Garco 10 targets turnover of $75m

Garment 10 Corporation (GARCO 10) expected to gain a turnover of VND1.58 trillion ($75.9 million) in 2012, of which exports will reach VND1.4 trillion ($67.2 million).

To achieve this goal, the corporation will apply modern technology to improve production capacity, in addition to seizing opportunities to boost exports right after the global market shows signs of recovery.

The corporation last year achieved a turnover of VND1.3 trillion ($63.2 million), up 30 per cent from last year. Of this number, exports reached $50 million, up 40 per cent over the previous year.

Many shares bottom out

Shares fell further on both national stock exchanges this morning, with the VN-Index losing 1.2 per cent and the HNX-Index losing 0.8 per cent.

On the HCM Stock Exchange, the benchmark VN-Index closed at 336.73 points. Losers outnumbered gainers by 148-66.

The value of trades, however, climbed 38 per cent over yesterday's session, totalling VN?420.4 billion (US$20 million). Trading volume reached 29.1 million shares, an increase of 41.2 per cent.

Most blue chips continued to tumble, with insurer Bao Viet Holdings (BVH) and food processor Masan Group (MSN) – two of the 10 leading shares by capitalisation – bottoming out. Other stocks to hit their floor prices included PetroVietnam Finance (PVF) and Saigon Securities Inc (SSI).

However, there were some positives, with Vietinbank (CTG) up 1.7 per cent, Eximbank (EIB) up 0.7 per cent, software giant FPT (FPT) up 0.8 per cent and Sacombank (STB) up 1.3 per cent.

STB was also the most active code with nearly 3.1 million shares changing hands.

On the Ha Noi Stock Exchange, the HNX-Index concluded at 55.43 points.

Losers outnumbered gainers by 147-58.

Market value fell 5.7 per cent compared to the previous day's trading to just VN?171.3 billion ($8.2 million) on a volume of 22.6 million shares, as investors continued sell-offs.

Kim Long Securities Co (KLS) and VNDirect Securities (VND) were still the most heavily traded stocks, with around 3.3 million shares exchanged.

VAT exempted on advance securities payments

A new decree has been issued amending the Law on value added tax. From March, advance payments on securities will no longer be subject to VAT. In addition, VAT will also be exempted on loans for margin trading.

It is hoped the regulation will end the dispute between the securities watchdog and securities companies about the tax.

Eximbank to pay 14% cash dividend in February

Eximbank (EIB) plans to pay a cash dividend to its shareholders at a rate of 14 per cent on February 29, the Viet Nam Securities Depository announced.

The local bank expects to spend VND1.73 trillion (US$82.4 million) on the payout.

January 16 will be the last day for shareholders to register to participate in the payment.

Property firm earns $23.8m through bond issue

Property developer Hoang Anh Gia Lai Co (HAG) successfully issued 500 million corporate bonds late last month, raising VND500 billion (US$23.8 million), the company announced last week.

The three-year bonds will pay an interest rate of 18 per cent in the first year and flexible rates after that.

HAG chairman Doan Nguyen Duc ranked No 2 in the richest people on the Viet Nam stock market in 2011.

PetroVietnam Engineering subsidiary posts gains

PetroVietnam Engineering Consultancy Co (PVE)‘s revenue in 2011 reached VND689.5 billion (US$32.8 million), 2 per cent over its target. Its gross profit reached VND78.5 billion ($3.7 million), up 10.6 per cent.

Its contribution to the State budget was VND58 billion ($2.8 million).

PVE expects to earn VND860 billion ($41 million) in revenue and VND95.7 billion ($4.5 million) in profit this year, contributing VND63 billion ($3 million) to the State coffer.

Major cities are well stocked for Tet

Major cities across the country are well stocked with goods ahead of the upcoming Lunar New Year Holiday which begins later this month.

Authorities in Ha Noi have signed agreements with nine neighbouring provinces to ensure enough agriculture products are available for the biggest festival of the year.

In addition, the city's Industry and Trade Depart-ment has proposed the People's Committee to allow 95 trucks to carry Tet goods all day in the lead up to the holiday.

These measures will help the city avoid any sudden shortages and will assist in stabilising prices during the Tet holiday, the department said.

To date, Ha Noi Trade Corporation (Hapro), the largest company to have joined the price-stabilisation programme, has stockpiled 2,430 tonnes of processed food, 575 tonnes of vegetables, 1,061 tonnes of rice and 542 tonnes of meat specifically for Tet.

In HCM City, prepar-ations for the festival are in full swing, as the city's Industry and Trade Dep-=artment has stated that the volume of goods in the price-stabilisation programme for Tet had increased, meeting about 30-40 per cent of total demand.

Under the programme, the city plans to bring 17,260 tonnes of rice, 7,300 tonnes of sugar, 4,430 tonnes of cooking oil, 14,830 tonnes of meat, more than 9,200 tonne of vegetables and a many other products to the market.

Shops joining the programme will open until January 22 and re-open on January 24, the department said.

Ha Noi's Industry and Trade Department reported the price of a number of food products and commodities had already begun increasing slightly.

By the end of December, gas prices had increased by VND5,000 per 12-kg canister to VND370,00 (US$17).

Price of rice has also increased by VND1.5 million ($71) per tonne and the price of pork has risen by roughly VND2,000 per kilo.

The department said the price increases were unavoidable and from now until Tet, the price of pork was estimated to increase by 10 per cent while price of chicken may increase by up to 50 per cent.

Vegetable prices in the capital will surely rise because of high demand and cold weather, which may affect crops.

In HCM City, prices are more stable with the price of rice, sugar, vegetables and eggs remaining unchanged.

Favourable weather has allowed the volume of fruit and vegetables to increase and each day by some 300 tonnes, according to deputy director of the Thu Duc market Nguyen Thanh Ha.

A bumper crop of a range of fruits may even push prices slightly down in the lead up to Tet, which has occurred recently with mangoes.

Stock market slump has knock on effect

Viet Nam's stock market slumped by more than 7 per cent during December, which resulted in a decline of the net asset value (NAV) of local funds listed outside Viet Nam with an average loss of 5.13 per cent, according to the Viet Nam Fund Rating Report in December.

The report, introduced for the first time by Woori CBV Securities Corporation in November last year, is a monthly evaluation of the performances of investment funds with Vietnamese holdings currently listed on international exchanges.

The report found fund ratings in December were essentially unchanged compared to the previous month, with more than 80 per cent of rated funds continuing to be ranked below average with negative final scores.

Among the 11 rated funds, the JF Viet Nam Opportunities Fund, managed by JP Morgan Asset Management with assets under management of US$117.2 million, received the highest rating of five stars for the second time. Its NAV suffered a moderate loss of 4.48 per cent.

At the other end of the spectrum, the FTSE Viet Nam Index Fund, with assets valued at about $222 million, received one star for the second month in a row for its performance. Its NAV also saw the biggest loss of 10.92 per cent.

In theory, during time of recession, balanced and conservative strategy tends to outperform the aggressive, but for the last month of 2011, balanced funds lost an average of 6.57 per cent while aggressive funds' losses were just 4.38 per cent, the report states.

"However, the performance of each fund in a single month does not guarantee a better rating for that month. With our revised methodology, funds are accessed for longer term performance, along with other related factors focusing on risk and efficiency, rather than just the NAV figure," the report said.

Since the regulation of open-ended funds was approved in Viet Nam in December 2011, the rating system has been updated with a revised methodology which uses total returns based on NAV instead of market prices for rated funds.

By focusing on the NAV ratings, Woori CBV is also building new index products, called the Viet Nam Mutual Fund Index family. The index family is calculated to reflect price movements of listed mutual funds both inside and outside Viet Nam.

Funds are categorised into different groups based on incorporated locations (foreign, domestic, offshore), amount of assets under management (small, medium, large), investment style (aggressive, moderate, conservative) and sector. Funds specialised in debt have also been included in the index family for the first time.

Japan stays popular for investment

Viet Nam remained one of the leading destinations for Japanese investors in 2011, receiving a total of US$1.84 billion in investment.

During the past year, the number of Japan-backed projects granted licences in Viet Nam reached 208, up 82 per cent from 2010, according to the Japan External Trade Organisation (JETRO). The manufacturing sector accounted for 54 per cent of total projects, mostly producing construction machines, automobile spare parts and electronic components. Trade and service businesses made up 15 per cent of the projects, including top Japanese retailer Ministop.

Viet Nam has attracted Japanese investors with low production costs, but also cultural similarities, according to Than Thanh Vu, chairman of the Sao Khue investment consultancy firm.

In recent years, the Vietnamese Government has encouraged Japanese businesses to increase investment in the country's support industries and commit to establishing Japanese-only industrial zones (IZs).

The Government plans to build two IZs specifically for Japanese investors in the northern port city of Hai Phong and southern Ba Ria-Vung Tau province, where streamlined administrative policies and specialised infrastructure would be available. Experts have indicated there will be a new wave of investment from Japanese companies as the country rebuilds after last year's devastating earthquake-tsunami.

Viet Nam will continue programmes to attract Japanese investors, said the Minister of Planning and Investment Bui Quang Vinh, adding that Japan had always been strategically aligned with Viet Nam in economic development.

Small firms lack access to credit
 
A shortage of capital and difficulty accessing bank loans were the most challenging issues for small- and medium-sized enterprises (SMEs) in both the global and domestic economy during the recent recession.

Nguyen Bich Ngoc, from the Institute of Strategy and Policy on Finance under the Ministry of Finance, said one of the major sources of finance for SMEs was bank loans, but only about 20 per cent of businesses were able to access loans due to their small size and production and a lack of financial transparency.

Experts said supporting SMEs with capital was done in most developed and developing countries with funds assisting SMEs development.

In Viet Nam, the establishment of such a fund was approved 14 years ago and the Government issued a decree and several regulations two years ago, but the fund is not yet operational.

Also, the credit guarantee fund model, which was established 10 years ago, has not helped SMEs because enterprises have not wanted to pay fees for the fund with not-for-profit purposes.

Experts said the goal of establishing a new fund for SMEs development should be new ventures as they required smaller amount of capital. As a result, the fund would help many new SMEs rather than those wanting to expand their production.

Nguyen Minh Phong, from the Ha Noi Institute for Economic and Social Development, said the State should have several mandatory policies requiring commercial banks to reserve loans for SMEs.

General Secretary of the Viet Nam Chamber of Commerce and Industry Pham Thi Thu Hang said a credit rating system would improve access to bank loans while cutting service fees and loan lending procedures.

However, she said credit rating agencies would face many challenges in rating local businesses' credit due to a lack of transparency in the financial capabilities of SMEs.

General Secretary of the Ha Noi Association of SMEs Nguyen Huu Su said all SMEs lacked financial understanding, especially with larger banks.

Tax exemptions have helped SMEs, but they have also impacted on the country's revenue.

Hang said tax incentives over a short term could support businesses, but they would affect the market mechanism.

Director of Market Development under the State Securities Commission Nguyen Son said attracting capital through the stock market or bond issuance by groups of businesses would be a better way of supporting SMEs.

Viet Nam should look at applying a type of capital mobilisation plan alongside an appropriate legal framework, in time for the world and domestic stock market's recovery, Son said.

To Hoai Nam, vice chairman of the Viet Nam Association of SMEs, said the Government should complete the credit guarantee fund model as all 11 existing funds have operated ineffectively.

He added the Government should help the private sector access official development assistance loans while micro-financing policies should be spread throughout rural and remote areas.

Viet Nam now has about 500,000 SMEs. In the past 10 years, the sector has played an important role in the economy, paying taxes worth one-third of the economy's total revenues, creating jobs for 5.6 million workers and contributing to social security.

HCM City resolves to revamp economy
 
City authorities this year will focus on restructuring economy and lowering the CPI (consumer price index) below the national level.

In 2011, the city was unable to reach four of its 22 targets on the economy, society and environment. The city's GDP (gross domestic product) grew 10.3 per cent, although it had been targeted to reach 12 per cent, and the CPI doubled, to nearly 16 per cent.

In 2012, socio-economic figures have been readjusted to reflect the new situation.

Revised targets include the GDP to grow 10 per cent; export turnover to reach 15 per cent; total investment of society to rise to VND215 trillion (US$10 billion) or one-third of GDP; State budget to reach VND234 trillion; total spending from the State budget to stand at VND43 trillion; and the CPI to fall, lower than the national level.

To reach these goals, controlling inflation, revising the growth model and restructuring the economy will also be key tasks.

Detailed solutions will be created for five sectors: logistics and export services; industrial development; agricultural, forestry and marine growth; and enterprise investment.

The city is also expected to focus on building infrastructure for logistics and export services.

A master plan to improve storage systems for all kinds of transportation will be carried out, and a full logistics service project is being prepared.

The city will promote production and processing of software for both local and export demand; expand IT and electronic projects; and strengthen development of major IT centres, including the Sai Gon Software Park and Quang Trung Software City.

Local authorities will also speed up infrastructure construction for the pharmaceutical industry industrial park in Phuoc Hiep Commune, in Cu Chi district.

This year experts expect a better business environment. Administrative procedures will be reviewed and simplified, and improper expenditures will be cut. Tax reductions will also be implemented.

Ministry to foster anti-transfer pricing inspections

Curbing the transfer pricing and loss-making activities of businesses is the highest-priority task of the inspectorate sector this year, Deputy Minister of Finance Do Hoang Anh Tuan told Tuoi Tre.

Tuan said the Ministry of Finance has ordered the General Tax Department to submit reports on the tricks of transfer pricing, as well as a solution to curb this issue.

The ministry has gradually developed a specialized team to conduct anti-transfer pricing inspections, and is also joining hands with the Ministry of Planning and Investment to complete the anti-transfer pricing plan, he added.

Tuan said the inspectorate sector will mainly run scans on the businesses suspected of engaging in transfer pricing, those that have repeatedly reported losses, and those subject to tax incentives.

“We will focus on businesses operating in the banking, pharmaceutical, real estate, power, oil and gas, and telecom sectors.”

Tuan said the inspectors will pay special attention to businesses that have reported losses in many consecutive years.

“A comparison between the firms’ financial reports and statistics from the relevant agencies, such as customs, will lay an important basis for the inspection,” Tuan said.

He added that in its draft plan to amend the Tax Management Law, the Ministry of Finance suggests adding the advance pricing agreement to the law to increase the effectiveness of the fight against transfer pricing.

Accordingly, the tax agencies and businesses will negotiate to reach agreement on a tax rate the latter will have to pay before they begin investment and operation.

“The method is being piloted in investment projects of Korea’s Samsung Co in the northern province of Bac Ninh,” Tuan said.

He also admitted the limited abilities of the tax agencies in detecting transfer pricing activities in the past few years.

“Only 58 percent of tax officials hold university degrees, and they also lack experience, while the executives of major businesses, especially those with foreign investment, are highly experienced,” he said.

Regarding the suggestion that the corporate income tax should be cut from the current 25 percent in order to curb transfer pricing activities, Tuan said the finance ministry will consider the issue.

He said Vietnam’s corporate income tariff is only higher than that of Singapore, which sits at 19 percent, while in other regional countries, such as Malaysia and Thailand, the taxes are as high as 32 and 30 percent, respectively.

“The tax rate in Vietnam is expected to be cut to 20 or 22 percent, in order to prevent businesses from transferring revenues to pay taxes in other countries with much lower tariffs,” Tuan explained.

Retail market enters fierce competition

Vietnam’s retail market is considered one of the most profitable investment areas for foreign distributors, as it is predicted to grow at 23-25 percent annually from 2011 to 2015.

However, the ratio of Made-in-Vietnam products to imports remains modest given the great potential of a market of nearly 90 million consumers. Vietnamese products lose out to imports, especially contraband goods, on the home market.

An uneven distribution system is one main issue hindering the development of the retail market, says Dr Pham Tat Thang, a senior market researcher of the Ministry of Industry and Trade.

Statistics show that in 2010 Vietnam had more than 450 supermarkets, 80 trade centres, over 2,000 convenience stores and approximately 8,600 traditional markets. Only 15-20 percent of retail sales came from the modern trading system, while 40 percent was generated from traditional markets and the remainder from private street traders.

Several companies with popular brand names such as Garment 10, Viet Tien Garment, Nha Be Garment, Trung Nguyen Coffee, Vinamilk and Kinh Do Cookies have developed distribution networks across the country. Yet, they are just a drop in the ocean for a large, potentially lucrative market like Vietnam.

The fact is that Vietnamese products make up a large proportion of goods in leading supermarkets such as Big C, Hapro, and Saigon Co.op. However, they have yet penetrated traditional wholesale markets including Dong Xuan in Hanoi, Rong in Nam Dinh city, Dong Ba in Hue city, Han in Danang city, and Ben Thanh in HCM City. These markets are regarded as ideal for low-cost Chinese goods which are then distributed to smaller markets and private traders across the country.

Dr Thang says it is time to apply a comprehensive vision of the goods distribution network to supply Made-in-Vietnam products to the wider consumer community.

During WTO negotiations, Vietnam tried to claim several rights protecting the interests of small traders. One of those rights was the Economic Needs Test (ENT), with which foreign distributors have found it difficult to enter the Vietnamese market en mass. In its White Book, the European Chamber of Commerce (Eurocham) in Vietnam even described ENT as a key market accessibility obstacle for investors.

In the near future, ENT and other technical barriers will be removed and domestic distributors will face fierce competition from abroad. One feasible solution, according to Dr Thang, is to make the most of the nation’s 22.8 million internet users and more than 120 million phone subscribers to develop sales channels for Vietnamese products.

Dr Thang points to the fact that contraband goods imported from China are cornering Vietnam’s retail market. He quotes world economic experts as saying no country in the world can compete with Chinese goods in terms of price, and Vietnam is no exception.   

It is worth remembering that several decades ago many Chinese goods such as Wanli beer, china, vacuum flasks, electric fans and clothes flooded the Vietnamese market. After Vietnam restructured domestic production, improved product quality and ensured food safety and hygiene, Vietnamese products gradually won consumer trust and regained the lion’s share of the market. To date, no bottles of Wanli beer are sold in Vietnam. Hanoi and Saigon beer, Ming Long and Hai Duong china, Rang Dong vacuum flasks, Dien Co electric fans, and Viet Tien, Garment 10 and An Phuoc clothing are now favourites with local consumers.

It is obvious that local consumers do not turn a blind eye to Vietnamese products if manufacturers respect and seek to cater to their diverse tastes. Businesses are advised not to look for support from the State but to unite and quickly adapt to market demand. In addition, consumers are required to be clever to protect themselves against products of unknown origin. Only when local businesses and consumers are aware of this, will Vietnamese products truly gain a firm foothold on the domestic market.

Danang port set ambitious target for 2012

Danang port has planned to handle 4.2 million tonnes of cargo in 2012, up 11 percent from 2011.

To meet this target, Danang has developed specific plans for each affiliated member, focusing on continued investment in infrastructure to increase productivity and reduce costs.  The city will accelerate communication campaigns to polish the port’s image in the process of international integration.

The largest port in the central region aims to modernize its facilities to boost the exchange of goods, develop its economy and transport transit goods between neighboring countries and other nations along the East West Economic Corridor (EWEC).

Local authorities have invested in modern equipment to improve the port's capacity, expecting Tien Sa port to handle more than 4.5 million tonnes of cargo per year.  

Next year, the port will dredge areas along quays to receive large cargo ships. It is expected to receive the 252 metre long, 32.2 metre wide 75,000 DWT COSTA VICTORIA, carrying 2,400 passengers.

In 2011, Danang port handled 3.85 million tonnes of cargo, up 16.6 percent from the previous year, of which container cargo reached 114,000 TEU (twenty-foot equivalent unit), up 28 percent.

Key items exported through the port include toys, mineral ore, garments and textiles, footwear, and seafood. A number of enterprises including Keyhinge Toys Vietnam, Transcend, Rieker Vietnam, and the Hoa Tho Garment and Textile Company, have recorded significant export volumes through the port.

JP Morgan upbeat about Vietnam’s economy

Experts of Singapore-based JP Morgan Chase Bank have predicted that the Vietnamese economy will achieve a higher degree of stability in 2012 than in 2011, thanks to the government’s tight policy which has started to bear results.

They also predicted that Vietnam’s inflation will cool down, the balance of payments will be better supported, and its foreign currency reserves will increase.

Vietnam’s trade deficit will be offset by overseas Vietnamese remittances and foreign direct investment, according to JP Morgan Chase.

The bank holds that the asset quality of banks remains one of the most worrying problems of the Vietnamese economy, even though the possibility of a crisis in the banking system is low at present.

Binh Duong aims for US$ 1 billion FDI in 2012

Southern Binh Duong province will continue to complete infrastructure, including roads, electricity and water supplies, with the aim of attracting US$ 1 billion foreign investment in 2012.

Huynh Van Trai, Director of the provincial Department of Planning and Investment, said that in 2011 the province’s foreign direct investment hit nearly US$ 1 billion, including 76 new projects with capitalization of more than US$ 400 million and 118 projects adding capital in the fields of electricity, electronics, construction and transport.

Trai added that Binh Duong will give incentives to high-tech projects which do not cause environmental pollution.

The province will improve the quality of human resource training with courses to be run at the Eastern International University and Vietnam-Singapore School. It will also work with businesses to retrain workers on-site or abroad, Trai said.

The Vietnam-Korea School will also be established.

Garment exports rise sharply in 2011

Vietnam’s garment exports reached US$15.6 billion in 2011, up 38 percent against 2010, the highest growth over the past five years.

The sharp increase is attributed to rising export prices and increasing number of export contracts to traditional markets, such as the US, the EU, and Japan.

Le Tien Truong, Director General of the Vietnam National Textile and Garment Group (Vinatex) said the garment sector’s success is due to better market forecast and textile and garment businesses’ creativeness in dealing with impact of economic downturn, high input material cost and difficult access capital. In addition, businesses have restructured their operation and investment effectively and established reliable relations with clients.

Truong said it is important for businesses to choose markets and specific products and make plan to become a long-term strategic partnership with big suppliers.

Businesses should focus on markets with high competitive edge, improve productivity, reduce prices and invest in products with high values, Truong added.

Producers, consumers long wait for eco-friendly bags

Since authorities have yet to develop standards for eco-friendly plastic bags, consumers still have to buy ordinary bags at high prices, while packaging producers are seeking ways to have their products recognized as “environmentally-friendly.”

Nga, a small trader in Ho Chi Minh City’s Go Vap market, said that since plastic bags’ prices have recently more than doubled to VND70,000 a kilogram, she decided to switch to eco-friendly bags.

“But I cannot find such a product in any store in this market,” Nga said.

Prices of plastic bags have dramatically surged since earlier this year, when the Environmental Protection Tax Law, which imposes a tax rate of up to VND50,000 (US$2.4) on every kilogram of plastic bags, took effect.

Khai, a plastic bag wholesaler, said that although prices have skyrocketed, [plastic bag] consumption has not gone down, since traders, who need the bags for wrapping their goods for buyers, cannot find an alternative commodity.

“I used to deliver the self-dissolving bags, but traders were reluctant to buy them,” Khai said.

“[Traders] said the bags are too costly, and will automatically dissolve when left unused.”

However, according to a representative of Vafaco, a HCMC-based packaging manufacturer, self-dissolving bags only dissolve when exposed to direct sunlight, and are durable for two years.

Manufacturers said that at present, they have yet to sell the self-dissolving bags to the markets, and only produce through contracts with supermarkets and shopping centers.

According to the Environmental Protection Tax Law, environmentally-friendly plastic bags are not taxed, in a bid to encourage the use of this product.

However, Hoang Duong Tung, deputy head of the General Environment Department under the Ministry of Natural Resources and Environment, said the authorities have yet to announce standards for plastic bags to meet in order to be called “eco-friendly.”

Thus, plastic bag manufacturers have sought ways to have their products recognized as environmentally-friendly plastic bags to enjoy the tax exemption.

According to the Quality Assurance and Testing Center 3 (Quatest 3), most other countries have developed a clear set of standards for such eco-friendly bags, stipulating that the self-dissolving plastic bags are environmentally-friendly, and thus should be subject to a tax incentive.

Hoang Lam, director of Quatest 3, said many businesses have called on the center to grant them the license for self-decomposing bags.

However, Lam said, in Quatest 3’s view, only self-dissolving bags can be called eco-friendly.

“Preparation for the self-dissolving test at Quatest 3 will reach completion in the near future, and we will provide tests for this standard at manufacturers’ request,” Lam told Tuoi Tre.

Hoang Minh Dao, head of the Pollution Management Agency, which is assigned by the General Environment Department to develop the standards for eco-friendly plastic bags, said his institution will collect opinions from relevant agencies for the standards in this first quarter.

“However, while waiting for the standards to be fully developed, the Ministry of Finance should form a solution to support the eco-friendly bag manufacturers,” Dao added.

Tung, of the General Environment Department, said most of the so-called “environmentally friendly” bags that have been circulated on the market are the self-decomposing ones, while the self-dissolving bags are not commonly used, since producers mostly export this commodity.

Tung said a tax exemption for this product is necessary, since it will encourage both consumption and production of the bags, contributing to environment protection.

“However, the official regulation for the exemption has yet to be announced, since the relevant agencies have failed to reach an agreement.”

Foreign-funded project modernizes VN’s land management

A project sponsored by the World Bank and the Embassy of New Zealand has been developing the most complete and modern land management system for Vietnam.

Deputy Minister of Natural Resources and Environment Nguyen Manh Hien, made the assessment at a conference to sum up the three-year implementation of the Vietnam Land Administration Project (VLAP) in Hanoi on Jan. 4.

This is a “golden chance” for Vietnam’s land administration sector, said Hien, who is head of the project steering committee.

However, he noted that the project should focus on finalizing a land database as an important foundation for the building of a modern land administration model.

Heather Riddell, a representative from the New Zealand Embassy, said New Zealand is ready to further support Vietnam in completing its land management system.

She shared views with the Ministry of Natural Resources and Environment (MoNRE) on the need to build a modern land administration system based on a uniform land database from the central to local levels.

The VLAP has been implemented between 2008-2013 in nine localities, including Hanoi and Hung Yen, Thai Binh, Quang Ngai, Binh Dinh, Khanh Hoa, Vinh Long, Tien Giang and Ben Tre provinces.

To date, the project has completed surveying and mapping on nearly 400,000 ha of land.

Recovery a long-term prospect

Shares on the nation's stock exchanges continued declining yesterday even as markets throughout the Asian region were more mixed over renewed concerns about the European debt crisis, fanned by news that eurozone banks had deposited a record of US$591 billion with the European Central Bank.

"Signs of a rally are no stronger, and the current expectation is just a technical correction," said analysts for BIDV Securities Co. "The current status of the market is only suitable for long-term buys."

With more optimistic prospects for the economy, supporting information might appear as soon as the second quarter, said FPT Securities Co analysts. "Instead of short-term targets with high risk, investors should turn to medium- and long-term prospects which promise lower risk" they said.

On the HCM City Stock Exchange yesterday, the VN-Index shed 2.3 per cent to close at just 340.94 points, setting a new three-month low. Losers overwhelmed gainers by 149-60. The value of trades reached only VND304.4 billion (US$14.5 million), while market volume dropped 18.9 per cent to 20.6 million shares.

Blue chips tumbled, with none of the 10 leading shares by capitalisation posting gains. Shares of real estate developer Vincom (VIC) hit their floor price of VND94,500 ($4.50) per share. Sacombank (STB), closing down by 1.2 per cent, was again the most-active share, with 1.8 million traded.

On the Ha Noi Stock Exchange, the HNX-Index retreated by another 1 per cent, concluding the day at 55.89 points. Nearly 86 per cent of all listed codes tumbled, even as the value of trades rose by 12.3 per cent over the previous session to VND181.6 billion ($8.6 million). Volume reached 20.4 million shares.

VNDirect Securities Co (VND) was the most-active share nationwide, with more than 1.9 million exchanged, but it bottomed out to just VND6,400 per share.

In HCM City, foreign investors returned to being net sellers by a margin of VND8 billion ($380,950), but they were net buyers for the 16th consecutive session in Ha Noi by a margin of VND22 billion ($1 million).