Vietnam is world’s 14th biggest economy in 2050

 

Vietnam is to be the world’s 14th biggest economy by 2050 with GDP’s growth rate at 8.8 percent - the highest in the world - when measured against purchasing power parities (PPP), said PricewaterhouseCoopers.

 

According to a forecast by the UK financial consulting firm, Vietnam’s GDP is projected at US$3,939 billion by 2050.

 

The ranking that takes into account price differences among countries means the Vietnamese economy will be bigger than developed nations like Italy, Canada, South Korea, and Spain.

 

The Southeast Asian country’s average annual real growth rate in GDP between 2009 and 2050 is estimated at 8.8 percent, the highest in world.

 

China’s GDP is expected to grow 5.9 percent on the average while its rival India is predicted to achieve an 8.1 percent rise during the same period.

 

At present, nine out of the ten biggest economies in the world as measured by market exchange rates are developed nations. But by 2050, according to PricewaterhouseCoopers, that number will slump to just four with the US at number two behind China, Japan at 5, Germany at 8 and the UK at 9.

 

When using PPP, the decline in the west happens even more quickly with the US falling to third behind China and India by 2050 and the UK in 10th place, one place below Germany.

 

Vietnam has just been rated the world's 139th freest economy in a 2011 ranking released Wednesday by the U.S.-based Heritage Foundation, up from 144th last year.

 

VN-Index wraps week in green

 

Vietnam’s benchmark VN-Index rebounded for three consecutive trading sessions on January 14 as most blue-chip stocks rallied.

 

The measure of 279 companies and five mutual funds listed on the Ho Chi Minh Stock Exchange jumped 1.05 percent, or 5.10 points, to finish at 489.22 points.

 

On the measure, 159 stocks advanced, 54 retreated, while 71 remained unchanged.

 

Trading volume on the city bourse improved by 40 percent over the previous trading session as around 41.5 million shares changed hands at a value of VND1.06 trillion this morning.

 

Tan Tao Investment Industry Corporation (ITA) won the position of most active share in volume with 2.61 million shares changing hands.

 

It was followed by Saigon Securities Inc. (SSI), the country largest brokerage, with 1.48 million shares.

 

Sacom Development and Investment Corporation (SAM) came in third with 1.34 million shares traded.

 

Dong A Plastic Group Joint – Stock Company (DAG), Lilama 10 Joint Stock Company (L10), and Vien Dong Investment Development Trading Corporation (VID) all sprang the daily maximum allowed limit of 5 percent to VND16,800, VND23,100, and VND10,500 respectively.

 

Rang Dong Light Source and Vacuum Flask Joint Stock Company (RAL) climbed for three straight days, gaining 4.98 percent to VND23,200.

 

Hoang Quan Consulting – Trading – Service Real Estate Corporation (HQC), Royal International Corporation (RIC), and Sacom Development and Investment Corporation (SAM) all advanced 4.97 percent to VND40,100, VND16,900, and VND19,000 respectively.

 

Stationery producer Thien Long Group Corporation (TLG) sank 5 percent to trade at VND28,500.

 

Duc Long Gia Lai Group Joint Stock Company (DLG) slashed 4.93 percent to VND27,000.

 

Transforwarding Warehousing Joint Stock Corporation (TMS) dropped 4.64 percent to VND26,700.

 

The smaller bourse in the north also slightly rose as the Hanoi’s HNX-Index added up 0.59 percent, or 0.63 points, to close at 108.05 points. Trading volume faintly recovered as just around 26 million shares were traded at nearly VND465 billion.

 

The UPCoM-Index inched up 0.37 points to 45.11. A total of 120,000 shares changed hands at VND1.6 billion as of 11:20 am local time.

 

Thais tie down giant refinery plans

 

Two Thai investors are taking another step closer to developing giant oil refinery and power plants in central Binh Dinh province.

 

Rayong Purifier Public Company will build an oil refinery with total annual capacity at three million tonnes and STFE Company will build a 700 megawatt thermal power plant in Nhon Hoi Economic Zone’s non-tariff area.

 

The two companies also signed a memorandum of understanding with Binh Dinh People’s Committee for developing the projects, which were initially proposed last July.

 

“The project site agreement is considered as an approval in principle for the two energy projects, that will allow the investors to conduct other steps,” said Man Ngoc Ly, director of Nhon Hoi Economic Zone Management Authority.

 

According to the memorandum of understanding, Rayong Purifier Public Company will pump $120 million into the oil refinery plant in the first stage, which is planned to break ground in July, 2011. The construction of this project will be implemented within two years.

 

The Thai company announced the new refinery’s capacity could be raised to eight million tonnes per year in the second stage of the project.

 

Rayong Purifier Public Company, founded in 1995, is now operating an oil refinery at Map Ta Put Industrial Estate in Thailand’s Rayong province. The refinery has a production capacity of 17,000 barrels a day, or 80 million litres per month. This company has also invested in petrochemical factory in southern Can Tho city.

 

Once licenced, Rayong Purifier Public Company’s project will be the sixth oil refinery factory in Vietnam. The other projects are located in Thanh Hoa, Quang Ngai, Phu Yen, Can Tho and Ba Ria-Vung Tau. But, only the refinery in Quang Ngai province is operating with annual refining capacity of 6.5 million tonnes.

 

Russia’s ALT Group is also seeking opportunity to build an oil refinery in Nhon Hoi Economic Zone. However, the company has not yet conducted a feasibility study for the project.

 

STFE Company plans to invest $850 million into a power plant, covering 60 hectares. It will import coal from Indonesia and Australia for the plant.

 

However, Ly said the investor had to wait for the governmental approval because the project was not in the nation’s power development master plan.

 

He said those two projects could be granted investment certificates because of the rising energy demand in Vietnam.

 

Vietnam has been encouraging foreign investors to build oil refineries and power plants, to reduce its reliance on petroleum imports and ease severe electricity shortages.

 

Mekong Delta to export 5.5 mln tonnes of rice in 2011

 

Mekong Delta provinces plan to export 5.5 million tonnes of rice in 2011, making up 90 per cent of the country’s total volume.

 

They will focus on Asian, African, EU and northern American markets.

 

To reach the target, the province plan to raise rice acreage to 3.8 million hectares for an output between 21-22 million tonnes of rice, ensuring surplies for processing for exports.

 

In addition, they will also focus on improving seedling quality, warehouse, market forecast and trade promotion of local rice.

 

In 2010, the region exported 5.6 million tonnes of rice, earning $2.6 billion.

 

Ha Noi banks target 27% rise in capital

 

In 2011, Ha Noi's banking sector targets to increase total capital mobilisation by 25-27 per cent compared to the previous year's figures and boost total outstanding loans by 23-25 per cent to contribute to the capital's economic development.

 

Hoang Manh Hien, vice chairman of the Ha Noi People's Committee, said Ha Noi targeted a 12-per-cent GDP (Gross Domestic Products) growth this year and to complete such a high target needed support from all ministries and especially the banking sector.

 

As of December 31, total mobilisation of Ha Noi-based credit institutions surpassed VND767.68 trillion (US$36.55 billion), a year-on-year increase of 31.1 per cent, which exceeded the annual target with a 28-30 per cent increase.

 

Deposits in dong (VND) were up by 38.6 per cent and US dollar (USD) deposits increased 12.5 per cent.

 

Last year, there were VND494.77 trillion in total outstanding loans, a 31.2 per cent increase over the same period in 2009. The amount exceeded the 2010 target of 25-27 per cent growth. Dong loans rose by 25.1 per cent and foreign currency loans increased by 46.7 per cent.

 

Hien said he appreciated the contributions that local banks made to Ha Noi's economic achievements last year, particularly with the capital's 11-per-cent growth in GDP.

 

"Providing sufficient capital to the economy and professional activities, along with the social programmes instituted by banks, have helped to develop a solid economic structure for the capital, creating momentum for rapid and strong growth in the following years," said Hien.

 

He stressed the important support provided by local banks that helped to create a sound and sustainable economic infrastructure, especially by boosting lending to rural areas, exporters and medium and small enterprises.

 

Since last November when interest rates tended to rise abnormally, the central bank's Ha Noi branch and bankers' association jointly called for consensus from 12 commercial banks in the area to limit interest rate hikes, which would help to stabilise the currency market.

 

Last year, commercial banks in the locality also focused on developing new and modern banking services. To date, 3,248 state-owned units in Ha Noi opened 158,048 bank accounts for employees.

 

On the occasion of the 1,000th birthday of Thang Long-Ha Noi, local banks invested in 1,994 ATMs (Automatic Teller Machine) and 11,000 POS (Point of Sale) machines as part of the first pilot project that is working to connect POS systems in the city.

 

Director of the State Bank of Viet Nam's Ha Noi branch Nguyen Thi Mai Suong said the local banking sector this year would continue to adhere to the Government's guidelines and the central bank's instructions.

 

She said total mobilisation in the locality this year is expected to rise by 25-27 per cent compared to last year's figures, total outstanding loans would increase by 23-25 per cent, and the ratio of non-performing loans to total outstanding debt should be less than 3 per cent.

 

VFA opens white rice export market

 

The Ministry of Industry and Trade has decided to allow companies that are not members of the Viet Nam Food Association to export white rice from February 14 under contracts signed by Vietnamese Government and its counterparts.

 

The ministry said the regulations would create favourable conditions for eligible rice exporters without effecting existing export activities.

 

Under current regulations, only members of the VFA are permitted to export rice under Government contracts with other countries.

 

Earlier, the government issued a decree to stabilise rice trading activities on the domestic market and improve the competitiveness of local exporters on the world market.

 

The Viet Nam Food Association (VFA) has estimated that the country would export a total of 6 million tonnes of rice this year, 750,000 tonnes less than last year.

 

The association planned to ship the largest volume accounting for 61.29 per cent to Asian countries and 29 per cent of the total to African countries.

 

Bao Viet earnings boost stocks

 

Stocks continued to rise this morning, tracking the positive earnings of insurance giant Bao Viet Holdings late yesterday.

 

In HCM City, the VN-Index closed up 1.05 per cent at 489.22 points and advancers doubled decliners with 159 stocks making gains.

 

Volume remained active with 41.4 million shares changing hands, valued at VND1 trillion (US$47.6 million).

 

Bao Viet Holdings (BVH) made the biggest gain, rising VND3,500; followed by software producer FPT Corp (FPT) and Sao Mai Construction (ASM), up VND3,000 each; Hoang Quan Group (HQC), up VND1,900 and PetroVietnam Low Pressure Gas (PGD), up VND1,800.

 

The insurer yesterday announced a total corporate premium of VND12.8 trillion ($609.5 million) in 2010, a year-on-year increase of 21.3 per cent. Affiliates of Bao Viet Insurance Co topped the life insurance market with a 24 per cent market share, while Bao Viet Non-Life Insurance Company ranked second in the non-life insurance market, with a 30 per cent market share.

 

The BVH gains helped boost other large stocks, including Vietcombank (VCB), Sai Gon Securities Inc (SSI), PetroVietnam Finance (PVF) and finance conglomerate Ocean Group (OGC).

 

In Ha Noi, the HNX-Index rose 0.59 per cent to 108.05.

 

Volume remained low at 25.9 million shares, worth VND464.7 billion ($22.1 million).

 

131 stocks gained points, including Dzi An Manufacturing (DZM), up the most by VND1,800; Mineral and Mechanical (MIM), up VND1,500; Song Da Consulting (SDC), up VND1,300; and Vinh Khanh Cable Plastic (VKC), up VND1,200.

 

Firms given more time to print invoices

 

Roughly 100,000 small firms or 30 per cent of the country's total businesses will be given an extra year to comply with new regulations regarding the printing of invoices.

 

According to new regulations which took effect on January 1, businesses were required to print their own invoice books rather than acquiring them from tax agencies as before.

 

However, a number of enterprises, including those with less than 10 employees and those situated in remote or disadvantaged areas, could not afford to have their own invoices printed, said deputy director of the General Department of Taxation Vu Thi Mai.

 

Mai said to help the enterprises, the Government had approved a Ministry of Finance proposal to allow the enterprises to continue to buy their invoices from tax agencies until the end of 2011.

 

The extension is aimed at helping the enterprises make the necessary preparations to have their own invoice books printed. Tax authorities will work with these companies to make new printing arrangements starting in the second and third quarters of this year.

 

The Government has also extended the deadline until March 31 for larger firms, due to overloaded printing houses.

 

Last month, it was reported that local printing houses had become overwhelmed with orders for invoice books.

 

Because the cost of printing invoice books is higher than buying them from tax agencies, many companies waited until the end of last year to place orders, leading to additional work for printers.

 

Nguyen Hai Minh, director of the Finance Printing Company's HCM City branch, said his branch received roughly 1,000 calls a day from businesses looking to place orders for invoice books last month.

 

Director of the General Department of Taxation's Tax Policy Division Cao Anh Tuan also admitted that tax agencies were still selling invoices to enterprises because printers could not meet the demand. Many enterprises that placed orders with printers for invoice books would not receive them until February or March, Tuan said.

 

However, Mai urged enterprises to place orders before the March 31 deadline, warning that if they did not have their invoice books on time, their business operations would be suspended.

 

Many VN firms fail to meet consumer tastes

 

A large number of domestic firms had failed to conduct professional and comprehensive research on producing quality consumer goods which could better meet the tastes of customers, said Ha Noi Development and Investment Group chairman Nguyen Hong Son.

 

During the official launch of the Viet Nam Association of Consumer Goods Development on Wednesday, Son who is also the association's chairman, said that modest co-operation among enterprises and organisations involved in training and research was also problematic.

 

The establishment of the association was expected to build closer links between producers, researchers and distributors in an attempt to foster the use of locally-made consumer goods, he noted.

 

Nguyen Ngoc Tuan from the Ha Noi Business Association agreed. He said that such co-operation would also build an internal market in which each member was not only a customer but also a trade partner.

 

The association would also help its members advertise their brands more effectively in the domestic and international markets. To date, the association has 300 members including producers, distributors and consultants.

 

HCM City promises to help businesses

 

Enterprises can look forward to more support from HCM City authorities in 2011, a top city official has said.

 

The city would continue the stimulus programme to support companies and add more value to products, Nguyen Thi Hong, vice chairwoman of the municipal People's Committee, told the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

 

Support will include a credit guarantee fund for small- and medium-sized enterprises, business consulting and a system for businesses to send their complaints to the Government," Hong said.

 

She said the city would continue to promote investment in infrastructure, training for high-quality human resources, strengthen trade promotion and tap potential export markets.

 

In 2010, HCM City had a GDP growth of 11 per cent and consumer price index (CPI) was kept at 9.58 per cent, more than two percentage points less than the national figure.

 

"We have implemented the price stabilising programme since the beginning of the year with crucial commodities, including rice, sugar, meat, egg, seafood and fruit to keep the city's CPI at the lowest level," Hong added.

 

In preparation for 2011, the city started asking industries and sectors in September to set up plans to control the consumer price, she said.

 

The city would also encourage local product consumption and create a better business environment by strengthening market watch mechanism.

 

Property prices likely to remain sky-high

 

A friend of my parents bought a lot of land near their house for around VND3.64 billion (US$173,333) last year.

 

Since then, the 40-sq.m lot has increased in value by VND20 million.

 

Real estate prices have increased across the country, especially in Ha Noi and HCM City, almost on a daily basis.

 

The prices of homes and apartments in Viet Nam were out of control and had skyrocketed beyond the reach of most buyers, said Viet Nam Construction Materials Association chairman Tran Van Huynh.

 

"As the cost of housing has increased, both low- and middle-income families have found it harder to afford a home of their own," said former deputy minister of construction Tong Van Nga. "Meanwhile, speculators have bought dozens of homes and apartments in order to resell them at higher prices, causing real estate prices to continue to rise."

 

In a time of tight credit and high interest rates, too much money had been poured into the real estate market, said Huynh.

 

The development of Viet Nam's property market had lacked specific strategies and planning and investors had focused on housing and urban projects for high-income people, said Deputy Minister of Construction Nguyen Tran Nam.

 

The prices had also increased due to a number of other factors such as the cost of site clearance, infrastructure, building materials and the price of services related to property projects.

 

Most property experts predicted that the price would continue to increase this year although inflation is expected to drop and the macro-economy to stabilise.

 

This year, the price of houses and apartments would increase for a short period on the domestic market, especially at new projects that have just been put on the market and projects with upgraded infrastructure, said Pham Trung Ha, general director of Hoa Phat Land.

 

Phan Thanh Mai, general director of VP Reit Real Estate Investment Fund Joint Stock Co, said that the predicted drop in inflation and better economic growth combined with more effective property investment compared to markets such as gold or securities would create a demand for property and cause the price to increase.

 

The price of property was bound to increase because of the exchange rate between the Vietnamese dong and the US dollar, the price of building materials and the cost of compensation, said Nguyen Huu Cuong, chairman and general director of Cuong Phat Construction Joint Stock Co.

 

However, developers were unlikely to increase property prices to avoid scaring customers away given the strict competitiveness of the market, according to a report on market trends in 2011 by the VietRees Market Research Company.

 

Prices are likely to remain stable this year and some developers may even reduce them slightly, according to VietRees.

 

For a long period, the price would stand at or fall lightly below its current level due to a surplus of property and improved infrastructure connecting urban areas with the city, said Ha.

 

Some property firms have already indirectly cut their prices with incentives such as low interest loans and furniture.

 

The State would encourage low- and middle-income housing projects by both State owned and private companies, Nam said, because the high demand for housing came from low- and middle-income people who accounted for the vast majority of the population.

 

Ngo The Vinh, director of Vinh Gia Real Estate Floor, said this year, middle-priced apartments would be attractive purchases for many customers.

 

General Manager of Indochina Capital Group Peter Ryder said his group planned to enter the middle-income market to complement the high-end apartment segment.

 

Expectations on the increased supply of houses and apartments and State policies could create more opportunities for potential homeowners to buy a property.

 

Metalwork opportunities discussed

 

Vietnamese mechanical engineering businesses would have more opportunities to seek export markets and new link-ups with foreign partners, said Christoph Miller, managing director of EMO Hannover in Ha Noi this week.

 

The venue, which has become a main meeting place for the international metalworking industry, will be staged in the German city again from September 19 to 24. It is expected to draw more than 1,500 visitors from 26 countries.

 

SHB raises more charter capital

 

The State Bank of Viet Nam has allowed the Sai Gon-Ha Noi Commercial Bank (SHB) to raise its charter capital to nearly VND5 trillion (US$238 million) from VND3.5 trillion ($166.6 million).

 

The bank will use the money to expand financial services and trading activities.

 

Architect 2011 to open on February 8

 

The biggest architectural exhibition in Southeast Asia, Architect 2011, will be held in Bangkok from February 8-13.

 

The exhibition, organised by the Thailand Association of Architects (ASA), will display products from 20 Vietnamese companies producing lighting and electrical equipment, ceramic tiles, energy saving and other utility services.

 

Seven more invest in Hoa Lac Park

 

Hoa Lac High-Tech Park management board has granted investment licences to seven projects with a total capital of VND2 trillion (US$95.23 million) this year.

 

The projects are owned by Tinh Van Technologies Co, NCS Technology Co, and the Post and Telecommunication Technology Joint Stock Company.

 

Hai Phong to get plaster plant

 

Saint Gobain, a leading international building materials company, will begin construction of a new plaster-board plant in Hai Phong under the brand Gyproc.

 

The project, under the management of Saint-Gobain Construction Products Viet Nam, will be the first plasterboard plant in northern Viet Nam.

 

Asset manager to unload stake in Prudential fund

 

SSI Asset Management has registered to sell its entire 8.5-per-cent stake in the HCM City-listed Prudential Balance Fund (PRUBF1). The sale of nearly 4.3 million fund certificates will be carried out between January 17 and March 17, through the order matching method.

 

Tien Phong Plastics sees earnings rise 29%

 

Northern Tien Phong Plastics Co (NTP) earned over VND1.9 trillion (US$91.9 million) last year, an increase of 29 per cent over the previous year, and posted a VND350 billion ($16.7 million) profit in 2010, a figure equivalent to the previous year's. NTP blamed the narrower profit margin on unfavourable exchange rates.

 

Earnings in the fourth quarter alone totalled VND572 billion ($27.2 million) or 30 per cent of the year's total. In 2011, the company has targeted earnings of VND2.13 trilllion ($101.4 million) and a profit of VND360.5 billion ($17.2 million).

 

Deutsche Bank ups stake in FPT to 6%

 

Three Deutsche Bank units have acquired nearly 2 million shares in software giant FPT, increasing holdings from 5.03 per cent to 6.03 per cent.

 

HCM City Securities Co claims best broker title

 

HCM City Securities Co (HSC) has been voted as best brokerage and the best equity research firm in Viet Nam for 2010, in the annual survey by Thomson Reuters Extel. Saigon Securities Inc (SSI) and Sacombank Securities (SBS) placed second and third in the survey.

 

HSC was voted as the 20th best brokerage in the Asia-Pacific region, 19th for research, and 14th for economics and strategy, and it was the sole Vietnamese firm among the top 20 brokers in the region.

 

Investco Construction to list shares in HCM City

 

Investment Construction and Development Co (Investco) will list nearly 17.7 million shares on the HCM City Stock Exchange under the code ING, but a listing timetable has not been revealed. With a charter capital of around VND177 billion (US$8.4 million), Investco specialises in construction, real estate and financial investment. In 2010, the company targeted VND938.6 billion ($44.7 million) in revenue and VND80.35 billion ($3.8 million) in profit.

 

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