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Stocks sag despite heavier trades
Accelerated sales extended the gloom on the nation's stock exchanges by another day, with the VN-Index shedding an additional 1.5 per cent to close at 426.89 points.
The volume of trades rose 17.3 per cent over Monday's session to 34.5 million shares, worth a total of VND726.1 billion (US$34.6 million).
Sell orders accounted for 77 per cent of total trading orders on the HCM City Stock Exchange yesterday, causing 196 listed stocks to decline.
Software firm CMC (CMG), Ngo Han Corporation (NHW) and Petrolimex International Trading (PIT) were among the shares dipping to the bottom of the regulated trading band of 5 per cent.
Major shares also declined, including financial conglomerate Ocean Group (OGC), down 4.11 per cent; Vietinbank (CTG), down 3.17 per cent; and insurer Bao Viet Holdings (BVH), down 3.15 per cent
"While it can be constrasted with heavy profit-taking, we still saw some bottom-catching," said Nguyen Ngoc Thang, a Ha Noi broker, pointing to rallies in shares of Quoc Cuong Gia Lai (QCG), up 4.87 per cent; Sacombank Securities Co (SBS), up 4.8 per cent; Bao Minh Insurance (BMI), up 4.58 per cent; and Vinafco (VFC), up 4.51 per cent.
"The stronger buys will appear when the VN-Index reaches the 420-mark in a couple of days," Thang said.
On the Ha Noi Stock Exchange, the HNX-Index declined by a little over a per cent to close at 97.44 points, with loser outnumbering gainers by more than five-to-one. However, market value was up modestly over Monday's session, totalling 26.9 million shares and generating a value for the day of VND457.1 billion ($21.8 million).
Sacomreal (SCR) claimed the position as the most-active share, with nearly three million traded.
An inflation estimate issued yesterday by the National Centre for Socio - Economic Information and Forecasting suggested that the consumer price index would continue to rise significantly in November.
"If that's the case, securities investment won't be a good option," commented Nguyen Thanh Quang, a member of an online investor forum.
Aquaculture plants struggle with lack of raw material
The shortage has resulted in a price increase.
Yesterday, tra fish were being sold for more than VND21 million (US$1,000) per tonne, a month-on-month increase of VND5 million ($256).
The cost of shrimp also increased by 15-20 per cent compared to a month ago.
These increases have forced prices up and many exporters are operating at a loss, struggling to meet contracts that were signed several months ago when the price was lower.
Director of An Giang Fisheries Import and Export Joint Stock Company (Agifish) Nguyen Van Ky said his company had only exported small volumes of seafood recently, and may fail to reach its target of $60 million this year due to the shortage.
VASEP said more and more farmers were becoming less inclined to invest in aquaculture, despite the fact the price of seafood products on the world market was increasing.
Farmers were reluctant to take out loans due to high interest rates of up to 17 per cent on top of the increasing cost of feed, VASEP said.
According to VASEP, the shortage would be difficult to solve in the short term.
Latin America trade to total $1.8 billion this year
The Industry and Trade Ministry estimates revenue from Viet Nam's exports to Latin America this year to top US$1.8 billion, a year-on-year increase of 40.6 per cent.
Bilateral trade turnover is expected to total $3.5 billion.
The ministry attributes the increase to the continuing recovery of the world economy.
"Better economic conditions are one of the main reasons pushing Vietnamese export turnover to Latin America. In addition, the prices of many products have increased, which have helped the total export value," said an expert from the ministry, Pham Ba Uong
Footwear exports are forecast to reach $325.5 million, accounting for 25 per cent of Viet Nam's export revenue from Latin America.
Garments and textiles are also key staples earning more than $100 million annually.
Aquacultural produce, especially tra and basa fish, have become popular in countries such as Mexico, Brazil and Columbia and have earned millions of dollars.
Other popular exports to Latin America are electronic goods, cement, steel, and timber-based products.
Among nations and territories in Latin America, Brazil, Mexico, Cuba, Panama and Chile are the biggest partners of Vietnamese exporters.
This year, the export value to Mexico and Brazil is forecast to be more than $400 million each. Following are Cuba and Panama with the export turnover of $200 million per year.
Although exports to Latin America have recorded good results, experts said it revealed some shortcomings.
Distance is one of the challenges. Moreover, enterprises in Viet Nam and Latin America lack market information.
Meanwhile, Vietnamese commercial offices in the region have only been established for a short period so they have provided enterprises with little help in finding new partners, according to the ministry.
Strong competition from other Asian companies has also offered a big challenge to Vietnamese companies wanting to do business in the Latin America market.
Due to these challenges, Viet Nam's market share was a tiny 0.18 per cent.
To solve the problem, the ministry has suggested the organising of more investment promotion activities.
"Signing free trade agreements with countries in the region is also a method to boost export in this market," the ministry said.
Exporting more new products such as pottery and consumer goods is another way.
These methods would help to reach an export turnover of $6 billion in 2015 and $12-15 billion in 2020, the ministry said.
Viet Nam currently trades with 33 nations and territories in Latin America.
In 1990, bilateral turnover between Viet Nam and the region was totalled in tens of millions of US dollars.
It increased to $145 million in 2000 and $2.4 billion in 2009.
Handicrafts industry fails in efforts to boost exports
Small-scale handicrafts businesses were unable to boost their exports because of a lack of information about market requirements, their small scale, and outdated equipment, a trade official told a seminar that ended in HCM City yesterday.
Le Hoang Oanh, deputy head of the Trade Promotion Department under the Ministry of Industry and Trade , said as a result the quality of products was uneven and their design not diverse.
Tran Van Thi of the Marketing and Finance University said Vietnamese handicrafts products were less competitive than those from Sri Lanka, Malaysia, Hong Kong, mainland China and Thailand.
"One of the biggest obstacles they face is lack of access to capital to invest in technology and equipment. Moreover, their heavy dependence on imported raw materials limits production."
Some of Viet Nam's main export markets are Europe, ASEAN, the US, Australia, China, India, Malaysia, Germany, and Ukraine and the main products they buy are handbags, hats, umbrellas, porcelain, and bamboo, rattan, pottery, and wood items.
Thi spoke about regulations and idiosyncrasies in foreign markets that exporters need to understand: For instance, German buyers prefer environmentally friendly products while Malaysia does not buy porcelain and other products with images of people or animals.
Local authorities should provide artisans with training in marketing and technical aspects and offer support to craft villages through preferential land and loan policies.
They should also help popularise traditional craft villages' brand names by using multimedia and improve artisans' skills through training, he said.
There was need to build close links between producers and exporters to penetrate global markets and with travel firms to sell products directly to foreign tourists, he said.
Businesses themselves would need to pay close attention to developing trademarks and distribution channels in potential markets.
Do Duc Kha of the University of Economics and Law said to develop global distribution channels for handicrafts, businesses needed to first have an understanding of customers' needs and existing distribution channels.
Independent speciality retailers were one of the largest distribution channels in the US and were ideal outlets for handicrafts, he said.
US buyers would prefer frequent changes in colours, designs and materials while in Japan, people would like to buy online from exporters, he said, (pointing out that Vietnamese businesses should therefore develop their websites).
Exporters should invest more in market research and develop skilled sale forces, he added.
Viet Nam is the third largest handicrafts exporter after China and Indonesia with a turnover of US$880 million last year.
There are about 2,017 craft villages in the country that employ nearly 13 million workers.
Sugar prices likely to decrease
Sugar producers have been surprised by the recent increase in the domestic sugar price but said it would drop at the start of the harvest later this month.
The price currently stands at VND24,000 (US$1.20) per kilo, up roughly VND3,000-VND4,000 against September.
Deputy director of BigC supermarket Nguyen Thai Dung said consumers had rushed to buy sugar for VND19,400 per kilo at the Government price stability retail outlets over the past few days.
General director of the Bourbon Tay Ninh Sugar Company Pham Thi Thu Huong said sugar producers had not expected the sudden rise as the wholesale price remained around VND18,000 per kilo and demand had not increased. Sugar demand often increases in November and early December when confectionery makers start production for the Lunar New Year festival.
Huong attributed the price rise to psychological factors.
Echoing Huong, chairwoman of Bien Hoa Sugar Company Pham Thi Sum said Bien Hoa's sugar provision to the market remained the same as in previous months.
Industry insiders admitted there was a difference between sugar supply and demand, but it was insignificant. Therefore, the price hike was unreasonable, they said.
Bourbon's Huong anticipated that the price would decrease when sugar factories commence production from November 20.
Despite the price hike in the domestic market and an authorised import quota of 100,000 tonnes, domestic sugar traders are not planning to import sugar as the import price is VND2,000 per kilo more than the domestic price. To deal with the volatility, the Ministry of Finance plans to offer investment incentives to sugar producers.
Minister of Agriculture and Rural Development Cao Duc Phat also said that his ministry had instructed provincial authorities to support sugar producers to encourage them to boost production.
However, Phat said that a master plan was necessary to avoid future market volatility because farmers were reluctant to grow sugar cane due to the volatile price of the crop.
The association anticipated that the 2010-11 sugar crop would yield around 900,000 tonnes, comparable to the 2009-10 crop, meaning the country would also need to import 300,000 tonnes in 2011.
Two major new airports planned
Two new airports are going to be constructed in the southern province of Dong Nai and the northern city of Hai Phong.
A meeting chaired by Deputy Prime Minister Hoang Trung Hai was held on Monday to guide the implementation of the two projects.
Construction of Long Thanh International Airport in Dong Nai will be divided into two phases. Phase one will be completed in 2020 and phase two by 2035.
After being put into operation, it will have a projected capacity of 80-100 million passengers and 3 million tonnes of cargo each year.
The total capital needed for the project is estimated to be US$6.74 billion. This is being mobilised from a number of sources including the State budget, official development assistance (ODA) and other organisations and individuals.
Located in Hai Phong City, Tien Lang International Airport will replace Cat Bi Airport.
It will cover an area of 4,000ha across four communes of Tien Lang District.
The Ministry of Transport has been assigned to carefully assess and study the exact location, capital and infrastructure conditions of the project.
When complete, it is hoped the airport will meet the demands for air transportation in the northeast region.
Steelmaker raises prices again
The Viet Nam Steel Corporation has raised the price of steel from between VND150,000 (US$7.6) and 300,000 ($15.3) per tonne.
The rise follows an increase of between VND100,000 and VND150,000 per tonne late last month.
The Viet Nam Steel Corporation, VSA, attributes the rise to the rapid consumption of construction materials in the last months of the year.
Steel usually sells at between VND13.3 million ($682) to 14.15 million ($725) per tonne excluding value added tax, it says.
But the fluctuating exchange rate between the dong and the US dollar had increased input costs from VND500,000 to VND600,000 per tonne, explained VSA deputy chairman Nguyen Tien Nghi.
Steel producers had not been able to immediately raise their prices to compensate for the higher costs, he said.
Construction-steel consumption increased dramatically against last September to reach 448,000 tonnes and has continued.
The VSA estimates that it will now reach more than 400,000 tonnes for the last two months of the year.
But deputy chairman Nghi forecast that if the price of pig iron continued at below $600 per tonne and the price of scarp iron fetched no more than $400 per tonne, steel prices would increase only slightly.
A sudden increase in steel prices could not happen as before, he said.
VSA figures show that stockpiled steel totals 320,000 tonnes while steel makers have prepared about 580,000 tonnes for this month to prevent any shortage.
Source: VNS
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