Shares trend downward on low value

Shares tumbled again this morning on both national stock exchanges after a rising session yesterday, with the two benchmark indices losing value.

On the HCM Stock Exchange, the VN-Index closed today off 0.04 per cent at 350.51 points, as decliners narrowly outnumbered advancers by 132-102.

The market value decreased 34 per cent to just VND557.2 billion (US$26.5 million) while the volume of trades dropped 16 per cent to 48.3 million shares.

Blue chips experienced mixed results, with property developer Hoang Anh Gia Lai (HAG) continuing to spike after news that its chairman registered to buy 5 million shares of the company broke. Eximbank (EIB), software producer FPT Corp (FPT) and food processor Masan Group (MSN) also rose 0.6-1.6 per cent.

Meanwhile, many other large caps lost betwaeen 0.6-2.4 per cent of value.

Of the 10 leading shares by capitalisation, only Sacombank (STB) bottomed out and insurer Bao Viet Holdings (BVH) declined 2.1 per cent.

Sacombank (STB) reclaimed the position of most active code in HCM City with over 2 million shares changing hands, closing unchanged at VND15,100.

On the Ha Noi Stock Exchange, the HNX-Index today declined 0.93 per cent to finish at 57.61 points, with the value of trades dropping slightly to over VND238.7 billion ($11.4 million) on a volume of 27.5 million shares.

Losers outnumbered gainers by 134-94.

VNDirect Securities Co (VND) dropped to the floor for the third consecutive session at VND6,500, but remained the most heavily-traded stock nation-wide with 3.3 million shares exchanged.

Shares rebound on bottom fishing

Shares on both national stock exchanges rebounded yesterday as many investors began to hunt bargains.

Most analysts agreed a rally was predictable after several consecutive sessions of decline but what investors cared about now was how long the uptrend could last.

"The supporting factor now is probably only the technical signals which indicate that the two indices fell too hard after several declines," analysts with Vietcombank Securities Co wrote in a market report.

"However, without the support from the improvements in the economic situation, any uptrends are unlikely to be sustained," they said.

The HCMC Stock Exchange saw more than 60 per cent of codes posting gains, with the benchmark VN-Index rising 0.82 per cent to finish yesterday's session at 350.66 points.

Most of the blue chips gained in value, with Vietinbank (CTG), Vietcombank (VCB), Saigon Securities Inc (SSI) and property developer Hoang Anh Gia Lai (HAG) hitting their daily limit of 5 per cent.

HAG chairman Doan Nguyen Duc registered to buy 5 million HAG shares from December 30 to February 29 – a move considered to take advantage of HAG's cheap share price to increase his holdings in the company.

Of the 10 leading shares by capitalisation, only Sacombank (STB) bottomed out and insurer Bao Viet Holdings (BVH) declined 2.1 per cent.

Financial Ocean Group (OGC) rose to be the most active code yesterday with 1.84 million shares changing hands, gaining 4.1 per cent to close at VND7,600.

Overall the market volume increased slightly to over 57.7 million shares, worth more than VND838 billion (US$40 million).

On the Ha Noi Stock Exchange yesterday, the Bank for Investment and Development of Viet Nam (BIDV) auctioned nearly 85 million shares in its initial public offering (IPO) with the starting price of VND18,500 ($0.88) per share.

Up to 16,238 investors had registered to buy over 140.8 million shares, surpassing the registered number by 66.2 per cent. The IPO results will be announced in the afternoon today.

The HNX-Index yesterday also surged 2.56 per cent to close at 58.15 points, with gainers outnumbering losers by 171-65.

The value of trades decreased 20 per cent, however, totalling VND249 billion ($11.9 million) on a volume of 30.5 million shares.

VNDirect Securities Co (VND) continued to be the most heavily traded stock in Ha Noi with 2.71 million shares traded, closing unchanged at VND6,900.

Foreign investors remained as net sellers in HCM City, unloading VND48.2 billion ($2.3 million) worth of shares, but they continued to pick up shares in Ha Noi, responsible for a net buy of over VND2 billion ($100,000) worth of shares.

Vietnamese products centre promoted in Berlin

A programme, themed “ Germany : Gateway for Vietnamese businesses to penetrate the EU market”, was held on Dec. 27 in Ho Chi Minh City, to introduce the Vietnamese product centre in Berlin.

The programme was co-organised by the Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC) and Vietnam Culture, Tourism, Investment and Trade Promotion Centre in Berlin (VIETHAUS).

The centre will help domestic businesses promote their products to consumers in Germany and the EU.

It will also focus on activities in the restaurant sector, develop Vietnam-Germany cooperative projects on export and investment, and provide trade promotion services, as well as organise cultural exchange activities between the two countries.

Hitachi Transport to launch logistics business in Vietnam

Hitachi Transport System Ltd plans to enter the logistics business in Vietnam as it looks to capitalize on rising consumer spending in the country, the Nikkei business daily reported.

The company, a unit of electronics maker Hitachi, will on Jan. 1 launch a third-party logistics business through a joint venture set up in November with a local consulting firm, the paper said.

The joint venture will mainly handle subcontracted logistics work from Japanese companies with operations in Vietnam and import-export freight forwarding, the Nikkei reported.

Hitachi Transport, which opened an office in Vietnam in 2006 to explore opportunities for local business, is targeting 400 million yen in annual sales from the Vietnamese logistics business by 2014, the paper said.

New circular kicks individuals out of tax exemption

Many people eligible for the National Assembly’s personal income tax exemption in the last five months of the year are now unlikely to benefit from the incentive, thanks to a new circular issued by the Ministry of Finance.

Under the NA’s Resolution No 8, individuals whose average taxable income in the period between August 1st and December 31st is less than VND5 million will be eligible for the tax exemption.

However, in the Ministry of Finance’s new circular to provide guidance on the calculation of taxable income to apply the exemption, the taxable income must have its calculation based on the average of all 12 months of the year, rather than the last five months, as stipulated by the NA’s resolution.

With such a calculation, many individuals will no longer be eligible for the tax incentives.

Experts said the calculation based on the average income over 12 months will be more disadvantageous for taxpayers than the average of five months.

In the first months of the year, people usually have higher incomes, especially in January and February, when they receive bonuses for the Tet holiday, experts said.

Thus, if the taxable income is calculated based on the 12-month average, many individuals will not have their taxes exempted despite having the average five-month income less than VND5 million.

According to Tran Xoa, lawyer at the Minh Dang Quang law firm, many organizations and companies have followed the NA’s resolution on the tax exemption to not collect taxes from the individuals who fell under the category stipulated by the NA.

“Now with the new circular from the Ministry of Finance, these individuals will have to pay their tax arrears,” Xoa said.

“This is not fair, since the tax exemption is aimed to assist individuals in the last five months of the year, when the economy usually encounters trouble.”

Xoa said the Ministry of Finance’s calculation has reduced the rights of taxpayers.

Meanwhile, the organizations and companies are further perplexed by the new circular since they have not collected taxes of their laborers and employees, according to the NA’s Resolution No 8.

“Many individuals subject to the tax arrears collection have already left their jobs, so who will pay the arrears?” Xoa said.

The difference between the two taxable income calculations: Given an individual has personal income of VND10 million a month in the period between January and July, and VND9 million a month in the last five months of the year.

If the five-month average taxable income is counted, he will only have to pay tax for the first seven months of the year, which is VND350,000 a month with the taxable income of VND6 million a month.

The taxable income in the last five months will be VND5 million a month, thus subjecting him to the tax exemption.

This means the entire tax he has to pay is VND2.45 million, which is the total tax in the first seven months.

Meanwhile, with the 12-month average calculation, the individual will have average income of VND9.58 million, and average taxable income of VND5.58 million, which result in a tax of VND308,000 a month, or VND3.69 million for the whole year since it exceeds the VND5 million limit on taxable income to be eligible for the exemption.

This means the tax difference will cost him VND1.24 million.

Foreign Social Enterprises in Vietnam

Social enterprises are businesses that apply their strategies to achieve philanthropic goals. Social entrepreneurs have the same knowledge, skills and characteristics as commercial entrepreneurs, but instead of making profits or financial returns for shareholders, they focus their activities on social or environmental issues.

In addition to many Vietnamese social enterprises, the number of foreign social enterprises in Vietnam is growing rapidly. When Australian Andrew Souto first visited Vietnam in 2005, he witnessed the plight of children coming from rural areas to cities and towns to earn money for their families. Souto, a motor mechanic, proposed establishing a social enterprise to provide the kids with on-the-job training. With support from the Volunteer International Development Australian Program and the Australian Blue Dragon Children’s Foundation, he set up the VIP Bikes Social Enterprise in 2008 to service, repair and rent motorbikes. VIP Bikes currently offers free training in motorbike mechanics for 12 young people in difficult circumstances in the hope that they will be able to earn a living and support their families.

Many social enterprises are short of capital and need financial support from international NGOs and professionals such as the Center for Social Initiatives Promotion (CSIP), the British Council & Social Enterprise London, and the One Foundation, just to name a few. These organizations are very experienced in developing self-sustaining methods and business expertise.

Under the patronage of these organizations, a number of social projects have got off the ground and paid off well.

Most notable is a project called Bloom Microventures, a micro-finance travel and tour enterprise launched by Spaniard Lain Heringman and German Malte Hoefner to train disadvantaged rural women in tourism services.

This is a new model aimed at reducing poverty in rural areas and helping international visitors learn more about challenges facing a developing country like Vietnam.

According to Pham Kieu Oanh CEO of CSIP, 20% of social entrepreneurs that have received support from her organization so far this are foreigners. This shows the willingness of foreigners and international organizations to help develop social enterprises in Vietnam and create a positive, sustainable impact on society.

Vietnam’s exports earn nearly US$95 bil this year

Vietnam’s export turnover was estimated at US$94,800 million by December 25, up 35 percent against last year’s figure and a highest increase since 1995, according to the Vietnam Customs.  

With imports hovering around US$105.2 billion, this year’s trade deficit has dropped to the lowest level of 11 percent since 2002.

Five key export items fetching over US$6 billion include garments and textiles, crude oil, seafood, footwear, mobile phones, and spare parts.

Five major import items worth more than US$6 billion are machines, equipment and spare parts, computers, electronics components, and petroleum.

45 best made-in-Vietnam products awarded

45 best made-in-Vietnam products were awarded at a ceremony in Hanoi on December 27.

Some brand names have become widely known among Vietnamese consumers such as electric wire and cable CADI-SUN from Thuong Dinh Electric Wire and Cable Joint Stock Company, Thong Nhat bicycle from Thong Nhat One Member Limited Liability Company.

The selection, starting from the “most favoured Vietnamese goods being used by citizens” campaign, had spread from Hanoi to Bac Giang and Vinh Phuc and HCM City.  

The voting was done in different forms from June 30 to November 20, either by phone or online at www.trangvangdoanhnghiep.com and www.hanoitv.vn .

Under the framework of the programmme, a trade fair of Vietnamese goods will be held in July next year to promote exchanges between enterprises and consumers.

Vietnamese cement products head for African market

Vietnam aims to export six million tonnes of cement products, including 500,000 tonnes of cement and 5.5 million tonnes of clinker, by 2012, primarily to the African market, according to the Vietnam National Cement Association (VNCA).

Head of the VNCA’s office Nguyen Van Diep said that due to the government's policy to tighten public investment in 2011 and the frozen real estate sector, domestic cement consumption stood at 49.15 million tonnes while exports reached 5.5 million tonnes and reserves hit 3 million. The sector production achieved just 85 percent of its total design capacity (67 million tones) while the consumption amounted to 91 percent of the year’s target.

The VCNA estimates that total cement consumption in 2012 will reach 60 million tones, 52-53 million tonnes of which are consumed in the domestic market.  

Mr Diep said eight cement factories with a capacity of 6.9 million tonnes will be put into operation next year, bringing the sector’s total capacity to 73 million tonnes.

MB named among Asia’s top 100 safest banks

The Military Bank (MB) has been ranked among top 100 banks with strongest balance sheet (safest) in the Asia- Pacific region by The Asian Banker magazine.

The banks in the list are assessed by their total assets, scale, balance sheet, risk, service quality and liquidity.

The list is considered an instruction source to evaluate the stability of banks.

Firms urged to protect intellectual property

Businesses have been urged to develop their own intellectual property protection system to improve their competitiveness amid the increasing global integration.

Since Viet Nam joined the World Trade Organisation in 2006, the issue of intellectual property protection had come to centre stage and was much discussed since it played a key factor in businesses' success, vice chairman of the HCM City Union of Business Associations Pham Ngoc Hung told a meeting held in HCM City yesterday to discuss ways to strengthen the role of businesses, business groups, and consumers in protecting intellectual property.

Though intellectual property is an important competitive tool, many Vietnamese businesses remain unaware of its significance.

A failure to attach importance to protecting intellectual property rights had caused many companies to lose trademarks, and thus their competitiveness, Hung said.

In the last few years, many famous Vietnamese trademarks have been usurped by foreign companies, preventing the original products from entering many foreign markets.

The latest instance was that of coffee brand Buon Ma Thuot which was found registered by a Chinese company last September.

Viet Nam had the 2005 Law on Intellectual Property and many legal documents to guide and protect local companies in terms of IP rights, Nguyen Thanh Binh, head of the National Office of Intellectual Property of Viet Nam (NOIP) ‘s office in HCM City, said.

Viet Nam is a member of the World Intellectual Property Organisation (WIPO), which validates internationally registered Vietnamese trademarks in all WIPO member countries under the Madrid Protocol.

While at least 524,000 companies had been registered, less than 130,000 trademarks were protected, and this included cases where some companies had registered more than 100 trademarks, he said.

"This means businesses … have not got to know that IP rights protect them from fakes, help secure a market share, and make their name more popular among consumers."

The NOIP had been organising dozens of seminars around the country to raise awareness among enterprises and guide them in IP registration and protection, he said.

Government's Programme 68 helped companies become aware of intellectual property and develop them, but since many were still struggling with their business activities, IP protection was not yet a priority, he explained.

The NOIP has launched a digital library on its website (www.noip.gov.vn) which has around 70 per cent of all the information enterprises need to check if they meet all the requirements for IP protection.

It plans to simplify administrative procedures to make it easier for businesses to apply for protection.

There have been complaints about the tardy process for registering and applying for extension of IP protection.

Nguyen Huu Danh, head of HCM City-based kitchen tools maker Hoan Cau, said he sent an application for a 10-year extension of IP more than six months ago, but the NOIP had yet to complete the task though it was required to do so within three months.

Binh admitted the NOIP was sometimes overloaded and thus slow, but promised continued improvement in its capabilities to meet the increasing demand.

The meeting also discussed measures to improve the role of business groups – there are around 200 of them in Viet Nam – in supporting the member companies protect their intellectual property.

Hung underlined the role of consumers in IP protection, and called for closer co-operation between business, consumers, and official agencies in implementing IP protection policies.

Domestic retail market contributes 16% of GDP

The domestic retail market contributed 15 per cent of the country's GDP, said the Viet Nam Retail Association.

The association said the retail market would reach US$86 billion this year, despite the economic downturn.

It predicted the market's yearly average growth rate would be 23-25 per cent till 2015.

Economists said Viet Nam's retail market had been one of five markets in the world with the highest profit capacity.

It would still be a destination for foreign retail distributors as barriers in the sector had been removed.

World seafood ranking in sight as exports beat target
 
Viet Nam earned US$6 billion from seafood exports this year, representing a yearly rise of 20 per cent, exceeding its target of $5.7 billion, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

The country's total seafood output reached 5.2 million tonnes, up 1.4 per cent over last year while the total aquaculture area increased by 2.5 per cent to 1,093ha, surging 2.5 per cent year-on-year, the association said.

"2011 is the first year we implemented the seafood development strategy from now to 2020. Thus, this year's impressive export result shows the prospects for our fishery industry," Deputy Minister of Agriculture and Rural Development cum head of the General Department of Fisheries Vu Van Tam said.

The seafood industry would likely farm and catch 5.35 million tonnes of products, and earn $6.5 billion in exports in 2012, the ministry said, attributing the prediction to the growing demand for seafood products in the global market and slumping fishery supplies of some other exporters.

It was a good time for the industry to restructure with a focus on updating advanced technologies and improving production capacities, experts said.

Earlier, VASEP announced an export turnover target of $10 billion in 2020 with the aim to transform the country into one of largest seafood traders in the world.

To reach its target, the industry must overcome challenges such as a lack of raw material for processing while promoting product quality, food hygiene and safety, competitive ability and the development of the export market, the association said.

Despite encouraging export results this year, the domestic processors currently face a serious lack of raw material, forcing them to spend $500 million on imports to meet processing demands, it said.

To solve the problem, the industry planned to better manage aquaculture in terms of food quality and hygiene alongside the application of modern technology to increase the capacity and quality of raw materials to reduce costs and develop value-added export products.

Co-operation with foreign partners in the exploitation and storage of raw materials in foreign countries before shipment to Viet Nam for processing should be encouraged, it said.

Regarding the development of the export market, the association proposed the Government implement additional trade promotion programmes in support of local seafood export products while reducing administrative procedures which increase costs.

City automakers to form park
 
The Government has cleared a HCM City administration proposal to upgrade the automotive industry cluster in Cu Chi District into an industrial park.

The decision, a possible turning point in the development of the mechanical engineering industry, will see the new IP added to a list of industrial parks to be given priority for establishment by 2015.

Industrial clusters are set up by local administrations as opposed to IPs which are set up by the central government.

The Cu Chi cluster, established in 2007, is 113 hectares in size and spreads over the two communes of Hoa Phu and Tan Thanh Dong.

Vu Ngoc Hieu, director of the Phu Hoa Joint Stock Company which owns the park, said it housed companies manufacturing automobiles, auto components, and transport equipment.

Around 40 per cent of its internal road network had been built as had been a road linking the cluster with provincial Highway No 8.

It had in place a drainage system, a systerm of waterworks with a daily capacity of 2,500 cubic metres and a water supply system, and electricity and telecom services.

Two firms are already there, one is a specialised vehicle factory with an investment of VND200 billion (US$9.60 million) set up by the Sai Gon Transportation Mechanical Corporation (Samco), and the other, a plant manufacturing water-related equipment and components set up by the Hiep Luc Mechanical Company.

The park, due to open in January 2012, would have new incentives to attract both foreign and domestic investors, Hieu said.

For instance, rent would be waived for the first five years for small and medium-sized enterprises.

The rent was fixed at $55 per square metre for the park's 50-year life span.

His company would help enterprises with technology transfers from developed countries like Japan.

Extension of syndicated loans authorised

The State Bank of Viet Nam issued Circular No 42/2011/TT-NHNN on December 15, providing for the extension of syndicated loans by two or more credit institutions and branches of foreign banks to borrowers with projects or business plans in Viet Nam.

Under the circular, syndicated loans jointly extended by more than one credit institution in the form of a loan, discount, financial lease, factoring, bank guarantee or other forms of credit can be extended on the basis of the voluntary engagement of the participants in response to the demand of the borrower, or when the financial capacity or funds of a participating credit institution does not meet the demands of the project, or due to the need to disperse remaining risk among the credit institutions, or financing is needed for important projects as directed by the Government.

In general, credit institutions engaging in a syndicated loan must be incorporated and operating under the Law on Credit Institutions, in compliance with prudential ratios after entering the syndicated loan agreement, and in non-breach of limits on credit extension in the Law on Credit Institutions.

Foreign credit institutions must be incorporated under foreign law and in compliance with regulations on investment, lending and foreign exchange. In the case of a syndicated loan with the participation of a foreign credit institution, the borrower must satisfy requirements on foreign loan registration, the opening and use of loan accounts, repayment of foreign debt and other relevant regulations.

The circular took effect on December 15, replacing Decision No 286/2002/QD-NHNN of April 2002, Decision No 886/2003/QD-NHNN of August 2003, and Circular No 08/2006/TT-NHNN of October 2006.

Work starts on fertiliser plant

VINACHEM Company Limited has started construction of its No 2 diammonium phosphate (DAP) plant in the northern province of Lao Cai.

The second-largest fertiliser plant in the north, it will cost more than VND4,000 billion (US$190.5 million). It will cover 71ha in Bao Thang District.

The plant will be able to produce 330,000 tonnes of fertiliser a year.

It is scheduled to start operations in the third quarter of 2014.

Welding plant for Quang Binh

The Kim Tin Group has started construction on a VND130 billion (US$6.2 million) welding material production plant in the central city of Dong Hoi.

The plant has been designed to produce 24,000 tonnes of welding material, 7,200 tonnes of soldering stick a year.

It is expected to create jobs for 500 local labourers.

Drug prices remain stable

A survey by the Viet Nam Pharmaceutical Manufacturing and Trading Association of 8,953 drugs found that the prices of 25 had increased by 5.5 per cent since the end of last year.

The prices of 37 imported drugs had increased by 7.8 per cent and those of 18 dropped by 4.6 per cent.

Analysts expect prices of many local products to increase next year due to higher prices of imported raw materials.

Southern hub property market still in nightmare

Ho Chi Minh City’s sleepy apartment market sees no sign of improvements amid a difficult economy.

“Never before has the property market been as stagnant as it is this year. There were a number of homebuyers by late 2008-2009, a period which was hurt by economic turmoil but there was almost no transaction at this time of the year,” said property firm TechcomReal’s general director Nguyen Xuan Loc.

Loc added that while homebuyers were almost absent, scores of customers wanted to sell apartments under consignment at prices equal or even lower than original prices to recoup capital.

“It seems that there are no opportunities for apartment projects at this point of time. The customers are reluctant even towards attractive sales promotion policies,” said Hoang Anh Sai Gon Company’s general director Doan Chi Thanh.

Tac Dat Tac Vang Company’s general director Hoang Anh Tuan said the market problem was rooted in the big gap between the supply and demand.

“Amid squeezed credit lines, many real homebuyers could not or did not dare to take on loans with high lending rates. How can developers sell out products when there are no buyers?” said Tuan.

Tuan said it was unlikely the southern property market would see the light at the end of the tunnel next year.

Reality shows that though the land and housing price slid remarkably in the past months, the customers are waiting for further reductions.

“The customers have taken a wait-and-see approach while firms wanted to sell out products as soon as possible through rolling out diverse promotions and discounts. This could worsen market situation,” Tuan commented.

Later last week, real estate firm Anh Tuan Group offered land plots under Anh Tuan Garden land plot project in Ho Chi Minh City’s Nha Be district at price of VND6.5 million ($309) per square metre against VND8.2 million ($390) per square metre offered in the previous launch. However, the project did not grab much attention from customers.

Recently, Vietcomreal launched its Moon Garden apartment project in the city’s District 4 at prices ranging from VND24-26 million ($1,140-$1,240). The project, however, could not appeal to customers despite having a ‘good location’.

According to Vietnam Housing Joint Stock Company chairman Tran Van Thanh, a number of property firms were brought to court as they had violated contract terms signed with the customers. In anther case, some firms had to take on quick loans with high interest rates to pay up staff salaries and cover operation expenses.

“These disorders are just the start unless market rescue policies are introduced in a timely manner,” said Thanh.