Shares slide on sour earnings
 
Shares extended their losing streak yesterday on the HCM City Stock Exchange, as about 20 listed enterprises reported losses in the second quarter of this year.

Unprofitable securities firms still accounted for a large proportion of these companies, with six brokerages posting losses, including Trang An Securities (TAS), Sai Gon-Ha Noi Securities (SHS), Sao Viet Securities (SVS), Phu Hung Securities (PHS), Kim Long Securities (KLS) and Phuong Dong Securities (ORS).

The VN-Index fell by 0.6 per cent to 421.99 points as losers overwhelmed gainers by 169-70. The value of trades dropped 26 per cent from last Friday's figure to VND783.5 billion (US$37.3 million) on a volume of nearly 50.7 million shares.

Four major blue chips bucked the downward trend, with HCM City Infrastructure Investment Co (CII), Phu My Fertilisers (DPM), steelmaker Hoa Phat (HPG) and Sacombank (STB) all gaining 0.9-3.1 per cent on the day. Together, however, they failed to lift the VN30 Index, which tumbled by 0.3 per cent to close at 495.86 points.

The exchange yesterday started to revise the basket of 30 shares tracked by the VN30. Da Nang Rubber Co (DRC), steelmaker Hoa Sen Group (HSG), Military Bank (MBB) and property developer Tu Liem Urban Development Co (NTL) replaced food processor Hung Vuong (HVG) and property developers Quoc Cuong Gia Lai (QCG), Khang Dien House (KDH) and Sudico (SJS) in the index calcuation.

None of these new shares advanced yesterday.

In the first six months of the year, shares in the VN30 had an average market capitalisation of around VND476 billion ($22.6 million) per day, accounting for 72 per cent of the entire market, the State Securities Commission said yesterday. They accounted for average trading value of nearly VND86.2 billion ($4 million) daily, or 62 per cent of the market.

After the revisions to the VN30 Index, the index focuses on three major sectors, the commission said. "They are finance, 10 companies; manufacturing and processing, 7 companies; and real estate, 5 companies."

On the Ha Noi Stock Exchange, the HNX-Index lost 1 per cent to stand at just 71.46 points. Meagre trades on the Ha Noi bourse totalled only VND509 billion ($24.2 million), 16 per cent below the previous session. The volume of trades dropped 32 per cent to just 43.6 million shares.

The HNX30, tracking the capital city's leading shares in terms of capitalisation and liquidity, fell 0.94 per cent to 137.37 points.

Facebook booms in Viet Nam

Viet Nam has surpassed Japan to have the highest growth rate of Facebook users in Asia during the second quarter of the year, said Huynh Kim Tuoc, Facebook's representative in Viet Nam.

Tuoc said about 5.43 million people in Viet Nam use Facebook each month, of which 3.55 million use the application through mobile devices.

Gov't bans used electronics imports

The Ministry of Information and Communications has announced a list of information and technology (IT) products banned from being imported into Viet Nam form the beginning of September.

The list includes second-hand IT items such as mobile phones, tablets, laptops, printers, cameras, soft disks, speakers and digital cameras and accessories. However, products which would be used for repairs or re-export are not banned from the new regulation.

The ministry asked organisations and individuals to report details on imports and inventories each year.

Software helps find missing phones

CMC Infosec Company on Wednesday released its latest anti-virus software, CMC Mobile Security 2013, which can also help users find lost smart phones with the Google Maps application.

The software for the Android operating system would help users control their smart phones by providing information on the location of the phone online.

The software also has an SMS filter to prevent unwanted spam clogging up your in-box.

Hewlett-Packard unveils new PCs

US personal computers and printers manufacturer Hewlett-Packard has rolled out more than 20 new models of PCs and printers in Viet Nam in the hope of maintaining its market share in the country.

Irving Oh, general manager, Personal Systems Group, HP Viet Nam, quoted the International Data Corp as saying HP was in second position during the first quarter with 13.5 per cent of market share.

Speaking at an event titled Making Technology Work for You in HCM City yesterday, he highlighted HP's new business computer with the latest Windows operating system, which he claimed starts 41 per cent faster and shuts down 30 per cent faster than older computers.

In March the company combined its PC and printing units into one business in a bid to boost business efficiency.

Orient Bank applies IBM technology

The Orient Commercial Joint Stock Bank (OCB) will deploy an IBM Information Management software portfolio that includes Netezza data warehouse and Cognos business analytics solutions.

An agreement to this effect was signed in HCM City yesterday.

OCB is the first bank in Viet Nam to deploy IBM Netezza for its entire banking system, including headquarters and nationwide branches.

Tra exporters agree to floor price
 
Leading tra fish exporters agreed to levy a minimum price of US$2-2.2 per pound on shipments to the US for the remaining months of the year in a move to ensure fair competition and regain value for Vietnamese tra fish, according to the Vietnamese Association of Seafood Exporters and Processors (VASEP).

Tra fish export prices to the US have decreased during the past several months as more domestic tra fish exporters have focused on the US market, which is seen as more lucrative than other markets. According to the US Customs, frozen Vietnamese tra fillets were priced at $3,480 per tonne last month, down 4 per cent over the previous month.

With some catfish exporters offering to sell products at unusual cheap prices, other Vietnamese catfish processors and exporters expected that the floor price regulation would ensure that only capable and honest businesses could join the US market and help reverse slumping prices.

VASEP said that many catfish exporters had been forced to sell at lower prices as they were under pressure to pay back bank loans. Some exporters offered to sell at only $2.2 a kg, a rate other firms said was incredibly low, as exporters could only make a profit from $2.7 a kg.

To apply a floor price, Truong Dinh Hoe, VASEP general secretary, said the association had asked the Ministry of Agriculture and Rural Development to require tra fish exporters to register export contracts with VASEP before making shipments. This regulation is to apply from August 1. Tra fish export contracts to the US, therefore, would need to be approved by VASEP for supervision on prices and quality, Hoe said, adding that exporters, whose export prices are lower than the floor prices would be fined.

The floor price regulations would be also applied for other markets, said Hoe.

Franchising falls by a third

Franchising of foreign trademarks in Viet Nam in the first half of the year fell 30 per cent compared with the same period last year, according to the Ministry of Industry and Trade.

In the first six months, the ministry registered only eight franchisers in the fields of food and beverage, fashion, transport means and computer services. However, they were for brands of renown.

Explaining the decline, the ministry said franchising was not a popular business model in Viet Nam.

However, it blamed this on the country's diversified investment policy. This gave investors more choices to do business rather than just franchising.

Economic experts said some Vietnamese getting involved in the business failed to thoroughly understand franchising techniques. Others had too few specialised employees or a comprehensive plan to develop outlets.

They added that lack of strong trademark protection had hampered franchisers.

The cost of renting outlets on major roads in big cities has also skyrocketed, making it difficult for businesses to find prime space.

Since 1990, more than 120 foreign brands have been franchised in Viet Nam.

Trade with Mexico blooms

High growth is expected this year in the two-way trade between Viet Nam and Mexico, the second largest economy in Latin America.

A report from the Vietnamese embassy in Mexico City said that business between the two countries had been developing strongly.

Viet Nam's export turnover to Mexico hit nearly US$467 million in the first five months of this year, an increase of 25 per cent compared with the same period last year. Key export goods were garments, seafood, shoes, printers, coffee and rubber.

At the same time, Viet Nam imported Mexican goods worth $39.8 million, 76 per cent higher than for the same period last year.

In May, there was a record import turnover of $13.7 million, an increase of raising by 109 per cent over May, 2011. Goods included stock feed, computers, electronic products and components, spare parts, iron and steel.

The Mexican economy had GDP growth of 4.6 per cent in the first quarter and expects it to be 4.5 per cent in the second quarter, thanks to rising imports and exports.

In the first five months of this year, Mexico's exports to foreign countries were more than $2.6 billion above imports.

However, its exports to Asia are lower than imports.

Foreign ports suspend fewer local ships
 
The number of sub-standard ships from Viet Nam being suspended at foreign ports is generally higher than vessels from other countries.

However, the number has fallen since last October when a directive was issued by the Transport Ministry's Department of Legal Affairs that all Vietnamese ships must be inspected and have any problems fixed before leaving Viet Nam for other countries.

According to the Viet Nam Maritime Administration, in the first half of this year, 32 Vietnamese ships were detained at foreign ports when undergoing Port State Control – the inspection of foreign ships in national ports to verify that the condition of the ship and its equipment comply with the requirements of international regulations and that the ship is manned and operated in compliance with the new rules.

In the same period last year, the number of detained ships was 51.

In the first nine months of last year, 83 out of a total of 763 inspected Vietnamese ships were detained in foreign ports, or 10.8 per cent.

Vo Duy Thang, head of the Maritime Safety and Security Department under the Maritime Administration, said that in the Asia-Pacific region alone, the percentage in the first quarter of this year was reduced to 6.52 per cent and that of the second quarter was 5.88 per cent.

He noted that Viet Nam's rate of ships detained in the 18 nations in Asia and the Pacific was lower than that of Indonesia (11.47 per cent), Cambodia (9.67 per cent) and Thailand (9.19 per cent).

Deputy head of Transport Ministry's Department of Legal Affairs Nguyen Hoang said that the reduction proved the effectiveness of the ministry's directive.

He said that the directive forced all shipping companies, big and small, to pay more attention to ship safety, security and environmental pollution.

However, Hoang said it was difficult to inspect all ships departing for overseas because container ships entered and left ports so frequently, some staying only a few hours.

The Maritime Safety and Security Department has recommended that ships that fail to meet foreign port inspections be placed on a black list and be subjected to more frequent inspections when returning to home ports.

Transport deputy minister Nguyen Van Cong agreed with the recommendation, asking relevant agencies to improve the image of Vietnamese fleets without inconveniencing shipping companies that always operated within the guidelines.

The new inspection system is expected to reduce pressure on port authorities, inspectors and ship owners, especially companies with well manned-and-operated vessels.

Exporters learn to avoid dumping actions

A training workshop that aims to help Vietnamese exporters learn how to use a website that could help them predict the possibility of anti-dumping lawsuits filed by major export markets, especially the US and the EU, was held in HCM City last Saturday.

Held by the World Trade Organisation Affairs Consultation Centre in HCM City, the workshop was part of a series of activities aimed at helping exporters better prepare for anti-dumping and anti-subsidy actions that could be taken against them.

The Early Warning System website (www.canhbaosom.vn or www.earlywarning.vn), in both Vietnamese and English, has been set up by the Ministry of Industry and Trade's Viet Nam Competition Authority.

It aims to give early warning about Vietnamese products that could be subjected to trade remedy measures including anti-dumping prior to official complaints submitted by foreign producers.

The system runs through a variety of data sources, sourced mostly from the Viet Nam Customs Department and foreign customs agencies. These include data about trade, market size and trade measures.

The database serves as the basis for filters of quantitative analysis, including negligibility filters and quantitative filters.

Speaking at the workshop, Trinh Anh Tuan, head of the Viet Nam Competition Authority's International Co-operation Board, said that by learning how to use the website, many Vietnamese businesses would be able to prepare better for counter-trade measures including anti-dumping taxes.

Exporters would have more time to make production adjustments and actively deal with investigations conducted by relevant foreign agencies, Tuan said.

The website would thus help enterprises maintain and build their business in a sustainable manner and improve their competitiveness in export markets.

It would also give exporters access to reliable trade data related to their business, provide advance warning, consultation service and help mitigate negative impacts of cases filed against them, Tuan said.

In addition, the system would help business associations anticipate problems better and provide more effective support to members.

It would also keep the Government updated on the country's export growth, promote exports and diversify markets and industries.

The system is built under the agreement between the Viet Nam Competition Authority and the Global Competitiveness Facility for Vietnamese Enterprises, funded by the Danish International Development Agency.

The early warning system would initially focus on five major Vietnamese exports: seafood, footwear, garments, wood furniture and cables, looking particularly at the US, EU, Canadian, Brazilian and Australian markets. Its scope would be further expanded to include Japan, South Korea and India in the near future.

Tuan said the website was a timely initiative because many Vietnamese exporters were passive in coping with anti-dumping lawsuits.

They typically lack information about such cases and thus have no idea how they have to respond when lawsuits are filed against them.

Most local exporters have no regular lawyers, and many Vietnamese lawyers are inexperienced in such cases, Tuan said.

The language barrier, differences in legal, accounting and financial systems become huge challenges for many export companies when they are under investigation for anti-dumping lawsuits.

Tuan recommended that exporters learn more about anti-dumping laws, adjust prices, diversify export markets, and take the initiative in researching anti-dumping cases.

Pham Chau Giang, deputy head of the International Co-operation Board under the Viet Nam Competition Authority, told Viet Nam News that the number of anti-dumping lawsuits filed has been increasing rapidly since 2004, and looked set to rise further.

"We now realise that some export markets intend to conduct anti-dumping investigations into our notebook paper. So exporters of this product must find measures to cope with this challenge soon," she said.

Giang said she highly recommends that exporters contact the Ministry of Industry and Trade's Viet Nam Competition Authority for help and support.

"We also hope to receive feedback from export businesses regarding the early warning website so we can improve it and expand its scope to more export markets," Giang said.

Nguyen Tran Phuong Ha, manager of Hoa Sen Group said that the workshop was helpful and hoped that the system would be further expanded to include many more industries, especially the steel industry.

To date, Vietnamese companies have faced more than 31 cases relating to anti-dumping, anti-subsidy and other safeguard measures, according to the Viet Nam Competition Authority.

Two-thirds of the anti-dumping lawsuits related to 15 leading export items, and three-fourths were from 10 major export markets including the US and the EU.

Modern retail centres outgun traditional markets

Modern retail centres, convenience stores and supermarkets are having an impact on traditional markets and the livelihood of thousands of merchants throughout the city, a seminar in HCM City heard on Friday.

The seminar of merchants, producers and distributors, held to seek solutions to the problem, also heard that customer concerns about fake goods, poor quality and hygiene at traditional markets.

The seminar heard that new private convenience stores also had cheap prices because of modern distribution channels and promotions which were not available to traditional market traders.

Consumers preferred to buy quality and safe goods at reasonable prices with after-sales services and they were also taken with innovative designs and eye-catching packaging, the seminar heard.

Vo Thi Phuong, a trader at the Bau Cat Market, said businesses should supply high-quality and safe products at traditional markets.

According to Vietnamese goods ambassador, actor Quyen Linh, sales at traditional markets had nearly halved over the past three years while sales at supermarkets had increased because customers wanted safe products.

Huynh Khanh Hiep, deputy director of the HCM City Department of Industry and Trade, said there should be co-ordination among ministries and sectors. The department would work with local authorities where traditional markets were located to reduce unfair competition.

Enterprises should produce high-quality products and innovative designs to attract customer, Hiep said. The department also recommended distributors offer promotions at traditional markets to help increase their attractiveness as well as their purchasing power.

Duong Thi Ngoc Dung, chairman and CEO of VinatexMart, said it was essential to create an awareness for local consumers that using Vietnamese goods "means patriotism and national pride".

She said most people wanted to use Vietnamese goods so her enterprise focused on setting up retail sales and distribution channels, partly to help change customer awareness.

When other countries launched local goods consumption programmes, imported goods would be driven back, she said, but in Viet Nam, this was not the case and it would be a long battle to correct the situation, with many obstacles.

Most Vietnamese enterprises were facing difficulties in delivering goods to the market, especially in rural areas, because they did not have enough financial resources to build up retail distribution channels, she said.

"It is necessary to intensify production, improve quality, diversify designs and enhance competitiveness with foreign goods, particularly those from China," she said. "Firms also should also cut costs and prices.

"The State should support them to bolster distribution channels domestically and abroad."

EVN denies monopoly of power market while seeking investment

Electricity of Viet Nam (EVN) claims it does not want to monopolise the power market and has called for investment from other companies.

To make its point, it said that electricity tariffs had not caught up with market realities, making it difficult to ensure there was enough money for production.

EVN's deputy general Dinh Quang Tri revealed this at a press conference to discuss electricity prices in Ha Noi yesterday.

Tri said EVN expected that revised circulars would be announced in the future to guarantee a mechanism existed to amend tariffs and ensure that the moves were transparent.

"The newly issued Law on Price stipulates that the Government regulates the framework for electricity generation. Electricity prices will be decided according to market mechanisms," he said.

He said that the group had found it difficult to find finance for power production. However, the dilemma was that if electricity prices were high, the economy and people would not be able to suffer.

"EVN cannot decide itself on raising power prices, but depends on instructions from ministries," he said in response to a question on a price hike earlier this month.

He added that EVN would review input costs every three months to submit to the Prime Minister whether or not prices were raised.

The group would only be providing 15 to 17 per cent of its output to the national grid by 2015, the rest would be supplied from other power companies.

EVN's main duty would be to buy and sell electricity to distribution companies to provide to consumers. It would also be responsible for arranging capital for transmission companies to buy electricity.

The deputy general director said the group would add VND6.5 trillion (US$309.5 million) into electricity prices each year from 2012-15 following the PM's requirement that compensation be paid for foreign exchange differences.

In the period of 2010, EVN imported oil for power generation and suffered a loss of VND15 trillion ($714.2 million) due to foreign exchange differences. In 2011, the loss was VND11 trillion.

He said the compensation was necessary because other groups such as Petrolimex could sell fuel according to market prices, while the power industry had to rely on those stipulated by the Government.

"The Government arranged $74 billion in loans for us to invest in power production. This will be transferred gradually into electricity prices," he said.

He said power price hikes would depend on economic and EVN's financial situation. Increases would be audited every year.

In responding to question on a possible decrease of electricity prices, he said the group had suffered losses and could not do this at present.

Following the PM's requirement to implement restructuring, he said EVN would bring three power generation companies (GENCO) into operation by the beginning of October. The companies would sell electricity to EVN.

Initially, EVN would arrange capital for the companies. GENCOs would be equitised and separated from EVN as the competitive wholesale power market come into operation by 2015.

He added that all investment in its power plants were loans, including 85 per cent from foreign financial institutions and 15 per cent from domestic commercial banks.

Construction material sector on verge of bankruptcy

The prolonged freeze in the property market and cut back in public investment has brought the construction material sector to the brink of bankruptcy.

According to Vietnam Steel Association’s latest report, the production and consumption of steel in recent years has reduced drastically.

Generally speaking, in the last six months of the year, 2.38 million tons of steel was produced, about 6.8 percent less than in the same period last year; and around 2.22 million tons was purchased, almost 7 percent less than in the same period last year.

In particular, in June, around 380,000 tons of steel was manufactured, a decrease of 12 percent compared to that in May.

The steel association also forecasts that around 20 percent of enterprises will be declared bankrupt in 2012.

Meanwhile the cement sector is also facing dismal times as it has more than 10 million tons of inventory and many enterprises have huge debts going into thousands of billions of dong.

The construction sector has seen a decrease by 50 percent in purchasing power in cement, steel and iron in wholesale and retail markets, and 40 percent fall in brick, tile, ceramic and paint.

Retail price of small iron dropped by VND500 per kilogram and big iron by VND9,000-VND14,000 a rod. Sand and brick slipped by 5 percent while bath showers, bidet mixers and lavatory seats decreased by 10 percent, and wooden flooring by 15 percent.

Tran Thanh Hung, director of Son Hung Construction Company, said after Government Resolution 13, to reduce and relax deadline for bank loan, the construction sector is hopeful for the future.

Hung said that one of the signs of recovery is that despite the rainy season, this time the company still has orders in the south. In addition, the bank interest is quite low; however, it is still not attracting investors.

On the other side, construction companies are selling at a loss in the hope of reclaiming money, and also activating the market.

VND600 billion to equip Phu Huu International Port

International Transportation and Trading Joint Stock Company has signed a contract of VND600 billion with Kocks Krane of Germany and Cargotec of Finland, to provide modern equipment and machinery for the construction of the Phu Huu International Port in District 9 in Ho Chi Minh City.
         
Accordingly, the foreign partners will supply the most modern machinery, known as ‘green technology,’ which is environment friendly and will run totally on electricity instead of DO oil. These machines will reduce energy consumption by more than 30 percent.

After completion, the Phu Huu International Port will transport goods within the city and to neighboring provinces.

The Consumer Price Index (CPI) in large cities like Hanoi and Ho Chi Minh City has continued to fall this month due to falling prices and decrease in purchasing power.

CPI in HCMC fell 0.57 percent in July against the previous month, but increased by 4.3 percent year-on-year, according to the City Statistics Office.

This was the highest fall in a month since 2003, the office said.

In 11 groups of goods and basic services, prices in only five groups increased slightly. Noteworthy was the education sector that witnessed an increase by 0.23 percent over the previous month. Five groups of goods showed reduced prices, of which two groups were down by 2.89 percent, while household utilities decreased by 2.15 percent.

Compared to January 7, 2011, CPI was up 4.3 percent, urban areas showing increase of 4.61 percent and rural areas by 1.87 percent.

Prices dropped 2-3 percent in transport, housing and building material sectors.

The cost of catering services also dropped 0.57 percent in line with falling rice and food prices.

Falling gas and petrol retail prices also had an effect, according to statistics offices in Hanoi and HCMC.

The Hanoi Statistics Office reported yesterday that the capital's CPI in July fell 0.29 percent against the previous month, but increased by 4.64 percent year-on-year. This was the biggest fall in CPI since the beginning of this year.

The cost of food and services fell by 0.21 percent, housing, electricity, water, fuel and building materials were down 1.2 percent, and transport dropped 2.9 percent.

Eight other commodity groups saw prices increase in July, the highest of which was garments, hats and footwear at 1.09 percent, followed by household utensils at 0.81 percent.

Explaining the increase in electricity prices from July 1, Dinh Quang Tri, deputy director general of Vietnam Electricity Group (EVN), said that input of electricity increased so that EVN was forced to increase electricity prices.

The electricity price increase by 5 percent will cause no major impact to the consumer price index.

The quota for poor households’ electricity usage under 50 kWh per month will not be increased and they will continue to benefit from a relatively cheap price of VND900 per kWh.

Massive investment potential is untapped

Vietnam is still ranked among the 20 top prospective host economies for foreign direct investment.

According to the “World Investment Report 2012” released by the United Nations Conference on Trade and Development (UNCTAD) early this month, Vietnam kept its 11th position as the most prospective economy for investment during 2012-2014. The ranking is based on the respondents of 174 validated transnational companies (TNCs).

“Obviously, many TNCs still eye Vietnam as a top investment destination,” said Nguyen Mai, chairman of Vietnam Association of Foreign Invested Enterprises, adding that recent investments by Bridgestone, Nokia and General Electrics were clear proof of this.

The UNCTAD report, released in the context of Vietnam facing an economic downturn and a straight decline in foreign direct investment (FDI) commitments in the last three years, signals bright FDI prospects for Vietnam.

Vietnam’s economy only accelerated 4.38 per cent in 2012’s first half because the government implemented tightened monetary and fiscal policies to tame high inflation. Meanwhile, foreign direct investment commitments dropped 27.7 per cent year-on-year, as foreign investors raised concerns about the economic downturn.

However, Mai said foreign investors believed Vietnam would overcome its current economic downturn.

Herb Cochran, executive director of AmCham in Vietnam, said a large, young workforce and a growing consumer market would continue attracting foreign investors to Vietnam.

In addition, he said foreign investors were interested in Vietnam’s political and social stability with a “business-like” government, improving infrastructure including industrial parks, transportation, telecommunications and strong trends of economic and social development.

Japan’s Nidec Seimitsu Corporation, a subsidiary of Nidec Group and the world’s largest mobile phone vibration motor manufacturer, has decided to build its first factory in Vietnam and the 11th one in this country.

The company said it had decided to establish its subsidiary and factory in Vietnam, after concluding it as appropriate as the company’s third motor-producing site, “based on the country’s abundant human resources and advantageous geographical conditions.”

Hari Achuthan, managing director of New York-based ACO Investment Group, said while the investment climate was challenging globally, in Asia-Pacific region appeared to be an attractive place for growth opportunities.

“We see strong growth opportunities in Vietnam as long as the necessary reforms are established, especially for American firms to sell equipment and services here and bring their operational expertise to help produce value added products and services,” said Achuthan.

ACO Investment Group is now looking for investment opportunities in renewable power, consumer goods and infrastructure sectors in Vietnam.

ARAs improves reporting standards

Fifty winners have been named for excellence in company reporting as Vietnam’s fifth Annual Report Awards competition wrapped up last week.

The 2012 awards also recognised firms that had displayed outstanding performances in the contest during the past five years. Among the winners, 39 are listed on the Ho Chi Minh Stock Exchange (HoSE) and the remainder on the Hanoi Stock Exchange (HNX), chosen out of more than 700 annual reports.

Top winner Bao Viet Holdings also secured the sole special prize as its annual report showed outstanding excellence in content and layout. The HoSE, HNX and VIR’s sister publication Dau tu Chung khoan have co-organised the contest with Dragon Capital the sole sponsor.

“Year after year, every annual report embraces transparency in order to not chase prizes, but to serve shareholders, the market and show professionalism,” said Nguyen Anh Tuan, VIR editor-in-chief.

The organising board selected 15 companies that have made good annual reports in consecutive years for the State Securities Commission to consider to award certificates of merit to acknowledge transparency.

State Securities Commission chairman Vu Bang said: “I hope the contest will continue to expand in scale in the coming years to examine more reports and our commission is willing to work more closely with the organisers to help companies improve their duty of publicising information.”

HoSE chief executive officer Phan Thi Tuong Tam, head of the organising board and chairwoman of the jury, said the adjudicators did not take profits or losses of listed companies into consideration, but focused on information transparency.

Dragon Capital CEO Dominic Scriven said by pairing up with the contest organisers over the past years, “we aim to build a strong, sustainable and healthy market in Vietnam, as the country imports ever more international standards into account.”

When initiating the contest in 2008, HoSE, Dau Tu Chung khoan and Dragon Capital expected to help listed companies improve awareness of the importance of an annual report. However, the competition has now become a ground for investors to measure companies’ transparency and professionalism in publishing information.

The 2013 contest will start next March. “The competition next year is likely to include corporate social responsibility norms. We want to encourage companies to embrace sustainable development,” said Tam

Gov’t allows EVN to gradually raise power price

The government has just allowed the state-owned Electricity of Vietnam Group (EVN) to gradually raise the electricity price in order to make up for losses the state utility company incurred in previous years.

Under its sales and investment strategy for the 2011-2015 period approved by the government, EVN can increase the power price under the supervision of the Ministry of Finance. The power price next year under this scheme will be equal to the market level, meaning all cost factors will be calculated.

EVN is also allowed to account foreign exchange differential in the past into the power price calculation for the 2012-2015 period.

The power supplier has chartered capital of VND143.4 trillion following its recent asset valuation and now looks set to make a profit between now and 2015, according to this government-approved scheme. It aims to meet the financial targets set by creditors such as a debt to equity ratio of less than 300 per cent, and self-investment ratio of more than 30 per cent.

EVN must satisfy the domestic consumption demand for commercial electricity by growing its power generation capacity by 13 per cent per annum during the period.

It must guarantee the construction progress of 20 on-going power plant projects with a combined capacity of 11,600 MW, including such hydropower plant projects as Son La, Huoi Quang and Ban Chat, and thermo-power projects like Hai Phong 2, Quang Ninh 2 and Mong Duong 1.

EVN also plans to deploy 12 power plant projects with a combined capacity of 12,410 MW from 2016 to 2020. Key power facility projects are Ninh Thuan 1 and Ninh Thuan 2 nuclear power plants, Duyen Hai 2 and Vinh Tan 4 thermal power plants, and Bac Ai pumped-storage hydroelectric plant.

Petrosetco dials in Samsung

Petrosetco Distribution, a member of PetroVietnam and a leading distributor of technology brands, last week signed an agreement with Samsung Vietnam to become the official distributor of Samsung cell phones in Vietnam.

“This marks an important step for Petrosetco Distribution and Samsung in the way to subdue and further expand information technology market in Vietnam,” Petrosetco Distribution (PSD) stated.
It added its cooperation with Samsung would bring more opportunities to local consumers to own hi-tech products from Samsung, one of the largest electronic firms in the world.

Established in 2007, PSD has rapidly emerged as a leading distributor of well-known technology brands including HP, Dell, Acer, eMachines, Fujitsu and Lenovo. During the past five years, PSD has developed its agents from 288 in 2007 to 1,600 in 2012 and eleven branches nation wide. Thanks to the rapid growth in terms of revenue and profit, PSD was regconised among the 500 largest companies in Vietnam.

Last year, PSD’s revenue was $350 million and the distributor expects this number would grow sharply in 2013 after it entered into a cooperation with Samsung. Phung Tuan Ha, general director of Petrosetco, which holds 95 per cent of stakes at PSD, said Samsung products would “create a break-through in term of revenue in 2013.”

“With a wide distribution network based on the outlet chains and the strategic partner Petrosetco Distribution, in association with outstanding products and continuously improved services, we are aiming to make Samsung be the top mobile phone brand in Vietnam as soon as possible,” said Cho Seok Hee, general director of Samsung Vina.

In 2012’s first quarter, Samsung produced 93.8 million mobile phones, surpassing Nokia to become the biggest mobile phone maker, according to International Data Group. In the smartphone segment, Samsung kept its first position with 38 million units sold, accounting 40 per cent of the globe’s Android phones. In Vietnam, Samsung also accounts for the biggest smartphone market share with 53 per cent till the end of 2011. But in general, Nokia still accounts for the biggest share in Vietnam’s mobile phone market.

Samsung expects PSD, with five years of experience in distributing Nokia’s products, will help it replace the position of Nokia to become the biggest player in Vietnam’s mobile phone market. Apart from introducing the new distributor, Samsung will continue presenting new technology products, expanding maintenance network and improving service quality to attract more customers in Vietnam.

Puma Energy to get its claws into Vietnamese market

Puma Energy, a subsidiary of one of the world’s largest independent commodity traders Trafigura Beheer, last week announced it would complete the acquisition of Chevron Kuo, a Singapore entity which owns 70 per cent of Chevron Bitumen Vietnam.

“This acquisition is one of our first steps to go deeper into Vietnam’s market and expand out business to other neighbouring countries outside Vietnam,” said Denis Chazarain, chief financial officer of Puma Energy.

“The acquisition is also another step in the development of Puma Energy and marks the company’s first expansion into Asia following rapid growth across Africa and the Americas,” Chazarain said.

Vietnam will become the 32nd country worldwide that Puma operates within. “Vietnam is seen by us of a potential country with increasing infrastructure, large population and a stable society,” he added. Chazarain declined to say how much the acquisition was worth.

Established in 1996, Chevron Bitumen Vietnam Limited imports, stores and distributes asphalt for road building and infrastructure development in Vietnam. The company’s northern Haiphong city port terminal has wharf facilities with a state-of-the-art bitumen storage terminal with a capacity of 5,000 metric tonnes and manages a bitumen distribution business around Hanoi and Ho Chi Minh City.

Puma Energy is a global marketer of bitumen with terminals in Spain, Angola and Central America, operating more than 100,000 tonnes of bitumen storage capacity with plans to expand the footprint to more than 200,000 tonnes within five years. The company is also an integrated mid and downstream oil company active in Africa, Latin America, the Caribbean, north East Europe, the Middle East and Asia.

Formed in 1997 in Central America, Puma Energy has since expanded its activities worldwide achieving rapid growth, diversification and product line development. Its core activities in the midstream sector include the supply, storage and transportation of petroleum products.

Its activities are underpinned by investment in infrastructure which optimises supply chain systems, capturing value as both asset owner and marketer of product.

Unemployment is looming large

Economic woes are leaving numerous workers in the lurch. InterContinental Hanoi Westlake Hotel has just sacked 50 employees due to increasing business difficulties.

“We currently have no plan to re-recruit this number of staff. Even in the future, we may have to continue with staff cut-backs,” said a personnel section representative. Meanwhile, Hanoi Knitting, which produces stockings and gloves for export, has been reducing working hours for months, with 600 workers slashed to 400.

“I have been working 20 days a month since early this year, because of our company’s lack of orders from foreign partners and local narrowing demand,” said Nguyen Minh Nguyet, a company worker. “We are bogged down in big difficulties.”

Ho Chi Minh City’s Department of Labour, Invalids and Social Affairs recently reported that over 4,800 enterprises in the second city had to cut down over 16,700 workers during this year’s first four months due to financial difficulties and a lack of orders.

Ho Chi Minh City Export Processing and Industrial Zones Management Authority said enterprises in the city’s export processing and industrial zones had dismissed 1,000 workers due to shrunk production.

The Ministry of Planning and Investment (MPI) reported that this year’s first half saw 26,324 enterprises having dissolved and cease doperation, up 5.4 per cent on-year.

The numbers are stark. Thus, if one enterprise employed 20 workers, the number of unemployed people would be at least 520,600. If the average income of a worker is VND3 million ($144.2) per month, total monthly income that these 520,600 people lost would be about VND1.56 trillion ($75 million), said Nguyen Duc Tiep, an economic analysis from Lien Viet PostBank.

The MPI said by May 20, 2012 Vietnam witnessed 213,000 people register as unemployed, mainly in Danang, Ho Chi Minh City, and Binh Duong and Dong Nai provinces which are known as labour-intensive localities. The government’s credit tightening policy had seen an average redundancy rate of 70 per cent on-year for skilled workers in the property sector and another 30 per cent on-year for the banking and financing sectors.

“The economic difficulties have forced many enterprises to fire their workers to save costs. However, now is also the time for strong enterprises to attract and keep their workers,” said Du Mai Anh, marketing director of Crown Plaza Nha Trang Hotel, managed by InterContinental Hotels Group.

Mai Anh said the hotel would need staff of 360 to operate the hotel which would become operational in December.

Lowering cement export prices, businesses weakening themselves

Vietnamese cement manufacturers have been doing a great deal of harm to each other when they try to lower the export prices to scramble for clients.
 
The cement volume sold in the first six months of the year saw a 10 per cent decrease in comparison with the same period of the last year. The oversupply has prompted cement companies to boost exports to earn money and clear the inventories.

In order to boost exports, a lot of cement manufacturers have to accept to slash the export prices. Vietnam’s cement export prices are now 10 per cent on average lower than the prices offered by other regional exporters.

The fact that Vietnamese enterprises accept to export clinker and cement at low prices has given foreign importers a reason to force the prices down further. Since some cement manufacturers have slashed the export prices, others have to follow the move, or they would not be able to sell products. As a result, cement enterprises all have reported bad business results.

According to the Ministry of Construction, in the first six months of 2012, Vietnam exported 3.2 million tonnes of cement and clinker, much lower than the targeted export volume of 7-8 million tonnes this year.

Cement manufacturers still believe that the modest export volume still should be seen as an encouraging result, because the exports have helped a lot in reducing the inventories, while only 23.8 million tonnes cement were consumed domestically in the last six months.

Nevertheless, the Ministry of Construction has pointed out that lowering the export prices must not be seen as a right track for cement manufacturers to follow, because this cannot bring profits to them and does not ensure the sustainable growth. While the input material prices all have increased sharply (the coal price has increased by 170 per cent, electricity by 19 per cent and oil by 40 per cent), it is really unreasonable to slash the export prices.

Nguyen Van Thien, Chair of the Vietnam Cement Association VNCA, has pointed out that the cement manufacturers’ problems are not only the common ones existing in the national economy, but also the lack of cooperation among them.

Thien said that in principle, the cooperation would help push up the production and the sales, both in the domestic and foreign markets. However, they still cannot have a common voice for mutual benefits.

VNCA, in an effort to establish the close cooperation among cement manufacturers, has gathered the managers of the cement plants to discuss the cooperation methods to ease the current difficulties.

VNCA has suggested that the cement plants in the northern, central and southern regions should appoint an enterprise, which is powerful and prestigious enough, to act as the leader in the market and step by step, organize an institutional market.

The current export prices of 36 dollars per ton of clinker and 50 dollars per ton of cement would make enterprises take profit, because the prices cannot cover the expenses. Therefore, VNCA believes that enterprises should join forces to raise the FOB (free on board) clinker price to 40 dollars per ton at minimum.

An executive of Fico Tay Ninh Cement Plant also said that the current export prices would not bring the turnover high enough for enterprises “to live.”

However, Deputy Director of Vicem But Son cement company Ngo Duc Luu, has warned that it would be impossible to call for the enterprises’ cooperation in pricing cement products, except the subsidiaries of the Vietnam Cement Corporation.

Exports to come up trumps

The Ministry of Industry and Trade (MoIT) last week stated that the country’s total export turnover for 2012 was projected to be $109.5 billion against last year’s $107.4 billion. In this year’s first six months, Vietnam’s total export turnover was estimated to be $53.33 billion, up 22.7 per cent on-year.

“Exports are the most salient point in Vietnam’s economic situation now. However, we must do our best to reap another $56.17 billion for the year’s remaining months, or nearly $9.4 billion per month,” said Vu Van Cuong, chief of the MoIT’s Office.

According to the MoIT this target might be feasible thanks to the world’s high export prices and an increase in Vietnam’s export volumes. In this year’s first half, the agricultural sector’s total export turnover was estimated to be $10.43 billion, up 8.4 per cent on-year and occupying 19.6 per cent of Vietnam’s total export turnover. According to the Ministry of Agriculture and Rural Development, the sector’s total export turnover this year might be $25.5 billion, slightly higher than last year’s $25 billion, thanks to the sector expanding markets by 15 per cent.

Vietnam will likely reap $18.5 billion from exporting textiles and garments this year, up 14 per cent on-year. It is because the exports to the US and Japan are expected to grow 8.5 and 16 per cent, respectively, this year.

Also, the leather and footwear sector raked in $3.4 billion from exporting its products in this year’s first six months, up 25 per cent on-year. “The sector’s export turnover target of $7.3 billion is quite feasible due to the world’s increasing demand,” said Vietnam Leather and Footwear Association chairman Nguyen Duc Thuan.

The country’s processing industry fetched $33.2 billion from exports in this year’s first half, up 30.5 per cent on-year. This industry’s export turnover was expected to hit $34.8 billion for the year’s second half, thanks to the local gradual industrial production recovery.

The Ministry of Planning and Investment reported that the industrial production index for the processing industry rose 9 per cent on-year in this year’s first six months. Vietnam’s import turnover was $53.81 billion for 2012’s first half and expected to be $61 billion for this year’s second half. The trade deficit for 2012 was expected to be $5.31 billion, or around 5 per cent of total export turnover.