CPI jumps in both major cities

The consumer price indices (CPI) in the country's two largest cities continued to increase in September due to a price surge in education-related commodities and services following the start of the new school year.

Statistics from offices in Ha Noi and HCM City showed that HCM City witnessed a 3.13 per cent increase over last month, while the index for Ha Noi showed a slight rise of 0.57 per cent.

This month's CPIs for HCM City and Ha Noi saw year-on-year surges of 5.13 per cent and 6.68 per cent, respectively.

In HCM City, increased prices were reported for four out of 11 goods and services.

This included education-related commodities increasing sharply at 57.2 per cent; goods and services up 1,69 per cent; housing, power and water up 0.84 per cent; and restaurants and catering services up 0.41 per cent.

In Ha Noi, 10 out of 11 goods and services also increased in price. The highest increase belonged to education-related commodities which was reported at 2.02 per cent.

The departments said that education-related commodities and services increased at the fastest pace this month due to the new school year, bringing with it a high demand for books and school supplies and also some increases in school fees.

Hue reopens upgraded airport

Deputy Prime Minister Nguyen Xuan Phuc yesterday attended the reopening ceremony of Phu Bai Airport in the central Thua Thien Hue Province after a 6-month closure for repairs.

Speaking at the ceremony, Phuc said Hue is a tourism hotspot thus a modern airport plays a crucial role in transportation service for visitors to the city.

He reminded local authorities and Airports Corporation of Viet Nam (ACV) to make full use of the newly-repaired airport to serve the socio-economic development of the province as Hue is also a centre of health and education services.

During the closure the airport's runway was expanded in width from 40m to 45m and resurfaced to accommodate the landing of medium-size aircraft such as the A321.

Its terminal was expanded to 6,500sq.m to increase capacity and service 1.5 million passenger a year. During a peak hour, the upgraded terminal can serve 800 passengers and three A321 aircrafts at the same time.

A new car park and taxi lounge with 160 parking spaces has also been built.

The airport upgrades were completed for a total cost of VND700 billion (US$35 million) from ACV's budget.

On September 20, the airport has accommodated flights by national flag carrier Viet Nam Airlines and cheaper domestic carrier VietJetAir from Ha Noi and HCM City to Hue.

Phuc told local authorities to diversify tourism services to attract more visitors to Hue for full exploitation of the airport.

On the same day, Phuc cut ribbons for the completion of the upgrade work to Hue bypass. The work began July of last year to overhaul the degrading bypass which presented traffic safety issues.

The 36km wide bypass upgrade cost the Ministry of Transport VND482 billion ($24 million) to complete. The bypass was put into use in 2004 to reduce dependence on the national highway for traveling to Hue City and to shorten the distance through the locality.

Seafood firms call for administrative reform

The Government should reduce administrative procedures related to food safety and quarantine of seafood export from and import into the country, delegates told a conference in HCM City last Saturday.

Vo Van Phuc, general director of the Viet Nam Clean Seafood Corporation, said food safety policies cost time and money for seafood exporters, reducing their competitiveness.

Others slammed the procedures for testing imported seafood, pointing out that importers had to register for quarantine at one place and then went to another for testing in addition to completing many procedures.

This took much time, sometimes up to 10 days, for their goods to be cleared, they said.

Vu Huy Quang of Sai Gon Food Company said most import consignments came with health certification (HC) from exporting countries, meaning they are safe, so testing them all over again was just a waste of time.

Authorities should therefore consider abolishing quarantining at ports or find another way to make it easier for businesses, he said.

Nguyen Thi Minh Tam, head of the Viet Nam Association of Seafood Exporters and Producers (VASEP) office, said apart from monitoring production at processing firms, authorities also tested export consignments to ensure food safety for issuing export licences.

The procedures took much time and affected export activities, she said.

Truong Dinh Hoe, VASEP general secretary, said ensuring food safety right from the early stages would be more efficient than testing export consignments.

"Most seafood processing firms have good food safety control systems.

"We need to focus more on checking inputs to mitigate risks involved in food safety."

Government programmes to control farming areas and toxic substances had seen some early results, but they should focus more on educating farmers to be responsible, he said.

Participants called on the National Agro-Forestry Fisheries Quality Assurance to upgrade its website to provide more information about food safety control and quarantine procedures to make it easier for firms.

Ngo Hai Phan, deputy chairman and general secretary of the Advisory Council for Administrative Procedures Reform, promised to pass on attendees' suggestions to the Government for consideration.

Gold price free-for-all helps to eradicate market disparity

Gold prices have been very volatile in recent days and the big gap between global and domestic prices has narrowed.

On Thursday morning the price of the precious metal in HCM City shot up by more than VND630,000 to VND37.8 million (US$1,791) per tael of 37.5 grammes.

By 5pm it had risen further to VND38.05 million.

There was a slight correction as of 1.30pm yesterday, with the buying and selling gold rates falling to VND37.75 million and VND37.90 million.

But they remained VND600,000 higher than two days earlier.

The trend was virtually identical in Ha Noi.

Analysts said domestic prices were tracking a sudden global surge, with international prices rising by US$67 per ounce to $1,360 in the last three days, a 15-month record for a three-day period.

Nguyen Duc Trong, sales director of Phu Nhuan Jewellery Company, said the global price rose sharply after the US central bank, the Federal Reserve, changed its mind about easing its quantitative easing.

Trong said the sharp increase in global prices has brought them closer to domestic rates, narrowing the long-existing difference by VND1 million to VND3.2 million per tael.

Nguyen Cong Tuong, deputy head of the Sai Gon Jewellery Company's gold trading division, said the price increase caused many investors to rush to buy bullion since they were afraid of a further rise.

On Thursday SJC sold 3,000 taels, double the previous days' figure, Tuong said.

A spokesperson for Bao Tin Minh Chau Jewellery and Gemstone Company too said buying surged at its outlets.

Gas industry transparency an explosive issue

Trade fraud is an increasing problem for Viet Nam's gas industry, said Tran Trong Huu, deputy general secretary of the Viet Nam Gas Association, at an online discussion in Ha Noi on Thursday.

Market watch teams dealt with 400 gas trading violations in the first eight months of the year, confiscating over 15,000 gas tanks and collecting penalties that totaled VND2 billion (US$95,200). Many enterprises used fake gas tanks to pump gas themselves from remote areas, said Do Thanh Lam, deputy head of the ministry's Market Management Department.

Huu said that authorities were too lax in granting licences to gas businesses.

Viet Nam has 23 businesses importing and distributing liquefied petroleum gas (LPG), according to Nguyen Loc An, deputy head of the Ministry of Industry and Trade's Domestic Market Department.

Monopoly is another pervasive problem for the gas industry. Last year, about 150 households in Ha Noi complained to the Viet Nam Consumer Protection Association (Vinastas) that the Red River Petroleum Company had cut their gas supply because of a dispute over the price increase and would not allow other firms to supply them with gas. Nguyen Manh Hung, vice chairman and general secretary of Vinastas, singled out PVGas – which holds 70 per cent of the gas market – as another potential concern.

During the discussion, participants also voiced worries over the surge of gas prices in the past few months. Retail gas prices recently rose VND4,250 per kilo or VND51,000 per 12-kilo gas tank due to the world increase. Since the beginning of the year, the price has risen by VND77,000 per tank.

Consumers should be quickly and accurately informed about such changes, Hung said, since the gas price was an important factor in their cost of living.

Nguyen Minh Phong, head of the Ha Noi Institute for Socio-Economic Development's Economic Research Division, said the Government should prevent businesses from controlling gas prices by requiring agencies to sell gas at list price.

Lam proposed revoking the business licences of firms that violated LPG trading regulations.

Last year, the country's total gas consumption was 1.24 million tonnes. Industrial and transport units accounted for around 35 per cent of gas consumption while commercial units and households consumed 65 per cent.

VN urged to court investors with local content ratio boost

The Vietnamese Government should issue support policies to help increase local content ratios for raw materials and parts, speakers said at a seminar held on Thursday in HCM City.

Yasuzumi Hirotaka, executive director of Japan External Trade Organisation (JETRO), said that Vietnamese businesses should consider the supply of locally produced raw materials and parts as a survival matter since this would be a decisive factor in retaining and attracting foreign investors, including Japanese.

The increase of local content ratios for raw materials and parts would help Vietnamese SMEs cut production costs and improve their competitiveness.

According to a survey by JETRO, the localisation rate in Viet Nam is only 28 per cent, while the ratio in China is 61 per cent, and Thailand 53 per cent.

Although many foreign companies are eager to find long-term investment opportunities with Viet Nam, they hesitate because of Viet Nam's underdeveloped support industries.

Pham Ngoc Hung, deputy chairman of the HCM City Union of Business Association, said foreign investors often have to import materials and components from abroad, which is detrimental to production and product prices, making it difficult to compete with rivals.

"This makes it difficult for Viet Nam to call for investment from big Japanese businesses," he added.

Japanese companies look to Viet Nam because of cheap labor. However, meeting participants said this was not sufficient because the support industry remained underdeveloped.

Hirotaka asked the Vietnamese Government to create a support policy to promote human resource training in industry.

Japanese investors are concerned also about low legal compliance, unclear tax and fee regimes, and informal costs.

A JETRO survey of Japanese-affiliated companies in Asia and Oceania pointed out that administrative procedures in Viet Nam are complicated, followed by Myanmar and Bangladesh.

In addition, the cumbersome tax system in Viet Nam was just behind India.

Hirotaka said that "tax difficulties and entanglements can cause big risks for trading activities of businesses."

JETRO surveyed Cambodia, Laos, Myanmar, Viet Nam, Bangladesh, India, Pakistan and Sri Lanka.

Investors also became frustrated when laws and decrees were changed frequently and not implemented in a consistent manner across Viet Nam.

They added that slow administrative processing and required duplicates of many papers in the central region and localities were big challenges.

Hirotaka warned that Viet Nam would lose investors if it did not improve the investment environment.

It is expected that in the future Japanese businesses in the fiber and manufacturing sector will move their factories and distribution systems from China and Thailand to Viet Nam, Indonesia and Philippines.

Apart from key areas such as HCM City, Dong Nai, Binh Duong, Long An and Ba Ria Vung Tau, investment destinations would also include the Mekong Delta region, Binh Phuoc Province, Lam Dong and the North.

According to the Foreign Investment Agency, among the 10 biggest FDI projects in Viet Nam last year were six investment projects from Japanese businesses in sectors such as real estate, manufacturing and processing, logistics and transport.

Hung said 60 per cent of Japanese businesses can generate profits from operations in Viet Nam. The percentage is higher than in China (57.2 per cent)

Nearly 66 per cent of Japanese enterprises in Viet Nam have plans to expand business in one or two years.

As of June this year, Japan had 1,990 investment projects in Viet Nam with total investment capital of US$33 billion. Newly registered capital of Japan in the first six months of this year was $4 billion and continues to increase.

Site clearance delays West Lake urban project

Although construction work on Starlake, a modern urban development area close to the city's West Lake, officially began one year ago, the project is now stagnating due to slow site clearance.

Municipal authorities said the cause of the delays was weak management capacity and a lack of co-ordination between management agencies and the project's investor.

The city's People's Committee recently reported on the project' progress, saying that the implementation was "too slow."

The Starlake was initially introduced as a mega urban project to stretch over 207 ha, spanning Xuan La Ward in Tay Ho District, Nghia Do Ward in Cau Giay District and Xuan Dinh and Co Nhue communes in Tu Liem District. The project is worth US$2.5 billion funded by Daewoo E&C and the Korean Development Bank.

Nearly one year on from the ground breaking ceremony, the project site is still deserted despite efforts to hasten implementation from the investor and the city's authorities.

According to the project' investor T.H.T Development, as of July, 26 ha of land had not been cleared for the project's first phase implementation.

T.H.T said that it had transferred an amount of $65 million for the city's land fund development centre, finance enough for site clearance compensation.

According to chairman of the city's People's Committee Nguyen The Thao, adjustments to the project's planning had also caused the project to move slowly.

He ordered a clean site to be handed over to the investor imminently and said that any planning adjustments must be submitted to the city for approval within this month.

As of the end of August, more than 91.76 ha out of 117 ha for the project's first phase had been cleared.

Central bank initiative reduces lending rates

The lending interest rate is currently equal to the 2005-06 rate thanks to the flexible interest rate cap regulations the central bank has applied since 2011, according to a report the bank released this week.

By reducing deposit interest rates by 7-10 per cent, the bank was able to get the lending rate down by 9-12 per cent against mid-2011.

Director of the central bank's Monetary Policy Department Nguyen Thi Hong said that in the second half of 2011 when inflation was high and liquidity of commercial banks was weak, the central bank focused on strictly punishing violators of interest rate regulations while keeping the annual deposit interest rate of 14 per cent unchanged.

In early 2012, the central bank announced plans to cut interest rates by one per cent per quarter on average to orient the market, Hong said. After five successive cuts, the deposit interest rate cap was six per cent lower.

The deposit rate also went down by roughly one per cent in the first nine months of this year. The interest rate cap for deposits of terms less than six months is seven per cent and the interest rate cap for longer deposits has been removed.

Currently, deposit interest rates at commercial banks are 1 – 1.2 per cent per year for demand deposits, 5-6.5 per cent per year for one to six month terms, 6.5 – 7 per cent for six month to below 12 month terms and 7.5-9 per cent per year for 12 month and 12 month-plus terms.

Lending rates are 7-9 per cent per year for short – term loans for prioritised sectors such as agricultural and rural development, exporters, supporting industries, small – and medium-sized firms and high-tech enterprises. The rates for other production and business sectors are 9-11 per cent. Borrowers with feasible business plans or healthy financial status can access loans at rates of only 6.5-7 per cent.

Despite the sharp cut of interest rates, deposits in dong by mid-September still rose 13.78 per cent against December last year, proving the success of the central bank's monetary policy management, Hong said.

Additionally, there has not been any unhealthy competition among commercial banks to attract depositors even though the central bank removed the interest rate cap for long-term deposits. The new interest rate curve shows improved capital distribution, according to Hong.

Book examines nation's TPP prospects

A professor at the HCM City University of Economics and a group of young researchers have written what is the first book on the challenges and opportunities Viet Nam has by signing the Trans-Pacific Partnership.

Assoc Prof Dr Pham Duy Nghia, the author, said membership of the TPP is important for Viet Nam's economy, but few companies are aware of what this holds for the country.

He pointed to a similar lack of preparation before joining the WTO on 2007, which saw the country fail to benefit as much as it should have.

The TPP offers a second chance, he said.

For the book, the researchers pored over information from the 17 rounds of negotiations and the hundreds of free trade agreements between Pacific rim countries.

They speculate on the advantages and disadvantages Viet Nam will face and its responsibilities as a member.

Of the several key areas still under negotiation, they focus on agricultural policies, intellectual property, state-owned enterprises, and public investment.

Thoi Ngoc Doan Thuy, a researcher at the Ba Ria – Vung Tau Province Department of Industry and Trade and one of the authors, said Viet Nam's rice exports would benefit since other leading exporters like Thailand and India would not be in the TPP.

Viet Nam's animal husbandry would face challenges since four other members — the US, Australia, Canada, and New Zealand – are very strong in this sector.

The four account for 95 percent of the proposed bloc's cattle and poultry exports.

Viet Nam still uses outdated technologies and poor farming techniques, and would be unable to compete with them, she added.

The book has been written with support from the university's Fulbright Economics Teaching Program.

More tilapia brood stocks supplied to S America

The Tilapia Breeding Centre has exported more than 26,000 breeder tilapias to South America, mostly to Mexico and Colombia, according to centre director Nguyen Cong Duong.

The centre, located in the central province of Quang Nam, is managed by the Institute of Aquaculture Research No. 1 under the Ministry of Agriculture and Rural Development.

It has exported breeder tilapias at a price of US$7-12 each since 2006.

Every year, the centre sells about 35-50 million black and pink breeder tilapias at least 21 days old to the northern region.

Duong said the Institute of Aquaculture Research No. 1 had assigned the centre to produce black and pink tilapia brood stocks to supply the domestic and export markets.

From 2011 to 2014, the centre invested VND64 billion (US$ 3 million) to set up two establishments for selecting and multiplying tilapias.

One establishment will select and preserve yellow and pink parent tilapias.

The other establishment will conduct breeding experiments with the newly created tilapia strains on an area of 7ha.

The centre has been selecting tilapia strains that live in non-optimal environments and producing male-dominant tilapia flocks by hybridising parent tilapias from different lines, Duong said.

The aim is to produce high-quality brood stocks that can meet harsh or variable weather conditions, he said.

By 2014, the centre will supply an additional 50 million breeder tilapias a year for the domestic market, he added.

Moody's awards VPBank stable rating

Global ratings agency Moody's gave B3 ratings to the debt and deposit of the Viet Nam Prosperity Joint Stock Commercial Bank (VPBank) in both local and foreign currency for the first time, saying the outlook was stable.

The ratings took into consideration VPBank's relatively advanced governance standards and progressive management plan to modernise credit risk management and operational controls.

The baseline credit assessment (BCA) also reflected the bank's need for external capital, exposure to other Vietnamese banks and aggressive turnaround plan, which involves inherent execution and asset quality risks.

Based on reported loans alone, VP Bank's current loan mix is 48 per cent retail, 43 per cent SME and 9 per cent corporate.

VPBank has one of the lowest loan exposures to SOE, which accounts for only three per cent of its overall loan book. Its retail banking strategy targets residents of HCM City and Ha Noi with monthly incomes between US$225-749.

In addition to loans, the bank has rapidly enlarged its deposit base, which grew by over 100 per cent between 2011 and 2012 and 29 per cent so far in 2013.

Nguyen Duc Vinh, the bank's general director, said the bank had focused on the retail banking segment and SMEs over the past three years with support from world leading consulting firm McKinsey.

By the end of last month, its charter capital was VND7 trillion with 200 units in 33 provinces and cities nationwide.

The bank's total asset size of VND103 trillion ($4.9 billion) positions it as a mid-tier joint stock commercial bank. It aims to become one of the three biggest commercial banks in the country.

Binh Duong attracts property developers

Long-term investors seeking capital gains or rental income are increasingly looking to the Binh Duong Province housing market, according to a survey by property services provider Savills Viet Nam.

The province has been a leader in attracting foreign direct investment, with almost 2,200 such projects with total capital of more than US$18 billion. Its population last year was around 1.69 million people, of which 75 per cent were of working age, revealing the potential of its residential market.

As of August, there were 49 apartment and villa/townhouse projects in both the primary and secondary markets, supplying around 11,000 dwellings – an 11 per cent average annual increase since 2009. All residential projects are located in the five main areas of Thuan An, Di An, Thu Dau Mot, Ben Cat and Binh Duong New City.

This year 18 additional projects are expected to hit the market with more than 11,800 apartments, villas and townhouses. Approximately 77 per cent are apartments. In that segment, the price of active projects is $800-1,200 per square metre and unit prices range from $80,000 to $120,000. In the landed property segment, prices range from $550 to $1,000 per square metre.

The average price in Binh Duong New City is $1,500-2,100 per square metre, higher than in other areas. The prices at popular townhouse projects in New City range from $200,000 to $260,000 per dwelling, while comparable houses in other areas sell for $50,000-110,000.

The most common household size in Binh Duong is two to four people, with 73 per cent falling in that range, making two-bedroom units the most appropriate.

Buyers bemoan social housing deposits

 The Ministry of Construction plans to allow investors of social housing projects to collect deposits from homebuyers, according to Deputy Minister Nguyen Tran Nam.

Recently, the investor of the social housing project at 143 Tran Phu Street, Ha Dong District collected a deposit of VND70 million (US$3,330) from each buyer as a guarantee. The money will become their first payment after signing the purchase contract; if they decide not to buy the apartment, they lose the deposit.

Many registered to buy apartments in social housing projects but ultimately decided not to buy them, said Hoang Van Anh, chairman of Song Da Urban Development and Construction Company. This made investment in such projects risky. The move aimed to lessen the risk for investors by ensuring that buyers actually intend to follow through with the purchase, he said.

According to Vu Van Phan from the ministry's Housing Department, there are regulations on deposits for commercial house purchases but none for social housing.

But many buyers object to the new practice, saying that investors of social housing projects already receive incentives from the Government.

Many social housing projects had not yet been started, so buyers sometimes waited for years to move into their apartments, said one buyer of an apartment in a social housing project in Hoang Mai District.

Pham Sy Liem, deputy president of the Viet Nam Federation of Civil Engineering Associations, said that if investors of social housing projects were allowed to collect deposits from buyers, the contract must specify that failure to hand apartments over to buyers within the deadline would necessitate financial compensation.

Liem urged the construction ministry to collect feedback from homebuyers as well as investors to ensure that the rights of both parties were protected.

As of the end of August, commercial banks committed to provide 331 individuals with VND105.32 billion (US$5 million) in loans from the Government's VND30 trillion ($1.42 billion) support package for the property market, according to the State Bank of Viet Nam.

Vietcombank led the five banks involved in loan disbursement with a commitment to provide VND44.89 billion in loans for 135 individual borrowers, followed by Vietinbank with VND29.47 billion for 92 borrowers and BIDV with VND16.3 billion for 40 borrowers.

Singapore lender eyes GPBank stake

Singapore's United Overseas Bank (UOB) may acquire a significant stake of Global Petro Bank (GPBank) if authorised, according to a private source of Dau Tu (Viet Nam Investment Review) online.

GPBank is among nine fragile banks which were to be restructured under Government schemes to strengthen the domestic banking system. While eight other banks have been reorganised, GPBank's plan is still under consideration.

The State Bank of Viet Nam (SBV) said on Monday that it was consulting Prime Minister Nguyen Tan Dung about the remaining weak bank, and there was a possibility that the bank would be consolidated with capital contribution from a foreign credit institution.

GPBank has over VND3 trillion (US$142.86 million) in equity, according to its website.

UOB – providing multi-area services globally through networks in Asia Pacific, Western Europe and North America – is highly ranked by credit rating organisations including Moody's and Standard&Poor.

It is among Singapore's leading banks in several areas, including credit card services, individual housing credit and small – and medium-sized enterprises financing.

The Singaporean bank first invested in Viet Nam in 2008 when it spent over VND480 billion (US$22.86 million) to buy a 10 per cent stake in Southern Bank. After two more share acquisitions, it now holds a 20 per cent stake and is a strategic shareholder of Southern Bank.

Domestic regulations currently allow foreign investors to own a maximum equity of 15 per cent in local banks, or 20 per cent in special cases permitted by the Government.

A revised regulation under Government consideration says that foreigner holdings can exceed 30 per cent with special permission for the sake of the credit institution restructuring process.

The eight banks that have been restructured through mergers or self-reorganisation are TrustBank (now Viet Nam Construction Bank), Ficombank, Sai Gon Commercial Bank, TinNghiaBank, Habubank, Western Bank, Navibank and TienPhong Bank.

The SBV said it would specify more weak institutions for drastic treatment in this year, while affirming that the credit institution system was operating better than it did in the first eight months of 2013.

Da Lat resort awarded Green Lotus for landscape

Da Lat Edensee, a resort in the Tuyen Lam Lake area with breathtaking surroundings, personalised service and spacious sanctuaries of peace and quiet in the flower city of Da Lat, has won the Green Lotus award from The Guide and Viet Nam Economic Times.

In the Certificate of Excellence, Da Lat Edensee was recognised for its magnificent location offering the most spectacular natural setting in Da Lat.

The Green Lotus label indicates that the resort has made efforts to protect the environment, use natural resources and energy efficiently, contribute to the preservation of heritage and the development of the local economy, culture and society, as well as pursue sustainable tourism development, according to the ministry's official website.

Central province breaks ground on $35m resort

Thanh Trung Ninh Thuan JSC has started construction of the US$35 million Nui Chua Eco-Resort on the coast of the south central province of Ninh Thuan. The project is expected to be completed in 2015 with around 170 villas.

The provincial People's Committee vice chairman, Vo Dai, said the project in the Nui Chua National Forest would significantly contribute to local tourism and socio-economic development.

It would be a link between major tourist sites in neighbouring localities, such as Nha Trang, Da Lat and Mui Ne, he added.

Dat Xanh reveals real estate e-commerce website

Dat Xanh Group unveiled 123muanha.vn, the country's first real estate e-commerce website, on Wednesday.

The website will supply customers with detailed information about property projects throughout the country and allow them to select property and pay a deposit.

The company aims to use the site to expand access to the national real estate market.

1,000 low-price apartments up for sale in Ha Noi

Muong Thanh Real Estate trading centre released 1,000 low-price commercial apartments in Kim Van-Kim Lu Urban Area, Ha Noi's Hoang Mai District for sale on Thursday.

With prices of around VND12 million (US$570) per square metre for apartments ranging from 50 to 60 sq.m per unit, they drew the attention of many low-income earners. About 800 units were sold on the release date, according to Dien Bien Construction Company No 1.

However, buyers often must pay an additional VND30-50 million ($1,430-2,380) for intermediaries.

ANZ Viet Nam opens office in Binh Duong Province

ANZ Viet Nam on Thursday opened a representative office in the southern province of Binh Duong, after receiving approval from the State Bank of Viet Nam.

The bank's CEO, Tareq Muhmood, said the office would focus on supporting customers involved in food and beverage processing, animal feed, textiles, garment and leather production, packaging and furniture.

"The new office confirms our commitment to the local market," he said.

Samsung establishes R&D Centre in Ha Noi

Samsung Electronics Viet Nam (SEV) will establish a research and development centre for mobile and smart electronic products at PVI Tower in Ha Noi, according to Savills Viet Nam.

The 10,000 sq.m centre will serve all Samsung factories in Asia.

SEV is a member of South Korea's Samsung Group, one of the largest foreign investors in Viet Nam. SEV signed a contract to hire spaces at the tower late last month, a move Savills said was a good sign for the frozen serviced office market.

Cashew exports likely to boom towards end of year

Cashew exports will pick up in the remaining months of this year, the Viet Nam Cashew Association has forecast.

The association cited increasing prices of exported cashew nuts in recent months as strong evidence of an imminent upturn.

The export price of cashews, which averaged less than US$6,300 per tonne in the first two quarters, had risen to $7,600 per tonne by early August.

Over the past eight months, Viet Nam has exported 168,000 tonnes of cashew nuts, earning US$1.07 billion, 18 per cent higher in volume and 10 per cent up in value over the same period last year.

IT firm wins $2.5 million contract in Laos

FPT Information Systems (FPT IS) announced it had won a US$2.5 million telecommunications contract with a Lao trade partner on Thursday.

Following the deal, FPT IS and Lao Telecom Company will join hands to develop payment calculation, customer management and service distribution systems.

FPT IS has secured a firm foothold in the Lao market. In April, the firm inked another contract with Lao Telecom Company worth $1 million.

Ha Noi prioritises trade infrastructure

The capital city is prioritising a plan to develop infrastructure for trading activities, contributing to socio-economic development, according to the municipal Department of Industry and Trade.

The priority is implemented in the 2011-2015 period and will be continued in the next five years. Over the recent time, the city has been promulgating many policies so as to develop as well as monitor the system of markets in the locality.

To date, the capital counts 414 markets, 122 supermarkets and 26 plazas which play an important role in supplying commodities to the city as well as Song Hong (Red River) Delta.

HCM City to host world textile machinery exhibition

Around 200 Vietnamese and foreign companies are expected to take part in an annual textile and garment machinery exhibition to be held in HCM City next month.

The companies – including from China, Germany, India, Japan, Taiwan, and the US – will display their products and technologies at more than 360 booths at the four-day event to open on October 24.

There will be machines for spinning, weaving, knitting, yarn processing, cloth cutting, sewing, and laundry, chemicals, and garment accessories on display.

The organisers, Viet Nam Exhibition and Advertising Company and Taiwan's Chan Chao International Co, hope the exhibition will provide local companies access to advanced machinery and technologies, enabling them to improve product quality.

Notch joins Riverorchid group to build top Indochina network

Notch, one of Viet Nam's longest established and leading digital agencies, signed an agreement on Wednesday to merge with Riverorchid, Indochina's specialist communications network.

Tarun Dhawan, managing director of Notch, said the strengths of Notch were a significant presence and client base in Viet Nam, while riverorchid Digital has existing operations not just in Viet Nam but also across Cambodia, Myanmar, Laos and Thailand.

The combination aims to build Indochina's premier specialist digital network embedded within Indochina's specialist communications network.

Bank deposits still seen as safe

Despite declining deposit interest rates, people see bank savings as a safe investment channel in the context of rising price pressure and market turmoil.

In the first eight months, total deposits at credit institutions grew about 10.5 per cent, although deposit interest rates fell by 2-3 percentage points.

Deposits in dong were up by about 11 per cent.

Industry insiders estimated that in the latter part of the year, deposit interest rates would not change much, but deposits might increase.

"The current interest rate is quite stable, benefiting both banks and depositors," said Vo Thi Sanh, BIDV director of managerial information and ALCO assistance.

BIDV recently slashed the rate for 3-11 month terms by an additional 0.25-0.5 percentage point and kept rates for more-than-12 month terms unchanged at 8 per cent annually in order to encourage long-term deposits.

"Let's say there is no way for people to put their money in. If somebody has idle money, they could make profits from savings," said Nguyen Thanh Toai, ACB's Deputy Director.

Some Ha Noi branches also reported good footfall for short-term deposits, which accounted for 50 per cent of the total.

"At the present time, I prefer the three-month term to longer time frames as it gives me a sense of flexibility," said Do Dang Tan, whose nine-month deposit was just due at Techcombank.

Tran Thi Dung, a customer at Vietcombank, added that he always chooses short terms because "with a big amount of money, a very slight increase or decrease in interest rates makes a big different in profit."

However, a few investors disagree.

"I know short terms are more flexible but I don't see a possibility of interest rates increasing. So I'm trying my luck with a one year term to enjoy the 8 per cent rate. In an emergency, I can always mortgage my savings to borrow money immediately," said Pham Thi Hoa, a retail investor.

WTO link doubles total trade

Viet Nam's total trade value last year reached US$228.31 billion after six years of participation in the World Trade Organisation (WTO), double what it was when the country joined in 2007, according to the General Department of Customs.

The figure shows that the country's total import-export value in 2007 surged 31.3 per cent, or $26.52 billion compared to 2006, the highest growth rate in the period of 2003-12. In 2011, its total import-export value was $200 billion.

Viet Nam's foreign trade growth was also reflected in its world ranking. The WTO ranked the country 50th and 42nd in terms of export and import revenue in 2003. However, Viet Nam moved up 13 positions to 37th in exports while its imports jumped 18 positions to 34th.

Nguyen Minh, head of the Ha Noi Institute for Socio-Economic Development's Economic Research Division, said the WTO accession had positively impacted the macroeconomy and businesses.

He said enterprises should comprehend this integration more thoroughly and accurately in order to plan development, map out practical investment plans, avoid risks, diversify businesses and delve into professional research.

Exports to US accelerate this year

Viet Nam accelerated exports to the US market over the past eight months, resulting in a record trade surplus of US$11.68 billion, according to the General Department of Customs.

Exports rose modestly by 4 per cent year-on-year to $15.14 billion, while imports dropped by 5 per cent to $3.46 billion.

Two-way trade has increased significantly in recent years, especially after Viet Nam joined the WTO in 2007. Despite the negative impact of the global economic recession, trade last year still topped $24.49 billion, more than double the figure recorded in 2007.

Trade surplus with the US jumped from $10 billion in 2010 to $14.8 billion in 2012 thanks to increasing exports of goods such as garments, timber products, seafood and footwear. Key imports from the US are machinery, equipment, tools, computers, electronics and components, cotton, plastic material, animal food and soybeans.

The US is now Viet Nam's second biggest trading partner after China. However, Viet Nam's exports account for only 1 per cent of US imports, with the country ranking 40th out of nations with the greatest export value to the US.

Experts suggested domestic businesses closely obey US market regulations and requirements to minimise the risk of being blocked by anti-dumping and anti-subsidy legislation.

Failed FDI projects lose their licences

Seventeen foreign direct investment (FDI) projects abandoned by investors in southern Dong Nai Province had their investment certificates revoked this year, according to the province's Industrial Zone Management Board.dy exodus of FDI investors since the early 2000s, leaving around 47 abandoned projects worth US$100 million in the area.

A $2 million project by Haileck started in 1997 to develop pipelines in Nhon Trach 1 Industrial Zone. However, investors retreated in 2010 with the company halting all operations in the country.

In a similar fashion, Richway Plastics Company shut down a $3 million project to build a factory in Nhon Trach 3 Industrial Zone with investors fleeing only four years after the project commencing in 2006.

The Dong Nai Industrial Zones' Management Board has pointed to project losses and financial difficulties as the major causes for the sudden flight of capital from the province. However, the board also blamed Viet Nam's bankruptcy proceedings as too tedious and costly for investors to wind up the projects properly or with due notice.

The sudden disappearance of FDI projects has left thousands of labourers without jobs and despite efforts to contact investors, no response had been received by the province's Management Board.

Nguyen Manh Van, deputy director of the management board, said dealing with abandoned FDI projects had been difficult due to the lack of detailed regulations in the Law on Investment.

He said the Ministry of Planning and Investment had since issued a document providing instructions for the handling of the projects early this year.

Inspection of the remaining 30 FDI projects left unattended is also underway, he said, adding that the projects were often inefficient and distorted employment opportunities.

"Handling these projects is urgent and now we have the regulations to resolve outstanding issues" he said.

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