Shares fall on stalled trading value
 
National stocks posted gains for most of yesterday's trading hours but finally declined again. Trading value did not improve.

On the HCM City Stock Exchange, the VN-Index shed nearly 0.3 per cent, standing at 418.04 points.

Some 43.9 million shares changed hands, worth a total value of VND739.9 billion (US$35.2 million), slightly decreasing over Wednesday's figure.

Only one third of the 30 leading shares in terms of capitalisation and liquidity concluded the session up, as more blue chips began to fall in afternoon trading.

The VN30, therefore, lost 0.2 per cent to 492.77 points.

Although telecom device provider Sacom (SAM) saw only 1.87 million shares change hands, it was the most heavily traded stock on the southern bourse.

On the Ha Noi Stock Exchange, the HNX-Index dropped steeper by 0.6 per cent, reaching 70.70 points.

Trading was sluggish, declining 27 per cent compared to the previous session. Market value and volume reached just VND325.16 billion ($15.4 million) and 34.8 million shares. PetroVietnam Construction Co (PVX) was the most active stock nationwide with around 4 million shares exchanged.

However, positive assessments from foreign investors about the Vietnamese market potential were continuously published.

Asean Investment Management and PXP Viet Nam Asset Management predicted the VN-Index would jump by 25-35 per cent in the last 6 months of this year. While emerging stock markets were struggling to maintain their rally, the Vietnamese market climbed 20 per cent to become the most powerful market in Asia thanks to improved economic data and the stability of the dong.

Asean Investment Management CEO David Roes told CNBC that Viet Nam's stock market would continue to achieve the strongest growth among ASEAN countries in the next three years. Meanwhile, according to emerging market fund manager Mark Mobius, as the Vietnamese market had low liquidity, any investment could make a huge difference to the market.

Foreign investors were sellers in HCM City by a margin of VND11 billion ($523,800), but they concluded yesterday as buyers in Ha Noi, picking a net of VND500 million ($23,800).

Inward remittances to HCMC down 20.8pct y-o-y

The inward remittances sent to Ho Chi Minh City in H1/2012 are estimated to have reached about $1.9 billion, down nearly 20.8 percent over the same period last year.

The total amount of inward remittances declined by about $500 million compared to the same time period last year.

A remittance is a transfer of money by a laborer working overseas to their home country; for example, a Vietnamese worker in California sending money to his/her family in Vietnam.

The money transfer turnover via HCMC-based credit institutions saw a relatively strong fall, while the amount of remittances sent through economic institutions surged sharply over the same period last year, said the HCMC branch of the State Bank of Vietnam (SBV).

According to remittance companies, the current global economic turmoil certainly influences the amount of foreign currency transferred to Vietnam.

In addition, the stagnant real estate market and US dollar interest rate ceiling control policy of the SBV have caused a strong decline in big deposits for investment purpose.

Remittance companies are still trying to maintain the turnover in labor export markets such as Taiwan, Korea and Japan.

The major remittance markets are still the US, Europe, Australia and Canada.

The World Bank (WB) said Vietnam’s inward remittances in 2011 were estimated at $9 billion.

According to the HCMC branch of SBV, the amount of inward remittances to the city in 2011 is estimated to have reached around $5 billion, up 10 percent against the previous year and accounting for nearly two-thirds of the country's total.

The remittances mainly came from the US, Australia, and Canada thanks to the sustainable income of overseas laborers in those countries.

According to the WB, Vietnam will be one of the top 16 remittance recipients in the world this year, and is expected to continue being a potential overseas remittance market for global transfer agencies.

The total inward remittance sent to Vietnam in 2010 was US$8 billion, of which the total volume of inflow to HCMC reached over $3.8 billion, up nearly 20 percent from 2009.

In 2009, the total inward remittances sent to Vietnam decreased nearly 13 percent, reaching only $6.3 billion, much lower than 2008's $7.2 billion.

Remittances are one of the most important foreign currency channels in Vietnam, significantly contributing to reducing the current accounts deficit, minimizing the risks in raising capital, and reducing dependence on foreign capital sources of the country.

Prices for special fruit fall as Delta festival opens

Farmers in the Cuu Long Delta saw their incomes plummet as the prices for specialty fruits fell at the time of the Doan Ngo festival, which falls on the fifth day of the fifth lunar month

Rambutan, pomelo, and mangosteen prices were sharply down ahead of Doan Ngo, or the "double five" festival since last Saturday.

Java rambutan at the orchard dropped to around VND5,000 a kilogramme from VND15,000 a month ago.

Durian and green skin pomelo went down in Ben Tre Province by VND5,000 to around VND20,000 and VND35,000 respectively.

Nguyen Huu Binh, deputy head of the Department of Agriculture and Rural Development in Tra Vinh Province's Cau Ke District, said mangosteen was down to VND30,000 from almost VND90,000 last month.

Bui Thanh Liem, head of the Cho Lach District Department of Agriculture and Rural Development, explained that prices fell possibly because many farmers adjusted their specialty-fruits harvest season to coincide with the festival.

Besides, demand did not increase this year, he added.

Nguyen Minh Chau, director of the Southern Fruit Research Institute, said most fruits grown in the delta, whether exported or sold domestically, are consumed fresh because of a lack of investment in fruit preservation and processing facilities.

Many traders have taken advantage of this to push down prices, he added.

Analysts called on local authorities to help fruit farmers restructure production and create close links between production and consumption.

Local authorities should also encourage more investment in fruit preservation and processing facilities to add value, they said.

HCM City to host fisheries exhibition

The Viet Nam International Fisheries Exhibition (Vietfish) to be held from June 26-28 is expected to strengthen trade promotion activities, help companies find new business partners and promote Vietnamese seafood brands in the world market.

About 175 local and foreign companies will take part in the event to be held at the Sai Gon Exhibition and Convention Centre in District 7.

With 330 booths, Vietfish 2012 will showcase products and services related to the seafood industry such as fresh, frozen, dried or salted fish and shrimp as well as processing equipment, machinery and other items.

Organised by the Viet Nam Association of Seafood Exporters and Producers (VASEP), the exhibition will offer opportunities for businesses to exchange information and update the latest information on seafood industry, including market trends, customer trends, new products and new technologies.

French businesses to seek opportunities in VN

A delegation of eight French businesses will arrive in Viet Nam tomorrow to explore the potential in the country's electricity sector.

The three-day trip was aimed at gaining an insight into the official policies of the two countries, major projects, and the ways foreign suppliers and investors can get involved, said the trip's organiser UBIFRANCE, which is an agency for the international development of French businesses.

It would also allow links to be strengthened between French and Vietnamese businesses in this sector, so as to develop durable commercial, industrial and technological partnerships.

HDB raises charter capital to US$238m

The HCM City Development Commercial Bank (HDBank) has completed raising its charter capital from VND3 trillion (US$143 million) to VND5 trillion ($238 million) following a plan approved at a recent shareholders' meeting.

With the additional charter capital, HDBank will improve its programmes, invest in infrastructure facilities, equipment and advance technology, and upgrade transaction points to make it more convenient for customers to use its services.

Fines fail to deter securities violations

The maximum penalty for securities violations will be held at the current level VND500 million (US$24,000) under the latest version of the Law on Administrative Violations approved by the National Assembly and taking effect in July of next year.

The low ceiling level is being viewed by experts as a setback to market development since it is certain to reduce the deterrent effect of administrative measures.

Tran Minh Hai, director of the BASICO Law Firm, said this penalty level was set 10 years ago and has already shown its limitations in dealing with violations on the stock market. Hai said that deterring securities violations required fines at least large enough to erase the gains from the violation.

In contrast to the somewhat toothless level of fines in the securities field, the Ministry of Justice was currently drafting a joint circular under the Criminal Code that would set fines in the areas of taxation and auditing and accounting that are likely to take a much higher baseline than VND500 million, he added.

However, he noted, global experience has shown that securities violations are better handled through substantial administrative fines and that criminalising securities violations should be avoided as likely to cause negative impacts on market development.

In the process of drafting the Law on Administrative Violations, the drafting agencies suggested increasing administrative fines on securities violations to VND2 billion ($95,200), four times the current level. However, faced with the argument that higher penalties would further deter growth of a stock market that is already struggling against poor economic conditions, the National Assembly voted to retain the current level of fines.

While the current amount is seen as too weak to prevent violations, market insiders have suggested that the State Securites Commision impose additional penalties to increase the disincentive to violations, including revocation of business licences and professional certificates, or suspension of violators' operations for a period of time.

Tan Binh ICC launches low-cost condo project

Tan Binh Investment and Construction Corporation (Tan Binh ICC) has put up for sale the remaining units of Tan Mai apartment project in HCMC’s Binh Tan District after transferring 200 units to homebuyers late last year.

Some 60 apartment units of 47-67 square meters will be marketed at VND700 million to VND950 million per unit.

In order to woo customers, the developer allows homebuyers to make a down payment of 35% and settle the remainder over three years.

For those needing credits, ANZ and Vietcombank will offer homebuyers home loans with an annual interest rate of 13-13.5% and a term of 10 to 20 years.

There is a huge demand for housing in HCMC, said Pham Thi Phuong Lien, a representative of Tan Binh ICC. Given tough financial constraints, it is still unlikely for low-income people to own a home.

Though the company allowed for a down payment of 50% half a year ago, many buyers were not able to pay on schedule, Lien said. This is why the firm has introduced a new payment method to support homebuyers, she added.

Tan Mai Apartment has two blocks of 18-21 floors with 752 units. Late last year 272 units of block B had been transferred to buyers.

Shipping potential remains untapped

Vietnam’s shipping sector is still facing multiple barriers to joining the global supply chain, said international experts at a conference in Hanoi last week.

At the conference, Jonathan Beard, managing director of Hong Kong-based GHK, warned that it was difficult for Vietnam to become a maritime country despite having a coastline of 3,260 kilometers and being in the middle of international sea lanes.

According to Beard, seaports in the nation’s northern region are still small, so they cannot keep abreast of the fast development of the region as well as of China’s southwest region. He proposed the Government develop some large seaports to pave the way for the northern region to grow.

World Bank expert Pham Anh Duc said the e-customs model should be boosted to facilitate export and import operations.

Vietnam ranks 53rd among 155 countries on the 2012 Logistics Performance Index (LPI) of the World Bank. The LPI was developed based on criteria such as infrastructure facilities, international shipments, shipping capacity and customs.

With the 2012 LPI, some criteria of Vietnam have been much improved, Duc said. However, the country has two big weaknesses – lack of warehouses and poor management services, he added.

The logistics sector accounts for 18-24% of Vietnam’s GDP, and this figure is much higher than in China, the EU and the U.S.

An efficient supply chain is important to enterprises and Vietnam’s economic development, according to experts at the conference.

City sees multiple business closures at IPs, EPZs

Persistent woes at home and abroad have forced many enterprises at the HCMC-based export processing zones (EPZs) and industrial parks (IPs) to stop operations.

At a press briefing last Friday, Nguyen Tan Dinh, deputy head of the HCMC Export Processing Zones and Industrial Parks Authority (HEPZA), said 90 businesses at the IZs and EPZs in the city had halted, scaled down or permanently stopped operations this year.

This figure is nearly equivalent to the number of businesses thrown into a similar situation throughout the 20-year existence of the IZs and EPZs in HCMC, said Dinh.

The reason is that these firms are facing financial distress, lacking orders, and struggling with poor consumption.

According to HEPZA, domestic firms make up more than two thirds of the 90 enterprises. However, Dinh noted most of them were small businesses that had operated for only a few years with small-scale production, so they would not cause any disturbance with their layoffs.

The biggest problems reflected by these enterprises are difficult access to funding sources  caused by high lending rates. In addition, domestic firms mainly produce goods for the local market while domestic consumer demand has been plunging this year.

Furthermore, domestic and foreign investment into this area also declined sharply.

According to HEPZA, as of June 10, the total investment capital, both newly and additionally registered, had reached over US$202 million, meeting 40.46% of the year’s target and declining 38.35% year-on-year. It is noteworthy that foreign investment only totaled US$75.84 million, down 59.45% over the same period last year.

To help enterprises overcome such difficulties and maintain production, HEPZA has taken measures such as offering timely help to troubled businesses and organizing meetings between HCMC leaders and enterprises so that they can stay afloat. The authority has also coordinated with the Department of Science and Technology to launch a science and technology development fund and a business restructuring program.

Moreover, HEPZA has been working with the HCMC Finance and Investment Company (HFIC) to introduce a low-interest loan program under the city’s demand stimulus program. So far, 20 projects at the IZs and EPZs have received subsidized loans worth a total of nearly VND1.18 trillion.

This year, 45 projects at the HCMC-based IZs and EPZs have revised down their capacities, comprising 16 foreign-invested projects and 29 domestic projects. In addition, eight projects have temporarily stopped operations, 30 projects have turned inactive and seven projects had been liquidated prior to maturity.

Korea grows fresh vegetables in Vietnam

South Korea has invested US$2.6 million on a fresh vegetable project in the northern province of Quang Binh, Cho Weon Dae, director of the Korean Project of International Agriculture (KOPIA) has revealed.

The four-year project began in December 2011, Cho said during the 2012 Korean Food Festival currently taking place in Hanoi.

“Besides developing products that are safe for Vietnamese consumers, we also plan to produce other potential vegetables to supply to Korean agricultural distributors,” he said.

There are 11 kinds of clean and safe fruits and vegetables being grown in the project, including chili, potato, tomato, onion, and cucumber.

“For those which yield high productivity, we will not only consume them in Korea and Vietnam, but also export to Japan, Taiwan, and the US,” he announced.

Vietnamese, Algerian businesses talk trade online

Almost 40 Vietnamese and Algerian businesses attended the Vietnam-Algeria online trade exchange in Hanoi on June 26.

Head of the Ministry of Trade and Industry for Africa, West and South Asia Market Department, Ly Quoc Hung, said the exchange aims to help Vietnamese businesses promote exports of rice, coffee, pepper, footwear and other primary exports to Algeria .

The online exchange method is considered effective, low cost, and an alternative solution to slashing trade promotion costs, Hung added.

Vietnamese Ambassador to Algeria , Do Trong Cuong, said Algeria is the fourth largest economy in Africa and Vietnam ’s leading trade partner in the continent.

Vietnam ’s exports revenue to Algeria hit a record of 100 million USD in 2011 with major staples including coffee, rice, seafood, pepper and steel products. The figure rose to 64.22 million USD in the first four months of the year.

Vietnam to open trade office in Italian province

The province of Florence in Tuscany, Italy, is always keen to expand its links with Vietnam, especially in education and tourism.

The President of Florence Andrea Barducci, stated this when meeting with Vietnam’s Ambassador to Italy, Nguyen Hoang Long, on June 25.

Florence will work with Vietnam to organise economic, artistic and cultural events in the province to mark the 40 th anniversary of the two countries’ diplomatic ties in 2013, said President Barducci.

The province will help Vietnam to hold a series of economic and cultural events to introduce Vietnam to local people in Florence as well as the international community, he said, adding that the local authorities have decided to hold a ‘Vietnamese Day’ in Florence in October.

He stressed that he supports joint initiatives in education and training between Italy and Vietnam and more cooperation between universities from both countries.

Ambassador Long said that the Vietnamese Embassy will liaise with the local authorities in Florence to organise economic, diplomatic and cultural activities, especially the ‘Vietnamese Day’ in Florence.

In the near future, the Embassy will focus on developing relations with the region of Tuscany and Florence in particular, including opening a Vietnamese office at the region’s trade and investment promotion agency.

The office, which will strengthen economic, trade and investment ties between Vietnamese and Italian businesses, is expected to open on September 16.

Regarding the prospects for economic cooperation, Long said that businesses in Florence are strong in fashion, garments, agricultural processing, engineering and medical equipment so Vietnamese companies will have the opportunity to seek out partners and study advanced Italian technologies in these fields.

Later the same day, in Florence, Vietnam’s Commercial Counsellor to Italy Bui Vuong Anh, gave a presentation on Vietnam’s socio-economic situation and its policies to attract foreign investment.

WB funds Mekong Delta urban upgrade project

The Ministry of Construction and the World Bank launched a 398 million USD project to upgrade urban areas in the Mekong Delta region, in Can Tho City on June 25.

Of the total capital, the World Bank has provided 292 million USD in loan with the remainder coming from the Vietnamese government.

The project is part of the National Urban Upgrading Programme until 2020, which aims to improve standards of living for poor residents in urban areas, while boosting sustainable development in the Mekong Delta.

The infrastructure in six Mekong Delta cities will be targeted, including My Tho in Tien Giang province, Ca Mau in Ca Mau province, Tra Vinh in Tra Vinh province, Cao Lanh in Dong Thap province, Rach Gia in Kien Giang province and Can Tho City.

The project will last until 2017 with the first phase due to get underway in August 2012 and run till January 2014.

Once completed, it will directly benefit about 276,000 poor people in the region and indirectly benefit nearly 1.6 million others from the upgrading of transport, housing and environmental sanitation services.

Kazakhstan airline adds route to Ho Chi Minh City

Air Astana, a carrier based in Kazakhstan, will begin service between its country and Ho Chi Minh City in early 2013, according to a representative at the municipal Department of Culture, Sports, and Tourism.

The representative did not specify a city of origin in Kazakhstan, where the capital is Astana.

The airline, which has been collaborating with the city’s tourism department, will offer three flights a week, with a layover in Bangkok.

Kazakhstan, a transcontinental country and the largest in Central Asia, borders Russia, China, and Uzbekistan.

In related news, Kenya Airways recently launched a route to Vietnam, making it the second African airline to connect the continent to this country.

Kenya Airways said it has assigned the Vacation Travel and Tay Ho Tourism Co tour organizers as its representatives in HCMC and Hanoi.

Meanwhile, two regional airlines are rolling out summer promotions with flights to and from Vietnam. Budget airline Vietjet Air and flag-carrier Singapore Airlines announced the discount fares last week.

FDI disbursement up 2 percent

Disbursement of foreign direct investment (FDI) experienced a modest increase of 2 percent during the first six months of this year, reaching US$5.4 billion, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).

However, new FDI registered in the country slumped significantly during the period with only 452 projects, worth $4.76 billion, licensed equivalent to one-fourth of the 2011’s corresponding period in terms of both number of projects and level of capital.

The rate of added capital in existing projects also decreased. In six months, 123 projects registered to increase their capital by a total of $1.62 billion, a year-on-year decrease of 65 percent in capital and 50 percent in project number.

During the first half of this year, foreign investors have committed to pumping total FDI of approximately $6.4 billion into the country, a 27.3 percent reduction from 2011.

Japan remained Vietnam’s largest foreign investor, pouring in $4.16 billion, making up 65 percent of the nation’s total FDI.

It was followed by the British Virgin Islands, the Republic of Korea, Hong Kong and Singapore.

The southern province of Binh Duong retained its position as the most favourite location for foreign investors, drawing about $1.79 billion or 38 percent of total FDI registered in the country over the period.

In the January-June period, the foreign-invested sector posted an export value of $32.7 percent year-on-year. It also recorded an export surplus of $4.7 billion.

According to a draft circular recently released by the Ministry of Planning and Investment, State authorities will check that foreign- invested enterprises and projects conform to investment licences, development plans, investment incentives as well as regulations related to capital attraction, land use, ground clearance and compensation.

They will also check on matters such as taxation, capital contributions, project progress, wage mechanisms, treatment of workforce and environmental protection activities.

Vietnam, Algeria foster business links

Nearly 40 enterprises from Vietnam and Algeria joined an online business forum in Hanoi on June 26 to boost bilateral trade ties.

The event was co-organized by the Ministry of Industry and Trade and the Vietnamese embassy in Algeria.

The online forum was arranged to increase trade cooperation between the two countries and promote Vietnam’s major exports to Algeria such as rice, coffee, pepper, and footwear.

Algeria is one of Vietnam’s leading trade partners in Africa. Last year, Vietnam exported commodities worth nearly US$100 million to this African nation, up 32.5 percent against 2010.

In the first half of this year, its exports to Algeria saw a year-on-year increase of 66.5 percent to hit US$642 million. Half of the value was generated from coffee sales.

Vietfish 2012 expo opens in HCM City

The Vietnam Fisheries International Exhibition 2012 (Vietfish) opened in Ho Chi Minh City on June 26, aiming to boost trade promotion and develop the Vietfish brand name in the world market.

The exhibition, organized by the Vietnam Association of Seafood Exporters and Producers (VASEP), features 175 businesses involved in sea food processing, machine equipment manufacturing and related services.

This year’s expo has also attracted enterprises from Thailand, Japan, France, India, and the US as well as fisheries associations from Bangladesh, Thailand, China and the Global Aquaculture Alliance (GAA).

According to VASEP, Vietfish is the leading aquaculture exhibition in Southeast Asia and one of the best in the world.

Vietfish 2012, which will last through to June 28, offers enterprises the opportunity to assess market and consumer tastes, look for new suppliers, and especially seek out partners to broaden their consumer markets.

ICT summit boosts national core infrastructure

The 2012 Vietnam Information and Communication Technology (ICT) Summit opened in Hanoi on June 26, aiming to boost the country’s technological infrastructure.

The two-day event, on the theme “Information Technology (IT) and Telecommunications – National Core Infrastructure", attracted representatives from the Government, relevant ministries and agencies, as well as business leaders and prominent experts.

Addressing the summit, Deputy Prime Minister Nguyen Thien Nhan emphasized the need to promote the application of IT, which plays a key role in national industrialization and modernization.

Vietnam's IT industry has achieved impressive growth over the past decade, with total revenues reaching US$20.7 billion in 2011, he said.

Participants in the event concentrated on hot ICT-related issues and devising strategies to develop smart infrastructure based on ICT applications.

Four seminars also took place during the meeting, with a focus on using ICT in traffic control, education reform, as well as in developing smart cities and e-citizen cards in Vietnam.

The event was organized by the Vietnam Software and IT Service Association (VINASA).

Vietnam Days to be held in Florence

Italy’s Florence authorities have decided to organize “Vietnam’s Days in Florence” in October this year.

President of the Florence province, Andrea Barducci, affirmed the decision during his meeting with Vietnamese Ambassador to Italy Nguyen Hoang Long on June 25.

During talks, Barducci and Long discussed measures to boost economic, trade and investment cooperation between the two countries and prepare activities to mark the 40th anniversary of bilateral diplomatic ties in 2013.

Barducci said Florence always supports and wants to expand cooperation with Vietnam in all fields, especially in education and tourism. He affirmed that as one of fashion centres in Italy and Europe, Florence will provide scholarships for Vietnamese students in the fields of fashion and fashion design.

Ambassador Long said he will closely work with Florence authorities to organize “Vietnam’s Days in Florence” successfully and a Vietnamese trade and investment office is expected to open in the province on September 16.

State Bank to halt all gold lending

The State Bank of Viet Nam on Monday issued a directive requiring credit institutions to comply with a deadline to halt mobilisation and lending in gold from November.

Accordingly, institutions will issue only short-term gold certificates to pay customers upon request, termination of which falls on November 25.

Before issuance, institutions must report to the State Bank clarifying need and purpose and drawing up effective roadmaps to meet the deadline.

The State Bank said it would strictly monitor the market to ensure compliance.

It expects the new regulation to help prevent gold speculation, which is popular throughout the country. Strict control over gold transactions is considered as part of efforts to stabilise the economy.

Currently, banks often mobilise capital in gold from the public to sell for dong to settle liquidity problems. The gold price is currently stable at VND41-42 million (US$1,950-2,000) per tael (1.2 ounces).

The State Bank said the new regulation would not have any impact on most people in the countryside who seldom had savings in the precious metal and little demand to trade in it. According to SBV statistics, gold mobilisation is highest in HCM City, accounting for nearly 76 per cent of the national total, with Ha Noi a distant 11.7 per cent and 31 other localities making up the remainder.

City to host construction expo

An international construction exhibition to be held in HCM City early next month is expected to provide domestic companies with the opportunity to create partnerships, improve products and services, and learn about the latest technologies.

Speaking to the media last week, the organisers of VIETBUILD 2012 said the exhibition will focus on construction and building materials and interior and exterior decoration. The event will be held at HCM City's Phu Tho Sport Complex.

The exhibition will be held in two phases. In the first, more than 800 firms from 22 countries, including South Korea, Thailand, Italy, India, Denmark, Philippines, Japan, Belgium, Netherlands, mainland China, Malaysia, Switzerland, Singapore, Hong Kong, France, the US, and Australia, will set up 2,200 booths showcasing new construction products from July 4 to 8.

Featured at the five-day event will be the latest building materials and energy-saving and environment-friendly machinery, equipment, and technologies used in making construction materials.

The organisers said in the context of the currently sluggish construction material and real estate sector, the event will be a valuable opportunity for businesses to promote their image to the world, seek partners and sign more contracts.

There will also be several seminars on new product advancements and environmentally friendly technology in the construction sector in the integration and development period, and a forum for businesses to exchange information, including with prospective customers.

The organisers will offer gold cups and VTOPBUILD gold medals for high-quality products.

The criteria for prizes will focus on environmentally friendly products, energy-saving products and products for "green" buildings.

Phase 2 from September 13 to 17 will also see nearly 800 enterprises from 22 countries displaying property and interior-exterior products featuring the latest high-quality designs at 2,200 booths.

VIETBUILD is an annual event held by the Ministry of Construction Information Center, VIETBUILD Construction International Exhibition Organisation Corporation and AFC International Exhibition Fair Corporation.

Industrial parks see falling investment

Total investment capital in industrial parks and export processing zones reached US$202.29 million as of June 10, a drop of 38.35 per cent compared to the same period last year, according to the HCM City Export Processing and Industrial Zones Authority (HEPZA).

Of that amount, FDI capital was $75.84 million, a drop of 59.45 per cent over the same period last year. There were eight newly registered FDI projects worth $23.03 million.

Domestic investment capital was estimated at $126.45 million, a fall of 10.39 per cent.

The drop in investment capital was due mostly to the strained global and local economies, which affected factory activity in industrial parks and export processing zones.

So far this year, 90 projects have either been suspended or have stopped operations or decreased capacity. This was due mostly to capital difficulties, a drop in orders and an inability to find new markets.

Of that number, 28 of the projects were foreign-direct invested, and the rest were domestic businesses.

According to the management board of HEPZA, the number of projects that have had difficulties for the first half of the year equalled the total number of projects that had stopped over the 20 years of establishment of HCM City IPs and EPZs.

Banks hike long-term rates
 
Small banks have raised interest rates on medium- and long-term deposits following a State Bank of Viet Nam decision to float these rates beginning June 11 to lure more long-term capital. However, new savings inflows remain limited at these banks.

Meanwhile, the State Bank has lowered the ceiling interest rate for short-term dong deposits of 12 months or less to 9 per cent per year.

Since June 11, Western Bank has increased the interest it offers on medium- and long-term deposits to 14 per cent per year, but they reduced it back to 12.5 per cent after a week.

Dau tu (Viet Nam Investment Review) has reported a similar situation at several other banks, including Kien Long Bank, Navibank and SeABank, noting that small banks were struggling to ensure liquidity.

An executive from one of these smaller banks said they were reluctant to raise rates for fear of losing existing depositors, noting that savings would flow into larger banks once a general ceiling interest rate was re-established. In practice, he said, customers preferred larger banks to save money long term, especially at a time when the central bank was restructuring the banking sector.

HCM City Economics University vice rector Tran Hoang Ngan told Dau tu that interest rates were likely to become more stable after the State Bank dealt with weak banks, predicting deposit rates would be uncapped "at a suitable time".

He said that, once the ceiling rate was removed, banks which maintained high deposit interest rates would be specially supervised by the central bank, since pushing up deposit rates was a red flag that a bank was facing difficulties in ensuring liquidity.

National Advisory Council on Monetary and Financial Policies member Le Xuan Nghia said the State Bank had finished the first phase of the banking system restructuring process by targeting fragile banks for merger or liquidation.

Accor hotels announce expansion in Viet Nam

International hotel operator Accor announced yesterday that it recently committed to the operation of three hotels now under development in Da Nang.

The three are the 186-room Pullman Da Nang Beach Resort, which will open in the third quarter; the 90-room Bana Hills, a member of the Mgallery Collection, to open in the third quarter of 2014; and the 372-room Mercure Da Nang French Village Bana Hills to open in the fourth quarter of 2013.

These developments will bring the total number of hotels or resorts in Accor's committed pipeline to 16 in Viet Nam, with more than 4,000 guestrooms, which will all become operational by 2015, according to Gaurav Bhushan, Accor's chief development and investment officer.

Also, Accor yesterday introduced its first ibis hotel in Viet Nam, the ibis Sai Gon South, as the first international-quality economy hotel in the country.-

Investment funds convert Masan bonds

Food giant Masan Group (MSN) yesterday converted into common shares VND630 billion (US$30 million) worth of bonds it issued in 2009 to investment funds under the management of US-based private equity firm Texas Pacific Group (TPG) and Danish asset manager BankInvest.

The bonds were converted into over 30.9 million shares, with a total market value of VND3.1 trillion ($147.6 million). While the conversion price was VND20,374 per share – just a fifth of MSN's closing price on the market of VND100,000 ($4.75) per share – the equity firms were making substantial gains on their initial investments.

TPG earlier made a large return on a 10-per-cent stake in software giant FPT before the company debuted on the HCM City Stock Exchange in late 2006. TPG sold these shares after the minimum six-month statutory holding period only to turn them over for a four-fold return.

In this conversion, TPG converted bonds from three different tranches worth a combined VND450 billion ($21.4 million) into 21 million shares, while BankInvest converted a VND180 billion ($8.6 million) bond into over 8.8 million shares.

Last week, BankInvest sold 20.6 million MSN shares to three individual investors but after acquiring this additional 8.8 million shares, the firm still holds nearly 41.7 million MSN shares, or over 7.6 per cent of Masan's charter capital.

After the conversion, the total outstanding shares of Masan Group being traded on the stock market increases from 515.3 million shares to 546.2 million shares.

Haulage rates remain static in transport companies

Even though petrol prices have fallen four times since the beginning of the year, haulage rates of most transport companies in Ho Chi Minh City have remained unchanged.

Petrol price fell for the fourth time this year a week back, but many of the larger taxi companies in the city have yet to react and reduce fares.

Only few taxi companies have reduced fares but only unnoticeably. For instance, Vinasun has lowered fare by a mere VND500 a kilometer.

Ta Long Hy, chairman of the HCMC Taxi Association, said that all taxi companies should lower their fares, especially those who have not made any reduction whatsoever till now.

Similarly, passenger coach companies have also kept their fares static so far.

Luong Hoang Trung, deputy chairman of the HCMC Cargo Transport Association, said that most businesses in the association have not reduced fare rates due to increase in overhead costs.

Do Xuan Phu, director of Minh Lien Transport Company, said that according to contracts with clients, his company will hike fares by 4 percent if petrol price moves up by VND1,000 and vice versa. So, although petrol price has fallen four times, the reduction is less than VND1,000 each time.

Mr. Trung added that the association will propose to members to reduce their rates at the earliest, especially those who have not made any reduction at all this year.
 
After gasoline and diesel prices went up by VND2,100 and VND1,000 a liter respectively on March 7, most of the transport companies hiked their fares.

Taxi companies increased fares by VND1,000-2,000 a kilometer, coach operators hiked by 5-10 percent and cargo transporters raised freight rates by 5 percent.

C.T Group launches 3rd sale of high-end apartments

C.T Group late last week started the third selling phase of its high-end apartment project Léman C.T Plaza and said two-thirds of the 29 apartments on offer were sold at the launch organized in the Park Hyatt Saigon Hotel.

Some 19 out of 28 apartments put forth have found buyers with the average price of VND90 million per square meter, the company said. Under its sale strategy, the developer will raise the selling price by 1% after each selling phase.

Located on the intersection between Nguyen Dinh Chieu and Truong Dinh streets in HCMC’s District 3, the 24-storey building will supply 12,000 square meters of retail space and 230 luxury flats to the housing market.

Prime location plus modern utilities have attributed to an increase in the price of Léman apartments, said Dinh Thi Bich Thao, general director of C.T Phuong Nam Co., a subsidiary of C.T Group.

The developer sells units phase by phase at stable price with an aim to guarantee the benefits of homebuyers.  

In order to woo customers, the realtor unveils new payment method. Any buyer who settles payment ahead of schedule will enjoy home loans with annual interest rate of 12.6%.

Léman C.T Plaza is scheduled for completion by the first quarter of next year.

New NPK fertilizer plants underway

Binh Dien Fertilizer Co. plans to develop two NPK fertilizer plants to meet market demand.

The plants will be built in Ninh Binh and Dong Nai provinces with respective output capacity of 150,000 and 200,000 tons per year, said Le Quoc Phong, general director of Binh Dien Fertilizer Co.

“As the economy still faces challenges, we will calculate construction and operation to satisfy the market demand for NPK fertilizer,” said Phong.

Apart from the Binh Dien plants, there is a NPK fertilizer project currently being implemented by PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo) in Nam Dinh, with investment capital of VND193 billion and annual output of 100,000 tons, said the Vietnam Chemicals Agency under the Ministry of Industry and Trade. The agency remarked the national demand for NPK fertilizer is 3.5 million tons, but the existing plants can only supply a combined 3.42 million tons.

According to the statistics of the General Department of Customs, as of June 15, the country had imported 104,000 tons of NPK fertilizer worth nearly US$51.2 million, up 2% year-on-year. With new NPK fertilizer plants to start operation in the next 1-2 years, imports would drop and prices would be more stable.