HR pros advised on selecting best staff

Pressing issues in human resource management, including employee assessments and high-performing teams, were discussed by participants at a seminar held on Thursday in HCM City.

Organised by Profiles International Southeast Asia, in collaboration with Vietnamworks, the seminar attracted more than 60 domestic HR directors, company leaders, project managers and HR advisors.

The meeting aimed to help HR staff select the correct people who will succeed in particular jobs.

Team performance, work place harmony and lowering of turnover were other issues discussed.

Co.opmart opens more outlets

Supermarket chain Co.opmart opened a new outlet in Ba Ria-Vung Tau on Thursday, its second in the southern province.

Co.opmart Vung Tau 2 in Vung Tau Plaza measures 6,000 square metres and costs VND80 billion (US$3.87 million).

Saigon Co.op, which owns the supermarket, will also open its second outlet in Ha Noi and the 67th overall on December 20. Co.opmart Hoang Mai will cost more than VND110 billion.

Farm, industry and trade fair in Dak Nong

A fair showcasing agricultural, industrial and trade products is taking place in the Tay Nguyen (Central Highlands) province of Dak Nong, with the participation of over 160 domestic firms nation-wide.

The event is described as a good chance for participating firms to advertise their products and seek new opportunities, said its organiser.

The fair will continue until next Wednesday.

FPT reports annual profit increase

Software developer FPT (FPT) announced it earned more than VND24.9 trillion (US$1.17 billion), increasing 14 per cent year-on-year, and reaching 93 per cent of the year's target.

Net profits reached nearly VND1.4 trillion ($66 million), up 2 per cent over the same period last year, and completing 82 per cent of the year's plan. Earnings per share were VND5,049 ($0.23).

FPT said December was a favourable time for some of its main business operations, therefore the company would fulfill this year's profit target.

Foreign investors boost stake in steelmaker

A group of eight foreign investors bought shares of steel maker Hoa Phat (HPG) to increase their stake from 8 per cent to 9.07 per cent, the company has announced.

The change in ownership will be effective from December 23.

Specifically, Norges Bank bought an additional 3.7 million HPG shares to hold 2.42 per cent in the company, while Ireland's DC Developing Markets Strategies and Singapore's The CH/SE Asia Investment Holdings raised their stakes by 0.14 per cent and 0.05 per cent, respectively.

Fund earns $3.36m through IPO

Bao Viet Equity Dynamic Open Ended Fund (BVFED), managed by the Bao Viet Fund Management Company, raised VND71.3 billion (US$3.36 million) through its IPO on Wednesday.

The IPO, which was higher than its expectation, attracted 140 individual and organisational investors, including foreign companies.

The fund is expected to run from the beginning of next year, with Bao Viet Securities Co (BVS) being the distributor for fund certificates.

Viglacera's IPO to take place in February

Brick and ceramics manufacturer Viglacera will conduct its initial public offering (IPO) on February 20 next year, the Ha Noi Stock Exchange announced.

Viglacera's charter capital is VND3.07 trillion (US$144.8 million), but the company will offer more than 76.9 million shares, accounting for only 25.06 per cent of the charter capital. The initial price will be VND10,300 ($0.48).

In addition, the company will sell a 0.77 per cent stake to its employees, while the dominant stake of 74.17 per cent is held by the State.

Thaco to produce diesel engines

The Truong Hai Automobile company (Thaco) will begin producing diesel engines for trucks and buses from 2015, the company said.

The company's engine manufacturing plant, whose construction commenced last year with an investment of US$185.5 million, will produce nearly 20,000 engines meeting the Euro 2 and Euro 3 Emission Standards between 2017 and 2018.

Central Province eyes 75 capital projects

The central province of Nghe An has targeted at least 75 new projects with a total capital of above VND12 trillion (US$571 million) in 2014, local authorities have said.

In order to reach the goal, the province would continue to simplify administrative procedures for investors, while supporting them in land clearance and human resources, they said, adding that speeding up investment promotion would also be included.

This year, the province licensed 72 projects with capital totalling over VND12.88 trillion ($614 million).

Japanese firm NIDEC to expand VN venture

Leading Japanese motor manufacturer NIDEC Corporation will expand its business in Viet Nam and increase its investment to over U$1 billion, from $600 million currently.

According to NIDEC chairman Shigenobu Nagamori, the firm will set up five additional subsidiaries in Viet Nam, with the goal of not only turning the country into a manufacturing hub, but also a leading technology research centre in the region.

Within its business strategy including a vision for the next 50 to 100 years, the firm will bring the latest technology to Viet Nam, while extending its operation beyond production, to research and development (R&D) activities, as well as building a distribution network.

Public sector set for future revamp

The number of State employees will remain the same until 2016, as a restructuring and staff refinement process continues in the public sector, it was reported at a conference yesterday.

The conference, held by the Ministry of Home Affairs, reviewed its performance this year and discussed the Ministry's responsibilities for next year.

According to Deputy Minister of Home Affairs Tran Anh Tuan, staff management in the public sector will participate in reforms, with many measures to be taken. Among those are the enhancement of the policy on favourable treatment towards talented officials, the development of a policy for the recruitment of ethnic people, the development of tests for staff recruitment, and enhancement of discipline and a sense of responsibility among State employees.

Tuan added that the Ministry would step up inspections and supervision of the performance of State agencies and organizations, as well as continue to fight against fraud in staff arrangements and management, in order to ensure productivity and efficiency in the operation of the public sector.

At the conference, Nguyen Thai Binh, Minister of Home Affairs, said the quality of the consultation work and advice made by State officials and some State agencies had not always been satisfactory, while the progress of developing legal documents was slow, without producing expected results.

The conference participants, however, agreed that administrative reforms in local and central governmental agencies had seen positive progress during the year.

Examples cited include the pilot recruitment through examination of senior State officials in certain ministries, sectors and localities and the application of advanced information technology in staff recruitment.

Gov't delays slow housing projects

Local governments had, as of last month, suspended 524 new urban areas and residential housing projects because they had made little headway in land clearance.

These projects, covering at total of 17,000 hectares, account for 13 per cent of the country's existing new urban areas and housing projects, according to the Ministry of Construction.

The ministry announced these figures after a study of 11 major regions in the country, officials said.

Nguyen Tran Nam, Deputy Minister of Construction, said the main criterion for suspending the projects was progress made in land clearance.

Projects wherein more than 30 per cent but less than 70 per cent of the allocated land has been cleared could be continued or suspended by local authorities, he said.

Those with less than 30 per cent of the land cleared and those whose investors were not deemed financially capable would be suspended, he added.

One of the aims of the suspension was to reduce the supply of commercial housing to a saturated market, Nam said.

"Even if the ministry doesn't examine and suspend these projects, their investors are not financially capable of completing them."

Many investors are at present only capable of finishing site clearance and paying land use fees, after which they have no funds to spend on the project, according to the deputy minister.

However, Pham Sy Liem, former deputy minister of construction and vice chairman of the Viet Nam Construction Association, said such studies should have been conducted earlier.

"The ministry should not have waited until the real estate market had frozen to review projects," he said.

Liem said that the forecasting of land demand for all kinds of project had not been done scientifically and in keeping with the country's socio-economic development strategy.

This resulted in the need for frequent adjustments to land use plans, he said.

Citing Ha Noi's housing development strategy as an example, he noted it estimated demand at 60 million square metres by 2020, but the actual land area that had been allocated to investors was more than 82 million square metres.

The situation has been repeated in HCM City. The estimated demand is around 66 million square meters and the allocated area is nearly 80 million square metres, according to Liem.

Regarding the suspended projects, Liem said that in case the investors were not replaced, the ministry should consider using the land for the actual needs of local residents.

For instance, for projects in suburban areas that had been suspended, local authorities could establish farms to provide fresh food for urban consumers, Liem said.

Renovations commence on int'l highway route

The upgrade of sections of National Highway 19 linking central Binh Dinh province's Quy Nhon seaport with the Central Highlands and Laos, Cambodia and Thailand began yesterday.

The Built-Operate-Transfer (BOT) project, which is to cost more than VND2 trillion (US$94 million), is scheduled to be completed in 2015.

The road work is expected to help ensure traffic moves safely on steep sections of the highway, and boost economic development in Binh Dinh and Gia Lai provinces, as well as the Central Highlands.

The sections to be upgraded include 33 km in Binh Dinh province and 22.6 km in Gia Lai province.

Also yesterday, construction of an 80km section of the Ho Chi Minh Highway began in central Thua Thien - Hue province.

The La Son - Tuy Loan section will be built at a cost of nearly VND12 trillion ($564 million).

Construction is to begin in La Son town, Phu Loc district, Thua Thien - Hue province, and end at the intersection with the Da Nang – Quang Ngai Highway in Tuy Loan Town, Da Nang City.

Once completed in April 2017, the section is expected to ease congestion as traffic will flow through the Hai Van tunnel and alleviate flooding on National Highway 1A.

Viet Nam enjoys smartphone boom

Viet Nam has become the region's fastest-growing market for smartphones due to customer upgrades from basic mobilephones to smartphones, according to experts and traders.

A recent report from GfK, one of the world's largest research companies, said that smartphone use in Viet Nam had increased 156 per cent in volume from January to September compared to the same period last year. It surged in value by 113 per cent.

Viet Nam and Thailand are the fastest-growing smartphone markets in the world.

In Thailand, volume increased by 118 per cent, and 114 per cent, in value.

"The increasing affordability of smartphones, particularly in developing markets, is helping many consumers in these countries make the switch from basic phones to their first smartphone," said Gerard Tan, account director for digital technology at Gfk Asia.

Nguyen Duc Tai, general director of The Gioi Di Dong (Mobile World) Joint-Stock Company, said the local smartphone market would continue to boom in coming years.

"This year, about 15 million out of 55 million users have used smartphones. The figure will soon increase to 30 million or 40 million," he said.

Tai told Viet Nam News that this year smartphone sales had exceeded sales of basic mobilephones.

He also said that smartphones accounted for 80 per cent of his company's total sales.

An expert from a research company told Viet Nam News that the smartphone market had developed well but had not reached its peak.

She said that basic phones make about 60 per cent of the market, and smartphones 40 per cent.

Next year, it is expected to be 50-50, she added.

Smartphones have become popular with young people because of the access to games, music, photos and applications.

Moreover, the price of smartphones have fallen. For about US$100, customers can buy a smartphone with many features, Tai said.

The most wanted smartphones are those with large screens that sell under VND10 million ($480). Samsung and Nokia are bestsellers.

GfK said that in the first three quarters of 2013, consumers from Singapore, Malaysia, Thailand, Indonesia, Viet Nam, Cambodia and the Philippines had spent $10.8 billion on nearly 41.5 million smartphones.

Lenders eye end-of-year credit targets

The State Bank of Viet Nam has deflated banks' hopes of achieving the credit growth target by lending at low rates to prime customers, warning it will penalise those lending at below deposit interest rates.

The central bank fears that the low interest rates some banks are offering could spark off unhealthy business practices.

But some analysts refuse to buy into what they deem as specious logic, pointing out credit institutions' liquidity has improved significantly and many are facing the pressure to hit their credit growth targets set for the year.

The target is 12 per cent but banks have achieved only 8.83 per cent growth, forcing lenders to be offer credit at drastically lower interest rates.

In the last year or so lenders' deposit growth has been several times higher than lending growth, causing them to sit on a pile of cash even as companies are wary of borrowing at high rates.

As a result, banks have been forced to vie with each other to launch preferential credit packages to attract customers.

HDBank recently earmarked VND1.5 trillion for loans on which the interest rate is zero for the first month and 12 per cent for the next 11.

Asia Commercial Bank is offering loans worth VND500 billion (US$23.8 million) to small traders in markets and trading centres at 0.79 per cent per month.

TPBank is offering loans to buy, build, or repair houses at a mere 5.8 per cent for the first few months.

OceanBank is willing to lend at 7 per cent for the first three months of the loan.

The head of a commercial bank in HCM City's Tan Binh District said banks are not losing on these loans since a majority of their plentiful deposits are non-term.

Banks pay 1 per cent interest on average on current accounts.

Usually non-term deposits are used to lend on the inter-bank market, but at present interest rates and demand there are too low to attract banks' interest.

Investing in government bonds is also not a profitable business for them since their liquidity is not high.

The non-term-deposit situation is rather stable, enabling banks to use some of them to lend at low rates for a short term to lure customers.

An executive at another bank in the city's District 5 explained why lending at low rates made sound sense.

His bank too offers loans at 6-7 per cent to companies which have feasible projects and good credit records.

"With this we can help enterprises overcome their difficulties and also retain good customers.

"These borrowers also bring other benefits to the bank by paying service charges and crediting their employees' salaries to their accounts.

"Banks always do business in such a way that they make profits."

He admitted however that the banks need to carefully monitor how their loans are used.

Some companies borrow at low rates and deposit the money at other banks that offer high interest rates, a common practice in international markets known as carry trade.

But the bottom line is that most banks lending at the low interest rates continue to make profits.

Stable inflation

Analysts expect inflation as measured by the consumer price index (CPI) to be contained at around 6.74 per cent next year after the Government managed to gradually rein in the earlier runaway price rise.

This year it will be within 6.3 per cent, the National Financial Supervision Committee has predicted in a report on the economic situation.

Vietcombank Securities Company forecast an even lesser rate – 6 per cent – and said GDP growth would be around 5.3 per cent.

All this indicates that the Government has had success this year in keeping the inflation within the targeted level.

The inflation rate has decreased consistently from 23.2 per cent in August 2011 to 7.5 per cent in August this year and 5.78 per cent in November.

Analysts explained that the trend is likely to continue next year also because the banking sector is struggling with bad debts and quality of credit, thus keeping lending at low levels.

However, the taming of inflation means that lenders are likely to start thinking again about lowering credit interest rates and lending again to facilitate companies' production and business recovery.

This could also result in an improvement in the quality of credit and the collection of bad debts, laying the foundation for the next lending boom.

Thus, the inflation fight is likely be a big challenge, especially for monetary policy makers, in 2014 since the country's economic growth target for the year is expected to be higher at around 5.8 per cent.

There are also plans to raise the budget deficit cap to 5.3 per cent of gross domestic product, which will also bring inflationary pressure.

And so it goes … round and round.

Downsizing units

The law stipulates that apartments have to be at least 45 square metres in size, but abolishing this provision could be one solution for reviving the property market.

If it is done, housing developers can rearrange unit sizes, making them smaller if required, and selling them to low-income buyers since the high – and medium-end segments seem to have been abandoned.

However, before the area cap is lifted, there are some issues that need careful consideration.

If there is no limit on the minimum size, kitchens and bedrooms could shrink or even be dispensed with.

This would restrict the use of many apartments and make them suitable only for certain customers like single people or small families.

But in that case many of them may not choose to buy, preferring to rent a place instead.

So, the Government needs to allow developers to offer these tiny apartments for lease, which would then meet many people's demand for shelter while also enabling developers to make enough money to finish many stalled projects.

Another problem with downsizing units is that this would push up management costs since developers have to spend more especially for expanding common spaces like parking lots and parks.

They would also need to make changes to the designed power and water supply capacities.

This is likely to work, however, only in suburbs and outlying districts.

HCM City looks for e-enterprise reform

HCM City will have 17 State-run enterprises that will use information technology for nearly all of their operations, according to the municipal People's Committee.

On December 20, the city's Department of Information and Communications organised a conference to develop a project designated to transfer 17 state-owned enterprises into e-enterprises. These SOEs are governed by HCM City.

In the last eight months, the agency has implemented a pilot e-enterprise project at Sai Gon Industry Corporation, achieving encouraging results.

The application of information technology has helped enterprises reduce the time needed to process affairs among the corporation's offices and member enterprises, and has also helped cut costs equal to billions of dong.

Based on the success of this pilot, the People's Committee has decided to broaden the project to State-owned enterprises, with priorities given to 17 companies headed by the municipal government.

Speaking at the event, People's Committee vice chairman, Le Manh Ha, said that the city government's IT applications would be improved so that all data from enterprises could be easily updated.

City leaders will outline timely and proper measures to settle any problems soon, Ha said.

If eligible enterprises for the project show signs of delaying IT application, they will be penalised, he added.

Investment flows to industrial zones

Companies in HCM City's industrial parks and export processing zones have reported an increase in investment and export revenues this year, the Export Processing and Industrial Zone Authority said on Friday.

They have attracted total investment of US$576.77 million this year, a 40 per cent increase year-on-year, Ho Xuan Lam, head of HEPZA's administrative office, said.

Foreign investment surged by 73 per cent to $358.5 million, including in 19 new projects worth $68.7 million, he said.

The $31 million Vie-Pan Techno Park project in Hiep Phuoc Industrial Park, a $9.8 million twine factory in Tan Phu Trung Industrial Park, and a $15 million drug storage project in Tan Tao Industrial Park are among the largest.

Twenty nine existing foreign projects brought in additional investment of nearly $290 million, he said.

Japan, the largest foreign investor in IPs and EPZs, accounted for half of the year's FDI, followed by Singapore (26 per cent) and Australia (14 per cent).

The remaining was from investors from Taiwan, Germany, Sweden, and Denmark.

Domestic investment rose by 7 per cent to US$218 million, all of it due to an increase in capital at existing firms.

New investors accounted for $125.9 million, a 10 per cent decrease year-on-year.

There are now nearly 1,300 projects with a total investment of $7.78 billion in IPs and EPZs, with 1,063 of them operational.

Exports have been worth $5.1 billion this year, an increase of 13 per cent despite the economic downturn.

Forty firms have shut down or reduced production, leaving more than 1,700 workers unemployed.

The number of workers fell by 2,700 to 268,800.

Many companies in IPs and EPZs are trying to pay Tet (Lunar New Year) bonuses and for workers' bus tickets to return home for the year's most important festival.

But only 150 out of more 1,000 firms have so far reported about their bonus plans to HEPZA.

Most firms plan to pay a bonus equal to one month's basic salary.

The average basic salary is VND4.72 million per month at foreign firms and VND3.26 million at domestic companies.

Labour unions in co-ordination with employers are set to provide 6,000 free bus tickets to workers.

More than 3,400 gifts will also be made to disadvantaged workers.

Business leaders urged to develop strategic thinking

Business leaders will need to apply strategic thinking in order to survive sustainably in the new economy, experts said at a seminar held on Thursday in HCM City.

The seminar was organised by the International Business Knowledge Corporation, attracting 150 Vietnamese economic experts, researchers, managers, strategy planners and business leaders.

Si Danh Quoc Hung, training centre director of OCB Bank, said that new strategic thinking was indispensable for a manager, especially for business leaders.

"Without strategic thinking, companies will not develop well or could go bankrupt," he said.

He outlined five basic steps in a strategic thinking model to help businesses identify "where we are", "where we want to be", "how we will go there" and "how are we doing".

The steps will allow businesses to realise priorities, understand their strengths and weaknesses to use resources effectively and make key decisions to reach their targets, he said.

Dang Quoc Tien, deputy general director of Military Bank, said that "traditional strategic thinking is based on today's figures and forecasts for the future. But new strategic thinking requires business leaders to be creative."

The businesses need to focus on market demand, market forecasts and outside influences on their firms.

For instance, future forecasts must be based on social conditions as well as short – and long-term situations.

Then they can prepare substitute products and services to meet market demands.

Tien said that "new strategic thinking would help firms build new business strategies that show the strengths of their businesses."

This approach helps them create distinctive products and services compared to other competitors.

"If the competitors want to copy these products, it will take them a lot of time and then the competitors will be left outside," he added.

Tien said new strategic thinking has become an urgent issue for businesses when most Vietnamese SMEs are still struggling in a difficult economy.

Since the beginning of this year, 55,000 businesses have gone bankrupt or ceased operations.

He said that it was necessary to seek advice from consulting firms on strategy because the latter could analyse strengths, weaknesses, opportunities and challenges for businesses.

Tran Quang Thang, head of the HCM City Institute of Economy and Management said that "new strategic thinking required business leaders to create many possible scenarios to cope with situations in the future market. This can minimise business risks."

New strategic thinking is needed for start-up businesses, SMEs businesses and large businesses since all enterprises face many risks during their own business development process, he added.

These risks are related to taxes, capital crises, human resources and management.

On the occasion of the conference, the International Business Knowledge Corporation announced the establishment of a Strategy Consulting Centre to provide courses in strategic thinking and strategic consulting for businesses and cities and provincial officials.

This would include risk and financial management, human resources and macro-policy analysis.

The centre will also create a strategy consulting board with the country's leading economic experts, including Tran Dinh Thien, president of the Viet Nam Institute of Economics; Pham Linh, deputy general director of OCB Bank; Nguyen Chi Hai, head of HCM City University of Economy-Law's Economic Department; and Vo Tri Thanh, vice president of Central Institute for Economic Management.

Tra fish exports down as farming area shrinks

Viet Nam's tra fish exports fell marginally in the first 10 months to US$1.4 billion, the Viet Nam Association of Seafood Exporters and Processors (VASEP) told a seminar in Mekong Delta Can Tho City on Thursday.

The fish was exported to 149 countries and territories with the major markets being the US and EU, buying almost 45 per cent – and accounted for 26 per cent of total seafood exports and second only behind shrimp.

According to VASEP, in the Mekong Delta tra fish is farmed on 4,679ha, only 87 per cent of the area last year. More than 1 million tonnes have been harvested this year at an average of 276 tonnes per hectare.

Deputy chairman of the Vietnamese Tra Fish Association Vo Hung Dung said the industry faced difficulties since the farming area had shrunk.

Exports to the US rose 5.1 per cent this year but the EU bought 10.7 per cent less compared with the same period last year.

Exports to the 14 markets in the Middle East have also declined.

The seminar discussed issues relating to the title "Developing Markets and Raising Value Addition of Tra Fish in the Mekong Delta", including the work on brand building.

It was organised by the Ministry of Agriculture and Rural Development's Department of Farm, Forestry and Seafood Processing Department, and the Vietnamese Tra Fish Association.

Taiwan potential still untapped

Vietnamese businesses should improve their understanding of Taiwan, improve product quality and sharpen their competitiveness in order to penetrate that market.

According to the Ministry of Industry and Trade's Asia-Pacific Market Department, Taiwan is a potential market for Vietnamese firms.

The consumer demands of the 200,000 Vietnamese, who account for 1 per cent of Taiwan's population, will contribute to boosting bilateral trade, it said.

Taiwan also serves as a bridge for the firms to access European, American and East Asian markets, it noted.

However, it's not an easy task for Vietnamese firms to penetrate Taiwan's market due to its strict food safety and hygiene standards, tax policies, and non-tariff barriers to agro-forestry and seafood imports, the department warned.

During a recent trade conference in HCM City, the Chamber of Commerce and Industry vice chairman Hoang Van Dung said there is immense potential for trade co-operation between Viet Nam and Taiwan.

He suggested that Vietnamese exporters should establish ties with Taiwanese importers who knew local consumer tastes, habits and market trends.

The General Department of Customs reveals that bilateral trade reached US$11 billion in 2012, of which Viet Nam earned $2.5 billion and Taiwan, US$8.5 billion.

In the past eight months, Viet Nam has earned $1.42 billion from exports to Taiwan, an increase of 7 per cent year on year, with key items being telephones and accessories, footwear, apparel and textiles, seafood, rubber, electronics, ceramics and products.

During the reviewed period, Viet Nam imported nearly $5 billion worth of goods from Taiwan. The major imports were raw materials for domestic production, such as animal feed, petroleum, chemicals, plastic materials, garment and textile materials, leather and footwear materials, and iron and steel.

Retailers launch year-end deals

Trade promotion programmes are on the rise as retailers aim to boost sales by the year-end, despite the economic downturn.

Saigon Co.op, one of the largest domestic supermarket chains, is discounting many products between 10-50 per cent, according to a representative.

The supermarket will also set up mobile shops selling essential goods in rural industrial zones and other remote areas.

Electronics retailers like Media Mart, Nguyen Kim, Pico, HC and Topcare are also slashing prices.

Tran Thi Phuong in Thanh Xuan District, Ha Noi, compared the prices of televisions and electric rice cookers at those retailers and reported little difference between them.

Nguyen Quang Duc, in charge of marketing for Pico told CAND online newspaper that electronics stores were offering discounts of 20-35 per cent or even 50 per cent.

However, purchasing power had not increased because consumers were spending less on home appliances. Retailers expect the domestic market to improve next year.

US tapering likely to benefit VN

The reduction of the US Federal Reserve's US$85 billion stimulus package to $75 billion won't directly impact the Vietnamese stock market, but will affect foreign capital inflows.

The Fed's decision, according to analysts, was reasonable, as the US economy has improved, with positive GDP growth and declining unemployment.

The reduction is also seen as a preventive action against an asset bubble, when housing prices in the US had climbed 11 per cent and the Dow Jones gained 26.45 per cent since the beginning of this year.

The Fed will probably continue to taper and is expected to terminate its quantitative easing by the third quarter of 2014.

According to MB Securities' Hoang Cong Tuan, the tapering would boost US government bond yields, indicating the Fed's confidence in the continuing economic recovery. Also, foreign investment would not be massively withdrawn from emerging markets, including Viet Nam, Tuan said.

In the long term, a stronger US economy will have a positive impact on Viet Nam's economy, because the US remains Viet Nam's largest trade partner.

Tuan said that only a number of stocks with weak business results during the first nine months of this year would be easily exposed to exchange-traded funds' (ETFs) offloading.

They could include PetroVietnam Construction (PVX), food processor Bourbon Tay Ninh (SBT) and property developers Tan Tao (ITA), Hoang Anh Gia Lai (HAG) and Dic Corp (DIG).

"In addition, although the selling trend remains in many emerging markets, it has ended in Viet Nam," added PetroVietnam Securities Co analyst Dao Hong Duong.

The price to earnings and price to book ratios of Viet Nam's stock market are among the lowest in Southeast Asia. This is one of the factors that limit money withdrawals from the market.

Hoang Thach Lan, head of MHB Securities Co's brokerage service, was more cautious, saying short-term foreign investment could be withdrawn since the market had absorbed a large value of indirect investment.

"However, I expect the amount of indirect investment next year will be poured into the Vietnamese stock market, rather than than moving out," he said.

Textiles to reap TPP gains

Of all the industries in Viet Nam, the garment and textile sector will benefit the most when the country becomes a signatory of the Trans-Pacific Strategic Economic Partnership agreement, a top economist has said.

Vo Tri Thanh, vice director of the Central Institute for Economic Management, said the TPP would bring many opportunities to the sector.

Thanh spoke during a seminar held yesterday in HCM City and organised by the Ministry of Industry and Trade and Viet Nam Chamber of Commerce and Industry.

Also speaking at the seminar, Le Tien Truong, deputy head of the Viet Nam Textile and Apparel Association, predicted that the industry's export turnover would surpass US$20 billion in 2013, exceeding the target of $19 billion set for the year by the association.

With TPP membership, Truong said the textile and garment export turnover to the US would increase annually by 13 per cent to 20 per cent until 2017, fetching total export turnover of $25 – 30 billion.

And by 2025, the sector's overall export turnover could reach $50-$55 billion, he said.

Industry insiders said that the TPP agreement would help stimulate investment in making raw materials, helping to increase the rate of localised products.

By 2015, the localisation rate for export products is expected to be between 60 per cent and 70 per cent, Truong said, adding that this would open up many opportunities for the sector.

He said the TPP agreement would allow Viet Nam to become one of the largest textile and garments centres in the world.

However, many experts said that Viet Nam faced serious obstacles to such status because it still must import 88 per cent of materials from other countries, including non-TPP markets.

Last year, Vinatas imported 415,000 tonnes of cotton, which satisfied 99 per cent of total demand.

The TPP negotiation has undergone 20 rounds on 30 topics.

Early this month in Singapore, negotiations on the TPP continued but were not concluded.

Another ministerial meeting will be held in January, according to Tran Quoc Khanh, deputy minister of Industry and Trade and head of the government's delegation for negotiations.

"Garments and textiles are one of the core benefits for us with the TPP agreement," Khanh said.

Viet Nam has around 4,000 garment factories employing about 2.5 million workers, according to the Ministry of Industry and Trade.

Vo Tri Thanh, vice director of the Central Institute for Economic Management, said, however, that the agricultural sector would face harsh competition from other TPP members.

But he noted that TPP membership would produce an overall positive impact on the country. It would stimulate the economy, and inflation would drop as the number of foreign-invested projects increased, he said.

Local gold price tumbles after Fed prompts global sell-off

Domestic gold price yesterday lost an additional 1.08 per cent to fall below the resistance level of VND35 million per tael (US$1,647), which marked a record-low not seen since November 2010.

The falling price followed the drop in world gold prices after the US Federal Reserve's move to curb its bond-buying stimulus prompted a huge sell-off. Spot world gold prices fell to a six-month low of $1,185.10 an ounce earlier yesterday, before it inched-up to $1,192.80 due to bargain-hunting buyers.

SJC gold bars were traded at VND34.9/VND35.13 million ($1,642/1,653) per tael. The drop extended the gap between local and world price to VND4.7 million ($221) per tael. One tael is equivalent to 1.2 ounces.

PNJ reported strong sales from individuals, doubling the volume of two days ago to around 300 taels. However, the daily purchase power remained stable at 500 taels.

Nguyen Cong Tuong, sales manager of Saigon Jewellery Company (SJC), quoted by Vnexpress as saying that many people worried about the down trend continuing, and sold their gold to secure as much as possible.

However, SJC said prices at the State Bank of Viet Nam's auction were improved.

During the 75th auction, 12 credit institutions purchased 14,700 of 15,000 taels of gold offered by SBV at a cost of VND35.01-35.04 million ($1,667-1,668) per tael.

According to SBV, it has sold 1.799 million taels of gold since its first auction in March.

Yesterday, the US dollar was traded at VND21,250.

According to the Committee for Overseas Vietnamese Affairs, some 4.5 million Vietnamese are living in more than 100 nations and territories around the globe.

There are also some 500,000 Vietnamese guest workers.

BIDV subsidiary company opens seventh branch in Cambodia

The Bank for Investment and Development of Cambodia (BIDC), a subsidiary company from the Bank for Investment and Development of Vietnam (BIDV) inaugurated its seventh branch in Cambodia on December 22.

The new branch office is located in Mean Chey district - an important economic sector of Phnom Penh where many Vietnamese businesses are involved in projects including one to build Cho Ray-Phnom Penh Hospital which is expected to put into operation early next year.

Addressing the inauguration ceremony, Uok Maly, deputy governor of the National Bank of Cambodia highlighted the BIDC’s efforts to improve the quality of its branch operations and contribute to developing the finance and banking system for the benefit of Cambodian economic growth.

She expressed her hope that the BIDC will continue to strengthen cooperation with the National Bank of Cambodia to meet customer demand and maintain the stable and sustainable growth of the banking system.

Cambodia is expected to achieve its economic growth of 7% this year, with two-way trade with Vietnam estimated at US$3.5 billion.

By September 2013, Vietnam had 126 investment projects in Cambodia with a total capitalization of more than US$3 billion, ranking fifth among the largest foreign investors in Cambodia.

Fruit, vegetable exports earn US$1 billion

Fruit and vegetable exports were estimated at US$1 billion by mid-December, according the General Department of Customs’ report.

The figure was 27 percent higher than over last year, especially in the context that the earnings from other agricultural products declined in terms of both quality and price.

Vietnam’s fruits and vegetables are on sale in 40 markets around the world.

The shipments of fruits and vegetables has risen steadily over the years, earning US$305 million in 2007, US$628 million in 2011 and US$829 million in 2012.

However, it requires greater investment in the purchase and processing of fresh fruits and vegetables for export to meet Good Agriculture Practice (GAP) standards.

HCM City strengthens ties with Chinese localities

HCM City attaches importance to cooperating with Chinese localities for mutual benefit, said Le Thanh Hai, Secretary of the Municipal Party's Committee.

Hai made the affirmation at a reception for Wang Jiarui, head of the Chinese Communist Party's International Liaison Department, in HCM City on December 21.

He expressed his delight at the fine development of the relationship between the two Parties and states through high-level visit exchanges, helping expand bilateral relations.

He briefed his guests on HCM City’s socio-economic development, emphasizing that the city wants to promote investment cooperation with Chinese localities.

Currently the city is home to more than 300 Chinese businesses investing nearly US$300 million in various areas. This year two-way trade between HCM City and China has reached more than US$3.6 billion, of which over US$1 billion was sourced from the former’s exports.

Hai expressed hope Wang will create favourable conditions for Chinese localities and businesses to strengthen cooperation with HCM City in not only economics and trade but other areas.

At the reception, Wang was very impressed by HCM City’s rapid development, crediting it to the sound leadership of the HCM City administration.

He also shared China’s viewpoint about current development trends and stressed both China and Vietnam are encountering difficulty in economic development due to the global economic recession.

He spoke highly of HCM City’s effort in weathering the storm and wished Vietnam’s largest economic hub greater success in the coming years.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR