Shares continue downward spiral on both exchanges

Over 55 per cent of shares on both national stock exchanges lost value this morning, pushing the two benchmark indices into a steep decline.

On the HCM Stock Exchange, the VN-Index declined another 1.38 per cent, closing today's session at 347.80 points, with advancers largely overwhelming decliners by 182-52.

Up to 106 codes dropped to the floor price, of which many were large caps including insurer Bao Viet Holdings (BVH), steelmaker Hoa Phat Group (HPG), PetroVietnam Finance (PVF) and property developers Hoang Anh Gia Lai (HAG), Kinh Do City Development (KBC) and Tan Tao Investment and Industry (ITA).

Of the 10 leading shares by capitalisation, only Sacombank (STB) posted a gain of 3.3 per cent to close at VND15,800 ($0.75) and they were also the most active code today with a volume of 5.54 million shares changing hands.

Investors continued to unload shares, pushing the market value up by nearly 12 per cent, totalling close to VND808.8 billion (US$38.5 million) with over 57.4 million shares exchanged.

On the Ha Noi Stock Exchange, the HNX-Index finished today at 56.70 points, off 0.82 per cent over yesterday, with gainers outnumbering losers by 189-51.

Many investors began hunting for bargain shares which drove up the value of trades by 18 per cent to nearly VND312.6 billion ($14.9 million) on a volume of 36.4 million shares.

Shares in securities continued to slide in Ha Noi, with Kim Long (KLS) and VNDirect (VND) – the two most heavily-traded codes with 4.37 million shares and 3.1 million shares changing hands, respectively – dropping to the floor price.

BIDV IPO attracts investors

There had been 16,238 investors registering to bid for shares in an initial public offering (IPO) by Bank for Investment and Development of Vietnam (BIDV) by last Friday, according to the Hanoi Stock Exchange (HNX).

Some 16,109 individuals and 129 organizations have registered for buying 101,809,100 and 39,066,000 shares respectively, 66.2% higher than the volume offered. The volume registered by individuals account for 120.1% of the total and organizations for 46.1%.

BIDV chairman Tran Bac Ha said the bank’s offering is 84,754,146 shares and the high volume registered by investors indicates their confidence in the bank. “We are totally c onfident of the success of the forthcoming share auction.”

BIDV’s IPO shows the Government’s consistent policy of restructuring state-owned enterprises in a bid to improve their corporate governance, said Nguyen Thi Hoang Lan, deputy general director of HNX.

She noted the IPO of the country’s second biggest bank by assets at a time of economic hardship proved its leaders’ determination to allow the bank to move forward.

The international credit rating agency Moody’s earlier had released a positive assessment on BIDV’s equitization plan, which is expected to help improve the capital adequacy ratio (CAR) of BIDV, bring about the bank’s necessary structural changes and improve its transparency regarding finance and governance.
 
Domestic gold prices down by VND200,000/tael

Domestic gold prices on December 27 went down by VND200,000/tael compared to the previous day after the world price of gold had dropped to below US$1,600 per ounce.

In Hanoi, SJC gold hovered around VND42.9-43.32 million/tael, while Thang Long Dragon gold at Bao Tin Minh Chau Company was traded at VND42-42.4 million/tael.

The exchange rate at commercial banks was listed at VND21,036 per US dollar (selling price) and at VND21-21,035 per US dollar (buying price).

Since September 7, the inter-bank exchange rate has risen by 0.97 percent to VND200 per US dollar.         

The world price of gold is now VND2.7 million/tael lower than that of domestic gold.

Vietnam earns US$6 billion from aquatic exports

The total export earnings from aquatic products reached US$6 billion by December 26, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

This showed an increase of 5.3 percent above plan and 20 percent over last year.

Vietnam has planned to raise the output of aquatic products from 5.2 million tonnes this year to 5.35 million tonnes and earn US$6.5 billion in export revenue by 2012.

President meets young entrepreneurs

President Truong Tan Sang on December 26 received 90 young entrepreneurs, who are delegates to the 4th Congress of Young Entrepreneurs’ Association (YEA) for the 2011-2014 term.

Praising young entrepreneurs’ efforts and contributions, President Sang told them to continue improving themselves to harvest greater business achievements.

Young entrepreneurs should pay attention to improving workers’ living conditions and assist each other in integration and development, he said.

Young entrepreneurs said that in the new tenure, they will unite to overcome difficulties and firmly advance on the path of integration.

The YEA has developed its networks in 62 out of 63 cities and provinces nationwide with 9,000 members.

Holding 75 percent of key positions at enterprises in Vietnam, young entrepreneurs have been actively participating in poverty reduction movements and charitable activities, making great contributions to the national industrialisation and modernisation.

Retail price of petrol and oil remain unchanged

Domestic retail prices for petrol and oil will not change as financial assistance for the price stabilisation fund diminishes, the Ministry of Finance said this morning.

The ministry asked petroleum trading wholesalers to hold oil and petrol prices at VND20,800 per litre for RON 92 and VND21,300 per litre for RON 95.

Financial assistance for the petrol price stabilisation fund will be reduced from VND550 per litre to VND300 per litre of petrol.

The ministry put into effect import taxes on oil and petroleum in a separate circular.

The price stabilisation fund for diesel will be reduced from VND1,000 to VND690 per litre, kerosene from VND900 to VND440 per litre and mazut from VND950 to VND740 per kilo.

The announcement took effect yesterday after statements from the Ministry of Finance (MoF) and the Ministry of Industry and Trade (MoIT).

The Finance ministry last week announced the results of investigations at four wholesale fuel companies including the Viet Nam National Petroleum Corporation, PetroVietnam Oil Corporation, Sai Gon Petro and Dong Thap Petroleum Trading after several fuel companies reported losses.

Audit reports revealed petrol and gas wholesalers had given fuel dealers excessively high commissions.

The petroleum price stabilisation fund operates on Vietnamese consumer contributions of VND300 per litre.

Wholesale companies are allowed to use the fund in accordance with MoF and MoIT guidance with the aim of stabilising the domestic price.

Similar funds have been set up and effectively operated in many countries around the world.

Loss-making firms begin to report profits

After being inspected by, and receiving warnings from, the authorities, many businesses suspected of engaging in transfer pricing have begun to report profits and pay taxes.

For example, the Du Thanh Co Ltd, based in Ho Chi Minh City’s Phu Nhuan District, reported revenues of VND74 billion (US$3.55 million) in its first year of operation in 2008. In 2010, the company’s revenues surged to VND79.1 billion, but it still incomprehensibly posted no profit.

In explaining to tax authorities its suspected transfer pricing operations, the company used the excuse that, since 2008 was its first year of operation, it had to incur many unexpected overrun expenses.

However, after working with the HCMC Tax Agency, Du Thanh Co reported a profit of VND4.2 billion in the first six months of this year.

Similarly, Dragon Up Co Ltd also revised its financial status declaration in the period between 2005 and 2010 with higher revenues after meeting with the municipal tax agency.

For example, it hiked its revenues earned in 2010 from VND38.9 billion to VND40.9 billion.

The tax authorities thus asked the company to submit a new corporate tax declaration for 2005 – 2010 with the revised revenues.

For its part, under the close watch that tax authorities have kept over its operation, PouYuen Vietnam Co Ltd began to post profits and pay taxes after repeatedly reporting losses from 2004 to 2007.

However, many major FDI businesses continue to report losses and are still categorized as the FDI enterprises with high risks by the municipal Tax Agency.

Topping the list of the loss-stricken businesses is the beverage producer Coca Cola Vietnam, who incurred accommodated losses of nearly VND870 billion from 2004 to date.

What is worth noticing is that flavoring accounted for most of the cost price of Coca Cola Vietnam’s products.

In 2006, when the company suffered its steepest losses, VND250.9 billion, flavoring accounted for as much as 85.4 percent of the cost price.

After working with the tax agencies, the company has revised the cost, with flavoring accounting for only 67.4 percent of the products’ cost prices in 2009.

B.A.T Vietnam Ltd, headquartered in Diamond Plaza in District 1, has also been operating with losses. In 2004, it suffered a loss of only VND55 billion, but within five years that figure had risen ten times, to VND586.3 billion.

Besides the businesses that have repeatedly reported losses since their very first years of operation, many others have been found to report huge profits during the time they enjoyed tax incentives, but begin to immediately post losses when the incentives end.

One typical example of these businesses is the footwear and bag producer Ty Hung Co. In 2009, when the company was no longer subject to a preferential tax policy, it began to post massive losses, running counter to the huge profits posted before.

Specifically, the company’s respective losses in 2009 and 2010 were VNd14.2 billion, and VND20.58 billion.

However, despite the reported steep losses, the company still managed to built a new manufacturing plant in Ben Tre earlier this year.

According to Nguyen Trong Hanh, deputy head of the HCMC Tax Agency, 460 out of the 3,800 FDI businesses in the city reported losses in 2010, with most of the loss-stricken firms operating in the footwear, textile, and garment sectors.

These businesses employ many tricks to make losses, he said.

One of the most common tricks, he added, is to declare a high price cost for their products and services; with some businesses even declaring cost prices higher than selling prices.

Hanh said that, in another trick to make losses, some businesses contracted with foreign partners on orders that they are incapable of filling.

“The businesses would then claim their inability to meet demand and transfer the orders to outsourcers, who charged them so highly that they had to incur losses.”

“There are businesses who have 80 percent of their products outsourced.”

Tra fish exports to EU decrease slightly

Tra fish exports to the EU market have seen a declining trend in the recent two months due to the Eurozone economic crisis after reaching a two-digit growth in August.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the export revenue of tra fish, also known as pangasius, dropped by 9 percent to US$45.5 million in October.

In the domestic market, the price of tra fish decreased by VND3,000-4,000 per kg after maintaining a high level of VND28,500 – 29,000 for nearly one month.

New terminal in Da Nang airport

The Da Nang International Airport in the central coastal city of Da Nang put a new terminal into service on Dec. 25, after four years of construction.

The three-storey terminal was built at a cost of over VND1.3 trillion (US$62.5 million) to meet standards of the International Aviation Transport Association. It is capable of serving 4-6 million passengers per year.

The Da Nang International Airport has the third largest number of passengers in Vietnam. It is seen as an important transport hub in the central region, serving socio-economic development in the central and central highlands region.

Each year, the airport, 2 km from the central city, receives 11,400 flights carrying some 3 million people.
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Imported beer trumps as favorite Tet gift

Though it costs more than local beer, imported beer is becoming a popular gift choice for many well-off consumers for the Lunar New Year.

Thuc Anh, who works for a company in Ho Chi Minh City’s District 1, said this year she had switched to buy 50 six-can cartons of the Japanese Sapporo beer for VND335,000 each to offer as presents to her company’s partners.

“Heineken or Tiger [beers] would be a too commonplace Tet gift,” Anh said.

She said Sapporo cost more than the above 2 “traditional” presents, which only cost VND370,000, and VND268,000 a 24-can carton.

“This is not to mention that the total volume of a Sapporo carton is only 3.9 liters, while the volume of locally-produced beer can be up to 7.92 liters,” she said.

Imported beer also takes up much room on the shelves of many supermarkets and major beverage stores.

For their parts, store assistants always recommend consumers to buy imported beverage, saying it is fashionable to use it as a Tet gift this year.

However, foreign beer all has steep prices.

For instance, Australia’s Coopers Stout costs VND65,000 ($3.12) a bottle, while German Duuel fetches up to VND160,000 ($7.7) a bottle.

Especially, Belgium Chimay beer costs between VND100,000 and VND230,000 a bottle ($11).

Tran Phuong, a beer wholesaler in District 4, said there were currently several dozen kinds of imported beer on the market.

He said besides the common brands such as Corona, Bitburger, Budweiser, and Heineken that are consumed all year round, there are also other less known brands with unusual tastes and designs which are preferred by well-off consumers for personal consumption or gifting.

Meanwhile, insiders forecast that the coming Tet market will not see any short supply of local beer products.

A representative of Sabeco said the company’s monthly supply in December and next January rose 30% higher than usual to 130 million liters this year.

Beer stores said that although the prices of certain kinds of domestic beer such as Dai Viet, 333, or Tiger had increased by VND10,000 a carton, beer prices in general will remain stable and will be lower than in previous Tets.

Ngo Van Hai, deputy sales manager of the supermarket chain Citimart, said Citimart supermarkets had increased its beer reserves by 20% compared to last year to 10,000 cartons, although “consumption is not as high as expected.”

A challenging year for SMEs

Head of global markets at HSBC Bank (Vietnam) Ltd. has projected next year would be still challenging for companies, particularly small and medium-sized enterprises (SME) because of both internal and external factors.

Major challenges for SMEs remained when the world’s woes and credit growth control in Vietnam were taken into account, Pham Hong Hai told the STD after a business luncheon entitled “Vietnam Macro Outlook & Visibility Creates Opportunities” last week.

“Some businesses will be unable to deal with difficulties,” Hai said. He pinpointed cash flow and the access to credit sources as among the major challenges for SMEs next year because banks still scrutinized corporate borrowers when the mobilizing interest rate remained the same.

It is too early to say that 2012 would be bright for businesses considering global uncertainties, although inflation, borrowing and lending interest rates might go down, Hai said at the event organized by the Malaysian Business Chamber in Vietnam (MBC).

He said the monetary and fiscal policies that the Government was following would support sustainable growth for the future. However, HSBC predicted the world’s business environment would be tougher next year than this year and this would affect Vietnam.

“So, challenges still stay for enterprises in Vietnam, especially SMEs, in the face of the world’s arising woes and the fact that Vietnam cannot loosen monetary policies,” Hai said.

But the good thing, Hai said, is that the Government has recognized continuing credit restraints will hit the sectors that still achieve healthy and strong growth and is therefore adjusting policies to make life easier for them.

Hai suggested tailor-made policies for different sectors as he emphasized that one policy could not be efficiently applied to all players. So, appropriate policies were of paramount importance for industries depending on their performance and financial issues.

“One policy could not satisfy and be proper for all enterprises. It will affect certain enterprises but we have to accept this,” Hai said.

To support SMEs, Hai proposed a fund be in place to guarantee that those SMEs that operate well and provide necessary products and services for local consumers could access banking loans in order to help SMEs ride out tough times.

Hai said HSBC painted a stabilized macroeconomic picture for Vietnam next year and projected no major changes to policies as the Government continued the fight against inflation and address structural issues.

The bank forecast the Vietnam dong/U.S. dollar exchange rate would average around VND21,500 for 2012 and 2013.

HSBC projected Vietnam’s gross domestic product would grow 5.8 percent this year, 7 percent next year and 7.2 percent in 2013; consumer price index would be around 18.4 percent this year, 11.2 percent next year and 9.5 percent in 2013.

No power price hikes before Tet: EVN

There will be no hike in electricity prices until Tet (Lunar New Year) late next month, Dinh Quang Tri, deputy general director of EVN, has assured.

Speaking in an online interview with readers of online newspaper VNExpress on Thursday, he said regulations require at least a three-month gap between hikes.

Tariffs were increased just recently - on December 20 the Government hiked them by 5 per cent to VND1,304 (US$0.06) plus VAT for a kilowatt-hour.

But he refused to speculate on whether the tariffs would increase again after three months, saying it depended on inputs like fuel prices, exchange rates, electricity generation structures, and the socio-economic situation at the time.

Nguyen Tien Thoa, head of the Ministry of Finance's Price Management Department, admitted the December 20 tariff hike would impact companies and households.

But the VND62 increase would not have too large an impact, he claimed.

The 5.7 per cent hike for the manufacturing sector would increase costs by 0.39-0.56 per cent for an industry like cement which used large amounts of electricity, he said.

The cost of supplying water would rise by 2-2.3 per cent, he said.

Only households using more than 100kWh a month have been affected since the hike is calculated from the 101st kWh.

Households using 200kWh a month would only pay an additional VND7,400, Thoa said.

Vietnam sees lower trade deficit than expected

Vietnam’s trade deficit this year is expected to top US$9.5 billion, or 9.9% of total export turnover, which is lower by 6.1 percentage point than earlier expected.

According to figures from the General Statistics Department, the trade gap this year narrowed by nearly 25 percent compared to last year.

Particularly, exports rose 33 percent year-on-year to $96.26 billion, while imports stood at $105.77 billion, or a 25 percent increase year on year.

In December alone, the trade gap widened by 23 percent month on month to $700 million as imports rose 2 percent against November to $9.6 billion, while exports remained at $8.9 billion.

Textile and garment, which brought home $14 billion this year, remains the top earner, followed by crude oil, and footwear.

Meanwhile, machinery and equipment still post the highest import turnover among the commodities, with imports worth $15.2 billion this year.

Diplomats may help with trade promotion

Viet Nam's envoys in foreign countries should continue to help companies export to these countries, a meeting here has heard.

Meeting with ambassadors and commercial counselors based abroad in Dong Nai Province last Friday, local entrepreneurs asked the envoys to provide them with regular information about the market, importers and distributors.

They also sought marketing support and timely information on trade barriers.

The meeting was organised by the Ministry of Trade and Industry and Dong Nai authorities.

At a similar meeting in HCM City last Wednesday, the envoys said the global trend is towards "green" or sustainable growth, with focus on environmentally friendly products.

Thus, products exported to many countries needed to meet their quality and food safety and hygiene standards, they said.

Dong Nai is home to 13,000 domestic and 1,000 foreign companies who export to more than 140 countries.

Their main export markets are the US, Japan and China.

In 2011, despite the difficult economic situation, Dong Nai achieved a growth rate of 13.5 per cent and exports of more than US$9.8 billion, or more than 10 per cent of the country's total export.

Its exports are expected to top $11.4 billion in 2012.

First VietJet Air flights take off

The launch of VietJet Air, the country's first private carrier to offer both domestic and international flights, is expected to help attract more international visitors, says Minister of Culture, Sports and Tourism Hoang Tuan Anh.

Anh delivered this statement during the ceremony to welcome the carrier's first commercial flight, which carried 120 passengers from HCM City to Ha Noi on Saturday.

The addition of VietJet Air to the market would help meet the goal of greeting 10 million foreign visitors per year by 2015, he noted, adding that about 88 per cent of international tourists currently arrived in Viet Nam by air, compared to just 10 per cent by sea and only 2 per cent by land.

"As of today, VietJet Air officially operates round-trip flights on the HCM City-Ha Noi route," said the airline's general director Pritam Singh. "In the short term, we will consider increasing the number of flights on the route to better meet the rising demand of passengers during the Tet (Lunar New Year) holiday."

The launch of Ha Noi-Da Nang and HCM City-Da Nang services was also slated for the first quarter of next year.

The airline planned to increase its fleet by three to five aircrafts annually to a fleet of 15 aircraft by early 2015, allowing the airline to fly to other destinations domestically and in the Asian region, including Macau, Singapore, China, Hong Kong, Japan and South Korea.

VietJet Air is the fifth airline to operate on the domestic market, following Vietnam Airlines, Jetstar Pacific, Air Mekong and the Viet Nam Air Services Co (Vasco). It was the first private airline to obtain a licence, although Indochina Airlines and Air Mekong, licensed in 2008 and 2009, were able to establish flights earlier.

Gov't needs more effective policies': analyst
 
The Government must implement effective management policies next year to weather difficulties presented by the gloomy outlook of the global economy, said head of the Viet Nam Institute of Economics Tran Dinh Thien.

Together with the global economic downtrend, Thien warned that the country would also enter 2012 with the lingering negative consequences of 2011, including a decrease in the economic growth rate, high inflation and trade and budget deficits.

The Government should make more efforts to decrease inflation to the lowest level of 5-6 per cent to ease the impact on businesses next year when the world's economy was forecast to experience an extremely difficult time, he said.

To help businesses overcome the challenges, Thien said that the Government needed to help businesses recover by restoring confidence and carrying out strong solutions to reduce interest rates and create the best possible conditions for them to access capital.

Dr Can Van Luc, a senior advisor from the Bank for Investment and Development, expected that newly-emerged markets would stand firm in the challenges of global economic downturn. Growth rates and the inflow of investment capital into domestic markets would be maintained at a satisfactory level, he said.

According to the UN "World Economics Situation and Prospects 2012", the inflow of capital poured into developing countries would show positive signs, as US$229.6 billion was predicted to be disbursed in 2012 compared to the 2011 figure of $218.6 billion, he said.

In comparison to other regional countries, Viet Nam reached an above average level and quality of growth. The country was one of the top 10 in terms of revenue from overseas remittances, estimated at $9 billion this year, accounting for 8 per cent of GDP, Luc said.

However, the Government should make a detailed plan and set an itinerary for the economic restructuring, he said. It should establish a dedicated committee on the issue instead of assigning it to the Ministry of Planning and Investment as it does currently.

HCM City firms earmark $265m for goods over Lunar New Year

Enterprises in HCM City have mobilised VND5.56 trillion (US$265 million) for reserving goods for the upcoming Tet (Lunar New Year festival) season, the HCM City Department of Industry and Trade has announced.

The reserved goods would be sold at fixed prices approved by the city authorities at 2,500 stalls under the city's Price Stabilisation Programme during three months before and after Tet.

These included 878 stalls built at 151 traditional markets in the city, said Le Ngoc Dao, Deputy Director of the Department.

Dao said the supply of goods for Tet, which would fall on 23 January 2012, would be maintained by enterprises from the city's major wholesale markets that have joined the city's price stabilisation programme.

City authorities have been preparing supply of essential goods for the Tet season since April this year.

Enterprises participating in the programme have also ensured that prices of goods such as beverages and confectionaries are between 15 to 25 per cent lower than prices of imported goods.

After visits to these enterprises, Nguyen Thi Hong, Deputy Chairwoman of the HCM City People's Committee, said the volume of goods reserved for Tet markets was much higher than demanded by the city authorities.

During a meeting with the HCM City People's Committee on Saturday, the Deputy Minister for Industry and Trade, Ho Thi Kim Thoa, expressed high appreciation for the efforts taken by the city authorities to prepare for the Tet season.

"We're very pleased with these efforts taken by the HCM City authorities who have paid close attention to improving people's living standards," she said.

"We'll popularise the experiences gained by HCM City [in price stabilisation] to other places across the country, aiming to boost cooperation in goods exchange in markets nationwide,"she added.

Policymakers to target inflation, stability

Financial policymakers will co-ordinate fiscal, monetary and other policies next year in a bid to curb inflation, ensure economic stability and maintain an appropriate growth rate while renewing the growth model and restructuring the national economy, Minister of Finance Vuong Dinh Hue said at a conference in Ha Noi on Saturday.

Deeper cuts to the State budget would also be needed to bring the State budget deficit down to less than 4.8 per cent of GDP, Hue said.

Market pricing would also need to be implemented under a set roadmap so the economy could operate under market principles with State management by 2015, he added.

The Ministry of Finance would implement market pricing this year of electricity, coal, petroleum and public services, he said, adding that it would co-ordinate with relevant ministries and agencies to ensure price stability.

The ministry would also work closely with the Government Inspectorate and the State Audit to keep a close eye on such economically sensitive commodities as electricity and coal to ensure transparent operations in these sectors, Hue said.

The ministry has also set to work with the Ministry of Planning and Investment to implement a plan on economic restructuring, targeting State-owned enterprises (SOEs), development investment credits, Government bonds and other public investments. The Government has targeted the completion of the process of equitising SOEs by 2015.

Deputy Prime Minister Vu Van Ninh told the conference that the banking and financial sector should continue mobilising every resource, while policymakers would amend the budgetary and tax systems to support businesses.

State budget revenues in 2011 surpassed estimates by 13.4 per cent and increased 20.6 per cent over last year, Ninh said. By December 31, public debt was estimated to account for 54.6 per cent of GDP, all well within safety limits, he added.

No more power price rises before Tet

There will be no hike in electricity prices until Tet (Lunar New Year) late next month, Dinh Quang Tri, deputy general director of EVN, has assured.

Speaking in an online interview with readers of online newspaper VNExpress on Thursday, he said regulations require at least a three-month gap between hikes.

Tariffs were increased just recently - on December 20 the Government hiked them by 5 per cent to VND1,304 (US$0.06) plus VAT for a kilowatt-hour.

But he refused to speculate on whether the tariffs would increase again after three months, saying it depended on inputs like fuel prices, exchange rates, electricity generation structures, and the socio-economic situation at the time.

Nguyen Tien Thoa, head of the Ministry of Finance's Price Management Department, admitted the December 20 tariff hike would impact companies and households.

But the VND62 increase would not have too large an impact, he claimed.

The 5.7 per cent hike for the manufacturing sector would increase costs by 0.39-0.56 per cent for an industry like cement which used large amounts of electricity, he said.

The cost of supplying water would rise by 2-2.3 per cent, he said.

Only households using more than 100kWh a month have been affected since the hike is calculated from the 101st kWh.

Households using 200kWh a month would only pay an additional VND7,400, Thoa said.

Ha Noi registers strong growth
 
Despite many difficulties, this year Ha Noi still obtained an increase of 10.1 per cent in GDP (Gross Domestic Product) against last year's figure, according to the Ha Noi Statistics Office.

High growth has been seen in the service sector, which reached 10.8 per cent in the period, followed by industrial and construction services, 10.2 per cent, and agriculture, forestry and fisheries sectors, 4.3 per cent.

Head of the Ha Noi Statistics Office Cong Xuan Mui said this was the first year the capital city had implemented the 2011-15 socio-economic plan.

He cited high interest rates, high commodity prices, and the high trade deficit as making it difficult for local enterprises to access bank loans, causing them to lose competitiveness and production efficiency.

Mui attributed the city's positive outcome to the effective implementation of a Government Resolution 11 aimed at boosting production and business.

He said there were many reasons for the impressive increase in the service sector this year, including a salary increase, effective measures on curbing inflation and consumption stimulus measures.

These solutions had helped raise total retail sales and the consumption of services, Mui said.

Steady production of rice and fairly favourable weather was a factor in the improvements in the agriculture, forestry and fisheries sector.

National CPI leaps by 19% this year
 
 The national consumer price index (CPI) for this year increased 18.58 per cent against last year, the General Statistics Office (GSO) reported yesterday.

This increase was close to the Government's target in terms of inflation after many policies to curb inflation and stabilise the macro economy were passed, said Nguyen Duc Thang, head of GSO's CPI Department.

However, December had the largest CPI increase in the last three months of the year at 0.53 per cent. The figures were 0.36 per cent for October and 0.39 per cent for November, he said.

Increasing demand for goods and services during the Christmas, New Year and Lunar New Year holidays had pushed prices of products up, he said. Natural disasters and the exchange rate increase between the Vietnamese dong and the US dollar had made prices up.

In December, garments, catering and consumption services, and home appliances saw the largest increase in comparison with last month.

Prices had a year-on-year surge of 12.9 per cent for garments, 17.29 per cent for home appliance and 24.8 per cent for catering and consumption services.

Food prices increased by 0.49 per cent in December against previous months and at 27.38 per cent over last December.

The rice price jumped 1.4 per cent in December against November and 19 per cent compared with last December due to impacts from floods in the centre.

Catering services also rose by 0.57 per cent in December and 23.37 per cent over last December.

The remaining eight good items showed a slight increase at below 1 per cent for December while prices for postal and telecom services reduced by 0.08 per cent.

Goods showing slight price rises in December had high price increase for the whole year, Thang said. For instance, the price of education services increased by 23.18 per cent over the same period last year due to the Government's policy to increase school fees.

Prices also increased by a sharp 16 per cent for transport services due to the high price of petrol and oil, and at 19.66 per cent for housing services and building materials due to high maintenance costs, high rent and high prices for electricity and tap water.

The price for gold reduced by 0.97 per cent in December but increased 39 per cent compared with the same period last year. The price for a US dollar climbed 0.98 per cent in December and 8.47 per cent over last year.

Industrial production slows down
 
Viet Nam's industrial production in 2011 has grown at 6.8 per cent, lower than last year, due to global economic volatility, according to the General Statistics Office.

The office said growth was lower than previous years, including 2009, at the peak of the global financial crisis.

Industrial production between March and October saw the lowest growth rates of the year, with the manufacturing industry rising 9.5 per cent against 12.6 per cent of 2010.

Production and distribution of power, gas and water also increased just 10 per cent, short of the 15-17 per cent mark domestic demand requires, the office noted.

The mining industry saw a decline of 0.1 per cent, despite coal production surging 2.1 per cent, crude oil 1.6 per cent and natural gas down 9.1 per cent.

"The mining industry will experience a slowing of growth over coming years due to scarcity of the nation's natural resources," the office said.

Low growth rates of industrial production were also reported for the country's two largest cities, with Ha Noi growing only 5.1 per cent and HCM City 5.4 per cent.

Consistent growth rates were reported for several cities and provinces in the country, including the northern province of Bac Ninh, which topped the list with 37.3 per cent, while Vinh Phuc, Binh Duong, Dong Nai and Can Tho also experienced a surge of more than 10 per cent.

The office said the consumption index of the manufacturing industry surged 15 per cent over the previous year, while the inventory index of the industry rose sharply by 23 per cent.

"Manufacturing industries, whose inventory indices rose sharply in 2011, include pottery, with a surge of up to 96.8 per cent; cement, up 64.1 per cent; fertiliser, up 57 per cent; plastic products, up 55.6 per cent; and paper production, up 53 per cent," noted the office.

The inventory indices of vegetable and fruit processing, tobacco, the auto industry, livestock feed, steel and iron, seafood processing and cloth production also surged sharply - between 25-49 per cent.

Bac A to consult firms on clean investments

Bac A Bank said it would continue to consult enterprises on investing in sustainable sectors such as agriculture, forestry, clean pharmaceutical, healthcare and education.

Thai Huong, the bank's deputy chairwoman cum general director, was speaking at a press conference to introduce the bank's new trademark in Ha Noi on Wednesday.

The bank has provided a consultation service on financial investment for a US$1.2 billion dairy cow breeding and milk processing project in central Nghe An Province – the largest of its kind in Southeast Asia.

In the time ahead, the bank plans to improve its business strategies to boost operational efficiency, strengthen risk management and ensure sustainable development.

Japanese retailer Aeon invests in trade centre

Japanese retailer Aeon Co plans to build a trade centre in HCM City's Tan Phu District.

The centre, which will cost US$101 million, will occupy an area of 3.5ha in Son Ky Ward.

Aeon is also interested in building another trade centre in the southern province of Binh Duong.

Oversupply of locally produced cement

Next year, there will be an oversupply of 12 million tonnes of cement, Bui Hong Minh, director of Bim Son Cement Joint Stock Company, said at a customer conference on Thursday in Ha Noi.

There had been a significant increase in production this year, while market demand was expected to rise by just 11 per cent per year, Minh said.

This year, Bim Son Cement is expected to produced 3.7 million tonnes, while consumption is expected to be 2.26 million tonnes.

Meat priced slightly higher for Tet
 
There will be no shortage of meat during the coming Tet (Lunar New Year) holiday with prices forecast to increase by only 2-3 per cent.

Director of the Ministry of Agriculture and Rural Development's Department of Livestock Husbandry Hoang Kim Giao made the above statement at a conference held in the capital yesterday, adding that the domestic livestock industry had enjoyed favourable conditions, especially in the latter months of this year when disease outbreaks were rare, to ensure an abundant meat supply.

With meat demand usually experiencing a 15-20 per cent increase during Tet, consumption has dropped significantly during recent years however, last year seeing a rise of only 12-15 per cent.

Meat demand had been saturated, Giao confirmed.

The local market currently consumed 262,000 tonnes of pork and 62,000-63,000 tonnes of poultry each month, said the department Deputy Director Nguyen Thanh Son.

Bouncing back after a strong slump in October, current pork and poultry prices had proven acceptable to both breeders and consumers, he said.

The Ministry of Industry and Trade warned that during the Tet holiday, demand for meat would surge by 40,000 tonnes in comparison with current figures.

Meanwhile, the livestock industry could only provide an additional 10,000-15,000 tonnes of meat for Tet at present, which means a possible lack of 25,000-30,000 tonnes, it said.

The latter months of this year saw a significant increase in meat exports to China with up to 936 tonnes crossing the border in November, triple March's figure.