Tour companies set for Independence Day bonanza

With Independence Day falling on a Friday and offering the last chance for a vacation for students before the new school year begins, Ho Chi Minh City travel agencies have been selling lots of tour packages.

The holiday falls on September 2 while schools reopen Monday.

Vietravel said it had achieved 85 percent of its sales target for the three-day holiday, adding there were 2,000 customers for domestic tours and 2,500 for outbound ones.

Some tour operators have managed to sell out by offering discounts.

Tran The Dung, deputy director of The He Tre travel agency, said his company’s tours to Phu Quoc, Con Dao, Da Lat, and northern and central regions were fully booked.
Booking for trips to Cambodia, Indonesia, Thailand, Singapore, and Malaysia had also been closed, he said.

Da Lat, Nha Trang, Phan Thiet, Phu Quoc, Con Dao, Hue, and Da Nang remained the top domestic destinations, he added.

The country’s top tour operator, Saigontourist, offered 100 different domestic and overseas tours for the occasion.

Besides its normal tours, it also rolled out adventure packages to the mountainous regions in the north and to Can Tho, Chau Doc, and Ha Tien in the south. Short trips to South Korea, China, Thailand, Brunei, Singapore, Cambodia, and Malaysia are also available.

Bus and train operators in Ho Chi Minh City are also offering additional services to cope with the demand that usually soars during holidays.

Mien Dong Bus Station said it would increase the number of buses by 31 percent, with around 1,500 vehicles carrying an estimated 34,000 passengers on September 1 alone.

Saigon Railway Station will add three more trains on the HCMC-Nha Trang route and one to Quy Nhon.

The HCMC public transport control center will add 1,125 trips to the 16 local bus routes passing through coach stations and theme parks between September 2 and 4.

PetroVietnam eyes gas exploitation in Bolivia

The Vietnam National Oil and Gas Group (PetroVietnam) has signed a cooperation agreement with the state-owned oil and gas company of Bolivia, YPFB, to study gas potential in the South American country.

The Bolivia News Agency reported that the results of the study will lay a foundation for the partners to sign contracts on natural gas exploration, exploitation, development and production in Isipote, Yoai and Algarrobilla areas in the southeastern region of Bolivia .

Bolivia is estimated to have a natural gas reserve of 281billion cu.m and is calling for foreign investment to exploit this huge resource.

Bolivia has annually exported about 30 million cu.m of gas to Brazil and some 7 million cu.m to Argentina .

In its strategy to expand operations in South America, PetroVietnam has invested in some projects to explore and exploit oil and gas in Cuba and Venezuela.

S&P lowers Vietnam’s dong long-term rating

Standard & Poor's Ratings Services (S&P) has lowered the its local currency long-term sovereign credit rating on Vietnam to 'BB-' from 'BB' after revising its methodology and assumptions for rating sovereign governments, according to Reuters.

The negative outlook on the ratings reflects S&P’s view that Vietnam faces risks of near-term economic and financial instability, it said on a press release cited by Reuters.

“We could lower the sovereign credit ratings if balance-of-payment pressures mount or fiscal contingent risks from the financial sector rise,” said S&P.

“The ratings could stabilize at the current level if we assess that the risks to financial sector stability have declined. This is likely to reflect the successful implementation of policies that lift confidence in the domestic currency and reduce private sector and public enterprise leverage,” it added.

In line with this, it has also lowered ASEAN regional scale long-term rating to 'axBB' from 'axBB+'.

S&P has also affirmed its 'BB-' foreign currency long-term rating, 'B' short-term foreign and local currency ratings, and 'axB' ASEAN scale short-term rating.

The outlook on the long-term ratings is negative, it said.

S&P also revised its transfer and convertibility (T&C) assessment for Vietnam to 'BB-' from 'BB' and affirmed its recovery rating at '3'.

"We lowered the local currency long-term rating on Vietnam after the implementation of Standard & Poor's revised methodology and assumptions for sovereign ratings," said S&P credit analyst Kim Eng Tan.

S&P affirmed its foreign currency long-term rating because it is unaffected by the criteria update and the sovereign's underlying credit fundamentals have not changed.

"Under the revised methodology, we are narrowing the gaps between the local and foreign currency ratings, where these had existed, for many sovereigns. This is because we believe that governments are likely to have fewer incentives to differentiate between their local and foreign currency debt in the event of debt restructuring, given the increasing globalization of markets," Tan said.

In accordance with our criteria for sovereign ratings, the local currency rating on Vietnam is now equal to the foreign currency rating because the Vietnam dong's pegged exchange rate limits its monetary policy independence and its domestic financial and capital markets are at early stages of development.

The 'BB-' sovereign credit ratings on Vietnam reflect the country's low-income economy, developing financial system, and evolving policy framework. Healthy economic growth prospects, reinforced by the government's persistent efforts in economic restructuring, partly offset these weaknesses.

The macroeconomic volatility of recent years, amid strong lending growth, has weakened the banking sector's resilience to a new financial or economic shock. The outflows of resident capital have reduced domestic liquidity and raised the cost of domestic funding.

"A large part of domestic credit--estimated to equal 118 percent of GDP at the end of 2011--are priced at nominal interest rates above 15 percent per annum," Tan said.

"A disinflationary environment could impair borrowers' ability to service these loans, which we expect to reprice slowly, and thus could hurt asset quality in the banking system. That may eventually require government recapitalization of key public sector financial institutions," he added.

In mitigation to the above weaknesses, openness to foreign direct investment (FDI) has improved Vietnam's economic prospects.

FDI has averaged above 8 percent of GDP during the past four years. These foreign-invested projects should help maintain Vietnam's trend annual real per-capita GDP growth at 5-6 percent.

Standard & Poor's estimates Vietnam's growth in 2011 at 5 percent.

Premier Oil confirms Vietnam oilfields’ potentials

Belut Laut, along with Gajah Laut Utara-1 and the successful appraisal of the Ca Rong Do discovery in Vietnam earlier this year, has confirmed the potential for hydrocarbons within the Oligocene section in the Nam Con Son basin, according to Premier Oil.

The ongoing sub-surface interpretation will now be focused to prospects at shallower depths where good reservoir properties are preserved up dip from proven source rocks.

At least five such prospects have been identified in the Tuna acreage and also in the neighboring Block 07/03 in Vietnam, which Premier plans to drill the first in the second half of 2012.

The CS-N2P well, a development production well for the Chim Sao project, has intersected the shallow part of a previously undrilled fault terrace to the north west of the Chim Sao field.

Based on Logging While Drilling data, the well encountered a 20 meter oil column in an independent closure within good quality Upper Dua Sandstones.

The plan is to appraise this new accumulation as a near-field tie-back opportunity via the CS-N1P development well, through which wire-line logs and fluid samples will be acquired. The results of this well are expected in October.

"We have learnt from the wells drilled on the Tuna acreage and will now target lookalike prospects in the Nam Con Son basin where the Oligocene reservoirs are at shallower depths and are therefore of better quality,” said Simon Lockett, chief executive officer of Premier Oil.

The discovery of new resources close to the Chim Sao development is very encouraging and we look forward to the appraisal results later this year," he added.

Cai Mep Port welcomes 1st Maersk Line's container ship

Cai Mep International Terminal (CMIT) has welcomed Grete Maersk, the 1st ship of Maersk Line's Trans-pacific String, on its route from Asia to North America.

With this first direct ‘Trans-pacific 6’ (TP6) vessel, weighing at 115,700 dwt and with a capacity of 9038 TEU, calling CMIT, Maersk Line has officially become a business partner of its sister company, APM Terminals, one of the three main investors in CMIT.

This move tightens the relationship between the carrier and port operator and benefits their import-export customers.

CMIT offers Maersk Line a 14-meter channel depth with 16.5-meter depth alongside, state-of- the-art shipside and shoreside handling facilities and over 36 hectares of container yard.

"We are excited to start calling at CMIT with our Direct Trans-Pacific service and look forward to further enhancing the service to our customers,” said Peter Smidt-Nielsen, general director of Maersk Line Vietnam.

“We are very proud to have 100 percent On-Time schedule reliability between Vietnam and the US West Coast in quarter 2 as the only line, and we look forward to continue delivering that important service to our customers," he added.

As business partners, Maersk Line and CMIT aim to provide their customers a better service to North American destinations, on-time vessel reliability and higher capacity to cover increased demand for imported cargo to Vietnam.

"With state-of-the-art equipment, highly trained and dedicated people and already high berth productivity, we are sure we can deliver on Maersk Line's high expectations of us,” said Michael Them Rasmussen, general director of CMIT.

The $270 milion CMIT was established on January 26, 2007 as a joint venture between the Vietnam-based Saigon Port, Vietnam National Shipping Lines and APM Terminals BV.

Maersk Line is the core liner shipping activity of the A.P. Moller - Maersk Group, and the leading container shipping company in the world with a fleet numbering more than 500 container vessels.

It serves customers through a network of its own offices and third party agents, in more than 125 countries, ensuring consistent, high quality service worldwide. It has about 20,000 employees in 130 countries worldwide.

VN ‘overlooks' agriculture's key role
 
The agriculture sector has been Viet Nam's buoy in times of economic crisis, but it has not received commensurate attention or investment, says Dang Kim Son, head of the Institute of Policy and Strategy for Agriculture and Rural Development.

The sector's crucial role as a crisis mitigator has been demonstrated several times, including in the late 1980s, late 1990s and in 2000, Son told the Thoi Bao Kinh Te Sai Gon (Sai Gon Economic Times) magazine.

It has helped the country ensure jobs, control inflation and reduce the trade deficit, which were three very important factors in maintaining macroeconomic stability, he said.

However, Viet Nam's investment in the agriculture sector was low compared to other countries and its investment structure was weak, he added.

"We need investment in science, technology, agriculture extension and human resources training, but investing in the agriculture sector so far has focused on constructing (infrastructure) facilities," Son said.

The issue was not just increasing investment but giving in assigning priority and investing effectively, because the Government did not have much money to invest in the agriculture sector.

He said the task of accumulating land for agricultural production and creating jobs for farmers during the country's industrialisation process - Viet Nam has targeted becoming an industrialised country by 2020 needed to be implemented in a much better fashion.

Recently, people in several provinces in the Cuu Long (Mekong) Delta, the country's rice granary, have accumulated land for production, raising concerns about the appearance of a new class of new landowners who exploit farmers.

Son said besides land regulations, the country's political and legal systems can prevent new landlords from exploiting farmers.

But the developing of farms in special agriculture zones in the Cuu Long Delta, Tay Nguyen (Central Highlands) and southwestern regions was the most effective way to raise production, he said.

He stressed that before allowing the accumulation of agricultural land, the Government needed to solve the issue of finding sustainable employment for workers in the sector.

The agricultural land holding per household in Viet Nam is very small at about 0.7-0.8ha.

In the southern part of the country, if farmers were allowed to accumulate land and obtain land-use rights for longer periods than currently regulated, the possibility that land was accumulated for increasing production becomes more likely, Son said.

"Meanwhile, in the northern part, the situation of land accumulation becomes more difficult and complicated when farmers leave their homes to work in urban areas but are not able to officially enter the labour market there," he further said.

In urban areas, farmers do jobs like xe om (motorbike taxi) drivers, porters, domestic helpers and construction workers. None of these jobs have a labour contract and they can be fired any time.

In the north, farmers hold on to their land at all costs, in case they are fired, leaving their land vacant without production and unused by people who are actually involved in agriculture production.

"Accumulation of agricultural land can only be implemented successfully when farmers can officially enter the labour market," Son said.

In other countries and territories like South Korea and Taiwan, it took 15-20 years to complete this process while other countries like Thailand and the Philippines have not finished it after several decades, he said.

"Countries and territories that can do this task well will be able to reach the industrialisation goal successfully, and those who fail will fall into the middle-income trap," he said.

"The lives of Vietnamese people in rural areas have improved significantly but the gap between rural and urban areas is still large. When rural areas take one step forward, urban areas have taken two or three steps," Son added.

"The problem is that progress in rural areas is too slow compared the efforts farmers put in."

Cocoa farmers set to boost cultivation
 
Cocoa farmers in Ba Ria-Vung Tau, Ben Tre and Dong Nai provinces will be able to apply best agricultural practices and improve the quality of cocoa beans under an agricultural extension agreement signed in HCM City yesterday.

The transfer will take place under the auspices of a Memorandum of Understanding signed by the Cocoa Association of Asia (CAA) and the HCM City Nong Lam (Agriculture and Forestry) University.

Under the MoU, a three-year project will begin implementation next month, training more than 2,000 farmers to apply cultivation methods that will help their cocoa crop gain an average yield of at least 1.5 tonnes per ha.

Pham Hong Duc Phuoc, head of NLU's cocoa department and deputy chairman of the Viet Nam Cocoa Development Committee, VAA would provide around US$100,000 in funds for the NLU to carry out the extension activities.

Yeong Chye, CAA chairman, said that CAA would also facilitate the farmers' access to the international cocoa market.

The yield of cocoa plants in Viet Nam is currently rather low and unequal among regions because of improper cultivation methods, Phuoc said.

There are about 20,000ha under cocoa cultivation in Viet Nam, mainly in the southern provinces and the Central Highlands.

Both Chye and Phuoc hoped that the project would significantly boost the income of cocoa farmers in Viet Nam.

HCMC braces for bigger travel demand during holiday

Coach and train stations in Ho Chi Minh City are adding more services in expectation of soaring demands during the forthcoming Independence Day which will fall on the weekend.

Thuong Thanh Hai, deputy director of Mien Dong Coach Station, said there would be a long Independence Day holiday this year, so the number of buses for the two peak days, September 1 and 2, would increase by 3 percent compared last year’s holiday and by 31 percent compared to normal days.

There will be around 1,500 coaches serving an estimated 34,000 passengers on September 1 alone, and about 100 other vehicles will be on standby, Hai said.

Hai said the most crowded routes would be those leading to Khanh Hoa Province that is known for the seaside resort town of Nha Trang, and other tourist attractions like Buon Ma Thuot, Vung Tau, Dalat, Nha Trang, Phan Rang and Phan Thiet.

Mien Dong Coach Station has asked the city’s transport authority for permission to impose a 30 percent surcharge on fares to offset the fuel costs for those vehicles returning to the city without passengers during the peak travel period.

Meanwhile, the number of passengers at Mien Tay Coach Station is forecast to go up 5-10 percent from last year’s holiday. Director Pham Van Thong of the station said 30,000-32,000 people would use transport services at the station on each of September 1 and 2 and the most popular destinations would be Tien Giang, Ben Tre, Tra Vinh, Can Tho and Dong Thap.

As for the Saigon Railway Station, Nguyen Van Thanh, deputy director of the station, predicted a 30 percent increase in passenger numbers. Therefore, the station will add more trains on HCMC-Nha Trang and HCMC-Quy Nhon routes.

Especially, three more trains will be put into service on HCMC-Nha Trang run and one more for Saigon-Quy Nhon service.

The HCMC public transport control center will add 1,125 commuter bus trips for the 16 routes passing through the coach stations and amusement parks from September 2 to 4.
The city’s Department of Transport has requested contractors to suspend their road excavation before and during the holiday.

Some large-scale projects for water plumbing and drainage can keep their fencings in place but must clean up the surroundings before September 1.

These projects include the urban upgrade project for Tan Hoa-Lo Guy Canal, the Nhieu Loc-Thi Nghe basin environmental rehabilitation project, and the Thu Duc-Binh Thai water pipeline project.

Vietnam urged to use advance pricing agreements

Executives of Ernst & Young have urged Vietnam’s tax authorities to consider using advance pricing agreements (APA) with corporate taxpayers as a way to fight transfer pricing at both foreign-invested and domestic companies.

The APA allows the taxpayer and the taxman to avoid future transfer pricing disputes by entering into a prospective agreement on the taxpayer’s transfer prices, said the audit and tax services provider in a statement obtained by the Saigon Times Daily on Thursday.

Ernst & Young said such an agreement should specify transactions covered by the APA, transfer pricing method, required APA records and terms, operational and compliance provisions, appropriate adjustments, critical assumptions regarding future events, and annual compliance reporting responsibility.

Luis Coronado, Asia Pacific Area Transfer Pricing Leader at Ernst & Young Solutions LLP, told the Saigon Times Daily that Vietnam’s tax authorities were on the right track when taking action to intensify transfer pricing examinations at foreign-invested companies. But he suggested APAs should be used as an option to counter and manage transfer pricing issues.

In HCMC alone, the Tax Department realized more than 60 percent of this year’s target for nearly VND110.4 trillion (US$5.32 billion) in the first half of this year.

This agency credited a year-on-year increase of over 20 percent in tax revenue in the year to June on the year earlier period to the fact that more foreign-invested enterprises reported profits after having run at a loss for many years as they heard about transfer pricing probes and crackdowns.

Tax authorities have also attended to possible transfer pricing cheats at local enterprises which manage to transfer profits to their subsidiaries in areas where there are lower tax rates and more incentives to evade their tax obligations, as locations in the country apply different tax policies.

Nitin Jain, director of tax and advisory services at Ernst & Young Vietnam Limited, said transfer pricing was applicable to local enterprises also.

“APAs can apply to all entities as long as they have related party transactions. For local entities it is generally referred as domestic APAs which generally are unilateral as there are no two governments or tax authorities involved,” he told the Saigon Times Daily in an email on Thursday.

Unilateral APAs involve agreements between only the taxpayer and one government, and taxpayers may also be in bilateral or multilateral APAs with more than one tax authority through the mutual agreement procedure included in most income tax treaties.

Ernst & Young Vietnam said the bilateral APA has helped address the inconsistent and evolving interpretation and enforcement of transfer pricing rules in other countries and the risk of double taxation.

The firm said there was no provision on APA in Vietnam’s transfer pricing regulations and there had not been any APA signed in the country. The Prime Minister’s decision in May 2011 on tax reform for 2011-2020 includes issuing regulations on APA among others.

Jain said it was expected that APA regulations would be available in Vietnam in the next few years. The General Department of Taxation recently surveyed taxpayers and tax agencies with queries about implementation of the transfer pricing regulations, how to improve relevant policies and APA introduction.

“This all answers that Vietnamese tax authorities and the Government are looking at APA as a perspective tool for mitigating transfer pricing disputes, and this is something they would like to introduce in the near future,” Jain said.

Ernst and Young’s recent survey with taxpayers around the globe showed transfer pricing was the most important tax issue, as chosen by 33% of the respondents in Europe, the Middle East, India and Africa, 30 percent of the respondents in Asia Pacific and 21 percent in North America.

Coronado said 74 percent of the respondents at parent companies and 76 percent at subsidiaries believe transfer pricing will be “absolutely critical” or “very important” to their organizations over the next two years. Up to 74 percent of the parent respondents say transfer pricing documentation is more important now than two years ago.

More nations are adopting APAs and the list of more than 30 countries worldwide include Australia, China, Japan, Korea, New Zealand, Indonesia and others in Asia Pacific, as APAs help save time and cost for both taxpayers and tax authorities.

According to Ernst & Young, the APA process generally takes less time to complete than a transfer pricing examination followed by a dispute resolution mechanism, which can last three to four years and longer in many cases with complex time-consuming and expensive checks.

Therefore, the Ernst & Young survey found that 23 percent of all respondents want to use APAs as controversy management tools, and up to 90 percent of those opting for APAs will count on such agreements to solve transfer pricing disputes.

Businesses find it hard to survive amid downturn

In a time when the economy is down and lending rates skyrocket, many local businesses have no choice but to shut down or cut production and workforce despite their uttermost efforts to survive.

Binh Duong Province-based Center for textile materials and accessories and footwear under Lien Anh Co Ltd, for instance, has recently been closed as its customers -- the businesses in the textile and footwear industry -- are badly affected by the economic downturn.

The center, a US$12 million project established in 2009 in a bid to support the domestic textile and footwear exporters with a sustainable material supply, in fact managed to lease only a few of its 650 booths to the material and accessory suppliers.

“We have been making no profits,” Truong Thi Thuy Lien, deputy director of Lien Anh Company, told The Saigon Times Newspaper.

Lien said the center -- which sells textile materials -- could hardly find customers since 70 percent of the domestic textile and footwear industries still operate as outsourcing manufacturers for foreign companies and as such didn’t need to buy materials but get them from the foreign importers.

“Besides, many manufacturers have gone bankrupt due to the troubling economy, which also caused negative impacts on the operation of our center,” she added.

A textile analyst said most of the firms have to operate as outsourcing manufacturers as the soaring lending rates prevented them from accessing bank loans for buying materials.

For his part, Phung Dinh Ngo, director of Binh Hoa Textile Company, said his company’s workforce had been cut from 600 to 100 laborers amidst the economic crisis.

“We could no longer afford manufacturing for the exporting partners,” he admitted, adding domestic businesses still received inadequate supports from the government.

Many businesses working in industrial parks and export processing zones have also been forced to cut production, transfer their manufacturing facilities or even cancel their projects.

Hence, the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) said it is seeking help from investment funds to support its members with low-cost lending.

Le Anh Tuan, HEPZA’s deputy head, also said they would reduce the time needed for administrative procedure clearances in order to help the businesses stay focused on their production.

“We will try our best to help the businesses overcome difficulties,” Tuan said.
 
HCMC park commercialized, defaced

Locals in Ho Chi Minh City’s District 6 are concerned as most of the space inside the Phu Lam Park is being rented out to a restaurant and invaded by other business establishments, with little space left for the public to relax.

Situated at the centre of District 6, with three of its sides surrounded by streets of An Duong Vuong, Kinh Duong Vuong and Le Tuan Mau, the Phu Lam Park used to be the main area of relaxation for locals.

But now, the only place the public can rest is in the so-called “hall of culture and art” which is actually the Sun Palace Restaurant and Convention Center run by the Viet Y Investment, Service and Culture Co Ltd.

The restaurant/culture hall occupies a large area inside the park while the park’s area adjacent Le Tuan Mau Street is filled up with stores selling bonsai trees.

According to District 6 Culture Center, the management unit of Phu Lam Park, there used to be a meeting hall on the plot of land where the Sun Palace restaurant is now situated.

In May 2007, Viet Y Company got approval from the municipal People’s Committee to convert the meeting hall into a “multi-functional cultural hall” to deliver cultural services like music show, conference and culture-art classes.

Under a 10-year contract signed in November 2007 with the authorities, Viet Y Company was permitted to build the cultural hall on an area of 1,900 square meters although just 500 square meters is needed to house the hall.

Viet Y later used the remaining space for business purposes.

In mid-2009, after four months of operation, Viet Y demanded to extend the contract term to 25 years, saying they needed more time to recoup their investment.

On August 2009, the two parties signed a new contract with the term of 22 years.

Following this new contract, Viet Y later changed the name of “multi-functional cultural hall” into the “hall of cultural and art” which has been invading Phu Lam Park since.

Many locals said it is unreasonable for a restaurant to operate inside a park and demanded the Cultural Center to withdraw the land rented to Viet Y Company.

The name of Phu Lam Park, in fact, has now been virtually wiped out since as early as in 1999 when the city People’s Committee ordered the Park be merged with the District 6 Culture Center and take the latter’s name.

Nguyen Quang Minh, director of the culture center, said the city’s order means that Phu Lam Park would no longer function as a place for public recreation and would come under the management of his center.

Hence, the center had the right to lease the park’s land to Viet Y and other businesses, he told Tuoi Tre.

Summer-autumn rice prices escalate  

Rice prices have soared to an all time high of VND6,400-6,700 per kilogram, causing farmers to hold on to their rice in expectation of higher rates while traders are stockpiling the grain in large quantities.  

Farmers in the Mekong Delta are nearing the end of their summer-autumn rice harvest season and rice prices have accelerated by approximately VND1, 500 per kilogram since the start of the harvest.

Nguyen Van Sau from Thoai Son District in An Giang Province said that summer-autumn rice prices are now the highest ever in the last few decades.

Price of husked rice too has risen. Processing plants paid VND9, 100-9,200 per kilogram at the Cai Rang wholesale market in Can Tho City yesterday.

Nguyen Thien Khanh, owner of a rice processing company says the price of summer-autumn rice is VND1, 000 higher than in the previous winter-spring rice crop season.

Hanoi: August CPI up 1.06 percent

Hanoi’s August consumer price index (CPI) increased 1.06 percent from July, up 22.6 percent compared to the same period last year and 15.65 percent compared to the year 2010, according to the city’s Statistics Office.

Restaurant and catering services saw the sharpest rise, followed by food and foodstuffs, accommodation, electricity and water, fuel and construction materials.

Economists say the CPI in August was still high compared to the same period in previous years.

However, they said, it has been slowing down for four consecutive months, which they attributed to Hanoi’s effective price stabilisation programme and tighter management of prices.

Vietnam supports US hosting APEC meeting

Vietnamese ambassador to the US, Nguyen Quoc Cuong, confirmed that Vietnam will support the US in hosting the 2011 Asia-Pacific Economic Cooperation (APEC) forum when he visited the US state of Hawaii, which will host the meeting in November.

During his visit, Ambassador Cuong met with the Governor of Hawaii, Neil Abercrombie, and the chief representative of the APEC organizing committee, Randall Tanaka. He also talked with scholars from the East-West Center and the Vietnam-US Chamber of Commerce in Hawaii as well as others concerned with Vietnam.

Mr Cuong reviewed the history of Vietnam-US relationship since the early 18th century, including its ups and downs. He said the two sides are now working closely together to define the content of their strategic partnership.

At the meeting, the Vietnamese diplomat answered questions regarding Vietnam’s development policies, the country’s concerns about climate change that could have negative impacts on the Mekong Delta, and Vietnam's border and territorial issues.

Ambassador Cuong affirmed that the Vietnamese government welcomes educational cooperation and tries to provide favourable conditions for US universities to set up their establishments in Vietnam. About 13,000 Vietnamese students are currently studying in the US, he added, and in Hawaii alone, 65 Vietnamese students are taking MA and PhD courses.

Sacomreal invites technical consultants for its projects

To enhance competitiveness on the market, Sacomreal has cooperated with leading specialists in related industries to carry out its real estate projects in the coming time, having earlier joined forces with material suppliers.

According to Sacomreal, the technical consulting committee includes architects Khuong Van Muoi and Nguyen Truong Luu among others. The committee will help Sacomreal resolve problems in architecture designs and technology issues in work execution.

In the rest of the year, the committee, for instance, will support the Cong Quynh project in HCMC’s District 1 by mapping out architecture ideas, assess technological risks and apply new technology to construction activity.

Dang Hong Anh, president of the company, said that the market was not faring as well as in previous times, thus enterprises must strengthen their competitiveness by ensuring quality and a reasonable price for products.

“Inviting leading professors in related industries will enable Sacomreal to come up with the most advanced solutions and technology to apply to the process of constructing and developing projects,” Anh explained.

In late July, the firm had signed deals with eight other strategic partners who are construction materials suppliers in order to set up its development strategy in a closed process. These partners, including Inax Vietnam, Dong Tam, DP and Phan Vu, are responsible for providing all related products and services throughout the development process of Sacomreal’s every construction scheme.

Thanks to such efforts, it is expected that the realty company would shorten the progress of construction, and offer its customers with high quality products at a discount price, ranging between 10% and 20%.

Within this year, these businesses also have plans to provide input materials for some projects invested by Sacomreal, such as the Belleza apartment project in District 7, the Carillon in Tan Binh District and Sacomreal Hung Vuong in District 6.

Banks and borrowers face aftermath of gold fever

Both banks and borrowers are burdened by gold lending chaos as the local price of the yellow metal has shot up staggeringly and remains high, at around VND45 million per tael to date. A tael equals to 1.2 troy ounces.

The ratio of outstanding loans in gold to collateral is usually fixed at 50-60%. However, this ratio is not ensured when the gold price goes up and thus banks would have their clients supplement deposits or mortgage.

Within five days from August 6-11, the local gold price became feverish after surging by 10% to VND46 million, putting many borrowers in the hot water as they had to increase collateral as required or saw their mortgage liquidated. In fact, many banks were forced to sell the collateral for debt recovery.

Still, there are banks softening this requirement for their corporate clients.

A banker in HCMC said his bank would wait for the gold loan to collateral ratio to reach some 85-90% to decide on those failing to meet the requirement.

The general director of a HCMC-based bank, known for its financial strength with gold, said the bank had warned clients of the rising gold price and advised them to have plans for gold risk management.

“However they refused to switch from gold loans to Vietnam dong loans because the former carries a lower interest rate,” he said. The annual gold lending rate is 4% at this bank, compared to the lending rate for Vietnam dong loans at over 20%.

To help borrowers reduce losses in gold lending, many banks have converted a proportion of outstanding loans to Vietnam dong and continually offer a loan extension.

Currently, many banks are struggling with their debt collection of gold loans due to the gold price hike. Many loans have already been listed as bad debts of such banks.

Not only gold borrowers but several banks also failed to retrieve the amount of gold that has been converted into Vietnam dong. Earlier, many banks facing the liquidity problem for Vietnam dong has converted gold deposited at their institutions into the local currency.

The central State Bank of Vietnam has ordered financial institutions to accomplish this back-conversion in June 2011 but there are still four or five banks that failed to do so, said Ho Huu Hanh, director of the central bank’s HCMC branch.

Hanh said he has reported the situation to the central bank and has yet to receive any instruction on this subject.

Under the current regulation of the central bank, gold lending is prohibited but banks can still issue gold deposit certificates until May 2012. Thereafter, gold mobilization and lending will be completely banned.

As of end-June, 14 banks in HCMC were still mobilization and lending gold with total mobilization of 2.43 million taels and total outstanding loans of 1.12 million taels.

Fortis spends US$64 million acquiring 65% of Hoan My

India-based Fortis Healthcare International Pte has struck deals totaling US$64 million to acquire a 65% stake in Vietnam’s Hoan My Corporation.

Duxton Asset Management Pte said in a statement that it and shareholders of Hoan My had agreed on the deal that made Fortis the major shareholder and strategic partner of the corporation.

Hoan My signed an agreement in late 2009 on investment cooperation with two investment fund management firms, VinaCapital and Duxton, to expand healthcare services. The two funds would equally lay out US$20 million on Hoan My.

“We’ve worked with Hoan My over the past two years and succeeded in developing Hoan My into a healthcare services organization that has been able to attract the attention of big partners like Fortis,” said Chong Kuan Yew, head of emerging market investment at Duxton.

News about the deal between Fortis and Hoan My has been around for some time. But until early August the parties involved had revealed little information about the deal, having said Fortis visited Hoan My and their talks were in the early stages.

Founded in 1997 with one clinic, Hoan My Corporation has now grown into a chain of hospitals and clinics in some cities and provinces like HCMC, Danang, Da Lat and Ca Mau and is working on a plan to construct a complex of schools and hospitals on six hectares in a northwestern urban area in HCMC’s Cu Chi. The corporation will inaugurate a new hospital in HCMC by the year’s end.

Earlier this month, the Government gave the go-ahead to Hoan My to establish Hoan My Medical University, Vietnam’s first private such educational institution since 1975.
 
Respect crucial to retaining good employees

A recent survey by the workplace provider Regus revealed Thai and Vietnamese employees insist that respect among colleagues is the key to keeping a hold of staff members after summer holidays.

The survey with more than 17,000 employees in more than 80 countries and territories indicated that up to 65% of Thai and Vietnamese workers said being respected in the workplace is the most important element of creating a happy working environment.

Encouraging knowledge and skills sharing among staff, and being on time for meetings were chosen as second and third most important factors, with 60% and 35% respectively. Helping out struggling colleagues came fourth, accounting for 29% of respondents.

“As work pressures and hours expand further into people’s personal lives, Thai and Vietnamese workers are ever more aware of the importance of the character of the people they work with and spend so many hours of their day with,” William Willems of Regus told the Daily.

“Aside from salary increases and material bonuses, simple steps like showing respect for all members of staff, making a point of congratulating workers on good work and helping colleagues develop by encouraging skills and knowledge sharing contribute to creating a more human and wholesome environment that staff are not easily tempted to abandon,” he said.

According to Regus, summer holidays is a time when employees think about whether they are happy with their jobs and workplaces or whether it is time to move on. Therefore, it is especially important for managers to keep job satisfaction up over the summer months to retain good staff.

PV