes and will take delivery of the A321s with the V2500 engines from next year.

In December 2007, Airbus signed US$3.5-billion deals in Hanoi to supply ten A321s and ten medium-capacity A350-900s to Vietnam Airlines, and another ten A321s to VALC.

In June 2009, Vietnam Airlines ordered for 16 more A321s and inked a memorandum of understanding for two more long-range wide-body A350s with a total catalogue price of US$1.9 billion.

Vietnam overseas remittances up 26 pct

Remittances into Vietnam will exceed US$8 billion this year, up 26 percent over last year, the State Bank of Vietnam said.

By the end of November they were $7.6 billion, the central bank said in a statement, and in December they are likely to total around $770 million.

The inflows often rise during the last few months of the year as many overseas Vietnamese send money home for spending during Tet, the Lunar New Year, in January or early February.

Overseas remittances, together with foreign investments, are an important source of capital that helps sustain Vietnam’s balance of payments.

Vinamilk receives Forbes Asia’s Best Under A Billion award

The Vietnam Dairy Products Joint Stock Co (Vinamilk) has received the Forbes Asia’s 2010 Best Enterprise award among Top 200 best enterprises in Asia at a ceremony in Hong Kong.

It is the first time that a Vietnamese enterprise to be acknowledged among 151 new others and awarded the title "Best Under A Billion" for small and medium-sized businesses with capital worth less than $1 billion by the professional financial magazine.

According to Forbes Asia's statistics, Vinamilk was reported having revenue of $575 million, being ranked the 16th position among 200 companies. Its net profit was $129 million and market value of $1.56 billion, being ranked 31st.

In the first 11 months of this year, VNM reached accumulative revenue of about VND14.7 trillion (US$754 million), a year-on-year increase of 49 percent.

It has been ranked 4th in the 2010 VNR500, the ranking of 500 biggest Vietnamese enterprises this year which was conducted by Vietnam Report with the consultation of domestic and foreign experts headed by Professor John Quelch, Associate Dean of the Harvard Business School.

Gold recovers as low prices boost demand   

The price of gold in Vietnam made a U-turn on December 10, adding VND50,000 per tael (1.2 ounces) over the previous day as the global prices slightly recovered.

Most gold shops bought the metal at VND35.75 million and sold at VND35.85 million as of 10 am local time. Gold currently stood at the lowest level since the end of November.

Sacombank Jewelry Company maintained buying gold at VND35.78 million and selling at VND35.82 million since 8:15 am local time.

Hanoi-based Phu Quy Jewelry purchased SJC-brand gold at VND35.78 million and sold at VND35.8

Domestically, gold fetched VND700,000 a tael higher than global prices.

This morning, dollars continued to devalue on free market. Dollars were bought at VND21,030 and sold at VND21,080, a decrease of VND10-20 per dollar over the previous day. The greenback lost VND270 per dollar within the past four days.

Internationally, gold slightly revived as a decline from record boosted investor demand for the metal as an alternative to currencies.

Gold for immediate delivery rose as much as US$5.7 an ounce to close at $1,388 an ounce on the Comex in New York.

In Asia, spot gold continued to gain $3 an ounce over the closing price in New York to trade around $1,391 an ounce as of 10:05 am Vietnamese time.

Gold slashed 3 percent in the past two trading sessions after hitting an all-time high of $1,428.7 an ounce.

SPDR Gold Trust, the world’s largest exchange-traded fund backed by bullion, continued to dump 1.5 metric tons, reducing its holdings to 1,293.8 metric tons, the company’s website showed.

A report by the US Labor Department showed that initial jobless claims for the week ended November 27 unexpectedly dropped to 421,000, much lower than a forecast of 425,000. This positive news increased the attractiveness of high-risk assets while eroding the greenback’s appeal.

The euro exchange rate against the US dollar hovered above $1.32 a euro in Tokyo this morning, almost unchanged as of the previous day.

Crude oil futures for January settlement inched up $0.09 a barrel to close at $88.37 a barrel.

This morning, crude oil faintly edged up, trading below $88.5 a barrel.

Russian group gets down to business

Vietnam’s state-run Vinacomin is intensifying efforts for building a copper metallurgical plant in northern Quang Ninh province in a joint venture with Russia-based Geo Pro Mining Group.

Vinacomin’s deputy general director Phung Manh Dac said the two parties had signed the cooperative agreement in September, 2010 and the Vietnamese government had agreed in principle the metallurgical plant’s investment commitment.

The parties are in the legal set-up stage so as to be able to start work on the project within the first quarter of 2011.

As planned, the copper metallurgical plant with an annual production capacity of 50,000 tonnes of 99.95 per cent copper purity will be based on northern Quang Ninh province.

Vinacomin will contribute 29 per cent of the total investment capital while Russia’s Geo Pro Mining Group will offset the remaining 71 per cent. The copper plant’s capacity will be doubled to 100,000 tonnes per year in the second phase of investment but exact date is still withheld.

Formosa Plastics plans $11.3-billion investment in Ningbo, US and Vietnam

Taiwan-based Formosa Plastics Group, the world's second-largest producer of polyvinyl chloride by output, plans to start three investment plans next year that will cost a total of $11.3 billion, the Economic Observer Newspaper reported.

The report said that the Taiwanese company will invest about $2.3 billion to expand a plant in Ningbo, Zhejiang province of mainland China, to increase the petrochemical complex's annual output by 2.9 million metric tonnes and its annual sales by RMB20 billion per year. The expansion project is expected to be completed by 2014.

In the first ten months of this year, the Ningbo plant booked operating revenue of RMB17.7 billion, after registering revenue of RMB16.4 billion in 2009.

The company also plans to invest $8 billion in a carbon steel plant in Vietnam, which is expected to start operation in three years and to become the second-largest steel plant in Asia and the six-largest in the world.

Furthermore, the company plans to invest about $1 billion in an expansion project in the U.S. to increase its annual capacity of ethylene by 450,000 metric tonnes and annual capacity of propylene by 400,000 metric tonnes.

Formosa Plastics Group, the most profitable company in Taiwan, reported a net profit of NT$91.8 billion in 2009.

PV