Local stocks remain alluring despite fall in prices

Vietnamese shares tumbled last Friday, but the two indices still added value compared with the previous week.

Some leading stocks, notably PetroVietnam Gas (GAS), spearheaded the rally. GAS increased strongly following news that its mother company, PetroVietnam, discovered the country's largest gas field in the central coast.

In addition, the oil giant's other subsidiaries also posted gains. However, unlike in previous trading days, the rally of these stocks did not attract enough attention to move the entire market forward.

Transactions on speculative stocks last week were less active as a result of increasing selling pressure, sparking more caution from investors. Last Friday, profit-taking was widespread, knocking blue chips down, and the indices declined rapidly.

The VN-Index at the HCM City Stock Exchange increased by one per cent over the previous Friday's session to end at 617.72 points. Transaction value averaged VND2.95 trillion (US$139.1 million) on a daily volume of 170.5 million shares.

Top gainers in HCM City included Thong Nhat Production and Investment (GTN), H.A.I Agrochem (HAI) and Viet Nhat Seafood (VNH).

GTN, which debuted on October 3, jumped up by 38.1 per cent after it announced the sale of nearly 16 per cent of Thong Nhat Co Ltd worth VND27 billion ($1.2 million). HAI climbed by 20.4 per cent as it announced plans of increasing its charter capital from VND174 billion ($8.2 million) to VND1 trillion ($47.1 million).

Meanwhile, VNH rose by 17.4 per cent. Although the company did not release any important information and the increase in its share price was minimal, the trading of shares in seafood companies in general remained active.

Meanwhile, the HNX-Index at the Ha Noi Stock Exchange inched up by 0.14 per cent to 90.45 points. The average value and volume of trades reached VND1.1 trillion ($51.8 million) and 79.1 million shares.

The top gainer in the northern bourse was Hanoi Milk (HNM), which surged by 54 per cent in spite of the absence of any special news about the company.

Foreign investors continued to be net sellers on both bourses, unloading a total margin of nearly VND248 billion ($11.6 million). Their activities affected the VN-Index only on several first sessions last week and had minimal impact towards the end of the week. In the capital city, sales did not target leading shares.

According to Bao Viet Securities Company analyst Nguyen Xuan Binh, the Vietnamese stock market is still attractive to foreign investors, not only in the short term but probably in the next few years. He predicted the domestic market's price-to-earnings ratio to be nine to 13 times higher by the beginning of next year, though this is relatively low compared with that of other Asian markets.

The biggest risk to the flow of foreign capital, he added, was global instability, currently due to political tension in Ukraine and Hong Kong. 

Deputy Minister says Long Thanh airport to cost over $18bn

It is estimated that the megaproject to build an international airport in the southern province of Dong Nai to share the overloading burden with Tan Son Nhat International Airport in Ho Chi Minh City will cost more than US$18 billion for all three phases, Vietnam’s deputy transport minister said Friday.

The money generated from selling the land plot where Tan Son Nhat – Vietnam’s largest airport – currently sits, as proposed by an economic expert, thus would not be enough to cover the enormous investment for the project, Nguyen Hong Truong told reporters in Hanoi.

Truong addressed a media meeting after Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Program in Ho Chi Minh City, suggested shutting down Tan Son Nhat airport to help finance the construction of the Long Thanh terminal in Dong Nai.

The 800 hectare land plot that would be left if the airport were closed could fetch no less than $8 billion, the Harvard Kennedy School senior fellow said in an op-ed published the same day in Tuoi Tre (Youth) newspaper.

Thanh proposed that the government should consider closing down Tan Son Nhat and making use of its land plot after 2025 – three years after Long Thanh is expected to be put into use – instead of operating the two airports at the same time, as originally planned.

The Ho Chi Minh City-based newspaper questioned the deputy transport minister over the possibility that the new, costly airport investment will increase Vietnam’s public debt at a time when less than 30 percent of the state budget is earmarked for investment and debt clearance.

Truong said that the government will contribute around VND84.62 trillion ($3.98 billion), funded by government bonds and official development assistance (ODA) loans, to the total investment for the first phase of the megaproject, estimated to cost some VND164.57 trillion ($7.83 billion).

“The transport ministry has stated clearly in the report submitted to the National Assembly Standing Committee that borrowing ODA loans would only result in a 0.029 percent increase in public debt,” Truong said, underlining that it is “a low ratio.”

“The ODA loans to fund the Long Thanh airport account for only 0.1 percent out of the total such loans for other infrastructure projects,” he added.

The transport official said the Ministry of Finance, which is the National Assembly’s public debt consultancy, will develop a debt payment plan on an annual basis.

Truong said the government capital in the project will be allocated to site clearance and compensation, as well as basic infrastructure construction, including traffic systems and the airport’s taxiways and aprons.

“These construction units need to be funded by the government as we cannot call for private investment in facilities that do not make a profit,” he explained.

The transport ministry has said it is essential that Long Thanh airport, located in the eponymous district in Dong Nai, be built to ease pressure on Tan Son Nhat, which is expected to become overloaded by 2017.

Long Thanh is about 50km away from Ho Chi Minh City.

The Ho Chi Minh City terminal now handles around 20 million passengers a year.

The 5,000-hectare Long Thanh airport is forecast to receive 25 million passengers a year during its first phase, ending by 2025.

While the overloading of Tan Son Nhat could be solved by expanding the terminal, the deputy transport minister said it would cost as much as $9.1 billion to take the capacity of the airport to 50 million passengers a year.

Part of the money needed for this expansion is to compensate 500,000 people from 140,000 households that will have to relocate, Truong elaborated.

“The investment is far bigger than building a new airport,” he said, adding that Tan Son Nhat airport must be kept to serve domestic or military services.

Meanwhile, the Airports Corporation of Vietnam (ACV), one of the investors of the Long Thanh project, is upbeat about resolving the funding issue of the costly terminal.

“We will borrow ODA loans from the government, and will repay the debts by ourselves,” ACV chairman Nguyen Nguyen Hung told reporters.

Hung said the investors demand that the government earmark VND18.5 trillion ($870.75 million) for site clearance and compensation, and they will cover the remaining investment.

“We have in fact succeeded in building the Tan Son Nhat terminal and the T2 terminal at Hanoi’s Noi Bai airport through this method,” he asserted.

Draft tax incentives get NA clearance

The National Assembly (NA) Standing Committee on October 8 allowed the Finance Ministry to present draft tax incentives and draft amendments to tax laws at the upcoming NA session slated to start later this month.

At a session of the standing committee in Hanoi on October 8, Minister of Finance Dinh Tien Dung said the drafts should be passed to provide incentives and reductions of corporate and personal income, value-added and natural resource taxes for local enterprises overcome difficulties, and to help the nation fulfill its commitments to international integration.

The draft will lead to a budget collection reduction by at least VND5.6-5.7 trillion in exchange of tax support for enterprises and individuals next year while increasing spending on tax rebate by VND1.3 trillion, Dung said.

Chairman of the NA Committee on Finance and Budget Phung Quoc Hien was concerned that the drafts may go against a resolution of the legislative body.

Resolution 57/2013/QH13 is in disfavor of policies that lead to State budget collections falling and expenditures rising this year because of fears of a bigger budget deficit.

Therefore, the drafts are not in line with the resolution, Hien said.

But NA vice chairwoman Nguyen Thi Kim Ngan said the drafts would help enterprises ride out difficulties and avert bankruptcy.

Before the suggestion, Minister Dung said budget reductions would just occur in several years before collections rise again in medium and long terms. Besides, the budget reductions could be offset by higher special consumption tax on tobacco, alcohol, casino business and online games.

Despite the tax incentives, the central budget is expected to have an additional VND896 billion next year, nearly VND3.6 trillion in 2016, VND5.34 trillion in 2017, over VND7.5 trillion in 2018 and less than VND10.6 trillion in 2019.

Some details of the drafts would be further discussed at the upcoming NA session.

Earlier, the Government proposed lifting the 15% advertising spend cap with an aim to make life easier for businesses to promote their goods and services, and thus increase sales.

Honda Vietnam recalls Civic and CR-V vehicles

Honda Vietnam, a subsidiary of Japan’s Honda Motor Company, has announced to recall 322 Civic and CR-V cars to fix faulty air bags.

According to the automaker, the partition of the driver-side air bags of those units has been wrongly installed, which may cause those bags to malfunction upon collisions.

So far, Honda has not received any complaints from customers around the world regarding this defect, and the company after a test has concluded that the error does not affect the operation of the vehicles.

However, Honda Vietnam decided to proceed with the check and replacement of air bags for Honda Civic manufactured from 2012 to 2014 and Honda CR-V manufactured in 2013 and 2014.

Free checks and replacements of the air bags will take place at all Honda dealers nationwide.

Authorized dealers will send emails or make calls to inform the owners of those cars.

Open-ended SSI-SCA fund starts operation

SSI Sustainable Competitive Advantage Fund, or SSI-SCA, will start operation on October 9 after having raised nearly VND112 billion from its initial public offering a month ago.

SSI Asset Management Limited Company (SSIAM), the manager of SSI-SCA, said on Tuesday the fund has obtained the business registration certificate allowing it to start operation.

On October 8, investors were able to place a minimum purchase order worth VND2 million for fund certificates.

SSI-SCA is an open-ended fund, which is the first of its type managed by SSIAM. The new fund must pay 1.5% of its net asset value (NAV) a year on management fee, 0.03% of NAV a year on custodian service and other smaller fees.     

According to a statement from SSI Company, SSI-SCA will have a balance portfolio, pouring capital into shares after carefully studying macroeconomic issues and the domestic market.   

SSI-SCA will invest in enterprises having sustainable competitive advantages and fixed earnings.

If the market is in good condition, SSI-SCA will spend 80% of its capital on stocks, including 20% on small companies with high potential and strong competitiveness. The remaining 20% will go to shares of firms having fixed earnings.

SSIAM, established in August 2007, is a subsidiary of Saigon Securities Inc. and now manages assets totaling VND4 trillion.

Vietnam, RoK cooperate in developing microchip industry

A conference in HCM City on October 9 discussed future cooperation and technology transfer possibilities between the Republic of Korea and HCM City in the microchip and semiconductor sector.

Speaking at the conference, Le Manh Ha, Vice Chairman of the HCM City People’s Committee said the city is bent on developing the microchip industry and it can benefit tremendously from the experiences of the RoK business community “The RoK is a well established leader in the industry and its experiences over the past 30 years are invaluable to Vietnam,” Ha said.

During the conference, a number of prominent experts from the RoK shared their experiences and talked about highly technical matters in addition to discussing recent developmental trends in the industry.

Park Sang Hyup, the Korea Consulate General’s trade office head in HCM City said with high added value, the microchip and semiconductor industry can serve as a springboard for development of other industries and play a key role in the production of almost all hi-tech products.

The strong development of the RoK over the past few years is directly attributable to the benefits provided by the microchip and semiconductor industry, Hyup said.

At the conference Seoul National University and the HCM City University of Technology signed a memorandum of understanding (MoU) on training human resources and researching the microchip and semiconductor industry.

A programme to improve business capacity towards creating harmonious workplaces was launched in Hanoi on October 9.

The programme is jointly implemented by the Confederation of Norwegian Enterprises, the Norwegian Confederation of Trade Unions, the Vietnam General Confederation of Labour (VGCL), and the Vietnam Chamber of Commerce and Industry (VCCI).

The project will be implemented in between 25 and 30 companies operating in different sectors in Hanoi, Bac Ninh and Hung Yen.

Under the project, seminar and training courses will be held to enhance managers and trade union workers’ skills and apply new labour regulations in business administration.

Additionally, senior experts will assist businesses in improving their human resources management and workplace relations.

Pepper exports expected to reach 1.3 billion USD

While many Vietnamese agricultural export items have faced difficulties in terms of market and price, pepper exports have showed rapid growth and affirmed its leading position in the global market, the Vietnam Economic News reported.

Vietnamese pepper export earnings exceeded 1 billion USD by the middle of September and will likely reach 1.3 billion USD by the end of the year. Regarding export markets, the US continued to be Vietnam’s largest pepper buyer, followed by Singapore, the UAE, India and the Netherlands.

The International Pepper Community (IPC) said that global pepper supply would not meet demand from now to the end of this year since major pepper exporting countries like India and Indonesia have reduced their production by 15-20 percent thus providing opportunities for Vietnamese pepper export businesses to increase their exports.

Vietnam joined the IPC in March 2005 and is currently its newest member. However, its position has increased as Vietnamese pepper is currently available in over 90 countries and territories, accounting for about 30 percent of the global pepper production and 50 percent of global pepper exports.

The Vietnam Pepper Association (VPA) said that Vietnamese pepper took first place in the world in terms of pepper export volume. The sector has maintained pepper growing areas and productivity, while increased the quality of pepper by investing more in post-harvest processing.

In addition, Vietnamese businesses have also reduced exports via middle traders and increased direct sales to material suppliers of seasoning processing factories in foreign countries.

VPA Chairman Do Ha Nam said that pepper exports would see a quick growth in the near future but this would not ensure sustainable development in the long term. After a period of rapid growth, pepper exports may cool down. For this reason, now it is the right time for the Vietnamese pepper sector to focus on improving processing technology to increase the quality of pepper and meet global food safety standards. Meanwhile, it is necessary to progressively increase the percentage of white pepper to increase the added value and profits.

It is also important to coordinate pepper exporters for mutual benefits based on reliable market information and forecast. Businesses need to connect with the banking system to obtain sufficient capital for purchasing and reserving pepper materials from the beginning of the harvest.-

Foreign businesses race to invest in oil refinery plants in Vietnam

Although Vietnam initially decided to build only three oil refineries, two are about to be built and others are under construction, while several more are awaiting licenses, according to an article published on the English language news portal VietNamNet Bridge on September 9.

Just one day after the Thai PTT Group submitted plans to build the 22 billion USD Binh Dinh oil refinery to the Ministry of Industry and Trade (MOIT), a groundbreaking ceremony for the Vung Ro Oil Refinery was held.

In addition, the construction of the Nghi Son Oil Refinery in Nghi Son Economic Zone kicked off a year ago. Meanwhile, the Canadian Malartic Group has expressed its willingness to develop the Nam Van Phong petrochemistry refinery project.

After 10 years of preparation, the investors of the Vung Ro oil refinery project have finally kicked off a project. The 3.18-billion USD oil refinery is expected to churn out commercial products by 2017, creating 1,300 stable jobs.

And the Thai PTT Group’s 22 billion USD Nhon Hoi oil refinery project to be built in Binh Dinh province holds the record in investment capital.

According to Man Ngoc Ly, Head of the Nhon Hoi Economic Zone Management, the Nhon Hoi oil refinery is expected to have a capacity of 20 million tonnes of crude oil a year, four times bigger than Dung Quat Oil Refinery.

Binh Dinh provincial authorities have prepared 2,000 hectares of land for the petrochemistry and refinery complex and have decided to build a deep water port to serve the pumping of crude oil into the oil refinery. Ly said the project was the top priority of the province.

Several other provinces are also expecting oil refinery projects with huge investment capital of tens of billions of dollars.

Currently, only two refineries exist in Vietnam, the small Cat Lai refinery in Ho Chi Minh City and the Dung Quat refinery in Quang Ngai province.

Dung Quat, with a capacity of 6 million tonnes per annum, can satisfy 30 percent of domestic demand. The investor plans to raise capacity to 10 million tonnes prior to 2015.

Thanh Hoa province also has an oil refinery, Nghi Son, the construction of which began one year ago. The 9 billion USD refinery would have a capacity of 10 million tonnes of crude oil in the first phase and 20 million in the second phase.

Under the oil and gas industry’s development plan, Nghi Son and Dung Quat will satisfy two-thirds of total domestic demand for petrochemical products.

Only three projects were mentioned in the oil and gas industry development plan, namely Dung Quat, Nghi Son and Long Son.

However, more and more projects have been added to the development plan, and the number of added projects has become so high that economists fear Vietnam will have “more than enough” oil refineries in the future, while other countries are seeking alternative energy resources.

Start-up capital goes up 13.9 percent in 9 months

As many as 53,192 new businesses have been set up in the first nine months of 2014 with a total registered capital of over 320 trillion VND (15.2 billion USD), up 13.9 percent in terms of capital compared to the same period in 2013.

These new registered businesses are expected to hire 795,000 workers, according to the Ministry of Planning and Investment.

During the same period, operating businesses also added nearly 421.5 trillion VND to their capital.

During the same period, 11,872 enterprises resumed operation after suspending for some time.

However, another 48,330 enterprises suspended or terminated operation, an increase of 13.8 percent from the same period last year.

Director of the ministry’s General National Economy Department Bui Ha said the statistics of starts up and dissolution reflected the three major trends among sectors.

Some sectors are seeing good growth, reflected by the increasing number of new starts up and decreasing number of dissolutions. This is most clearly seen in the distribution, power, water and gas supply sector, with an increase of 14 percent in new businesses and a 26 percent drop in dissolutions.

Meanwhile, strong fluctuations in the numbers of enterprises in some sectors showed major restructuring is underway. These sectors included entertainment and recreation with a 55.3 percent rise in start-up and 24.2 percent increase in dissolution, agriculture-forestry-aquaculture with increases of 26.2 percent and 6.8 percent, and real estate with rises of 23.4 percent and 9.3 percent, respectively.

Fewer starts up and more business dissolutions were seen in sectors such as construction, retail, wholesale, auto-motor maintenance and other small services, reflecting gloomy business conditions.

Vietnam should end the use of company seals in its legal system to reduce the costs and procedures for businesses and to increase security.

The issue was discussed at a meeting in Ha Noi yesterday. In accordance with the Prime Minister's guidance, head of the Central Institute for Economic Management Nguyen Dinh Cung proposed that the use of company seals should be made optional. "It is an important change in mindset," he commented.

According to a survey by the institute, 52 per cent of the people agreed that corporate seals should be abolished, while 30 per cent alleged that companies should have the freedom to make their own seals .

"Company seals have been a popular area of reform in the past seven years," said Jean Michel Lobet, senior World Bank expert. Many countries have even eliminated the use of seals. "However, it is still in common practice," he added.

The World Bank Group's data shows that the lower a nation's income, the more company seals it uses.

Seals can be forged and take a relatively long time to make, taking up about 20 per cent of the total procedures, according to Lobet.

Former Vietinbank's official Huynh Thi Huyen Nhu reportedly forged eight company seals and appropriated VND4 trillion (US$188.6 million) from 2007 to 2011.

Lawyer Vu Xuan Tien of VFAM Vietnam said in HCM City that firms spend between VND6.4 billion to VND8.4 billion ($301,800-396,200) annually to make and keep seals.

"As business activities become fluid with technology entering the digital age, corporate seals have become obsolete and are, to some extent, a hindrance," Lobet added.

He suggested the use of electronic signatures or recognising the director's signature as legally binding authorisation.

Lawyer Cao Ba Khoat noted, "The company seal is simply an identification. For long, we have mistaken it to be legal signature."

Meanwhile, seals have not helped solve internal conflicts.

In addition to electronic signatures, enterprises can switch to fingerprint or iris identification of their directors, Khoat suggested.

In general, the lawyers who attended yesterday's meeting thought that the State gives particularly high validity to corporate seals, causing incalculable damage if the seal gets lost or stolen.

They also agreed that enterprises are accustomed to using seals, and that it will be a challenge to eliminate the practice.

Cung said Viet Nam will have to undertake large-scale reform and change current laws that regulate the use of corporate seals.

Authorities told to clear land for refinery

Prime Minister Nguyen Tan Dung directed concerned authorities in central Quang Ngai province last Wednesday to clear land for the upcoming expansion of the Dung Quat Oil Refinery.

The expansion is expected to raise the refinery's current annual output from 6.5 million tonnes to 10 million tonnes, thereby meeting 50 per cent of the country's demand for refined petroleum products.

At a meeting with provincial authorities, the Prime Minister also instructed the authorities to help Singapore's Sempcorp Group to build the Dung Quat Thermal Power Plant as scheduled.

Asked about funding for the implementation of land clearance and resettlement for large projects in the Dung Quat Economic Zone, the Prime Minister said the State would prioritise budget allocation for the Dung Quat Thermal Power Plant, and provincial authorities must map out and appraise the plan before submitting it to him for review and approval.

The Prime Minister also instructed the Ministry of Industry and Trade to map out effective plans for supplying electricity to some areas in Ly Son Island.

Since its launching in 2009, the Dung Quat Oil Refinery, the first of its kind in Viet Nam, has produced roughly 30 million tonnes of products, raking in VND580 trillion (US$27.23 billion) in revenues and contributing VND93 trillion ($4.37 billion) to the State budget.

Last year alone, it produced 6.6 million tonnes, or 17 per cent more than its target, and earned more than VND154 trillion ($7.3 billion) in revenues and VND2.9 trillion ($138 million) in profits.

Support industry expos open in HCM City

Four mega-exhibitions related to the support industry opened yesterday at the Sai Gon Exhibition and Convention Centre in District 7.

The four expos are Metalex Viet Nam, Nepcon Viet Nam, Business Alliance for Support Industry in HCM City and Industrial Components and Subcontracting Viet Nam.

They will all feature new innovations from over 700 global technology providers from 30 countries and territories, including Germany, Japan, Korea, Malaysia, Singapore, Thailand and Taiwan, said Duangdej Yuaikwamdee, deputy managing director of Reed Tradex Company.

The Metalex and Nepcom events will offer the latest machine tools and metalworking technologies, and testing technologies for electronic manufacturing.

Soichi Yoshimura, executive vice president of the Japan External Trade Organisation (JETRO), said the percentage of parts procured by Japanese firms locally was just 32 per cent in Viet Nam compared to 64 per cent in China and 53 per cent in Thailand.

As a result, Japanese companies in Viet Nam must import necessary parts from other countries, he said.

Speaking at the opening ceremony, Nguyen Tuan, deputy director of the the HCM City Investment and Trade Promotion Centre (ITPC), said the city was implementing policies to encourage enterprises to invest in the support industry in an effort to raise the percentage of local content.

Tat Thanh Cang, deputy chairman of the city People's Committee, said the city would provide favourable conditions to facilitate the operation of businesses.

Co-organised by JETRO, ITPC and Reed Tradex Company, the expos, which will run until October 11, are expected to attract more than 10,000 manufacturers from Viet Nam and many other countries.

Tata Power hopes to speed Mekong plant

Tata Power, India's largest integrated electricity company, wants to speed up work on its 1,320MW thermal power plant in the Mekong Province of Soc Trang.

The US$1.8 billion Long Phu No 2 plant was originally scheduled for completion in 2022-23, but Tata now hopes to start power generation in 2018/19, Indronil Sengupta, Viet Nam chief executive of Tata Sons – the group holding company — told Viet Nam News.

A MoU to this effect was signed between Tata Power and the Ministry of Industry and Trade during a visit to India by Party General Secretary Nguyen Phu Trong in November 2013.

The Mumbai-based Tata Power submitted a feasibility study to the ministry's General Director of Energy on July 31 for review and approval, Sengupta said.

"This is a very quick time of just six months. We expect to start the construction at the earliest after completing the relevant agreements.

"We intend to further speed up the project if we are allowed to advance the commissioning date to bridge the gap for the envisaged power shortage in southern Viet Nam."

Viet Nam has political and economic stability that offers favourable conditions and safety for foreign investors, he said.

"Viet Nam, which is on a fast growth path, will need more and more power.

"Tata Power. with its 100 years of experience in power, decided it would be meaningful to be partners in progress with Viet Nam by investing in the power sector." he said.

SBV survey predicts 14.5% credit growth

Deposit and credit growth will likely accelerate in the last quarter of 2014, pushing the growth rate for deposits to 14.4 per cent and that for credit to 14.5 per cent this year.

This forecast is based on the survey on the latest business trends among credit institutions in the fourth quarter of 2014 by the State Bank of Viet Nam's Statistics and Forecast Department.

According to the survey, about 90 per cent of credit institutions anticipated deposits to rise by 4.96 per cent and credit to rise by 5.13 per cent in the fourth quarter.

The institutions said six-to-12 month deposits would post a higher increase than that of other terms, meaning the restructuring of the capital sources of institutions would be more rational and sustainable.

As much as 43 to 51 per cent of institutions expected deposit interest rate levels to remain stable in the last three months of the year while 35 per cent predicted the rate to further decline by 0.12 per cent from the third quarter. An estimated 44 per cent of the institutions also anticipated lending interest rates to decline by 0.22 per cent in the fourth quarter.

For the entire 2014, about 90 per cent of the institutions expected deposit and lending interest rate levels to either be stable or decline year-on-year, by 0.93 per cent for deposits and 1.14 per cent for lending.

Credit growth for Vietnamese dong loans in the last quarter is also expected to be higher than that of US dollar loans.

The survey also showed that credit growth rates of large commercial banks would be higher than that of small and medium banks.

According to the survey, all credit institutions are optimistic about liquidity, saying it would either remain stable or increase in the fourth quarter and the entire 2014.

Vietcombank early this week slashed its annual dong deposit interest rates by 20 to 50 basic points, and with this third adjustment this year, the highest rate for these deposits now stands at 6.3 per cent.

The rates were reduced from 4.8 per cent to 4.5 per cent for one-month deposits,from 5 per cent to 4.5 per cent for the two-month term, and from 5.5 per cent to five per cent for the three-month term.

They were lowered from 5.7 per cent to 5.5 per cent for deposits with terms of six to nine months, from 6.5 per cent to 6.2 per cent for 12 months, and from 6.8 per cent to 6.3 per cent for 24 to 60 months. Non-term deposits also had a new rate of 0.8 per cent instead of 1 per cent.

Several banks have also adjusted the annual interest rates for short-term deposits in recent weeks. BIDV reduced the rates by 0.2 percentage point for terms of three to six months while MB, ABBank and Eximbank slashed the rates by 0.1 to 0.3 percentage point for terms of less than 12 months.

According to the latest SBV report, dong interest rates have fallen by 0.5 to 1.5 percentage points this year compared with the end of last year. Deposit rates are now 5 to 6 per cent for short-term loans, 6 to 7.2 per cent for loans of less than 12 months and 7.3 to 7.8 per cent for longer-term loans.

The southern province of Dong Nai earned more than $420 million from exporting 193,000 tonnes of coffee in the first nine months of this year, up 43 per cent in value and 42 per cent in volume compared to the same period of 2013.

The province's coffee export turnover is expected to reach over $80 million in the last quarter of 2014, bringing the total yearly figure to more than $500 million, according to the provincial Department of Industry and Trade.

Director of the department Le Van Danh said coffee was among several exports from the province that saw sharp rises in both volume and value this year.

To boost sustainable coffee development, the provincial People's Committee assigned a local firm to set up a specialised cultivation region with a view to increasing the locality's coffee growing area to 22,000 ha.

Supply chain training camp held

Viet Nam Supply Chain (VSC) will organise a free training camp for young talent in the supply-chain industry on October 11 at the Samsung Experience Enterprise Centre (SEEC).

The camp will bring together more than 1,000 students from leading universities including the HCM City Polytechnic University, Foreign Trade University, University of Economics, University of Economics-Law and Transportation University.

Sessions will focus on supply chain vocational careers, industry insights and human resources issues.

HCM City gives priority to domestic support industry products

Businesses should speed up implementation of projects in the support industry, which have been approved by the city, to soon introduce domestically made products with aiming to limit import products said Tat Thanh Cang, Deputy Chairman of HCMC People's Committee on October 8.

Mr. Cang proposed the enterprises to make proposals for their difficulties to get assistance from the city People’s Committee.

They should choose main products and boost investment to improve competitiveness, meet domestic demand and attend in exports.

On the other hand, local businesses should strengthen cooperation and consumption of each other’s products if they are locally made with quality being equivalent to import items.

In related news, four exhibitions on the support industry will take place at the Saigon Exhibition and Convention Center, District 7, Ho Chi Minh City from October 9-10.

They include ‘Alliance of Support Industries 2014’, ‘Metalex Vietnam’, ‘Nepcon Vietnam’ and ‘Industrial Accessories and Subcontractors Vietnam.’

The first one has attracted attention of 104 Japanese and Vietnamese enterprises while the rest three have seen 700 businesses.

Opportunities for Vietnamese goods to enter Russia

Bilateral trade between Vietnam and Russia has stably grown and taken a lot of opportunities for Vietnamese goods to enter Russian market, said director of the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City Vo Tan Thanh at a forum hosted on October 8.

In the first nine months, the total bilateral trade between the two countries exceeded US$1.8 billion. Of these, Vietnam exports to Russia topped US$1.1 billion and imports hit US$700 million.

Vietnam with strengths in food production especially tropical products and Russia with strengths in machines, fertilizer and oil and gas can complement each other, which is advantageous for their trade development, pointed out Mr. Thanh.

The under-negotiation Free Trade Agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan is expected to finish by the end of this year to further increase the bilateral trade.

However, Mr. Thanh advised Vietnamese businesses to improve their product quality in order to compete with commodities from other nations in the Russian market.

Stating at the forum, Deputy Chairwoman of HCMC People’s Committee Nguyen Thi Hong, said that HCMC always considers Russia as one of key and potential markets.

By the end of September, Russian businesses invested in 20 projects in HCMC at a total capital of US$44.37 million. The bilateral trade between HCMC and Russia approximates US$190,000.

In tourism, Russia is among the top ten nations and territories with most visitors to HCMC.

Outstanding agricultural initiatives honoured

As many as 16 outstanding innovative solutions from the fifth national contest on farmers’ technical creativity were honoured at a ceremony in Hanoi on October 9.

The awarded initiatives, which are all feasible and realistic, were selected from 62 entries in farming, aquaculture, environmental protection, agricultural mechanics and farm product processing. First prize went to an initiative by Ngo Thai Nguyen from Thanh Hoa province to treat waste by classifying it into three recycling categories.

The second prize was presented to Do Duc Quang and Do Duc Sang from Gia Lai province with their innovation for coffee bean collectors while third and fourth place prizes, along with 10 consolation prizes, were awarded to other outstanding solutions.

The 18 winners of prizes received certificates of merit from the Vietnam Farmers Association Central Committee.

According to Nguyen Duy Luong, the Committee’s Vice Chairman, the contest was launched in June 2013 as campaign on technical initiatives for farmers’ production and living standards nationwide. The contest encourages the application of scientific and technical advancements for developing agricultural production and rural areas in order to speed up industrialisation and modernisation.

Vietnam sees increased exports to new markets

Vietnam's exports to new markets including Africa, Latin America and the Caribbean, enjoyed high growth rates in the January-September period, according to the Ministry of Industry and Trade.

During the nine-month period, Vietnam's exports to African countries increased by over 50% compared to the same period last year. Exports to North Africa in particular were up by over 60%.

The primary goods exported to Africa include computers, electronic products and components, telephones, transport vehicles and spare parts, machinery, footwear, textiles and construction materials. Other exports including seafood, coffee and pepper also saw high growth rates.

In the meantime, Vietnam's export revenue to Latin American and Caribbean countries reached US$25.22 billion in the last nine months−an increase of 25% from the same period in 2013.

Most notably, export revenues to Chile were recorded at US$354 million−up 132.9% over the same period last year−thanks to positive impacts from the free trade agreement signed between the two countries in effect as of January 2014.

Though export revenues to new markets make up a relatively small percentage of Vietnam’s total export revenue, positive growth rates indicate that Vietnam's goal of diversifying export markets is moving in the right direction.

Fuel price stabilization fund surges to record high

As of quarter three, the balance of the fuel price stabilization fund had risen to nearly VND2.3 trillion, the highest since the use of the fund was made known to the public.

The Ministry of Finance in a report released on October 8 said petrol traders in the third quarter alone collected over VND1.1 trillion from consumers for the fund, which is used to compensate oil traders for losses they incur when the input cost is higher than the retail price.

In the quarter, the Ministry of Finance and the Ministry of Industry and Trade let fuel trading firms extract an estimated VND403.46 billion from the fund.

The fund’s balance was recorded at nearly VND1.6 trillion at the end of quarter two, but the amount surged to around VND2.3 trillion at the end of the third quarter. The fund is kept at oil traders who have to periodically report their balances to the Finance Ministry.

In 2013, the balance frequently stayed at only tens of billions of dong, with many oil traders reporting a deficit, meaning the sum collected from consumers was not sufficient to compensate traders.

However, the balance has started picking up this year, from VND840 billion in quarter one to VND1.5 trillion in the following quarter, as the global oil price has steadily fallen while the local price has remained high.

The Ministry of Finance’s report also indicated 15 out of 17 fuel trading firms had the positive balance, with Vietnam National Petroleum Group (Petrolimex) reporting VND1.352 trillion and PetroVietnam Oil Corporation over VND265 billion.

Speaking to the Daily on October 8, the leader of a fuel trading firm said the prices of finished petrol products in Singapore had been going down.

Therefore, there is a likelihood that the domestic retail price may decline by up to VND500 per liter of petrol soon. RON 92 petrol is currently priced at VND23,560 per liter.

PVN to divest VND5 trillion from OceanBank, PVcomBank

Vietnam National Oil and Gas Group (PVN) will have to withdraw its non-core investments from 11 enterprises, including more than VND5 trillion from OceanBank and PVcomBank, a deputy general director of PVN said.

Le Minh Hong told a news briefing on PVN’s January-September business operations on October 8 that the amount PVN would be taking back is not huge and that the group will finish its capital withdrawals from non-core operations by the end of next year.

PVN currently holds a 52% stake in PVcomBank, equivalent to over VND4.5 trillion, and a 20% stake in OceanBank, or VND800 billion.

PVN is also handing over Lai Vu Industrial Park One Member Company, which it previously took over from Vinashin, to the government of Hai Duong Province.

PVN has so far finished equitizing almost all units under its umbrella. The five units yet to be equitized are PetroVietnam Ca Mau Fertilizer One Member Company Limited, Binh Son Refining and Petrochemical Company Limited, Dung Quat Shipbuilding Industry Company Limited and PetroVietnam Power Corporation, with the first planned for equitization this December.

PVN is now in talks with Russian oil firm Gazprom Neft to convert Binh Son into a two-member company with PVN holding a 51% stake and Gazprom Neft the remainder. Negotiations are underway and the Russian firm may sell crude oil to Dung Quat Oil Refinery when the refinery increases its processing capacity in the coming time.

Regarding offshore investments, PVN has poured around US$2.6 billion into 17 oil and gas exploration and exploitation projects, and eight of them have turned out products.

Reserves at PVN’s overseas projects amount to 170 million tons of oil equivalent and 5.4 million tons has been extracted so far. The group has sent home US$470 million in profit and the profit margin from its overseas projects is over 17%.

In January-September, PVN posted revenues of VND560 trillion, 84% of the year’s target, and paid VND125 trillion in taxes.

Australian firm wants to breed cows in Quang Ninh

Australian firm Austrex has plans to build a dairy farm worth nearly US$200 million in the northern province of Quang Ninh.

Quang Ninh Chairman Nguyen Van Doc on Monday met with an Australian delegation led by Jake Morse, head of Austrex, who came to sound out business opportunities in the province.

The Australian firm wants to develop a farm breeding Aussie cows to supply beef for the local market and other regional nations.

The project is expected to cover an area of 200-250 hectares to raise 15,000 to 20,000 head. It is estimated to cost about US$200 million and create 200-300 jobs.

Austrex is a major supplier of cattle and poultry for many markets like the U.S., Russia, China, Uruguay, Turkey, Indonesia and New Zealand.

Chairman Doc at the meeting said agriculture is one of the priority sectors in the province, so local authorities welcome investments in this sector. Doc proposed Austrex study natural conditions in the province and quickly proceed with its project.

Domestic beef has faced stiff competition from Aussie products in terms of prices since last year due to the increasing number of Aussie cows being imported into Vietnam, which is made possible owing to low import tariffs.

In line with the ASEAN-Australia-New Zealand Free Trade Agreement that took effect in 2010, the tax for processed beef shipped from Australia to ASEAN nations ranges from 14% to 30%, much higher than the 5% on live cow imports.

As a result, many enterprises have imported live cows for local slaughtering with an aim to enjoy the low tax.

Vietnam’s seafood, agricultural products make way to Singapore

The Ministry of Industry and Trade (MoIT) expects trade turnover between Vietnam and Singapore will increase up to fourfold in the near future from the current modest level.

Vietnam’s agro-forestry-fishery exports only account for below four percent of Singapore’s total imports, Le An Hai, deputy head of the MoIT’s Asian-Pacific Market Department, told Vietnam News Agency correspondents on the sidelines of an October 9 meeting on seafood and agricultural products between representatives from some 40 Singaporean associations and businesses and 16 Vietnamese companies.

Almost all the Vietnamese firms in the delegation to Singapore had gained a foothold here but still wanted to expand their market share, he added.

From October 7-9, the delegation had working sessions with the International Enterprise Singapore, the Agri-Food and Veterinary Authority of Singapore, the Singapore Fruits and Vegetables Importers and Exporters Association, and NTUC Fairprice – the country’s leading supermarket chain.

The two sides discussed the increase of Vietnamese exports, the attraction of Singaporean importers and producers’ investment in Vietnam, and cooperation in animal and plant quarantine, Hai said.

Nguyen Viet Chi, Vietnamese Commercial Counsellor to Singapore, said almost all seafood and agricultural products on sale in the country are imports, and these are of Vietnam’s strength.

Vietnam’s seafood and agricultural exports to Singapore enjoyed an average annual growth of nearly 20 percent, rising from 279 million SGD (219.6 million USD) in 2011 to around 400 million SGD (314.8 million USD) in 2013.

Vietnam is Singapore’s third largest exporter of rice and aquatic products with respective export revenues of nearly 79 million SGD and 92 million SGD in 2013, she elaborated, adding that it is the eighth biggest purveyor of fruits and vegetables in Singapore with around 42 million SGD in revenue last year.

Chi stressed that Singapore’s demand for seafood and agricultural products remain enormous, which is a great opportunity for Vietnamese companies to boost their exports.

Lee Boon Cheow, President of Singapore Fish Merchants General Association, said: “Vietnam’s frozen fish is quite popular in Singapore; the price is very reasonable to suit our market’s demand. Normally, the fish is very good in taste for consumers.”

“Our association will try to increase chilled fish (import) from Vietnam because we can import from Thailand and Myanmar and I think Vietnam is also possible”, he added.

Vietnam’s agricultural products showcased in Russia

Vietnam’s agro-forestry-fishery products and handicrafts are on display at the 16 th annual Russian Agricultural Fair, dubbed “Golden Autumn 2014”, in Moscow from October 8-11.

The Vietnamese pavilion is one of the few foreign ones at the event, showing great business opportunities for Vietnamese companies, especially when Russia is seeking new sources of goods following the economic sanctions imposed by the US and Western countries.

Taking advantage of this chance, the Vietnamese Embassy in Russia and the Ministry of Agricultural and Rural Development on October 8 co-organised a forum promoting the trading of the country’s agro-forestry-fishery products.

Speaking at the forum, Deputy Minister Vu Van Tam said the export turnover of such products to Russia reached only 400 million USD in 2013, equivalent to 0.1 percent of the country’s total figure.

He expressed his hope that through this fair, Vietnam will soon become a reliable and long-term partner of Russia in supplying high-quality tropical agricultural products.

The Deputy Minister affirmed that the ministry will act as a bridge for Vietnamese and Russian’s businesses to seek cooperation opportunities in the field.

State budget collection likely to exceed estimates

State budget collection for 2014 is likely to exceed estimates by 9 percent, Deputy Minister of Finance Vu Thi Mai said at a regular meeting in Hanoi on October 9.

In the January-September period, 636 trillion VND (30.2 million USD) was collected for the State budget, equal to 81.3 percent of the estimates and representing a year-on-year rise of 17.2 percent.

Meanwhile, the budget spending edged up 11.9 percent to 768 trillion VND (36.5 million USD), she reported.

The Government bonds have also received more attention from investors, especially five-and 10-year-term bonds which made up 25.9 percent and 12.1 percent of the total money mobilised by the State Treasury, in the reviewed period.

To ensure the balance, the ministry is stepping up measures to reform administrative formalities in taxation and customs sectors such as enabling enterprises to use e-tax declarations and facilitating business operation.

Finance officials will also tighten management in the field so that the State budget collection can meet or exceed the estimates.

At the same time, the ministry continues directing taxation and customs agencies and insurance business associations to come up with solutions to back firms overcome difficulties and develop operation.

In addition to thrift practices, the ministry strives to manage and utilise effectively the standby State budget with priorities to preventing natural disasters and diseases.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR