Scandal keeps eroding shares

Shares continued to tumble again yesterday on the nation's stock exchanges in the wake of last week's arrests of two major banking tycoons under investigation for financial fraud, reversing a small correction last Friday precipitated by bargain-hunting investors.

"Friday's buoyancy was dampened back down by renewed sell-offs brought on by continued fears of the impact of the bankers' arrests and grim economic data," wrote FPT Securities Co analysts on the company's website.

The return of high inflation after two deflationary months had added to investor concerns over corporate earnings, they added.

On the HCM City Stock Exchange yesterday, the VN-Index lost another 3.38 per cent of its value yesterday to close at 386.19 points. The value of trades fell to just VND645.2 billion (US$30.7 million), about half of Friday's level, on a volume of 42.3 million shares.

Slumping blue chips led the market downturn. Twenty-eight of the 30 leading shares by market capitalisation and liquidity declined, most dropping to their floor prices, including insurer Bao Viet Holdings (BVH), property developer Hoang Anh Gia Lai (HAG), steelmaker Hoa Phat Group (HPG), PetroVietnam Finance (PVF) and financial conglomerate Ocean Group. The VN30 Index therefore fell 3.48 per cent to end the session at 456.32 points.

Military Bank (MBB) was the most-active share with nearly 3.3 million changing hands before it closed off by 3.6 per cent to VND13,400 per share.

On the Ha Noi Stock Exchange, the HNX-Index plummeted by another 4.44 per cent to close at just 60.31. The value of trades dropped 46 per cent from Friday's level to VND320.4 billion ($15.3 million), while volume decreased 53 per cent to only 35 million shares.

The HNX30 Index – tracking the exchange's 30 leading shares – gave up 5.4 per cent to conclude the session at 111.93 points.

VNDirect Securities Co (VND) became the most-active share on total trades of 4.8 million shares but dropped to its floor price of VND9,400.

Foreign investors continued to look for bargains, becoming net buyers on both exchanges and picking up shares worth a combined net of VND28.3 billion ($1.3 million). Since last week's fraud scandal broke, foreign investors have continued to buy up shares, picking up a net of VND343 billion ($16.3 million) worth of shares last week.

Downside risk still ahead: brokers

Although the market sharply rebounded last Friday, securities enterprises predicted a downside move this week, saying that investor sentiment is not stabilized after the steep decline last week.

After a mild rise on Monday, the market crashed in the three following sessions last week given shocking news from the banking sector. Last Friday, the VN-Index gained back 6.9 points to close the week at 399.72, narrowing down week-on-week loss of the index to 7.8%.

Viet Capital Securities Co. (VCSC) said that the bottom fishing last Friday was driven by investors realizing that the concern of a contagious event in the banking system might have been overrated and the bail-out of stocks, banks in particular, in the last few days had presented with a niche opportunity to accumulate. Investors witnessed the State Bank standing up to their affirmation to support liquidity to Asia Commercial Bank (ACB) in case mass withdrawal happened, helping sentiment to improve.

The markets recovered after hitting major support levels of 393 points for the VN-Index and 61 points for the HNX-Index. The sharp increase of trading volume showed bottom fishing in most stocks. Though the short-term momentum indicator is still in oversold territory, which signals a buy opportunity, the previous downtrend was too strong, indicating that short-term risk still remains, VCSC commented.

“Therefore, risk-averse investors should wait for a confirmation of uptrend in the next sessions though high-risk investors may disburse in blue-chips with low proportion and should not use leverage in the meantime,” the broker said.

Meanwhile, HCMC Securities Corp. (HSC) said the market does still look pretty oversold and it is likely to see some further upside in the early part of this week.

However, at the heart of this recent drop are a handful of banking stocks, especially ACB, STB and EIB, which account for a substantial chunk of open margin positions at many brokers. They are liquid and have actively been traded on margin since last year. Given that many brokers have applied restrictions to either margin positions or margin ratios in these three stocks over the past few days, any fully-fledged recovery in both indices would require brokers to ease or even lift those restrictions.

“This appears unlikely for the time being and hence any bounce is likely to take us only part of the way back to where we were at the beginning of the week for now. Even so sentiment appears to have stabilized for now and bargain hunting will likely continue at least for a day or two.

“The publication of the Sacombank takeover report expected before the end of the month will provide the next big news event and market reaction to that will offer some clues as to the medium-term direction of stocks,” HSC said.

Fahasa among Top 500 Asia-Pacific retailers

The Ho Chi Minh City Book Distributors Joint Stock Company (Fahasa) has been selected as one of the top ten retailers in Vietnam and among the top 500 Asia-Pacific retailers in 2012, by the Singapore-based Retail Asia magazine.              

Fahasa has currently 56 bookstores across the country with a turnover of VND1,400 billion in 2011. The company expects to earn VND1,500 billion in 2012.

The country’s leading book distributor has also been named one of the top ten retailers in Vietnam this year, along with Saigon Commercial Cooperative Union or Saigon Co-op; HCMC-based jewelry trader Saigon Jewelry Holding Company (SJC);  Phu Nhuan Jewelry Joint Stock Company (PNJ); Nguyen Kim Electronic Appliance Center; Big C supermarket chain; Parkson department store chain; The Gioi Di Dong, a chain of mobile phone stores; Vien Thong A, a chain of mobile phone stores; and TCT Group, that has five marts and Nha Dep Decor & Furniture Shops.

Launched in 2004, the annual Asia-Pacific Top 500 Retail Awards are based on surveys of turnovers by Euromonitor International in 14 regional countries including Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, Taiwan, and Vietnam.

China border laws stifle export trade
 
Border trade at northeastern Quang Ninh Province's Mong Cai International Border Gate has stagnated in the last three months, witnessing a sharp decline in the number of goods crossing the border to China.

According to the border gate's Customs Division, over 4,200 containers were waiting for customs clearance until August 20. About 1,000 trucks carrying frozen products required proper storage at Ka Long border gate's storehouse.

At present, nearly 300 container trucks have been held at customs yards for at least four months.

Vice head of the Customs Division Nguyen Van Bac, as quoted in Tuoi Tre (Youth) newspaper, said that the situation was due to Chinese authorities tightening control and quarantine of imported products, constraining the delivery of goods between Vietnamese enterprises and their Chinese partners.

Hoang Van Thu, an officer at customs clearance told Viet Nam News that his station had previously handled clearance for an average of 70 trucks every day. At peak times the number of trucks crossing via the station increased to around 100.

However, now only 15-20 trucks are carrying goods to China, he said, adding that many trucks carrying fruit had spoiled due to the excessive waiting times on exports.

Along part of Ka Long River, at Ka Long border gate, nearly 3,000 boats have become idle due to a lack of goods to transport.

With the biggest border gate in the north, Mong Cai City usually sees over 400 regular enterprises involved in international trade via the border gate. There are about 450 containers passing the gate each day, according to a report by the municipal People's Committee.

Before the block, total import-export value in the last six years was nearly US$24 billion and yearly growth had been reported. However, in the first half of 2012, import-export value was only $2.38 billion, accounting for 86 per cent of the amount recorded in the same period last year.

Notably, export value was $242.6 million or nearly half compared with the amount registered during the same period in 2011.

The same stagnant situation is also being seen in northern Lang Son Province's Tan Thanh border gate. Meanwhile, at the province's Chi Ma border gate, few goods for temporary import and re-export are able to cross to the other side of the border.

According to the Ministry of Industry and Trade, the export of Vietnamese goods to China has been decreasing due to China's increased control and quarantine.

Previously, China has undertaken such measures only once or twice a year, for periods of about two months. However, this year, the Chinese's tightened control over border trade has been in effect since April.

Women key to food hygiene control

Improving awareness of food hygiene and safety, especially among women, is key to reducing the incidence of food poisoning, Tran Thanh Binh, deputy chairwoman of the Viet Nam Women's Union, has said.

Speaking at a workshop organised by the union and the Viet Nam Food Administration in HCM City yesterday, Binh explained that women account for 50 per cent of the population and have a predominant role in making food and caring for the family.

"If they are provided the right information and scientific knowledge about choosing and processing food, they would be good to educate the public about food safety and hygiene," she said.

The workshop aims to encourage women to say no to unsafe food and additives.

Nguyen Thanh Phong, the administration's deputy head, warned that using additives not permitted by the Ministry of Health and overusing even approved ones could cause food poisoning.

For example, one gramme of borax, used illegally to keep certain foods fresh, could cause diarrhoea and vomiting, while 15gramme of it could cause death, he said.

All over the world additives are widely used. The Codex Committee on Food Additives, an international body that regulates the use of additives, allows the use of 700 kinds of additives and more than 2,000 kinds of condiments in food.

Viet Nam allows 337 additives and condiments.

Only 5-10 per cent of additives consumed in the country was manufactured domestically, Phong said, with the rest imported.

"Large volumes of additives are smuggled into the country, and monitoring it is a difficult task," he said.

He urged people selling additives in the market not to sell them without certificates of origin and safety.

They should ask imported companies to show these certificates, he said. And they should learn knowledge about the safe use of additives to guide buyers, he added.

Many delegates called on authorities to slap stiff penalties on violators.

But Phong said penalties can only be imposed on sellers and it would not prevent people from buying unsafe additives.

At the workshop, the management of Kim Bien Market in the city's District 5 and local shopkeepers signed a pledge to only sell permitted additives and those with clear origins.

Vietnamese rice sells in Thailand via Cambodian traders

Some traders from the Mekong Delta have reported that a very large volume of rice was transported to Thailand recently without any legal import contract.

Farmers in Mekong delta harvest rice. Rice bening sold to Thailand in such manner is cause of rice prices shooting up in the country

The rice consignment was not bought directly by Thai businessmen or importers but moved to Thailand after being purchased by Cambodian traders.

Provinces along border crossings between Vietnam and Cambodia are hot spots for Cambodian traders to buy Vietnamese rice of various varieties, from low to high quality, such as fragrant rice and high quality OM4900 and OM4218.

Cambodian traders then re-sell to Thai traders at a profit. Around 400,000 tons of Vietnamese rice, including 100,000 tons of 5 percent broken rice and low-quality IR 50404 has so far been sent to Thailand via such channels.

Nguyen Trung Kien, deputy head of Vietnam Food Association, confirmed the above news to a Saigon Giai Phong newspaper reporter.

Kien added that rice being sold to Thailand in such manner is cause of rice prices shooting up in the country. He also emphasized that it will be a disadvantage for the country if the supply runs short and also warned of a hike in food prices around the world.

Goods showcased in City market

Seven domestic companies showcased their products in Rach Ong Market in HCM City's District 8 last weekend and interacted with small traders and consumers for a programme to market domestically made goods.

The event, called "Ngay vang hang Viet" (Golden Day for Vietnamese Goods), was part of the second phase of a larger programme to link up producers and traders in traditional markets.

Organised by the Business Association of High-Quality Vietnamese Goods with support from the District 8 People's Committee, the event also featured games, product trials, meeting Vietnamese goods' ambassadors, and promotions.

Nguyen Van Trung, head of sales at Lien Thanh Seafood Processing JS Company, said thanks to the programme manufacturers have more opportunities to approach consumers and the latter know more about local products.

His company's sales through traditional markets had increased significantly since it joined the programme, he said.

"We will surely buy Vietnamese products," Nguyen Thi Hong Dao of District 8 said, adding she felt secure buying them because their origin and quality were clear.

The second phase of the programme began on August 21 with a training course for more than 100 shopkeepers in Rach Ong Market.

Vu Thi Kim Hanh, chairwoman of the Business Association of High-Quality Vietnamese Goods, said this phase would focus more on helping firms create a stable distribution system in traditional markets and improving marketing to boost sales of Vietnamese goods.

"Businesses taking part are required, besides ensuring product quality, to have firm promotion programmes for small traders and buyers and take part in all training courses for small traders to foster links between producers and traders," she said.

"If companies have a small market share or do not have experience in distributing goods through traditional markets, programme experts will train their sales team and help draft plans to penetrate markets."

A training course for small traders and a "Golden Day for Vietnamese Goods" will be organised at 10 different markets in the second phase.

Seven companies are taking part in the programme – Duy Thanh Plastic Company, Bidrico Beverage Company, Chi Thanh Plastic Company, Lien Thanh Seafood Processing JS Company, My Hao Cosmetics Company, Duy Tan Plastic Company, and Sun House Group JSC.

The first phase of the programme was implemented at nine markets in the city, attracting more than 10,000 consumers.

Struggling supermarkets face fierce foreign rivalry

The number of foreign retail outlets is on the rise in Viet Nam even as domestic retailers struggled to survive during the current economic downturn, said Ha Noi Supermarkets Association chairman Vu Vinh Phu.

According to the association, Metro Cash & Carry has opened 10 new outlets, while Big C has opened 13 new stores and Parkson has opened seven new outlets.

"Domestic retailers are facing difficulties and a number of enterprises have gone bankrupt," Phu said, predicting that bankruptcies would continue to increase throughout the rest of this year.

Retailers accounted for 20 per cent of 12,000 dissolved businesses in the first half, he noted, and major supermarket chains like FiviMart and Intimex reduced their number of outlets as earnings declined by 5-10 per cent from the same period last year.

Declining consumer purchasing power was the primary cause for the decreasing turnover, he said.

"About 70 per cent of shoppers come to supermarkets for food and food products, the prices of which have been seriously affected by rising fuel and energy costs," Phu said. "Inventories in the city's supermarkets have risen to over 20 per cent."

Domestic retailers would be increasingly hard-pressed to compete with foreign rivals like Metro or Big C which have significant advantages in capital, he said. Foreign retailers could also cover losses against profits in other countries due to their wide networks.

The deputy head of the Ministry of Planning and Investment's Central Institute for Economic Management, Vo Tri Thanh, agreed, saying that domestic retailers had been warned of possible challenges when Viet Nam joined the WTO in 2007. Under WTO commitments, the country had to begin opening the market to foreign retailers starting in 2009.

Localities have also offered favourable investment conditions for foreign retailers with the consequence that domestic companies may lose their own market, Thanh said.

The nation now has 638 supermarkets and 117 shopping centres, according to the Ministry of Industry and Trade. The number of supermarkets has increased 20 per cent in the five years since WTO membership, while the number of shopping centres has risen 72 per cent.

Viet Nam Retailers Association chairman Dinh Thi My Loan urged domestic retailers to find their own ways to develop and overcome shortcomings. Loan also recommended that the Government issue policies to encourage the establishment of major domestic distribution systems. A representative from Ha Noi Trade Corporation (Hapro) said the opening of the market has been a vital trend but that Vietnamese businesses needed to develop .

Farmers thrive in new production model

Many farmers in the Cuu Long (Mekong) Delta province of Tra Vinh have joined the large-scale rice production model that yielded profits of over VND20 million per ha in the last summer-autumn crop.

The 105ha cultivated by 77 households in Phuoc Hung Commune in the province's Tra Cu District will be expanded to 400ha and 200 households this winter-spring crop at the end of this year, a meeting held to review the model in Phuoc Hung on August 15 heard.

Thach So Phanh, deputy head of the district Division of Agriculture and Rural Development, said co-operation between State agencies, scientists, businesses, and farmers helped achieve a bumper summer-autumn crop and high profits.

Tra Cu had some 16,000ha under rice in the summer-autumn crop, including 902ha under the large-scale production model that yielded high-quality rice in, besides Phuoc Hung, the communes of Tan Son and Tap Son.

He said authorities provided 30 per cent of the seeds for the programme, including OM 6976, OM 4900, OM 6162, OM 5451, and OM 8686 strains, while the Tra Vinh Plant Protection Department's staff trained Phuoc Huu farmers.

Cu Chi Bio-Chemicals Co. trained farmers in the use of fertilisers while Tra Vinh Food Co bought the entire output of the summer-autumn crop.

The model helped Phuoc Huu farmers save 100kg of seeds per ha and attain an average yield of 6 to 6.5 tonnes per ha.

As a result, production costs fell from VND3,043 to VND2,539 for a kilogramme of paddy.

Some Phuoc Huu farmers even attained yields of seven tonnes, earning VND20.6 million per ha.

Thach Chang, a farmer in the commune's O Rung hamlet, said: "With assistance from Government farming experts, we can cut production costs and attain higher prices for our products by joining the large-scale production model."

He himself earned around VND10 million per ha more than normal by joining it.

Kim Se, head of the Tra Vinh Plant Protection Division, said the five crops in the last two years demonstrated the efficiency of the large-scale rice production model.

From 200 households two years ago, the programme has not attracted 2,500 households for the next winter-spring crop, he said.

Hoi An resorts suffer

Luxury resorts in the central city of Hoi An are lamenting a shortage of water supply.

VIR newspaper quotes Alexandru Dorus, manager of the Golden Sand Resort Hoi An, as saying his resort has faced shortages since May.

Though he rents tankers to bring clean water to the resort, the supply remains insufficient for guests' needs.

Other fancy places like Palm Garden Resort, Victoria Resort, and Sunrise Resort too face the same situation.

The managers of these high-end resorts, which have helped burnish the Hoi An tourism brand name, warn that the problem is affecting the local tourism industry.

Many of them have had to install pipes to pump underground water for use.

The city's water supply and drainage utility wrote to Golden Sand Resort Hoi An recently to explain the problem, blaming the shortage on saltwater infiltration into the pumping station, power failures, and the rising demand for water.

Nguyen Duc Thanh, deputy director of the company, says a new water plant with a capacity of 15,000 cubic metres per day is being built at a cost of $11.2 million to resolve the water shortages facing the city.

No local resident or visitor will have to suffer water shortages once construction of the new plant is complete, he promises.

But the catch lies in the fact it is uncertain when the plant will be completed. Truong Van Bay, deputy chairman of the Hoi An People's Committee, says the Quang Nam Water Supply and Drainage Construction JSC broke ground for it several years ago, but construction has been progressing at a snail's pace.

Hoi An wants the Quang Nam provincial authorities to urge the contractor to speed up work or find a new, more competent contractor, he says.

State to buy ‘damaged' gold

Damaged SJC gold bars and non-SJC gold bars meeting quality standards will be reprocessed into SJC gold under the supervision of the State Bank of Viet Nam (SBV).

In an announcement last week the central bank said Sai Gon Jewelry Company (SJC), whose brand is now under its jurisdiction, will process gold for the SBV at a fee.

SBV will decide when to make them, in what volume, and the source of the gold.

To make gold bars, the central bank will sign an outsourcing contract with SJC whenever there is need. The gold processing will be supervised by SBV's inspectors, and SJC will hand over the bullion it produces to the central bank.

SJC has repeatedly sought approval from the central bank to reprocess its deformed and scratched gold bars, saying it did not have enough money to buy back all such bars since the amount of disfigured gold bars amounts to thousands of taels. A tael equals 1.2 troy ounces or 37.5g.

Those wanting to convert non-SJC into SJC gold bars will have to seek approval from the central bank which will be given 30 days after the proposal is sent, and SJC will then send a reprocessing plan to the central bank within two days after that.

Under the decision, the HCM City branch of the SBV will be in charge of receiving, sealing, and preserving gold moulds after this decision takes effect.

Survey eyes ecological, social impacts of lending

A new survey from International Finance Corporation (IFC), a member of the World Bank Group, and the State Bank of Viet Nam (SBV) has found that most of the country's banks would benefit from better environmental and social risk-assessment standards in loan approvals.

"Financial institutions can reduce their own risks and seize business opportunities by encouraging sustainable business practices among companies," Cat Quang Duong, deputy head of the SBV's Credit Department, said.

Simon Andrews, IFC Regional Manager for Viet Nam, Cambodia, Laos, Myanmar, and Thailand, said: "A client's business viability rests not only on its financial health but also on how well it manages the impact of its operations on the environment and the community."

"Addressing environmental and social sustainability issues also opens up new business opportunities, such as energy-efficiency and renewable-energy financing," he added.

Conducted in June, the survey examined 54 Viet Nam-based financial institutions. It found that few Vietnamese banks have formal policies, procedures or systems to manage environmental and social risks faced by their clients.

Many banks are not fully aware that environmental and social risks could affect the financial performances of their clients' businesses and, in turn, the banks themselves. Nguyen Thuc Quyen of IFC Washington said that a survey of 56 financial institutions in seven countries showed that one-third of the respondents had incurred losses related to environmental and social risks.

"They accepted losing money because they did not want to take responsibility and pay compensation for what their customers had done," Quyen said.

She also pointed out that such cases would cause the number of bad loans to increase and affect the reputation of financial institutions.

"During the 2002 – 05 period, financial institutions paid a lot of attention to keeping their good reputation," she added. In the survey, while 89 per cent of banks said there were no regulations related to environmental and social standards, 93 per cent of them said such regulations were necessary.

The mining, processing, construction, electricity, agriculture and forestry sectors are the most sensitive, and small – and medium-sized enterprises also bear the most risks.

"Local banks should take advantage of foreign partners who have knowledge and experience in environmental and social risks to improve the situation, but a strong commitment of time and resources by leaders is needed," said Dr. Kenneth Macek of the MCG Management Consulting Group.

One of the key constraints hindering banks is the lack of specific guidelines on identifying and managing environmental and social risks in project financing.

Limited knowledge, expertise, qualified consultants and supporting providers in the field are other constraints. Lack of enforcement on related laws is a challenge as well.

Macek recommended that senior bank officials and staff must become more aware of the issues, and that the capacity of law-makers, investigators and consultants should improve.

"The State Bank of Viet Nam should release specific environmental and social standards for the banking sector," he added.

Dung Quat oil refinery resumes production

The Dung Quat oil refinery plant resumed production and sold 4,000 tonnes of liquid petrol gas (LPG), 3,000 cubic metres of A92 petrol and 4,000 cubic metres of diesel oil after it stopped operation for at least two weeks for repairs.

According to its yearly plan, the plant will provide 2.5 – 3 million tonnes of different petrol and oil products to the local market to the end of 2012.

Regional ports association meets in central city

The Working Committee of the ASEAN Ports Association (APA) convened its 33rd annual meeting in the central city of Da Nang last Friday.

At the event, senior officials from the APA, the Viet Nam Ports Association and APA member ports reviewed the implementation of co-operation projects and discussed contents for the APA annual conference scheduled for later this year.

Participants also discussed human resource development, technological renovation and sea port projects in the region, as well as measures to promote co-operation between member ports.

Viet Nam has been a full member of the APA for 18 years.

Dong Nai hosts information technology expo

Viet Nam's 16th Information and Communications Technology exhibition is underway in southern Dong Nai Province.

Featuring 38 businesses, the event was organised by the Dong Nai People's Committee to promote hi-tech industrial development in the province.

Numerous products and services are being showcased at over 60 stands, including administrative solutions, production management and hi-tech applications in everyday life.

The three-day exhibition, which opened last Thursday, is also running several promotions for visitors, including a ‘golden hours' offer and discount days.

City urged to lift industrial efforts

HCM City needs to do more if it is to spearhead Viet Nam's makeover as an industrialised country by 2020, National Assembly chairman Nguyen Sinh Hung told city authorities during a meeting with them last Friday.

It should focus on resolving difficulties faced by businesses, assisting banks with their debt issue, and generally stabilising the economy, he said.

The city should achieve the targets set in the Politburo resolution related to development orientations and have closer co-operation with other provinces and cities in the country and even in other countries, he said.

NA deputy chairwoman Nguyen Thi Kim Ngan hailed the city's achievements in socio-economic development, welfare, and political and social security.

While admittedly its economic growth was higher than the national average, its investment in infrastructure has been inefficient, she said.

Le Thanh Hai, secretary of the city Party committee, said HCM City would continue with its measures to assist businesses and facilitate production. The city has determined that its key tasks are limiting inflation, stabilising the economy, and ensuring social welfare, he said.

It has set a growth target of 10 per cent this year, he said. In the first half growth was just 8.1 per cent.

The city administration urged the NA to create a central city authority that would give greater autonomy to city agencies.

It said satellite cities would be created, with power devolved to local authorities.

City officials also sought an enlargement of the People's Council, with the number of members increasing by at least a third.

 State farms go under microscope

The Prime Minister has ordered a nation-wide check on land under the management of State-run farms and forest enterprises.

The move aims to help prevent and handle violations and problems arising during the equitisation process of State-run farms and forest enterprises.

The checks will ensure areas of land that used to be under management of State-run farms and forest enterprises has been returned to local authorities, which inspectors will also check on allocation of land to State enterprises.

Authorities also plan to improve land use planning and speed up the granting of land use rights certificates and land lease contracts to prevent encroachments and disputes.

A recent workshop addressing problems related to reform of State-owned farms and forest enterprises pointed out that violations of land transfers and leases were common in some State forest enterprises in Nghe An, Lang Son and Quang Binh provinces.

According to statistics from the Consultancy on Development Institute, in 2011, State-run forest enterprises managed to return only about 702,000 ha to local authorities, making up for more than 63 per cent of the planned figure.

The slow progress held back the allocation of land to local farmers, resulting in wastes land as farmers eager to expand production were left short of land while inefficient State enterprises had vast areas of land.

Encroachment and disputes among State enterprises and local residents were reported as major headaches in some localities due to loose management after equitisation.

Reports on the land checks must be submitted to the ministries of Natural Resources and Environment and Agriculture and Rural Development by the end of November this year.

Cashew farmers switch to pepper crops
 
Nguyen Dinh Tung is one of hundreds of farmers in Tay Nguyen ( the Central Highlands) who have replaced cashew trees and other crops with pepper bushes.

Tung, who lives in Dak Nong Province, grows coffee trees on three hectares and cashew trees on two hectares in Quang Duc District's Quang Tan Commune.

In previous years, he had managed to harvest a respectable 2.5 tonnes of cashew nuts, but his last crops have had low yields because of frost and unseasonable rains.

"My family decided to cut down our cashew trees after other farmers switched to pepper during the rainy season," he said.

Authorities, however, have warned farmers that such unplanned cultivation on a large scale could have negative consequences, especially on selling prices.

Farmers have switched to pepper because in recent years the price has been high, whereas other major trees like coffee, cashew and rubber have been sold at lower prices.

The price of pepper stands at VND118,000-120,000 (US$5.6-5.7) a kilo.

Last year, Hoang Van Suu, a farmer in Tuy Duc's Dak Buk So Commune, earned a profit of more than VND1 billion ($47,000) from 12 tonnes of pepper grown on his 4.5-ha plot.

In the Central Highlands, land used for pepper cultivation has increased by 3,200ha in the past year, with a total now reaching 24,883ha, according to the region's Steering Committee.

The new pepper-growing areas in the Tay Nguyen region are mostly in Dak Nong, Gia Lai and Dak Lak provinces.

Dak Nong has 1,000ha of newly planted pepper, according to the province's Department of Agriculture and Rural Development.

Ho Gam, the department's deputy director, said pepper had helped many farmers become wealthy over the past few years.

"However, the rapid increase could affect the province's zoning plan for pepper cultivation," he said, adding that the province has 7,769ha of pepper while its zoning plan calls for only 6,000ha.

"Unzoned cultivation and improper farming techniques (such as planting in low-lying areas where rain drains slowly) could lead to disease outbreaks," Gam said.

In the first seven months of the year, more than 177ha of natural forest in Dak Nong was cleared to grow pepper, according to the province's Sub-department of Forest Protection. The wood is also used for poles on which to grow the pepper.

Do Hoai Nam, chairman of the Viet Nam Pepper Association, said the country had zoned 50,000ha of pepper, but the area under pepper cultivation covered more than 62,000ha.

This area could increase to 80,000ha in the near future, causing prices to decline.

Disease outbreak in many pepper orchards is another risk, as farmers are using seedlings that have no clear origin.

In Viet Nam, pepper is grown mostly in the Central Highlands provinces of Gia Lai, Dak Lak, Dak Nong and the southern provinces of Binh Phuoc, Dong Nai and Ba Ria – Vung Tau.

Nguyen Xuan Hong, head of the Plant Protection Department under the Ministry of Agriculture and Rural Development, said farmers should invest more in intensive farming of peppers, which would have a higher yield on a smaller area.

Hong said one farmer in Gia Lai Province planted 30ha with a yield of 10 tonnes per hectare, compared to the country's average yield of 2.4 tonnes per hectare.

The farmer used organic fertiliser and live trees as pepper poles to increase the moisture of the soil and pepper yield.

 Mekong Delta autumn-winter rice cultivation to equal 2011

Farmers in the Cuu Long (Mekong) Delta, the country's rice granary, have planted 400,000ha of autumn-winter rice.

In all, they will plant 600,000ha, equal to last year's autumn-winter crop, according to the Ministry of Agriculture and Rural Development's Plant Protection Department.

In An Giang Province, the country's largest rice producer, 150,000ha will be planted. By last week farmers had sowed 38,752ha, mostly in Thoai Son, Chau Phu, Cho Moi, Tri Ton, and Chau Thanh districts and Chau Doc town, which have robust dykes to protect the rice crop during the annual flooding caused by a rising Mekong River.

The flood season is almost upon the delta, with authorities warning the inundation could be severe this year.

Doan Ngoc Pha, deputy director of the An Giang Department of Agriculture and Rural Development, said sowing of the remaining area was expected to be finished by the end of this month.

"An Giang has been repairing its dykes," he said.

Farmers in Dong Thap, one of the upstream provinces, have sown 72,000ha out of a planned 87,000ha.

Duong Nghia Quoc, director of its Department of Agriculture and Rural Development, said most of the planted fields have been protected by sound dykes.

"Dong Thap has warned farmers to only grow the autumn-winter crop in areas with robust dykes," he said.

"Though the water level in the Tien, a tributary of the Mekong, is now a meter lower than at the same time last year, the extent of rainfall and the number of storms cannot be predicted," he said.

However, the Southern Centre for Hydro-Meteorological Forecasting has said there would be more storms and low pressures than usual over the East Sea this year, warning farmers they face a risk of damage to their crops.

The flooding this year could match last year's record level, it said.

The Ministry of Agriculture and Rural Development warned the delta provinces not to expand the area under the autumn-winter rice crop to prevent flood damage.

But many farmers have ignored the warning and planted in areas where the crop could be destroyed by floods.

The bigger profit yielded by the autumn-winter crop compared to the summer-autumn crop was the reason that farmers have ignored the warning, local authorities said.

Poultry farmers happy as smugglers retreat

Cheap, low-quality, smuggled poultry from China has been cleared from Ha Noi markets, enabling chicken farmers to make a profit for the first time in months.

However, the farmers and animal health officials said much more needed to be done to put an end to the smuggling industry.

Duong Xuan Tinh, deputy head of Thuong Tin District's Animal Health Station, said there was no low-quality smuggled chicken at Ha Vy Market, the main poultry provider for the capital.

He said this followed a request from the Prime Minister on July 31. Authorities have now put stricter checks on poultry at border gates.

According to the Ministry of Agriculture and Rural Development, stopping the smugglers has benefited domestic breeders.

Nguyen Van Chien, a small trader, said when smuggled chicken was everywhere, domestic chicken prices were seriously devalued, causing farmers to suffer great losses.

But now, he said, prices were up by 20-30 per cent. However, deputy director of the municipal Department of Agriculture and Rural Development Nguyen Huy Dang said that controlling poultry smugglers was still difficult.

The northern mountainous province of Lang Son, where most of the poultry enters illegally from China, had too many pathways. this made it difficult for border officials to control smugglers.

"Instead of fining porters or drivers hired to transport smuggled chicken, the authorities should fine the wholesalers in Viet Nam selling the meat," said Dang.

Meanwhile, Tinh said that culling live birds smuggled from China was a big problem.

He said Thuong Tin Animal Health Station once had to put down 3.1 tonnes of smuggled chickens, but no commune in Thuong Tin District agreed to provide land for the job as they were afraid of an epidemic.

Poor foreign investment health

Despite mammoth development potential, foreign investment in Vietnam’s healthcare sector remains modest.

Tran Quoc Khoa, head of the Ministry of Health’s (MoH) Private Medical Examination and Treatment Division, said Vietnam was home to six operating 100 per cent foreign-invested hospitals with the total investment capital of $94 million and some 30 foreign invested general and specialised clinics worth $14.4 million. These hospitals and clinics are mainly located in large cities such as Hanoi, Ho Chi Minh City and Danang.

“The above figures show foreign investment in the field of medical examinations and treatments in Vietnam is too little as compared with its huge development potentials,” Khoa noted.

He said private companies, particularly foreign businesses, often picked up large cities to invest in as there was a big demand and high living standards. Private hospitals and clinics require higher payments as compared with state-run ones so the public in provinces, especially in rural and remote areas, cannot afford such high costs.

“We have encouraged some private investors, including foreign ones to invest in other localities but they said they could not because there were a few patients,” Khoa said.

Ravindran Govindan, chairman of Singapore-based Mercatus Capital Pte - which is seeking to take part in some medical infrastructure projects in Vietnam, said although it was worth looking at Vietnam with the country’s big population of 90 million and energetic and intelligent people, laws and rules in the country were unclear and presented investment risks.

Meanwhile, Nguyen Ba Cuong from the Ministry of Planning and Investment’s Foreign Investment Agency said that previous infrastructure development projects, including hospitals, were often sourced from the state budget or official development assistance. But, from this year the country started slashing public investment and focused on attracting private investment, particularly foreign direct investment in development infrastructure system, including projects in the healthcare sector.

Khoa said most state-run hospitals in cities and provinces were overloaded, while developing public hospitals was difficult. Therefore, the MoH was working out a project on easing overload in public hospitals, which included the content of prioritising private medical service providers.

“This is a big opportunity for foreign investors to pump their capital in the healthcare sector in Vietnam,” Khoa added.

According to the MoH, Vietnam has 137 private hospitals, including six 100 per cent foreign-invested ones, accounting for 12 per cent of the country’s total number and beds at the private hospitals make up only 10 per cent.

Recently, Malaysia-based Columbia Asia opened its new hospital in Vietnam – the latest addition to the group’s regional portfolio. The Columbia Hospital-Binh Duong is the 22nd healthcare facility of the group in the region and the third in Vietnam, following the establishment of two clinics in Ho Chi Minh City.

Hoa Lam-Shangri-La Healthcare Company, a Singapore-Vietnam joint venture, is also building a $400 million International Hi-Tech Healthcare Park in Ho Chi Minh City, which is expected to be operational by the end of this year.

Last year, Fortis Healthcare agreed to pay $64 million for a 65 per cent stake in Hoan My, one of the leading healthcare groups in Vietnam with six hospitals and many clinics across the country.
Hospital plan in fine health

Canada-based Triple Eye Infrastructure Corporation is expecting to gain an investment certificate to build an international-standard hospital in northern Hai Duong province.

“I gonna say given the support we already got from the local government in Hai Duong and the support we already seen in higher government authorities, I’m thinking that we could probably see the licence application fast tracked and the certificate for the hospital will come true,” Triple Eye Infrastructure Corporation general director Marc Kealey told VIR last week.

Triple Eye Infrastructure Corporation is a company specialised in healthcare infrastructure in Canada and in association with Vietnam’s Dai An Joint Stock Company, it several months ago proposed to build a 200-bed international hospital in Hai Duong, worth $160 million. This is the first investment project of Triple Eye in Vietnam and the first international hospital in Hai Duong.

Vietnam’s healthcare system is currently overloaded, however, this also offers potential opportunities for foreign investors to build hospitals in Vietnam.

Kealey said he saw profitable healthcare sector investment in Vietnam as the lack of high-qualified hospitals in the country saw many Vietnamese spend money on overseas healthcare services.

He said the money spent outside Vietnam for healthcare could reach $5 billion.

“We look at in this context that we could repay money back to the hospital, we could design and build hospital and do all procurements,” added Kealey.

Given the strong support of leaders in Hai Duong province and good relationship with Dai An Joint Stock Company, Kealey said the joint venture planned to break ground of this project in the first quarter of next year and the construction work would complete in 2015.

In recent years, some foreign and domestic investors have recognised the potential of Vietnam’s healthcare sector, but most selected big cities like Hanoi and Ho Chi Minh City.

For Triple Eye, Hai Duong – about 60 kilometres north east of Hanoi – is a good location.

“How do we recoup patients to the hospital? People from Hanoi will come to Hai Duong and from Haiphong to Hai Duong. We believe the expansion of the Highway 5 will make it a better location. It’s fantastic, the opportunity is great. I think we picked the right location and the right partner,” said Kealey.

Manulife Vietnam continues strong growth in the second quarter of 2012

Manulife Vietnam, a top-three life insurer in Vietnam, has reported strong second quarter growth with total premiums and deposits increasing by 29 per cent and the annualiszed premium equivalent (APE) increasing by 26 per cent over the same quarter last year.

The business result achieved in the second quarter is strong evidence of the company’s determination in business development and market expansion.

“The success of the first quarter inspired all our agency force and employees to strive even harder for strong growth in the second. With our strategy of diversifying our life-insurance product portfolio and providing customer services of international standards, we aim to become a key financial support for Vietnamese customers,” said Chung Ba Phuong, CEO and general director of Manulife Vietnam.

In support of this strategy, Manulife Vietnam has heavily invested in a world-class professional agency force. By the end of the second quarter, the company had developed a nationwide network of around 12,000 agents. “Manulife Vietnam is committed to providing strong support to the agency force to help them achieve career success, as their own success is also the company’s. This is an important part in our business development strategy,” Phuong added.

Operating in Vietnam since June 1999, Manulife Vietnam – the first 100 per cent foreign-owned life insurance company licenced in Vietnam – provides financial services to nearly 300,000 customers through a network of nearly 12,000 professionally qualified agents.

On June 14, 2005, Manulife Vietnam Fund Management Company Limited, whose name was changed to Manulife Asset Management (Vietnam) Company Limited in November 2010, a wholly owned local subsidiary of Manulife Vietnam, was granted a licence to operate a fund management and portfolio management services company, further expanding Manulife Vietnam’s product offerings for its customers.

As the top player in the market, Manulife Vietnam offers a wide range of innovative insurance products which are supported by the most effective and value-added services on the market today. Whatever stage in life, Manulife Vietnam can help its customers feel financially secure with a life insurance plan that meets their specific needs – whether it’s family protection, education or investment solutions.

Canada sends international trade minister to Vietnam

Canadian international trade minister Ed Fast will travel to Vietnam August 26-28 to help strengthen Canada’s trade and investment ties with Asia.

Fast will take this opportunity to drive his country’s success in priority markets, which include Asia.

The minister was scheduled to meet with Hi Chi Minh City leaders, visit the Ho Chi Minh City University of Technology (HUTECH) and engage in roundtable discussions in the southern economic hub with Canadian business leaders.

On August 14, Fast released the final report of the Advisory Panel on Canada’s International Education Strategy (IES). The report recommends focusing on growth markets, including Vietnam. The Canadian Government will review the advisory panel’s recommendations, prior to a formal response and implementation plan for Canada’s IES.

Canada-Vietnam bilateral trade reached an all-time high of nearly $1.6 billion in 2011. Merchandise imports from Vietnam were valued at $1.3 billion, while exports were worth nearly $300 million. Statistics Canada reports that the stock of Canadian direct investment in Vietnam was $89 million at the end of 2010.

Canadian companies have found opportunities in Vietnam in a variety of sectors, including agriculture and agri-food, education and training, forest industries, oil and gas, as well as information and communication technologies.

In 2013, Canada and Vietnam will celebrate the 40th anniversary of their bilateral relations.
 
Vietinbank offers VND10 trillion for enterprises at 8.95 pct

Vietinbank has announced it will provide VND10 trillion ($480 million) in business loans at an annual interest rate of 8.95 pct until the end of 2012 to help enterprises overcome their current economic difficulties.

The lender will also offer VND5 trillion ($240 million) for individual and household businesses at 10.99 pct per year for short-term loans and 11.99 pct for medium and long-term loans.

Customers are eligible for loans if they are rated 'A' or above according to the bank’s criteria, and have no record of bad debts at any credit institution.

In another programme, Vietinbank will lend VND5 trillion to home buyers at 12 pct annual interest, allowing each customer to borrow up to VND25 billion ($1.2 million).