Stock markets perform poorly in 2011

Up to 60 percent of listed firms on both stock markets had poor performance, and 85 firms were mired in the red last year, said the State Securities Commission.

The final statistics is not yet available though most listed firms have submitted their financial statements. However, SSC said 2011 was a grim year for the economy, especially for the equity market.

Listed firms had to grapple with many problems, from higher interest rates to high input costs and difficulties to mobilize funds. Understandably, the number of loss-making enterprises in 2011 was higher than in the previous year: 85 compared to 50.

Property companies suffered the most, followed by construction, sea-freight, power generation and financial enterprises.

Property companies suffered the most, followed by construction, sea-freight power generation and financial enterprises. Quoc Cuong Gia Lai Joint Stock Co. (QCG) posted the accumulated losses for the whole year of 2011 at VND30.76 billion despite a profit of VND236.9 billion in 2010.

The company’s financial costs, mainly lending rates in the fourth quarter last year, was VND23.47 billion, up 160 percent against VND9.03 billion in the same period one year earlier.

The firm attributed the late handover of the apartment building Quoc Cuong Gia Lai 1 to the borrowing problem. It said accessing banking loans was very difficult under the monetary tightening policy and extremely high annual lending rates, which were up to 22-24 percent and adversely affected its operation.

Similarly, Song Da Urban & Industrial Zone Investment and Development JSC (SJS) suffered a loss of VND61.93 billion in the last quarter of 2011 while having earned VND127.03 billion in profits in the same period in 2010.

The whole year of 2011’s accumulated losses amounted to VND46.22 billion while it obtained a profit of VND456.12 billion in 2010.

Local securities trading firms have continuously incurred losses as a result of the gloomy stock market. As of now, 12 listing securities companies have posted losses, mostly due to brokerage services and self-trading activities like AVS, BSI and BVS.

Notably, Sacom Development and Investment Corporation (SAM) posted the loss of VND204.46 billion for the whole year of 2011.

The stock broker’s general director Do Van Trac said his firm had a loss of over VND200 billion last year while it earned a profit of VND108 billion in the previous year.

Meanwhile, the loss of Pha Lai Thermal Power JSC (PPC) in 2011 came from exchange rate risks. This company lost VND1.262 trillion.

Shares gain on rumours of big bank merger

Stocks on the HCM City Stock Exchange saw their fourth consecutive week of gains last week, although increased profit-taking held the VN-Index to an overall increase of just 0.8 per cent over the previous Friday's close.

The VN-Index closed out the week at 405.02 points , while the value of trades on the HCM City bourse fell to an average of VND614.6 billion ($29.3 million) per session.

The new VN30 index, in its first trading week, edged up by nearly 2 per cent, concluding Friday's session at 458.23 points.

Sell pressures on the HCM City exchange concentrated in hot stocks such as PetroVietnam Finance (PVF), financial conglomerate Ocean Group (OGC), investment group Tan Tao (ITA) and Becamex Infrastructure (IJC). The market buoyed by foreign investors, who spent a net of around VND400 billion (US$19 million) buying blue chips.

Sacombank (STB) saw five consecutive sessions of gains, soaring by over 17 per cent over the previous week. While financial statements for the fourth quarter of last year, published back on January 31, showed profits up 49 per cent over the same period in 2010 and bad debts down 50 per cent from the beginning of 2011, this was hardly the driving force for the stock last week.

"We believe that the rumour surrounding the merger between Sacombank, Eximbank and Asia Commercial Bank had an active impact on speculation in STB shares," said analysts for the financial information website vietstock.vn. "This makes a lot of sense, since the buy orders mainly came from domestic investors."

Foreign investors, meanwhile, sold a net of over VND23 billion ($1.1 million) worth of STB shares.

Bank shares also rose on the Ha Noi Stock Exchange last week, with Habubank (HBB) and Sai Gon Ha Noi Bank (SHB) seeing dramatic trading volumes during the week.

The HNX-Index closed up 1.36 per cent over the previous week's close to 62.69 points, while the average daily value of trades rose to VND354.4 billion ($16.87 million), a 24-per-cent increase over the previous week.

VNDirect Securities Co (VND), PetroVietnam Construction (PVX), PetroVietnam Power Land (PVL) all saw heavy sales.

At mid-week, SME Securities Co (SME) was again fined for failing to settle its transactions. In response to the increasing difficulties seen by brokerages across-the-board due to the prolonged market downturn, the Viet Nam Association of Financial Investors (VAFI) asked the Prime Minister and the Ministry of Finance to reduce the number of securities firms from the current 100 to about 25, calling this a critical measure in the medium term.

In the coming week's trading, some reliable technical signals were showing a likely decline, said PetroVietnam Securities Co analyst Ngo Hong Duc. "Investors who are holding cash should stay out of the market, while others would be better off reducing the proportion of shares in their portfolios," he said.

Vietstock analysts said money could be poured this week into sound shares which were not showing drastic movements, or shares in sectors expected to grow throughout the year, such as agriculture, seafood, petroleum and mining stocks.

Towards the end of the week, investor attention will shift towards monthly inflation data for February, with aftereffects of the lunar new year holiday expected to push the one-month increase in consumer prices to as high as 2 per cent.

Deal inked for first petrochemical plant

The Thai-owned Siam Cement Group, Qatar Petroleum International, PetroVietnam, and the Viet Nam National Chemical Group signed in Bangkok last week an agreement to invest in Viet Nam's first petrochemicals project in Ba Ria-Vung Tau Province.

Kan Trakulhoon, president and CEO of SCG said: "With the investment of $4.5 billion, the project will be Viet Nam's first integrated petrochemicals complex, serving as a springboard for import substitution and value-added conversion industries for the country, and a vehicle to capture the ASEAN growth for the country.

"In addition to full integration and economies of scale, security and availability of long-term feedstock is essential for the competitiveness of this project.

"Qatar International Petroleum Marketing Comp. Ltd. (TASWEEQ), the exclusive marketer of regulated products from Qatar, signed a long-term agreement to supply propane and naphtha for the cracker plant, while PV GAS, a subsidiary of PetroVietnam, signed a memorandum of understanding to supply ethane."

SCG holds a 28 per cent stake in the project, while Thai Plastic and Chemicals, an SCG affiliate holds another 18 per cent.

QPI Viet Nam (a subsidiary of Qatar Petroleum International), Petro Viet Nam, and Vinachem hold the remaining stake.

The plant is expected to begin commercial operation in the next four years, producing 1.4 million tonnes of olefins besides downstream products like polyethylene, polypropylene, and vinyl chloride monomer.

It has support infrastructure such as storage facilities, port, jetty, power plant, and other utilities.

The majority of the output will be consumed domestically, though other ASEAN member countries are also on the JV's radar.

Located in Long Son Island – adjacent to a planned oil refinery for operational synergy – the petrochemical complex will be close to the southern Vietnamese market.

The complex also has excellent synergy with a wide array of Vietnamese industries that require its products – such as manufacturers of consumer goods packaging, PVC pipes, electrical appliances, and automobiles.

Blue chips lead plunging shares

Shares continued to retreat this morning, closing the first session of this week down on both national stock exchanges with over 55 per cent of codes losing value, led by blue chips.

On the HCM Stock Exchange, the VN-Index slid 2.34 per cent to finish today's session at 395.54 points. Market volume declined 31 per cent from Friday to just 34.5 million shares, worth VND679.3 billion (US$32.3 million).

Blue chips slumped, with the VN30 Index losing 2.62 per cent over Friday to finish at 446.23.

Bank shares, the impetus behind last week's gains, all lost ground this morning. Vietinbank (CTG) and Sacombank (STB) dropped to their floor prices, while Eximbank (EIB), the most active share on a volume of 1.76 million shares traded today, was down 4.4 per cent; Military Bank (MBB) closed off 6.8 per cent; and Vietcombank (VCB) lost 1.6 per cent.

Other heavyweight stocks also hit the floor or lost value.

Only Phu My Fertiliser (DPM) bucked the trend, gaining 1.4 per cent to close at VND28,900 ($1.38). DPM posted a net profit of VND3.1 trillion ($147.6 million) in 2011, and its cash-on-hand reached over VND4 trillion ($190.5 million) by the end of last year.

The benchmark HNX-Index on the Ha Noi Stock Exchange concluded today at 21.04 points, down 2.63 per cent over Friday's close, with decliners overwhelming advancers by 202-58.

Trading value remained low at VND272.2 billion ($13 million) with 32.3 million shares changing hands.

Bank shares also lost ground on the Ha Noi bourse. Ha Noi Housing Bank (HBB) and Sai Gon-Ha Noi Bank (SHB) dropped to the floor while Asia Commercial Bank (HBB) also plunged 5.1 per cent.

VNDirect Securities (VND), the most heavily-traded stock nationwide with 4.37 million shares exchanged, also bottomed out at VND7,100.

Sugar processor compensates farmer

Phung Hiep Sugar-Cane Factory has compensated Nguyen Thanh Hung, a local fish farmer, VND20 million (US$960) after about 100 tonnes of sugar syrup overflowed into a local river, killing 40,000 penned tra fish.

The incident, in Cuu Long (Mekong) Delta's Hau Giang Province, occurred when a tank ruptured late last month.

The provincial Environment Department ordered the factory to rectify the problem.

Flowers cost more after Tet

The cost of flowers has risen slightly since Tet (Lunar New Year) as Valentine's Day approaches.

Roses cost VND60,000-120,000 (US$3-6) for 60 flowers, depending on colour and size. High-quality red roses cost VND3,200 per flower.

A shortage of carnations from China has pushed prices up to VND70,000-VND80,000 ($3.5-4) for 20 flowers.

The Da Lat Hasfarm Company said it would provide about 3 million flowers for Valentine's Day.

Sugar processor compensates farmer

Phung Hiep Sugar-Cane Factory has compensated Nguyen Thanh Hung, a local fish farmer, VND20 million (US$960) after about 100 tonnes of sugar syrup overflowed into a local river, killing 40,000 penned tra fish.

The incident, in Cuu Long (Mekong) Delta's Hau Giang Province, occurred when a tank ruptured late last month.

The provincial Environment Department ordered the factory to rectify the problem.

Hai Ha seaport IZ added to Mong Cai border gate EZ

The Prime Minister has agreed to add the Hai Ha Seaport Industrial Zone to the Mong Cai Border Gate Economic Zone in the northeastern province of Quang Ninh.

The Mong Cai Border Gate Economic Zone has been open since 1996. Goods exported and imported through the zone are diverse, ranging from cassava powder, seafood and confectionery to rubber, footwear, machines and fertiliser.-

Gas suppliers reduce prices for 12-kilo canisters

The country's biggest gas suppliers, Petrovietnam Gas and Saigonpetro Gas, have decided to reduce gas prices by VND12,000 (US$0.57) for a 12-kilo canister.

The new price took effect on Friday. The decision was made after consumers complained that gas traders had increased the price three times in one month.

Traders claimed the price hikes were due to higher global fuel prices. Early this month, traders began charging an additional VND42,000 (US$2) for a 12-kilo canister.

The information that the global gas price had increased by US$145 per tonne shocked local consumers because in less than two months, domestic gas prices rose by VND74,000 per 12-kilo canister.-

Vinatexmart opens market in My Phuoc Town

Vinatextmart will open to sell all kinds of goods instead of just garments starting Sunday in the My Phuoc Town of southern province of Binh Duong. In an area of 2,000 sq.m, the market trades various goods of food, cosmetics, electric appliance, and footwear.

Vinamilk tops US$22.3m in revenue

Viet Nam Dairy Products Joint Stock Co (Vinamilk) gained a US$22.3 million export revenue by the end of January 2012, five times higher than the same period last year.

Apart from taking a firm foothold in the domestic market, Vinamilk products have so far been exported to 16 markets worldwide including the USA, Australia, Canada, Russia, Turkey, the Phillipines, and Korea.

Rate of new enterprises decreases in January

Only 4,117 enterprises were set up in January, with registered capital of VND18.2 trillion (US$866.6 million), down 36 per cent in volume and 56 per cent in value against the same period last year, according to the Ministry of Planning and Investment.

The ministry attributed the decrease to challenges businesses face due to the economic difficulties and tightened financial policies to control inflation, hindering businesses from mobilising capital.

Petrol from Dung Quat heads for Laos

The PetroVietnam Oil Corp (PV Oil) and Viet Nam National Petroleum Group (Petrolimex) are allowed to make a pilot re-export of petrol to Laos. The petrol is bought from the Dung Quat Oil Refinery.

The ministries of Industry and Trade, and Finance are responsible for supervising the re-export activities to avoid commercial fraud and negative impacts on domestic petrol supply.

The trial is valid until the end of 2012.

‘Super Investors Day' to debut next week

Twenty leading experts from a range of industries will gather for this year's annual Super Investors Day in HCM City on February 16 to discuss investment opportunities and prospects in the country.

Speakers will include Le Hung Dung, chairman of Sai Gon Jewelry; Dang Le Nguyen Vu, chairman of Trung Nguyen Cafe; Ngo Duc Tri, CEO of Global Cybersoft; Nguyen Lam Vien, chairman of Vinamit; and Cao Tien Vi, chairman of Sai Gon Paper.

The panel will discuss investment and other opportunities in more than 20 different industries like franchising, food, tourism, foreign trade, agro-processing, IT, branding and foreign capital.

Australian businesses eye Quang Binh province

Australian businesses have expressed their hope for early opportunities to invest in Vietnam’s central Quang Binh province.

They made this statement at a seminar promoting investment in Quang Binh province, in Sydney on February 9.

At the event, Chairman of the Quang Binh Provincial People’s Committee Nguyen Huu Hoai briefed Australian companies and Overseas Vietnamese businesspeople on the province’s potential and investment opportunities in the service and tourism sectors.

Quang Binh has introduced preferential investment policies to assist investors in training labourers, basic infrastructural construction and compensation for site clearance, he said.

At present, the province has 27 projects with 10 focusing on developing rural areas, health care, culture and education and building tourist sites and industrial zones.

VN to reserve ODA to develop infrastructure

Under a Prime Minister’s decision, Vietnam will reserve Official Development Assistance (ODA) funds and concessional loans for the development of infrastructure in the 2011-2015 period.

Under Decision 106 of the Prime Minister, the total amount of ODA funds and concessional loans pledged by donors in this period will be around US$32-34 billion while the figure for disbursed capital is $14-16 billion with 50 percent carried over from projects in the 2006-2010 period.

The average amount of disbursed ODA funds and concessional loans is estimated to reach about $2.8-3.2 billion a year. The disbursement pledges in this period are very important for socio-economic development.

Under the scheme, these loans will be mainly spent on infrastructure projects such as expressways or roads in major economic areas.

Currently, most parts of the North-South Expressway are ODA-funded projects, in which two major projects are the VND8.97-trillion ($431.5 million) Cau Gie-Ninh Binh Expressway and the $1.18-trillion HCMC-Long Thanh-Dau Giay Expressway which will be completed this June and late next year respectively.

The Danang-Quang Ngai Expressway worth $1.4 billion and the Ben Luc-Long Thanh Expressway worth US$1.68 billion are also in need of capital.

Some other projects to get ODA funds include Trung Luong-My Thuan-Can Tho, Ninh Binh-Thanh Hoa and Thanh Hoa-Ha Tinh expressways.

In addition to infrastructure projects, ODA funds and concessional loans will be spent on major public projects which are unlikely to attract private investors or commercial loans. These loans will also be used to encourage private investments in infrastructure transport projects under many different forms such as public-private partnership.

Regarding the capital demand for transport projects in the 2011-2015 period, Deputy Minister of Transport Truong Tan Vien said the transport sector would need at least VND483 trillion ($23.2 billion) for its projects in the next five years.

If enough capital is allocated, the ministry will build and expand 6,000 kilometers of roads and 44.6 kilometers of bridges, and build 150 kilometers of railways, he said.

According to the scheme, the total ODA pledged reached over $31.76 billion in the 2006-2010 period, or 15 percent higher than planned. The disbursed ODA amount was $13.86 billion with transport, telecom and water supply accounting for the highest rate of 36 percent.

Tough time ahead for banking industry: bankers

Soaring bad debts, together with liquidity problems and economic restructuring, particularly banking reorganization, have pushed commercial banks to face a great deal of difficulties in 2012.

Citing uncertainties coming from fledgling economic reform and the ongoing European debt crisis, Tran Phuong Binh, director of Dong A Bank, told newswire Vnexpress that further difficulties would come this year.

In the meantime, the government's targets in 2012 are inflation mitigation and macro-economic stabilization.

As a result, interest rates and credit growth continue to be a puzzle for commercial banks this year, Binh said.

Therefore, capital increases would be Dong A Bank's first priority in an attempt to strengthen financial capacity and its leading position in banking technology, he added.

Also, the development of finance and banking largely depends on the central bank's policy, according to Trinh Van Tuan, general director of Phuong Dong Bank.

2012 is the first year of economic restructuring and banking reform in particular, which would pose tremendous difficulties for credit institutions, he said.

An expert, a member of the National Monetary Policy Committee, said administrative measures which have been applied to keep a lid on the capital mobilization rate are just situational moves.

However, given the current context, such tough regulation would be necessary in order to achieve important economic targets.

Therefore, commercial banks would continue encountering difficulties attracting dong deposits in 2012, he said.

Moreover, the cautious monetary policy has taken a toll on money supply and banks' liquidity.

Also, economic statistics in early 2012 have indicated inflation has been dropping significantly along with continuously low economic development, according to Australia-New Zealand Banking Group (ANZ).

Currently, the State Bank of Vietnam has expressed its intention to bring down interest rates, following the cooling of inflation.

Price impacts following the Tet holiday, however, should be evaluated carefully by the central bank, said ANZ.

According to the Asian macro-economic report quarter 1 2012 of HSBC's economic research unit, inflation at the end of this year is forecast to fall to a single-digit rate from about 18.6 percent as of last year.

Interest rates of 14% may therefore be lowered to 13% in Q1/2012 and then reduced to 9% by the year-end.

Despite the prediction of being a very tough year, many commercial banks are setting a high profit plan based on their optimistic view of the market.

Among top commercial banks, Vietinbank has announced that its pre-tax profit growth in 2012 was targeted to surge 20 percent against the year earlier, with total assets, total deposits, and total outstanding loans to rise 20 percent, 25 percent, and 20 percent respectively.

Reportedly, the lender posted the pre-tax profit of VND8.105 trillion, total assets of VND460.421 trillion, bad debt ratio of 0.74 percent on total outstanding loans, return on equity (ROE) at 25.4 percent, return on asset (ROA) at 1.96 percent, and a dividend payment of 20 percent in 2011.

Similarly, Vietnam Bank for Investment and Development (BIDV) has also planned to reach a pre-tax profit of VND5.8 trillion in 2012, increasing 30 percent year on year.

This year, BIDV's ROE target was raised from 13 percent of 2011 to 17 percent, total assets at VND50 trillion, up 17 percent year on year.

In addition, Dong A Bank has set the 2012 profit at VND1.650 trillion, an annual growth of 131.5 percent compared with 2010's actualized VND1.255 trillion. Its charter capital and total assets are planned to increase to VND6 trillion and VND100 trillion from VND4.5 trillion and VND64.56 trillion respectively in 2012.

Military Bank is also expected to gain a total assets growth rate of 22 percent and chartered capital increase of 64 percent in this year. Furthermore, MB targets to expand its network to 240 points.

Small-sized lender Kien Long Bank has also offered the quite impressive business plan for 2012 with a pre-tax profit of VND710 billion, a dividend rise of 30-40 percent compared with 2011. Last year the bank earned a pre-tax profit of VND522 billion, leaping 102 percent year on year.

Since the central bank said it may merge 5-8 banks, it will be a big chance for remaining banks in business in 2012, said Tran Phuong Binh of Dong A Bank.

But most of banks that set high business targets for 2012 are large ones, while small to medium sized banks seemed to keep their profit plan unannounced.

Vietnam does not dump wind turbines in US market

Vietnamese wind turbine tower manufacturers do not dump their products in the US market, affirmed a Foreign Ministry spokesperson.

The US Department of Commerce’s decision to investigate alleged dumping of Vietnamese wind turbine towers imported into the US is groundless, Luong Thanh Nghi told reporters at a regular press briefing in Hanoi on February 9.    

He said the decision does not reflect the actual manufacturing of these products in Vietnam and it goes against US commitments, especially those made at the 19th Asia-Pacific Economic Cooperation (APEC) summit in the US in November 2011, to promote green growth and facilitate international trade.

We think the US Department of Commerce should view and handle this issue in an objective and fair manner and in line with the spirit of trade liberalisation, its multilateral commitments, as well as the growing economic and trade ties between Vietnam and the US, said Nghi.  

US bank to fund local wind farm projects

The US Ex-Im Bank has agreed to a policy on a funding package to support wind farm projects in the southern province of Bac Lieu, the bank chairman said Wednesday.

At a meeting with the Vietnamese Development Bank (VDB), Fred P.Hochberg, chairman and president of US Ex-Im Bank, said the total investment for the project is as much as US$200 million.

The two banks also reached an agreement on the capital mobilization method, in which VDB will borrow loans from foreign banks under the guarantee of US Ex-Im Bank.

At present, three international banks, including Credit Agricole, Citibank, and JP Morgan have demanded to participate in VDB’s sponsor project, newswire VnEconomy reported.

Earlier, VDB and US Ex-Im Bank also inked a memorandum of understanding on a credit support worth $1 billion for the Mekong Delta Wind Power Center for the period between 2011 and 2015.

Also at the meeting, VDB CEO Nguyen Quang Dung called on US Ex-Im Bank for additional credit support worth $500 million, after a package worth $1 billion has been disbursed.

The proposal received initial approval from the US chairman.

HSBC named best bank in Vietnam for 2011

The Hong Kong-Shanghai Banking Corporation (HSBC) Vietnam Ltd (HSBC Vietnam) has been named the Best Bank in Vietnam by The Asset Magazine for its excellent performance in 2011.

This is the fourth consecutive year that the bank has received the Triple A Country Award.

The Asset Magazine selected award winners according to their financial performance, scale of operation, business network, investment performance, services and solutions for businesses, contribution to their domestic market, and client testimonials.

Currently, HSBC is one of the leading foreign banks in Vietnam. With 16 branches throughout the country, HSBC is one of few foreign banks to provide a full package of financial products and services to customers in the Vietnamese market.

SHB increases investment in Cambodia

The Saigon - Hanoi Commercial Joint Stock Bank (SHB) on February 9 opened its branch in Phnom Penh, Cambodia, becoming Vietnam’s fifth bank to operate there.

Speaking at the inauguration ceremony, Do Quang Hien, Chairman of SHB, confirmed that choosing Cambodia as the bank’s first foreign investment market is part of its long-term strategy to make SHB a modern retail bank domestically and regionally.

The establishment of the bank not only demonstrates the fine development of the comprehensive cooperative relationship between Vietnam and Cambodia, but also offers an opportunity for the development of the banking sector in Cambodia, said Hien.

The branch committed to bringing diverse, convenient and competitive services for Cambodian businesses and people, and supporting Vietnamese businesses in investing in the country, he noted.

Also at the event, Cambodia’s Permanent Deputy Prime Minister Men Sam An highly appreciated the opening of SHB’s branch in Cambodia, showing the firm confidence of foreign investors in general and Vietnamese investors in particular in Cambodia’s bright economic future.

She expressed her belief that the establishment will advance Cambodia’s finance and banking sector and increase people’s standard of living through creating jobs and providing finance services for businesses.

On the occasion, SHB leaders handed over US$50,000 as gifts to the Cambodian Front for National Solidarity and Development.

Emerging export market for banana and chili leaves

Although chili pepper and banana leaves are not worth much domestically, farmers have earned hundreds of millions in VND through exports of these products.

While other fields in the Red River Delta are occupied with growing cabbage, cauliflower and onions at this time, the area surrounding Xuan Tri Village in Ninh Giang District, Hai Duong Province is covered with chili peppers. In the last two years this has become main source of income for the village.

A farmer said that in a good year she could earn hundreds of millions in VND by selling leaves. When trade starts in the market in the afternoon, numerous sellers rush to the spot with large bags filled with the leaves.

Tran, a major trader at Xuan Tri village shared that this type of leaf is in great demand in South Korea, Japan and Malaysia.

Like chili leaves, banana leaves have also become sought-after in recent years. The first, and only, company to export banana leaves is called Thanh Hai, based out of Nha Be District in Ho Chi Minh city.

Lam Minh Thanh, General Director of Thanh Hai, shared a discovery that he came across during a business trip to the US - while there is a large market for products like fish sauce and banana leaves, most of this market goes to Taiwan and Thailand.

So he started exporting banana leaves to A&M Seafood Corporation, and at the end of 2008, the company exported a total of 20 tonnes of leaves. The leaves became an instant hit among overseas Vietnamese populations.  

Currently, Thanh Hai is exporting one container of leaves per month  to America, while Eastern Europe and China are also becoming major customers of banana leaves.

One trader commented that there is a large demand, while the domestic supply is small. Many farmers are not aware of the value of the leaves, and harvest them last. At the same time, leaves for export must meet food hygiene and safety standards.

Although chili pepper leaves are still considered to be a unique export, the market appears to be growing. Banana leaves are also being recognised in many areas as a cash crop.

Sugar mills cut wholesale prices
 
Several sugar processing factories have reduced the wholesale price of sugar to promote consumption, according to the Ministry of Agriculture and Rural Development (MARD) said.

The ministry's Inform-ation and Statistics Centre reported by mid-January, all 38 sugar factories nation-wide had aimed for a combined production to reach a total output of 461,000 tonnes for the year, 48,000 tonnes higher than last year.

Meanwhile, factory stockpiles by mid-January had risen to a year-on-year increase of 5,600 tonnes to stand at 151,000 tonnes.

The wholesale price of white sugar fell by VND1 million (US$48) per tonne to VND16.3-17.7 million against last month's wholesale price.

Former general secret-ary of the Viet Nam Sugar and Sugarcane Association Ha Huu Phai said sugar factories in the north could profit with a wholesale price of more than VND16 million per tonne, but in the south factories would face difficulty if they were forced to sell sugar at the same price.

Factories in the north could purchase sugarcane at VND900,000-VND1 milion per tonne, while southern factories must buy at VND1-1.2 million per tonne of sugarcane.

Ouput of sugarcane in the northern provinces had beenalways higher than in the southern provinces, however many factories must sell sugar at low prices to increase capital for production and payment of raw materials.

Sugar factories had always faced a lack of capital for production, Phai said.

The ministry estimated the industry would have a year-on-year increase in sugar output of 250,000 tonnes of sugar to reach 1.4 million tonnes for the 2011-12 crop.

Domestic sugar consumption is expected to be 1.3 million tonnes for this year, leaving the domestic market with a surplus of 200,000 tonnes, including 100,000 tonnes in stock from last year, 70,000 tonnes of imported sugar under Viet Nam's commitments entering to WTO and 30,000 tonnes of imported sugar through border gates.

The association proposed that the Ministry of Industry and Trade create favourable conditions for enterprises to export sugar to ensure the price would not fall dramatically.

Phai said if the wholesale price of sugar went too low, factories would not be able to ensure profits for farmers, who may instead plant trees, which could create a lack of materials for sugar factories.

SSC cracks down on insider trading

The State Securities Commission (SSC) said it will develop mechanisms to better co-operate with the Finance, Post and Telecommunications and Public Security Ministries and State Bank of Viet Nam to tackle insider trading and activities that distort the market.

According to the commission, the domestic stock market now has over 1,000 public companies, nearly 700 listed companies, 105 securities companies, 47 fund management firms and around 1 million accounts held by local and foreign investors.

The scale of management and inspection activities were therefore becoming broader and broader, said the commission.

"Together with the development of the stock market, come new violations in the market which are becoming more and more complicated, especially in the context that the market faces many difficulties," the commission wrote on its website.

"Thus, fortifying capacity in inspecting, supervising and treating violations related to securities and stock market laws will be a key task of the SSC in 2012."

Last year, the SSC issued 164 decisions on punishing violations by organisations and individuals, with fines totalling almost VND11 billion (US$523,800).

The SSC dealt with 63 cases that violated regulations on initial public offerings and disclosure of information, and fined nine individuals for trade fraud and market distortion. It also tackled 47 cases of insider trading at listed firms and 11 cases of securities companies violating reporting regulations.

This year, the commission said it would speed up inspection of securities and fund management firms, and focus on checking their financial security and payment abilities, a move it said would help them restructure and boost efficiency. State-run groups and insurance companies and securities firms benefiting from financial contributions from banks would be key objects of supervision, it added.

Assuring equity among institutions and individuals in the stock market and protecting investor rights and assets would be important tasks, the SSC said.

New rules govern State firm IPOs

A Ministry of Finance circular providing guidelines for the initial public offering (IPO) of equitised State-run companies will go into effect on February 15th.

Expenses for the equitisation of an enterprise valued at over VND100 billion (US$4.76 million) should not exceed VND500 million ($23,800), the circular stipulates.

The maximum expense levels are VND400 million for a company valued between VND50 billion and VND100 billion, VND300 million for VND30 billion to VND50 billion, and VND200 million for below VND30 billion.

Share prices will be determined at auction, with an initial price no lower than the face value of VND10,000 per share.

Prices of preferential shares reserved for company employees can comprise as much as 60 per cent of the lowest winning bid, if a company hold public auctions before selling stakes to its strategic partners.

If the company sells shares before organising public auctions, preferential share prices can comprise as much as 60 per cent of the lowest price determined through negotiation or bids with strategic partners.

A State-owned company must complete the IPO within three months of the day its equitisation plan is adopted by authorities, the ministry stipulates. Affiliates and subsidiaries are not allowed to take part in the IPO of their parent company.

Tuna exports to US may increase

US demand for Vietnamese tuna is expected to increase this year, the Viet Nam Association of Seafood Producers and Exporters (VASEP) announced.

The US must increase tuna imports from Asian countries because of restriction on tuna imports from Mexico, the association said.

Last year, the US was the largest export market for Vietnamese tuna. Viet Nam's export value of tuna to the US increased last year by 31.8 per cent to US$171 million against 2010.

Meanwhile, Viet Nam's total tuna export value reached $379.3 million in 2011, 29.4 per cent higher than the previous year, the association said.

Fishermen have had massive tuna hauls so far this year, the association said. However, tuna catches are subject to strict controls and must abide by the Agreement on International Migration of Fish, which comes under the Convention on International Law of the Sea.

When the fish migrate to Vietnamese waters, catches are subject to the Western and Central Pacific Fisheries Commission (WCPFC). The international organisation strictly controls tuna catches worldwide, even though Viet Nam is not a member.

Vietnamese fishermen and tuna-exporting enterprises will face challenges selling their fish abroad, the association said, adding that Viet Nam should join the WCPFC to develop trade marks for Vietnamese tuna products.

Additionally, tuna-exporting enterprises should invest in cold-storage facilities and large fishing boats, while helping fishermen to reduce costs and boost efficiency.

Those enterprises should also expand export markets in co-operation with foreign partners, the association said.

Dong Thap to have large aquaculture feed mills

Hung Ca Co., Ltd on Tuesday kicked off construction of an aquaculture feed mill and fish oil refinery in Binh Thanh Industrial Zone in the southern province of Dong Thap.

Costing a total of VND250 billion and covering eight hectares of land, the two mill projects are set to become operational by December. The feed mill is designed to have a daily capacity of 800 tons while another produces 300 tons of fish feed and fish oil a day using advanced European lines.

The two factories each year will supply 290,000 tons of fish feed and over 400,000 tons of aquaculture feed to Hung Ca Co. and fish and shrimp farmers in the Mekong Delta, said Tran Van Hau, managing director of Hung Ca Co.

“Aquaculture feed price volatility posed one of the biggest difficulties for the firm last year. The presence of these two mills sets a benchmark for us and means we have to complete the closed process from farming, processing to export as well as produce high value products by using available by-products,” Hau said.

Hung Ca Co. is cultivating tra fish on 410 hectares, which is considered one of the largest farming areas in the delta. It also has two tra fish processing factories.
 
HCMC sees drop in purchasing power after Tet  

Although prices of several commodities have dropped suddenly after Tet Lunar New Year, purchasing power is still relatively low in markets and retail stores in Ho Chi Minh City.  

One week after Tet, food prices have dropped by half as compared to before Tet Lunar New Year festival season.

This is being attributed to supermarkets reopening too soon, on the very second day of the lunar year, offering competitive prices and attracting a large number of consumers. This has forced traders in markets to reduce prices on most commodities.

Besides also, people don’t usually do a lot of shopping in the beginning of a lunar year.

Similarly, consumer demand is at a record low in even building material, clothes and accessories like shoes.

Dinh Thi Kim Cuc, owner of the Phuoc Thinh Nhom Company that trades in building material, said that she usually opens all her shops on the fourth day of lunar year and earns about VND50-70 million by mid month. However, this year the turnover is less than VND10 million for the same period.

The low purchasing power of consumers has resulted in some clothes and shoe shops to temporarily shut down.
 
First inspection results show EVN's high salaries despite losses

The Ministries of Labour, Invalids and Social Affairs (MoLISA) and Industry and Trade (MoIT) met yesterday to assess the first results of the inspection into salary payment at the Electricity of Vietnam Group (EVN).

In an interview with Dtinews yesterday afternoon, deputy minister of the MoLISA, Bui Minh Huan said that his inspection team had performed their task at 25 subsidiaries of EVN, including EVN’s head office, The National Power Transmission Corporation(NPT), as well as other corporations, from December 12, 2011 to January 14, 2012.

“The team’s initial report shows that, despite the fact that the company has been operating at a loss, EVN still payed high salaries to their staff,” he said.

According to a report by the State Audit Agency, the staff working at the holding company received the highest average salaries, amounting to VND13.7 million per month, while the electricity distribution divisions got an average VND7.9 million, and VND10.8 million for the power transmission units.

Huan also said that his ministry is in the process of urging the team to complete their report, whose findings will be publicly announced in detail as soon as possible.

EVN’s chairman, Dao Van Hung, was dismissed by the Prime Minister on February 1, for violations that caused serious losses to the group.