Hopes fade for renewed rally
 
Stocks continued to lose ground yesterday on the nation's stock exchanges. Despite analysts telling investors that current declines were merely a technical correction, hopes continued to erode that the market would resume its recent four-month rally.

"Flows of cash into the market have not been substantial enough to further boost share prices," sighed VNDirect Securities Co chairwoman Pham Minh Huong.

Quach Manh Hao, deputy director of Military Bank Securities Co (formerly Thang Long Securities Co), predicted the current correction would last up to two weeks.

"Market values have been maintained at quite a high level recently, and general market prospects continue to be positive," Hao said.

But, FPT Securities Co analysts countered, "The value of trades is declining over time, signalling weakening chances for a rally."

VietCapital Securities Co analysts agreed, noting a large number of negative indicators affecting investor psychology. A number of businesses have gone bankrupt or been forced to halt operations in the first four months of the year, credit growth remains stagnant, and inventories continue to be high.

Earnings reported by many listed companies in the first quarter were also meagre, suggesting the second-quarter outlook was no different, they said. Most brokerages had reached their limit for financing clients' margin trades, and foreign investors have shifted to a position as net sellers.

On the HCM City Stock Exchange yesterday, both the benchmark VN-Index and the more narrowly-focused VN30 Index both retreated by 1.7 per cent to close yesterday at 434.95 and 504.61 points, respectively.

The value of trades reached about VND1.2 trillion (US$57 million), while volume totalled around 80.4 million shares. Decliners overwhelmed advancers by a margin of 233-34.

Of the 30 leading shares tracked by the VN30, only those of food processor Hung Vuong (HVG) advanced, while shares of Tan Tao Investment Group (ITA), financial conglomerate Ocean Group (OGC), Petrovietnam Finance (PVF) and Kinh Do Confectionery Corp (KDC) all plunged to their floor prices.

On the Ha Noi Stock Exchange, the HNX-Index fell by 3 per cent to 73.81 points with losers outnumbering gainers by 251-50. The value of trades rose by nearly 30 per cent over the previous session to VND706.9 billion ($33.6 million), on a volume of 74.3 million shares. Habubank (HBB) recovered the spot as most-active share, with 7.2 million changing hands.

Farmers trapped by Chinese traders: an old story

The fact that many local farmers in the southwestern provinces have suffered from a sharp decline in purple sweet potato prices as Chinese traders have suddenly stopped buying is just the latest episode in a long story containing myriad similar cases reported over the last few years.

While local farmers have been repeatedly trapped by Chinese traders under the same trick, no intervention or support from authorities and relevant agencies has ever been offered to protect them from the trap.

So far this year, three cases have been added to the story, in which Chinese traders left local farmers with a huge unsold stock of sweet potatoes, defaulted on crab purchases, and encouraged locals to hunt leeches for them.

In mid-2010, as many Chinese traders came to Vietnam to buy Japanese purple sweet potatoes at high prices, a number of farmers in the Mekong Delta province of Vinh Long began scrambling to grow the vegetable.

Things were going well until last month, when the traders unexpectedly cancelled their purchases, sending prices into a steep plunge -- from VND800,000 for 60kg down to only VND250,000.

At the huge purple sweet potato farm in Binh Tan District these days, no Chinese traders can be spotted, while the vegetables are all overripe.

Tran Van Vu, who had to rent two hectares of land to grow potatoes, said he is on the brink of losing everything, since even when all of the harvest is sold he will still not have enough money to clear bank debts.

Ngo Van Tua, head of the Thanh Dong commune cooperative, said the trading between his facility and Chinese traders has been made without any papers or contracts.

“The cooperative only buys from farmers if they agree on the prices and product quality set by Chinese traders,” said Tua.

“We know nothing about the traders except for the address of their warehouses on National Highway 1A.”

Many farmers in the town of Nam Can District in the southernmost province of Ca Mau have fallen into the trap of a Chinese trader, who was later identified as Wang Juanmei, 39, who goes by the alias A Kieu.

Police said A Kieu had been temporarily residing in the town to buy crabs from local farmers before they were swindled in early March with a debt borrowed from some farmers worth VND6 billion.

Tran Ngoc Dat is the largest creditor of A Kieu, with VND1.8 billion in crab purchases.

“I sold him VND100 million worth of crabs, and he only paid 30 percent of the sum in advance, saying the rest would be cleared when he received the products.

“But later he told me to continue selling crabs to him before he cleared the old debt.

“The process had been repeated many times before he ended up defaulting,” said Dat.

Dat said other crab traders in his neighborhood also lost money to A Kieu.

The total amount of money defaulted on could be as high as VND10 billion (US$480,000), the Nam Can police department said.

Only locally-made goods eligible for VAT deferral: official

Only products that are domestically manufactured can enjoy the proposed value-added tax deferral, which is expected to be officially released next week, Deputy Minister of Finance Do Hoang Anh Tuan has said.

Imported consumer goods are not eligible for this tax relief, Tuan told Tuoi Tre.

“However, imported goods in the equipment, machinery, and raw material sectors will have their VAT payment deferred, in a government bid to assist businesses,” he added.

Except for those working in the finance, insurance, and banking sectors, small- and medium-sized enterprises with under 300 employees and VND100 billion in capital are subject to the deferral, said Tuan.

”Businesses with more than 300 laborers that are operating in the agro-forestry-seafood processing and manufacturing, textile and garment, footwear, and electronic parts sectors, and constructors of eco-social infrastructure, will also benefit from the tax break,” he added.

Meanwhile, Nguyen Van Phung, deputy head of the Tax Policy Agency under the Ministry of Finance, said businesses are still required to complete VAT declaration, but clearance will be delayed.

“And of course they will not be fined for late VAT clearance,” added Phung.

The Ministry of Finance said it will also release guidance on a 50 percent cut imposed on the land using fee in 2011 and 2012 for businesses operating in the commercial and service sectors.

The cut is expected to reduce state budge collection by VND2 trillion this year, the ministry said.

The government will also allow investors which are in financial trouble to delay their land usage fee payment by at most 12 months, a gesture made mainly to assist businesses in the real estate sector.

Ha Long cruise offers tours for a fraction of a cent

The Quang Ninh-based Tuan Chau Five Star Yacht Joint Stock Company (Paradise Cruise) has just launched a big promotion offering tours costing from only VND7 to VND 1.7million (US$85), starting May 15.

Titled “Summer in Paradise,” the program, on the occasion that the bay has just been recognized as a new world wonder, includes 7,000 tickets at the above prices for 2-day-1-night tours of Ha Long Bay on the Paradise Luxury ship for the period from June 1 to September 30.

The promotion is for customers going in pairs. One of them will have a chance to buy one ticket at VND1.7million, while their partner will get the discount prices at VND7, VND70, VND700, VND70,000 or VND700,000.

If a customer goes alone, he or she will buy ticket for VND1.7million.

The prices include Deluxe cabin rates, tax, entrance tickets to Ha Long’s tourist destinations, a tour guide, breakfast buffet and insurance.

“Ha Long has been recognized as a UNESCO World Heritage Site and is now a new world wonder. It’s wonderful!”, Caroline Thomas, director of the marketing department of Paradise Cruise, shared.

The promotion is a sign of the company’s goodwill to express gratitude to the millions of people who voted for the bay, and is also a way to promote a beautiful Vietnamese tourist destination, she added.

Paradise Cruises launched their first boat, Paradise Luxury I, in November 2008, which was soon followed by the Paradise Luxury II in March of 2009.

The company is offering tourists four ship options, including Paradise Luxury, Paradise Privilege, Paradise Peak and Paradise Explorer.

For detailed reservation information, interested people can access the company website at www.paradisecruises.vn or email promotion@paradisecruises.vn.

Farmers evacuate bees following new technical barrier

Local beekeepers in the Central Highlands and southwestern region have been ‘evacuating’ hundreds of thousands of swarms of bees to northern or western localities to ensure the quality of their honey under a new technical barrier set by the US -- their main exporting market.

The US has recently applied a new limit on the carbenzamin content in honey products shipped to the country.

Carbenzamin is a chemical contained in the pesticide used to protect rubber and cashew trees, which provide a large source of honey for the local bee-raising sector, from mold.

And yet it is in the Central Highlands that a huge amount of this chemical is used, driving beekeepers northwards.

Local beekeepers said the limit set by the US, which accounts for as much as 85 percent of the country’s total honey export turnover, is too strict, as it is 100 times lower than the European standard.

“This has severely hindered our bee-raising and exporting activities,” they lament.

Figures from the Department of Agriculture and Rural Development of the Central Highlands province of Dak Lak show that there are over 200,000 swarms of bees being raised in the area, most of which belong to the Dakhoney JSC.

Annual productivity of honey produced from cashew and rubber flowers is 5,000 – 7,000 tons.

However, many local beekeepers, as well as those in Binh Phuong and Dong Nai, have joined the northward evacuation to protect their bees.

“I harvested nearly 20 tons of honey last year, but this huge amount worth VND600 million (US$ 28,800) is now held at Dakhoney since it has been rejected from being shipped due to its cashew and rubber origins,” said Ta Minh Phung, a beekeeper in Dak Lak.

“The company suggested that we bring the bees to northern provinces to make honey from litchi flowers.

“I have had to borrow VND40 million from the company to cover expenses for the trip, while I still have an unsettled bank loan of VND200 million,” he said sadly.

Meanwhile Nguyen Chi Toan, who runs a honey farm in Buon Ma Thuot City, said he had transported 300 barrels of bees to the northern Bac Giang and Phu Tho provinces to make honey from litchi blooms.

“We used to yield dozens of tons of honey from rubber trees, but such honey is now unmarketable,” said Toan.

“Therefore, we had to earmark VND100 million to transport our bee swarms northwards.”

Similarly, Ngo Sy Hoanh, another beekeeper in Buon Ma Thuot, said he also had to hire three workers for VND60 million to transport his bees to the north.

Although beekeepers said the new technical barrier has hindered their exports, Nguyen Xuan Binh, director of the Animal Health Centre region 6, said honey exports to the US are still at a normal level, instead of being banned as earlier reported.

Le Tan Luc, deputy director of Dakhoney, said the company normally exports 4,000 tons of honey to the US by this time every year, but the figure this year is only 1,000 tons so far.

“While waiting for guidance from authorities, Dakhoney has instructed its farmers to bring the bees northwards,” said Luc.

“We have also expanded into other Asian countries to diversify our exporting markets,” he added.

For his part, Phan Dinh Trong, director of Dong Nai Honey Co, said only beekeepers in the areas where rubber and cashew trees are protected with carbendazim face difficulty in exporting, while their counterparts in other localities are unfazed by the US barrier.

“We have exported around 1,500 tons of honey so far this year,” said Trong.

Trong added that Vietnam’s bee-raising sector should try to ensure hygiene and food safety standards for its products to enter other potential markets, rather than focusing solely on the US.

“A delegation from the US will arrive in Vietnam this September to check the chemical residues in Vietnamese honey.

“If it passes all the inspections, Vietnamese bees can return to the EU market after being banned in 2007,” he said.

Using cancer patient’s image, commercial raises debate

An advertising clip for a local instant noodle company has raised a public debate over its use of an image of a child cancer patient to call for charity donations via purchases of its products.

Titled “Gau Do – Gan Ket Yeu Thuong,” (Red Bear – Tie People’s Love), the commercial was made to promote the Red Bear Instant Noodle brand of the Binh Duong-based Asian Food Corporation.

It tells the story of Tuan, a child with cancer whose family cannot afford the treatment. The clip has touched people by depicting the pain of parents who can’t save their child’s life due to a lack of money. Through the ad, the company has announced a charity program in which VND10 (US$ 0.00048) of every purchase of a pack of Gau Do noodles will be donated to the family.

Many viewers have been moved after watching the advertisement.

“The clip has evoked the spirit of solidarity among Vietnamese,” Nguyen Thi Thanh Hoai, an economics student shared. “Once the pioneer in making this kind of advertising, the company has made a difference as well as touched customers’ psychology. I think local enterprises should learn from this to not only sell their products, but to also send meaningful messages to Vietnamese people and the world.”

Duy Linh, another netizen, said it’s reasonable that the company has a foundation for child cancer patients.

“It can help patients with hospital fees as well as tie the love among people,” he added.

However, there’s also a large number of netizens who disagree with the advertisement, caliming that it takes advantage of disadvantaged people.

“People can think of tons of ways to make money, but earning money from the pain of others, especially patients’, is not acceptable,” Minh Bao shared.

“While watching the clip viewers can’t help but cry, but the end of the video doesn’t make sense since it is commercialized. It would be better if the producers hadn’t put advertising into the video,” he added.

Some also oppose the idea of using charity activities to promote commercial products.

“Do they want to use advertising to raise money for charity or use charity to promote their product?” netizen WIKI expressed in anger. “To me, there’s no way to equate advertising and charity, as well as profit and non-profit purposes.”

Vietnam aims for US$1.78 bln from exports to France

Vietnam’s exports to France are expected to earn nearly US$1.8 billion by the end of this year, according to a seminar in Paris on May 16.
    
Participants at the event focused their discussions on bilateral trade ties, Vietnam’s policies on trade, investment and economic development, and its legal environment, as well as investment opportunities in the Southeast Asian country.

Vietnamese Deputy Minister of Industry and Trade Nguyen Thanh Bien said that Vietnam aims to increase its trade turnover with France by three times compared to 2010, to reach US$500 billion by 2020.

To achieve the target, he said, it is essential to implement five synchronous measures, including boosting production, expanding markets, adjusting investment attraction policies, developing infrastructure, and promoting human resource training.

Bien highlighted the European Union (EU)’s vital role in promoting economic and trade relations with Vietnam and other countries and regions around the world. Despite recent fluctuations in the global market, Vietnam’s total export value from France, one of its key EU markets, hit over US$500 million in the first four months of this year, he noted.

Vietnamese Embassy envoy Bui Tien Hue stressed the need to build a more effective Vietnam-France partnership in the near future, especially in 2013 when the two countries will celebrate the 40th anniversary of diplomatic ties.

The seminar was jointly held by the Vietnamese Embassy in France and the Paris Chamber of Commerce and Industry (CCIP) with the theme “Vietnam – France’s important trade and industry partner in Southeast Asia”.

BIDV to offer loan for low-cost housing

The Bank for Investment and Development of Viet Nam (BIDV) will provide a line of credit of VND2 trillion (US$96 million) over the next two years to support the construction of the social housing projects.

To support investors in hastening housing projects for low-income people and workers, loans will be provided with a preferential interest rate equal to that of the Viet Nam Development Bank under the guaranty of the Ministry of Construction, currently about 14.4 per cent per year, or 3-4 per cent lower than prevailing market rates.

BIDV chairman Tran Bac Ha, addressing a signing ceremony with the ministry on Wednesday, said that priority would be given to unfinished housing projects in crowded urban areas and in industrial zones with large numbers of workers.

Deputy Minister of Construction Nguyen Tran Nam said the ministry would co-ordinate with BIDV in evaluating projects to decide on loan allocations. About 20 projects would benefit with a credit limit up to VND200 billion ($9.6 million) per project, he said.

Loan agreements were already signed with four investors, including Vinaconex Xuan Mai, Viglacera Corporation, the Compensation and Site Clearance Co and the Duc Manh Co, all of which were building affordable housing in Vinh Phuc Province, Ha Noi, Da Nang and HCM City.

The investors have pledged to speed up the construction process and minimise costs in an effort to lower prices of apartments and make them affordable to low-income people.

BIDV was also considering a support package of about VND2 trillion (US96 million) to help low-income people buy homes in these projects. The support package might be worth a total VND17 trillion ($809.6 million) by 2015, the bank said.

The ministry has reported that 42 low-income housing projects were under construction nationwide, expected to provide living space for over 73,000 people. However, by the end of last year, projects were completed to accommodate only 8,000 people.

The ministry blamed a lack of capital for the slow pace of development and also noted that the price of apartments, ranging around VND13-15 million ($620-720) per square metre, still remained out-of-reach for low-income people. Nam called on other banks to provide similar loan incentives to help boost the construction of affordable housing.

Off-shore fishing operations to focus on resource sustainability
 
Viet Nam would focus on off-shore fishing activities till 2020 to ensure the sustainable development of the sea ecosystem and fisheries resources, said Nguyen Qui Duong, deputy director of Centre of Fisheries Planning and Development yesterday.

He said more than VND2 trillion (US$95 million) would be channelled into the plan initially.

Specifically, fishermen would get financial assistance to improve the capacity of their vessels and apply new technologies for their off-shore fisheries resources exploitation activities.

To the year 2020, it was expected to have 25,000 vessels with a capacity of more than 90CV and 12,500 vessels with capacity of under 20CV.

Besides, a database system of off-shore fisheries resources would be set up and forecasts of fishing grounds would be delivered to fishermen to raise their effectiveness in catching high-value fisheries resources such as codfish, tuna and cuttlefish which had a large demand from markets of Europe, Japan and China.

He said anchorage areas would be improved and human resources in management networks of fishing activities at all levels would also be supplemented.

All this was to stop using explosives to catch fish and reduce shallow-water fishing activities to protect baby fish and favourable seawater areas where fish laid their eggs.

Nguyen Ngoc Oai, head of the Department of Fisheries and Resources Protection, said post-harvest fish technology should get investment to raise the effectiveness of off-shore fishing activities.

Deputy Minister of Agriculture and Development Vu Van Tam said fisheries resources were decreasing so these measures were a good move to ensure sustainable exploitation of fisheries resources.

He said raising fishermen's awareness of the depletion of fisheries resources was also necessary because they played an important role in protecting the resources.

Experts optimistic about stock market

Speakers at the seminar “Macro-economy and stock market 2012” held by Kim Eng Securities Company on Wednesday shared the optimistic view that the equity market will take on the uptrend this year.

Economist Tran Du Lich, a member of the National Assembly (NA) Economic Committee, said the investment channels like real estate, gold and savings will hardly gain high profit in the coming time, while the stock market will become an attractive investment channel as it recovers sooner than the economy.

Michael Kokalari, research director of Kim Eng Vietnam, forecast the bailout package for the economy will create a stronger cash flow into the stock market. This is an important condition for the stock index to go up.

Investors now have many opportunities but are still waiting for the market to stop falling, said Kokalari. The market needs to take a rest before bouncing back, he noted.

“I don’t believe the VN-Index will plunge to below 440-445 points,” he said.

NA deputy Lich stressed Vietnam is facing multiple short-term difficulties, such as how to handle the relationship between consumer price index (CPI) and gross domestic product (GDP). It will take time to find whether GDP growth will be maintained at 6.5% or pulled down to 5.5%, how interest rate cuts will be carried out and how to reduce inventories and boost consumption.

Holding a not-so-pessimistic view, Lich said signs of recovery have emerged. Although the index of industrial production only inched up 4% in the first four months of the year, versus 10% in the same period last year, the index of processing industries increased by 7.5% and 9.3% in March and April respectively, Lich said.

He predicted recovery will speed up by the end of the second quarter and the year’s economic growth will reach 5.5%.

From an angle of an economic expert, Lich forecast CPI growth this year will be 5-6%, against the Government’s target of below 10%. He said the fiscal and monetary policies should be utilized to stimulate demand to prevent the economy from falling into stagnation.

In early 2011, enterprises experienced a forex rate shock when the central bank advised up the forex rate by 9.3%, plus power and fuel price hikes as well as surging global goods prices, sending local businesses into tailspin. However, stable forex rate, easing inflation and lower interest rates this year offer conditions for enterprises to make business plans, said Lich.

He stated enterprises must save themselves and the Government’s bailout can only solve the temporary problems.

Shipping firms hit by big waves

Escalating sea fares have driven local import-export firms into stormy losses.

Foreign shipping firms colluding with each other to hike fares from $700 to 2,000 per container recently has put importers and exporters into a pickle, particularly food and agricultural exporters.

“Big firms usually sign longer-term contracts with shipping firms coinciding with the time they deliver goods to their partners, so recent fare hike did not hurt their profits,” said Nguyen Trong Quy, a Uni Global Logistics representative. Uni Global Logistics is one of best sea freight forwarders in Vietnam with good relationships with international carriers like Kline, MOL, Cosco and MAERSK.

With a dominant market share, foreign shipping firms are getting the upper hand in the sea transport market.

In this situation, the Ministry of Industry and Trade has joined hands with the Ministry of Transport and Vietnam Shipowners Association (VNSC) to discuss fee revision negotiations with foreign shipping firms.

“This is extremely hard since foreign shipping firms are operating in Vietnam mainly via their agents, final decisions, therefore, depend on ship owners,” said VNSC’s general secretary Phan Thong.

Uni Global legal expert Do Hoang Vinh Du said it was unlikely foreign shipping firms would pull down shipping rates.

“The best cure in current context is local firms teaming up to create strength in negotiations. Besides, it is important to develop a powerful local ship fleet to compete with foreign players,” said Du.

Phan Thanh Quang, a Japan-backed Sagawa Express Vietnam representative, said fare hikes would affect import-export firms’ business plans.

Quang argued Vietnam mostly exported raw agricultural, forest and fisheries products with low added value and high transport fares would drive up their costs significantly, sometimes equal to product actual value.

“If we invest in strong ships running to some key import export markets, we can still hold the initiative with shipping fares, from there breaking the current monopoly of foreign shipping firms, which was evidenced in their recent fare hikes,” said Quang.

Life buoy may miss drowning firms

Labour-intensive sector insiders are skeptical whether a recent government support package will hit the mark.

Ho Chi Minh City Leather and Footwear Association general secretary Nguyen Van Khanh said the support, via corporate income tax (CIT) tax reductions and extensions, could fail to help the footwear sector as most firms saw export orders fall 30-40 per cent and their CIT amounts would not be large.

“We will sit with enterprises to listen to their needs and concrete proposals relevant to the government support package,” Khanh noted.

Thien Nam Textile Garment firm director Nguyen Dang Chuc said textile and garment firms need more attention as it was a labour intensive industry.

“It would be most practical for firms if the government applied tax incentives like in 2008 when it halved value added tax (VAT) to 5 per cent,” said Chuc.

Vietnam National Textile Garment Group deputy director Le Tien Truong said the CIT reduction would only help profitable businesses.

Truong said a six-month VAT payment extension could help firms concentrate more on production. However, stepping up production amid dwindling consumption would be unwise.

Textile garment firms said they wanted lower VAT rates to kick up consumption and drain unsold stock.

“Though domestic market is in difficulty, most of our firms have orders in export markets, hence there should be a specific package to help firms weather the storm,” Vietnam Textile and Apparel Association deputy chairwoman Dang Phuong Dung said.

In fact, escalating input costs in previous months made locally-produced materials and accessories more expensive than imported ones. Hence, from early this year many foreign partners shipped materials to Vietnam for local companies to perform export processing. This has cast a remarkable dent on firms’ profits, while local material producers saw rising inventories.

Industry insiders assumed alongside expectations for lower VAT rates further easing the interest rates would be the most substantial support for firms in current context.

MIC takes a hard look at real estate projects  

The Ministry of Construction (MIC) has made plans to tighten regulations over the real estate market this year.

The ministry made a report on situation included plans for 2012, in which they gave their assessment of the property market.

The report stated that the market showed some positive signs in social construction projects and urban area and resettlement development. On the other hand, it showed a general slowdown of transactions and a fall in prices since last year.

The MIC will tighten control over the realty market under Prime Minister's directives to improve the real estate management.

Functional agencies will be asked to build an information system and map out standardised criteria for this market. MIC will also inspect and classify projects that are under construction, projects that are on hold and projects that need changes to adapt to the market. Investors involved in housing development projects must set aside at least 20% of land for social housing.

In June 2012, MIC will send the Government proposed regulations on resettlement areas, amended resolutions on violations and religious buildings and the real estate information management system.

Low income housing will also be inspected. MIC said that 42 projects are under construction, with a total investment of VND4.5 trillion (USD216 million) and a land area of 907,000 square metres. These projects will eventually house 73,000 people and 1,714 apartments have been completed.

Within the year MIC said it aims to build 1.5 million square metres of social housing in urban areas, for 66,000 disadvantaged households in rural areas.

Vietnam currently has 755 urban areas and 628 new urban areas projects. There are 528 new small-scale projects of around 200 hectares, 80 projects of 200-1,000 hectares and 14 large-scale projects of 1,000 hectares or more.

New SBV Deputy Governor to fast-track restructuring plans    

The Prime Minister has appointed another deputy governor to the State Bank of Vietnam (SBV) to accelerate restructuring in the banking sector.

Dao Minh Tu will be the sixth deputy governor of the SBV, beginning May 15, 2012.

Other SBV deputy governors include Nguyen Dong Tien, Le Minh Hung, Tran Minh Tuan, Dang Thanh Binh and Nguyen Toan Thang.

Various international organisations have been recommending that Vietnam set a comprehensive programme for the restructuring of the banking sector for some time.

In order to meet this target, they say, it is vital that the country has both capital and competent human resources.

According to the country's road map for restructuring of the banking system, banks have been put into categories. Category number 3 are given from the second quarter of this year until the end of next year to complete their restructuring plans. The target for this group is to achieve credit growth rate of 8% in 2012.

Between 2013 and 2015, the country will focus on enhancing the efficiency of banks and strive to increase the level of at least 1 or 2 of them to the highest rated in the region.

Another goal is that by 2015, at least four financial institutions will be eligible to compete in the regional market. By 2020, one or two institutions are expected to be listed among the largest financial institutions in the Southeast Asia.

Vietnam strives to boost exports to EU

Measures to further boost Vietnam’s exports, especially wooden and aquatic products, to the European market were the main focus of a seminar that was held in Quy Nhon city, the central city of Binh Dinh, on May 17.

The event was coorganised by Vietnam Chamber of Commerce and Industry’s Da Nang Chapter and Binh Dinh provincial People’s Committee.

At the seminar, experts in wooden and aquatic products from Binh Dinh province and Germany reviewed exports to the EU market.

A number of challenges and potential for exports to the EU market were also put on the table for discussion.

Delegates at the event highlighted the need for Binh Dinh and other localities to pay more attention to design and invest in production technology at factories to raise product quality.

In 2011 and the first four months of 2012, the EU market suffered from serious impacts posed by the public debt crisis, the degradation of its currency and the belt-tightening policies from EU governments.

Last year, Binh Dinh earned 275 million USD from exporting wood products, up 2.2 percent against the previous year. However, in the first four months of this year, the figure stood at only 88 million USD, a year-on-year decrease of 14.5 percent.

The delegates pointed out major reasons for the contraction, such as a limited number of orders, exporters’ concern about increasing prices of materials, losses and the shortage of production capital.

Binh exports wooden products to 70 countries and territories worldwide, with Germany , France , the UK , the Netherlands and Italy being the province’s major importers.

Senior officials on East-West economic corridor convene in Quang Tri

Senior Vietnamese, Lao and Thai officials convened at a meeting in the central province of Quang Tri on May 17 ahead of the forthcoming Deputy Foreign Ministerial Conference on East-West Economic Corridor.

Participants discussed issues related to the East-West Economic Corridor, and reached consensus on a joint declaration.

They also talked about issues such as the development of transport infrastructure and a legal framework, in an attempt to develop the economic corridor, turning it into an economic reality.

The Deputy Ministerial Meeting on East-West Economic Corridor is scheduled to begin on May. 18.

Big layoffs reported at city’s IPs, EPZs

Thirteen firms at industrial parks and export processing zones in HCMC have suspended production this year, making large numbers of workers jobless, the HCMC Export Processing and Industrial Zones Authority (Hepza) said.

Of the 13 suspended enterprises, there are five mechanical engineering firms, three chemical manufacturers, two plastic producers, two electronics firms and one seafood processor, said Nguyen Tan Dinh, deputy head of Hepza.

It is not easy for the unemployed workers to find new jobs because the recruitment demand of other industrial parks and export processing zones in the city is falling drastically, he said in a report sent to the city government on Tuesday.

There are 14 major manufacturers at Tan Thuan Export Processing Zone, for example, always having needed thousands of workers, but now they have almost no demand for new labor, Dinh told the Daily.

“Most enterprises at industrial parks are producing goods for export. Since exporters are in trouble as shown by the shrinking number of orders, employers are hesitant to hire more workers. Many enterprises said they only have orders to fulfill in May and June, but have yet to know what will happen in July and August,” said Dinh.

He said that in the past workers often left HCMC for their hometowns to seek jobs, but now they tend to return to HCMC, leading to labor redundancies in the city.

There are currently 14 industrial parks and export processing zones in the city, attracting some 270,000 laborers. In late 2011, Hepza forecast the city-based industrial parks and export processing zones would need around 50,000 workers this year, but reality has it that that demand would be only around a half.

In its report, Hepza said enterprises are struggling with rising inventories. Therefore, Hepza proposed a value-add tax (VAT) cut to help enterprises lower prices, stimulating consumption, and thus reducing inventories.

BIDV sets aside VND2 tril. for budget housing projects

Bank for Investment and Development of Vietnam (BIDV) will provide VND2 trillion as middle and long-term loans with preferential rates for developers of housing projects for low-income earners and workers at industrial parks.

This is the content of the agreement signed between BIDV and the Ministry of Construction on Wednesday. The supporting loans will be given out in 2012 and 2013.

According to BIDV, the program will prioritize the projects in big cities and areas with large numbers of workers.

The bank will coordinate with the construction ministry to review and evaluate the housing projects for low-income people in urban areas and workers at industrial parks so that BIDV can sign loan contracts, disburse and recover lending capital.

BIDV has signed financing agreements with owners of several low-cost housing projects, such as Viglacera Corporation with a 2,000-flat project for low-income earners in Gia Lam, Hanoi and Clearance Compensation Corporation with a housing project in Tan Binh District, HCMC.

BIDV has also inked a deal with Vinaconex Xuan Mai Concrete and Construction Joint Stock Company to support the latter in a low-cost apartment project in Vinh Phuc Province. In addition, the lender has agreed to finance the project An Trung 2 in Danang with 3,000 apartments for low-income people, developed by the joint-venture between Duc Manh Joint Stock Company and Civil Engineering Construction and Investment Joint Stock Company 579 (CECICO 579).

* In related news, customers buying apartments of Nam Do Complex located at 609 Truong Dinh Street in Hanoi’s Hoang Mai District can borrow loans at a preferential rate of 10%, which is now the lowest rate in Vietnam.

This pledge was made by BIDV and GP Invest Co., the investor of this project, at the signing ceremony of a contract to offer credit support for customers in Hanoi on Wednesday.

Under this contract, customers buying apartments of Nam Do Complex from now until August 31 can enjoy the rate of only 10% in the first 12 months when borrowing loans at BIDV with a loan term of up to 15 years.

Nguyen Phuoc Hiep, director of GP Invest, said that the low rate of 10% would be applied for 150 apartments. In addition, 270 other customers who have registered to buy apartments of this project still can enjoy this rate if they take out loans during the time mentioned above, he added.

Hiep added the soft rate of 10% was made possible as the property developer itself would subsidize 6 percentage points in the bank’s offered rate.

Nam Do Complex is included in the credit support program worth VND4 trillion of BIDV for individuals and households buying apartments and houses in Hanoi and HCMC, said Tran Xuan Hoang, deputy general director of BIDV.

This rate is currently the lowest in Vietnam in the midst of the lending rate still staying high at 18-20% per year.

Experts advocate power price hikes

Delegates at a seminar in Hanoi on Wednesday voiced their support to power price hikes in the country, saying this would be a long-term solution to raise energy saving awareness among the public, attract investment into the power sector and reduce power shortage in the future.

Speaking at the energy economic forum held by the Ministry of Planning and Investment and the Central Propaganda Department, the delegates calculated that Vietnam’s energy demand in 2050 would shoot up by 15 times compared to 2000 while carbon exhaust would surge by 26 times.

They gave a scenario under which energy demand of the whole economy and all production and service sectors would grow by 22-25% each year.

According the Ministry of Industry and Trade, power consumption of the electricity sector rose by 17-20% annually in the 2006-2010 period. Meanwhile, power supply is expected to rise only 14.1-16% between 2011 and 2015, 11.3-11.6% in the 2016-2020 period and 7.4-9.2% between 2021 and 2030.

Despite increasing demand, the electricity sector still could maintain relatively stable supply in recent years due to stagnant industrial production, explained Do Huu Hao, president of the Vietnam Association of Science and Technology for Energy Efficiency and Conservation.

According to the national power development plan for the 2011-2020 period with the vision to 2030, to meet electricity demand in the country, power production volume and power import of Vietnam must be around 194 to 210 billion kilowatt- hours (kWh) in 2015, from 330 to 362 billion kWh in 2020 and 695 to 834 billion kWh in 2030.

Therefore, the electricity sector from now to 2020 is expected to need an investment capital of around VND929,700 billion, or US$48.8 billion, which is equivalent to US$4.8 billion each year. In the 2021-2030 period, the sector is estimated to need over US$75 billion of investment.

The high demand for power production also brings many investment opportunities for local and international enterprises. They can join power plant projects in Vietnam via many channels such as credit, bond, direct investment under BOT (build-operate-transfer), IPP (independent power producer), PPP (public-private partnership) formats or M&A (merger & acquisition) deals.

However, to attract investors, the power price should be revised up in the future compared to the current average of VND1,242 a kWh, which is said to be lower than the production cost for many power projects.

Lao Cai strives to boost tourism

The northern province of Lao Cai aimed to receive 1.5 million visitors and earn more than VND3.4 trillion (US$162 million) from tourism services by 2015, according to its tourism development plan for 2011-15.

In order to reach the target, the province has developed 12 tourism sites and identified Sapa, Bac Ha and Lao Cai City as key destinations for tourism development.

The province would focus on investing in infrastructure, diversifying tourism products, training human resources, and advertising to attract both domestic and foreign visitors.

KL – HCM freight route established

MASkargo, the air cargo subsidiary of Malaysian Airlines on Saturday launched the first cargo transport service flight linking HCM City with Kuala Lumpur.

The A330-200F freighter is scheduled to fly twice a week between the two cities with transits in Thailand's Bangkok City. The flights will arrive in HCM City's Tan Son Nhat International Airport on Tuesdays and Saturdays.

Tax income down in first four months

Only VND148 trillion (US$7 billion) in taxes were paid to the HCM City budget in the first four months of this year, a reduction of nearly 65 per cent in comparison with the target set at the beginning of this year, said deputy director of the city's Taxation Department Nguyen Trong Hanh.

Hanh said that income tax payments increased by 27.2 per cent and land and water surface hire taxes increased by 34.1 per cent, but automobile registration fees fell 22.9 per cent.

Hanh said that car registration fees had fallen because consumers had bought cars before the new tax was applied.

Milk distribution methods spotlit

A conference on enhancing milk distribution was held in Da Nang Province yesterday by the Domestic Markets Department under the Ministry of Industry (MoIT) and Multilateral Trade Assistance Project Vietnam III.

The event covered regulations on milk quality management, opportunities and challenges for milk producers as well as experiences in establishing milk distribution systems.

Participants also shared their experiences in the long-term strategic development of the milk industry.

The MoiT said milk is a quick-developing industry benefiting the Vietnamese economy with a growth rate of nearly 18 per cent.

However, Vietnam's milk industry, according to the MoIT, is facing challenges such as food hygiene and safety and milk quality, amongst others.

Accordingly, high quality foreign milk products which have benefited from tax reductions after Viet Nam signed the Agreement on the Common Effective Preferential Tariff (CEPT) for the ASEAN Free Trade Area (AFTA), have appeared at competitive prices, creating new difficulties and challenges for local milk producers.

For development, it is essential to encourage economic investors to build milk quality testing facilities with advanced, modern and internationally standardized equipment to improve the quality of products and contribute to the growth of the milk industry during the country's integration period.

Tuna exports to Middle East increase

Tuna exports to the Middle East market up to the middle of April reached US$9 million, a year-on-year increase of nearly 17 per cent, reported the Viet Nam Association of Seafood Exporters and Producers (VASEP).

VASEP said the Middle East held potential for Vietnamese tuna exporters with around 6 per cent of total exports heading to 10 Middle East countries.

Israel, Sudan and Lebanon were the biggest consumers, with a total export value of $6.4 million, 70 per cent of total exports to the region, VASEP said.