Gold prices fall sharply

Domestic gold prices fell sharply to around VND46 million per tael on the morning of September 17.    

At 10.00, SJC gold was listed at VND46.5-46.85 million per tael by Saigon Jewellry Company in Ho Chi Minh City.

Meanwhile, it was bought at VND46.63 million and sold at 46.83 million per tael by Doji Gold &Gems Group in Hanoi.

In the Asian market, gold was transacted at US$1,775.85 per ounce at 8.30, up five percent over the weekend.

Trans-national cable network launched in Vietnam

The Vietnam Post and Telecommunications Group (VNPT) and its Chinese partner, the China Mobile Communications Corporation, have launched a trans-national optical cable network to connect with China.   

The first phase will be operated using Synchronous Digital Hierarchy (SDH) technology, with a design speed of 10Gb/s, which will be 40Gb/s at the end of the second phase.

According to Pham Long Tran from VNPT, to become one of the 20 largest telecommunications operators in Asia by 2020, the group is keen to form partnerships with neighbouring companies to expand its business in foreign markets.

First established in early 1990, VNPT is Vietnam’s leading telecoms group providing a range of international telecommunications services including broadband, data and fixed-line services.

Industrial product exports increase sharply

Industrial product exports in the first eight months of this year rose by 30.7 percent compared to the same period in 2011, according to the Ministry of Industry and Trade.    

Products manufactured by foreign-invested businesses, including cell phones, cameras, computers, and electronics contributed over US$4.5 billion to the export turnover.

Several products from domestic businesses also showed high growth. Plastics rose 67.8 percent, transport vehicles and components 55.9 percent, machinery and equipment 43.5 percent, and iron and steel products 34.9 percent.

The export value of footwear increased 17.4 percent, while garments went up only 8.7 percent.

Vietnam shares auditing experience with France

Vietnam wants to learn from France’s experience in audit planning, management, and financial report appraisal.

Le Minh Khai, Deputy General of the State Audit of Vietnam, made the proposal at a working session with Alain Hespel, president of the French Court of Auditors, in Paris on September 14.

The two audit agencies need to increase cooperation on a par with the fine relationship between Vietnam and France, said Khai.

He proposed that the French Court of Auditors seek official development assistance from the government to fund a technical assistance project for Vietnamese auditors.

He also asked the French side to send its experts to train and share experience, especially in using the latest software programmes, with their Vietnamese auditors to improve their professional skills.

Both sides reviewed their cooperation in recent times and discussed future plans.

Belarus to boost trade with ASEAN through Vietnam

Belarus wants to increase its market share in Southeast Asian nations through Vietnam, PM Mikhail Myasnikovich told a press briefing in capital Minsk on September 14.

He said ASEAN is a prospective market of 500 million consumers and with its improved liquidity.

He hailed the fine traditional relationship between Belarus and Vietnam, a country that is keeping a central role in Southeast Asia.

Myasnikovich expressed his belief that Hanoi will support Minsk in speeding up the signing of a free trade agreement (FTA) between the Customs Union of Russia, Belarus and Kazakhstan and ASEAN.

He said Vietnam can be a gateway for Belarus to diversify and increase its exports to other Southeast Asian nations.

Vietnam, RoK localities boost trade ties

A delegation from the Republic of Korea (RoK)’s city of Busan on September 14 made a fact-finding tour of the southern province of Binh Duong to seek ways to strengthen economic cooperation between the two localities.

Vice Chairman of the Binh Duong People’s Committee Tran Van Nam briefed the delegation on socio-economic development of the province in recent years, with contributions from Busan investors.

He highlighted the implementation of an agreement between Binh Duong’s Ben Cat district and Busan’s Yeongdo district.

On behalf of the delegation, parliamentarian Lee Kyeung Chun expressed special interest in the investment environment in Binh Duong.

Currently, more than 400 RoK-funded businesses are operating in Binh Duong.

Investment for green economy discussed in Danang

A seminar was held in the central city of Danang on September 14 to discuss measures to increase investment in developing new and renewable energy.    

Participants in the seminar, jointly held by the Ministry of Natural Resources and Environment, the General Confederation for Labour and Danang municipal authorities, emphasized the important role of new and renewable energy in ensuring sustainable development of Vietnam’s green economy.

They compared notes and shared experience in developing and using renewable energy in a more efficient manner.

They highlighted advantages of renewable energy, saying that it will help protect the environment, prevent climate change and reduce the reliance on oil and fossil fuels toward a green economy.

Vietnam has built a national environment protection strategy till 2020 with a vision to 2050 to increase the proportion of new and renewable energy in the country’s total energy sources to 5 percent in 2020 and 11 percent in 2050.

Recently, the United Nations General Assembly has chosen 2012 as an international year for sustainable energy, aimed at mobilizing all investment sources to enable people to access modern energy services, increase energy efficiency and develop renewable energy.

Provisions push bank profits down

The big spread between borrowing and lending rates generated high profits for many banks last year but if provisions were made as sufficiently as required, the real margins would not have been as large as announced in their financial statements.

According to the 2012 macro-economic performance report prepared by the National Assembly Economic Committee and announced on Tuesday, all banks broke the deposit rate cap of 14% per annum last year, which eventually sent their lending rates soaring.

In some particular cases, the interest rate on loans for production and business purposes was as high as 20% or higher, while the rate for consumer loans hovered in the 22-24% range.

The gap between deposit and loan rates widened to 4-5 percentage points, instead of a reasonable three percentage points. Therefore, big banks earned higher profits than in 2010 although their credit growth was lower than in previous years.

The average return on equity (ROE) at eight listed banks rose from 18.8% in 2010 to 19.68% a year later.

The report notes the bad debt ratios of many banks picked up but their provisions for such debts fell. Credit risk provisions by the end of last year represented 62.8% of the total bad debts, down 17.15 percentage points versus 2010.

The report cites Habubank as an example. The bank claimed a bad debt ratio of 4.69% and made profit in 2011, while a plan for its merger with SHB put Habubank’s bad debt ratio at 16% and its loss at over VND4 trillion after all provisions were included.

Habubank and Vietcombank recorded the fastest growth in overdue debts, some of which might turn bad this year, according to the report.

Meanwhile, banks can classify debts based on the repayment ability of borrowers. Therefore, many banks have managed to transfer loans from high risk groups to lower risk groups in order to reduce credit risk provisions.

If debt classifications and risk provisions had been done properly, many banks could have reported losses, instead of handsome profits.

Furthermore, a serious problem in banking operations last year was that overdue debts rose drastically on the inter-bank market, rising 94.24% from 2010 and accounting for 10.8% of total outstanding loans. However, excluding a foreign bank with overdue debts making up 82% of the total in the banking system, overdue debts of local banks increased by 17.07% year-on-year.

Farmers join world trend to go ‘green'
 
The restructuring of Viet Nam's agriculture sector to become more adaptable to climate change is one of the top priorities in the country's socio-economic development plan between 2011-20, Prime Minister Nguyen Tan Dung said yesterday.

Speaking at the ongoing 2nd Global Conference on Agriculture, Food Security and Climate Change, the PM re-emphasised Viet Nam's efforts in restructuring its agriculture sector. These include the application of progressive technology, integrating agricultural production with processing and discovering output markets, and environmental protection.

"We're willing to work with other countries and international agencies to implement green agricultural models so we can learn from other partners," Dung said.

The leader also said the country faced enormous challenges in maintaining food security and ensuring export levels while mitigating the effects of climate change and rising sea levels.

PM Dung hoped that Viet Nam would continue to receive further support from other countries and international organisations to ensure food production and its current level of rice export, which accounts for one fifth of the world's rice export volume.

On Wednesday, Oxfam released a report suggesting that food price increases would worsen due to extreme weather caused by climate change devastating food production.

The report examines the impact of extreme weather scenarios on food prices in 2030. A nationwide drought in India and extensive flooding across Southeast Asia could cause the world market price of rice to increase by 22 per cent.

Shrimp breeders scoff rising prices in Mekong Delta

The recent hike in shrimp prices in the coastal provinces of the Mekong Delta have failed to enthuse breeders, as they have no more aquatic crops to sell and are in desperate need of further capital for the next crop.

In Ben Tre, Tra Vinh and Bac Lieu Provinces in the Mekong Delta, shrimp farmers are unexcited about the increased prices. Le Hoang Vu, a shrimp farmer in Binh Thoi Commune of Binh Dai District in Ben Tre Province, said he has just sold 900 kilograms of shrimps at VND130,000 (US$6.2) a kilogram, profiting by VND15 million($720).

But Vu moaned that a profit of VND15 million was not high enough because he had spent much more on tackling diseases and lost on account of dead shrimps as well, which all reduced his income.

Le Minh Hung, party secretary of Binh Thoi Commune, said that Vu should consider himself lucky that at least he is still selling shrimps as in the commune 70 percent of aquatic animals have died due to diseases.

Farmers in Cau Ngang, Duyen Hai, Tra Cu Districts of Tra Vinh Province are unhappy to see shrimp prices shoot up every day. Dang Van Chien in Hiep Thanh Commune in Duyen Hai District of Tra Vinh Province said many hectares of shrimp farms in Bac Lieu have been destroyed because of disease. Most of the shrimp have died within 20 to 30 days of breeding, causing great financial stress to farmers who invested in upgrading ponds, improving on shrimp breeding and better feed. Chien is lucky to still maintain a 3,000 square meter pond, but he has not earned much because disease in shrimps is rampant.

According to the People Committee of Tra Vinh Province, shrimps have died enmasse over 9,000 hectares of shrimp farms in the province, resulting in a loss of VND2.3 trillion ($110 million) since the beginning of the year.  Many breeders are continuing to raise shrimps on 5,886 hectares but have failed. Increasing prices result in shortage of shrimps, but farmers are unable to benefit from this.

The Vietnam Association of Seafood Exporters and Producers (VASEP) announced that export of shrimps in June decreased by around 4 percent and in July by 6.8 percent. This happened because of increased competition from many countries; difficulty in finding new markets; shrinking of old markets; and disease in shrimps. But exports are expected to leap in the third quarter of the year.

Shrimps died enmasse in coastal provinces of the Mekong Delta worrying experts and farmers. Many international and domestic scientists jumped in to investigate the cause of these deaths, but their efforts have all failed.

Nguyen Van Phong, deputy chairman of the People’s Committee of Tra Vinh Province, said this year unusual deaths of shrimps have caused concern among farmers who are asking me how to treat them, whenever they meet me.

Vo Hong Ngoan, an experienced farmer and considered the King of Shrimp in Vinh Trach Commune of Bac Lieu Province, said people flocked to the province to breed shrimps without paying attention to investing in environment protection. Many of them used toxic chemicals to reduce environmental pollution and curb further deaths in their crops of shrimps.

Ngoan confirmed that many households in coastal provinces of the Mekong Delta are living changed lives, thanks to shrimp breeding, but many households are also bankrupt and in bad debts for  the same reason.

 US imposes anti-dumping tax on Vietnamese shrimp exporters

Vietnam Association of Seafood Exporters and Producers have announced that as per the final decision at the sixth administrative review for anti-dumping duties by the US Department of Commerce, Vietnamese shrimp exporters will pay an anti-dumping tax of 1.25 percent on batches exported between February 1, 2010 and January 31, 2011.

The US also levied an anti-dumping tax of 2.51 percent on Indian shrimp exporters and 1.38 percent tax on Thailand’s shrimp exporters.

Compared to a preliminary result released in mid-March, tax level went through many changes. Anti-dumping tax applied on the Minh Phu Group rose to 1.27 percent from 0.09 percent; on Nha Trang Seafood it went up 1.23 percent from zero percent; and on Camimex it increased from 1.03 to 1.25 percent. Other firms also saw anti-dumping tax levels climb to 1.25   percent from 1.03 percent.

IMF loans not needed for internal economic issues

The Vietnamese government has no need to ask for loans from the International Monetary Fund (IMF) or the ASEAN Plus Three to resolve internal economic issues.  

This is mainly due to the country’s positive macro economic situation, payment balance, foreign currency reserve and market confidence at present.

Prime Minister Nguyen Tan Dung made the affirmation while answering query regarding Indonesian President Susilo Bambang Yodhoyono’s remarks on the sidelines of the 20 APEC Summit held recently in Vladivostok, Russia.

President Yodhoyono was quoted as saying that “Indonesia and other fellow ASEAN members will be ready to help Vietnam through the crisis without the country having a bailout from the International Monetary Fund.”

PM Dung said under the agreement on the Chiang Mai Initiative Multilateralisation (CMIM), which Vietnam is an active member, all member countries have the right to approach the loan when they need urgent assistance to address short-term payment balance and foreign currency liquidity in order to stabilise the macro economy and monetary market.

The government leader said since early 2012, the Vietnamese macro economy has seen positive changes. The eight-month period inflation rate was kept at 2.86 percent and the annual rate is expected at about 6 percent.

The current account balance surplus exceeded US$6 billion, while the overall balance of payments surplus was about US$8 billion, PM Dung said, adding that the state foreign currency reserves doubled the level of the beginning of the year together with stable foreign exchange market and exchange rate.

In addition, the country’s exports increased by nearly 20 percent while trade deficit accounted for nearly 1 percent of the total export-import value. GDP growth rate of the following quarter was higher than the previous one and is estimated to reach 5.5 percent for the whole year.

Restructuring the economy in general and the banking sector in particular has reached preliminarily positive results, the government leader said.

He affirmed that these achievements and the government’s orientation of macro economic policy have been highly valued by the market and international community.

The Vietnamese government continues to maintain the close relationship, within the cooperation framework with the IMF and the ASEAN Plus Three, including the regular macro economic supervision activities, the PM added.

 WB helps Vietnam improve power distribution efficiency

The World Bank (WB) will provide US$449 million to Vietnam’s project to provide electricity users across the country with better quality and reliable electricity services, and to reduce greenhouse gas emissions through efficiency improvements.
    
Apart from WB’s contribution to the US$800 million distribution efficiency project, US$30 million comes from the Clean Technology Fund (CTF) that will support the implementation of smart grid technologies.

The Australian Agency for International Development (AusAID) provides US$8 million in grants for technical assistance and capacity building while the remaining will come from the Vietnamese Government.

Senior energy specialist and task team leader for the project Van Tien Hung said the efficiency and modernization investments under the project will improve the reliability of energy supply to industries and households and contribute to Vietnam’s socio-economic development.

Reliable electricity supply will further reduce the need of households to use alternative polluting fuels, such as coal and kerosene, to meet their domestic energy needs and should have positive gender and poverty impacts, he added.

The project will contribute to meeting the objectives of the national energy development strategy to 2020 by reducing investment needs in the power sector, strengthening energy security and contribute to climate change mitigation.

It covers the construction and reinforcement of electricity distribution networks, the introduction of smart grid technologies in distribution and a technical assistance and capacity building facility for the Electricity Regulatory Authority of Vietnam (ERAV) and five power companies to develop efficient electricity tariffs and design effective energy demand programmes.

Over the past decade, the WB has closely collaborated with the Vietnamese Government to expand the power network and to provide electricity to all parts of the country. At present, the focus of WB assistance has shifted from providing new electricity connections to improving the quality of services to consumers.

Vietnam-Japan forum boosts investment in industrial zones

A forum on promoting investment in industrial zones and coastal economic zones was opened in the capital city of Tokyo on September 13.    

It is part of the Vietnam-Japan Meeting 2012 which is taking place in Japan from September 13-17.

The event drew more than 300 delegates including major investors and businesses from Japan and Vietnam.

Addressing the opening ceremony, Vietnamese Ambassador to Japan Doan Xuan Hung stressed the long-standing and mutually trusted relationship between Vietnam and Japan, considering it a firm foundation for bilateral economic, trade and investment development.

At the forum, representatives from five localities of Vietnam namely Haiphong, Thua Thien-Hue, Phu Yen, Binh Dinh and Vung Tau, introduced their potential for developing industrial zones, as well as investment encouragement policies.

Noriyuki Watanabe, General Director of the Sumitomo Mitsui Banking Corporation in Hanoi said that although Vietnam boasts more than 280 industrial zones, many of them have yet to met Japanese enterprises’ criteria.

He suggested that the Vietnamese government attract more foreign investment in the field of the support industry.

Japan is currently Vietnam’s leading foreign investor with more than 1,700 projects worth US$28 billion.

Vietnam, Thailand, RoK work on energy security

Vietnam, Thailand and the Republic of Korea (RoK) have agreed to cooperate in the energy sector.   

The agreement with Thailand was made at talks between Vietnam’s Deputy Minister of Industry and Trade, Le Duong Quang and Thailand’s Minister of Energy, Arak Cholatanon, on September 13, on the fringes of the ongoing 30th ASEAN Energy Ministers’ Meeting in Phnom Penh.

They agreed to adopt a joint statement on the deal, under which, both countries will put forward appropriate cooperation models and mechanisms to increase the efficiency of joint initiatives between their business communities.

They also agreed to hold a bilateral energy forum on implementation of joint projects.

Earlier, on September 12, the RoK’s Deputy Minister of Knowledge Economy, Lee Kwansup, pledged to further assisting Vietnam in human resources training to develop its energy and technology sector.

ASEAN competition conference opens in HCM City

A conference titled "Mergers and Acquisitions impact on ASEAN" was jointly held by the ASEAN Economic Co-operation Work Programme and Vietnam Competition Authority (VCA) opens in Ho Chi Minh City on September 13.

In the context of global economic decline, M&A (mergers and acquisitions) is one of the most effective tool for enterprises to restructure and increase their efficiency, Bach Van Mung, head of the VCA told the press meeting a head of the conference.

The conference will discuss whether M&A should be controlled to avoid monopoly and cause bad impact, he added.
In the first half of this year, M&A by ASEAN-based companies were worth a record US$26.2 billion, higher than in the whole of last year US$23.2 billion.

The two-day event will discuss the legal framework on M&A in ASEAN member nations, impact of mergers on the regional economy, and international experience in managing and supervising M&A, especially trans-border ones.

Officials from competition-management agencies in ASEAN member countries, Australia, Japan, New Zealand, the Republic of Korea and the US, and local businesses will participate in the conference.

Five of the member states, including Vietnam, have full-fledged competition laws in place, and all 10 are expected to have them by 2015.

Store brands enhance profits
 
Supermarkets hope to see a spike in profits by teaming up with private labels to produce affordable and enticing store brands.

The strategy hoped to emulate the success of the private brands, which have been a major success story in recent years, while using supermarket buying power to expand the supply chain, said Ha Noi Supermarket Association chairman Vu Vinh Phu.

Phu added that producers would have to re-label their products with supermarkets names before becoming private label products sold in supermarkets.e

Taking the lead in developing private label products are supermarkets such as foreign invested Big C (600 products) and LotteMart (650), as well as Viet Nam's Co.opmart with around 100. All are mainly developing private label products for food and home-care facilities.

Phu said private label products were normally 3 to 20 per cent cheaper than their equivalents, a sure-fire way of attracting consumers.

He explained that store brands were cheaper because they cost little or no money to promote.

He predicted that the number of store brands would grow from 10 per cent to 20 per cent of the total sold in supermarkets across the country in the next few years, bringing in huge profits.

LotteMart strategy director Kim Tae Ho said over the last three months, sales of private store brands spiked by more than 50 per cent compared to the same period last year, while sales of other products grew slightly.

The success or failure of supermarkets greatly influences the fate of manufacturers, who agree to label their products with supermarkets brand names.

"Manufacturers can earn large amounts of money if supermarkets sell products well; however the risks are more tangibl," said Sai Dong Garment CEO Nguyen Anh Ngoc.

Ngoc said a manufacturer who labels its products with a supermarket name can face ruin if the supermarket decides to choose another makers' products to label.

"We have to reduce our shirts price or they will stop buying", he added.

Ba Huan company deputy director Pham Thanh Hung said over 30 per cent of their eggs were being sold to supermarkets who have been asking the company to label its eggs with their brand.

"The supermarkets will stop buying our eggs if we refuse to label our eggs with their names", said Hung.

Another risk is that labeling products with supermarkets names will gradually obliterate manufacturers' names from consumers' minds, limiting their opportunities for the future.

"Labeling products with supermarkets' names is a good choice for small and medium manufacturers at the moment who account for more than half the market, due to their fame and prestige," said Phu.

Phu added small and medium manufacturers, with their limited scale and budget, can gain higher profits than expected if supermarkets choose to work with them.

According to Sai Gon Paper company director Bui Duc Hue, producers can sell their products at a high price to supermarkets if they know their products' strength and make them unique.

Trade with Americas hits $18bn this year

The Ministry of Industry and Trade has announced plans for a business trip for domestic engineering enterprises to seek new business opportunities in the US cities of New York, San Francisco and Chicago.

The trip, from October 5-15, aims to help local firms to explore market trends in developing support products used by the machinery engineering industry in the US, establish relationships with US firms as well as better advertise the advantages of Vietnamese support products in the engineering industry.

During their stay in the US, the businesses would get the chance to meet representatives from engineering companies to exchange co-operation opportunities and participate at the MetalCon International 2012 expo, one of the biggest exhibitions on the machinery engineering industry in the US.

Engineering companies seek US business

Two-way trade between Viet Nam and countries in the Americas exceeded US$18 billion during the first seven months of this year, up 19 per cent against the same period last year, according to the Viet Nam General Department of Customs.

During the period Viet Nam enjoyed a trade surplus with nearly $13.4 billion in export revenue and more than $4.6 billion in value of imports, representing a year-on-year increases of 20 per cent and 16 per cent respectively.

The US remained Viet Nam's biggest trading partner in the region, with export-import turnover rising 20 per cent to $13.9 billion during the period, followed by Brazil ($1.1 billion), Canada ($903 million), Argentina ($530 million) and Mexico ($473 million).

Viet Nam's key export items to these countries included garments and textiles, wooden goods, footwear, seafood, machinery and accessories. Its imports from the Americas included computers, electronics and components, foodstuff and materials.

 Singapore firms eye M&A opportunities in Viet Nam

Mergers and acquisitions (M&As) by Singaporean companies in Viet Nam reached US$72 million during the past 12 months, accounting for 9 per cent in terms of quantity and 3 per cent in terms of value of all M&A deals.

The total value of M&As in the local market was estimated at $2.5 billion during the twelve months from August last year, the highest level in a decade.

The figure for Singaporean investors increased by more than three times compared to last year's level, which stood at $23 million, and is an all-time high for Singaporean investors here.

According to London-based financial data provider Mergermarket, since August 2007, Singaporean companies have invested around $203 million in the Vietnamese market and carried out more than ten M&A deals.

These M&As were mostly in the chemical and biotechnology industries, while the construction, consumer goods, transport and financial sectors also saw deals.

Most notable was the acquisition of Fortis Healthcare International for a 65 per cent stake in Hoan My Medical Corporation at $64 million in August last year. The company's name was then changed to Fortis Hoan My Group.

Earlier in 2008, Singapore automotive group Jardine Cycle and Carriage purchased a 12-per-cent stake in Truong Hai Auto for $41 million.

The Vietnamese Government is requiring State-owned enterprises to divest from their non-core business following huge losses by some State firms, and this move is seen as creating opportunities for foreign investors to move into the Vietnamese market.

"Despite recent arrests of several Vietnamese tycoons as part of what appears to be internal power struggles and persistent rumours around the health of the banking system, the long-term growth prospects for Viet Nam remain strong, and so investors who make a long-term commitment should do well," Jason Wright, associate managing director for Kroll Advisory Solutions in South East Asia said in a report.

While Singapore firms were increasingly expanding M&As in Viet Nam, Japanese investors still dominated with eight deals worth up to $803 million during the last 12 months.

Although French investors carried out only two M&A deals during the period, they topped the table in terms of value, with $1.3 billion in investments. The biggest M&A deal took place in February when ConocoPhillips, the third largest US oil company, sold its assets in Viet Nam to French partner Perenco.

Real estate market expected to heat up

The Viet Nam real estate market was expected to recover and re-gain consumer confidence despite having been characterised by instability over the past few years, experts said at a seminar for property firms on solutions and opportunities on approaching capital from credit organisations.

Tran Kim Chung, Policy Research's head from the Central Institute of Economic Management, said the local real estate market would likely improve by this year end due to the effects of State credit policies for the property market, but there would not be any significant boom in the next few months.

The banking sector and property sector were on their way to restructuring to overcome current difficulties in production and business, Chung said. So the value of the banking loans for property projects would still be limited and dependent on the quality of projects and investors in those projects.

The local property market showed signs of warming up but the recovery of the market was still slow and depended on the recovery of the domestic market, Deputy Minister of Construction Nguyen Tran Nam said at the seminar held on Wednesday in Ha Noi by the Xay dung (Construction) newspaper.

The real estate investment fund would go into operation on September 15 and was expected to create new capital as the most important potential source for the market, Nam said.

However, the State policies had not yet seen many effects in the property market because not many enterprises got loans with a low interest rate at around 12 per cent, Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company Ltd said.

Many firms must accept losses in order to go through their apartment inventory, he said.

Nguyen Manh Ha, director of the Construction Ministry's Housing and Real Estate Market Management Department, said the State should exempt 10 per cent of value-added tax for housing buyers to reduce selling prices and inventory.

Phan Thanh Mai, general secretary of the Viet Nam Real Estate Association, said the State should create policies that stabilise interest rates of loans for buyers for the long term to encourage people to buy into the property market.

Over the past years, the domestic real estate market saw unstable development, price fever and high profit in trading property products which created a misleading impression of the demand and liquidity of the market, Deputy Minister Nam said.

So enterprises invested in the property market, even firms that did not have experience in the property sector and finance ability, Nam said. Loans for property projects increased quickly and focused on the segment of luxury apartments and houses.

The construction licences were not based on real demand or development of infrastructure in the regions that had property projects, he said.

Many property trading firms saw difficulties in production and business, especially small – and medium-sized enterprises with limited financial capacity and must accept loans from banks and their customers to implement their projects, he said.

The trouble in the property market affected banks' liquidity as well as the production and business of sectors connected with the real estate sector, including building material production and decoration.

Therefore, the market now had a total inventory of 60,000 units of apartments worth VND60 trillion (US$2.85 billion) in Ha Noi and HCM City, the country's two largest cities, according to the General Statistics Office.

Banks had credit tightening policies to reduce risk from the property sector. These policies made the situation of the real estate firms more difficult.

Property prices were reduced many times in the two major cities, but the market nevertheless did not attract customers because of the absence of confidence. They said the quality of property products had not matched the selling price for many years, Nam said.

VN fertiliser makers fight back
 
Vietnamese fertiliser companies are resuming their prominence in the market by increasing exports and reducing dependence on imported fertiliser products.

In the first eight months of this year, imports continued to decline while exports increased in both value and volume, according to a report from the General Statistics Office.

During that period, a total of 2.5 million tonnes of fertiliser were imported, a drop of 4.3 per cent compared to the same period last year. Urea-fertiliser imports saw the biggest decline.

According to the Ministry of Agriculture and Rural Development, in the first eight months, the country spent US$146 million importing nearly 330,000 tonnes of urea fertiliser.

While imports dropped by 42 per cent in volume and 28 per cent in value year-on-year, the amount of fertiliser exports surged in the first eight months.

By the end of August, nearly 900,000 tonnes of fertiliser valued at more than $400 million were exported. That was an increase of 67 per cent in volume and 93 per cent in value, compared to the same period last year.

The Viet Nam Fertiliser Association attributed the situation to higher levels of productivity nationwide.

The association said the country currently has an abundant fertiliser supply, partly due to the Ca Mau Fertiliser Plant's opening in April. It added that domestic production would meet demand.

In addition, a more stable supply of fertiliser is expected to exist in the future after several facilities that produce urea fertiliser begin operating.

Some of them are being upgraded and others newly built, from now to the end of 2015.

The volume of urea fertiliser made locally is expected to reach more than 3 million tonnes by 2015. Demand is currently 2 million tonnes.

Moreover, domestic fertiliser producers are also actively seeking export markets in Southeast Asia, India and Africa.

Vietnamese fertiliser has many advantages because of lower transportation costs and less travel time to markets in the region, including Thailand, Cambodia, the Philippines and Myanmar

Credit rating agency Moody's keeps Sacombank outlook at stable

Credit rating firm Moody's has maintained its "stable" outlook for Sacombank.

The bank's standalone credit capacity continued to be rated at E+, equivalent to long-term credit at B1, thanks to its branch and ATM networks, assets value (the sixth largest in Viet Nam), and lower bad debt and higher capital adequacy ratio compared to the market average, among others.

Moody's also rated deposits in dong and foreign currency as B1 and B2, the highest among Vietnamese institutions.

HSBC named best foreign bank in Viet Nam by Hong Kong magazine

HSBC Bank Viet Nam has been named Best Foreign Commercial Bank in Viet Nam for the seventh straight year by Hong Kong-based FinanceAsia magazine.

The bank has 18 outlets and 200,000 customers across the country.

Finance Asia praised HSBC's continued efforts to expand operations and diversify services despite the testing market conditions.

The joint stock DongA Bank has won the Best Foreign Exchange Provider in Viet Nam 2012 (Wholesale Banking category) from another magazine, Asia Banking&Finance.

Norwegian pipe supplier opens warehouse in southern province

Norwegian company Brodrene Dahl, a provider of materials for ship piping systems, yesterday opened an office and warehouse in Dong Xuyen Industrial Park in southern Ba Ria – Vung Tau Province.

Its general director, Alexander Hellesen, said around 3,000 tonnes of pipes, fittings, flanges, valves, and actuators are in stock at the warehouse ready for delivery to customers in Viet Nam.

Japan to help Da Nang improve ports, build metro

Representatives from the Japan Transport Co-operation Association (JTCA) and Marubeni Corporation proposed a plan to improve and develop the central city of Da Nang's ports and metro system, respectively.

Meeting with the city's administration on Wednesday, JTCA's representative Tetsuo Yoshida proposed a plan for improving the cargo demand capacity of Da Nang port and enable it to receive passenger ships in the future.

The central city has finalised its Master Plan on the future transport and infrastructure development in 2020-30, of which a metro system is the top priority.

In a meeting with the city's administration, the Japan International Co-operation Agency (JICA) Viet Nam said it would help improve the city's Lien Chieu water supply plant and Tien Sa port with funds totaling US$86 million from the Asia Development Bank.