Ho Chi Minh City skyscraper opens observation deck

 

Ho Chi Minh City’s tallest building, the 68-story Bitexco Financial Tower, has opened its Saigon Skydeck to offer visitors a panoramic view of the city.

 

Eight telescopes have been installed on the 49th floor, while a restaurant and bar will open in April.

 

The service is now available from 1 pm to 9 pm on weekdays and 10 am to 10 pm at weekends. Tickets cost VND200,000 for adults and VND130,000 for children.

 

The 262-meter building is on Ngo Duc Ke, District 1.

Shares up in HCM City, down in Ha Noi

 

Increases in some major blue chips helped lift the VN-Index by 0.74 per cent today to close at 517.87 points, although losers outnumbered gainers by 144.67 overall.

 

Value of the day's trades decreased nearly 7 per cent on the HCM City Stock Exchange, reaching almost VND826 billion (US$39.3 million) with nearly 33.4 million shares changing hands.

 

Of the 10 largest capitalised shares, six – Vietinbank (CTG); Phu My Fertiliser (DPM); property developers Hoang Anh Gia Lai Group (HAG) and Vincom Co (VIC); PetroVietnam Finance (PVF) and Bao Viet Holdings (BVH) – all posted strong gains today, with the two latter hitting their ceiling prices.

 

Electricity shares, which were the largest gainers yesterday, retreated today with the exception of Thac Mo Hydro Power (TMP), which rose 0.9 per cent. Vinh Son-Song Hinh Hydropower (VSH), Pha Lai Thermal Power (PPC) and Khanh Hoa Power all faced losses.

 

The power price adjustment scheme, proposed by the Ministry of Industry and Trade, was submitted to the Government yesterday for approval. In March, electricity prices are expected to increase by 18 per cent, or VND160 ($0.008) per KW/h.

 

Logistics company Thuan Thao Corp (GTT) was the most active stock on the southern bourse today with 2.46 million shares changing hands, but it closed down 2.3 per cent to VND8,400 ($0.4) per share.

 

On the Ha Noi Stock Exchange, the HNX-Index fell 0.68 per cent to finish at 106.65 points.

 

Both market volume and value remained sluggish with just nearly 26.2 million shares worth VND452.6 billion ($21.6 million) exchanged.

 

Decliners outnumbered advancers by 194-77.

 

Kim Long Securities (KLS) continued to be the most heavily-traded stock on the northern bourse with over 1.68 million shares traded. But it closed down 1.3 per cent to VND15,000 ($0.71). –

 

Dong devaluation pushes prices up

 

The devaluation of the Vietnamese dong has already pushed the cost of a number of products up.

 

Tour operators announced an increase in prices for outbound tours just a few days after the State Bank of Viet Nam (SBV) announced it was devaluing the dong by 9.3 per cent against the US dollar last Friday.

 

The increase had been from between 5 and 7 per cent since Monday, a representative from Ben Thanh Tourist said.

 

Head of the company's Outbound Department Ta Thi Cam Vinh said that customers who had booked tours before the announcement by the SBV would not be affected. In those cases, her company would accept the loss.

 

The new exchange rate had forced companies to change their tour prices, she added.

 

The Lua Viet Travel Company shared that it was also facing difficulties buying dollars from banks.

 

The exchange rate on the black market was so much higher that the company had to increase its outbound tour prices by 10 per cent.

 

Meanwhile, Saigontourist said it was trying to maintain prices until April, but the exchange rate adjustment was still impacting on the cost of tours, as the prices were in dollars.

 

While many companies have increased prices, others are accepting losses or a cut in profits.

 

A representative from Fiditour said his company did not have any plans to increase prices. The company sold tours in Vietnamese dong and would continue to apply the old exchange rate.

 

The company had to accept losses to keep customers, he added.

 

Vietravel and TST Tourist also committed to maintaining existing prices. They also sell their tours in Vietnamese dong.

 

Like tour operators, car importers and assembly companies announced their would be a price increase.

 

Last Friday, Hyundai Thanh Cong (official importer of Hyundai Company in Viet Nam) sent a memo to resellers instructing them to increase prices by up to VND78 million per vehicle.

 

Other companies such as Toyota, Honda, Truong Hai and Mercedes said they were considering how they would respond to the move.

 

They said that higher prices were unavoidable because they had pay for imported cars and spare parts in dollars.

 

The cost of electrical goods is also likely to increase.

 

Dinh Anh Huan, Director of thegioidientu.com said his company had been forced to increase the cost of products such as Samsung and Sharp by 5-10 per cent from Monday.

 

Huan also said that most electrical shops and centres were still selling previously-imported products so that they had not had to increase prices yet.

 

The new prices would only be applied when shops imported new products to serve the demand on National Liberation and Labour Days which fall at the end of April.

 

Gov’t prioritizes training for key industries

 

The country’s most important strategic tasks for 2011 will include providing high quality vocational training for workers in key economic sectors and zones as well as vocational training for rural workers.

 

The Deputy Director of the Vocational Training Directorate under the Ministry of Labour, Invalids and Social Affairs (MoLISA), Cao Van Sam, said that his agency will focus on the high demand for recruitment in the fields of mechanical electronics, welding, computer programming, electronics, garments & footwear, finance & banking, food processing, management, human resources, carpentry & fine arts, home décor, construction and architecture.

 

The agency will also invest in training for seasonal jobs such as caretakers, cleaners and salespeople, he said, adding that it is looking towards a joint training model for schools and businesses that provide on site vocational training and human resources.

 

According to the MoLiSA’s vocational training development project between now and 2020, the country’s key industries will need around 800,000 trained workers, including 530,000 for the garments sector, 151,000 for the electricity sector, 50,000 for the shipbuilding industry and 15,000 for machinery assembly industries.

 

Air Mekong to begin Hanoi-Phu Quoc service

 

Air Mekong said Thursday it will launch the first ever direct service between Hanoi and Phu Quoc island April 28.

 

The Kien Giang-based carrier will use a 90-seat Bombardier CRJ 900 aircraft for the daily service which will leave Hanoi at 6:00 am and return at 12:40 pm.

 

A round ticket will start at VND2.27 million (US$115.7) exclusive of taxes.

 

Between February 10 and 14 Air Mekong will operate four additional flights on the Hanoi-Ho Chi Minh City route every day, increasing the number to seven.

 

It also plans to double its weekend service on the Hanoi-Da Lat route to two flights a day and expand services from HCMC to Con Dao, Pleiku, and Phu Quoc this summer.

 

The carrier suspended its daily HCMC-Danang service last week. It will consider resuming this route when it received more aircraft, possibly later this year.

 

More grass to be grown for herbivores

 

The livestock sector plans to increase its acreage of pastures from 290,000 ha to 509,000 ha by 2020 in an effort to provide an extra 150 million tonnes of grass for animal breeding each year.

 

Hoang Kim Giao, Head of Livestock Production Department under the Ministry of Agriculture and Rural Development, said the sector will draw up a national plan for producing fodder across the country.

 

The sector is currently creating policies to encourage localities to grow grass on 2-5 percent of agricultural land, provide 100 percent of the initial different varieties for provinces and give farmers access to loans with preferential interests, he added.

 

The animal husbandry sector plays a key role in the rural economy although its turnover makes up only 26- 27 percent of agriculture value each year, said Do Kim Tuyen, Head of the Department of Livestock Breeding’s Cattle Office.

 

Apart from providing natural fodder for animals and fertiliser for the agricultural industry as well as food, the sector intends to generate jobs, increase farmers’ incomes to help ensure food security, eliminate hunger and reduce poverty, he added.

 

The rapid development of the dairy sector over the past 10 years has helped to reduce imports of milk by 15 percent.

 

According to Tuyen, the output of grass and its quality still remain low due to the out of date methods of breeding and cultivation and the fact that stock mainly graze on natural pastures. He added that the areas planted with grass can only meet 10 percent of the fodder needed for animal breeding.

 

Moreover, the shortage of grass has led to poor animal breeding although grass, animal-feed crops and agricultural by-products come to between 60-70 million tonnes per year.

 

Vietnam has over 10 million grazing livestock, of which cows account for 6 million, buffalos 2.9 million and goats and sheep 1.37 million.

 

Securities watchdog calls for making over VN-Index

 

The State Securities Commission of Vietnam has urged the Ho Chi Minh City Stock Exchange to restructure the VN-Index so that it gives more weightage to liquid stocks.

 

Studies show that some companies with a large number of outstanding shares are barely traded though every listed stock is a part of the index.

 

SSC chairman Vu Bang told Tuoi Tre that this means the VN-Index does not adequately mirror the stock market’s movements.

 

He suggested making over the index by having only stocks that are transacted or introducing supporting indices that capture the market trend.

 

Tran Dac Sinh, HOSE director, earlier admitted that many listed shares are rarely traded despite having large numbers of outstanding shares.

 

Nation imports US$160 million in cattle feed

 

Vietnam spent nearly US$160 million importing cattle feed in the first month of the year, replicating 2010’s figures, announced the Ministry of Agriculture and Rural Development.

 

According to cattle feed producers, import value would be much greater due to the importation of corn and wheat for cattle feed processing.

 

Last year, Vietnam spent over US$2.17 billion importing cattle feed and raw materials for processing.

 

Record interest rates hit businesses

 

Interest rates have risen to record levels after Tet, driving businesses into a corner.

 

Banks are now demanding in excess of the 19-20 percent reached at the height of the global financial crisis in 2008.

 

A Long An Province-based feed producer, for instance has negotiated to borrow at 19 percent, a 4-5 percent rise since the middle of last year.

 

So, to cut costs and face the interest rate challenge, the company has cut inventory by 30 percent.

 

Rates are also being hiked for those borrowed earlier.

 

For a VND500 million loan, a customer, who wanted to be unnamed, said he now has to pay VND11 million a month instead of VND9 million earlier.

 

A banker told Tuoi Tre that at these rates, only those with margins of 30 percent can afford to borrow.

 

Most of the businesses are scaling down production, waiting for the rates to fall.

 

But banks are not worried since they are not keen on lending because it is hard for them to attract depositors at low rates. Most have again raised deposit interest rates to above 16 percent if bonuses, gifts, and term-end interests are included.

 

In the event, the lending rates are reasonable, the general director of a commercial bank in HCMC’s District 1 told Tuoi Tre.

 

Jetstar Pacific slashes prices for a day

 

On Friday, February 11, Jetstar Pacific, the low-cost domestic airline, will slash prices for flights departing from April 5 to 20.

 

Tickets from Ho Chi Minh City to Hue will cost VN250,000 (US$12.8).

 

Rates from HCMC to Vinh and Hai Phong will drop to a VND500,000, according to the program that will last until 5 pm Friday.

 

Customers will have to pay extra VND65,000 per sector for the promotional tickets if they want to check in 20 kg-luggage.

 

The tickets will be sold on the Internet at www.jetstar.com using credit cards.

 

Stock market lacks protection instruments: expert

 

The Vietnamese stock market which has recently shown positive signs is still unable to set investors’ mind at ease because experts believe it is negatively dominated by large-capitalization stocks besides a non-existent derivative instrument.

 

Tran Dac Sinh, director of the Ho Chi Minh City Stock Exchange (HOSE) which announces the country’s benchmark VN-Index, said influences by big stocks on the index is somehow inevitable since it has been built on market capitalization, which is a drawback.

 

Dozens of such stocks are now listed on the southern bourse and institutional investors have taken advantage of the defect to control the index to some extent, Sinh added.

 

But he noted that more developed markets have also faced the same problem.

 

It is anyway beneficial when foreign institutions keep investing in those stocks, he added.

 

Sinh said it is not adequate to calculate the VN-Index against all the listed stocks, of which a substantial proportion is held by insiders and government stakeholders.

 

Despite their low liquidity, those stocks do have certain effects on the VN-Index which then may not reflect the market as it is.

 

Every index has its own weaknesses so HOSE is considering introducing some other indices to more comprehensively reflect the market like the VN-Index 30 or VN-Index 100.

 

The Vietnamese stock market lacks financial instruments to protect investors, he confessed, revealing HOSE finished preparing a proposal to develop a derivative market three years ago and submitted it to competent agencies for nearly one year but nothing has happened.

 

It takes time, however, to run such a market since necessary elements like technology, the legal system, and participants’ knowledge are not up to expectations at the moment.

 

It is said that the Vietnamese stock market is expanding in scale but shrinking in liquidity so the introduction of new services can help improve the situation, Sinh said.

 

Some such services include margin trading and the opening of multiple accounts by one investor.

 

Prices surge 15-60% during Tet

 

Prices of commodities increased 15-60 percent during the Lunar New Year, according to the Ministry of Industry and Trade.

 

The price of vegetables and fruits rose 10-50 percent compared to the pre-Tet period, or 10-60 percent year on year, while that of meat and processed goods rose 5-15 percent.

 

While pork increased 5-10 percent in price, the price of beef, chicken and seafood rose 10-20 percent due to surging high demand and the northern harsh cold spell that killed 18,000 cattle, according to the Ministry of Agriculture and Rural Development.

 

In the northern region, beef cost VND180,000 per kilogram, pork price ranged from VND75,000 to VND100,000, and chicken price ranged from VND75,000 to VND130,000. Meanwhile in Ho Chi Minh City, retailed pork were sold at VND65,000-80,000.

 

Beverages, cakes and sweets upped 10-15 percent year on year as their materials’ price increased. Imported materials like wheat powder, cream, cheese and milk rose 25-35 percent year on year.

 

During the past Tet’s holiday week, the municipal market monitors uncovered and imposed fines worth VND2.6 billion for violators, according to the Ministry of Industry and Trade.

 

WB to lend Vietnam $350 mln to reform gov’t policy

 

The World Bank (WB) will lend Vietnam US$350 million in a second phase of a project aimed to help the country’s government develop its public investment policy.

 

The loan comes from two of the World Bank affiliates: US$250 million from the International Bank of Reconstruction and Development (IBRD) and US$100 from the International Development Association (IDA) fund. French Development Agency (AFD), a development fund of the French government, will also provide €35 million (US$48 million) as part of a co-financing scheme with the World Bank for the project.

 

The Public Investment Reform Project seeks to support modern governance in such areas as better planning processes, more transparent procurement and stronger public financial management. It is designed to assist the government of Vietnam to strengthen the selection, preparation, implementation and supervision of public investment projects.

 

The first phase of the project, from Dec 2009 to Sep 2010, received US$500 million of funding from the World Bank and €100 million (US$134.5 million) from the French Development Agency (AFD).

 

Fitch rates stable on Hoang Anh Gia Lai’s finance

 

Fitch Ratings has assigned 'B' for long-term foreign currency and local currency Issuer Default Ratings (IDR) to Vietnam’s leading real estate developer, Hoang Anh Gia Lai Corp. (HAGL), and the outlook for both ratings is stable.

 

However, the international credit rating institution said in its press release that HAGL’s ratings are constrained by its large capital expenditure plans of over US$400 million until the end of 2013. The company plans to diversify away from its core business of residential property development in Vietnam into hydropower generation, iron ore mining and rubber plantations in Vietnam, Cambodia and Laos.

 

This concern is heightened by the company’s high funding costs, with current interest costs of 16% to 17% per annum on its existing floating rate Vietnamese dong denominated loans, reflecting the current high interest rate environment in Vietnam, Fitch said.

 

Furthermore, there are execution risks in the planned expansion as the company has a limited track record in the new businesses which face material regulatory risks.

 

However, Fitch said HAGL has taken steps to address many of these risks. It has plans for a U.S. dollar denominated offshore debt funding, which, if successful, will lower its funding costs and improve its debt maturity profile. Furthermore, the company has recently sold new shares and minority stakes in operating subsidiaries to raise capital.

 

There is also significant flexibility in its capital expenditure plans to reduce, delay or cancel projects as they are modular. Furthermore, many of its projects are being executed with in-house project management and construction know-how, where it has a proven track record in its property development business.

 

In addition, the company has begun selling iron ore domestically at prices not much lower than international prices less export taxes and transportation costs, suggesting that this venture can be profitable even without exports.

 

The ratings are also supported by HAGL's established residential property development business, which focuses on the mid-tier market in HCMC. The company has a sufficient land bank for proposed projects over the next five years.

 

The stable outlook reflects Fitch’s expectation that cash flows from property development would be sufficient to cover funding costs during HAGL's expansion phase until the end 2013.

 

Fitch expects the company’s funds from operations (FFO) interest coverage will range between two to three times during this period.

 

Negative rating actions could be taken if the company’s FFO interest coverage is sustained below two times or if the company does not scale back its capital expenditure without securing longer term lower cost funding.

 

Life Resorts stops management of property in Danang

 

Life Resorts has terminated management of a 5-hectare resort that used to be known as Life Resort Danang in the central city of Danang.

 

At present the Dutch-owned resort management group manages only Blue Ocean Resort in Phan Thiet, Life Heritage Resort in Quang Nam and Life Wellness Resort Quy Nhon in Binh Dinh.

 

Located on Danang beach, with an investment of US$25 million, Life Resort Danang (Life Style Resort Danang now) is a five-star luxury beach front resort in Central Vietnam.

 

The reason for the termination is not known.

 

DHL again wins Best Third Party Logistics in Vietnam

 

For the second year in a row, the not-for-profit organization Supply Chain Community has again picked DHL Supply Chain Vietnam as Third Party Logistics (3PL) Company of the Year in Vietnam in 2010 based on judgment by customers, suppliers and logistics firms as well as senior supply chain directors and academics.

 

The company outperformed over other 10 international 3PLs operating in Vietnam in 2010 to win the title. The judging committee said in a statement obtained by the Daily on Thursday that despite the more competitive landscape DHL was again chosen to be the award winner because the company received positive feedback from multi-sector customers.

 

To retain the title, DHL scored highly across all eleven elements of the judging criteria covering sustained growth rates, customer services, innovative use of IT, complexity of logistic solutions as well as security, sustainability, human resources and contribution to developing local industry standards and capabilities.

 

“Being recognized by clients, peers and the public as Vietnam’s best third party logistics company for the second consecutive year validates our approach to Vietnam and our continued investment which focuses on customers, people, innovation and real estate,” Ryan Tang, country manager of DHL Supply Chain Vietnam, said in the statement.

 

The award recognizes DHL’s continuous investment and capability development in Vietnam. The world’s major logistics company entered Vietnam in 1988 and DHL Supply Chain followed in 2001.

 

Last year, DHL Supply Chain invested US$1.5 million in a large built-to-suit multi-user warehouse at the Inland Container Depot Song Than in Binh Duong Province in order to further help customers cash in on Vietnam’s fast-growing economy.

 

Oscar de Bok, chief executive officer of DHL Supply Chain for South and South East Asia, said that the company was committed to further investing, especially in people as a key to its continued growth and expansion in Vietnam.

 

“We have our sights firmly set on further expanding our footprint through a series of DHL-specified built-to-suit mega distribution centers. These facilities are part of our overall plans to expand DHL Supply Chain’s footprint throughout Vietnam,” he said.

 

Established in 2003, the Supply Chain Community serves as a leading independent platform to support and promote the cross industry collaboration, offering vital link for supply chain and learning opportunity to over 10,000 supply chain professionals in Vietnam.

 

New standards will apply to fisheries soon

 

Vietnam will apply new standards of the UN Food and Agriculture Organization to all processes of fishery development in the country in the first quarter of this year, an official said.

 

“The Code of Conduct for Responsible Aquaculture (COC) will apply. The new standards will step by step replace all of standards that have been applicable in Vietnam,” said Nguyen Tu Cuong, director of the Center for Fishery Consulting and Service under the Vietnam General Directorate of Fisheries.

 

Cuong, who previously served as former general director of the directorate, said the new standards are built on the fishery farming procedures dictated by FAO to ensure four key standards regarding food safety, environment, epidemics and social environment.

 

“This is the set of standards adopted by FAO after a long debate among governments, manufacturers, processors and traders of seafood in the world,” Cuong told the Daily on the phone on Wednesday.

 

Currently, seven different international organizations in Vietnam are issuing safety certificates for seafood products in the country, including the World Wildlife Fund (WWF) and GlobalGap.

 

Therefore, to avoid overlapping standards when the new set of standard is applied, the fisheries directorate and the Ministry of Agriculture and Rural Development would integrate optimum criteria from standards of the above organizations into the new set. 

 

Cuong added that while standard certificates from international organizations are issued at a cost of between US$5,000 to US$10,000, the new standard is free so it will be easily applied for all fisheries, especially Tra fish.

 

“If the new standards apply, the country’s fisheries sector in the future will not face problems like the recent red-listing of Tra fish by the WWF,” Cuong said.