Market value decreases on both bourses

Shares tumbled during this morning's session with sluggish trades on the Ha Noi Stock Exchange.

The HNX-Index on the northern bourse lost 1.4 per cent to rest at 78.22 points. Decliners overwhelmed advancers by 180-66.

Around 56.5 million shares changed hands, totalling a value of VND581.1 billion (US$27.6 million), falling 20 per cent compared to yesterday morning's level.

Habubank (HBB) was still the most active stock in Ha Noi with some 3.4 million shares exchanged.

On the HCM City Stock Exchange, the VN-Index also retreated 0.85 per cent, reaching 468.13 points with the number of losers doubling that of gainers.

Market value hit VND1.6 trillion ($76.2 million), declining 7.5 per cent from yesterday morning's level, on a volume of nearly 98.2 million shares.

It was hard to find any blue chips that posted gains this morning. Many real estate shares lost ground, among which Quoc Cuong Gia Lai (QCG), Sudico (SJS) and Thu Duc House (TDH) plunged to their floor prices.

Notably, three penny stocks saw surging trading volumes between 2.8-3.6 million shares and all hit their ceiling prices. They were steelmaker Huu Lien Asia (HLA), Nari Hamico Minerals Co (KSS) and Viet Nam Mechanisation Electrification and Construction Co (MCG).

The VN30 tracking the city's 30 best stocks slid 0.9 per cent to 536.74 points.

Top shares fall on city bourse

Despite early gains in the morning, shares tumbled on both stock exchanges yesterday.

On the HCM City Stock Exchange, the VN-Index lost 0.14 per cent to stand at 472.16 points. Profit-taking largely drove trading in the markets, which ended at nearly VND2.5 trillion (US$119 million) on a volume of 143.5 million shares, an increase of 25 per cent in value and 21.6 per cent in volume over Tuesday's session.

Nearly three-quarters of the 30 leading shares by market value and liquidity declined. Also three real estate shares hit record lows, including Khang Dien House (KDH), Quoc Cuong Gia Lai (QCG) and Sudico (SJS).

Eight other stocks on the VN30 contributed to its decline, which closed yesterday at 541.60 points, down by 0.46 per cent.

A number of real estate firms managed to continue their rising streak, even set highs, including Becamex Infrastructure Development (IJC), Dat Xanh Real Estate Service and Construction (DXG), Kinh Bac City Development (KBC) and Tu Liem Urban Development (NTL).

Telecommunications equipment provider Sacom (SAM) was the most widely traded stock, with 7.3 million shares changing hands.

"The good news is that most of the declines were quite moderate and the balance between buys and sells remained relatively stable," said analysts from FPT Securities Co on their website.

On the Ha Noi Stock Exchange, the HNX-Index slid 0.7 per cent to finish at 79.33 points on a turnover of nearly VND1.27 trillion ($60 million).

Declines led advances by a margin of 144-138.

In Ha Noi Habubank was still the most actively traded stock in terms of volume, around 11.7 million shares, but still closed down 1.4 per cent at VND6,900.

Although the two benchmark indices both lost ground, analysts remained optomistic. "The VN-Index and HNX-Index continue to see a fairly solid rise," said analysts for the financial website vietstock.vn.

If the above-average values can be maintained for the next 20 trading days, the likelihood for growth would be greatly increased, they reported. "Still, investors should be careful of buying at high prices if they want to avoid short-term losses."

They also predicted that market movements could be unpredictable in the near future, since the indices reached their previous high levels of 480 points and 80 points, they predicted.

State Bank may lift deposit rate limit in June

The State Bank of Vietnam might remove a cap being put on the deposit interest rate in June or July this year if commercial bank liquidity improved, a forum heard.     

At the event, held by the Ministry of Planning and Investment in Hanoi on April 16, participants were told that the ceiling interest rate was considered an instrument to help the central bank control monetary policies.

On April 11, the central bank decided to lower the deposit interest rate by one percent to 12 percent per year in a move to help businesses access credit more easily.

According to the State Bank’s earlier announcement, it would continue lowering the rate by one percentage point every quarter with the aim of bringing the rate to 10 percent by the year-end.

However, participants said the State Bank should put a cap on all commercial bank lending interest rate instead of existing cap on the deposit interest rate.

They said current State Bank policies were administrative and temporary only, including forex market stabilization, the lending interest rate reduction and credit growth rate allocation.

Senior economist Vu Dinh Anh said the State Bank should continue maintaining a cap on the deposit interest rate until the market becomes more stable.

Meanwhile, Truong Dinh Tuyen, former Minister of Trade, said the State Bank should put the cap on both deposit and lending interest rates if the central bank still wants to use such policies.

However, Trinh Quang Anh, a representative from Maritime Bank, said that a cap on lending interest rates might make the situation more complicated as the central bank is unable to force banks to offer loans with low interest rates.

Experts said the existing challenges domestic banks are facing are related to low liquidity caused by bad debts and loans made to the real estate sector.

The slump in the property market was blamed for the bad debts, which in turn, has led to borrower inability to pay back loans.

Unable to collect loans from the real estate sector, alongside the central bank’s tightened monetary policies to curb inflation, banks are hesitant to offer loans with low interest rates.

Stagnation in the domestic real estate market is forecast to last for the next two to three years, the forum was told.

In the past months, many businesses, especially small-and medium-sized enterprises, complained about their inability to access bank loans.

According to the SBV, bad debts worth about 6 percent of total outstanding loans belong to the nine weakest banks.

At the monthly Government meeting in Hanoi last month, State Bank Governor Nguyen Van Binh said Vietnam now has nine poorly performing credit institutions and banks accounting for 10 percent of market shares. These banks are now being supervised for purposes of restructuring.

Hanoi hosts ASEAN horticultural meeting

The eighth Meeting on ASEAN Standards for Horticulture Produce (MASHP) convened in Hanoi on April 17.

At the conference, which has been held annually since 2005, the task group of ASEAN Standards for Horticulture Produce will focus on building standards for horticultural produce, based on international and ASEAN member countries’ standards, to be presented to the ASEAN Agriculture Summit this year.

The delegates will review four ASEAN standards for mangoes, pineapples, bananas and durian, complete 10 draft standards for okra, cashew nuts, chillies, green chillies, onions, sapodilas, rose apples, aubergines, pumpkins and popcorns and build five new standards for cabbages, chinese peas, tamarinds, coffee beans and saffron.

The International Relations Department of the Ministry of Agriculture and Rural Development said the task group reached consensus on building 19 ASEAN standards for the field.

The conference will run through April 20.

Imported, mostly Chinese, fruit deluges local markets

Markets around Ho Chi Minh City have recently been flooded with a great variety of imported fruits and vegetables, most of which are from China.

The managing board of the Hoc Mon wholesale market said that around 110 to 150 tons of fruits and vegetables are imported on a daily basis, with Chinese products accounting for as much as 70 percent of the total.

“Since products shipped from the north fail to meet demand, I have to import more from China,” said Thanh, a wholesaler at the market.

Some 500 – 700 kilograms of garlic are distributed daily from his store to citywide markets and neighboring provinces, he said.

At the Tam Binh wholesale market in Thu Duc District, fruits imported from China, Thailand, Australia, and the US also dominate.

The most-consumed products are Chinese oranges, apples, pears, and pomegranates, traders said.

“Import prices have dropped 10 – 15 percent, so many wholesalers have increased their fruit stocks to welcome the coming holidays,” said a trader.

“My sales rose 25 percent compared to the same period last year,” said Cuong, a trader who sells fruits bought from Tam Binh market.

Fruit and vegetable import turnover saw a drastic year-on-year rise, the General Department of Statistics reported.

Import turnover was worth US$56.09 million in the first quarter of 2011, and the figure rose by 26.6 percent to $71 million in the first three months of this year, the department said.

Chinese fruits imported to Vietnam have also been on the rise, it said, with Chinese products accounting for 53.5 percent of the total imported fruits and vegetables in the Jan – Feb period.

US-imported fruits take second place, with its products on shelves in most of the supermarkets and convenient stores around the city.

“Chinese agricultural products have totally dominated the low-cost segment,” many traders said.

Despite the high transporting cost since the products have to be transported from the northern border gates to HCMC, their prices, both wholesale and retail, are still lower than the Vietnamese counterparts.

Prices for garlic, carrots, or ginger are only two third of domestic prices, traders said.

Moreover, Chinese products also penetrate deeply into the local market, with traders willing to distribute the fruits directly to customers.

“With orders of more than 5kg, we will deliver the products right to your home, with prices unchanged from those sold at the market,” said Truong Thao, who sells Chinese fruit in HCMC.

“Consumption is stable,” she added.

Vietnam Airlines to add 200 flights on upcoming holiday

National flag carrier Vietnam Airlines (VNA) will schedule 200 additional domestic and foreign flights over upcoming Southern Liberation Day (April 30) and May Day (May 1).
    
As these two days fall on Monday and Tuesday, employees will have four days off work altogether, and the travel demand in the country during the holiday is expected to rise by 10 percent compared to the same period last year. To cope with the increase, VNA will add 195 flights on 8 domestic routes between April 27 and May 2.

Flights to Danang city for the upcoming international fireworks festival will be increased, so will flights to major sightseeing and recreational areas such as Hanoi, HCM City, Nha Trang, Quang Binh, Hue, and Phu Quoc.

More international flights to Bangkok, Hong Kong and Siem Reap are also being scheduled during the holiday period.

Tighter oversight of State firms urged
 
Vague regulations on State management of State economic groups have caused difficulties not only for the State's supervision over its capital but for economic groups as well, according to Director of the Central Economic Research and Management Institute Le Xuan Ba.

To solve this problem, deputy head of the financial corporation department under the Ministry of Finance Dang Quyet Tie said it was vital to ensure a way to evaluate the real financial situation and potentially financial risks of State economic groups and corporations.

Monitoring of representatives of State ownership in State economic groups and corporations should be carried out during business management and administration, said Tien. But implementing the rights of representatives of State ownership should not be involved in too many agencies.

Economists also suggested regulations on management of the groups should take into account representatives of State ownership in economic groups or corporations operating through enterprise model (a State capital investment company). The possibility of establishing a specialised State agency as the representative of State economic groups or State-owned corporations should also be considered.

Ba said quarterly and annual reports of State business groups and State-owned companies on their capital investments and earnings should be publicised.

The economic group model was first piloted in 2005. It was not until 2009 that Decree No 101/ND-CP was passed by the Government on trial establishment, organisation, operation, and management of State economic groups was issued. However, the decree has come under criticism for being inadequate and poorly implemented.

Sectors face restructuring axe
 
A just released general economic restructuring scheme gives priorities to the development of seven sector groups until 2020.

Composed and completed by the Ministry of Planning and Investment, the scheme will be submitted to the Standing Committee of the National Assembly this week.

The sector groups are metallurgy, petro-chemicals, shipbuilding and vehicle production, electronics, green industries and recycling energies, logistics and tourism.

The scheme is aimed at restructuring economic growth towards improving the economy's effectiveness, productivity and competitiveness to 2015 and orientations by 2020.

The scheme comprises four parts with 32 pages. Part 1 reviews achievements and shortcomings of the economy and reasons. Part 2 maps out general targets, principles and orientations of the economic restructuring. Part 3 is a system of specific measures and Part 4 is implementation.

The Standing Committee will collect opinions of members tomorrow before submitting them to the National Assembly.

The scheme document said: "The development of seven sector groups will involve sharpening competitive advantages and at the same time gradually replacing some industries which use a huge volume of labourers such as textiles and garments, leather and footwear, and wood and wooden furniture."

Under the programme, telecommunications and IT infrastructure would be modernised and Viet Nam would apply state-of-the-art technologies to generate breakthrough development for the IT industry.

In terms of agriculture, manufacturing and services, the scheme emphasises higher effectiveness and proportion of value-added products, as well as higher contributions of these sectors to the country's GDP and exports.

It has been estimated that the proportion of agriculture of the total national economy would decrease to 15 per cent by 2020 from 80 per cent now, whereas the ratio of manufacturing and services would climb to 85 per cent from the current rate at 20 per cent.

Solutions for restructuring implementation would focus on improving the quality of master plans of sectors, urban areas, industrial zones and villages.

The ministry also devised measures to renovate systems on distribution, management and use of State-owned capital resources as well as improving the quality of State-owned enterprises.

The programme also sets a target to keep inflation at 4-6 per cent per year. The financial policy would reduce public expenditure and State over-spending to 3-3.5 per cent per year.

The Government would gradually reduce corporate income tax to 22-23 per cent by 2015 and 20 per cent by 2020 from the current 25 per cent.

The State would play a key role in building and developing infrastructure and offering appropriate policies to attract foreign and local investors in a bid to bolster the sectors' developments.

The ministry also mapped out solutions to help improve the quality of private firms and management effectiveness of foreign-invested projects while the Government would continue completing legal frameworks for economic development.

State Bank may lift deposit rate limit in June

The State Bank of Viet Nam might remove a cap being put on the deposit interest rate during June or July this year if commercial bank liquidity improved, a forum heard.

At the event, held by the Ministry of Planning and Investment in the capital on Monday, participants were told that the ceiling interest rate was considered an instrument to help the central bank control monetary policies.

Last Wednesday, the central bank decided to lower the deposit interest rate from 13 per cent to 12 per cent per year in a move to help businesses access credit more easily.

According to the State Bank's earlier announcement, it would continue lowering the deposit interest rate by one percentage point every quarter with the aim of bringing the rate to 10 per cent by the year-end.

However, participants said the State Bank should put a cap on all commercial bank lending interest rates instead of the existing cap on the deposit interest rate.

Attendants said current State Bank policies were administrative and temporary only, including forex market stabilisation, the lending interest rate reduction and credit growth rate allocation.

Senior economist Vu Dinh Anh said the State Bank should continue maintaining a cap on the deposit interest rate until the market became more stable.

Meanwhile, Truong Dinh Tuyen, former Minister of Trade, said the State Bank should put the cap on both deposit and lending interest rates if the central bank still wanted to use such policies.

However, Trinh Quang Anh, a representative from Maritime Bank, said that a cap on lending interest rates might cause the situation more complications as the central bank was unable to force banks to offer loans with low interest rates.

Experts said the existing challenges domestic banks facing related to low liquidity caused by bad debts and loans made to the real estate sector.

The slump in the property market was blamed for the bad debts, which in turn, led to borrower inability to pay back loans.

Unable to collect loans from the real estate sector, alongside the central bank's tightened monetary policies to curb inflation, banks were hesitant to offer loans with low interest rates.

Stagnation in the domestic real estate market was forecast to last for the next two to three years, the forum was told.

In the past months, many businesses, especially small- and medium-sized enterprises, complained about their inability to access bank loans.

According to the SBV, bad debts worth about 6 per cent of total outstanding loans belong to the nine weakest banks.

At the monthly Government meeting in Ha Noi last month, State Bank Governor Nguyen Van Binh said Viet Nam now had nine poorly performing credit institutions and banks that accounted for 10 per cent of market shares. These banks were now being supervised for purposes of restructuring. — VNS

More banks cut lending interest rates

Maritime Bank will reserve about VND2 trillion (US$95.3 million) at preferential lending interest rates ranging from 16 to 18 per cent per year for small- and medium-sized enterprises (SMEs) until the end of May.

Such firms will include those involved in seafood processing, fertilisers, chemicals, pharmaceuticals, heath care equipment, rubber and plastic trading and production.

In particular, the agricultural sector will enjoy VND5 trillion ($238 million) at a lending interest rate of only 15 per cent per year.

Meanwhile, Sai Gon-Ha Noi Bank (SHB) will lend VND5 trillion for SMEs at a rate of 15 per cent per year to help SMEs overcome difficulties due to the shortage of loans.

Sacombank will offer VND1 trillion ($47.6 million) at a 12 per cent per year over twelve months to households and family-run businesses operating in the agricultural, forestry and fishery industries.

City seeks small business tax extension
 
HCM City has asked Prime Minister Nguyen Tan Dung for permission to extend the quarterly deadline for small- and medium-sized enterprises (SMEs) to pay their corporate income taxes, according to the municipal People's Committee office.

On its website, the city said the move would make it easier for firms to cope with the tough economic conditions they were currently facing.

HCM City has asked for the first-quarter deadline to be set back to July 30, the second quarter payment date to be postponed to October 30, third quarter payments to be made by January 31 next year and for fourth quarter taxes to be paid by April 30.

The authority suggested that firms involved in property, banking, finance, insurance, lottery and the stock market be exempted from the plan.

It also proposed that companies subject to special consumption taxes not enjoy the preferential policy.

Earlier this month, Minister of Finance Vuong Dinh Hue said the ministry was making every effort to support enterprises in terms of policies and finance.

"In the process of economic restructuring, enterprises which practically can't operate should terminate their operations," he said.

"We know that companies are meeting with a lot of difficulties, but how hard the situation is and what the main problems and reasons are we need to study," Hue said, adding that the latest customs' data showed that the country had seen a trade surplus over the last three months.

He further said that the ministry was considering asking the Government to raise the issue of tax incentives at the National Assembly meeting next month.

Shipping sector sails into rough waters this year

Viet Nam marine transport sector is expected to face difficulties, as forecasts for the world economy remain gloomy.

Truong Dinh Son, general director of the Viet Nam Sea Transport and Chartering JSC (Vitranschart), said the expectations for the global economy in 2012 remained bleak, and that the shipping industry would continue to take blows from declining economic growth as well as the European debt crisis.

Son said, total global dry cargo trade this year was expected to rise by 4 per cent compared to 2011, while fleet growth would go up by 10 per cent. This would lead to decreased demand of nearly 44 million DWT (Dead Weight Tonne)

General director of Dong Do Maritime Corporation Bui Minh Hung said that according to international and local economists, this year their operations would face more challenges than opportunities.

Hung added that the shipping industry had been going through a prolonged decline since mid-2008 despite a temporary recovery in the second quarter of 2009. The recovery, he said, was mainly attributable to import orders of raw materials from China, which were influenced by the economic regulatory policy of the Chinese goverment. As a result, marine transport industry was difficult to predict and posed high risk.

Slow business and capital shortage have caused other problems in the industry, such as untrained staff and declining fleets.

A number of shipping companies have been reporting losses. For instance, the Viet Nam Ocean Shipping Company (Vosco) claimed a loss of more than VND51 billion (US$2.4 million) in the third quarter of last year, while Vinaconex Shipping Company (VCV) suffered a loss of more than VND6.5 billion. Southern Container Corporation lost more than VND37 billion.

Some shipping companies posted small profits, including the Ha Noi Maritime Corporation which earned a net profit of VND108 million, the Hai Au Ocean Shipping Company earned a profit of VND2.7 billion and the Dong Do Maritime Corporation, VND1.3 billion.

Statistics show that around 700 container ships are sitting idle at ports, awaiting cargo. Many of these vessels are 3,000 TEU vessels.

Container shipping agencies have had to use cost-saving measures, such as employing mechanical feeders.

Vietnamese goods fair opens

The HCM City Investment and Trade Promotion Centre and Hoc Mon District will jointly organise a Vietnamese high-quality products fair from April 18-22 following the success of similar fairs in Cu Chi, Nha Be, Can Gio, Thu Duc, and Binh Tan Districts.

The exhibition will feature 50 businesses displaying a range of products like garments and textiles, footwear, handicrafts, food, and household and electrical goods in 70 booths.

There will also be free health checks with support from the district Department of Health.

It is the 19th fair organised to response a campaign titled "Vietnamese people prioritise Vietnamese goods."

Foreign investors to visit Ha Noi

Thailand Reed Tradex Co, one of the leading exhibition organisers in Southeast Asia, has announced it would organise a business trip to Ha Noi starting on May 23.

"The two-day mission programme will enable foreign investors to explore and survey investment or trade opportunities in Viet Nam, while learning about the requirements of Vietnamese industrialists through a series of networking activities," said managing director Chainarong Limpkittisin.

"Viet Nam is still a big potential market for foreign investors as it has high ratio of industrial expansion. To further the potential, Vietnamese manufacturers need to learn what technology trends are coming so they can catch up with the advances."

Companies plan to hire more staff

More than 70 per cent of enterprises plan to increase staff numbers in the first and second quarter of this year, according to Towers Watson Viet Nam survey.

Of those enterprises, 43 per cent will increase sales staff while 15 per cent plan to increase production and marketing staff and 9.6 per cent expect to increase technology staff.

According to a related survey conducted by the same company in March, the salary increment ratio stood at 13.3 per cent, down 14 per cent over the average figure last year.

Vietnam catfish could lose its EU market, warns importer

The repeated slashing of selling prices has hurt the image and reputation of Vietnamese catfish exporters in the EU markets, warned an importer and distributor of the product in the EU.

“The dumping strategy of some Vietnamese catfish businesses over the last few months has reduced their prestige,” Jean-Charles Diener, director of Ofco Sourcing Co, told a conference on catfish exports in Q1/2012 held in Ho Chi Minh City yesterday.

“Low prices do not always please importers since they have to compete aggressively with each other, and it is difficult to earn profits when there is always someone who sells at lower prices.”

The importers have thus limited their catfish imports in an increasingly well-organized campaign to raise awareness of what Vietnamese catfish exporters are doing.

“Vietnamese catfish could have been sold at prices 30 – 50 percent higher than the current rates had local exporters developed better strategies,” Diener said.

Business confidence falters in first quarter

In the first quarter of this year, Vietnam’s business confidence index dropped by three points from last year’s fourth quarter, according to the latest survey by WVB Vietnam Financial Intelligence Service Company.     

This underlines the fact that many businesses are uncertain about the future in the domestic and global marketplace.

Nearly 44.5 percent of all surveyed businesses said they do not have any plans on recruiting more employees, while 14.8 percent will downsize their workforce in the near future.

Regarding investments in fixed assets, nearly 44.5 percent of respondents said they will maintain their current levels, while 20.4 percent will reduce their investment and only 35 percent plan to spend more.

The survey also showed that over 56 percent of businesses believe that the falling interest rates on deposits will bring down the cost of borrowing, but only in the short term. However, they remain uncertain as to whether or not they will be able to access preferential loans.

Many of those attending said that the State’s decision to raise the minimum monthly salary to VND1,050,000 as of May 1 will increase labour and production costs, putting them under even more financial pressure.

Gov't to maintain role in regulating power price

Electricity will remain a special commodity whose prices should be determined by the government, Phung Quoc Hien, chairman of the National Assembly for Finance and Budget, said in a meeting to discuss a draft amendment to the Electricity Law held yesterday in Hanoi.

“Power is still the monopoly of state-run enterprises, so the government should determine prices to avoid the monopolization of prices and profits,” said Hien.

Hien also proposed that the Prime Minister be the one who decides the average power retail price.

Meanwhile, NA Chairman Nguyen Sinh Hung said the Electricity Group of Vietnam (EVN) is currently functioning as a power generator and distributor, while also buying power from other generators to resell.

Of course EVN can determine its purchase price since it holds the rights to distribute power, said Hung, while adding that this structuring should be revised.

“EVN should only act as a power buyer and seller, while the electricity generating sector should attract the participation of other players,” stated Hung.

Hien also expressed his concern that the draft amendment stipulates too many components to establish power prices, including transmission, distributing, wholesale, and supporting services prices, and the power regulating fees.

“Multiple layers of prices and fees will raise power prices,” said Hien.

In response, Deputy Minister of Industry and Trade Vu Huy Hoang admitted that “there seems to be too many prices and fees.”

He explained, however, that this is because the country is in the process of restructuring the power sector.

The power sector consists of many different aspects, from generating to transmitting power.

Power transmission is still a state monopoly, but power retailing is set to be mobilized.

“Since there are many aspects and participants in the sector, there should be different prices and fees,” said Hoang.

Houses out of reach for capital buyers

While most Vietnamese people dream of owning a place to live in a big city, only five percent of the people who live in Hanoi can afford to buy a home.

Dean Cira, the World Bank urban sector coordinator, said that due to the high costs most people had no opportunity to own their own in Vietnam.

In the report “Urbanisation Review in Vietnam” issued last week, the World Bank revealed that real estate prices in Hanoi and HCM City were high when compared to other cities in Asia.

“The price of vacant land is roughly US$500 per square metre and more in both cities and the price for vacant land in the city centres is much higher,” the report said.

And, when compared Hanoi and HCM City, prices in Hanoi are twice those in HCM City.

Cira added that when the figure was US$7,000 to US$8,000 per square metre of vacant land in Hanoi, it was US$4,000 per square metre in HCM City.

“This unusually large difference suggests that vacant land prices reflect a strong expectation of increased rent or resale value in the future which would justify such a high initial investment,” he added.

Cira said the price of land in Hanoi and HCM City was equivalent to income earned though renting a property for 80 years.

“The price of land is nearly 1,000 times the monthly rent at the same location,” he added.

Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said the current average price of a home was 25 times a worker’s annual income and that was five times higher than in developed countries and 10 times higher than in developing countries.

“If a worker saves 30 percent of his income, he will be able to buy a house after 75 years. The price of real estate in Vietnam is the highest in the world, while the average income of Vietnamese workers is among the lowest,” Vo said.

Meanwhile, CBRE Vietnam said that a Vietnamese person with an average income had to save for more than 50 years to be financially capable of buying an average apartment.

The recent issue of “Market Research” looked at how many years a family in Hanoi and HCM City would have to save to buy an apartment were jointly conducted by CBRE and market research firms TNS and Nielson. The research assumption was that a family would be able to save 19 percent of its income that would later be used for a home purchase.

The study findings show that families with an average income, earning around VND160 million (US$7,680) a year or VND13 million (US$619) a month, have to save for 30 years to be able to purchase an inexpensive apartment for VND880 million (US$42,000).

It would take a person 51 years to save enough money to buy a VND1.5 billion (US$71,400) apartment and 96 years to buy a better quality apartment costing VND2.8 billion (US$133,000).

Fisheries seek to penetrate European market

Nearly 40 Vietnamese businesses will take part in the annual European Seafood Exposition to be held in Brussels , Belgium on April 24-26.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the move aims to promote Vietnamese aquatic products to the European market.

The fair, the largest of its kind in Europe , brings together about 1,600 seafood producers, processors and consumers from 70 countries worldwide.

Products and services serving the seafood processing industry will also be introduced at the exposition.

Europe is seen as a key market for Vietnamese aquatic products as it consumes nearly 20 percent of the country’s fisheries exports.

However, the General Department of Vietnam Customs said fisheries export turnover to Europe in the first quarter of this year was just over 200 million USD, reflecting a year-on-year decrease of 8 percent.

The contraction is mainly attributed to reduced exports of shrimp and tra fish. Meanwhile, other export items such as tuna and molluscs are still favoured in the EU.

Luxury sedans sell well amid economic woes

While the country’s automobile industry experienced a sharp fall in sales in the first quarter of the year, the luxury sedan sector posted a strong performance, said Laurent Genêt, CEO of Automotive Asia, a specialized Audi importer.

Sales of the whole industry dropped by 40 percent year on year, while the number of Audi cars sold in Q1/2012 rose 15 percent, said Genêt.

Last year Automotive Asia sold 398 cars of different models, two thirds of which to young customers, who made the purchase without taking any bank loans.

Sales in the few past months have not reached its potential, due to the slow delivery from the Audi assembly plant in Germany, Genêt said, adding that there is a long list of customers waiting to receive their cars.

“Should the economy stay strong, it is completely possible for us to sell 600 cars this year -- a 50 percent year-on-year increase,” he said.

Business sentiment down in Q1

Economic unpredictability has been held responsible for a decline in the Viet Nam Business Confidence Index in the first quarter. The index fell three points to 113.

The information was released following a survey by the Viet Nam Financial Intelligence Service of more than 160 enterprises in 11 key sectors between mid-March and the first week of April. More than half of the respondents were small and medium enterprises.

Nearly half said they would not hire new staff; another 14.8 per cent said they would reduce their workforce.

Regarding assets investment, 35 per cent of the businesses planned to increase their investment in assets; 44.5 per cent said they would remain at the current level; and 20.4 per cent said they would decrease their asset investment within the next 12 months.

The survey also showed that more than 56 per cent of the businesses believed the State Bank of Viet Nam's policy to reduce lending interest rates would take effect but they remained sceptical about their ability to access the loans at reduced rates.

Most of the businesses said the rise in the minimum wage to VND1,050,000 (US$50) from the current VND830,000 ($40), to be applied in May, would increase their production costs and cause financial pressure at a time of economic difficulties.

Seafood firms join European expo

The Viet Nam Association of Seafood Exporters and Producers (VASEP) will lead a delegation of nearly 40 seafood enterprises to the 2012 European Seafood Exposition (ESE), to be held in Brussels from April 24-26.

As the world's largest fish and seafood trade show, ESE is the premier venue for showcasing the world's marine-based foods to decision-makers and purchasers.

Exhibitors from all over the world come to advertise fresh, canned, frozen, and value-added seafood; storage, processing, and handling equipment; and a host of seafood-related services including freight-handling, insurance, and information technology.

Prizes are awarded to best new seafood products, best retail products and best food services.

Cashew export price increases

Exports of cashew nuts rose consistently over the last five days, with an average increase of US$0.2 per pound (0.454kg), according to the Viet Nam Cashew Association (Vinacas).

Over the past few months, cashew nuts W320 price surged from $3.2 to $3.33 per pound. This climb can be partially attributed to the decreasing stockpile of cashew nuts from 2011, which has led to more large volume purchases and contracts.

The price of cashew nuts was expected to increase again in the second quarter as cashew importers prepared for the high demand during the winter holidays like Christmas, Vinacas said.-

Ministry to supervise rice stockpile

Deputy PM Hoang Trung Hai has asked the Ministry of Agriculture and Rural Development to supervise the stockpiling of rice from the 2011-12 winter-spring crop.

Accordingly, Hai instructed the ministry to check the warehouse system to ensure good preservation, to order enterprises to quickly construct additional storage space and to report back to him in June.

Hai also directed the Ministry of Industry and Trade to tighten its investigation and to revoke certificates of rice export from businessmen who did not abide by regulations.

Quiescent gold market holds breath for new regulations
 
The Vietnamese gold bullion market has gone very quiet as it waits on a Government decree vesting management of gold trading in the central bank to take effect on May 25.

Transactions are sharply down while a long-existing difference between domestic and global prices has almost closed.

This happened last week when global prices increased by US$20 to $1,647 per ounce but local rates remained unchanged and sometimes even edged down at around VND42.77 ($2,037) million per tael. (One tael is equivalent to 1.2 ounces).

From a gap of VND1.7 million in mid-March per gramme/tael, it has now narrowed to around VND300,000.

An official from the Sacombank Jewellery Company (SBJ), who declined to be named, said transactions were very low at his company last week.

In the past, he said, whenever world prices changed by around $10 per tael, people would rush to trade.

Nguyen Thi Cuc, deputy director of the Phu Nhuan Jewellery Company (PNJ), said last week her company had offered a slew of promotions, including a cut in prices to VND30,000-50,000 below SJC's levels.

Yet transactions were down by 50 per cent compared to a year ago, she said.

SJC gold too had seen transactions slump, market observers said.

Nguyen Cong Tuong, deputy head of SJC's business office, said only around 1,000 taels were traded per day, much lower than the normal 3,000-4,000 taels.

Analysts said Decree No 24/2012/ND-CP on gold management was the likely reason for the fall in bullion trading.

Speculation had reduced significantly, they said, pointing to the narrowed gap between the world and domestic prices.

Once the decree takes effect, the State Bank of Viet Nam will be solely responsible for producing gold bullion and jewellery, a move expected to get rid of speculation.

Dr Le Tham Duong of the HCM City Banking University expects the decree, if implemented properly, to help relevant agencies manage the gold market efficiently and transparently.