Overseas remittances see impressive rise

Overseas remittances are expected to record USD8 billion in 2010, an increase of 25.6 percent over last year.

According to the Foreign Currency Management Department under the State Bank of Vietnam, overseas remittances were USD7.6 billion  in the first 11 months of this year and likely to be USD770 million  in December.

In addition, Vietnam ’s commercial banks have said that foreign currencies are flowing into Vietnam and have seen a rise of between 20-30 percent against the previous year.

This high level of remittances is attributed to the recovery of the global economy, which enables overseas Vietnamese to send more money to their relatives in Vietnam, the strong development of banking networks and the improved services offered at banks and economic organizations.

This year’s remittances are mainly from the US, Canada, Australia and markets that accept Vietnamese workers, such as the Republic of Korea, Taiwan and Malaysia .

However, money from Europe is likely to be affected due to public debt in Greece and Ireland .

Overseas remittances are forecast to increase in the next two months until the Lunar New Year festival.

Earlier, the World Bank released a report on worldwide remittances in 2010, with Vietnam’s overseas remittances forecasted to be USD7.2 billion against USD6.6 billion  in 2009.

The report also showed that Vietnam now ranks 16th out of the top 30 countries surveyed.

Luxury apartment sales in Hanoi to remain in red until first half of 2011 

Luxury apartments are carrying high risk of losses to speculators as the segment has been hit hard by many difficulties this year, analysts said. 

Attempts to boost sales of luxury apartments during the quiet market this year have seen property firms in Hanoi quickly carrying out many promotional packs including steep price reductions for homebuyers and high commissions for investors.

This is the first time ever the property companies released these kinds of promotional packs, which are only familiar with Ho Chi Minh City’s real estate market, brokers said.

Sales of many five-star apartment buildings including Richland Southern, Mulberry Lane and Tricon Tower slumped. The unlisted property firm FLC last month announced it would sell more apartments in the FLC Landmark Tower at the price of VND28 million (US$1,400) per square meter.

The price was a bit lower than previous sales, but brokers said it plunged on the stronger dollar, surge in construction materials and gold prices this year.

Similarly, apartments in Time Tower in Ha Dong District were offered at the price of VND19.2 million per square meter. Royal City’s apartment of the listed builder Vincom (VIC) were sold at VND$2,000 per square meter only.

Brokers said property enterprises offered an average profit rate of $50-70 per square meter for investors.

The plunging sales of luxury apartments in Hanoi showed the property bubble was about to burst, analysts said.

“Luxury apartment suppliers tried to make huge profits, prompting a big gap between actual and market prices,” a property broker in Hanoi said.

Fluctuated gold price, dollar getting stronger and high interest rates have also led investors to stay away from luxury apartments, brokers noticed.

Statistics from the commercial property and real estate services adviser CB Richard Ellis showed demand for apartment worth $1,500 per square meter or more fell sharply in the first half of 2010.

The supply meanwhile is abundant, of which around 10,000 new apartments will be available on Hanoi in upcoming time. They will raise the total amount of new apartments to 20,000 this year.

Experts expected the prolonged boom of apartments for middle earners would bring sales of luxury apartments in the first half next year down further.

96 enterprises receive national quality awards 

Prime Minister Nguyen Tan Dung has decided to confer the 2010 National Quality Awards on 96 enterprises, of which 11 will receive golden prizes, while the other 85 silver prizes. 

This annual event, organized by the Ministry of Science and Technology, aims to honor those outstanding enterprises for providing high quality products and services; and for increasing their capacity and competitiveness. Likewise, these enterprises have built a viable business culture and enlarge their campaigns in improving socio-economic development.

The awards belong to the International Asian – Pacific Quality system in order to merit those enterprises that achieve a high competitiveness and performance efficiency.

It also aims to recognize the high quality of Vietnamese products, in both local and global markets. In addition, it aims to show that local enterprises are able to compete in international global markets, with appropriate business strategies.

The award ceremony for the National Quality Awards and International Asian – Pacific Quality Awards will be held later.

Gold advances on rising demand for wealth protector   

The price of gold in Vietnam surged to VND36.35 million a tael (1.2 ounces) on December 14 as global prices resumed gains on a weakening dollar.

Most gold shops bought the metal at VND36.25 million and sold at around VND36.35 million as of 9 am local time, an increase of VND250,000 a tael over the previous day.

Saigon Jewelry Company bought gold at VND36.27 million and sold at VND36.33 million as of 9:30 am local time.

At the same time Hanoi-based Phu Quy Jewelry purchased SJC-brand gold at VND36.27 million and sold at VND36.37 million.

Domestically, gold fetched VND400,000 a tael higher than global prices.

On free market, the US dollar exchange rate continued to emerge this morning. Dollars were bought at VND21,180 and sold at VND21,230, an increase of VND10 per dollar over the previous day. The greenback gained VND150 per dollar over last weekend.

Internationally, gold advanced as the US dollar weakened, bolstering the demand for the metal as a protector of investors’ wealth.

Gold for immediate delivery soared US$8.7 an ounce to close at $1,395.5 an ounce on the Comex in New York.

In Asia, gold extended rising trend of the trading session in New York, sending the prices to hit $1,400 an ounce again after it failed to maintain this level last week. Spot gold rose nearly $7 an ounce over the closing price in New York to trade at $1,402 an ounce as of 9:45 am Vietnamese time.

Credit rating agency Moody’s Investors Service signaled that President Barack Obama’s agreement to extend tax cuts would likely increase the country’s budget deficit and the chance of a negative outlook for the nation’s credit rating.

The US dollar exchange rate against the euro dropped to $1.34 a euro in Tokyo this morning from $1.32 the previous day.

Besides, the US tax-cut policy may also strengthen inflation, boosting the precious metal’s appeal as a hedge against inflation.

Gold also climbed because China refrained from raising its benchmark interest rates last weekend as most analysts had forecast, although they said that inflation might urge the country to increase interest rates rapidly next year.

However, China’s inflation itself is one of most important factors that supported the gold price. The demand to buy gold to prevent the currency from depreciating strongly rose in the second-largest consumer market for gold.

Stocks dip, traded value up

Shares on Vietnam’s two stock exchanges yesterday took a dip with 246 million shares traded at VND5.5 trillion (US$284 million), following three consecutive positive trading sessions.

Strong demand on the back of bank shares helped prevent a big slump. The benchmark Ho Chi Minh City index, or VN-Index, suffered a mere 0.57 percent loss and closed at 489.65 points.

Bank shares are in high demand thanks to low prices and a recent one-year extension of the deadline for commercial banks to raise registered capitals.

Yesterday’s traded volume on the HCMC stock exchange hit 135 shares with total traded value of over VND3.2 trillion ($168 million), a 72 percent increase.

Bank stocks changed hands in huge volumes in this session, led by STB (Sacombank) with 14.7 million units traded, followed by EIB (Eximbank) with 7 million shares transacted.

On the Hanoi bourse, the HNX-Index slid 2.15 points to 119.61 points. Nearly 111 million shares were traded, equal to VND2.2 trillion ($116 million) in value, up 110 percent.

Vietnam garment exporters snatch orders from China

A switch by global textile and garment buyers from China to Vietnam has fetched Vietnamese exporters orders that will keep them busy for the most of next year, industry insiders said.

International buyers now prefer Vietnam because of the quality of its products, reasonable prices, and prompt delivery, Diep Thanh Kiet, deputy chairman of the HCMC Association of Garment, Textile, Embroidery – Knitting, said.

Saigon 3 Garment Joint Stock Company, for instance, has signed a US$50 million contract to ship five million pairs of jeans to Japan in the first half of next year and Phuong Dong Garment Joint Stock Company has a deal to supply five million pieces of apparel in the same period.

Some exporters with a large workforce have even signed deals that will keep them occupied for the whole of next year.

Big players like Viet Tien, Nha Be, Phong Phu, Gia Dinh, Thanh Cong, Thang Loi, and Viet Thang have all reported a minimum of 15 percent increase in export orders for next year.

A cut in the import of raw materials has helped increase domestic firms’ revenues, the insiders said.

Textile and garment exports are up 23 percent year on year in 2010 and the industry is set to hit a record $11 billion this year, slightly above the target of $10.5 billion.

The textile and garment industry accounts for around 13 percent of the country’s total exports of $70 billion.

Japan JGC says made bid to build Vietnam refinery

Japanese engineering firm JGC Corp said on Monday it has made a bid to build Vietnam's second oil refinery for a joint venture led by Idemitsu Kosan Co and Kuwait Petroleum International.

A Tokyo-based JGC spokesman declined to provide the names of the firm's partners in the bid, though the Nikkei Business Daily said these included Japan's Chiyoda Corp, France's Technip and South Korean groups SK and GS.

Idemitsu said it and its partners had opened a tender for contractors to build a 200,000-barrel-per-day refinery in Vietnam, with a final investment decision to be made by the end of March 2011, denying it had unofficially selected the JGC group, as the Nikkei reported.

Without citing sources, the Nikkei also said the firms will sign an official agreement in February.

"Bids are in, and we're now considering (to whom to award the contract). We cannot say when we will finalize the results," a spokeswoman at Idemitsu said, adding that the cost of construction is yet to be fixed.

Idemitsu and Kuwait Petroleum International both hold 35.1 percent stakes in the Nghi Son plant, while PetroVietnam has 25.1 percent and Mitsui Chemicals Inc holds the remaining 4.7 percent.

Idemitsu said in September it had delayed the start of operations at the plant to some time in 2014 from its previous plan for during the April 2013-March 2014 financial year.

Man behind bars for defrauding bank of $2 million

Nha Trang city’s police last week arrested a Hanoi man for attempting to defraud VND50 billion (US$2 million) after he claimed to possess $500 million which he wished to deposit in a local bank.

In early November, Vu Xuan Lai, 53, visited a branch of the Saigon-Hanoi Commercial Joint Stock Bank (SHB) in Nha Trang and asked to deposit VND10 trillion ($500 million) at a 3 percent annual interest rate in ten years. The current rate offered is much higher.

In return, Lai asked for $2 million in “commission.”

But Truong Ngoc Nguyen, the branch’s director declined, noting the unusual nature of his unprecedented request.

However, two SHB staff - Chu Thi Hang Nga, a financial controller, and Nguyen Thi Truc Kieu, an accountant - illicitly opened a $2-million bank account for Lai, intending for him to proceed with the deposit.

The three met in a hotel in Nha Trang a week ago to sign a deposit contract. But after Nga and Kieu handed the man the savings book, he disappeared.

The two bank officers have been suspended, SHB said in a statement yesterday.

A commercial bank’s executive told Tuoi Tre fraudsters attempted the same trick two years ago by promising to deposit large non-existent amounts in exchange for real commissions.

Vietnam extends deadline for banks to raise capital

Vietnam has extended by one year to December 2011 the deadline for banks to raise their registered capital to VND3 trillion ($154 million), the central bank said Tuesday.

A bearish stock market and a government ruling that restricted investment by state business groups in banks had made it tough for lenders to meet the deadline, the State Bank of Vietnam's chief inspector, Duong Quoc Anh, said.

Share issue regulations affecting several listed banks were another factor, Anh said in an interview published on the central bank's website (www.sb.gov.vn).

The move had been expected on Vietnam's main stock exchange in Ho Chi Minh City, helping the VN index .VNI rise 3.63 percent Monday. The index slipped back 0.12 percent Tuesday.

The government had told banks to raise their registered capital by the year-end as part of a strategy to strengthen the banking system. Registered capital determines the size of a bank's loans and deposits.

Banks have scrambled to raise funds this year, with many issuing stocks or offering stakes to strategic partners.

Only half of the 22 lenders that needed to raise their capital this year had completed the task by the end of October, news website VnExpress.net said, quoting central bank data.

Hanoi chases FDI with one-stop-shop approach

Hanoi is dedicated to creating the most favourable conditions for foreign investors, particularly those from Singapore, to invest in its industrial and export processing zones (IZs&EPZs) through an one-stop-shop mechanism and incentives in taxes and land use.

The director of the municipal IZs&EPZs Management Board's Information and Investment Promotion Centre Nguyen Si Hien made the statement during a conference organised last Sunday.

Singaporean firms have to date pumped $3.2 billion into 104 projects in Hanoi. That made Singapore the second largest foreign investor in the city behind South Korea.

However, only eleven projects, capitalised at $100 million, have invested in the city's IZs to date. Hien said that this figure remained modest compared to the great investment potential between Singapore companies and the city's IZs.

Currently, eight of the 19 IZs approved by the PM in Hanoi have reported full land occupancy.

"From now until 2015, the city will have 20 IZs put into operation, which will offer great opportunities for Singaporean investors," he noted.

Vietnam was an important market to Singapore, said the Second Secretary of the Singaporean Embassy in Vietnam Raymond Lui.

International Enterprise Singapore (IE Singapore), an agency to promote the overseas growth of Singapore-based enterprises, has opened 30 representative offices worldwide and Vietnam was the only country in Southeast Asia that has two offices, one in Hanoi and the another in Ho Chi Minh City.

As of September, Singapore had 792 valid projects valued at $17.6 billion in Vietnam. The island-nation's investors have gradually shifted their attention to Hanoi and some northern provinces recently rather than their previous focus in the south, he said.

Many Singaporean businesses have committed to long-term investments in the country such as Sembcorp, APL, DBS, OCBC, UOB and Mapletree.

Singaporean enterprises wanted to invest in Vietnam, especially in processing, healthcare and logistics, in the coming years, said Vietnamese Investment Counsellor in Singapore Le Truong Son.

Up to 20 Vietnamese companies have invested over $100 million in Singapore thus far, Son said.

Long Thanh airport getting wings

The Ministry of Planning and Investment recently gave the go-ahead to the Ministry of Transport (MoT) to sign a memorandum of understanding with Japan International Cooperation Agency (JICA) to study investment for the Long Thanh international airport project.

The study will assess the project’s feasibility and propose investment under the public-private partnership (PPP) model. JICA expressed the possibility to lend official development assistance (ODA) capital to get the project rolling.

The southern Dong Nai province-based airport will be developed into a big transit international airport to handle 44.5 million passengers and 1.2 million tonnes of goods by 2030 in its first phase of investment during 2020-2030.

Similarly, Long Thanh airport will receive 90 per cent of international flights and 20 per cent of local flights to and from Ho Chi Minh City. The project will start work in 2018 with construction costs mounting to $6.048 billion, not including site clearance and compensation costs.

Plan boiled down to provide copper plant

Vietnam will have a second copper smelter plant next year.

State-run Vinacomin Group and Russia’s GeoProMining (GPM) are preparing documents for an investment licence application, agreed in principle by the Vietnamese government.

Vinacomin and GPM in September, 2010 signed an agreement in Hanoi to cooperate in the construction of a copper smelter plant in northern Quang Ninh province with a total capacity of 50,000 tonnes of copper per year.

Under the agreement, GPM will contribute 71 per cent of the capital to build the plant, with 29 per cent from Vinacomin.

The plant is projected to double its capacity in the following stages of development. It will be built near a deepwater port or thermal power plants or hydropower plants, using advanced technology.

Nguyen Manh Quan, head of Ministry of Industry and Trade’s (MoIT) heavy industry department, said the Vietnamese government would increase the deep processing of minerals to serve domestic demand and exports.

“Current investment in deep processing projects is very low due to difficulties in technology transfer and capital raising, and lack of cooperation. Thus, up to now some minerals are mainly exported at raw level like titanium ore and lead. Some deep processing investment has been carried out but in small-scale projects such as copper and zinc,” he said.

Vietnam’s first copper refinery project worth VND1,300 billion ($66.6 million) was built by Vinacomin in 2005 in Tang Loong Industrial Park of northern mountainous Lao Cai province.

The project became operational in August, 2008 with an overall capacity of more than 10,000 tonnes per annum. The investor planned to raise its capacity to 15,000-20,000 tonnes per year in the next stages of operation.

Vietnam is said to have a total of 5.4 million tonnes of copper available in various ores across the country, of which the Sin Quyen ore in Lao Cai province has about 1.2 million tonnes.

Habeco’s thirst to re-enter the market

Habeco, Vietnam’s second largest brewer, is likely to list on the stock market in next year’s second quarter.

“After finishing an auction of 6.954 million shares on December 24 and asking for shareholders’ opinions at its shareholder meeting in the first quarter next year, we will carry out listing on the stock market,” said a Habeco spokesman.

Last week, the Hanoi Stock Exchange (HNX) announced Habeco’s auction of 6.954 million shares at an initial price of VND32,000 per share.

The total share volume offering for the auction accounted for 3 per cent of its chartered capital of VND2,318 billion ($122 million).

The auction is part of Habeco’s plan to decrease its state stake from 81.79 to 66 per cent. Of the 15.79 per cent stake to be sold, 3 per cent will be publicly auctioned and the remainder will be sold to existing shareholders with a ratio of 1:0.7, meaning that a shareholder owning one share will have the right to buy 0.7 additional shares.

It is Habeco’s second public offering after the initial public offering (IPO) in March, 2008.

However, Hanoi Securities Joint Stock Company director Dao Viet Truong said that Habeco’s auction did not seem good in the current market’s situation.

“Currently, many companies also plan to issue more shares for their shareholders while many banks have found ways to mobilise capital by pushing up short-term interest rates. Therefore, it appears to be quite difficult for the auction to see good results,” Truong said.

Another director of a securities company said that VND32,000 was not too-high a price. However, the investors’ attention must be based on its financial potential and earnings per share.

“The price Habeco gives in this auction is suitable for its financial data and situation, which was discussed with the Ministry of Industry and Trade (MoIT) and Carlsberg, its strategic partner with a 15.77 per cent stake,” said the Habeco spokesman.

Meanwhile, Habeco’s deputy general director Nguyen Tuan Phong said its strategic partner always wanted to raise its stake in Habeco. However, according to the memorandum of understanding between Habeco and Carlsberg in September, 2009, Carlsberg would not be allowed to own Habeco’s stake exceeding 30 per cent.

Currently, Habeco’s market share is 15 per cent, behind Sabeco with 35 per cent. Habeco is the market leader in the northern Vietnam, where Carlsberg is present through its brewery joint ventures in Hanoi and Halong.

The increased partnership will provide opportunities for both Habeco and Carlsberg to further strengthen their market positions in northern Vietnam, but also in central Vietnam, where Carlsberg is a market leader through its brewery joint venture in Hue.

In the first six months of this year, Habeco’s beer production output reached 241 million litres, up 28.1 per cent against the same period last year, and accounted for 41.9 per cent of the year’s plan.

In the remaining six months of 2010, the company is expected to reach VND2.86 trillion ($150 million) in industrial production value, and beer and wine production outputs of 328.3 million litres and 17.3 million litres, respectively.

PV