France hosts economic, finance conference by Vietnamese experts

The Association of Vietnamese Scientists and Experts in France (AVSE) has held its first economic and finance conference in the Economic Centre under Patheon-Sorbonne University in Paris.

The conference, which took place on June 24-25, was attended by many specialists, lecturers and researchers from the Paris region and some French cities.

It aimed to provide new information on Vietnam’s macro- and micro-economy, including research conducted by Vietnamese intellectuals, and to gradually assist policymakers in Vietnam.

Speakers at the conference presented many issues such as the clean development mechanism in Vietnam, practices in businesses’ organizational and efficiency innovation, analysing the chain of values applying to macrofinance in Vietnam’s rural areas, and risk management in investment funds.

At the conference, representatives of Prevoir Group, which is operating in the life insurance field, shared their successful experience.

Some issues concerning Vietnam’s monetary policy, stimulus policy, and macroeconomic stabilization were enthusiastically discussed.

The second economic and finance conference is scheduled to take place in 2012 in eastern France’s city of Strasbourg.

Foreign investors bypass shares, buy into companies

Foreign institutional investors are bypassing the stock market in order to invest directly in domestic companies.

Economist Pham Do Chi said foreign investors were actively buying into companies in Viet Nam and were aiming not just at manufacturing enterprises but smaller companies with valuable assets.

Hanshin Engineering and Construction Co Ltd recently bought 25 million shares, representing a 10-per-cent stake, in PetroVietnam subsidiary PetroVietnam Construction Co at a price of VND25,000 (US$1.20) per share.

The negotiated price was nearly double the level at which shares of PetroVietnam Construction Co are traded on the Ha Noi Stock Exchange, where they are traded under the code PVX.

Other two South Korean industrial conglomerates, Huyndai and Kumho, have also expressed interest in buying a 20-per-cent stake in PVX, which is planning to issue additional shares and increase its total equity from VND2.5 trillion ($121.4 million) to VND5 trillion ($242.7 million).

The Oman Investment Fund, the sovereign wealth fund of Oman, recently purchased a 12.6-per-cent stake in PetroVietnam Insurance (PVI) for $42.4 million, becoming a strategic shareholder.

According to the newspaper Dau tu Chung khoan (Securities Investment), the Oman Investment Fund was eyeing investment in some additional listed companies, with new deals expected to be revealed in the near future.

In the meantime, the Oman Oil Company has agreed to contribute capital for the PetroVietnam-invested Ca Mau fertiliser plant project, slated for completion early next year, and Phu My Fertilisers (DPM), which is responsible for distributing Ca Mau fertiliser, has also recently received expressions of interest from foreign investors.

DPM vice chairwoman Nguyen Thi Hien told Dau tu Chung khoan that up to 40 institutional investors made contact with the company's investor relations department between April and June to seek investment information, including Goldman Sachs, Route One and Franklin Templeton Investment.

DPM is the sole distributor of the Ca Mau fertiliser plant, which will be the nation's largest, supplying up to 1.6 million tonnes of fertiliser to the domestic market annually.

It is also actively expanding its business with foreign markets, including Cambodia, Laos, and Thailand, while eyeing even more demanding markets such as Japan and Switzerland.

The HCM City-listed logistics company Gemadept (GMD) plans to issue additional shares this year, and many foreign investors are reportedly circling.

However, the company said demand for capital was not large, and it did not want to issue shares when share prices on the stock market were far below book value.

However, Chi predicted that mergers and acquisations activity would continue to be brisk through the remainder of the year.

Enterprise forum to be held in Vienna

The sixth Viet Nam Enterprise Forum in Europe will take place in Vienna, Austria, on September 9-11, according to the Viet Nam Enterprise Groups Union in Europe.

At the forum, Vietnamese enterprises in Europe will have a chance to discuss their role in economic development.

About 250 delegates and representatives from 18 European nations and Viet Nam will take part in the forum.

Lam Dong invests $1m in industrial parks

The Central Highland province of Lam Dong this year has invested VND20.7 billion (US$1 million) in building infrastructure for five small and medium industrial complexes.

The province is trying to complete work such as ground clearance, resettlement, transport infrastructure and lighting systems.

Key industrial zones to be completed

The southern province of Vinh Long is expected to complete the construction of the Binh Minh and Hoa Phu industrial zones this year.

The province is also building other industrial zones in Binh Tan (400ha), An Dinh (200ha) and Dong Binh (350ha).

Capital city increases seafood breeding area

The Ha Noi Agriculture and Rural Development Department reported that the area of aquaculture in the capital reached 13,500ha in the first six months of the year, with total output of 29,000 tonnes, up 6 per cent year on year.

With steady consumption and rising fish prices, farmers in the districts of Ung Hoa, Phu Xuyen and Thanh Tri have made high profits from their produce.

State invests in petrochemical plant

The Government has agreed to increase investment capital for infrastructure and land resettlement compensation at the Nghi Son petrochemical plant to US$235.66 million, up $35.66 million compared with the original figure.

The adjustment is due to rising input costs and a change in compensation policies in accordance with a newly-issued decree.

The complex will cover 962ha in the central province of Thanh Hoa's Nghi Son District.

Ha Noi, HCM City get $50m housing grant

The Ministry of Construction has announced that only Ha Noi and HCM City would be granted housing funds exceeding VND1 trillion(US$50 million), although the same type of fund had been established for other provinces and cities.

Bourses won't extend trading hours

The State Securities Commission does not have any plans to extend trading hours on the nation's stock exchanges to include afternoon sessions, according to a commission source. Such a change would only take place once economic conditions had improved and the stock market showed signs of recovery, he added.

Firm aims to refinance debts

HCM City Infrastructure Investment Co (CII) says it is in talks with a foreign bank for a loan of up to US$30 million at a preferential interest rate in order to overcome business difficulties resulting from high domestic interest rates.

The prolonged slump on the stock market has also interfered with the company's divestment plans – its main source of income this year – while interest and other input costs have increased subtantially. CII said it would slow some real estate projects and review other operations in order to avoid defaulting on debts.

CII shares have declined in seven out of the last 10 sessions since it announced a possible loss in the second quarter. CII closed unchanged yesterday at VND25,300 ($1.25) per share.

Developer to issue corporate bonds

Shareholders of real estate developer Quoc Cuong Gia Lai Co (QCG) have approved a plan to issue corporate bonds worth VND300-500 billion (US$14.6-24.3 million). The bonds, with a two- to three-year term, would have a face value of VND1 billion ($48,500) each with a floating interest rate. The issue, to be carried out this year, would aim to raise capital for the company's hydroelectric power project, rubber plantations and other projects.

QCG has also announced that it will require the remaining stake in Green Sai Gon Real Estate Joint Stock Co, in which it currently holds an 85-per-cent interest. The additional stake is worth an estimated VND30 billion ($1.5 million) and will allow Green Sai Gon to be fully merged in QCG.

Sacomreal sells garment maker stake

Sacombank Real Estate Co (Sacomreal) has reduced its stake in Tien Phat Garment Co from 89 per cent to 19 per cent in a deal expected to bring Sacomreal a profit of about VND261 billion (US$12.7 million), Sacomreal announced yesterday. The divestment was in line with its portfolio restructuring plan this year, the company said.

Hoa Phat's share buyback fizzles

Steel giant Hoa Phat Group (HPG) has bought back just 4.2 million shares out of 10 million it had initially registered to repurchase. The buyback was carried between March 22 and June 22. The company attributed the failure of the buyback offer to unfavourable conditions on the stock market.

Profits soar for gas supplier

The second-quarter business results of Sai Gon Petroleum Construction and Investment Co (PSG) would be as positive as its first-quarter results, said PSG chairman Nguyen Sy Thang.

PSG posted a net profit of VND64.8 billion (US$3.1 million) in the first quarter, an increase of 205 per cent over the same quarter last year.

Thang said profits in the first six months of this year would likely complete 70 per cent of its profit target for the entire year, with the completion and operation of the two natural gas plants in southern Dong Nai Province and HCM City in late March greatly contributed to PSG's earnings stream.

Ministry mulls incentives for 49 items in supporting industries

Strong incentives will be offered to those companies producing 49 selected items tentatively listed by the Ministry of Industry and Trade as key products in the supporting industries.

The Ministry on Wednesday had a working session with related agencies in a bid to implement Decision No 12/2011/QD-TTg dated February 24, which was issued by the Prime Minister with an aim to encourage development of supporting industries.

At the working session, the Heavy Industry Department under the ministry put forth the tentative list that covers 49 product items in six different industries, comprised of mechanics, electronics and informatics, auto assembling, apparel, footwear and high-tech industry.

The draft list is expected to focus incentives on certain supporting industries effectively, said director of the department Nguyen Manh Quan.

According to the decision, incentives and preferential treatment is given to those producing materials, parts, components and semi-finished products for such industries.

To be subject to the incentives, products must have high adaptability, can be produced en masse, and must be are made from local materials.

Those producing the selected items will be given priority to receive land incentives, tariffs, financial support and other assistance like design copyright, software, hiring foreign experts, transferring technology and labor training.

According to the ministry, the priority list of items will be completed this month and submitted for the Prime Minister’s approval. When implementing the regulation, the list will be updated and supplemented where necessary.

Top Vietnamese brands to receive Gold Star awards
 
The Top 310 brands of Viet Nam will be recognised at an awards ceremony to be held in October in the capital, the Viet Nam Young Business Association announced yesterday.

The winning brands will be selected based on a number of criteria, such as profitability, competitiveness and the position of the brand's products, product quality, technological sophistication, environmental impact, brand development and marketing.

In order to encourage domestic firms to pay more attention to sustainable and comprehensive business development, this year's award would add new criteria to assess the corporate social responsibility (CSR) of businesses in two areas of labour and environment as well as factors related to the sustainable development of enterprises, said association vice chairman-cum-general secretary Nguyen Manh Cuong.

Besides the top 10, top 100, top 200, the awards would also honour 10 other enterprises for their well-implemented CSR, he said.

The ninth Gold Star Awards programme aims to foster better conditions in which to launch new brands and promote existing trademarks, as well as to improve the visibility of Vietnamese brands internationally.

Winning brands will be selected from a wide range of sectors, including electronics, IT, real estate, securities, engineering, banking, finance, agro-forestry-fisheries, beverages, textiles and garments, handicrafts, trade and tourism.

Eight years after its first launch in 2003, the awards had been granted to 1,327 outstanding trademarks.

Breeder blunder leads to tra slump
 
The price of tra catfish has fallen sharply by VND3-5,000/kg despite rising production costs.

After rising to VND29,000/kg in April, wholesale prices were now as low as VND24,000/kg, causing sizeable losses to breeders, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

Nguyen Van Kich, general director of Cafatex, a seafood exporter based in the southern province of Hau Giang, said prices began to plunge on the EU market after the annual seafood trade fair in Belgium, falling from US$3.40-3.50/kg on average to $3.20/kg.

VASEP vice chairman Duong Ngoc Minh said that, after the trade fair, breeders held onto stocks, expecting the export price to rise. However, this resulted in an oversupply of large fish. Farms ended up with 70 per cent of their stock in fish weighing 1-1.1kg per unit while 70 per cent of market demand was for small-sized weighing 700-850 gramme per unit, Minh said.

To keep prices from falling further and protect the interests of breeders, tra exporters have agreed to maintain floor prices in the second half of the year, the head of VASEP's Freshwater Fish Committee, Duong Ngoc Minh, announced at a press conference in HCM City yesterday.

The move followed a June 20 meeting among the 25 leading exporters and the fish breeding associations of An Giang and Dong Thap provinces in which they had agreed to a free-on-board price of $3.30/kg of trimmed filet and $2.30 of untrimmed for all markets except the US, Minh said.

They also agreed to buy fish weighing up to 850g at a price of at least VND26,000/kg, he added.

Meanwhile, Minh said, processing companies and the associations should educate breeders about the size of fish to prevent shortages or oversupply, since processors were currently unable to source enough small fish to process.

He urged breeders to closely co-operate with tra exporters to more fully understand their needs.

Tra exports totalled 263,000 tonnes in the first five months of this year, worth $672 million, an increase of 4.7 per cent in volume and 24.7 per cent in value, Minh said.

VASEP has recommended that the State increase oversight of the tra market in order to avoid dumping of low-quality fish on export markets.

More than 190 local and foreign companies will take part in the Viet Nam International Fisheries Exhibition (Vietfish) to be held at the Saigon Exhibition and Convention Centre in District 7 from June 28 to 30.

With 320 booths, the exhibition will showcase products and services such as fresh, frozen, dried or salted fish and shrimp as well as equipment, machinery, packing, chemicals, cold storage and other items.

Organised by the VASEP, the exhibition will offer business exchange opportunities for attendees and update the latest information on seafood industry such as market trends, customer trends, new products and new technologies.

The exhibition also will include professional seminars on sustainable seafood development.

On June 27, a day before the exhibition, Vasep, in cooperation with the Viet Nam Fisheries Society, the World Wildlife Fund Viet Nam and WWF International, will hold a workshop on sustainable pangasius development through certification at the Sheraton Hotel, according to Vasep general secretary Truong Dinh Hoe, who spoke at a press conference in HCM City yesterday.

Hoe said Vasep at the exhibition opening ceremony would launch a campaign calling for contributions from businesses and individuals to help East Sea fishermen overcome difficulties so they could resume offshore fishing.

Viet Nam expects to earn US$5.5 billion from seafood exports this year, Hoe said, adding that seafood export revenue reached $2.5 billion in the first half of the year.

Belgium extends 60 million euro aid to Vietnam

The Belgian government has approved a program to provide Vietnam with a 60 million euro grant in 2011-2015, the Embassy of the Kingdom of Belgium in Hanoi said in a statement.

Deputy Minister of Planning and Investment Cao Viet Sinh and Director General Peter Moors of the Directorate General for Development (DGD) signed the minutes of the Joint Commission approving the new Indicative Cooperation Programme (2011-2015) on June 22.

The new assistance is expected to mainly support two sectors – water and sanitation, and governance. Vietnam and Belgium agreed that the future bilateral cooperation should focus on those sectors and a limited number of provinces and cities to ensure aid effectiveness.

Besides poverty reduction, the new cooperation program centers on emerging challenges for Vietnam such as climate change, lack of high quality human resources, the development of a green-based economy, and gender disparities.

About 30 million euros is expected to go to a water and sanitation program in the framework of climate change adaptation and mitigation in Ninh Thuan, Binh Thuan and Ha Tinh provinces. The program will help enhance institutional capacities of the three provinces to carry out the national strategy on climate change while covering issues related to regional spatial planning, urban planning and water management.

Around 12 million euros will be used for covering interventions in the governance sectors related to planning reform, and issuing new policies to encourage development of business incubators for short-term assistance to SMEs in their start-up phase.

Belgium is discussing with the Ministry of Science and Technology how it can support the drafting of a legal framework for technology business incubators, the set-up of a pilot technology, and implementing pilot funding programs for incubating new spin-off SMEs.

In addition, 12 million euros will fund a Belgium scholarship program to help Vietnam partly solve its lack of qualified human resources.

Auto registration fees to rise soon

The Government has approved a proposal to increase the ownership registration fee for cars by 5 percentage points.

Effective in September, the maximum registration fee for passenger cars with fewer than 10 seats will increase from 15 per cent (depending on locality) to 20 per cent of the vehicle's value, while the fee for larger vehicles will remain at the current 2 per cent.

Registration fees for motorbikes will also increase in urban areas from 2 per cent to 5 per cent of value.

The increase in registration fees was intended to slow the rapidly increasing numbers of private automobiles on the nation's roads, which grew by 12 per cent, or 183,000 vehicles, in 2010, according to the Ministry of Finance. About 1.7 millions cars were operating on the nation's roads at the end of that year.

The ministry collected an average of VND7 trillion (US$343 million) annually in registration fees during 2006-10.

Dollar rates to remain stable until year-end
 
The US dollar-Vietnamese dong exchange rate is expected to hold steady to the end of this year, but ANZ and Standard Chartered banks anticipates a dong devaluation early next year.

According to ANZ's report released on Wednesday, Government efforts to stabilise the foreign exchange market and restore confidence in the dong were having a positive effect.

The dong onshore trading rate has stabilised in the VND20,550-VND20,650 per US dollar range in recent months.

In the offshore Non Deliverable Forward (NDF) market, the dong's implied 12-month discount has narrowed by 2.2 percentage points from its post-devaluation peak in February. The dong's one-month NDF discount has also stabilised around 1 per cent.

"The State Bank of Viet Nam (SBV)'s more aggressive stance on inflation and changes in its FX policy are behind the recent stabilisation," ANZ's report said.

However, both ANZ and Standard Chartered Bank assumed that depreciation pressure would resume next year due to rising inflation, a widening trade deficit, low FX reserves, and the risk of new policy mistakes.

ANZ expects the dong to be devalued by 3-4 per cent within the first quarter (Q1) 2012 as inflation remains in double-digits. The dong's real effective exchange rate (REER) – a measure of its cost competitiveness – has appreciated by 5.6 per cent since March. Further REER gains will adversely impact on the trade deficit and exacerbate Viet Nam's already fragile balance of payments position.

Yesterday, Standard Chartered Bank also pushed back expectations of a further devaluation in the dong from Q3 this year to 2012. It forecast the exchange rate at the end of Q3 to be VND20,600 per dollar and VND20,600 at end-Q4. At the end of Q1 in 2012 it expects the rate to be VND21,400 and VND21,400 at end-Q2. It predicts a further rise to VND22,000 at Q3-end and VND22,000 at the end of Q4.

"The change in our FX forecasts reflects encouraging steps by the Vietnamese authorities to tighten monetary policy and their commitment to maintaining a stable exchange rate," Standard Chartered said.

Standard Chartered factors in dong devaluations of 6.8 per cent next year - comparable to the average yearly dong devaluation between 2008-10.

Viet Nam's yearly inflation climbed to 19.8 per cent in May, marking a 29-month high - the fastest rise in any of the 14 Asian economies tracked by Bloomberg.

Viet Nam's trade deficit reached $1.7 billion - its greatest level in 17 months. In April it stood at $1.49 billion. The May deficit brought the total for the year to $6.59 billion, wider than the $5.46 billion deficit at the same point last year, putting further pressure on authorities to address imbalances in the economy.

VN businesses meet in Phnom Penh

The Viet Nam Business Association in Cambodia opened its first general meeting in Phnom Penh on Wednesday, almost one year after it was founded on August 15, 2010.

A congratulatory letter from Deputy Foreign Minister Nguyen Thanh Son was read out at the meeting, which praised the association for helping overseas businesses fulfil their investment and business potential.

Son, who also acts as Chairman of the State Committee for Overseas Vietnamese, recognised expatriate businesses' assistance to the Vietnamese community in Cambodia and their efforts to promote Vietnamese products.

Vietnamese Ambassador Ngo Anh Dung called on Vietnamese businesses to abide by Cambodian law and take care of the Vietnamese-Cambodian community.

The participants voted on a new agenda to be carried out over the next four years, which focused on increasing membership and prioritised campaigns to promote trade and Vietnamese trademarks in Cambodia.

The resolution also emphasised that the association should expand operations and serve as a channel to distribute Vietnamese goods, especially in the Angkor Wat market.

Vice President of the Vietnamese-Cambodian Association Nguyen Van Dung was elected as the new chairman of the association.

Economic, cultural, social growth must go together

Economic growth must be harmoniously combined with cultural development and social progress and equality, said experts at a seminar held yesterday in Ha Noi.

Economic growth remains dependent on extensive development factors, said Professor Do The Tung, from the National Academy of Politics and Public Administration in his speech. "Economic growth is one of many factors that contribute to comprehensive development."

He warned that Viet Nam was in danger of falling into the middle income trap if it continued to rely on natural resource export, outdated technology and cheap labour.

"We have learnt that we must attach special importance to quality, efficiency and sustainable development, ensuring macro-economic stability and dealing with the relationship between the pace and quality of growth," he said.

At the one-day seminar, Doctor Tran Van Binh pointed out that there is a big gap between economic growth and social progress and equality. "We are faced with problems that not only destroy economic growth but also threaten social stability," Binh said.

In his speech, Binh outlined that Viet Nam's human development index had increased during the 20 years of renewal, but healthcare services for poor people remained inadequate, and large number's of children from rural areas were still dropping out of school.

Binh stressed that it was necessary to have a synchronous policy and legal framework to implement effective economic growth, cultural development and social progress and equality.

Cultural and social sectors must be promoted in line with economic development, Dr Phan Hong Giang presented in his report.

"Culture is society's spiritual background which constitutes the stable and long-lasting values of a country as well as forming a nation's distinct identity," Giang said.

"Culture creates a great social resource and deeply penetrates the development process. Each development stage of any country always bears cultural imprints."

From this angle, culture is not only the obvious result but also an ingredient of rapid and sustainable development.

To ensure equal interests and create an impetus for socio-economic development, Bui Ngoc Thanh from the National Assembly's Office proposed measures including preventing corruption, improving management skills at all levels and narrowing the gap between rich and poor people.
 
Bank ID deadline extended
 
The State Bank of Viet Nam has extended the deadline until the end of next year for bank card issuers to change their bank identification number (BIN).

The deadline was June 30 this year.

The extension was granted after commercial banks asked the central bank said millions of cards had not had their BIN changed.

The BIN consists of a single-digit major industry identifier, a six-digit issuer identification number, a variable length individual account identifier and a single check digit calculated using the Luhn algorithm.

Vietnamese banks previously used their own numbers on their cards which caused numerous problems when domestic debit cards shared a common ATM and POS networks. Then the State Bank of Viet Nam in 2007 ordered commercial banks to use a standard BIN.

Viet Nam has about 30 million domestic debit cards. The big bank card issuers told the central bank that they could not meet the deadline.

The central bank stated that from 2013, bank cards which use the old BINs would not be able to access ATM and POS (point of sale) networks and the bank card issuers would be responsible for all losses or problems involved in BIN changes.

Ha Noi tax bureau collects $11.3m

The taxation office collected VND232 billion (US$11.3 million) in fines from tax evaders in the first half of this year.

Thai Dung Tien, deputy chief of the Ha Noi Taxation Bureau, said in the last six months tax receipts totalled VND54.6 trillion ($2.6.6 billion), an increase of 11.1 per cent compared to the same period last year. He said in the second half of this year tax officials would focus their efforts on medium and large-sized enterprises, particularly those involved in real estate.

VN exports 3.5 mln tonnes of rice in first half

Vietnam exported 3.5 million tonnes of rice in the first six months of this year, earning $1.7 billion, according to the Vietnam Food Association (VFA).

The VFA reported that farmers in the Mekong delta, Vietnam ’s largest rice bowl, have harvested over 210,000 ha of rice out of the total cultivated area of 1.6 million ha in the 2010-2011 summer-autumn crop with an average yield of 5 tonnes per hectare, up 0.2 tonnes over the yield in the same period last year.

The provinces of An Giang and Can Tho saw even higher average yields of 6-6.5 tonnes per hectare.

Normal rice was purchased at prices from 5,800 to VND6,000 per kilogramme, meanwhile the price of high quality rice type was between 6,300 and VND6,800 per kilogramme. As a result, farmers earned profits of 30-35 per cent compared to production cost.