Stocks rebound after three days of falls

Shares rebounded this morning on both national stock exchanges after three days of heavy losses following the arrests of two banking tycoons.

The benchmark VN-Index on the HCM City Stock Exchange regained nearly 8 points, or 1.97 per cent, to close this morning at 400.55 points on improved trading value of more than VND907.6 billion (US$43.2 million).

Gains by blue chips boosted the market, and saw most bank shares recover.

Vietinbank (CTG) and Military Bank (MBB) both hit the ceiling prices while Vietcombank (VCB) also rose 4.4 per cent. Only Eximbank (EIB) was off 1.7 per cent and Sacombank (STB) closed flat.

Other large-cap shares including Phu My Fertiliser (DPM), dairy giant Vinamilk (VNM), steelmaker Hoa Phat Group (HPG) and software producer FPT Corp (FPT) also jumped from 2-4.6 per cent.

The VN30 Index was up 1.62 per cent at 472.37 points.

Gainers outnumered losers by 149-54 overall, 48 of which hit the daily limit rise this morning.

Tan Tao Investment Industry Corp (ITA) was the most active this morning with almost 4.3 million shares changing hands, closely followed by Eximbank (EIB) with nearly 4.1 million shares traded. But while ITA was up 1.7 per cent to VND5,900 ($0.28) a share, EIB lost 1.7 per cent to end at VND17,700 ($0.84) a share.

On the Ha Noi Stock Exchange, the HNX-Index also edged up 2.79 per cent to finish at 62.94 points on a turnover of VND420.3 billion ($20 million).

Advancers overwhelmed decliners by 130-93 with bank shares rising.

Sai Gon-Ha Noi Bank (SHB) increased 6.2 per cent while ACB regained 3.3 per cent after three sessions of hitting the floor price. Small banks such as Nam Viet Bank (NVB) also rose 1.3 per cent.

Leading shares such as Kim Long Securities (KLS), VNDirect Securities (VND) and PetroVietnam Construction (PVX) also jumped 3-6 per cent, with the latter becoming the most active on trades of 6.4 million shares.

Trading will resume at 1pm.

Businesses sell abroad 4.5 million tonnes of rice

Vietnamese businesses have so far this year shipped over 4.52 million tonnes of rice abroad for nearly 2.06 billion USD, said the Vietnam Food Association.

The figures, however, reflected a year-on-year decrease of 10.9 percent in volume and 19.44 percent in value.

Despite these decreases, local farmers in these days were happy with a sharp rise in paddy rice price.

In the Mekong Delta, the price of undried IR 50404 paddy enjoyed an increase of 400–500 VND a kilo to 4.800–5.000 VND from a week ago.

In some localities, farmers sold this kind of paddy, the dried, for 5.600–5.700 VND a kilo, the highest price during the summer/autumn crop.

According to the association, paddy-rice prices are expected to continue to rise sharply for the rest of this year.

Local traders analysed that higher demand for paddy from exporters, news about a new contract on the purchase of 500,000 tonnes of rice with Indonesia and the increasing volumes of rice bought by Cambodian traders across the border could also drive rice prices further up.

This year, Vietnam has set to export between 6-6.5 million tonnes of rice.

Haiphong hails Japanese projects

Haiphong last week honoured investment certificates to two Japan-backed investment projects.

Idemitsu Lube Vietnam’s lubricant production factory and Fuji Xerox Haiphong’s manufacturing base will take shape in the province.

The $31.7 million Idemitsu Lube Vietnam project will cover 60,000 square metres in Dinh Vu Industrial Zone and manufacture lubricant oils from imported base oil and additives to supply to the domestic market.

With 46 year lifespan, the project will start construction in November 2012, install equipment in July 2013 and the first commercial production is expected to be on stream by early 2014.

“We believe our project can contribute to the industries and end-users by our high performance and environmentally friendly lubricant products, especially for motorcycles and automobiles, which have approved quality by Japanese makers,” said Idemitsu Lube Vietnam’s chief executive officer Ryuji Kusaka.

“Our project will enhance the convenience for Japanese investors to get familiar lubricant oil for their efficient production in Vietnam,” he said. Meanwhile, Fuji Xerox Haiphong project will have charter capital of $36 million and the total amount of investment in this project is $113.5 million.

The project, to cover 176,700sqm in Vietnam Singapore Industrial Park with 46,700sqm reserved for building a plant, will manufacture digital colour multifunction devices and small-sized light-emitting diode (LED) printers, as well as components for these devices in a capacity of two million items per year.

Construction will take place in December 2012 and the plant will be commissioned from November 2013, recruiting around 700 workers.

Haiphong City People’s Committee chairman Duong Anh Dien urged Fuji Xerox Haiphong to scale up preparations to soon kick-off construction.

“City authorities will try our best to shortly hand over space to the investor,” said Dien.

Nha Trang looks to get moving

The conference "Development of Capital Market in Restructuring the Financial System in Vietnam" will be held by Vietnam National Financial Supervisory Commission in corporation with Irish Aid and VinaCapital asset management group on August 23-24 in Nha Trang.

It is expected more than 120 attendants including policymakers, ministries' leaders and international and domestic senior economic experts such as the Ministry of Finance, the Ministry of Planning and Investment, the State Bank, the Ministry of Public Security, the Ministry of Justice, the Ministry of Home Affairs, IMF, World Bank, JICA, ADB, UNDP, IFC and HSBC.

The conference is designed to support the government to push up capital market development, and contribute to financial system and economic restructuring.

A gold move for market

Local bullion market will soon be knocked into shape following a policy move.

One week after the Saigon Jewellery Company (SJC) - a major player retaining a 90 per cent of the market share relative to gold products - again declared to stop buying deformed SJC gold bars which had worried consumers State Bank (SBV) deputy governor Le Minh Hung later last week suggested businesses and residents not to try to sell this gold at low costs since the SBV would soon finalise regulations ruling SJC gold bar production and trading.

The document reportedly covers conversion of deformed SJC and non-SJC gold bars into SJC gold bars. Accordingly, all sorts of deformed SJC gold and standard non-SJC gold bars will be liable to be converted into SJC gold bars upon demand. The document slated to make public within this week.

In this context, SJC’s Gold Business Department Nguyen Cong Tuong said the company would not resume deformed SJC gold purchases when it had yet to receive any guiding document from the central bank.

Tuong said in the past SJC’s Member Council decided on founding a VND200 billion ($9.5 million) fund to buy back and store deformed SJC gold to support local residents as in light of governmental Decree 24/2012/ND-CP dated April 3, 2012 the company was unable to continue processing gold bars.

“With 13 per cent per year interest rate, we have to pay VND460,000 ($21) interest for one tael of deformed gold bar, irrespective of risky prices,” Tuong said.

In the past months, Phu Nhuan Jewellery JSC (PNJ) bought in and kept in stock a big volume of PNJ gold and increased sale of SJC gold bars to serve customers, said PNJ’s deputy general director Nguyen Thi Cuc.
The company then hoped central bank’s guiding documents would be soon in place.

Since the enactment of Decree 24 on gold business management which came into force from May 25, 2012 and articulated state monopoly status on gold bar production and trading and the intention to turn SJC gold bars into national gold brand people rushed into selling non-SJC gold.

Deformed gold bar holders were also in a critical situation and had to accept to sell products at lower than regulated prices.

Vietnam Gold Business Association Dinh Nho Bang assumed this came from unclear state policies. The State Bank then needed to work out a clear and transparent plan on SJC gold conversion to soothe the public.

According to figures from gold bar trading companies, there area around 22 million gold bars produced by eight local firms in the domestic market. Of them, about 20 million pieces carry SJC brands. Deformed gold bars kept by SJC reportedly amount to 7,000 taels.

Auto market’s recovery drive

July saw a slight auto market recovery after three consecutive months’ decline.

According to the Vietnam Automobile Manufacturers’ Association (Vama), the total sales of Vama members plus non-Vama members’ sales of imported completely-built-vehicles in July hit 7,433 units, up 13 per cent against June. Of which 2,729 units were cars and 4,704 units were trucks.

Especially, cars showed better growth at 21 per cent, while the growth of trucks was 10 per cent.

Previously, the auto industry was hit by month-on-month falling sales such as a drop of 4.6 per cent in June, 2 per cent in May and especially 24 per cent in April.

July’s positive sales are a result of recent better automobile policies and efforts of auto makers, importers and dealers to heat customer’s consuming demand such as promotion, no-profit sales campaign and interest support for buying car via banks.

Michael Behrens, CEO of Mercedes-Benz Vietnam, said: “The market will basically be better by the end of the year. The recent decision on the four-year postponement of personal vehicle fee application is expected to underpin the up-trend in sales, helping relieve car buyers’ stress. This goes hand-in-hand with the first good signs of upward improvement in the Vietnamese economy.”

Behrens hoped that the Vietnam Motorshow in Hanoi in September would kick-start for the auto industry upswing.

To catch up this recovery, Mercedes-Benz Vietnam revealed it would bring an exciting new model and new after-sales products to this show.

Within the first two weeks of August, there were four new domestically-assembled and imported cars to be introduced in the market by Toyota, Honda and Truong Hai Auto Corporation. Most of new cars are small-sized to closely touch the essential demand of customer in the tough time.

According to Vama, sport utility, multi-purpose and cross-over vehicle were the best selling products with 36 per cent growth in July.

Vama’s chairman Laurent Charpentier forecasted on annual basis gives a full industry at 95,000 units with a second half much better than the first one, a 16 per cent increase versus June’s trend.

PVFC might use Western Bank as a bridge to change its status

PetroVietnam Finance Corp. was reportedly eyeing to buy into poorly performing Western Bank so as to turn itself into a commercial bank.

Local media reported that the finance company (PVFC) was in talks with Western Bank last week to buy a controlling stake in the bank. A PVFC spokesman declined to comment on the information when contacted by VIR.

The news, however, did not surprise the market as it had been rumoured for a number of months.

“Indeed speculation about this deal has been common currency for several months already,” Ho Chi Minh City Securities stated in a note to clients last week.

“Buying a bank is the best way of doing that as the State Bank of Vietnam is clearly not going to issue new banking licences anytime soon,” the leading local brokerage house added.

Western Bank, a fairly small scale bank, is a within-the-reach target for PVFC. The bank has total assets of just VND20.6 trillion ($995.2 million) and equity of just VND3.1 trillion ($149.8 million) by the end of 2011, a several times lower scale compared with PVFC’s.

If the deal happens, PVFC’s total assets will be nearly VND110 trillion ($5.3 billion) and its equity will be of some VND10 trillion ($483.1 million), a scale that can put the company in the top end of the middle group of commercial banks.

Western Bank has close connections with the well-known financier Dang Thanh Tam, who owns another commercial bank NaviBank and several real estate units. Three out of five Western Bank board members are key leaders of Tam’s real estate company Kinh Bac City Development Share Holding Corp. Kinh Bac holds 25 million shares or a 8.4 per cent stake, which has a par value of VND265 billion ($12.8 million), in Western Bank. The real estate market’s downturn has pushed Kinh Bac into continuous losses, sparking speculation that Tam might divest some of his assets.

Nguyen Thi Thanh Nga, an analyst for Vietcombank Securities, wrote in a July report that “there is rumour” that Kinh Bac might transfer all stake in Western Bank to another partner and considered the move as “help improving its cash position and reduce its debt ratio.”

However, PVFC shareholders are not charmed by the deal. PVFC shares gained only 3.3 per cent last Wednesday August 15 on the Ho Chi Minh Stock Exchange, the day the news spread, and soon fell back 0.8 per cent in the next day, on the back on fears about Western Bank’s true financial position.

Western Bank is classified as a weak bank with observers unsure about its true level of non-performing loans (NPLs). Although the bank posted a NPL ratio of just 1.2 per cent, it showed massive risky and hard-to-assessed investments.

According to the creditor’s 2011 consolidated financial statement, some 30 per cent of its assets was related to securities and real estate investments. Those investments include bonds worth VND1.5 trillion ($72 million) in Kinh Bac City Development Share Holding Corp. (KBC).

PVFC itself has some financial problems. The company posted second-quarter profit at lowest level since 2010, with securities investments making losses for six straight quarters.

PVFC has VND1.1 trillion ($53.1 million) outstanding loans to some of Vinashin’s units, VND1.7 trillion ($82.1 million) loans to some of Vinalines’ units and those loans have not yet had loss provisions. Nearly half of PVFC’s mobilising and credit operations are for arranging capital for the units of oil and gas giant PetroVietnam.

“In terms of scale of assets, equity, mobilisation and credit, PVFC is on a par with mid-scale commercial banks. But in terms of business efficiency, PVFC is far below the common level of commercial banks,” stated BIDV Securities in a June report.

Banks lack social risk management

Many banks operating in Vietnam have lacked official policies and systems to manage environmental and social risks of their customers, according to a recent survey.
   
The survey was conducted in June at 54 credit organisations operating in Vietnam by the International Financial Corporation (IFC) in Vietnam and the State Bank of Vietnam (SBV).

It showed that one of the main obstacles to initiating policies on social and environmental risk is the lack of the sector’s specific guidance on environmental and social risk management in credit activities.

Almost all of the banks needed to apply better norms on environmental and social risk assessment for businesses’ loans to improve sustainability of projects, it said.

According to Simon Andrews, IMF Regional Manager in Vietnam, Cambodia, Laos and Thailand, managing sustainable development of environment and social issues will bring new business opportunities to banks, such as support for energy saving and recycled energy.

Cat Quang Duong from the SBV said that the central bank is willing to cooperate with the IFC to promote the sector’s environmental and social risk management.

He said the survey indicated almost all banks are not aware of the impact from environmental and social risks on their business.

Cooperating with the SBV to improve environmental and social risk management in the banking sector is an activity in the IFC’s advisory services programme in order to promote sustainable growth in Vietnam.

Global recession discussed at regional conference

An international conference on global recession and strategies of left-wing and progressive movements in Southeast Asia took place in Hanoi on August 21.    

The conference was organised by the Vietnam Peace and Development Foundation (VPDF) in coordination with the Rosa Luxemburg Foundation (RLS) and the South-South People’s Solidarity Network.

Addressing the event, Nguyen Thi Binh, former Vice State President and President of the VPDF reviewed the global socio-economic situation, as well as the performance of left-wing and progressive movements in Southeast Asia over the past years.

She applauded the development of the movements, which contribute significantly to the process of building the ASEAN Community of peace, security, prosperity and political stability.

She stressed Vietnam’s enthusiasm for a peaceful and stable environment to further boost its success in renewal and development of the socialist-oriented market economy.

During the two-day conference, participants also discussed the impact of the global recession on each country and people’s movements.

Rice exports hit more than US$2 billion

As of August 15, Vietnam had exported 4.52 million tonnes of rice worth US$2.05 billion, according to the Vietnam Food Association (VFA).   

The country has set a target to export 6-6.5 million tonnes of rice in 2012, which means it will have to ship abroad more than two million tonnes in the last 4 months of the year.

Common unhusked rice in the Mekong Delta is currently hovering around VND5,600-5,700 per kilogram and the price of unhusked long grain rice is VND5,800-5.900 per kilogram.

Unhusked rice to process 5-percent broken rice currently costs VND7,350 - 7,450 per kilogram, while raw 25 percent broken rice sells for VND7,200-7,300 per kilo.

Japan prefecture boosts economic cooperation with Vietnam

The Ministry of Planning and Investment and the Japanese prefecture of Saitama signed a Memorandum of Understanding (MoU) for economic cooperation in Hanoi on August 21.    

Addressing the signing ceremony, Minister of Planning and Investment Bui Quang Vinh affirmed that the relationship between Vietnam and Japan has been developing steadily in recent years.

The two countries have been working well together to deepen cooperation in all fields, especially economics, trade, and investment, he said.

Minister Vinh highlighted the mutual trust between the two governments and peoples, which has laid a firm foundation for long-standing comprehensive bilateral cooperation.

The Vietnamese Government hopes that Japanese enterprises, groups and localities will continue their investment in Vietnam, he added.

Saitama Governor Kiyoshi Ueda said that his visit to Vietnam aims to strengthen the friendship and economic cooperation between the two nations.

Businesses from Saitama prefecture also affirmed that they will invest in Vietnam in the future.

Saitama specializes in manufacturing and mechanical engineering. Some of its major companies, such as Honda and Canon, have already invested in Vietnam.

Seaports towards international integration

The Vietnamese seaports sector will be actively engaged in the process of reform, competition and international integration.    

This was confirmed by the Vietnam Seaports Association (VPA) at its annual meeting in the central city of Danang on August 21.

In the coming time, the VPA will propose effective measures to the government to enhance the market transparency and openness, stabilize prices, strengthen foreign relations and participate in the activities of the Asian Ports Association and the International Associations of Ports and Habors.

It will ask for consultancy advice from domestic and international experts and cooperate with relevant agencies to solve common issues related to the development of ports and marine community.

Last year’s total cargo through the VPA’s 59 ports reached more than 159 million tonnes, four percent higher than the previous year.

Vietnam profile to be raised in Japan

A tourism and cultural festival will be held in Tokyo and Fukuoka from September 11-20 to introduce local people to Vietnam’s typical specialities and call for cooperation in various areas.

The festival will offer a chance for the Southeast Asian nation to promote its distinctive cultural identity and increase cultural exchanges between the two countries.

Diverse activities will take place, including a music and dance programme, a fashion show, and a photographic exhibition that features the beauty of Vietnam’s land, people, culture, and heritage, as well as fine art handicrafts, costumes, and special dishes.  

Highlight of the festival will be the “Meet Vietnam” zone where more than 70 stands are put up to introduce different dishes from across Vietnam, traditional handicrafts, and tourist attractions.

Artisans will demonstrate trimming skills on different kinds of fruits to entertain Japanese visitors.

The Vietnam Festival in Japan, which was held for the firs time in 2008, attracting 150,000 visitors, has become a big event to promote cultural exchanges between the two countries.

Vietnam and Japan lifted bilateral relationship to the strategic partnership in 2009, and they will celebrate 40 years of diplomatic ties in 2013.

Technical barriers needed

Domestic producers have voiced their concerns about the competitiveness of Vietnamese products if technical barriers are not installed properly to prevent the mass influx of foreign goods into the local market.
    
According to its free trade agreements (FTAs) with other countries, Vietnam is committed to reducing import tariffs to below five percent by 2015 and to zero percent by 2018.

At present, the country is honouring its commitments, which has made many local businesses recognize the heavy pressure of fierce competition from imported goods in a more open market.

Many domestic producers are worried that some foreign goods, such as construction glass, paint, poultry and farm products, are making the best use of low import tax rates to compete with Vietnamese products.

According to Vu Kim Hanh, Chairwoman of the Vietnam High-quality Product Association, it is essential for Vietnamese producers to hold sway over the domestic market, especially when the tariffs between Vietnam and the Association of Southeast Asian Nations (ASEAN) are removed.

She says that regional countries have already made concrete plans to penetrate the Vietnamese market.

Her view is shared by the head of the HCM City Rubber and Plastics Association, Nguyen Quoc Anh, who says technical barriers should be created to help local businesses gain ground while the tariff barrier is being gradually lowered.

However, Anh says, Vietnam has not yet established technical standards for plastic products. It is the only country in Southeast Asia that does not have such standards for tyres or any quality control centre. That’s why the rubber and plastics sector is facing numerous difficulties.

Van Duc Muoi, Chairman of the HCM City Food Association, says that when the tariff barrier is reduced to zero, technical barriers should be put in place to prevent fake products coming from regional countries that are grasping opportunities offered by the FTAs to dump their products on the Vietnamese market. Technical barriers can protect both domestic producers and consumers, he argues.

Muoi says that Indonesia, the Philippines and India have already made plans to cope with international integration. If Vietnam does not have its technical barriers installed by 2015, local businesses will be unable to gain ground on home turf.

A large number of Vietnamese consumers are low-income earners and they often choose imported goods at lower prices than those made in Vietnam, he notes.

Economist Pham Chi Lan proposes that Vietnam set up non-tariff barriers to control the inflow of imported goods. If not, she says, the national economy will be put at a huge disadvantage.

In reality, Vietnamese exporters are facing many technical barriers in overseas markets. To sharpen their competitive edge in both local and global markets, they should increase their production capacity, Lan insists.

Truong Thuy Trang from the HCM City Department for Science and Technology calls on relevant agencies and all economic sectors to cooperate more closely to keep businesses fully informed and updated on overseas market development. In the meantime, businesses should also be more active in making proposals to the Government on appropriate policies and regulations, she adds.

Trang suggests they should focus on producing high-quality products that can overcome non-tariff barriers and meet the requirements of global markets.
 
Cement sales down so far this year

Total domestic consumption of cement during the first seven months of this year was 27.6 million tonnes, down by 3 per cent against the same time last year and 50 per cent of the yearly target, according to the Ministry of Construction.

In July alone, only 4.14 million tonnes of cement were sold, 300,000 tonnes lower than the previous month. The downturn has been blamed on gloomy real-estate market.

To better deal with cement stockpiles, cement producers have pushed exports. A total of 4.5 million tonnes of clinker and cement were shipped abroad during the period.

Solar panel plant seeks more time

The Indochina Energy Industry Co Ltd (IC Energy) has petitioned the Chu Lai Open Economic Zone Management Board to extend the completion time for its US$390 million solar panel plant.

This was because of difficulties in the market and relevant production technologies, deputy head of the board Do Xuan Dien told Dau Tu (Investment) newspaper.

Work on the 12-ha factory began in May, 2011 and was slated to be completed this year, creating 1,000 local jobs.

Oil refinery begins full operation

Dung Quat oil refinery yesterday started operating at full capacity after halting production on August 8 because of technical problems, said Nguyen Hoai Giang, general director of Binh Son Petro-chemical Refinery Co which operates the refinery.

The refinery's petroleum products would be sold again starting from Friday this week, he said.

The country's first oil refinery is expected to provide 6 million tonnes of products this year, generating a revenue of more than VND108 trillion (US$5.14 billion).

Inflation reheats in major cities
 
Consumer price index (CPI) in the country's two biggest cities in August increased again after two consecutive months of decline due to the soaring price of fuel, according to statistics office estimates.

According to the Ha Noi Statistics Office, the capital's CPI rose 0.57 per cent in August against the previous month. Compared with the last month of 2011, the CPI surged 2.86 per cent.

The CPI month-on-month rise in HCM City in August was higher at 0.66 per cent. The rise was 2.14 per cent compared with the last month of 2011, reported the HCM City Statistics Office.

Among 11 commodities that are used to calculate the CPI, prices of most of them rose against last month in both cities. Ha Noi saw a price hike for 10 commodities while the figure in HCM City was nine.

The biggest price hike in the capital was seen in housing and building materials which rose 2.89 per cent, followed by transportation services at 1.1 per cent. Month-on-month price increases ranging from 0.33 per cent to 0.65 per cent were reported on garment, footwear, beverages and cigarettes, household goods and utensils, medicine and healthcare services.

In HCM City, the highest price rise of 3.56 per cent was reported for the item of culture-sport-entertainment. Transportation service was followed with a hike of 1.17 per cent.

Statistic office estimates yesterday also reported that Ha Noi faced a trade deficit of up to US$8.82 billion while HCM City gained a trade surplus of $1.58 billion in the first eight months of the year.

The Ha Noi Statistics Office said the capital fetched an export turnover of roughly $874.5 million in August, up 1.3 per cent over the same period last year. It raised the city's export value in the first eight months of the year to more than $6.65 billion, up 4.3 per cent.

The city, meanwhile, spent roughly $2.07 billion on imports in August, down 1.6 per cent over the same period last year. The capital's import value in the first eight months totalled $15.48 billion, down 6.2 per cent.

HCM City, meanwhile, spent more than $17.68 billion on imports in the first eight months, up 3.7 per cent over the same period last year. It earned nearly $19.27 billion from exports in the period, up 1.2 per cent over the same period last year.

Tighter controls on e-commerce

Discussions on a new draft decree on e-commerce were held in the capital city today.

The new draft aims to replace a shortage of clear regulations in Government decree No 57 issued in 2006.

According to Tran Huu Quynh, chairman of Viet Nam International Arbitration Centre (VIAC), the draft is a good signal for e-commerce because it concentrates on establishing trustworthiness and ways of solving conflicts.

"Enterprises have expressed concerns about e-commerce security while consumers are afraid of running into troubles not completely covered in the previous decree," said Quynh.

"The lack of security has cost many enterprises hundreds of billions of dong – and consumers find no help when they get into trouble," Quynh added.

"The rapid development of e-commerce across the country calls for the update," said Legal Department of Ministry of Industry and Trade (MoIT) chief Nguyen Tan Nhat Linh. "The draft decree is expected to become law next year."

Tran Huu Linh, head of the E-commerce and Information Technology Agency said that more than 30 per cent of the population was now using the internet.

At today's meeting, participants put forward suggestions on improving the draft decree.

Doctor Ho Thuy Ngoc, an arbitrator from VIAC, said the draft did not clarify the regulations on e-commerce contracts.

Lawyer Le Quoc Dat from Tri Tue Law Firm said commercial banks should be asked to guarantee e-commerce payments instead of the State Bank.

According to Ha Noi Bar Association laywer Bui Thanh Lam, many fraudulent activities have been occurring due to a shortage of information about e-commerce payment methods.

"The draft decree should provide clear guide lines for enterprises." said Lam.

Capital city seeks to upgrade floodworks

The Ha Noi People's Committee has asked the Government to provide US$95 million for urgent upgrade work to the city's dykes and irrigation infrastructure.

The work is expected to stop bank erosion and landslides along the Hong (Red), Da and Duong rivers, and prevent flooding during the rainy season.
 
Regulators eye e-commerce

Discussions on a new draft decree on e-commerce were held in the capital city today. The new draft aims to replace a shortage of clear regulations in Government decree No 57 issued in 2006.

According to Tran Huu Huynh, chairman of the Viet Nam International Arbitration Centre (VIAC), the draft is a good signal for e-commerce because it concentrates on establishing trustworthiness and ways of solving conflicts.

"Enterprises have expressed concerns about e-commerce security while consumers are afraid of running into troubles not completely covered in the previous decree," said Huynh.

"The lack of security has cost many enterprises hundreds of billions of dong – and consumers find no help when they get into trouble," Huynh added.

"The rapid development of e-commerce across the country calls for the update," said Nguyen Tan Nhat Linh, head of the Legal Department of Ministry of Industry and Trade (MoIT). "The draft decree is expected to become law next year."

Tran Huu Linh, head of the E‑commerce and Information Technology Agency said that more than 30 per cent of the population was now using the internet.

At today's meeting, participants put forward suggestions on improving the draft decree.

Doctor Ho Thuy Ngoc, an arbitrator from VIAC, said the draft did not clarify the regulations on e-commerce contracts.

Lawyer Le Quoc Dat from Tri Tue Law Firm said commercial banks should be asked to guarantee e-commerce payments instead of the State Bank.

According to Ha Noi Bar Association laywer Bui Thanh Lam, many fraudulent activities have been occurring due to a shortage of information about e-commerce payment methods.

"The draft decree should provide clear guidelines for enterprises," said Lam.

Craft exports rise 6% in seven months
 
The export value of handicrafts in the first seven months of this year increased 6 per cent year-on-year to US$900 million though the handicraft industry still faced challenges, said Le Ba Ngoc, chairman cum general secretary of the Viet Nam Handicraft Exporting Association (Vietcraft).

The major export markets of Vietnamese handicraft products made an export value of $355 million from the US, $290 million from the European Union and $85 million from Japan.

Pottery, porcelain, bamboo and rattan products were still key export products for the industry, Ngoc said.

The association expected the industry to achieve an increase of 7-8 per cent in export value to $1.6 billion for this year against last year, he said.

"However," Ngoc said, "the most important figure was a growth rate of profit for exporters, for whom increased export profit means capital to continue production and export."

The export profit had a growth rate of 15-20 per cent each year in previous years but now the growth rate has declined to 10 per cent, he said.

With the low growth rate in export profit, the exporters found production difficult. They needed to get an increase of 15 per cent in export profit to invest in production, because their production activities suffered impacts from inflation and increases in the cost of raw materials and labour, he said.

Now, Vietnamese handicraft exporters have implemented export contracts with large importers in the world with a total export value of $100 million per year for each enterprise. But the large contracts had low profits and additionally, the large importers often asked to reduce the price of products by 3-5 per cent as a condition for co-operation.

Therefore, enterprises often did business with smaller importers who had contracts with high buying prices for handicraft products, he said.

Ngoc said other difficulties the industry faced were unprofessional marketing, advertising and trade promotion activities and design of products.

The industry should have professional designers and seek out alternative raw materials to diversify products and improve their quality, he said.

To create business opportunities for enterprises within the industry, the association plans to organise a trade fair, Ha Noi Gift Show 2012, in October. The show is expected to attract 250 domestic handicraft exporters.

Dao Thu Vinh, deputy director of Ha Noi's Industry and Trade Department, said this year, the trade fair was not for handicraft villages as in previous years, but was for exporters.

"The Ha Noi Gift Show 2012 is expected to attract visits by foreign importers from markets such as the US, the EU, Russia and Taiwan, because these importers also plan to attend another chain of trade fairs in the Asia Pacific region in October," Vinh said.

Rice prices tipped to remain high
 
The price of rice, especially the low-quality IR 50404, rose sharply this week, 10 days after the completion of a Government programme to buy 500,000 tonnes of the grain for reserve.

Yesterday farmers in the Mekong Delta sold undried IR 50404 paddy for VND4,800 to VND5,000 per kilogramme, and dried IR 50404 for VND5,600 - VND5,700.

Pham Thai Binh, director of Can Tho-based rice export firm Trung An Co, said rice prices increased by VND300-400 in the Mekong Delta provinces of An Giang, Dong Thap, and Tien Giang and Can Tho city in the past week.

Unpolished IR 50404 rice was sold for VND7,450-7,750, and long-grain rice for up to VND7,700. If polished, they fetched VND1,000 more.

Tran Ba Dai, a farmer in Vinh Hanh Commune in An Giang Province's Chau Thanh District, said these prices would fetch him profits of VND15 million per hectare.

"Farmers are very happy because they are selling paddy at the highest prices during this summer-autumn crop," Duong Nghia Quoc, director of the Dong Thap Department of Agriculture and Rural Development, told Viet Nam News yesterday.

At these prices, Dong Thap farmers can earn profits of 30 per cent as mandated by the Government, he said.

Tran Van Thom, a trader in An Giang Province's An Phu District, said it was the high demand for paddy from exporters and news about a new contract to sell 500,000 tonnes of rice to Indonesia that had helped push prices up.

The increasing volumes of rice bought by Cambodian traders across the border - for selling to Thailand — could push prices further up, he said.

Nguyen Trung Kien, general director of Gentraco Can Tho and deputy chairman of the Viet Nam Food Association, said rice export prices rose by US$5 per tonne from last week.

Now, 5 per cent broken rice fetched $430-440 per tonne, and 25 per cent broken rice, up to $415.

At a meeting held in Kien Giang in mid-August to collect opinions for drafting regulations on the rice reserve purchase, VFA chairman Truong Thanh Phong said paddy-rice prices would continue to rise for the rest of this year.

Thai telecom eyes Viet Nam mobile market

Thai communications conglomerate True Corporation was considering investing in a communications project in Viet Nam in 2015, Bangkok Post reported.

The newspaper said Thailand's third largest mobile operator would come to Viet Nam after the formation of the ASEAN Economic Community (EAC), which is expected to be officially established in 2015.

According to Bangkok Post, True Corporation plans to become an integrated telecoms services provider in Viet Nam by seeking a communications infrastructure and network license.

Established in 1990, the company is also a large cable TV provider and internet service provider in Thailand. Its services are also available in Cambodia, Laos and Malaysia.

There is fierce competition in Viet Nam's telecoms market, and there have already been a number of casualties.

While Russian telecoms giant Beeline had to withdraw in April, Vietnammobile is seeking a Government bailout.

SFone last month made most of its employees redundant in order to end its Business Co-operation Contract (BCC) mechanism and change to a limited liability company.

The Vietnamese telecoms market, which has 135 million phone subscriptions, is dominated by VinaPhone, MobiFone, and Viettel, which hold a combined 95 per cent market share, while Beeline, Vietnamobile, and S-Fone share a minuscule 5 per cent.

 Delisted companies leave shareholders in the lurch

Several companies whose listings have been cancelled have apparently "disappeared" from the face of the earth, providing no information or explanation to shareholders over their capital losses.

The HCM City Stock Exchange in May cancelled the listings of Cavico Viet Nam Mining and Construction Company (MCV) and VIKY (Tan Hoa) Plastic Company (VKP) but both firms have failed to make full disclosures of events and causes to investors.

MCV was delisted for continually violating information disclosure regulations and VKP was delisted after posting losses for three consecutive years to 2011.

Shareholders of MCV can't even access its website.

One investor holding more than 10,000 MCV shares was quoted by the Sai Gon Dau tu tai chinh (Saigon Financial Investment) newspaper as saying: "The HCM City's exchange attributed its decision to delist those sharesto protecting investors' interests but we are the victims and don't know who to call for help.

"A VND40 million (US$1,900) investment in MCV is now waste paper," he said.

Other delisted companies such as Vien Dong Pharmaceutical Co (DVD) and Sai Gon Beverages Co (TRI) have also "disappeared" without any explanation to shareholders.

Some companies have moved to the Unlisted Public Company Market (UPCoM), including Viet Hai Shipping and Real Properties Company (VSP) and Cadovimex Seafood Import-Export and Processing (CAD) Company.

However, low share prices and lack of liquidity have made it nearly impossible for shareholders to recover their investments. VSP is trading at VND2,500 ($0.12).

Investors in other companies have now become jittery and to more likely to bail out of any company on the slightest rumour of difficulties.

For example, shares of An Giang Coffee Co (AGC) fell from more than VND2,000 ($0.10) to VND900 ($0.04) a share following information the company would be delisted from July 17.

Unexpected surge in rice price in Mekong Delta

Price of rice in the Mekong Delta unexpectedly surged, with price of dried paddy rising by VND5,500-5,600 per kilogram after purchase of rice for temporary stockpiling ended.

On August 20, the price of low-quality IR 50404 variety crossed VND5,000 per kilo in some places, the strongest gain since the beginning of the summer-autumn crop. According to export rice suppliers, price of paddy used to produce 5 percent broken rice climbed to VND8,600-8,700 per kilo.

Besides frequent export orders to China, Indonesia, and other countries, rice price rose also because of information that Vietnam had recently signed a contract to export 500,000 tons of rice to Indonesia, and that the Philippines is likely to import more rice from Vietnam as its crops were seriously damaged in natural disasters.

It is expected that price would continue to advance further as rice stock is running out at the end of the summer-autumn crop, while some rice exporters are increasingly transporting small volumes through Cambodia to Thailand.

The Department of Agriculture and Rural Development in Long An Province has recently decided to develop a 100-hectare sample rice field which will get a fund of VND3 billion to grow its specialty rice variety-Nang Thom Cho Dao. Farmers will be supported 100 percent for high-quality seedlings and 30 percent for fertilizers and plant protection drugs.

Nang Thom Cho Dao rice will be packed under registered brand-name and with clear origin markings to prevent consumers from buying fake rice.

The People’s Committee of Kien Giang Province has also given permission to Kien Giang Forestry-Agro Limited Company to carry out a project to develop a high grade rice-growing area under VietGap standards, covering an area of 1,200 hectares, of which 40 percent will be allotted to almost 3,000 farmers so as to provide jobs.

HCMC real estate market shows recovery

The Ho Chi Minh City real estate market is now showing positive signs of recovery, after a long period of freeze in transactions, according to several research companies specializing in the real estate segment.

Property prices at present have decreased to 50 percent since it peaked, but according to market analysts, 50 percent in real estate was a reasonable level when considering affordability and the real need of the buyers.

In the first six months, sales of apartments were modest, but since July the market has witnessed a lot of apartments, mainly in the medium segment, being offered at bargain prices.

For instance, Nam Long Investment Joint Stock Company last week introduced to homebuyers of average income a 2,000 apartment project ‘Ehome 3’ in Binh Tan District. Price fluctuated from VND615 million (US$30,000) per apartment, with favorable interest rates of 12 percent per year by Vietcombank.

Investment and Building Company No. 8 also recently announced a package sale of flats in the ‘green building’ project (Cao oc Xanh) on Nam Hoa Road, Phuoc Long A Ward, District 9, Ho Chi Minh City, at around VND1 billion per flat. Customers who buy apartments have to pay 15 percent and the remaining 85 percent will be paid in loans at interest rate of 12 percent per year during the first six months.

Duc Khai Company stock has also launched the sale of 200 apartments of The Era Project that is only 15 minutes from the luxury Phu My Hung area, for VND1 billion for a 100 sq.m apartment.

Customers will be supported with loans upto 7 percent of the value of the apartments with flexible payment modes, and interest rates of 12 percent for six months.

Not only are property investors offering dozen of projects for sale at promotional prizes, but some are offering a free car, while others are announcing a reduction of 50 percent on actual price.

A director of a construction company in District 3 when cordially   exchanging ideas with reporters said that at present real estate prices cannot be reduced any further.

However, these recommendations depend on who really wants to buy real estate at this time. Two factors must be seen, the legality of the project, the capacity of investors and in particular they should watch the construction quality of the project.

"Market survey showed that customers should trust investors who have long-term vision, not those in a hurry to join the competition on prices”, the director said.

According to the analysis of a finance investment company, people can choose to stabilize their savings by VN dong and accept the devaluation risk.

Depositing US dollars at a low interest rate of 2 percent per year is just to ensure capital preservation purposes.

Buying real estate property will help customers to avoid losing money. An apartment costs from VND1.7 billion (about $ 80,000), with this amount of money, if you put in the bank, with interest rates of 2 percent a year, you can get $1,600 per year.

But with an US$80,000 apartment, you can rent at US$350 per month (about US$ 4,000 per year). Thus, the money collected from rental apartments surpass far more than putting in the bank to benefit the interest, concluded this director, who is also a real estate broker.

Funds shortage hinders construction of student dormitories

Slow disbursement and shortage of capital for construction of housing projects for students in Hanoi is causing concern among parents and students as they continue to pay high rents for living accommodation.

Many parents and students have been searching for rooms to rent in Thanh Xuan, Cau Giay, Phung Khoang, Me Tri, Phu Do and Cau Dien Districts, which are closer to their universities.

Nguyen Van Duc, a land broker in Phung Khoang and Thanh Xuan, said rentals increased by 20 percent this year.

Landlords have pushed up a 20 square meter room with private entrance to VND3 million a month. Students usually rent houses with an area of 15 square meters, with a shared toilet and bathroom, at a rent of VND2 million a room.

These slum-like rooms are becoming increasingly unsafe and unhygienic as landlords do not upgrade them and they become run-down gradually.

However, parents with low-incomes have no choice but turn a blind eye and let their children stay in such accommodation.

Only 10 percent from thousands of students pursuing higher education in Hanoi have a place in dormitories, despite efforts by the City to build more dormitories.

Nguyen Quoc Tuan, deputy director of the Department of Construction, said that Hanoi is planning to construct 10 dormitories to meet the demands of 43,648 students.

Currently, two dormitories for students of Thuy Loi (Irrigation) University and Viet Hung College have been opened and are accommodating 3,000 students from both the schools.

Construction of these buildings kicked off in 2009 and as scheduled was completed by 2011. However, shortage of capital affected further progress and capital recovered from selling governmental bonds has just covered one- third of the planned construction.

Source: VNN/VIR/VOV/VNA/VNS/SGGP/Dtnews/SGT