Techcombank voted as Vietnam’s best bank

Techcombank has won top awards from the Hong Kong based FinanceAsia magazine.  

 The magazine described it as “Vietnam’s best bank in 2011”, “The best cash-management bank ion Vietnam” and “The best trade finance bank in Vietnam”.

The bank, one of the fastest growing in the nation, was the first in Vietnam to receive the three awards. FinanceAsia publisher Jonathan Hirst applauded the bank for its profit growth rate, its effective supervision of operational and credit risks, and its successful network expansion.

People’s trust should be consolidated, say IMF experts

The International Monetary Fund (IMF) on September 26 released its World Economic Outlook 2011 (WEO), saying that the global economy is in a dangerous new phase.

Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing, says the IMF report.

IMF experts predict that the global growth will moderate to about 4 percent through 2012, from over 5 percent in 2010. Real GDP in the advanced economies is projected to expand at an anemic pace of about 1.5 percent in 2011 and 2 percent in 2012.

Real GDP growth in emerging and developing economies during the second half of 2011 is expected to be about 6.5 percent, down from around 7 percent during the first half of the year. Emerging Asia is forecast to continue to post strong growth of about 8 percent, IMF reports.

Former Trade Minister of Vietnam, Truong Dinh Tuyen, says the risk of public debt in Europe is growing while US is facing a high unemployment rate. This will make a negative impact on emerging economies, including Vietnam.

According to IMF representatives in Vietnam, the country’s economic growth may hit 5.8 percent in 2011, with its inflation rate reaching 19 percent. However, Vietnam’s inflation rate will drop to 12 percent, while its economic growth will rise to 6.3 percent in 2012.

IMF chief representative in Vietnam, Ben Bingham, says as Vietnam will be affected by the global economic downturn the country should focus on ensuring social welfare, especially for poor people. People’s trust in the national economy should also be consolidated, he adds.

IMF economists speak highly of Vietnam’s steps to achieve sustainable economic growth, as well as its efforts in curbing inflation and stabilizing the fiscal situation by keeping foreign exchange rates under control. However, this should be done in a more synchronous manner, they suggest.

Vietnam has large potential for hotel investment

Potential for investing in hotels in Vietnam is promising, especially for investors who target long term growth, said Robert McIntosh, CBRE Hotels Asia Pacific Executive Director.

He made the statement at a conference on hotel investment strategy, held by CBRE Vietnam in Ho Chi Minh City on September 27.

The hotel segment in the Asian cities has bounced back rapidly after the financial crisis with revenue earnings registered from the rooms reaching at least 80 percent compared to the pre-crisis period.

Despite the stagnation in the real estate sector, the hotel market in Hanoi and Ho Chi Minh City has seen an impressive growth over the years with the number of room occupants rising by 5-10 percent over 2010.

McIntosh said that with the high interest rates offered by banks in Vietnam, most three-star hotels have earned a big profit for investors. However, these cheap hotels should be more efficient in designs and operations, said the experts from CBRE Vietnam.

Also at the seminar, CBRE experts spoke of different to invest in hotels, through selling or re-renting and emphasized the important role of management and advisory agencies in helping investors build and operate the hotels.

Regarding the establishment of a hotel investment trust in Vietnam, McIntosh said the model is still new in the country, therefore, investors should consider it carefully to develop a suitable legal framework for it.

Vietnamese businesses look to export Halal products

A seminar to boost trade in Halal products, which are manufactured under Islamic law, opened in the Malaysian capital city Kuala Lumpur on September 27.

As part of activities under the 2011 national trade promotion programme of the Vietnamese Ministry of Industry and Trade, the event was jointly organised by the Vietnamese Embassy in Malaysia, and the Chinese Chambers of Industry and Commerce of Kuala Lumpur and Selangor.

Addressing the opening ceremony, the Vietnamese Ambassador to Malaysia, Nguyen Hong Thao, said that the event is a positive signal for Vietnam to cooperate with Malaysian businesses in manufacturing and exporting Halal products.

Thao said that the cooperation would not only help Vietnam exploit the Malaysian market but also the global Halal market, which is expected to be worth US$2.3 trillion annually, thanks to the rising demand for Halal products from Islamic countries.

The event offered a chance for Vietnamese businesses to get an insight into regulations and criteria for the certification of Halal products issued by Malaysia.

In the first six months of this year, Vietnam’s total Halal food value reached US$1 billion and this figure is expected to increase by 2015.

Every year nearly 50 Vietnamese companies receive certificates for seafood exports, which account for 60 percent of the total Halal products, beverages, canned food, confectionery, vegetarian food and medicine.

Vietnam Economist Annual Meeting opens

The fourth Vietnam Economist Annual Meeting (VEAM) is being held in Ho Chi Minh City from September 27-28.

The meeting provides a good chance for university lecturers and businesses to access research on Vietnam’s economic potential, share knowledge and propose economic development policies for the upcoming years.

Participants heard 44 theses by professors, lecturers and PhD students in the US, France, Germany, Canada, Japan, Singapore, India, Australia and Thailand. The papers focused on issues related to economic development such as energy consumption, major factors affecting Vietnam’s growth and business equitization.

The meeting aims to gradually build a network to coordinate researchers and economic lecturers in Vietnam and abroad and so far many economic initiatives and projects have been implemented.

German venture opens infusion solutions plant

German joint venture Fresenius Kabi Bidiphar Co, a market leader in infusion therapy and clinical nutrition, opened a new plant in Quy Nhon City, the central province of Binh Dinh, on September 26.

The 15,000sq.m plant, which was two years in the construction, cost VND340 billion and replaces German firm Fresenius Kabi's existing production facility in Quy Nhon.

It allows the company to almost double its manufacturing capacity for infusion solutions and liquid medications, mostly meant for the Vietnamese market.

German Minister of State Cornelia Pieper highlighted the plant's role in German-Vietnamese relations: "I am pleased to see that Fresenius Kabi has opened a new plant in Quy Nhon. Direct investments such as these benefit both Germany and Vietnam. And they serve to secure jobs in both countries as well.

Nearly 380 employees will work at the facility.

The manufacture of infusion solutions has already received a GMP (good manufacturing practice) certificate based on guidelines set down by the World Health Organisation.

Fresenius Kabi of Germany holds 51 percent in the JV, Bidiphar, a State-owned health care company based in Quy Nhon, owns 20 percent, and others account for the 29 percent.

Jan Walter, managing director of Fresenius Kabi for Vietnam, Cambodia and Laos for the last three years, said sales in Vietnam have grown at more than 20 percent annually.

EU meat producers target Viet Nam
 
The Union of Producers and Employers of the Meat Industry (UPEMI) yesterday launched a campaign to promote the sale of European beef and pork in Viet Nam.

"The programme, titled "Tradition, Quality and European Taste", is co-financed by the EU and Poland. It will be carried out in the US, Viet Nam and South Korea over the next two years," said Agnieszka Rozanska, director of UPEMI's International projects.

The campaign targeted distributors, wholesalers, importers, local manufacturers and processors, industry associations, and five-star hotels, she said.

Kamil Czub, foreign trade director of the Poland based PKM Duda SA, said Viet Nam was a potential market for EU beef and pork since current meat consumption per capita in Viet Nam was still low compared to an average of 43 kilos per year per person in the EU.

In addition, with increasing annual incomes in Viet Nam, demand for meat had been expected to rise significantly, Kamil said.

Europe is famous for its rich tradition of producing high quality beef and pork of unique quality. The high quality of the meat is the result of breeding based on stringent EU regulations and on care given to each and every element of the food chain.

"EU is very dependent on exports so animal health and food safety are crucial requirements," he said.

"Viet Nam has a great tradition of fresh, healthy dishes, and we think that European meat would fit perfectly within this tradition," Wieslaw Rozanski, UPEMI's president, said in a press release.

Foreign arrivals up over 15 per cent in nine months

Viet Nam welcomed 4.3 million international visitors in the first nine months of this year, surging 15.5 per cent against the same time of last year, according to the General Statistics Office.

Of the total, those travelling for tourism rose by 11 per cent to 2.6 million while those for business dropped by 5 per cent to 720,000.

During the period, almost all foreign sources of Vietnamese tourism saw year-on-year increases. Visitors from China rose 45 per cent, South Korea by 4 per cent and Japan by 8.2 per cent. Other sources such as Taiwan, the US and France also saw positive growths.

Surveys from the Viet Nam Administration of Tourism showed that foreign visitors stayed in Viet Nam for an average of nine days per visitor and they spent about $72.5 a day.

Tourism experienced the highest growth when compared to other services in recent years after transport, finance, insurance and telecommunications.

US first-ever agricultural trade mission visits Vietnam

US Acting Under Secretary for Farm and Foreign Agricultural Services Michael Scuse is leading the first-ever agricultural trade mission to Vietnam from Sept. 26- 29, according to the United States Department of Agriculture (USDA).

The mission’s visit is aimed at to promote US agricultural exports to Vietnam.

"Vietnam is one of the world's fastest-growing economies and an important market for US agricultural products with two-way agricultural, fish and forestry trade reaching nearly US$3.4 billion in 2010", said the USDA in its September 26 press release.

Fifteen U.S. companies representing a wide range of food and agricultural products are taking part in the mission. They are scheduled to meet with nearly 150 Vietnamese producers, importers, buyers, distributors, and investors to develop trade relationships.

While in Vietnam, Acting Under Secretary Scuse planned to meet with Vietnamese government and agricultural officials, and visit agricultural production and development sites. He will also participate in the opening of the USA Pavilion at Food and Hotel Vietnam (FHV) - one of Southeast Asia's premier food trade shows.

Asians shoppers like advice  

Most Asian shoppers were open to advice and recommendations made by staff at the right moments, according to the recent G2/Grey Group Eye
on Asia – Retail Study.

Viet Nam has the highest percentage of people seeking advice at pharmacies, 40 per cent compared to Asian average of 18 per cent, Japan's 3 per cent and Korea's 1 per cent. According to the study, around 11 to 16 per cent of shoppers did not want to be approached at all.

"As the complexity of promotions and the variety of products increase, non-advice seekers are more likely to switch sides and seek guidance from sales staff," said G2/Grey Group Viet Nam strategic planning director Sumit Pillai.

Need for advice varied by country and channel choice. At 93 per cent, Indonesian shoppers were the most open to approach and advice at supermarkets while the figure was 81 per cent for Vietnamese consumers.

Australia had the largest number of non-advice seekers (25 per cent) followed by Indian shoppers (22 per cent) who tend to shop "by the list".

Southern hub projects hit brick wall

Ho Chi Minh City build-transfer infrastructure projects have run into rough ground.

Though accommodating just three build-transfer (BT) infrastructure projects worth $532.3 million in total investment, the city faces myriad difficulties relative to giving land to BT project developers, according to Ministry of Planning and Investment.

Developer Petroleum Urban and Infrastructure Investment Joint Stock Company of beltway 2’s southern section in Binh Chanh district said the firm just received the land given in exchange for the BT project’s implementation in July 2011.

The land, however, is not clear and it was given late, delaying the beltway project and costing developer a big chunk of money for planning and land acquisition.

In case of four kilometre Ha Huy Giap road which links Thuan An town in southern Binh Duong province to Ho Chi Minh City’s District 12 developer Idico Infrastructure Development and Investment Joint Stock Company (IDI) said the city authorities agreed for the company to use two land plots in District 12 and land areas alongside the road to recoup capital.

However, it cost VND1.218 trillion ($58.84 million) for land acquisition, almost equal to the project’s total investment of VND1.231 trillion ($59.46 million).

According to Ho Chi Minh City Transport Department’s road construction division deputy head Nguyen Thanh Tuan, in light of project contracts land acquisition was the responsibility of competent state agencies.

The city authorities have assigned the people’s committees in districts where BT projects run through to take charge of clearing relevant land. However, land acquisition saw little progress, hindering the projects’ pace.

For instance, stagnant site clearance delayed the VND1.352 trillion ($65.3 million) Tham Luong-Ben Cat waste-water treatment plant for almost two years.

“Though the BT project was ratified in January 2010 and planned to come online within 2011, however, it is still in the land acquisition stage,” said Vo Van Canh, an investor consortium representative.

Another bottleneck in BT project implementation was the valuation issue, particularly in regard to the valuation of land areas without associated technical infrastructure.

Banks become innovative in attracting new deposits
 
Many banks are managing to lure more depositors by offering attractive preferences on certain products.

The Sai Gon Thuong Tin Joint-Stock Commercial Bank (SCB) has adjusted its non-term deposit polices by increasing its overnight interest rate to 12 per cent per annum for individual depositors, and to 8 per cent for organisational depositors.

Following this trend are many other banks, including Viet A Joint-Stock Commercial Bank (VietAbank), Viet Nam Joint-Stock Commercial Bank, and Viet Nam Export–Import Joint-Stock Commercial Bank (Eximbank).

VietAbank's daily deposit interest rate ranges between 13 and 13.8 per cent per year while Navibank's non-term rate is 14 per cent per annum offered for deposits worth VND100 million or more.

At Eximbank, the overnight interest rate stands at 7 per cent per year while deposits with a term of 48 hours or two days have an interest rate of 8 per cent.

Many other banks including Orient Joint- Stock Commercial Bank (OCB) have launched promotion programmes under which a depositor would receive a gift with a value aligned with the individual's account as well as the term of the deposit.

OCB also allows depositors to withdraw their money prior to the due date after one-third of their deposit term has been completed. They are not required to give back any gifts.

The chairman of one bank's executive board said that small banks lost their competitive advantage after the State Bank of Viet Nam established a common pricing mechanism for bank capital mobilisation.

Many depositors at small banks have withdrawn money to deposit at large banks, particularly State-run banks, to ensure safety. This change has caused small banks'capital sources to fall sharply.

Small banks have been trying to promote one-day deposits as a way to prevent capital shortage.

Port is left in a storm

A host of difficulties are hampering Saigon Port’s removal plan.

According to Saigon Port Authority’s (SPA) general director Le Cong Minh, the firm’s biggest difficulty upon removal was where to source capital for building a new port.

To become financially viable for building the new port, the firm had to change the usage function of the existing port’s land, Minh said. He added that the land transfer plan was not ratified by Ho Chi Minh City People’s Committee, so SPA could not draw an investment plan to source investment for the new port project.

“Decision 46/2010/QD-TTg allows removing port businesses to take loans for building new ports. However, taking on costly loans will drive up investment expenses and badly affect project’s efficiency,” Minh added.

Another hindrance was the lack of roads.

As planned, the Saigon-Hiep Phuoc port project’s first phase with a handling capacity of 8.5 million tonnes per year at a total investment of over VND3 trillion ($145 million) is about to be finalised and would be pressed into service in late 2011.

The proposed D3 road connecting Hiep Phuoc Industrial Park (IP) in Ho Chi Minh City’s Nha Be district to Saigon-Hiep Phuoc port has yet to be built. The road is developed by Tan Thuan Industrial Promotion Company (IPC) which then trusted the task to Hiep Phuoc IP Joint Stock Company (HIPC) for the project’s implementation.

Both IPC and HIPC, however, were yet to complete the project’s design and could only compensate 40 per cent of the proposed area. Sourcing the project’s investment capital remains a dilemma to developers also.

Besides, the Soai Rap channel leading to Hiep Phuoc port is shallow, hindering the port from receiving big ships.

“The estimated expense for dredging Soai Rap channel is enormous and Ho Chi Minh City authorities and relevant bodies still fail to source investment hindering ports in Hiep Phuoc from receiving big ships,” Minh said.

Members of the Vietnam Seaport Association in Ho Chi Minh City said that as a port city, Ho Chi Minh City needed to outline and enact specific management mechanism to regulate the operation of Hiep Phuoc port complex to sharpen its competitiveness relative to other ports in the area.

Saigon Port is one of the leading ports in Vietnam with a cargo handling capacity of around 12 million tonnes per year.

Will fuel prices decline in Vietnam?

Vietnamese consumers and fuel dealers are anticipating a retail price cut and a commission hike since global oil prices are declining.

WTI crude oil for delivery in October yesterday tumbled US$2.37 a barrel to $77.48, while London's Brent North Sea crude dropped to $103.19.

In Singapore, Vietnam’s largest fuel supplier, A92 gasoline quoted at $118 a barrel on September 23, and analysts said the current downward trend could take it down to $115 this week.

In Vietnam, there is expectation of a fall in retail prices.

Fuel retailers said the current commission of VND150 per liter of gasoline was not enough for them to cover expenses.

They wanted the commission to be increased back to VND800, the rate obtaining in late July and early August when A92 was between $118 and $120.

Last month fuel retail prices edged down by VND300 – 500 (($0.015-0.025) per liter after soaring by VND2,900 in February.

The pump prices of A92 and A95 are now VND20,800 and VND21,300, while diesel and kerosene cost VND20,800 and VND20,500.

Incham to host pharmaceutical seminar

The Indian Chamber of Business in Vietnam (Incham) will organize a pharmaceutical seminar on the industry’s outlook this year on Friday evening at Sheraton Hotel.

Around 100 state officials, hospital representatives and pharmaceutical importers in Ho Chi Minh City are expected to participate in the event.

The event will be a chance for Indian and Vietnamese firms operating in the field and other related sectors to bolster their partnerships, said P.N.Madhusoodhanan, the head of pharmaceutical sector of Incham board of governors.

We are seeking for more accessibility at Vietnamese hospital, he told Tuoi Tre.

Incham has 42 member companies operating in pharmaceutical manufacturing and trading among 120 Indian firms operating in the industry with over 4,500 products in Vietnam.

Indian pharmaceutical companies are trying their best in helping healthcare professionals and the people of Vietnam to access unmet medical needs by producing international quality medicines at affordable prices, Madhusoodhanan said.

Indian-made medicines, meeting any strictest international standards, can be averagely 10-times cheaper than those produced in developed world, he said.

Since many EU and US pharmaceutical firms have been outsourcing their Research and Development (R&D) work in India to cut cost, India now can produce more medicines at fair prices when the 20-year patent protection for any drugs expires.

They are also playing a significant role in the development of Vietnamese pharmaceutical industry through knowledge sharing, and being source of quality active pharmaceutical ingredients (API), machinery and technology, he added.

Their market shares in Vietnam are around 20 percent in volume and 30 percent in value of the sector.
If the collaboration between Indian and Vietnamese firms can be strengthened, the proportion of 20 percent of Vietnamese patients getting diagnosis and treatment will be improved, said Rajiv Sharma, director of Indian Reliv Healthcare Inc.

India is now the world’s 3rd and 14th largest producers of pharmaceuticals by volume and value respectively. It is exporting medicines to 151 countries and territories worldwide.

Its leading foreign markets last year were US, UK, and Germany with $1.8 billion, $264 million and $243 million respectively. Vietnam was ranked 12th among its foreign markets with around $103 million.

For more information and registration, please contact Ms. Phuong at (083) 823 85 30.

Vietcombank to sell 15 pct stake to Mizuho - chairman

Vietcombank, Vietnam's second-largest partly private bank by assets, has reached an agreement to sell a 15 percent stake to Japan's Mizuho Corporate Bank, a unit of Mizuho Financial Group, the chairman of the Vietnamese lender said on Tuesday.

"The State Bank (of Vietnam) has agreed for us to sell our stake to Mizuho," Chairman Nguyen Hoa Binh said, but declined to provide the value of the deal.

In July sources said Mizuho was expected to buy up to 20 percent stake in Vietcombank in a deal worth more than $500 million.

Vietnam Air eyes budget offshoot

Vietnam Airlines is considering entering Asia's booming low-cost aviation sector with a new offshoot, while aiming to build its home base into a major entry point for Indochina, its chief says.

The state-owned airline is confronted with "growing pressure" from Asia's budget operators, president and CEO Pham Ngoc Minh told AFP in an interview.

"We see opportunities in the low-cost segment," he said, without revealing more details of the group's plans.

From Malaysia's AirAsia to India's GoAir and the Philippines' Cebu Pacific, a host of no-frills airlines have spread their wings in Asia in recent years, in a challenge to the traditionally more expensive flag carriers.

While some analysts argue the market is already too crowded, given the dozens of discount airlines already criss-crossing the skies, others believe there is still room for more competition.

Aviation analyst Shukor Yusof of Standard & Poor's Equity Research said flying is currently affordable for only a relatively low percentage of Vietnam's 86 million people.

He said Vietnam Airlines should "seriously" consider starting a low-cost subsidiary.

Vietnam Airlines also hopes to make the country's two biggest airports, Hanoi and Ho Chi Minh City, a gateway to the fast-growing sub-region of Vietnam, Cambodia and Laos, competing with Bangkok and other regional hubs.

Analysts agree that Indochina, with more than 100 million people, has strong tourism potential, but they say Vietnam remains far from hub status.

Vietnam needs "a lot more spending" on airport and other infrastructure for it to become a gateway that could compete with hubs like Singapore or Hong Kong, said Jonathan Galaviz, chief economist at Galaviz and Co consultancy, which focuses on travel and leisure.

The government says the number of foreign arrivals in Vietnam was more than 3.9 million in the first eight months of the year. By comparison, tiny Singapore's visitors exceeded three million in the first three months.

Analysts say those numbers could be boosted if Vietnam Airlines can begin service to the United States, home to a large percentage of the four-million-strong Vietnamese diaspora.

But flights to the US west coast have still not begun pending US Federal Aviation Administration approval of Vietnam's security and other standards, Minh said.

The airline has previously cited similar reasons for delays in the service, which it has talked about for several years.

"We will open our direct flight to west coast America" on receiving the all-clear, said Minh, a veteran of almost three decades with the airline. He assumed the top job in December 2007.

Galaviz called US-Vietnamese routes "critical" to bilateral relations.

Since the restoration of diplomatic ties between the former enemies in 1995, a wide range of links has evolved.

Established in 1993 as the once-isolated communist nation began opening to the world, Vietnam Airlines joined the industry association IATA in 2006, aligning it with international standards.

It has grown to serve 55 destinations in 19 countries, either directly or through codeshare partners, and Minh sees the airline intensifying its network in Southeast Asia, Australia, Japan, South Korea and booming neighbor China.

"There's a lot of potential for this carrier," Yusof said.

Last year it became the first Southeast Asian airline to join the SkyTeam global alliance, which includes Delta Air Lines of the United States and others.

It plans a stock market flotation when conditions improve -- hopefully within two years -- to help finance an expansion of its fleet, which currently comprises about 70 aircraft, including 10 wide-body Boeing 777-200ER planes.

"We will have about 115 aircraft by 2015 and about 170 aircraft by 2020," Minh said.

He says the airline is different from other state-owned firms because of its lengthy international business experience. Foreign investors have criticized inefficiency in the broader state-owned sector, a key part of the economy.

"We don't have any subsidy," Minh said at the airline's compound of low-rise Soviet and modern-style blocks. "And we shall survive in this environment."

PV