Vietnam aims to cut credit growth to fight inflation

Vietnam's central bank is aiming to cut growth in credit in 2011 to 23 percent from more than 27 percent this year as part of its effort to bring down inflation.

The State Bank of Vietnam is also targeting money supply growth of between 21 percent and 24 percent in 2011, after 23 percent this year, it said in a statement on Tuesday.

The central bank will coordinate its measures with fiscal and macroeconomic policies to help contain inflationary pressures and stabilize the economy, which will top its agenda next year, the statement said.

The central bank would consider granting credit growth quotas to banks based on their size and operations, The Sai Gon Times newspaper said in an online report (www.thesaigontimes.vn).

Loans in the banking system grew an estimated 27.65 percent this year, above the central bank's target of 25 percent, central bank governor Nguyen Van Giau said last week.

The International Monetary Fund has said that even 25 percent was "too high for the economy" and that official targets for credit growth ought to be significantly lower.

Lending would have jumped 29.81 percent from 2009, and money supply could have risen 25.3 percent, if gold prices and changes in the dollar/dong exchange rate in 2010 were taken into account, according to the central bank's statement on Tuesday.

The government has projected economic growth next year of between 7 percent and 7.5 percent, against an expected 6.7 percent this year.

Annual inflation hit 11.75 percent this month, the highest since February 2009. Vietnam wants to contain the rise in consumer prices next year at 7 percent.

Inflationary pressures are expected to continue in the first two months of 2011 as prices often increase before Tet, the Lunar New Year festival, which falls in early February next year.

Vietnam hotels on world’s best 500 list

US-based Travel + Leisure magazine has listed Hilton Hanoi Opera, Sofitel Legend Metropole Hanoi, Caravelle Hotel, and Park Hyatt Saigon on the T+L 500 world’s top-ranked hotels 2011 published in its January 2011 edition.

Annually, Travel + Leisure asks readers to vote on their favorite hotels around the world, based on a number of key benchmarks like rooms and facilities, location, service, restaurants and food, and the pricing system. This year it polled 973,000 subscribers.

Other Southeast Asian countries also earn honorable mentions in the compendium, including Thailand (12 hotels), Singapore (6 hotels), the Philippines (4 hotels), Cambodia (3 hotels), Laos (1 hotel), Indonesia (1 hotel), and Malaysia (1 hotel).

The magazine also presents other awards including the World's Best Awards, an annual reader survey rating destinations and travel providers; America's Favorite Cities, where readers rank U.S. cities on different categories; Best New Hotels that picks the hottest new hotels around the globe; among others.

Travel + Leisure is published 12 times a year to 4.8 million readers.

Credit growth lowest in 3 years

Bank credit has grown at 27.65 percent this year, the lowest rate in the last three years, according to the State Bank of Vietnam.

A central bank report said it is 2.65 percent higher than targeted, with dong credit expanding at 25.34 percent and foreign currency credit at 37.76 percent.

Economists said the monetary market remains volatile since people mainly deposit their money in banks for the short-term.

Liquidity in the interbank market remains low, with the real interest rate reaching 1.47 percent.

The growth in loans to the property sector in the first 10 months was at an acceptable rate, the central bank said.

Total outstanding loans for property investment in the period were VND225 trillion (US$11.25 billion), a 22 percent increase from the end of last year, it said.

It expects the figure to rise to VND228 trillion at the end of the year, representing a 23.5 percent year-on-year increase.

“Credit institutions provided loans for effective property projects in time,” the bank said in its report.

Vietnam's ABBank to raise $31 mln via bonds

Vietnam's An Binh Bank, 20 percent owned by Malaysia's top lender, Maybank, said on Tuesday it would sell convertible bonds to raise VND600 billion.

It would issue the 24-month bonds on Thursday with an annual coupon of 6.9 percent, it said in a statement.

Maybank is expected to take up part of the debt to maintain its 20 percent stake.

The issue is part of a plan approved in March by shareholders of the bank, also known as ABBank, to raise its registered capital to VND5 trillion in 2012 from the VND3.83 trillion expected at the end of this year.

ABBank's gross profit reached VND648.7 billion at the end of November, 3 percent above its target for the full year, it said in a separate statement.

The lender's total assets at the end of November jumped 31 percent from the end of 2009 to VND34.75 trillion.

Bank, card firms link up with merchant network

The Ho Chi Minh City-based Housing Development Commercial Joint Stock Bank and two card services firms, Smartlink and VNBC, have linked up to a merchant network that accepts all kinds of plastic.

The network is operated by 20 commercial banks including all the giant state-owned ones like Vietcombank, Agribank, VietinBank, BIDV, and Eximbank, and has 131 merchants in the city alone.

Holders of HDCard, a debit card issued by the bank, can now use it at member hotels, restaurants, and supermarkets nationwide including Big C, Co.op Mart, Maximart, Metro, Citimart, and others.

Work begins on Bac Ninh industrial park-urban area

Taiwan-based Shun Fur Housing Development Co. has begun construction of the Thuan Thanh II urban area and industrial park in the northern Bac Ninh Province at a cost of US$80 million.

The 304-hectare development in Thuan Thanh District will be divided into areas for high-tech plants, service centers, entertainment, and workers’ accommodation.

When completed it will be the district’s 2nd industrial park and the province’s 11th.

Bac Ninh’s industrial parks have attracted 422 projects with a total investment of $3.23 billion.

Vietnam’s monetary policies expected to be kept stable

Sandwiched between double digit inflation and a businesses community unhappy about lending rates as high as 19 percent, Vietnam's central bank will likely keep interest rates stable in the short term, economists say.

Annual inflation this month was at 11.75 percent, the highest since February 2009, while the year's average inflation hit 9.19 percent, the government estimated on Friday. Economists expect inflationary pressures to persist through Tet, the Lunar New Year, which falls in early February.

The high inflation rate this year has sent a warning to the central bank to pursue cautious measures to contain inflationary pressures in 2011, Tran Hai Yen, economist at Hanoi-based Bao Viet Securities Co (BVSC) said.

The central bank tends to ease monetary policies during early months of the year as prices fall after the Tet holiday.

Banks are currently offering deposit rates at the central bank's cap of 14 percent, which the authorities hopes will help control lending rates. "The rate of 14 percent is now reasonable given the market situation," Yen said.

The rise of the consumer price index (CPI) in the last months of the year was expected and thus it will not affect interest rate levels, which have been high in recent months, bankers said.

In a meeting with experts and members of the National Assembly's Economic Committee, State Bank of Vietnam Governor Nguyen Van Giau said one of the preconditions to keeping rates stable and gradually bringing them down in 2011 would be keeping the CPI low from the beginning of the year.

The cumulative CPI reading must be 3.5 percent or lower in the first half and no more than 7 percent for the whole year, the Vietnam Economic Times quoted him as saying.

Those targets will be hard to reach, given the current trend, economists say, and monetary policies alone will not be able to contain inflationary pressures if budgetary expenses keep rising.

One of the major drivers of the buildup in inflationary pressures this year was loose monetary and fiscal polices after a first half with relatively subdued inflationary pressures.

"The central bank and the government were swinging back and forth between economic growth and containing inflation," the Vietnam Economic Times quoted Tran Du Lich, a member of the National Monetary and Financial Policies Advisory Council, as saying.

Tran Hai Yen, the economist at BVSC, said she expected the central bank to keep policies unchanged from now through the Tet because trying to lower rates would be very difficult.

The central bank may use its open market operations to monitor the rates and stabilize the market, she said.

Explosive trading leads to sharp rise on VN-Index

Explosive trading helped the HCM City Stock Exchange rally this morning, with the VN-Index closing up 1.33 per cent at 479.33 points.

Trading volume soared to 89.1 million shares worth over VND2 trillion (US$98.9 million) changing hands.

Just under 200 stocks gained points, with over 40 hitting their ceiling prices. Imexpharm Pharmaceutical (IMP) saw the highest increase of VND2,500; followed by Long Hau Corp (LHG), up VND2,000; Tan Binh Import-Export (TIX), up VND1,900; and Thu Duc Housing Development (TDH) and Sacombank Securities (SBS), each up VND1,600.

Blue chips continued to rally, of which Masan Group (MSN) rose the most by VND2,500; property trader Vincom (VIC) rose VND2,000; Saigon Securities Inc (SSI) rose VND1,500; and insurer Bao Viet Holding (BVH) rose VND1,000.

The number of stocks to lose points dropped to 50 from 99 on Monday; with LIX falling the most by VND3,000 and EVE, down VND2,300.

The markets heard this morning that the Government will allow Vinashin to take out a zero interest loan from the Viet Nam Development Bank from February next year to help the beleaguered shipbuilder to pay off debts and compensate its officials and engineers.

In Ha Noi, the HNX-Index rose for a second day by 3.03 per cent to 114.81 points, with two thirds of the 340 listed stocks advancing.

Volume improved to nearly 45 million shares, totalling VND903.4 billion ($43 million) in value.

Sai Gon Hotel (SGH) rose the most by VND5,700; followed by Ha Giang Mineral and Mechanics (HGM) up VND5,600 and Vimeco (VMC), up VND3,400.

Ocean Hospitality and Services (OCH) was the only blue chip to close unchanged while others gained points.