Vietnam runs 200m USD trade surplus in July

The trade balance returned to a surplus for the month of July, reaching 200 million USD, the General Statistics Office (GSO) said in its recent report.

The improvement in the surplus helped narrow the total trade deficit in the January-July period to 733 million USD, equal to 1 percent of the country's total export value, said Pham Thi Quynh Loi, Deputy Director of GSO's Trade and Service Statistics Department.

In the first seven months of this year, the country is estimated to reap a total of 72.74 billion USD from exports, increasing 14.3 percent year-on-year while it imported 73.47 billion USD worth of goods, increasing 15 percent from the same period in 2012, the data showed.

It is worthy of note, foreign direct investment (FDI) enterprises still remained a driving force for the import-export activities as the sector recorded a trade surplus of nearly 7 billion USD since the beginning of this year, with exports and imports surging 22 percent and 24 percent respectively against the same period last year to reach 48.24 billion USD and 41.33 billion USD.

In contrast, the domestic sector shipped 24.5 billion USD worth of goods in the period, up 1.6 percent year-on-year, and it contributed 32.14 billion USD of the country's total import value, up 5.2 percent against 2012's same period, posting a 7.64 billion USD trade deficit.

Vietnam's export staples in the seven-month period were mobile phones and spare-parts (11.63 billion USD) – up 87 percent; garments and textiles (9.64 billion USD) – up 16.3 percent; electronic products, computers and components (5.69 billion USD) – up 40.4 percent and footwear (4.79 billion USD) – up 15.6 percent.

Most commodities recording high growth were in the FDI sector or companies in which FDI enterprises held a large amount of capital.

The country's key imported products in the period were machinery, equipment, and spare-parts (10 billion USD); electronic products, computers and components (10 billion USD); petroleum (4 billion USD); raw material for textile and leather (3.96 billion USD).

Declines or slight increases were seen in some imported goods for domestic production included fertilisers, medicines, rubber, wood and wood products.

Goods and services retail sales up 12 percent

Vietnam’s goods and services sector maintained impressive momentum during the first seven months of 2013 as total retail sales reached 1.488 trillion VND (70.9 billion USD), representing a year-on-year increase of 12 percent.

According to a General Statistics Office (GSO) report, the country’s total retail sales reached 213.3 trillion VND in July, up 0.4 percent against the actualised figure in June and surging 12.83 percent over the same period last year.

According to the GSO, the total retail sales in July increased due to a range of factors with stronger consumer demand one of the main drivers while the consumer price index (CPI) is estimated to rise as a result.

Meanwhile other economic sectors posted growth of between 10-37 percent year-on-year with the foreign-invested economic sector leading the charge, although it remains only a 3.3 percent contributor to the common indicator.

Trade activities posted strong results, leaping 11.4 percent, as did the hotel and restaurant sector with an increase of 14.7 percent to 179 trillion VND. Tourism, meanwhile, rose 2 percent to 14.3 trillion VND.

Work starts to upgrade north-south highway

Work to upgrade the section of National Highway 1A connecting Ha Tinh City bypass and Ky Anh District got underway in central Ha Tinh Province yesterday.

The VND3 trillion (nearly US$143 million) project on what is seen as a key between the north and south, will help connect Cau Treo International Economic Zone and Vung Ang Economic Zone, as well as promoting business exchanges between countries in the East West Corridor region (Viet Nam, Laos, Cambodia, Thailand, Myanmar and China.

The 72km road, featuring six lanes and an 80km per hour speed limit, starts from Cam Vinh Commune in Cam Xuyen District and ends at Ky Anh District's Ky Trinh Commune.

Divided into two sub-projects, in which 38km of the first project will be upgraded with more than VND2 trillion ($95million) invested by the Ha Tinh Transport Department. The remaining 33.6km – comprising the second sub-project, will be upgraded by the transport ministry.

The project is expected to be finished by the end of 2015.

Steel, cement sectors to pay more for power

Power price hikes topped the agenda in an on-line discussion titled "for sustainable development of the local steel and cement industries" held in Ha Noi on Wednesday.

Tran Viet Ngai, chairman of the Energy of Viet Nam Association, said Vietnamese customers pay an average of VND1,600 (US$0.076) for a kWh of electricity compared with $0.1 in other countries in the region.

To operate all the power plants in existence by 2020, the sector needs 80 million tonnes of coal compared with some 30 million tonnes expected to be mined in the country this year.

Thus, Viet Nam will have to import coal for its thermal power plants, according to Ngai.

He said electricity prices will then rise to VND8,000-9,000 per kWh. "The electricity sector has suffered great losses."

Bui Quang Chuyen, deputy head of the Ministry of Industry and Trade's Heavy Industry Department, said steel and cement plants consumed 12 per cent of the country's electric output in 2010 and 11.4 per cent last year.

In 2013 the steel sector is expected to produce 5.3 million tonnes of ingot and 10 million tonnes of steel, an increase of 10 per cent compared with last year.

The supply of some steel products exceeds demand while others are imported to meet domestic demand.

Most steel plants in the country are small and use outdated technologies that are not environmentally friendly, Chuyen said.

Nguyen Van Thien, chairman of the Viet Nam National Cement Association, said the country is expected to achieve cement output of 75 million tonnes by 2015, 10 million higher than demand by that time.

Nguyen Tien Nghi, deputy chairman of the Viet Nam Steel Association, said power price hikes would raise costs for the steel and cement sectors, causing them problems since prices of steel and cement products cannot be raised.

Nghi said any power price hikes would have negative impacts on these two sectors and affect the country's economy.

Ngai of the Viet Nam Energy Association said the steel and cement sectors have to adopt the latest technologies that help them use power effectively and profitably.

Chuyen summed up by saying hiking power price is "a must."

He added that by 2020 any manufacturer using electricity inefficiently would face bankruptcy because the high production costs would render them uncompetitive.

BIDV, Medlife link up for joint venture

US insurer MetLife and the Bank for Investment & Development of Viet Nam on Wednesday agreed to set up a life insurance joint-venture in Viet Nam later this year.

A memorandum of understanding was signed during President Truong Tan Sang's visit to the US, highlighting MetLife's ambition to expand into Southeast Asia.

It also marks BIDV's strategic foray into life insurance, which complements the bank's business tradition, it said in press release.

The joint venture hopes to leverage the large network of BIDV branches across the country and will offer Vietnamese customers access to global expertise, financial reliability, and a wide range of products and services.

MetLife is the largest life insurer in the US and has been in Asia for over 60 years.

It was named one of the "World's Most Admired Companies" by Fortune Magazine in 2011, and is ranked 40th in this year's Fortune 500 list.

BIDV, founded in 1957, is the bank with the longest history in Viet Nam.

It also has interests in securities, insurance, and a presence in several countries like Laos, Cambodia, Myanmar, and the Czech Repulic.

Christopher Townsend, MetLife's president for Asia, said: "Viet Nam is a dynamic emerging market and is one of the fastest growing life insurance markets in Asia.

"This agreement paves the way for the formation of a unique and compelling partnership and reinforces our commitment to Asia and our goal of becoming a top-tier life insurer in the region.

Billions of dong spent building social houses

Work began on Wednesday on a social housing project worth VND560 billion (US$26.6 million) in the capital city's Ha Dong District.

The 35-storey building, covering an area of 2,590 square metres, will provide 512 affordable flats to around 2,200 low-income earners when completed in 2015.

It is among the first commercial housing projects to be transformed into social housing by the municipal People's Committee.

The project's investor - Song Da Urban and Industrial Zone Investment and Development JSC - may be eligible to receive a loan of VND200 billion ($9.5 million) from the Government's VND30 trillion-credit package.

Australia steps up direct aid

The Australian government has funded 13 projects in 10 provinces in southern Viet Nam with AUD145,000 (US$132,700) through its Direct Aid Programme (DAP) for the 2012-13 financial year.

The Australian consulate-general's office in HCM City said in a statement that the funding provided assistance across a range of areas, including community health, education and small-scale infrastructure projects.

It said the funding was in addition to the larger-scale aid projects in Viet Nam funded by the Australian government, whose aid to Viet Nam in the financial year totalled approximately AUD153.1 million (US$140.1 million).

Seafood distribution centre to take shape in Belgium

Deputy Minister of Industry and Trade Tran Tuan Anh has held a working session with the Belgian ambassador to Vietnam Bruno Angelet to discuss the building of a centre to distribute and auction Vietnamese seafood products at Zeebrugge port, Belgium.

Ambassador Bruno Angelet said Zeebrugge has a modern and deep-sea port that is of strategic importance to Europe.

If the centre takes shape, he believes, it will help Vietnamese tra fish businesses reduce transport costs and sell goods directly to supermarkets, and big retailers.

Deputy Minister Tran Tuan Anh underscored the need to develop a specific roadmap for the project to run effectively.

He said his ministry will co-ordinate with the Ministry of Agriculture and Rural Development, the Vietnam Association of Seafood Exporters and Producers (VASEP) and related Belgian agencies to conduct a feasibility study.

At first, the trade promotion department will co-ordinate with the Belgian embassy in Hanoi to organize a seminar to introduce the project and appoint a group of experts in charge.

Dairy giant to double output of soya milk

The Viet Nam Soya Product Company (Vinasoy) launched the second and final phase of its soya milk factory in the Tien Son Industrial Zone in northern Bac Ninh province on Wednesday.

The move will allow the firm to double its output to 180 million litres of soya milk per year and meet increasing demand for soya milk in the northern market.

Construction on the second phase began in August 2012, requiring a total investment of over VND650 billion (US$31 million).

The new factory covers 61,000sq.m and is equipped with modern packaging and processing machines from Swedish company, Petra Tak.

According to a market survey conducted in June by global information and measurement company, Nielsen, Vinasoy is the leading Vietnamese enterprise in the manufacture of soya milk products, commanding a 78 per cent share of the total market.

Vinasoy reported a total revenue of approximately VND1.9 trillion ($90.5 million) last year; a figure that is expected to hit VND2.44 trillion ($116.2 million) in 2013.

Lending, deposits rise in big cities

July's outstanding loans from Ha Noi-based commercial banks reached roughly VND669.717 trillion (US$31.5 billion), up 1.9 per cent month-on-month, and 2.6 per cent against December of last year, according to the municipal Statistics Department.

Overall, short-term loans increased 2.1 per cent month-on-month and 1.2 per cent against December of last year, while the rates for medium- and long-term loans increased 1.7 per cent and 4.7 per cent, respectively.

Total deposits for the banks in July is estimated to increase 7 per cent over last December, and 2.3 per cent month-on-month to VND959.45 trillion ($45.69 billion).

HCM City has not released this month's statistics, but last month the city's deposits and lending values experienced their biggest increase since the beginning of the year.

According to the HCM City Statistics Department, total deposits reached VND1,054 trillion ($50.2 billion) in the beginning of July, an increase of 1.7 per cent month-on-month, and up 11 per cent from previous year.

Deposits in foreign currencies accounted for nearly 16 per cent of total deposits, down 18.2 per cent from 2012; while local deposits accounted for 84 per cent, up 19 per cent from the prior year.

The city's outstanding loans reached VND894.6 trillion ($42.6 billion) in the beginning of July, up 1.9 per cent from the previous month and up 16.7 percent over last year's figures.

Foreign currency loans accounted for 18 per cent of all total loans and was down 20.2 per cent from 2012; while loans in dong accounted for 82 percent, an increase of nearly 30 per cent.

State-owned banks posted their highest increase in deposits in June, up 2.63 per cent; while joint-stock banks showed the highest lending growth, at 2.57 per cent.

H1 sees 40,000 new startups

Although the macro economy remains bleak, the number of new startups in Vietnam reached 40,000 in January-June.

By June 30, Vietnam had had over 457,000 enterprises operational, up 9.5% year-on-year and 4.9% from last December.

Meanwhile, there were 24,931 enterprises closing in the period, with State-owned enterprises accounting for 202, foreign-invested firms for 269 and local private enterprises for the remainder.

However, according to the Ministry of Finance, despite positive operation signals in the year’s early months, there are many risks including low economic growth, high input costs, low consumption, difficult access to loans and low capital absorption.

“Lower-than-expected State budget revenues in the year’s first months have painted a dismal picture. The possibility of State budget revenues declining this year is high,” said the ministry.

VAMC says to focus on buying debts at book value

Vietnam Asset Management Company (VAMC) will initially focus on buying debts at book value, said Dang Thanh Binh, deputy governor of the State Bank of Vietnam (SBV), recently appointed as chairman of the board of members of VAMC.

When VAMC has gained some experience and the situation gets better, the company will consider buying debts at market value. There needs to be an independent appraisal unit then to ensure transparency, he told the Daily ahead of the company’s inauguration scheduled for this Friday.

Currently, VAMC’s ability is still limited and thus it cannot purchase all bad debts at once. The company has to carefully consider how much it should purchase and who it should buy from.

VAMC cannot buy bad debts with problems in the process of loan application, collateral appraisal and use of loans, Binh stressed.

“VAMC doesn’t operate for profit, but it doesn’t mean loss is accepted. The company must try to minimize losses and have revenue exceeding expenditure,” he stated.

In the process of bad debt settlement, debt recovery ability greatly depends on mortgaged assets. “Thus, we will initially purchase secured debts only. Later, when VAMC’s capacity improves, we will consider buying unsecured debts,” he said.

Before coming to purchase decision, VAMC will carefully examine whether the values of mortgaged assets correspond to debt values.

Assets mortgaged for the debts bought by VAMC will be handled in two ways. They will be either liquidated at a negotiated price or put up for auction whether with or without consent of debtors.

The latter solution, according to Binh, will help speed up bad debt settlement. However, he expressed a concern that several problems would possibly emerge, making VAMC unable to auction mortgaged assets.

“There may be many events that we cannot anticipate now,” he said.

Decree 53 has provided a framework for VAMC to handle bad debts, but the company needs some more legal documents to receive a full support to sell mortgaged assets quickly, said the VAMC chairman.

The Ministry of Justice is working with SBV and the Ministry of Natural Resources and Environment over joint circular with guidelines for treatment of mortgaged assets. “We are waiting to see if VAMC will be favored over institutions. If not, there would be certain difficulties in handing mortgaged assets quickly to recover debts,” said Binh.

It is concerned that certain debts will quickly turn bad, including debts classified into group two and debts that have been restructured but are actually bad debts.

Binh admitted that there were a number of debts not as good as classified. “If there were no regulations on debt restructuring, some debts would have turned irrecoverable,” he noted.

He said Decision 780 of the central bank with regulations on debt restructuring was just an ad-hoc solution with an aim of relieving the financial burden on banks so that they could better assist enterprises. This decision will be annulled, but not now, he said.

Circular 02, scheduled to take effect on June 1, 2014, will lay down new criteria for debt classification, making the classification more accurate. SBV has asked credit institutions to get well prepared so that they will be financially capable enough to handle debts classified by new criteria.

Asked if private firms will have chance to sell their debts to VAMC, Binh stated VAMC would purchase debts based on bad debt criteria and characteristics of the debts that need handling, not on which economic sector the debtors come from.

VAMC is set for opening this Friday with a staff of 32 members.

“We now have 32 staff members and will recruit more. In the early stage, the company needs 50-60 employees,” said Binh.

All VAMC employees used to work at commercial banks and have experience in debt settlement. “I especially have high confidence in the company’s leadership,” said Binh.

Under the decision of the SBV governor dated July 16, Binh is appointed as chairman of the board of members of VAMC.

Nguyen Quoc Hung, deputy general director of Agribank, is chosen as vice chairman of the VAMC board of members. Meanwhile, Nguyen Huu Thuy, deputy head of the SBV’s Department of Foreign Credit Institution Inspection, is appointed as general director of the company.

First PPP project introduced to Singaporean investors

Vietnam’s first public private partnership (PPP) infrastructure project, Dau Giay-Phan Thiet Expressway, was introduced to global investors at a conference held in Singapore on July 26.

The 100km toll road running through Dong Nai and Binh Thuan provinces will be a critical link in the national north-south highway corridor, and is expected to reduce travel time between Ho Chi Minh City and its neighbouring regions once completed in 2019.

Its construction will meet strict international requirements in terms of technique, environment and economics to ensure sustainable development and the 2020 target to turn Vietnam into an industrial country, said Deputy Minister of Transport Nguyen Ngoc Dong.

Multi-industry group Bitexco was selected by the Vietnamese Government and the World Bank as an investor of the US$757 million expressway.

Bitexco said it will contribute a 60% stake to the project and join the national programme to find, amongst several Asian nations, a second investor.

The project was earlier introduced to investors in India and the Republic of Korea.

Industrial output up after strong month

The index of industrial production (IIP) for July rose by 7% year on year, according to the General Statistics Office (GSO).

In July, mining and manufacturing production increased by 6.8%, while the power sector grew by 9.2% compared to the previous year. Water supply and waste treatment saw a smaller rise of 1.6%.

Based on July’s figures, total industrial output in the first seven months of 2013 went up by 5.2% over the same period last year, the GSO reported.

During the January-July period, leather products made the biggest annual gain, jumping by 17.3 percent, followed by motor vehicles and paper, which rose by 14.3% and 11.6%, respectively.

The IIP for most cities and provinces nationwide increased during this period, with the northern province of Vinh Phuc recording the highest growth of 24.4%, followed by the central city of Danang at 10.5%. HCM City rose by 4.2% and Hanoi by 5.3%.

Earlier this month, the Ministry of Industry and Trade forecast that rising orders and signs of recovery in the property sector would drive industrial growth in the final months of the year.

The GSO also reported that the inventory index for the manufacturing industry as of July 1 increased by 8.8% against the same period last year.

However, it noted that further increases are not sustainable, partly because manufacturers have reduced production due to low consumer demand.

Large stockpiles are still leading to cut backs in production levels in beverages, cigarettes and pharmaceuticals, yet garments, leather, vehicle engines and electronics-computers all saw inventories fall.

Promoting Vietnam-Singapore business links

A workshop was held in Singapore on July 27, providing Vietnamese IT businesses the chance to explore the investment environment and establish partnership with Singaporean companies.

Business Connectivity 2.0 brought together representatives of 50 businesses and more than 100 experts of Vietnam and Singapore to share experience in doing business in the IT industry.

During the past decade, Vietnam’s IT industry has achieved an annual growth rate of 20% and its revenue has also increased substantially, reaching US$2.3 billion in 2012.

With the number of Internet users ranking 18th in the world, Vietnam is a potential market for providing e-payment, e-hospital and e-ecommerce services.

Vo Hoang Hai, team leader of Vietnam Business Connectivity 2.0 project, pointed out the fact that more Vietnamese IT businesses want to sound out the business environment overseas through support of the Vietnamese entrepreneur communities there.

He said members of the project are willing to support Vietnamese companies in exploring the business investment in Singapore where many foreign companies in dire need of IT outsourcing and nearly 170 investment funds are located.

Vietnamese ambassador to Singapore Tran Hai Hau said although Singapore is one of Vietnam’s leading investors, few financial companies and private investment funds have invested in Vietnam – a potential market with more than 40% of its population aged under 25.

Business Connectivity 2.0 is an excellent initiative to connect Vietnamese businesses with Singapore’s financial companies and investment funds, said Hau.

Gary Yng, managing director of CLSA Capital Partners Pte Ltd, said his company plans to invest approximately US$20 million in several projects in Vietnam, mostly in education, health and goods sales.

Attending the event, Nguyen Hoa Binh, managing director of Vietnam’s PeaceSoft Group, said he expected to find Singapore’s investors and companies to promote his company’s IT products in Vietnam and abroad, even in Singapore.

More than 20 meetings between Vietnamese and Singaporean businesses took place, focusing on opportunities and challenges facing Vietnamese small and medium-sized IT businesses, investment trends in the mergers and acquisitions (M&A) market in Vietnam, and Singapore’s support policies for IT businesses.

The event was hosted by the Association of Vietnamese Professionals in Singapore (Vietnam 2020). Since its establishment in 2007, Vietnam 2020 has organised a number of events for young Vietnamese entrepreneurs who want to start up business in Singapore to meet and share experience with their Vietnamese counterparts in Singapore.

BIDV supports Japan businesses

The Bank for Investment and Development of Vietnam (BIDV) and Japan Bank for International Cooperation (JBIC) have recently signed a business cooperation agreement under which BIDV will operate a Japan Desk.

The agreement also provides for JBIC to arrange loans for Japanese small-and medium-sized enterprises (SMEs) to conduct business activities in Vietnam.

The cooperation agreement comes as a result of a Japanese government initiative from last December designed to support Japanese SMEs in Asia, for which JBIC is the regional coordinator for financial support services through local banks across the Asian region.

In April, BIDV established a working group to implement a Japan Desk and be ready to provide diverse financial services with competitive pricing, from deposit, payment, cash management, trade financing, as well as other advisory services.

Danang to host East-West economic expo

Over 280 businesses from Thailand, Laos, Cambodia and Vietnam will be participating in the East-West Economic Corridor Expo in the central city of Danang on August 8-13.

Businesses will display products in 450 pavilions and introduce a variety of products used in the processing of electronics, shoes, interior decoration, furniture, food processing, textiles and school facilities.

The exhibition will also feature property projects of participating countries to call for investors.

The Embassy of South Africa in Vietnam and the Chamber of Commerce and Industry from Cambodia will also exhibit at the five-day fair.

Haiphong welcomes Japanese investors

Chairman of the Haiphong municipal People’s Committee, Duong Anh Dien, has pledged to create optimum conditions for Japanese investors in the northern port city.

Dien made his affirmation on July 27 while receiving Japan’s visiting Keidanren business delegation seeking investment opportunities there.

He highlighted Haiphong’s advantages, saying the biggest port city in the north has high-quality human resources and convenient waterway and land routeslinking the country’s major key economic zones. The city’s Cat Bi international airport will soon begin direct flights from Haiphong to Japan, he added.

Dien called on Japanese investors to pay attention to high-tech projects, particularly in support industries.

Haiphong is among the top 10 venues in Vietnam in foreign investment attraction, thanks to its traffic convenience, modern infrastructure and incentive policies.

The city’s industrial parks (IPs) and economic zones (EZs) are being occupied by many foreign investors, especially those from Japan.

As of July 2013, its IPs and EZs attracted approximately US$10 billion in investment capital, with around half of it foreign direct investment (FDI).

Companies from nearly 30 countries and territories have poured investment into Haiphong, including big names: General Electric, Kyocera, Bridgestone, Nipro Pharma Toyota, and LG.

Vietnam, Japan enter new phase of joint initiative

The Vietnam Ministry of Planning and Investment and the Japanese Embassy organised a high-level meeting in Hanoi on July 26, kick-starting the fifth phase of a Joint Initiative between the two countries.

The new phase covers a number of issues and areas relating to law enforcement, tax mechanisms, transportation, customs, human resource training, intellectual property rights, environmental protection, retail, real estate, non-banking credit, food safety and export, infrastructure construction, an industrialisation strategy, and macroeconomic stabilisation.

Both sides agreed to work on these areas over 18 months, from July 2013 to December 2014.

There will be two mid-term review meetings in December 2013 and June 2014 and a high-level meeting in December 2014 to examine the result of the whole phase.

Both sides accomplished 85% of the committed workload in the previous four phases.

The joint initiative is said to succeed in linking the private and State sectors, facilitating Japanese operations in Vietnam.

Ba Ria-Vung Tau opens Grand-Ho Tram Oceanfront Resort

The Grand-Ho Tram Strip, a luxury oceanfront tourist area and resort complex in Xuyen Moc District in Ba Ria-Vung Tau Province opened to visitors on July 26.

The resort complex has two imposing architectural towers. The first tower has 541 rooms, including a modern game lounge for foreigners, a conference center, ten restaurants and bars, a luxury spa, three outdoor swimming pools, and a shopping mall among many other features. The second tower includes 559 luxury rooms, which are still under construction.

Grand-Ho Tram Strip is the first resort to have a casino of international standards.

Violations in petrol price management revealed

On July 25, the State Audit Office announced at a press conference the auditing results of 2012 which found many petrol price management violations.

Since December 15, 2012, each consumer contributed VND300 per litre of petrol they buy in order to establish the price stabilisation fund. The fund will be disbursed to the petroleum enterprises in order to offset the losses they sustain when the world price of petrol increases but domestic retail prices must be kept low. The retail price is based on average world prices during a 30 day period.

Petrol companies must calculate the prices base on the interbank average foreign exchange rate. However, the Vietnam National Petroleum Group (Petrolimex) has used the rate set by Vietcombank, which is different from the interbank exchange rate.

"Consumers are, as usual, on the receiving end of this subterfuge. The whole price can be massively changed by just one different digit," economist Ngo Tri Long said.

Petrolimex's action is deemed illegal and is a ruse to raise the retail prices, say several experts. In addition, Petrolimex is being equitised and their appraisal of the state's stake was found to be wrong. The State Audit Office urged the Prime Minister to direct the Ministry of Finance and the Ministry of Industry and Trade to speed up the equitisation process.

Violations by other fuel companies were also disclosed. For example, Saigon Petro Company does not have standard commission rates for their agents.

Other shortcomings in administrating the fuel price stabilisation fund were also mentioned at the conference: for  example keeping the companies compensated even though the fund has been exhausted.

The price adjustment and compensation rate for companies are made within a 30 day period so it cannot catch up with world prices. Previously, the government had set an annual limit to the amount of fuel each company is allowed to import and this limit is now posing threats to the market balance.

Deputy State Auditor General Le Minh Khai said the management regulations must be tightened. The stabilisation fund will be unnecessary once they successfully implement the market-based mechanism.

HCM City pushes Laos investment

More than 100 Vietnamese and Lao enterprises took part in the HCM City – Champasak Investment – Trade – Tourism Promotion Conference and Exhibition held in the Lao City.

It was a joint effort by the two cities to improve the efficiency of economic co-operation to serve socio-economic development in these two nations.

HCM City has promoted economic co-operation with Champasak and many city firms have invested in Laos, but it has not been reciprocated.

Through the conference, the two nations hoped, Lao enterprises would find business opportunities in HCM City and appropriate partners to start business here.

"HCM City always welcomes and creates the most favourable conditions for Lao firms," Thai Van Re, director of the city Planning and Investment Department, said.

Also at the event, HCM City firms specialising in food processing, household plastics, agricultural products, electricity, and construction material industries displayed their products.

Localities to decide land compensation

Land compensation in Ha Noi would be based on the market price as of tomorrow, according to the municipal People's Committee.

Accordingly, district level people's committees would survey land prices in their localities and propose compensation rates for each project to the city's People's Committee for approval.

For cases in specific relocation, the municipal Department of Finance was assigned to evaluate and approve selling prices to ensure compatibility with compensation rates.-

Luxury hotel to hit the City

A high-end hotel would be built at HCM City's 164 Dong Khoi Street with total investment of more than VND7.1 trillion (US$341.33 million), according to the city's People's Committee.

More than half the capital would be spent on compensation for those relocated during site clearance.

The coveted land - covering an area of around 9,800 square metres in the city centre - had previously attracted attention from nearly 70 investors.

Roof caps of Lotte Centre

Lotte Viet Nam Company on Wednesday roofed its 65-floor Lotte Centre in Ha Noi.

The 32,000sqm skyscraper is currently under construction and will feature 320 luxury hotel rooms, 258 high-end apartments, office and entertainment space, a shopping mall and a convention centre.

The building is a modern architectural design inspired by a traditional Vietnamese dress, the Ao dai. It is intended that the tower will become a symbol of Vietnamese beauty and modernity.

As of November 2010, the highest building in Viet Nam is the Keangnam Ha Noi Landmark Tower at 72 stories.

The Lotte Centre is expected to be operational by June 2014.

EVN Finance divest from Thac Ba Hydro-power Co

The finance arm of Electricity of Viet Nam, EVN Finance, conducted a major sell of all of its 6.22 per cent stake in Thac Ba Hydro-power Co's (TBC) capital, the company reported yesterday.

The company earlier posted a net profit of VND69.2 billion (US$3.3 million) in the first half of this year, up 79 per cent year-on-year.-

Sao Ta food company to issue 5 million shares

Sao Ta Foods Co (FMC) unveiled plans to issue 5 million shares to supplement working capital.

Initial price offerings will bottom out at VND10,000 a share and be subject to transfer limits. The offering awaits approval from the State Securities Commission.

BMC pays 15 per cent cash dividends

Binh Dinh Minerals Co (BMC) paid VND18.6 billion (US$905,000) from undistributed profits to finance its first-phase dividend this year. The 15-per-cent dividend payout will be made in cash.

The dividend is equivalent to the company's second-quarter profit of nearly VND19 billion. Retained profits reached over VND78 billion ($3.7 million).

BMC plans to pay total cash dividends of 40 per cent this year, down 10 per cent from the 2012 dividend.-

VN30 businesses dominate stock market trades

HCM City's VN30 (ranked by market capitalisation and liquidity) made up nearly 60 per cent of the market's total trades, with investors showing an appetite for large-cap shares.

The top 30 companies reported positive business results with an average return on assets (ROA) of 7.47 per cent, 5.22 per cent above the market average. Return on equity (ROE) averaged nearly 16 per cent against a poor market trend of -3.72 per cent.

Professional services accounted for 45.75 per cent of the VN30 basket, followed by manufacturing, processing and property development.

Market capitalisation totalled VND556.4 trillion (US$26.5 billion) by close of June.-

FPT earns $50.5 million during first half of year

Software producer FPT Corporation (FPT) yesterday posted a first-half net profit of nearly VND1.06 trillion (US$50.5 million), VND803 billion ($38.2 million) of which comprised parent company profits, up 7 per cent year-on-year.

The corporation's revenue topped over VND12.48 trillion ($594.3 million) over six months, up 9 per cent from last year.

Technology and Telecom businesses were the biggest contributors, making up 76 per cent of its total profits. Technology (including software, system integration and IT services) grew 23 per cent accounting for 34 per cent of profits, while telecoms grew 12 per cent and 8 per cent, respectively.

Cash and short-term deposits reached nearly VND3.24 trillion ($154.3 million), up 20 per cent year-on-year. Half yearly earnings per share (EPS) was VND2,934, up 5 per cent year-on-year.

Steel firms need State support or face closure

The Viet Nam Steel Association (VSA) has warned that local steel businesses may face bankruptcy if the State does not intervene.

The announcement came as VSA businesses reported a 2.08 per cent drop on 2012 production levels, producing only 2.26 million tonnes of construction steel during the first half of this year. As of June 30, nearly 327,000 tonnes of this produce had yet to be sold.

The association blamed the industry's dire state on the real estate market's extended freeze and the dominance of Chinese steel in Viet Nam.

Large quantities of Chinese alloy are being imported as construction steel to dodge taxes and undercut domestic producers to the point of bankruptcy, the VSA said.

Competition from imported foreign steel has pushed prices down VND300–500 (US$0.014-0.024) per kilo, whilst local producers are also struggling with anti-dumping taxes imposed by several export markets.

By the end of May, more than 5.3 million tonnes of steel, worth $3.5 billion had been imported to Viet Nam, while total export volume reached just 1.2 million tonnes, with turnover slightly over $1 billion, according to the General Department of Customs.

Awards bestowed on listed firms

Fifty out of the nearly 700 companies listed on Viet Nam's stock exchanges were honoured yesterday based on information about their business strategy, transparency and sustainability in their annual reports.

The appearance of their reports was another criteria this year.

Leading the list were Bao Viet Holding (BVH), DHG Pharma (DHG), PetroVietnam Drilling Corp. (PVD), PetroVietnam Fertilisers and Chemicals Co. (DPM) and Vinamilk (VNM).

Asia Commercial Bank (ACB), Binh Minh Plastics Co. (BMP), Vietcombank (VCB) and Financing and Promoting Technology Corp (FPT) followed.

This year, five companies won the first-ever Sustainability Reporting Award, which included a first and second prize, and three consolation prizes.

The World Bank's International Finance Corporation (IFC) and the UK-based global body Association of Chartered Certified Accountants judged the sustainability reporting, selecting the five awardees based on a total of 88 annual reports that included sustainable development issues.

The first prize went to Vinamilk and the second to BVH. The consolation prizes were granted to DHG, PVD and HSC.

The Annual Report Awards contest was first organised in 2008 by the HCM City Stock Exchange, Vietnam Investment Review's sister publication Dau Tu Chung Khoan and fund management company Dragon Capital.

Tran Anh Tuan, editor-in-chief of Dau Tu Chung Khoan, said this year's entries had adhered to the guidelines published in Circular 52/2012/TT-BTC that replaced Circular 09/2010/TT-BTC on publishing information about the stock market. The new circular is in its first year.

Phan Thi Tuong Tam, CEO of the HCM City Stock Exchange and head of the awards' organising committee, said: "Investors are paying more and more attention to annual reports. Therefore, we have made efforts to improve competition criteria year after year, in both quality and appearance of the report."

"As for next year's criteria, we will work out more norms for transparency to require more honesty in publishing information. For example, companies will have to include sustainability reporting and analyses of operations, and corporate governance must be more specific instead of being general as now. We will announce the norms for next year before we start publicity on the 2014 contest," he added.

Pham Nguyen Vinh, business development director at Dragon Capital, said the contest was a good media channel for promoting corporate awareness of annual reports and sustainability reporting.

"When the economy becomes stable, companies that will benefit from it will be those who respect investors and partners to build trust and attract more investors through two-way information exchange," he added.

ACCA Vietnam member Nguyen Viet Thinh, advisory partner at PwC Vietnam, team leader in charge of sustainability reporting judging, said: "It is worth noting that this year, the reports took into account social and environmental issues, not just charity activities. Many reports include many details on the use of electricity, oil and water, as well as the volume of re-used water and waste discharged."

"Many companies have identified sustainability as part of their business strategies. Some companies have started applying reporting standards and their reports turned out to be more reliable and convincing than the ones that do not apply the standards," he said.