Exports increase by over 23 percent in first quarter

Vietnam’s total import-export turnover was estimated at US$50 billion in the first quarter of the year, according to the General Statistics Office.  

Of the figure, exports reached US$24.5 billion, up 23.6 percent, and imports nearly US$24.8 billion, up 6.9 percent against the same period last year.

In March alone, the country earned US$17.45 billion in import-export turnover, of which exports accounted for US$9.15 billion, up 10.2 percent over the previous month.

Some major groups including electronics, computer, machine and equipment, and means of transport saw sharp increases of between 50-100 percent. Other groups such as seafood, crude oil, wood products, footwear and textile maintained stable growth. Meanwhile, exports of rice, coffee and rubber decreased dramatically compared to the same period last year.

The import of automobiles dropped to a record low of 32.4 percent while that of cotton, yarn and other fabrics also experienced a dramatic decrease that would affect the garment and textile sector’s export earnings this year.

Shady feed firms closed down

Three feed companies in Dong Nai Province have been shut down after authorities discovered their products containing ractopamine, a banned growth agent and using out-of-date raw materials.

Dinh Duong Vang, Thien Huong Phat, and Nhan Loc Companies were also found using out-of-date raw materials and violating other regulations by inspectors from the province's department of Industry and Trade and market management agency.

Tests showed that Dinh Duong Vang company's vitamin and feed products contained ractopamine which is banned by WHO and in many countries though not in the US.

The substance is used to increase the volume of lean meat in pigs and boost the animals' growth.

When the case first came to light earlier this month, pig farmers in the province called on authorities to file a criminal suit against the companies' top executives for causing them losses and damaging the health of consumers.

Ironically, many of the same farmers were merrily using the agent to cause their livestock to rapidly gain weight. Pigs fed on it can put on 1.5-2kg per day.

Many veterinary drug shops were also secretly selling the banned substance, smuggled in from China, to farmers.

This week the province People's Committee and Ministry of Agriculture and Rural Development will jointly make a report to the Government.

According to the local Veterinary Department, feed producers in the locality will be ordered to stop using, storing, transporting, or consuming the banned chemical.

Minister of Agriculture and Rural Development Cao Duc Phat said his ministry would carefully monitor the situation and severely punish violations.

Another banned chemical, salbutamol – which helps burn fat in animals – was also found in the feed.

Foreign investors reduce stake in real estate developer HAG

Real estate developer Hoang Anh Gia Lai (HAG) has announced that its major shareholder group, including three Deutsche Bank affiliates, has sold over 15 million HAG shares, reducing their combined stake from 9.55 to 6.32 per cent.

Vietcombank targets higher earnings, dividends this year

Vietcombank (VCB) projects a net profit this year of over VND4.9 trillion (US$233.3 million) on which it will pay a 12-per-cent dividend. Last year, the bank posted a profit of nearly VND5.7 trillion ($271.4 million), up 2.3 per cent over 2010. Total assets reached VND367 trillion ($17.5 billion), an increase of 19.2 per cent, while the bank's bad debt ratio was 2.03 per cent, well within its target of 2.8 per cent.

The State Bank of Viet Nam has approved Vietcombank to increase its charter capital to nearly VND23.2 trillion ($1.1 billion), making it the third commercial bank with a charter capital of over $1 billion, after Agribank and the Bank for Investment and Development of Viet Nam (BIDV).

Logistics company Tan Cang sells additional 2.24 million shares

Tan Cang Logistics And Stevedoring Co (TCL) has issued 2.24 million additional shares to existing shareholders, around 20 per cent of which were bought by its underwriting agent, Thang Long Securities Co, at a price of VND15,860 per share. TCL also plans to cancel a sale of 4 million shares to strategic partners and liquidate underwriting contract with Thang Long Securities.

Central bank gives nod to Vietinbank capital increase

The State Bank of Viet Nam has approved an increase in Vietinbank's (CTG) charter capital from VND20.2 trillion (US$961.9 million) to VND26.2 trillion ($1.24 billion), in a decision issued on Wednesday.

Listed affiliates of construction giant Song Da to merge

Shareholders of construction companies Song Da 6.06 (SSS) and Song Da 6 (SD6) have approved a merger of the two companies through a stock swap at a 1:0.6 ratio. Odd shares of SD6 after the swap will be demolished, and the company will pay VND10,000 per share to shareholders. The merger will be completed when the Ha Noi Department of Planning and Investment issues a new business registration certificate to SD6. The listing of SSS shares on the Ha Noi Stock Exchange will be cancelled.

FAO backs prevention of shrimp disease

The UN Food and Agriculture Organisation (FAO) has agreed to support a one-year project worth US$500,000 to control the spread of a particular shrimp disease.

According to the Ministry of Agriculture and Rural Development, the fund will be used to employ international and domestic consultants, buy new breeding shrimps and pay for equipment and lab activities to find out causes of the disease.

The FAO will also help improve biological safety in shrimp farming, complete instructions for urgent situations and develop a strategy to manage aquatic products.

In recent months, the disease breakout became serious, especially in southern provinces. It has affected 30,000 shrimp farming families. —

Large-scale rice cultivation profits Can Tho
 
Farmers in Can Tho City have increased their profits by VND4.8 million to VND5.3 million per ha in the last winter-spring rice crop under the large-scale cultivation model, according to the local Department of Agriculture and Rural Development.

Addressing a seminar held in the Cuu Long (Mekong) Delta city last Thursday to review results obtained with large-scale farming under Vietnamese Good Agriculture Practices (VietGAP) standards, the department's director, Pham Van Huynh, said farmers had earned profits from VND29.8 million to VND34,6 million per ha.

Huynh explained that in last winter-spring crop, farmers spent from VND2,558 to VND3,116 on a kilogramme of paddy under the large-scale model, VND400 per kg lower than on small fields, while selling paddy at VND5,750 to VND7,350 per kg, VND100 to VND200 higher than paddy grown on small fields.

Furthermore, each ha under the large-scale farming model produces 7.78 to 8 tonnes of paddy, an increase of 350 to 500kg per ha under the traditional farming model, said Huynh.

In the 2011 – 2012 winter-spring crop, Can Tho City had 89,000 ha under rice cultivation, and 963 families had voluntarily registered to take part in the large-scale farming model with fields covering a total of 1,832 ha in the districts of Vinh Thanh, Co Do, Thoi Lai and Thot Not.

Under the new farming model, only one variety was sowed at the same time in a field. This helped farmers save 80-100 kg of seeds per ha.

However, several difficulties still remained in the application of large scale rice cultivation model, the seminar heard.

Spearkers said low educational background of farmers, unlevelled fields and under-developed irrigation systems increased production costs and reduced yields.

Huynh said underdeveloped transport infrastructure was another factor that affected efforts to mechanise agricultural production and increase efficiency.

In related news, the Minsitry of Agriculture and Rural Development held another seminar in Can Tho City the same day to introduce "solutions to post-harvest rice drying in the Cuu Long (Mekong) Delta."

The seminar aims at reducing post-harvest losses and improving rice quality.According to the ministry, the Cuu Long (Mekong) Delta has nearly 4 million ha under rice cultivation, producing more than 21 million tonnes of paddy annually, accounting for 50 per cent of the country's paddy yield and 90 per cent of its rice exports.

However, the country still suffered great losses during and after harvests, amounting to 3.2 million tonnes per year, including the loss of some 970,000 tonnes of paddy per year in the drying process, it said.

It said modern drying facilities were needed to prevent such losses.

Taiwanese firms receive updates on IP regulations

Hundreds of Taiwanese companies doing business in Viet Nam received the latest legal and regulatory updates pertaining to software ownership in a workshop held recently in Ha Noi.

The workshop, entitled "Better competitiveness through compliance with Viet Nam IP laws and related legislation", was attended by the Copyright Office of Viet Nam (COV), Business Software Alliance (BSA) and the Taiwan Chamber of Commerce in Viet Nam.

The information is expected to help Taiwanese companies avoid any legal or regulatory conflicts that could arise due to lack of awareness.

Addressing the workshop, Director General of the Viet Nam Copyright Office Vu Manh Chu provided an update of the current regulatory framework and walked the participants through existing laws and regulations on copyrights and related rights in Viet Nam to provide Taiwanese companies active in the country with detailed information on the topic.

"Use of illegal software by businesses may result in criminal charges and severe legal punishments," said Chu.

In addition, copyright owners are also entitled to pursue other means to address infringements of their intellectual property rights, including filing complaints at the relevant court of law in line with Article 198.1d of the Intellectual Property Law and/or requesting the court to order the offenders to stop their misconduct, formally apologise and initiate remedial measures. They may also seek to demand the offenders to compensate for any damages caused, including material losses, and pay court fees in line with Articles 202, 204 and 205 of the Intellectual Property Law.

"The degree of damage is determined based on the actual losses to the intellectual property rights owner that were directly caused by the intellectual property right encroachment," stressed Chu.

At the workshop, BSA and its members including Lac Viet Computing Co, Bkis, PCT, Microsoft, Open Computing Alliance and Lac Viet also advised on effective software ownership solutions.

BSA representative Dao Anh Tuan informed participants that the Asia-Pacific region recorded a software piracy rate of 60 per cent in 2010 as reported in the International Data Corporation's Global Software Piracy Study. This translates into a commercial value of US$18.7 billion in pirated software.

WB supports urban infrastructure, energy efficiency, forestry sectors

The World Bank approved on Thursday a total of US$522 million in credit for the development of Viet Nam's urban, energy, and forest sectors.

Three projects will receive the funds: the Cuu Long (Mekong) Delta Region Urban Upgrading Project; the Second Power Sector Reform Development Policy Operation; and the Forest Sector Development Project – Additional Financing.

All three projects support the World Bank's new Country Partnership Strategy (2011-2016) for Viet Nam, the bank said in a press release.

"œThe approval of the three operations demonstrates the continued strong partnership between Viet Nam and the World Bank. They address emerging challenges such as rapid urbanisation, the need for an efficient power sector to meet Viet Nam's rapidly growing demand for power to support rapid growth, and the importance of sustainable management of Viet Nam's forest resources to help move rural communities out of poverty," said Victoria Kwakwa, World Bank Country Director for Viet Nam.

The Cuu Long (Mekong) Delta Region Urban Upgrading Project will improve infrastructure and services for more than 1.5 million people in the Cuu Long (Mekong) Delta cities of Can Tho, My Tho, Cao Lanh, Ca Mau, Rach Gia, and Tra Vinh.

The bank release said an estimated 275,900 people living in low income areas of these cities will directly benefit from improved infrastructure such as roads, drainage, canals, water supply and sanitation, public facilities and power supply.

The bank's International Development Association (IDA) will fund this project with $292 million.

The Second Power Sector Reform Development Policy Operation is one of three policy operations that support the Government in implementing reforms in the power sector to facilitate and promote effective competition in power generation; transparency and predictability in electricity pricing and tariffs; encourage investment in power generation; and implement programmes and incentives for efficient use of electricity.

"The programme is organised around four key policy areas, which are the development of a competitive power market, power sector restructuring, electricity tariff reform, and improving demand side energy efficiency," the press release said.

For this operation, the Bank provides $200 million, half of which comes from IDA, and the other half from the International Bank for Reconstruction and Development.

The Forest Sector Development Project aims to promote sustainable smallholder plantation forestry to help raise rural incomes and support biodiversity conservation across Viet Nam's priority conservation areas.

The project supports the National Forestry Strategy through restoring and increasing forest cover, promoting market-based approaches to forestry, increasing roles and responsibilities of local forest owners, strengthening protected areas management and conserving biodiversity with the involvement of local communities.

Under the Additional Financing operation, IDA will provide an additional $30 million over three years to the project covering six provinces in the central coastal region of Viet Nam.

Investors cheer low inflation, delayed electrical rate hikes

Stocks are expected to extend their rally into this week as investors' short-term economic concerns related to inflation have eased with the release of March CPI data and the decision by Electricity of Viet Nam to delay any further electrical rate hikes.

The nation's consumer price index (CPI) in March was reported to have risen just 0.16 per cent over February, the slowest pace in the past 20 months.

Meanwhile, electricity rates remain below production cost and EVN is under pressure to increase the prices to cover losses. Current regulations would allow EVN to increase rates again effective March 20, three months after its previous rate hike in December 2011. But the official determination to control inflation has persuaded the utility to delay the move for a while.

FPT Securities Co's analyst Nguyen Ngoc Tuan wrote in a weekly report that the VN-Index this week could test the resistance mark of 450 points and likely head to 470 points on the strength of a solid performance by shares tracked in the VN30 Index.

In the past week, Tuan said, investors became more optimistic, helping lift stocks on both national stock exchanges. Rising capital inflows helped keep market volumes at a high level.

On the HCM City Stock Exchange, the VN-Index gained 3.66 per cent over the course of last week, closing out Friday's session at 454.10 points. Blue chips led the rise, with the VN30 Index – which tracks the performance of the 30 leading shares by market value and liquidity – increased by over 3.2 per cent to conclude the week's trading at 512.84 points.

The value of trades averaged over VND1.13 trillion (US$54 million) per session, on an average daily volume of nearly 78 million shares.

Shares of mineral companies were the biggest gainers, rising by an average of 11.9 per cent over the previous week, while securities companies also outperformed the market, increasing by an average of 8.5 per cent on the week. Real estate and bank shares also rose by over 4 per cent on average.

Binh Thuan Hamico Mineral (KSA) led the market, gaining 25 per cent last week following the confirmation from the company's chairman that KSA had sufficient funds on hand to pay a 10-per-cent as earlier promised on its net profit of over VND35 billion ($1.7 million).

Agribank Securities (AGR) and Sacombank Securities (SBS) closely followed with a rise of 24 per cent and 21 per cent, respectively. Securities shares are expected to continue their growth this week after the information that companies' capital reserves set aside to cover losses incurred by share price decreases last week will be reimbursed partly or wholly.

On the Ha Noi Stock Exchange, stocks of small securities firms were also the biggest winners last week, with PetroVietnam Securities (PSI), Hai Phong Securities (HPC), An Phat Securities (APS), and Orient Securities (ORS) all gaining by 30-34 per cent.

Overall, the HNX-Index rose by over 6.4 per cent over the course of the week, closing on Friday at 77.57 points. Market volume increased 15 per cent to a daily average of 92 million shares, worth nearly VND921 billion ($43.9 million) per session.

Foreign investors continued to be net buyers again last week by picking up another VND417 billion ($19.9 million) worth of shares on both exchanges. They focused buys on bank shares, including Sacombank (STB), Military Bank (MBB), Vietcombank (VCB) and Habubank (HBB).

Ha Tinh Province seeks to expand investment in Laos

The chairman of the People's Committee of the central province of Ha Tinh, Vo Kim Cu, has asked the Lao government to help enterprises in the province expand their investment in Laos.

Cu, who just concluded yesterday a four-day working visit to Laos, presented the request to Lao Deputy Prime Minister Somsavat Lengsavath on Saturday. Cu said that 10 businesses from his province were already investing in Laos in rubber plantations and processing, barbed wire production and forestry.

Ha Tinh, which has also helped build schools in the neighbouring Lao provinces of Khammouane and Bolikhamsai, now wanted to boost commercial co-operation with them, Cu said.

Lengsavath also applauded Ha Tinh's support for Lao localities, especially in education, said he would assign provincial authorities in Khammouane and Bolikhamsai to study Ha Tinh's proposals to increase co-operation.

Province woos Canadian investors at Toronto forum

Over 100 Canadian businesses gathered at a recent forum in Toronto to inquire into investment opportunities in Viet Nam's northern province of Thai Nguyen.

Thai Nguyen Party Committee secretary Pham Xuan Duong helped introduce the policies, strengths and socio-economic development orientations to Canadian business representatives, urging them to demonstrate their areas of strength and help build mutual understanding and trust with administrative agencies and businesses in Thai Nguyen.

Thai Nguyen People's Committee chairman Duong Ngoc Long also answered questions from Canadian businesses regarding provincial advantages, policies and procedures.

At the forum, representatives of Viet Nam's Chien Cong Mineral and Industry Joint Stock Co and the Forrec Company of Canada signed a design and consultancy agreement for the Festival Land project at the province's Nui Coc Lake.

CPI ups only 0.16 percent despite petrol price hike

The country’s Consumer Price Index (CPI) in March rose only 0.16 percent against the previous month, despite petrol price increasing by 10 percent, the General Statistics Office (GSO) said.

The figure, however, reflected a year-on-year increase of 15.95 percent.

Of the 11 goods categories, only post and telecommunications services continued to fall, while others increased by between 0.07-2.31 percent.

The highest growth during the month was seen in the group of housing and construction materials while the lowest increase was recorded by the batch of drinks and cigarette.

GSO Deputy Head Tran Thi Hang said a drop in March’s CPI is not “strange” as the group of restaurant services, including food and foodstuff, which account for 40 percent of the market basket, experienced a decrease of 0.83 percent.

Food prices this month dropped by 1.21 percent from the previous month, mainly because of continuous fall in the price of rice in the Mekong Delta and unfavourable export price.

Prices of foodstuff were down 1.25 percent due to decreasing demands and plentiful supply.

The CPI market basket in Vietnam currently contains 11 items: food, restaurant services, beverages, textiles, medical services, transportation, post and communications, educational services, electricity and construction materials.

Vietnam may sell alumina from Q2: Vinacomin chairman

Vietnam's state coal and mineral group Vinacomin may start selling alumina product next month during its test-run of the country's first alumina plant, a senior executive said on Thursday.

"We will strive to keep the test-run period as short as possible and bring the plant to full capacity," Chairman Tran Xuan Hoa of the National Coal and Mineral Industries Group (Vinacomin) said on the sidelines of an energy conference.

Hoa said Hanoi-based Vinacomin would operate at 70-80 percent of the Tan Rai plant's capacity during the test-run. The US$460-million facility has a designed capacity of 600,000 tonnes a year, he said.

Up to 99 percent of the Tan Rai plant has been completed, state media has reported, but construction has been delayed because of rain and incomplete administrative procedures, which in turn slowed the funding process, Hoa said.

Production at the plant in the central highland province of Lam Dong had initially been scheduled to start in the last quarter of 2011.

"Prolonged rains made it difficult for building the red mud reservoir, while procedures that our Chinese contractor failed to complete on time has delayed our disbursement, which finally delayed the construction," he said.

The Tan Rai plant is built by China Aluminum International Engineering Co (Chalieco), a subsidiary of state-owned Aluminum Corp of China, or Chinalco, the country's top aluminium producer.

Vinacomin plans to raise 3 trillion dong ($143.8 million) via domestic dong-denominated bonds this year to finance projects, including the alumina plant, while keeping an overseas bond issue on hold, Hoa said.

He did not give a date for the dong bond issue.

The group, which is also Vietnam's top coal producer, has been developing the Nhan Co alumina project in the province of Dak Nong, with projected initial output of 300,000 tonnes in 2014, which could be raised to 650,000 tonnes by 2016.

Vinacomin has forecast Tan Rai's alumina output at 300,000 tonnes this year, rising to 500,000 tonnes in 2013 and 650,000 tonnes in 2014.

Vinacomin and China's Yunnan Metallurgical Group have a memorandum of understanding under which the Vietnamese firm has agreed to sell 600,000-900,000 tonnes of alumina a year to Yunnan Metallurgical, which plans to supply the alumina to its smelter, Yunnan Aluminium Industry Co Ltd.

Hoa said the group had not fixed any contract with foreign partners, although China would be its largest market.

"We are just in negotiations with partners and we have received much interest from them," he said.

Alumina is a white powder made from bauxite ore that is used to produce aluminium. ($1=20,860 dong)

Japanese insurer launches new product in HCMC

The Vietnamese arm of the Japanese Dai-ichi Life Insurance Co has held a conference in Ho Chi Minh City to introduce its new product.

The product, named An Phuc Hung Thinh (Happy Life - Prosperous Future), is told to have many advantages over other products available in Vietnam.

It is profitable since its declared interest will closely match with the market benchmark and is guaranteed not lower than the minimum guaranteed interest rates. The interest will be announced at the beginning of each month on Dai-ichi Life Vietnam’s website.

The interest will closely match with the interest rate of fixed income assets, such as Govement bonds and bank deposits, which is always higher than the minimum guaranteed interest.

The minimum guaranteed interest is 5 percent per year for the first 10 years and 3 percent per year thereafter.

Its current annual interest rate is 11.5 percent, 1.5 percent lower than the depositing rate offer by the local banking system.

The product will meet the short-term financial needs as the customers will receive periodic cash benefits payable every 3 years.

For every 3 year, the customers will receive a cash amount for their short-term financial need as originally planned; or they can leave this amount at the company to earn monthly interest.

It also offers comprehensive protection with death or total/permanent disability benefit.
The new product also has maturity benefit as total policy value is accumulated with premium paid and interest.

An Phuc Hung Thinh insurance product is available customers who is from 0 to 60 years old with different options of policy term: 6 years, 9 years, 12 years, 15 years, 18 years or 21years so that the customers can decide which is most suitable with their financial plans.

“An Phuc Hung Thinh is a secured and stable investment channel as it brings customers a peace of mind, free from worries about financial market’s fluctuations; make them feel secured about the efficient, stable and long-term financial investment,” said Tran Van Hien, head of Dai-ichi Life Insurance Vietnam’s HCMC sales department.

“It is backed up by Dai-ichi Life Japan, one of the leading life insurance corporations in the world, with strong financial strength and more than 100 years experience in Japan and worldwide,” he added.

Regarding the local market situation, Hien said the Vietnamese market is hugely potential for both local and international life insurance firms since there are only 7 percent of the population has joined a life insurance program.

Vietnam’s neighboring countries, Malaysia and Indonesia, have a higher rate with 20 percent and 30 percent, while that in developed world is around 90 percent, he said.

Dai-ichi Life Vietnam, established in October 2005 after the takeover of Bao Minh CMG, currently has 80 offices and branches with 18,000 employees and 700,000 customers nationwide as of December 31, 2011.

Its charter capital was VND 1.141 trillion ($72 million) and its premium income in 2011 was VND 1.116 trillion.

Rotterdam Port eyes Van Phong transshipment port investment

The business delegate of Port of Rotterdam Authority, the developer and operator of the European Union’s largest port, yesterday worked with authorities of the central province of Khanh Hoa to promote investment in the Van Phong international transshipment port.

Project Manager Kees Weststrate said he was satisfied with the conditions of the Van Phong construction site, as it is planned to be built inside the Van Phong Economic Zone, with many industrial parks and manufacturing plants.

“Port of Rotterdam have many customers, which are major container shipping lines in Singapore and neighboring countries, which is an advantage for an investment in Van Phong international transshipment port,” he said.

“Moreover, we also want to cooperate with Vinalines, and the management board of the Van Phong EZ to manage the economic zone.”

For his part, Nguyen Chien Thang, head of the provincial People’s Committee, said he highly supported the investment plan of Rotterdam Port.

FAO supports Vietnam to prevent disease on shrimps

The UN Food and Agriculture Organization (FAO) has agreed to support Vietnam in implementing an one-year project on controlling the spread of an identified disease on shrimps, which was estimated worth US$500,000.

According to the Ministry of Agriculture and Rural Development, the fund will be used to employ international and domestic consultants, buy new breeding shrimps, as well as pay for equipment and lab activities to find out causes of the disease.

FAO will also help improve the biological safety in shrimp farming, complete instructions for urgent situations and develop a strategy to manage aquatic products in the future.

In recent months, the disease has initially broke out seriously, especially in southern provinces. It has affected over 30,000 shrimp farming families.
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Gov’t strives to keep inflation below 10 pct

The Government is trying hard to achieve the single-digit inflation target, Deputy Minister of Industry and Trade Hoang Quoc Vuong said.

Speaking to representatives of local and foreign businesses at a business luncheon organized by the European Chamber of Commerce in Vietnam (EuroCham) in HCMC last week, Vuong said the consumer pricing index in the first two months of 2012 was the lowest level compared to the same period in previous years.

Inflation hit 18.58 percent last year and 2.38 percent in the first two months of this year.

“Observing what happened in the first two months compared with the records in many years before and with the measures we are implementing now, we hope that the (inflation) situation can be under control,” Vuong said.

Vuong said the budget deficit would also be within the target: 4.8 percent of the country’s gross domestic product.

But he said it was a difficult task to rein in inflation below 10 percent this year as the Government was under pressure to allow for adjustments of prices of many key items including gas, coal and electricity.

“So, the Government has to carefully and cautiously consider (the price adjustments) so as to keep the inflation rate under control,” Vuong responded to a question from the audience regarding how to balance the inflation target and increasing prices, particularly possible electricity tariff increases.

“I cannot confirm anything at the moment,” Vuong said and stressed that power tariffs would change in accordance with major cost factors, including the exchange rate between the Vietnam dong and the US dollar.

“How much power tariffs are increased should be carefully and cautiously weighed by the Government so that we will achieve the bigger objective of macroeconomic stability,” Vuong said.

In its latest report on Vietnam, HSBC Global Research projected the Vietnamese currency would depreciate to VND21,500 per dollar by the end of this year given concerns about double-digit inflation, negative real interest rates and a sizeable trade deficit despite improvements.

“We have long been of the view that Vietnam dong still faces downside risks and have been calling for further depreciation of US dollar-Vietnam dong to VND21,500 by the end of 2012,” the report said. “This would be largely in line with what the State Bank of Vietnam recently stated was its view for the dong in 2012 - when (SBV) Governor Nguyen Van Binh stated that he saw no more than 2 percent -3 percent depreciation this year.”

The Ministry of Industry and Trade is making efforts to maintain the same trade deficit this year as in 2011.

Last year saw exports increase over 33 percent year-on-year to top US$96 billion and imports near $106 billion, leaving a trade deficit of $10 billion, which was lower than the $12.6 billion in 2010.

IBM to help Da Nang to be smarter city

The central city of Da Nang has been listed amongst 33 municipalities worldwide to receive fund from the Smarter Cities Challenge organized by US-based multinational technology giant IBM.

Da Nang, as well as the remaining funding recipients, will be awarded a total fund of US $400,000, according to the list announcement released Friday.

As part of the funding, IBM will send its top experts to Da Nang to analyze and put forth recommendations for successful growth, better delivery of municipal services, and more effective citizen engagement.

"The cities that have been selected are all different, but they have one clear similarity: the strong personal commitment by the city's leadership to put in place the changes needed to help the city make smarter decisions," said Stanley S Litow, IBM vice president of corporate citizenship & corporate affairs, and president of IBM's Foundation.

"These cities demonstrated a desire to set an example for other municipalities, an eagerness to collaborate with multiple stakeholders, and a strong commitment to consider implementing recommendations the city felt would be the most feasible and beneficial to their residents."

The IBM Smarter Cities Challenge is a three-year philanthropic initiative, seeking to award a total of US $50 million worth of technology and services to 100 cities worldwide.

The program is conducted by teams of top IBM experts, who study the cities and make detailed recommendations addressing locally important urban issues.

The winning cities proposed intriguing projects and areas of focus for IBM experts. They included initiatives for economic and workforce development, transportation, sustainability, health, education and urban planning.

Last year, 24 cities won IBM Smarter Cities Challenge prizes, and are now making progress in putting their aspirations into practice, having made public policy changes or launched important new initiatives that address longstanding issues.

IBM's Smarter Cities Challenge is an outgrowth of IBM's Corporate Service Corps grants programme, in which IBM deploys teams of top employees to areas in the developing world to work on projects that intersect business, technology, and society, according to VNA.

Since the launch of Corporate Service Corps in 2008, nearly 1,400 IBM employees based in 50 countries have been dispatched on more than 140 team assignments in 24 countries.

HoREA suggests developing small-sized apartments

The HCMC Real Estate Association (HoREA) has suggested developing residential areas with small-sized apartments from 20 to 70 square meters for singles and small families to meet the current demand for housing.

As the country is still developing, building small-sized apartments in accordance with the urban planning of each locality is the most appropriate and necessary solution in the current period, said HoREA chairman Le Hoang Chau at a seminar on solutions to unfreeze the property market held in HCMC on Tuesday.

The Binh Duong-based Becamex IDC has recently kicked off a project to construct 3,000 apartments of 30 square meters each, worth VND90 million per unit, which is considered a breakthrough to realize the dream of low-income people to own a home.

Chau said this model should be deployed on a national scale.

He stressed the realty market has experienced tough times since 2008, causing many problems to project developers, investors as well as consumers. Most property firms have to struggle with capital shortages, difficult access to bank loans, and sky-high lending rates of 24-25%.

Property trading remains dull, leading to a slump in the market liquidity, which is associated with the liquidity of the banking system. Relevant industries like cement, steel, and interior furnishing items are also dragged down.

To cope with the general difficulties, property enterprises must come up with solutions such as restructuring business and investment, postponing projects, offering discounts along with various promotion programs to stimulate consumer demand.

The market has yet to prosper since the deposit rate ceiling was lowered by one percentage point last week, or the HCMC government said it was considering buying unsold mid-end apartments for resettlement purposes.

Therefore, the outlook of the realty market is still dreary in 2012, with the biggest challenge being to improve sales and market liquidity, handle the unsold units and regain consumer confidence.

HoREA suggested there should be a specific schedule to pull down lending rates to 11-12% per year. In addition, the Government should adopt policy to offer consumers preferential interest rates for their first house purchase.

The association also proposed removing the land use fee slapped on property projects and imposing a tax rate of 10-15% instead.
 
Prices to edge up on higher fuel costs

Goods producers and suppliers have announced to adjust up their prices following the 10% fuel retail price increases, but the planned hikes are limited given the current dampened consumer demand.

Representatives of several supermarket chains confirmed to the Daily about the forthcoming price rises of some items. There is a 5% increase in prices of cosmetic products, processed food and beverages at Citimart.

Similarly, Nguyen Thi Anh Hong, managing director of Maximark supermarket chain, reported 5-7% price increases of some items due to the fuel price hikes and rising material costs.

The higher fuel prices are sending production and transport costs soaring, according to Huynh Huu Tuan, manager of Citimart Chu Van An.

However, retailers insist the price increases will not apply across the board. “At present, there are a handful of suppliers who propose a price hike,” Hong of Maximark said.

“They (suppliers) told us they were unwilling to increase prices for fear that sales would fall. As of now, prices must be revised up but they are making huge efforts to retain the current levels to maintain sales amid a gloomy economic outlook,” she added.

With proposals for a upward price adjustment from suppliers, retailers said they could negotiate to extend the term of the newly-announced list price or propose promotion programs in an attempt to keep consumers happy.

Name change for the tallest building in Vietnam

The name of the tallest building in the country, PVN Tower, will be changed after the investor, Vietnam Oil and Gas Group (PVN), pulled out of the project.   

A source from PetrolVietnam Construction JSC (PVC) told local website VnExpress that it is now the major investor of the huge project, and that it will be built without funding from the State or PVN. The source said the name of the tower may be changed since the capital from PVC only accounts for 15-20% of the total.

"PVC will mobilise the capital from private investors. The company has already started negotiations with potential partners." the source said. "The project is scheduled to be operational in 2012, however the date may be pushed back because of the decline in the real estate market. We expect to fully recover investment within 15 to 20 years."

In 2010, PVC planned to build a 102-story skyscraper, the highest building in Vietnam, with an estimated cost of USD1.2 billion. The project was funded by PVC, PVN, Ocean Bank under Ocean Group and the real estate developer SSG Group. However, the building's planned height was cut down to 79 floors in March 2011. The decision allowed PVC to reduce the costs to USD600 million. In January 2012, PVN withdrew from the project, in accordance with the Prime Ministers instructions on withdrawing from non-core businesses.

To stay in line with the Prime Minister's directive, PVN can only invest funds for its office located in the building. He also ordered PVN to co-operate with municipal authorities in Hanoi to deal with the completed sections of the building in terms of planning and investment funds.

Farming project sees rice crops overcome low level soil salinity

An agricultural project has successfully grown rice on land where soil salinity was previously thought to be too high for cultivation of rice paddies.

Under the project in the southernmost province of Ca Mau, farmers combine rice cultivation with shrimp farming on land where soil salinity is nearby freshwater areas.

According to the Ca Mau Rural Development and Agriculture Department, the project has proved to be a success after many years of trials. Nearly 2,000 farmers have successfully harvested rice in areas previously thought to be unable to support rice crops.  

Under the model, farmers can reap four tonnes of rice per hectare while also harvesting 500 kg of shrimp per hectare. This has doubled farmer's income to VND100 million per hectare.

Earlier, shrimp farming was limited to areas with high salinity while rice paddies were limited to fresh water areas. Local farmers had struggled to effectively use land, totalling some 100,000 hectares in the districts of Thoi Binh, Cai Nuoc, Phu Tan, Tran Van Thoi and U Minh where soil salinity was thought to be too high for cultivation of most crops.

The combined production model has opened up many new opportunities for thousands of farmers. The province currently has about 20,000 hectares of cultivation land under the combined rice and shrimp farming production model.

Hanoi starts building Nhat Tan - Cau Giay road

The Hanoi People’s Committee and the World Bank on Thursday hosted a ground-breaking ceremony for belt road 2 linking Nhat Tan bridge and Cau Giay junction.

As part of the Hanoi urban transport development project, the work is expected to shorten travel time from the downtown area to western and northwestern areas of the city.

Once completed, the belt road will be 58-64 meters wide, including two lanes on each side. With a total investment of US$304.7 million, the city’s urban transport development project was loaned over $155 million by the WB and given $9.8 million aid by the Global Environmental Facility.

The project will also help build an express bus system and a residential resettlement area. Deputy Chairman of the Hanoi People’s Committee Nguyen Van Khoi said the work will contribute to improving transport infrastructure for municipal socio-economic development.

Farmers forced to sell paddies at dirt cheap prices

Despite the rising rice export prices, and the government plan to stockpile 1 million tons of rice that was implemented over the last week, many farmers still have to pile up paddies in their houses since buyers, if there are any, always demand dirt cheap prices for the grains.

“My house is now filled with paddies, but I cannot manage to sell even a single seed,” lamented Pham Van Minh, a farmer in the Mekong Delta province of Tien Giang’s Tan Phuoc District.

Minh said several traders have come to browse the paddies, bargained, and quickly left.

“How can I clear the debts with the fertilizer and insecticide suppliers?”

Similarly, Le Phuong Quyen, another local farmer, has also been desperately seeking buyers for his 30 tons of grains over the last week.

“The traders deposited VND1.5 million (US$72) for the harvest, then completely disappeared,” said Quyen.

“They told me that they were willing to lose the deposit, and asked me to seek another buyer.”

However, Quyen still could not make any sales, even though the price is only VND4,200 a kilogram.

A bit luckier than Quyen was his neighbor, Le Van Rong, who managed to sell around 9.6 tons of paddies after a desperate week of searching for traders, at the throwaway price of VND4,200 a kg.

“The traders are extremely hateful,” said Quyen.

“They acted as if they do not need us, examined the grains for ages, and ended up complaining that they are of low quality.”

For his part, Huynh Thanh Nam, a trader who is looking for grains in Tan Phuoc District, said traders have hesitated to buy from farmers, since their next customers -- rice exporters -- only purchase low quantities at unchanged prices.

“No traders want to have large paddy stockpiles for fears that the exporters will unexpectedly cut buying prices,” he explained.

“We do not buy much from farmers, to minimize the losses just in case.”

“Rice exporters have been allocated stockpile quotas and are hurriedly buying paddies,” confirmed Pham Van Bay, deputy chairman of the Vietnam Food Association (VFA).

Bay said the exporters have purchased more than 120,000 tons of rice, which is 12.03 percent of the plan.

“It is such a speedy progress,” said Bay.

However, the director of a Long An-based agricultural firm said the progress seems quick on the surface, but it is in fact not that speedy.

“There are as many as 90 companies taking part in the stockpile plan, far greater than in previous years,” he elaborated.

“Should rice exporters continue buying from farmers at this pace, they will not ease the latter’s pressure to empty their piles of paddies.”

He said the more exporters procrastinate in buying farmers’ grains, the harder the pressure will become, and domestic paddy rice cannot shoot up.

“That is why paddy prices only rise by VND200 a kg, while the rice export price this week soared by $15 a ton against last week, and by $50 compared to the lowest rate recorded early this year,” the director said.

Meanwhile, Tran Duc Tung, former specialist of the Planning Department under the Ministry of Agriculture and Rural Development, criticized the stockpile plan for only benefiting rice exporters.

In his view, an official from the Cultivation Agency said the plan is not to be blamed, but the VFA’s non-transparent management is at fault.

“VFA has kept most of the information regarding export contracts confidential, so farmers do not know how to determine their paddy prices,” he said.

“Meanwhile, since rice exporters know the exporting prices, they will demand to buy from farmers at a price that is as low as possible.”