Property ownership limits stir controversy

The Ministry of Construction's proposal that real estate ownership be limited to 50 years has been criticised by concerned authorities and members of the public.

However, Nguyen Manh Ha, director of the ministry's Housing Administration and Real Estate Department, said no official announcement had been made.

Ha said all strata of society should be encouraged to own property but added that it should not be forgotten that house-ownership and land were closely linked and that the nation's land was owned by the people of Viet Nam.

The State has permitted long-term land use of 50 years to 70 years, after which the land reverts back to the State.

Ha added that proposed extensions to the time residents could own property had not been introduced in the draft Housing Law to be amended in 2012.

Nguyen Quoc Khanh, general director of DTJ Real Estate Joint Stock Company, said many countries imposed restrictions on residential ownership. However, he said a limit of 50 years in Viet Nam would hit demand for property – particularly high-end.

Khanh said if the ministry wanted to limit the amount of time residential property could be owned, it needed to formulate comprehensive regulations and create favourable conditions for investors, ranging from site clearance to land rent. This would encourage real estate firms to invest in the property sector and residents to buy, he said.

Meanwhile, Dao Chung Chinh, deputy general director of the Land Administration Department, said the Ministry of Environment and Natural Resources had asked for input on limiting the amount of time land could be used for real estate development.

Although many countries around the world have limitations on the length of time land and property can be owned, the system would not be feasible in Viet Nam, he said that residents would be reluctant to let go of their property.

Nguyen Quynh Hoa, a resident in Cau Giay District, said residents in Viet Nam expected to be able to leave their property to their relatives.

Dang Hung Vo, a land administration expert, said he supported the proposal because it would help tackle obstacles to urban real estate development.

Vo added that it would also help to end land and property speculation and reduce prices.

Property trading floors under fire

The Ministry of Construction has set alarm bells ringing across the country about the way business is conducted on property transaction floors after fining 36 centres.

At the end of last month, the ministry imposed fines on 25 property transactions floors in Ha Noi and 11 in HCM City including well known names such as CEN Group and Quoc Cuong Gia Lai Company.

The main violations included wrongly announcing ownership capital, selling projects that had not been started and raising more than 70 per cent of the building cost.

Pham Gia Yen, head of the ministry inspector delegation said fines from VND60 million (US$2,800) to VND250 million ($12,000) had been issued.

A report by the ministry said that since the Law on Real Estate business took effect in 2009, nearly 700 property transaction floors had opened.

It was time for authorities to strictly control the operation of property transaction floors following their hot development, said deputy minister Nguyen Tran Nam.

Nam added that the stricter supervision would help floors operate more effectively.

Nam also said that the ministry was preparing to compile a new draft of business guidelines for property transaction floors.

The draft would regulate the number of transactions that a floor must complete per month or per quarter.

Operations begin at Binh Dinh terminal

The Tan Cang terminal in central Binh Dinh province welcomed its first vessel on Tuesday.

The container terminal, a subsidiary of Sai Gon Newport Corporation, can handle ships up to 15,000 deadweight tonnage.

The terminal will draw commodities from southern central provinces and Laos as well as providing a link with to other areas and Europe.

Japan-run steel tube manufacturer to open

A steel tube manufacturing company will be established next week by Japanese companies JFE Steel Corporation, Maruichi Steel Tube Ltd and Toyota Tsusho.

To mark the formation of the limited liability company, to be called J-Spiral Steel Pipe, it will hold a seminar on steel pile produced in Japan, in conjunction with JFE and the Ministry of Transport.

New air route to link Ha Noi-Phu Quoc

Domestic carrier Air Mekong will open a route linking Ha Noi-Phu Quoc in late April, the longest in the country.

Air Mekong Administration Board president Doan Quoc Viet said the new service would speed up provincial tourism development.

The airline would use its Bombardier CRJ 900 jet, which would halve the flying time to two hours, Viet said.

4,000 tonnes of goods pass over border gate

Over 4,000 tonnes of agricultural products were exported in the first-working day of the new year at Tan Thanh border gate in the northern Viet Nam-China border area, the customs department reported.

The border gate in the Van Lang District in the mountainous province of Lang Son re-opened on February 10.

Products passing through included watermelon, longan, banana and dragon fruit.

The management board of the gate's economic zone has created favourable conditions for export and import activities.

Customs has targeted an export turnover of VND70 billion (US$3.5 million) at the gate this year.

Goldman fund buys convertible bonds from developer

HCM City Infrastructure Investment Co (CII) will begin issuing the second US$15 million tranche this quarter of its convertible bonds worth $40 million to

Goldman Sachs Asset Management. The first tranche was issued in January. The bonds, with a 4-per-cent yield and five-year maturity, have a face value of $500,000 and are convertible into shares after one year and redeemable after two years. Shares would be converted at a price of VND43,500 ($2.25) per share.

CII has also previously issued over VND71 billion ($36.6 million) worth of convertible bonds to the State-owned HCM City Finance and Investment Co.

Construction materials trader issues additional shares

Binh Duong Trade and Development Co (TDC) will issue 80 million additional shares to existing shareholders next month at a ratio of 1:4. The construction materials trader said it would use the additional capital raised to finance construction projects.

TDC earned nearly VND657.6 ($33.7 million) last year, posting a net profit of over VND96.2 billion ($4.9 million). Earnings-per-share reached VND4,813. The company has announced that it will pay a 40-per-cent cash dividend on April 13 on 2010 profits. TDC also plans to increase its charter capital from VND200 billion (US$10.3 million) to VND1 trillion ($51.3 million).

Vinamilk offers shares to employees at 50 cents

Dairy giant Vinamilk (VNM) is offering shares representing nearly 1 per cent of equity to its employees, at an offer price of VND10,000 (US$0.5) per share.

Employees interested in participating have been required to register and complete the share purchase prior to next Tuesday, with transfer of any shares acquired restricted for three years.

Vinamilk has reported earnings of VND16.17 trillion ($829.2 million) for 2010, with a whopping profit of VND3.6 trillion ($184.6 million), making it the most profitable listed company. Its earnings-per-share (EPS) last year climbed to VND10,212 ($0.52).

Market ignores currency change

The State Bank announcement to change the inter-bank foreign exchange rate to VND20,693 against the US dollar, instead of the previous VND18,932 has had little effect on the sharemarket because it was expected.

The bank also narrowed the trading band for the VND/USD exchange rate to ± 1 per cent from ± 3 per cent.

In HCM City, the VN-Index dropped slightly by 0.05 per cent to close at 519.98 points. The trading volume was 12.7 per cent higher than on Thursday with 35.6 million shares, worth VND879 billion ($41.9 million) in value.

Blue chips continued to disappoint, with insurer Bao Viet Holdings (BVH) down 1 per cent, software producer FPT Corp (FPT) down 0.8 per cent, PetroVietnam Finance (PVF) down 0.7 per cent and Hoa Phat Group (HPG) down 0.5 per cent.

Masan Group (MSN) was the only one among blue chips to gain, with a modest 0.6 per cent rise.

Penny stock Interfood Shareholding Co (IFS) achieved the highest increase in price with a 5 per cent rise to VND12,600, followed by Binh Duong Trade&Development (TDC) up 4.93 per cent to VND29,800 and Ca Mau Trading (CMV) up 4.85 per cent to VND23,800.

The Investment and Trading Real Estate Co (ITC) was the most active stock with 2.3 million shares traded.

Dang Anh, an analyst with financial service provider, said the State Bank decision hadn't had much of an impact on trading because it had been foreseen. There had been a big difference between the official and black markets.

In addition, the market was governed by foreign investor trading, he said. Foreign investors remained as net sellers in HCM City, with 454,000 shares at VND28.8 billion ($1.4 million)

In Ha Noi, the HNX-Index finished 0.13 per cent up to close at 107.81 points.

The volume remained low at 19.1 million shares, totalling VND367.5 billion ($17.5 million). Kim Long Securities (KLS) claimed the heaviest volume with 1.3 million shares traded.

Foreign capital inflows remain strong in shares

Foreign investment in the Vietnamese stock market remains robust despite the ongoing flow of money being withdrawn from emerging markets due to concerns about an unstable macro-economy.

Since the beginning of this year, around US$7 billion has been withdrawn from India, Thailand and Indonesia, the largest amount taken out in the last three years.

Inflation is the most serious threat in many emerging markets. China, for example, has had to increase interest rates three times within four months.

Last year, the stock market in Viet Nam received $750 million in foreign investment, nearly five times higher compared to 2009.

Although the Vietnamese stock market is much smaller than other countries, investors have not withdrawn their funds.

Along with an unstable macroeconomy and rising inflation, Viet Nam is facing fluctuating currency rates, which has also restricted funds from flowing into the country.