Ministry cuts fuel prices, 2nd time in May

Retail prices of petrol and oil in Vietnam are down by VND300 – 600 a liter as from 3:30pm today, May 23, according to the Ministry of Finance’s circular No 216.

Retail price of A92 gasoline dropped by VND600 a liter from VND23,00 to VND22,700 (US$1.08) a liter.

Diesel oil price was reduced from VND21,600 to VND21,200 a liter.

Fuel oil and kerosene both declined by VND300 to VND18,900 a kg, and VND21,100 a liter, respectively.

This is the second retail price cut this month, following the VND300 per liter reduction on May 9.

The domestic retail price cuts were imposed following a constant downward trend in global fuel prices.

Prices of A92 gasoline in Singapore, Vietnam’s main fuel supply, in the first half of this month fell sharply by 8.65 percent month on month, according to Petrolimex, the country’s largest fuel wholesaler.

Following the global slump, local fuel wholesalers have reaped fat profits worth more than VND1,000 a liter, and have thus increased commissions for their dealers.

Fuel prices have been hiked two times so far this year, gaining totally VND3,000 a liter. The latest increase occurred on April 20.

Shares plunge on sluggish trading

Shares plunged further in yesterday afternoon's session as blue chips lost ground and investors became cautious after Tuesday's bulltrap.

The VN-Index gave up another 2.5 per cent to close at 436.75 points, with trading value decreasing by 25.5 per cent over the previous session to VND1.12 trillion (US$53.3 million) on a volume of 66 million shares.

On the VN30 Index, 25 of the top 30 shares by market capitalisation and liquidity sank, driving the Index down 1.63 per cent to 508.45 points.

The two largest shares Vietcombank (VCB) and PetroVietnam Gas (GAS) bottomed out while insurer Bao Viet Holdings (BVH) lost 3.6 per cent.

Steelmaker Hoa Sen Group (HSG) was the most active stock yesterday on trading of 2 million shares, gaining 1.68 per cent to settle at VND18,200 ($0.87).

On the Ha Noi Stock Exchange, the HNX-Index fell by a more substantial 3.73 per cent to 73.61 points. Market liquidity decreased slightly to 55 million shares, worth VND596.6 billion ($28.4 million).

Habubank (HBB) reclaimed the position of the most active share in Ha Noi yesterday with over 5 million shares traded, but slid 5.6 per cent to a close off at VND5,100.

"The sharp fall today showed that the current price level may not be attractive to investors yet. Expectations of a strong bounce bank did not materialise and may lead to higher selling pressure in coming sessions," said Pham Tien Dung, an analyst at Bao Viet Securities Co.

Yesterday afternoon, the Ministry of Finance decided to lower the cost of fuel by VND600 per litre to VND21,700 ($1.03), but the announcement came after trading had already closed for the day.

Governor of the State Bank of Viet Nam, Nguyen Van Binh, said for the first time in a recent statement that the central bank would consider redefining the prime interest rate and reducing key interest rates if inflation continued to decrease and economic conditions improved.

However, according to analysts, the positive news did not seem to lift investor psychology much as stocks had doubled or even tripled in price over the past four months, and investors were likely to grab any profits they could if there were any negative signs.

Foreign investors were still net buyers on both exchanges yesterday, picking up shares worth a combined value of over VND57 billion ($2.7 million).

Vietnamese firms update on Japan market

Vietnamese businesses had a chance to update information on the Japanese markets and expand their business in the northeast Asian country, thanks to a workshop in Hanoi on May 22.

Vo Thanh Ha from Asia-Pacific Market Department under the Ministry of Industry and Trade pointed out difficulties for Vietnamese companies when they penetrate the Japanese market, such as high technical standards for industry and agriculture and technical barriers for each agricultural product, as well as the distribution system and trade promotion costs in Japan.

He suggested Vietnamese businesses learn about Japan and its business practices, regulations and standards, and prepare customs information ahead of fairs or workshops in Japan, ensuring effective negotiations and reduced expenditure.

At the workshop, themed “Japanese market – opportunity for Vietnamese business”, Le Hoang Oanh, Deputy Director of the Ministry’s Trade Promotion Department, said that along with the Japan-ASEAN comprehensive partnership agreement, Vietnam and Japan had signed a bilateral economic partnership pact in 2008, creating a legal framework for the two countries’ economic ties and trade.

The countries saw strong development in economic, trade, industrial and investment cooperation in 2011, despite Japan suffered from the earthquake and tsunami disaster and nuclear crisis.

The Ministry’s statistics showed that trade between Vietnam and Japan reached 21.1 billion USD last year, a year-on-year increase of 26 percent. Of this, Vietnam ’s exports to Japan were valued at 10.7 billion, up by 39 percent.

Vietnam’s key exports to Japan included seafood, apparel, wooden and plastic products, coffee, leatherwork and footwear.

In the first three months of this year, Vietnam ’s exports reached 3.1 billion USD, while imports from Japan cost 2.5 billion USD.

Japan is a leading investor among 26 nations and territories investing in Vietnam with a total capital of 2.3 billion US, accounting for 88.8 percent of the country’s total foreign investment.

Authorities, experts at odds on macro situation

Two senior state officials have mentioned signs of economic recession and deflation in the first session of the National Assembly (NA) gathering in Hanoi.

While the chairman of the NA mentioned signs of deflation, a deputy prime minister talked about signs of economic recession

Opening the session, NA Chairman Nguyen Sinh Hung emphasized though achieving some encouraging results, the national economy is still developing in an unstable way, and the economic structure shifts are processing very slowly.

In addition, as businesses face more difficulties, signs of deflation and low growth rates, together with other social and environmental problems are the real obstacles for the achievement of the overall objectives and targets of the 2012national socioeconomic plan.

The macroeconomic picture in the first 4 months of the year has witnessed positive changes, as inflation is under control, interest rates are declining, the exchange rate is stabilizing, and balance of payments is improving, according to Deputy Prime Minister Nguyen Xuan Phuc.

However, the government said that there are signs of an economic recession as many businesses are in trouble and the bad debts of the banking system have increased.

For the remaining months of 2012, the risk of macroeconomic instability is becoming more likely.

Interest rates are still high, and pressure on price hikes of some commodities used as the inputs for production will continue to pin down business sentiments, as well as macroeconomic management.

The government decided that the key task is to remove those difficulties and promote business development.

Meanwhile, the government will continue to implement consistent policies to curb inflation, and stabilize the economy to create the foundation for sustainable growth. It will gradually implement the policies focused on restructuring the economy towards higher quality, efficiency and competitiveness.

Specifically, it will implement tighter and more prudent monetary policy and pay attention to the harmony between monetary policy and fiscal policy to ensure the inflation target range of 8-9 percent in 2012.

Experts said that the economy is taking positive signs of recovery, thanks to the solution package included in the appropriate financial and fiscal monetary policy of the government.

According to Dr Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management, despite economic difficulties, the first positive signs have appeared.

Thanh said at a recent forum held by the Ho |Chi Minh City Export Investment and Trade Promotion Center (ITPC) that the businesses began importing goods and machinery, raw materials to serve production.

The sign has been reflected in April’s trade deficit, which will probably increase in the coming months.

According to the Ministry of Industry and Trade, the trade deficit in April was at about $400 million.

Besides, Thanh also expected the business support measures, including the disbursement of VND180 trillion in investment capital for development from the state budget plus VND45 trillion from government bonds in 2012 will help the economy start growing from Q2 onwards.

Similarly, Le Xuan Nghia, former deputy chairman of the National Financial Supervision Commission (NFSC), said there have been strong indications showing economic recovery.

The industrial index in April increased nearly 12 percent month on month, the highest monthly level since 2011, while imports, mainly machinery and equipment for production, also surged in April.

For export markets, Nghia said recent forecasts of the world economy also showed positive signs, with many big markets, such as US, EU and Japan, and predicted positive economic growth.

This is good news for Vietnam’s export activities, which rely heavily on those import markets.

Forecasts of declining interest rates will continue to be a positive factor supporting the recovery of the economy. Nghia expected interest rates will soon drop to 13-14 percent a year or further and interest rates would remain low in 2013.

"Public investment and private investment last year was very low, causing shrinking aggregate and credit demand. When the banking system ends the first phase of restructuring to establish order, liquidity stability will make the reduction of interest rates more intense, "said Nghia.

However, the economic experts agree with the forecast of total growth domestic product (GDP) growth will probably be less than the government’s target of 6-6.5 percent, more likely to only reach 4.5-5.3 percent.

XP Power opens factory in Binh Duong

XP Power Vietnam Co. has opened an electronic power converters manufacturing facility at My Phuoc 3 industrial park in the southern province of Binh Duong.

Yap Chee Tiong, general manager of XP Power (Kunshan) Ltd., said on May 21 that XP Power has invested some US$8.5 million in the first stage of the new facility, and US$2 to US$3 million will be added in the second stage, beginning next year.

The XP Power facility’s gross floor area of approximately 11,600 square meters is for manufacturing, assembly, quality engineering, value-added operations, testing and administrative offices.

The facility includes renewable energy design features such as a solar panel array system to significantly enhance energy efficiency and generate electricity for its own energy requirements.

This facility is earmarked to be the first building in Vietnam to be awarded Singapore’s Green Mark Gold Plus by the Building and Construction Authority of Singapore, said the Singapore contractor of the facility.

Organic Agriculture Association makes debut

The first congress of the Vietnam Organic Agriculture Association (VOA) was held in Hanoi on May 22, electing a 19-member executive board for the 2012-2017 period.

Ha Phuc Mich, Vice Chairman of the Vietnam Farmers’ Association (VFA) was elected as VOA Chairman.

Addressing the congress, VFA Chairman Nguyen Quoc Cuong highly valued the role of organic production in the development of sustainable agriculture, affirming that organic production is the target of the country’s agriculture.

Representatives from the International Federation of Organic Agriculture Movements (IFOAM) stressed the need for establishment of a national organic agriculture organization, saying it ensures the development of the organic sector and benefits Vietnam.

The first VOA congress outlined its key tasks as increasing promotion of information on Party and State policies and domestic and international information relating to organic agriculture, as well as expanding international cooperation in organic agriculture.

It also agreed to provide knowledge on organic agriculture to its members and consultancy to the Party and State on mechanisms and policies to create a legal corridor for the development of organic agriculture in the country.

By the end of 2009, IFOAM had certified 160 countries around the world in organic agriculture, with 37.2 million hectares of organic agriculture land or 0.9 percent of the world’s agriculture land.

In Vietnam, 14,000 hectares have been put under organic cultivation, accounting for 0.14 percent of the country’s agricultural land. Of this, aquaculture makes up 7,000 hectares. Thirteen producers are qualified for organic recognition and they are producing shrimps, basa fish, tea and cashew nuts.

Argentina increases agricultural exports to Vietnam

Argentina’s agricultural exports to Vietnam in the first quarter of this year reached 191,780 tonnes and earned US$70.38 million, up 105 percent in volume and 71 percent in value compared to the same period last year.    

According to the Argentinean hygiene and food quality department (SENASA), the products with the highest export value include soybean powder (US$28.8 million), corn (US$21.46 million), and vegetable-based cattle feed (US$4.93 million).

Animal products exported to Vietnam brought Argentina US$14.43 million, particularly cow’s milk, fish, chicken powder, shrimp and cattle hides.

Last year, Argentina’s agricultural exports to Vietnam fell by 31 percent in volume to 1,410,849 tonnes and 3 percent in value to US$581 million against 2010.

Argentina imported 989 tonnes of agricultural products worth US$3.26 million from Vietnam, down 12 percent in volume, but up 117 percent in value. Its major imports were pepper, coconut, coffee, tea and saffron.

Vietnam is one of the non-traditional markets receiving more attention from Argentina’s export expansion plan.

IBM branch debuts in Danang

The world’s largest information technology (IT) services and consulting provider, IBM, opened its new branch office in Danang on May 22, the third of its kind in Vietnam after Hanoi and HCM City.      

The new office is expected to help Danang deploy the “Smarter City” programme and build an e-administration management model.

In recent years, the Danang municipal authorities have coordinated with IBM to increase the quality of public services. IBM has also collaborated with the city to set up an IT centre at Danang University to train high-quality human resources.

IBM Vietnam and the Danang People’s Committee launched a project to make Danang a smarter city on May 7. The project covers three main fields including food safety, water supply and drainage management, as well as helping improve waste treatment in industrial zones.

Danang is only city in Vietnam, and one of just 33 cities in the world, to receive assistance from IBM in 2012 under the corporation’s Smarter City programme.

Phu Nhuan Jewelry sets deadline for participation in 5% dividend

Phu Nhuan Jewelry (PNJ) announced May 31 would be the deadline for existing shareholders to register participation in the 5 per cent cash dividend payout.

The payout on June 14 will be the third for last year's profits.

PNJ closed up 0.5 per cent yesterday at VND41,800 (US$1.99) a share.

Ocean Bank to sell 15% stake to Hermes Capital

Ocean Bank plans to sell 15 per cent of its total capital to London-based Hermes Capital this year as well as boost its charter capital by 25 per cent from VND4 trillion (US$190.5 million) to VND5 trillion ($238.1 million).

Last year, Ocean Bank earned a pre-tax profit of VND643 billion ($30.6 million) on a total assets of nearly VND62.64 trillion ($3 billion). This year, it targets a total profit of VND750 billion ($35.7 million) and a dividend payout of 10 per cent.-

New information disclosure rules to apply beginning June 1

Listed companies must comply with new information disclosure regulations under Circular 52 from June 1, following which the required time for publishing financial reports will be shortened and major stakeholders will be prohibited from simultaneously buying and selling their shares.

State Securities Commission's Market Development Department head Nguyen Son said public companies with a charter capital of more than VND120 billion (US$5.7 million) and 300 shareholders must disclose information in the manner of listed firms.

Meanwhile, commission representative Le Nhi Nang said the penalty for breach of information disclosure rules may soon be increased from the current VND500 million (US$24,000) to VND2 billion ($95,000), with individuals responsible for violations being liable for compensation or subject to criminal liability or to have the listings of their companies cancelled.-

Sacombank real estate arm posts high profit in first quarter

Sacomreal (SCR), the real estate arm of Sacombank (STB), posted a high net profit of VND91.37 billion (US$4.4 million) in the first three months of this year, which far exceeded the net profit of just VND2.33 billion ($111,000) in the first quarter of last year.

The result was attributed to the joint-venture business with Sai Gon Thuong Tin Tan Thang Investment Real Estate Co, which earned Sacomreal a total of VND87.71 billion ($4.2 million) during the period.

However, the company's main business and financial activities declined. Its gross revenue totalled just VND101.8 billion ($4.8 million), a year-on-year decrease of 64 per cent, while revenue from financial investments also dropped 20.8 per cent to VND38.5 billion ($1.8 million).

Insurer's profit surges 81.5% in first quarter

Bao Viet Holdings announced it made a consolidated pre-tax profit of VND626 billion (US$29.8 million) for the first quarter this year, an increase of 81.5 per cent over the same period last year.

Consolidated revenue also surged 18.1 per cent to VND3.97 trillion ($189 million).

Bao Viet chief operating officer Hoang Viet Ha said that the insurance market achieved resilient growth despite challenges in the Vietnamese economy, with total premium revenue in the first quarter increasing 19 per cent compared to the same period last year.

Bao Viet's performance has grown commensurately, with gross written premium revenue from our insurance business reaching VND2.5 trillion ($119 million), up 19.2 per cent compared to the first quarter of 2011.

Struggling companies to get land use break

The Finance Ministry's Department of Public Property Management said they had provided specific guidance on the reduction of the land hire fee for a year as well as extended the payment deadline for businesses in difficulty.

Government Resolution No 13 stipulates that the reduction and extension would be applied to both State-owned enterprises and those operating in the commerce and service sectors.

The department said eligible businesses should send their applications and documents to local tax departments for consideration.-

US investors keen on Ninh Thuan

The central coastal province of Ninh Thuan last week signed a Memorandum of Understanding (MoU) with a delegation of US investors on studying investment opportunities in the province.

The MoU was inked after the delegation, including representatives from Livingston Group LLC, Silverfin Development, H&H and Link World, made a fact-finding tour of the province to designate possible sites for a 466-ha resort, a Disney entertainment centre and centres for tertiary education.

They also pledged to help the province advertise its advantages and opportunities for investment to potential investors.-

Japanese to invest in industrial park

Mizuho Bank and Chodai Corporation of Japan are negotiating with the management board of Hiep Phuoc Industrial Park (HIPC) on the kind of investment that will be made in the park.

According to Phan Dinh Cuong, head of the international clients department at the park, the Japanese partners have proposed two investment alternatives.

The first one would be a joint-venture company with HIPC to invest in building a Viet Nam-Japanese Industrial Park in Nha Be District. The 100-ha area would be part of HIPC project's second phase of construction.

Under this investment agreement, HIPC would contribute its land and the Japanese partners would invest in infrastructure and make efforts to attract companies to the park. The alternative investment form would be the lease of HIPC's land for 50 years, which HIPC prefers.-

Budget airlines set to operate new routes

Vietjet Air is set to begin flying the Ha Noi - Nha Trang route from Thursday this week.

The new route is the carrier's third, in addition to the Ha Noi - HCM City and HCM City - Da Nang routes.

Another carrier, Air Mekong officially opened a direct air route between Ha Noi and Con Dao last Saturday, with nine flights a week.

The new route was expected to meet increasing demand of tourists from northern localities to travel to the historical, southern island during the summer, the airline said.

Virus decimates shrimp population

Up to 900 million breeding shrimp have died in the southern province of Tra Vinh, causing local farmers initial losses of VND1 trillion (US$48 million).

The dead shrimp accounted for 50 per cent of the total in the province, according to the provincial Agricultural and Rural Development Department.

The shrimp, which were from 15-45 days old, died of the infectious hypodermal and haematopoietic necrosis virus (IHHNV), reported the department.

Uncertainty over where the shrimp originated from could also be a factor, said Pham Minh Truyen, deputy director of the department.

Only 37 per cent of the shrimp had been through local quarantine stations located in the districts of Chau Thanh and Duyen Hai since the start of this year, Truyen said.

More than 8,000 local farmers raised this species of shrimp, which were believed to have been purchased from the central provinces, he said, adding solutions to curb the disease and to deal with loans that local shrimp farmers had taken out to raise shrimp would be addressed at a meeting today.

In the short term, authorised agencies have ordered local farmers to put a temporary halt on breeding activities until the situation is under control.

According to a Vietnam News Agency reporter in the province, the situation is the worst that farmers in the province have experienced in five years.

Around 1.8 billion breeding shrimp are raised across 23,000ha in the districts of Cau Ngang, Chau Thanh, Duyen Hai and Tra Cu.

Delta to get wind power plant by 2015

Construction of the Mekong Delta Wind Power Centre with a capacity of about 500MW in Bac Lieu City is expected to be completed by 2015.

According to the plan, the centre will be built in Vinh Trach Dong Commune and will also have offices in Tra Vinh Province's Duyen Hai District and Soc Trang Province's Vinh Chau District.

The project is expected to help ensure a sufficient electricity supply for the Mekong Delta, as well as change the economic structure of the area, promote investment in industrial projects and reduce the impact of climate change.

Last October, the Viet Nam Development Bank (VDB) signed an agreement with the Export-Import Bank of the United States (US Eximbank) to receive a loan of US$1 billion to VDB to fund the project.

In co-operation with the Mekong Delta provinces of Bac Lieu, Tra Vinh and Soc Trang, VDB and Cong Ly Ltd Co, the project's investors, had conducted initial investigations to develop the specific plans.

Major equipment contract for thermoelectricity plant signed

A contract for the design and supply of equipment and technological services for the Thai Binh 2 Thermoelectricity Plant Project was signed in Ha Noi yesterday.

The contract, worth more than US$826 million, was signed between the PetroVietnam Construction Joint Stock Corporation (PVC) and the Sojitz-Daelim contractors (SDC).

Speaking at the signing ceremony, general director of the PVC Vu Duc Thuan said the contract included equipment supply and a detailed design for the turbine and generator areas. It also gave technical consultancy and guidance for the equipment installation and pilot operation.

As expected, the duration of the contract between the PVC and SDC will ensure compliance with the engineering-procurement-construction (EPC) contract signed.

The Thai Binh 2 Thermoelectricity Plant, with the capacity of 1,200 MW and a total investment of US$1.6 billion, is expected to commence operation in 2015 with output of about 6.7 billion kWh per year.

The plant located in the My Loc Commune, Thai Thuy District in the northern province of Thai Binh. -

Farmers, enterprises lock horns
 
More contracts between farmers and companies in Mekong Delta provinces are being broken, and as a result, more lawsuits are being filed.

According to the latest survey of the Viet Nam Chamber of Commerce and Industry's (VCCI) Can Tho branch, farmers have complained that companies were buying at the lowest prices and refusing to pay other expenditures related to production.

In other words, they did not share the benefits as well as the risks.

On the other hand, companies claimed that farmers had been ready to break contracts for higher benefits and that they did not keep original agreements.

They said farmers were also using more additives, stimulants and agricultural chemicals to their products.

In addition, farmers have not used scientifically proven feeding techniques and cannot ensure quality.

"Trading relations between farmers and enterprises are not good and are unfair in the long-term," Nguyen Huu Nguyen, chairman of An Giang Province's Chau Phu Tra Catfish Cooperative, was quoted as saying in the Sai Gon Giai Phong (Liberated Sai Gon).

"Despite major contracts with farmers, enterprises never make deposits and do not become notarised," he added.

In addition, enterprises often did not make payments or were late in paying, from one month up to one year. Meanwhile, farmers must borrow money and pay interest at banks.

"It's a big risk and farmers also suffer interest payments on loans after selling fish. This has caused thousands of households in the Mekong Delta to go bankrupt," he added.

However, according to Nguyen Van Nhut, deputy general director of Nam Viet company, companies cannot make deposits to farmers because the costs would be too high.

"Why don't farmers give us a deposit to ensure that they have fish to sell?" he said.

Due to such conflicts, more contracts are being broken.

The farmers have the potential to make the products gain but he would receive a low income in the production value chain.

Farmers' work is seasonal, production is small in scale, and market and technical information is minimal.

"These are all weak points for farmers," said Nguyen Phuong Lam, head of VCCI's Can Tho branch's legal department.

Moreover, few enterprises invest in farmers' production, and authorities have not done a good job of regulating the two sides.

The role of the Farmers Association and the financial regime regulating connections between farmers and enterprises remains unclear. To achieve successful transactions, experts said clear and detailed contracts should be created and carried out through banks. Insurance for agricultural products should also be included in contracts, Lam said.

Dr. Vo Hung Dung, director of VCCI's Can Tho branch, said that farmers should sell their products through contracts to ensure their rights and to limit risks.

"Farmers should unite. They need to improve quality and learn about laws and regulations so they can become great partners," Dung said.

At the same time, the Government should create a master plan for localities.

"The Government should issue new policies on owning land, and promotion of long-term production," said Dr. Nguyen Anh Phong of the Agriculture and Rural Development Strategy and Policy Institute.

Tay Ninh Province to revert industrial land for paddy farming

The People’s Committee in the southern province of Tay Ninh has decided to erase down seven industrial parks, asking local authorities to once again convert the land into cultivable rice fields.

Previously, the People’s Committee had ordered the district administration to check on the progress of industrial parks in the province. After a thorough investigation, local authorities found that only four industrial zones had constructed their infrastructure while as many as 16 were still going round in circles.

With industrial parks failing to make progress, despite vast paddy field areas having been cleared for the purpose, the People’s Committee of Tay Ninh decided to take back the 743 hectares of land and revert to paddy farming.

Seven industrial parks reverting to paddy fields are Long Chu and Tien Thuan in Ben Cau District with an area of 350 hectares; Bau Don in Go Dau District with an area of 200 hectares; Dong Khoi in Chau Thanh District with 20 hectares; Tan Dong and Suoi Ngo in Tan Chau District with 40 hectares; and Suoi Can in Tan Bien District with 133 hectares.

Last December, the National Assembly had passed a resolution that the country should preserve 3.8 million hectares of paddy land by 2020.

The government asked Tay Ninh to protect 81,000 hectares for paddy cultivation and the People’s Committee had requested the Department of Natural Resources and Environment to inspect the land transfer from paddy to other purposes.

Paddy land area has decreased over the last few years in the country with haphazard investments of industrial parks.

Fuel traders offer big commission for agents

Local oil traders have enjoyed large profits from the sharp tumbles of petrol prices in international markets, and to maintain their market shares, several have offered higher commission for fuel retailers, with some earning as much as VND1,000 a liter.

Le Thanh Man, head of the sales department of Petimex, on Monday said the commission level his company set for local fuel traders was VND700 a liter, up by VND50-100 from ten days ago.

According to Man, local wholesalers including his business are gaining mounting profits thanks to the petrol price fall in foreign markets and they have revised up the commission for retailers as a result.

Oil traders consider higher commission payment a way to cope with the current fierce competition among industry insiders, Man pointed out.

“Global prices are falling and a number of local firms granted import licenses have taken the chance to import fuels as much as possible. With the present low buying prices and the absence of inventories, these companies are fetching large margins and thus tending to attract petrol traders with higher discounts,” Man stated.

“There is a firm offering its retailers up to VND800-900 a liter and we have no choice but to lift up the discounts for our partners to maintain the sales as well,” Man added.

An executive of Comeco said the wholesaler had increased the discount to his firm to VND650 per liter for almost a week.

Vietnam National Petroleum Corporation (Petrolimex) said on its website that prices of petrol products in the Singaporean market last Friday continued the downtrend from early May, declining by some U.S. dollars versus the previous day.

The RON92 petrol price slipped to US$114.61 a barrel while diesel oil shrank to US$120.61 a barrel. Similarly, DO 0.05S and DO 0.25S oil dropped to US$122.37 and US$121.46 a barrel respectively, meaning local fuel traders might have reaped big gains if they had imported fuel at such low prices.

Funds for property sector still choked

Funds from banks for the property sector, especially for project development, have remained locked after over a month since the central bank loosened its grip on capital for the industry, industry insiders said.

Tran Minh Hoang, board chairman of Vinaland, said lending conditions have eased substantially, but the market has reacted slowly.

Hoang said that the sentiment remained low on the market while panic still haunted many home buyers who fear that even if they pour money into ongoing projects, property developers could hardly complete their schemes on schedule.

“Apartment prices have tumbled, but (houses are) not cheap enough. The crucial point now is how to win back home buyers’ confidence,” Hoang explained.

Since lending conditions were eased on April 11 following a decision of the central bank, few banks have channeled funds into property developers. However, many banks have launched programs to attract genuine home buyers at preferential lending rates.

HSBC Vietnam is perhaps the lender with the biggest number of home buyers seeking loans after the bank launched a great promotion, charging a lending rate of only 15.5% a year for long-term loans plus a zero interest rate for the first month. The bank said that declining property prices coupled with lower lending rate would be a good chance for home seekers.

A credit officer at Asia Commercial Bank (ACB) observed that credits for home buyers have increased slightly in recent weeks. The bank has set aside VND1 trillion to lend home buyers, offering collateral loans at an interest rate of 18-19% a year.

Ly Xuan Hai, general director of ACB, said the VND1-trillion credit line is launched to capitalize on the housing demand poised to go strong once the property price goes down and loans are cheaper. However, Hai also admitted that the lending rate remains high for home seekers.

At Vietnam International Bank (VIB), home buyers have come knocking, but the number is still small, said an executive. However, there are almost no borrowers who are project developers, since there are no signs the frozen market is thawing, the source said.

Tran Anh Tuan, General Director of Nam A Bank, said the wait-and-see attitude still prevails. Home buyers are waiting for the interest rate to go down further, waiting to see property prices to ease, and waiting to see warming-up signs on the property market, he said.

Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), commented that the crisis on the local property market relates largely to the confidence.

While people in need of housing products are waiting for prices to go down further, developers are selling products at break-even point or even at a loss, Chau said. The solution now is how to build up confidence, how developers could provider buyers suitable products at reasonable prices, he said.

Given the dreary property market, some enterprises have initiated new solutions.

Bank for Investment and Development of Vietnam (BIDV), for example, has recently announced a connectivity program linking up key stakeholders in the property market, namely the project developer, the contractor, the supplier of building materials, and the bank. The cooperation among these stakeholders will help project developers have funds to complete projects, while suppliers of building materials can sell their products.

However, Chau of HoREA observed that such collaboration initiated by BIDV only helps with the market input, while the big problem now is how to find outlets for the market as property developers are facing mounting inventories.

Chau, therefore, suggested that there is collaboration among other stakeholders to find the way out for the market. He said the collaboration should include the investor, the broker, the consumer, and finally the bank.

Private CNG-bus operators bemoan discrimination

Although CNG (compressed natural gas) buses have proved effective for fuel and cost reduction, private transport firms in HCMC are still hesitant in expanding CNG bus fleets as they do not enjoy tax policies like State-run enterprises.

Phung Dang Hai, general director of HCMC Transport Cooperative, told the Daily that the unit receives neither tax incentives in CNG-powered bus import nor interest rate subsidy to expand investment.

Although the city government encourages investment in CNG buses to reduce environment pollution, enterprises are meeting many challenges such as high bank lending rates, fuel price fluctuations and rising maintenance fees and worker salaries. Most of CNG bus operators are suffering losses.

However, the cooperative still has plans to launch eight more CNG buses into operation in early July to replace degraded diesel oil-run vehicles.

Meanwhile, Saigon Passenger Transport Co. Ltd. (Saigon Bus), a State-owned company, enjoys many incentives for investing in CNG buses.

Nguyen Tuan Viet, deputy general director of Saigon Bus, said the enterprise had received preferential loans and 100% car import tax exemption for launching 21 CNG buses into operation last August.

The city now has 28 CNG busses operating on four routes. The municipal government targets to launch 350 CNG buses into use in 2015 and gradually reduce the number of diesel oil-run buses.

After pilot operation, CNG buses have proved a wise choice as machine runs smoothly while smoke and toxic exhaust is reduced. The buses also help save 30-45% of fuel costs compared to diesel oil-run vehicles.

Mövenpick Resort & Spa Quy Nhon deal inked

Mövenpick Hotels & Resorts, an international hotel company of Swiss heritage,has inked a management agreement to become the official operator of Mövenpick Resort & Spa Quy Nhon in Quy Nhon province with Dviews Investment JSC.

Mövenpick Hotels & Resorts, Asia-Pacific vice president of Development Jens O. Reichert said his company was pleased its brand had been selected by the developer and was excited about this outstanding new resort.

He said the resort would be the first newly built property in Quy Nhon operated by an international brand.

Pacific Land Services managing director Reno Mueller, the lead project consultant and owner’s representative, underpinned the project’s unique proposition for the market in terms of location, product composition, innovative design and brand positioning.

“Quy Nhon and its surrounding region possess great tourism potential within the domestic market and as gateway to Cambodia, Laos and Eastern Thailand that will be further unlocked by continuing infrastructure development,” he said.

The Mövenpick Resort & Spa Quy Nhon will boost 180 hotel rooms and 52 exclusive private villas nestled amongst ocean cliffs and offer extensive spa and leisure facilities, numerous dining options and conference rooms, a cliff-top golf putting green, a diving school, and its own private marina.

The 22 hectare project will occupy a unique location on Phuong Mai peninsular in Nhon Hoi Economic Zone surrounded by pristine ocean cliffs and bordered by its own coral reef that is alive with many rare sea species. With crystal clear water and year-round sunshine the resort is set to become a top spot for relaxation and diving in central Vietnam.

One of Dviews’ top priorities for the eco-friendly and sustainable development of the resort is to preserve the cultural heritage of Quy Nhon and its unspoiled environment and distinctive marine ecosystem. The developer aims for LEED Platinum certification (Leadership in Energy and Environmental Design) and Green Globe accreditation, a goal that is strongly supported by Mövenpick Hotels & Resorts.

Construction for the main infrastructure is already well underway and the resort is slated to open in the first half of 2015.

Government may continue to regulate power prices    

The government may continue to regulate power prices instead of handing over the entire decision to the state-owned Electricity of Vietnam Group (EVN).

According to the draft Law on Prices, which will be delivered at the National Assembly on May 28, electricity production is defined as key service which dramatically affects production and people’s lives. Therefore, the government will continue to regulate prices.

As a result, the government may decide prices for power transmission and support services as these are state-monopolies.

The government could only set a framework for power generation, wholesale and retail prices and allow power companies to decide detailed prices.

Regarding power generation prices, the government is speeding up the building of a competitive power generation market which is expected to start operation in 2012, along with giving power companies more autonomy to decide their wholesale power prices in order to increase their competitiveness.

The setting of framework for power generation, wholesale and retail prices are expected to prevent power companies from colluding with one another in order to drive up prices, negatively affecting production and people’s lives.

Concerning the country’s average retail power prices, the draft law said that the current power pricing mechanism is no longer suitable as it has remained unable to fluctuate based on input costs.

In order to improve the situation, the draft law suggested that the government decide the framework for average retail power prices and retail power pricing. The Ministry of Industry and Trade should be responsible for defining retail power prices for particular groups of consumers.

Vietnam’s potential promoted in Ukraine

The Vietnamese Embassy in Ukraine promoted the image and potential of Vietnam at an annual tourism festival in Odessa province from May 19-20.

The Vietnamese Embassy delegation, led by Ambassador Ho Dac Minh Nguyet, also introduced Vietnam ’s economic, trade and tourism potential to other diplomatic corps and businesses in Odessa province.

The delegation also attended the opening ceremony of the Odessa club of diplomatic corps.

After joining the diplomatic activities, Ambassador Nguyet worked with the Executive Committees of the Association of Vietnamese People and the Association of Vietnamese Entrepreneurs and met with outstanding Vietnamese business people in Odessa.-