Hanoi Stock Exchange headquarters inaugurated

A new headquarters of the Hanoi Stock Exchange was inaugurated in Hanoi on January 15 in the presence of National Assembly Chairman Nguyen Sinh Hung.

Chairman Hung said, as the Party and State are making efforts to restructure the national economy, the securities market will have more opportunities to grow.

The legislative chief said he hopes the financial sector and the State Securities Commission will facilitate the development of the stock market to turn it into a strong important financial channel for national socio-economic development.

The project was built with the state-of-the-art facilities and has hosted an initial public offering (IPO) of stocks of the Bank for Investment and Development of Vietnam, the first ever largest IPO of a State owned enterprise.

It also held the first bidding of Government bonds in 2012, contributing VND1.88 trillion to the State budget.

Shares bounce back stronger

Shares continued to gain over last week's rally with more improved trading value on both of the country's bourses today.

On the HCM Stock Exchange, with 165 winners out of 280 codes, the VN-Index added 1 per cent over last Friday's session to reach 357.87 points.

The value of trades nearly doubled Friday's level, hitting VND842.4 billion (US$40.1 million) on a volume of 29.4 million shares.

Although most blue chips performed well, insurer Bao Viet Holdings (BVH), Eximbank (EIB) and property developer Vincom (VIC) tumbled between 1.6-2.9 per cent.

Food processor Masan Group (MSN) reached its ceiling price of VND100,000 ($4.7).

Saigon Securities Inc (SSI) was the most active stock in HCM City with more than 1.5 million shares changing hands, edging up 2.9 per cent during this morning's session.

On the Ha Noi Stock Exchange, the HNX-Index marched 1.3 per cent higher, finishing at 57.00 points.

Losers outnumbered gainers by 168-74.

Market value climbed 23 per cent over Friday, totalling VND194.4 billion ($9.26 million). The volume of trades also rose 29 per cent to 25.9 million shares.

With 3.16 million shares exchanged, Kim Long Securities Co (KLS) became the most actively traded stock nationwide. It concluded the session up 5 per cent.

Foreign firms look to invest in cotton sector

Viet Nam Cotton and Spinning Association (Vcosa) said many foreign enterprises from Taiwan, mainland China, Korea and Japan have flocked to HCM City to look into investing in the domestic spinning industry for the past few months.

The companies felt they could benefit from tax exemptions or reductions as Viet Nam begins implementation of the Trans-Pacific Strategic Economic Partnership Agreement (TPP), said the association.

The agreement, which was signed last November, allows members to enjoy a zero tax rate by 2015.

Companies to open representative offices

Foreign enterprises must establish representative offices in Viet Nam to handle trade promotion, according to a new regulation draft in consideration by the Ministry of Industry and Trade.

After the legal file is submitted, the Department of Trade Promotion under the ministry will have 20 days to make a final decision on the licences for foreign trade promotion organisations.

If a representative wants to halt operations, the office in question must submit an application to the department at least 60 days before the expected closing date.

Hai Phong targets growth of up to 13%

Hai Phong's industry and trade sector plans to reach total export and import turnovers of US$2.78 billion and $2.79 billion this year, equivalent to an increase of 20 and 18 per cent, respectively.

The sector also aims to grow from 11.7 to 12.7 per cent in index-industry products (IIP).

Retail sale values are expected to reach VND52 trillion ($2.47 billion), a rise of 23 per cent.

Last year, many key industries experienced slow growth such as cement, iron and shoes, the Department of Hai Phong Industry and Trade added.

Deal inked for new thermo-power plant

The Power Engineering Consulting Company No2 (PECC2) of Electricity of Viet Nam Group and Malaysia-based Toyo Ink Group signed a contract in HCM City on Wednesday to provide consultancy for drafting the Song Hau 2 Thermo-Power Plant project.

Its signing followed a Memorandum of Understanding between Toyo Ink and PECC2 in 2009.

The plant, located at Song Hau Power Centre in southern Hau Giang province, will have a capacity of 2,000 MW annually and will be operational by 2018.

HCM City apartment prices decrease by 10 per cent

Prices for HCM City apartments have decreased by an average of 10 per cent compared to previous quarters, said Director of Price Evaluation and Consultancy at Knight Frank Colin Luff.

The reason for the decrease was low liquidity in the property market when investors were scheduled to repay their bank loans, Luff said.

The city's market offered 2,200 apartments last quarter with the middle market segment accounting for 66 per cent of the total.

Property centre to provide market information mooted

The municipal Construction Department has submitted a proposal to the Ministry of Construction and relevant agencies to establish a central-level centre for property market information and forecasting.

Establishment of a central-level centre would provide a foundation for localities to set up their own centres.

The centre would be used to forecast the market situation and promulgate policies to manage and develop the market, the department said.

A lack of mainstream information was one of the causes of market speculation, so the centre would boost the health of the market and help avoid speculation, it said.

Ha Noi unlikely to reach low-income housing target

The municipal Construction Department said the capital would not reach its Government mandate of providing 15,000 apartments for low-income earners by 2015.

The situation was due to limited capital resources combined with the fact that the country had no established guidelines for low-income apartments in terms of design standards, technologies and scale, it said.

Department figures showed that approvals to construct 11 low-income projects with more than 11,700 apartments had already been given. When complete, the apartments will provide housing for nearly 40,000 people.

Insurer PetroVietnam Holdings sees profits rise 34% in 2011

Insurer PVI Holdings (PVI) has estimated last year's earning at VND5.2 trillion (US$247.6 million), a 15 per cent increase over 2010 and exceeding the 2011 target by 6 per cent. Profit last year rose 34 per cent to VND450 billion ($21.4 million). PVI aims this year to earn VND6.5 trillion ($309.5 million) and post a profit of VND700 billion ($33.3 million), with plans to pay a 15-per-cent dividend.

Japanese bank completes acquisition of 15% stake in Vietcombank

Vietcombank (VCB) has announced completion of its sale of a 15-per-cent stake to Japan's Mizuho Bank for a cost of over VND11.8 trillion (US$561.9 million). Nearly 348 million shares were sold at VND34,000 ($1.60) per share. Following the transaction, Vietcombank's charter capital was increased from VND19.7 trillion ($938 million) to nearly VND23.2 trillion ($1.1 billion).

The State Bank of Viet Nam still holds the major interest in Vietcombank, controlling over 77 per cent of equity in the lender.

Unlisted cement pile producer sells shares to Japanese investor

Cement pile producer Phan Vu Investment Co has filed to sell 5 million shares to Japan Pile Corporation, which operates in the cement and hydraulics sectors.

Phan Vu shares are traded on the unlisted public company market (UPCoM). The company has charter capital of VND150 billion (US$7 million).

French-funded transport projects to be speeded up

Minister of Transport Dinh La Thang said yesterday Viet Nam would speed up construction work on traffic projects partly funded by France.

He made the statement while meeting French Minister Of Ecology, Sustainable Development, Transport and Housing Thierry Mariani, who is on a three-day visit to Viet Nam.

Work on improving and upgrading the Yen Vien-Lao Cai railway and modernising the signalling system on the Ha Noi-Vinh railway has falling behind schedule, as has construction of the road tunnel through Ca Mountain Pass and a number of co-operative programmes on air transport.

The two ministers agreed to focus on overcoming difficulties incurred regarding capital investment in order to complete the projects as quickly as possible.

The two ministers also agreed to strengthen co-operation on infrastructure development through Public-Private Partnership programmes, with France providing financial aid. The two ministers are also looking to increase the number of flights between France and Viet Nam and to step up training of Vietnamese air and rail workers.

Deputy Prime Minister Hoang Trung Hai yesterday also received the French Minister.

Restructuring helps improve agricultural effectiveness

The restructuring of State-owned enterprises (SoEs) in the agricultural sector has helped improve their effectiveness in spite of difficulties caused by the world economic crisis, concluded a workshop held on Thursday to review business performance in 2011.

The Ministry of Agriculture and Rural Development reported that it equitised 14 SoEs last year with 10 businesses holding 51 per cent of the stake.

Four equitised holding companies - Viet Nam Northern Food Corporation, the Viet Nam Southern Food Corporation, Viet Nam National Coffee Corporation and Viet Nam Rubber Corporation - had a total revenue of more than VND42.1 trillion (US$2.02 billion) last year, up 14.8 per cent from 2010.

The agricultural sector plans to continue equitising four more parent companies and six businesses this year, following guidelines set out by Prime Minister Nguyen Tan Dung.

Nguyen Phu Doanh, Deputy Head of the Government Board for Enterprise Renewal and Development, said in 2012 it would be essential to examine difficulties in the capital and stock markets and also in the production of businesses that are seeking to be equitised.

Viet Nam aims to restructure and renew more than 1,300 SoEs in the next five years.

Falling demand to hit production
 
The General Statistics Office urged producers to be cautious as both production and consumption have been forecast to face difficulties this year.
 
The office reported that last year's consumption index of the manufacturing industry surged 15 per cent over the previous year's, while its inventory index rose sharply by 23 per cent.

"Within manufacturing inventory indices, pottery surged up to 96.8 per cent compared with 64.1 per cent for cement, 57 per cent for fertiliser, 55.6 per cent for plastic products and 53 per cent for paper products," noted the office.

The inventory indices of vegetable and fruit processing, tobacco, the auto industry, livestock feed, steel and iron, seafood processing and cloth production also surged sharply – ranging between 25-49 per cent.

Statistics from the first three quarters of 2011 also showed that the total inventory volume of listed enterprises surged more than 30 per cent over the same period of the previous year.

Vu Dinh Anh from the Ministry of Finance's Institute of Finance and Price attributed the high inventory index to the decrease in demand due to high inflation, which caused local consumers to tighten their belts.

Anh also anticipated that the country's economy this year would face not only high inflation but also a further slowdown in production and consumption.

"Falling consumption will cause production to decline. The commodity shortage will in turn bring about a rise in imports and smuggling," Anh said.

To aid producers, experts have recommended that the Government cut interest rates, which would help lower input costs.

Former Governor Cao Sy Kiem said if the high interest rates lasted an additional five or six months, a series of enterprises would go bankrupt and others would be placed under significant strain. Now was the time to lower the lending interest rates, Kiem said.

Prime Minister Nguyen Tan Dung in a recent meeting with the banking industry also required the State Bank of Viet Nam to cut interest rates starting early this year, as inflation was kept under 1 per cent for the past six months.

S&P affirms Vietcombank’s stable rating

Standard & Poor’s Ratings Services (S&P) has upgraded its long-term rating of the Bank for Foreign Trade of Vietnam (Vietcombank) to stable from negative.

According to its announcement on January 13, S&P affirmed ‘B+’ counterparty credit ratings on Vietcombank and revised the stand-alone credit profile (SACP) of the bank to ‘b+’.

Ivan Tan, an S&P analyst, said the improvement of Vietcombank’s capital position was attributed to the acquisition of a 15-percent stake in the bank by Mizuho Corporate Bank Ltd of Japan (MCB).

“We no longer factor extraordinary government support into the rating on Vietcombank,” he said, “We revised Vietcombank’s SACP to reflect the bank’s improved capital position after the MCB deal.”

“We believe that Vietcombank’s more moderate loan growth following the Vietnam government’s credit tightening measures will support the bank’s capital sustainability. We expect that the bank will continue to strengthen its balance sheet through higher retained earnings contributions and sensible dividend payouts,” Tan elaborated.

“Vietcombank’s capital and earnings are weak, in our view,” said Tan. “Following MCB’s capital injection, we expect Vietcombank’s risk-adjusted capital ratio before diversification adjustments to be between 4.5-5 percent in the next 18-24 months.”

According to the S&P analyst, the alliance with MCB will provide Vietcombank with enhanced products and services, and accelerate the alignment of the bank’s risk management system and processes with international best practices.

“The stable outlook reflects our expectation that Vietcombank will maintain its strong market position and its financial profile despite challenging conditions and high inflation in Vietnam,” he added.

Garment exports to hit US$15 billion in 2012

The garment and textile sector aims to achieve export earnings of US$15 billion in 2012, despite a predicted 15 percent fall in orders from major markets compared to last year.  

Chairman of the Vietnam Textile and Apparel Association (VITAS), Vu Duc Giang, said this year the US, EU and Japan will remain the sector’s major export markets, accounting for 80 percent of export revenues.

However, the sector will face numerous challenges due to difficulties in the national economy, the global economic downturn and the public debt crisis in the EU, he said.

Businesses should promoting trade in new and potential markets to cover the shortage of traditional orders, he said.

In 2011, the sector earned US$15.6 billion from exporting its products, up 38 percent against 2010, its highest growth in the past five years.

This was mainly attributed to the increase of orders from traditional markets including the US (14 percent), EU (41 percent) and Japan (52 percent). Moreover, a 12-percent price increase was an additional factor.

Exports to some emerging markets like the Republic of Korea (RoK), Taiwan and Canada also helped raise export earnings. Most notably, exports to the RoK in the first ten months of 2011 soared by 128 percent over 2010 to hit US$753 million.

Improving small and medium businesses’ capacity

The Vietnam Association of Small and Medium Enterprises (VINASME) on January 13 held a seminar in Hanoi to improve its capacity building of trade policy.

The seminar, part of the Multilateral Trade Assistance Project III, aims to discuss ways to iron out snags and create favourable conditions for business and production activities, as well as to seek markets, boost trade, and promote the connection between the State and the private economic sector.

VINASME Deputy General Secretary Vu Van Dung said that through the project, his association has proposed issues related to trade policy, focusing on income tax, land rental price, bank interest rates, and a roadmap to establish a credit guarantee fund.

The association has also held 15 training courses to help business owners improve their management capacity and business skills, and increase their awareness of social responsibility, he said.

Dinh Thi Lien, Vice President of the Vinh Phuc provincial Business Association, said the project has helped provide businesses with information on trade policy.

To Hoai Nam, VINASME Vice President and Secretary General, predicts that in 2012, small- and medium-sized businesses will face various challenges, still finding it difficult to access capital resources due to complicated procedures and high interest rates.

According to participants, if Vietnam considers small and medium businesses a key sector to reduce poverty and ensure social welfare, it is necessary to reduce administrative procedures to help the businesses access capital.

10 million cubic metres of petroleum to be imported in 2012

The Ministry of Industry and Trade (MoIT) has provided the minimum import quota of petroleum to 13 import and export businesses in 2012.

Accordingly, total import quota of different types of petroleum will be more than 10 million cubic metres including petrol, diesel, fuel oils (FO), kerosene and jet fuel.  

The Vietnam National Petroleum Group (Petrolimex) has been given the most import quota with around 5.840 million cubic metres while the PV Oil with more than 1.26 million cubic metres.

The MoIT also asked businesses to consider the import plan of petroleum to ensure the supply source for the domestic market based on the supply from the Dung Quat Oil Refinery.

Thai logistics company expands investment in Vietnam

Thoresen Thai Agencies plans to expand its activities in the south of Vietnam in order to become a logistics service provider in the country.

According to the Thai daily newspaper Bangkok Post, the company has invested more than US$30 million in the Vietnamese market where its two branches, namely Baconco Ltd and Thoresen-Vinama Logistics Co (TVL), are operating.  

TVL has been licensed to operate in logistics and its 16,000 square-metre facility has been inaugurated recently near Phu My Industrial Park.

The President and Executive Director of Thoresen Thai Agencies, M.L. Chandchutha Chandratat, said that the company has gained remarkable results from investment projects in Vietnam. He expressed confidence that logistics services and other business activities will meet the requirements of customers.

Meanwhile, the President of the TVL and Baconco Ltd Management Board, Sigmund Stromme, said that demand for logistics services has increased rapidly and the company will continue to invest in projects in Phu My IP in the coming time.

Senior expert optimistic about lower bank rates

The lending interest rates could be trimmed to 15-16 percent, 4 percent lower than the current figure, if the inflation rate is brought down to 9 percent in 2012, says a senior financial expert.

If the Government’s anti-inflation measures continue to pay off, the lending interest rates could be even reduced to 13-14 percent/year, Vu Viet Ngoan, chairman of the National Financial Supervision Committee, told Vietnam Investment Review on January 13.

Such rates would benefit depositors, banks, borrowers and especially the national economy, because low capital costs stimulate investment and economic growth, increase budget collection and generate more jobs, Ngoan explained.

According to the expert, the world’s GDP in 2012 is forecast to grow 2.4-3.2 percent, much lower than the 4 percent level in 2011 and as a result, demand for materials will decline, causing the prices of materials to go down as well.

Vietnam imported US$105.8 billion worth of materials last year, equivalent to 89 percent of its GDP, and a fall in global market prices would reduce pressure on inflation, said Ngoan.

The expert predicted that the inflation rate in 2012 would hover around 9 percent, offering a good opportunity for commercial banks to lower loan and deposit interest rates.

Saigontourist focuses on high-grade hotel projects

Saigontourist Holding Company deemed hotel services an important business field, along with travel and restaurant, and will place its focus on developing and upgrading three- to five-star hotel projects.

Such a business target was mentioned at the conference to review the company’s business in 2011 held on Wednesday in HCMC.

The country’s leading hospitality company is active in several fields, including hotel-resort, restaurant, travel services, export-import, transport, construction, office leasing, tourism training, and foodstuff production and processing. Each year, the company spends some VND1 trillion, or some US$450 million, in these areas.

Tran Hung Viet, general director of Saigontourist, said the firm would invest in its core fields, namely hotel, tourism, and restaurant services, which are bringing in good business results.

“Between 2012 and 2014, we will prioritize investments in these three fields, and will notattend much to others like construction or food processing,” Viet told the meeting.

Saigontourist is completing procedures to invest in and design dozens of hotel projects in HCMC and other popular tourist attractions like Hanoi, Nha Trang, Sapa, and Con Dao.

Large projects will be concentrated in HCMC, such as the project to expand the exhibition space and develop five-star hotel area at the Saigon Exhibition and Convention Center in District 7, the five-star Saigon-Gemadept Hotel and Kim Do Hotel Complex in District 1, and Saigon Sports Hotel in District 11.

“Saigontourist will promptly put these projects into operation and pay special attention to the constructions in HCMC and other localities with high tourism potentiality,” said Viet.

He added investments in HCMC would be higher on the agenda, as “investments in the city cost trillions of Vietnam dong for each project, but such facilities can be put into operation right after completion and help us recoup investment.”

In 2011, the company achieved good business results with hotel and restaurant services. Some 1.25 million of the total 1.6 million tourists going on tours operated by Saigontourist last year chose to stay in the company’s hotel system, contributing to the average hotel room occupancy of 65%.

Saigontourist is operating eight travel agencies, 54 hotels, 13 resorts and 28 restaurants. The enterprise has also invested in 50 local joint stock and limited liability companies and nine joint ventures with foreign capital contribution.

The total revenue of Saigontourist last year was over VND11.3 trillion, rising 14.6% over 2010, with the total gross profit of nearly VND3.5 trillion, or a year-on-year increase of 10.9%.

* The Grand Hotel has put a new building into service on a trial basis, paving the way for it to become the five-star hotel after a four-year upgrading duration at a total cost of VND700 billion.

The new building with 130 rooms has been opened on a pilot basis since last month with a range of guest services, said Nguyen Dang Tien, general manager of the Grand Hotel. Besides, the hotel is preparing next phases for the official inauguration in the coming time.

“The newly-added area has brought the hotel a revenue of VND5 billion with a high room occupancy reaching over 70% over the past month. We hope that it is set to become a five-star hotel in this April,” he continued.

The Grand Hotel under Saigontourist Holding Corporation is renovated on the basis of the old building built in the 1930s. As a five-star hotel, the Grand Hotel covers 2,780 square meters on Dong Khoi Street in downtown area.

The 20-storey hotel has 230 rooms, five restaurants, two parking lots and A-class shopping stores.
 
Work starts on new bridge in Dong Nai

Vietnam Railway Corporation (VRC) on Wednesday kicked off construction of a new bridge for vehicles instead of using the Ghenh railway bridge in Dong Nai Province.

This is one of the three new bridges constructed as required by the Prime Minister to avoid overland transport means using the same bridge with trains.

Speaking at the commencement ceremony, Tran Van Vinh, vice chairman of Dong Nai Province, said Ghenh Bridge was built over 100 years ago and has now deteriorated severely despite having been upgraded several times.

A fatal accident last February made some iron bars bended, making the bridge weaker, he added. The accident was caused when several vehicles were stuck on the bridge and was collided by an approaching train, killing several people.

Currently, the volume of transport on Ghenh Bridge is rising, making it difficult to control vehicles’ load when crossing the bridge and posing huge accident risks. Therefore, it is necessary to build a new bridge to ensure traffic safety on Ghenh Bridge.

The new bridge being constructed, 1.5 kilometers long and 18 meters wide, will connect Buu Hoa and Hiep Hoa wards. Having four lanes, the new bridge invested by VRC with a total investment of around VND600 billion taken from the State budget will be completed after one year.
 
Australian realty firm explores investment prospects in Vietnam

Australia’s Empire Property Investors is seeking opportunities to invest in local property projects and enter the real estate services market as part of a plan to spread its wings outside Australia.

Jack Tran, director of Empire Property Investors, made known the company’s intention at a seminar on the firm’s business opportunities in Vietnam and Australia held in HCMC on Thursday.

With 24 years’ experience in the realty sector, Empire Property Investors will expand property investment, development and management services to Southeast Asian countries in the next three years, with Vietnam being the first destination, Tran said.

He informed the company would prioritize investment in three major fields: housing, hotel-resort and commercial center. The company is eyeing the housing and hotel segments in HCMC initially to gauge the market.

The firm is now conducting market research, and will seek partners to develop projects in Vietnam if possible, said Tran.

Regarding the housing market, CB Richard Ellis Vietnam’s (CBRE) market survey for the fourth quarter last year shows that the low-cost apartment segment saw prices stabilizing though the economy was still facing many challenges.

Marc Townsend, managing director of CBRE, said there are fewer speculators and investors in the low-cost apartment segment. The major demand of this segment is sourced from buyers for residential use, so transactions are reflecting the actual demand of house buyers.

According to CBRE, investors have finally realized the actual demand of the market, as over a half of the apartments going onto the market in the last quarter belonged to the low-cost segment.
 
Traders to be held responsible for petrol quality

Petroleum traders nationwide will be held responsible for all petroleum products in their distribution system, said Minister of Industry and Trade Vu Huy Hoang.

The move is aimed to ensure that all petroleum products meet quality standards in a bid to ensure consumer safety amid rising controversy over a recent spate of vehicle fires, Hoang explained.

To realise this target, petroleum wholesalers must heighten their oversight over their entire petrol distribution systems. Only standard petroleum products will be allowed to be sold in the market, the minister insisted.

More attention should be paid to petrol importation, blending, storage, transportation and retail sale, he added.

As part of efforts to ensure that standard petroleum products are sold to consumers, the Ministry of Industry and Trade’s Department of Market Management has requested market watchdogs nationwide to crack down on all street side petrol sale stalls.

The move came after 1,600 litres of diesel of the Petroleum Machanical Joint Stock Company (PMS) was seized at three illegal petroleum blending stations in Ho Chi Minh City’s District No. 7, said the department’s Deputy Director Vo Van Quyen.

According to Quyen, further investigations are underway to resolve the situation.

The ministry has required the state-owned Vietnam National Petroleum Corp (Petrolimex), the holding company of PMS, to clarify the responsibility of those involved in the scandal, ranging from top leaders to drivers.