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BUSINESS IN BRIEF 6/12

Rice exports hit a record high; Rare earth processing plant built in Quang Ninh; HCM City’s GDP soars by 9.3 pct; New ruling fails to rouse gold market; Tightening fruit and vegetable imports; EVN to issue bonds to repay debts
Rice exports hit a record high

Vietnam is likely to export 7.650 million tonnes of rice this year, according to the Vietnam Food Association.
    
The information was released at a seminar in HCM City on December 4 to discuss rice production and consumption.

The VFA said, rice exports reached 7.101 million tonnes in the past 11 months, and are expected to hit more than 7.6 million and earn nearly US$3.2 million in revenue by the end of this year.

The export price was US$445.56 per tonne, down US$43.3 per tonne on average compared to the same period last year.

Truong Thanh Phong, President of the Vietnam Food Association said that 5 percent broken rice including fragrant or sticky rice accounted for 59 percent of total export revenue, up 78 percent from last year.

Rare earth processing plant built in Quang Ninh

A hi-tech rare earth processing plant will be built in Ha Long city, the northern province of Quang Ninh.

An agreement to this effect was signed in Quang Ninh by Global Rare Earth, an affiliate of Vietnam’s Tuan Chau Group and the Winglee Resources PTE Company of Singapore on December 4.

Accordingly, the US$35.5 million Vietnam – Singapore International Rare Earth Ltd, will sit on a 50,000 square metre site in the region’s Viet Hung industrial zone.

Construction is expected to finish in the next eight months since the plant gets the government’s permission.

In the second phase, additional mining surveys will be conducted to provide materials for the plant.

Rare earth elements are important materials in the production of components used in mobile phones, solar batteries, high-efficiency electric motors, flat-screen televisions, military equipment and other clean energy technologies.

Vietnam welcomes Swiss finance experts

Vietnam welcomes advice from leading Swiss financial experts that will help improve the country’s monetary and financial supervisory system.    

Deputy Prime Minister Vu Van Ninh made the remarks in Hanoi on December 4 when he received Daniel Zuberbuchler, former Vice Chairman of the Board of Directors of the Swiss Financial Market Supervisory Authority, FINMA, Daniel Patrick Senn, Head of Financial Services of the Global Audit Group (KPMG) and Swiss ambassador to Vietnam, Andrej Motyl.

Ninh said that Vietnam is seeking international experience to help build a financial supervisory model that is applicable to the country’s situation.

Sharing experience in monitoring Swiss banks, the guests agreed that any national finance supervisory agency should make assessments independently so that it is able to issue early risk warnings and take effective preventive measures.

They hoped to continue in-depth research on Vietnam’s financial system and make suitable proposals for a modern financial supervisory system that meets international standards.

Trade fair draws attention to regional handicrafts

Hand-made crafts made by artisans from Vietnam, Laos and Cambodia are the primary exhibits at a trade fair in the Central Highlands province of Kon Tum.

The fair, which opened on December 4, brought together 700 businesses displaying their high-quality products at 360 pavilions to seek potential partners.

It is one of a series of events to herald the 8th Conference of the Vietnam - Laos - Cambodia Triangle Development Coordinating Committee and the 100th founding anniversary of Kon Tum (9/2/1913 – 9/2/2013).

Asia-Pacific conference discusses e-postal payments

A conference on developing electronic-postal payment services in Asia and the Pacific took place in Hanoi on December 4, drawing participants from nine regional countries and the Universal Postal Union (UPU).

The conference, the fourth of its kind, held in the framework of cooperation between the UPU and the International Fund for Agriculture Development (IFAD), aimed to expand the electronic-postal payment network to serve farmers and small and medium-sized enterprises.

Participants reviewed the implementation of national and joint projects with regional countries, and discussed measures to develop e-commerce services in the system.

Vietnamese representatives held bilateral meetings with representatives from China, Malaysia, India, Laos and Cambodia. They discussed trialing services and the building of joint programmes to advertise express-money services between Vietnam and other countries.

Vietnam hosted the conference after it was elected to the UPU’s Executive Council at its 25th Universal Congress in October, 2012, demonstrating the growing prestige of the nation’s postal industry in the region and world.

ASEAN Banker Forum 2012 opens in HCM City

 The 2012 ASEAN Banker Forum began in HCM City on December 4, organised around the theme “Retail banking: building competitive advantages that engage and retain customers”.    

The forum, hosted by the Vietnam Bankers Association (VBA) and the International Data Group (IDG), aims to offer an interactive platform for commercial banks, banking experts, and consultants to discuss and evaluate Vietnamese retail banking’s potential.

It also serves as a venue for Vietnamese and ASEAN bankers to meet and share experiences of the sector’s development in the wider region.

On the forum’s opening day, experts delivered reports on and discussed competitive environment analyses, sustainable development strategies for the sector over the 2013–2015 period, earning the faith of consumers through information security and risk management, and improving customer service through innovative payment solutions.

Some experts said that Vietnamese commercial banks have dramatically transformed in recent years, despite slow credit growth rates and tough competition. Almost all banks are now firmly focused on developing services they offer.

Banking service revenues account for 20-30 percent of the sector’s total revenue. Competition has forced banks to invest in technologies expanding distribution channels and improving service quality.

With nearly 40 percent of the population now Internet users, more than 3.5 million mobile phone users, and 15.5 million of fixed subscribers, Vietnam abounds with opportunities for the development of hi-tech financial services.

The forum’s organising board will also officially recognise Vietnam’s outstanding banks over the course of the two-day event.

HCM City’s GDP soars by 9.3 pct

Ho Chi Minh City’s GDP is estimated to exceed VND595,373 billion in 2012, equal to a growth rate of 9.2 percent but lower than last year’s increases of 10.3 percent.

Nguyen Thi Quyet Tam, the HCM City Municipal People’s Committee Chairwoman, noted that in the context of the global economic climate, the 9.2 percent growth rate is still positive—1.77 times higher than the national average.

She made the assessment at the Committee’s year-end meeting on December 4.

The four-day meeting from December 4-7 reviews 2012’s socio-economic situation and devises approaches to socio-economic development, budget estimates, and resource allocation for the new year.

The committee used its report to identify a number of challenges the city has encountered over the year, including low purchasing power, large inventories, capital access difficulties for businesses, and sluggish securities and property markets. These factors have prevented the city from fulfilling 2012’s set targets for socio-economic development and budget revenue.

In 2013, the city is aiming for an economic growth rate of 9.5–10 percent, an income per capita of US$4,000, and total social investment capital amounting to 36–37 percent of its GDP.

Export turnover is expected to grow by 13.5 percent. Total budget revenue and budget spending are forecast at 112.95 percent and 88.14 percent of 2012’s figures.

New ruling fails to rouse gold market

A week after banks stopped accepting gold deposits, the bullion market has yet to see benefits from the central bank's move.

The State Bank of Vietnam's prohibition on gold deposits took effect on November 25 and was expected to persuade people to sell gold to banks rather than hoard it.

Now banks charge a fee for safekeeping of customers' gold.

The rationale was that customers would avoid keeping the gold if they had to pay for it, and would rather sell it off, increasing supply in the market.

But bullion sales barely increased in the last week.

Only 10 and 15 percent of the gold withdrawn from banks was sold, a gold trading company based in HCM City's Tan Binh District said.

Consequently, the price of the precious metal remained at between VND47- 47.15 million per tael on November 30.

Earlier the gap between global and domestic gold prices was only VND3.2-3.3 million per tael (37.5gm), but since the banks stopped accepting gold deposits it has risen to VND3.7 million, with local prices being higher.

An analyst said this was because some banks had to buy 20 tonnes of gold bullion to return to their customers while supply was low.

The big gap in prices will continue if supply does not improve, he warned.

The banks' safekeeping services, which cost 0.01-0.05 percent of the value, has failed to elicit interest.

Nguyen Hoang Minh, deputy director of the State Bank of Vietnam's HCM City branch, said people have yet to get used to the new concept since for a long time they were paid interest for depositing gold.

He also revealed that only eight banks and 13 companies have registered for gold bullion trading, a tiny number considering 12,000 companies involved in gold trading.

But analysts are optimistic that the gold market will see a distinct improvement in early 2013 when banks completely stop trading gold bars.

Korean giant eyes Vietnam market

The largest manufacturer and exporter of “regenerated polyester staple fiber” in Korea, Dae Yang Industrial Co Ltd, has carried out a market survey in Vietnam to find partners for consumption and distribution of its product in Vietnam.

Regenerated polyester staple fiber, which is mainly used for home furniture like sofas, chairs, cushions, pillows and blankets, is lighter than cotton and cheaper than other chemical fibers.

The company is also looking forward to co-operating with Vietnamese textile enterprises such as Viet Tien Corporation or Phong Phu Corporation to carry out joint projects.

The Dae Yang has been exporting regenerated polyester staple fiber for more than 20 years to USA, Japan and the EU, with a production capacity of 500 tonnes per month, but this is the first time the company has approached the Vietnamese market.

HCM City aims for US$3.4 billion overseas remittances

Overseas remittances to Ho Chi Minh City are expected to hit US$3.4 billion by the end of this year, higher than last year’s figure.    

Nguyen Hoang Minh, Deputy Director of HCM City-based State Bank of Vietnam branch, said that most overseas remittances were channeled through credit organizations.

This year’s gain came from major labour markets, including Taiwan, Japan, and the Republic of Korea.

In addition, the real estate and stock exchange also contributed greatly to the increasing amount of overseas remittances, especially for the development of restaurant and hotel services.

Vietnam-New Zealand Committee meets in Hanoi

The Vietnam-New Zealand Joint Committee for Economic and Trade Cooperation held their fourth meeting in Hanoi on December 3.

The Vietnamese delegation was led by Deputy Minister of Industry and Trade Nguyen Cam Tu and the NZ delegation was led by Deputy Minister of Foreign Affairs and Trade Andrea Smith.

Both sides discussed measures to increase bilateral cooperation by speeding up the implementation of signed agreements and memorandums of understanding.

They agreed to accelerate negotiations for a double tax avoidance agreement and market access for Vietnamese farm produce to New Zealand.

They acknowledged that Vietnam and New Zealand need to work closely to strengthen cooperation in economics, trade and investment, as well as within multilateral cooperation frameworks such as the ASEAN-Australia-New Zealand Free Trade Agreement (AANFTA), the Trans-Pacific Partnership (TPP) agreement, the Regional Comprehensive Economic Partnership (RCEP) agreement, the Asia-Pacific Economic Cooperation (APEC) forum, and the World Trade Organisation (WTO).

Two-way trade between Vietnam and New Zealand rose 12.6 percent in 2011, hitting US$535.4 million. Between January-October 2012 bilateral trade fetched US$462.3 million, a year-on-year increase of 6.3 percent.

By September 2012, New Zealand had 18 valid projects in Vietnam with a total registered capitalisation of US$76.4 million, ranking 41st amongst foreign investors in the country.  

Tightening fruit and vegetable imports

The Ministry of Agriculture and Rural Development (MARD) has asked foreign exporters to strictly adhere to its Circular 13, ensuring food hygiene and safety for local consumers.   

Under Circular 13, all types of imported fruits and vegetables must be carefully examined before being shipped to Vietnam. Border crossing inspections are a special priority.

From December 31, 2012, Vietnam will temporarily halt fruit and vegetable imports from countries who fail to complete the specified procedures.

MARD Deputy Minister Nguyen Thị Xuan said that all fruits imported into the Vietnamese market must have clear origins and meet minimum quality requirements.

She revealed that Vietnam currently imports fruits and vegetables from 59 countries and territories around the world.

At present, 11 countries have received permission to export vegetables and fruits to Vietnam, namely the US, France, Australia, New Zealand, Canada, Thailand, the Republic of Korea (RoK), Chile, Cambodia, South Africa, and India.

Two other countries, Laos and China, were temporarily approved to continue their Vietnamese exports of fruits and vegetables until the end of 2012.

Manufacturing industry recovers

HSBC’s seasonally adjusted reading of Vietnam’s manufacturing PMI has exceeded the neutral 50.0 value for the first time in 14 months, rising from October’s 48.7 to 50.5 in November.
    
The rebound in manufacturing activity is anticipated and much-needed, which is supported by stronger credit growth as well as relatively benign inflation in conjunction with weak export demand, said Trinh Nguyen, Asia Economist at HSBC.

“Looking ahead, we expect a gradual pick-up of economic activity supported by both domestic demand and a gradual recovery in China,” she said.

The survey shows that improvements in operating conditions reflected November’s returns to positive trends in both production levels and new orders. Output increased at its most marked pace since September 2011, thereby ending a seven-month period of contraction.

Although the latest rise in new orders was only modest, the rate of expansion was still the strongest since April 2011. Work backlogs also decreased for the eighth consecutive month, suggesting a general easing of pressure on operating capacity across the Vietnamese manufacturing sector.

Another staffing level increase contributed to the latest reduction in the sector’s work outstanding. The pace of job creation picked up slightly from October and reached its highest in a year.

Price discounting strategies supported new business gains in the Vietnamese manufacturing sector. Factory gate prices decreased for the seventh month running and by the greatest extent since August. Average cost burdens continued to rise during November—driven by rising oil-related prices—but the cost burdens’ inflation rate  ebbed back further from September’s five-month high.

Hanoi fair to showcase agricultural, craft village products

An agricultural and craft village product fair featuring more than 150 booths,has been scheduled for Hanoi between December 14 and 17.    

The fair, organised by the Ministry of Agriculture and Rural Development, will display premium products including safe vegetables, fruits, agro-aqua-forestry produce, processed food, fresh food, and plant varieties from and northern provinces and various craft villages.

This is an excellent opportunity for enterprises to promote trade, advertise and enhance the reputation of their trademarks for domestic and foreign customers, and ultimately hopefully attract new investment to the agricultural sector.

A series of seminars on developing craft villages and introducing new models and advanced technologies into exisiting production processes will be held during the event.

Hanoi’s economy grows by 8.1 percent

The Gross Regional Domestic Product (GRDP) of the capital city is estimated to slow to 8.1 percent this year, a figure which is much lower than the set target of 10-10.5 percent.

However, the local economy has achieved a higher growth rate on a quarterly basis and 1.55 times higher than the national average, said Nguyen Van Suu, Vice Mayor of Hanoi, at the Municipal People’s Council’s year-end session on December 3.

The services sector is expected to gross a growth rate of 9.3 percent, construction-industry 7.7 percent, and agro-forestry-fisheries 0.4 percent.

The capital’s export earnings are estimated at US$10.3 billion, a year-on-year increase of 5.3 percent, but failing to meet the set target.

Its total development investment capital is estimated at VND222.5 trillion, up 13.2 percent against 2011, and not meeting the annual set target.

The consumer price index (CPI) is forecast to be kept at a single digit by the year-end. In November the index inched up 0.22 percent against October, or 6.67 percent from a year earlier.

The number of newly-established businesses has decreased significantly. Only 15,000 businesses have registered to operate in 2012, capitalized at VND83 trillion, or 90 percent and 70 percent of last year’s corresponding figures.

Meanwhile, more than 12,500 businesses have suspended their operations, accounting for 11.4 percent of the total number of operating businesses.

In its report, the city pointed out weaknesses of its economy, including risks of high inflation, business inaccessibility to bank loans, and downsizing production as a consequence of the global economic slowdown.

Given difficulties in 2013, the city aims to achieve an economic growth rate of 8.0-8.5 percent, with services increasing 9.0-9.3 percent, construction-industry 7.7-8.2 percent, agriculture 1.8-2.2 percent, and exports 9-10 percent.

Vietnam’s hotels win Gold Circle Awards 2012

Thirty six hotels in Vietnam are among 494 outstanding hotels worldwide selected to win the Gold Circle Award 2012 presented by leading Asian hotel booking site, Agoda.com.

Hanoi has seven hotels in the list, which are Rising Dragon Palace, Sofitel Legend Metropole, Melia, Nikko, Moevenpick, Daewoo and Fortuna.

Winning hotels must meet the criteria of the website such as positive comments from customers, good information display, and competitive prices.

Award-winning hotels will pledge to always provide the most reasonable prices for customers.

Banks forecast surge in profits

Ha Noi-based commercial banks are expected to buck the trend of economic gloom to report a surge in deposits and credit this year, according to the Ha Noi People's Committee.

The committee estimated banks in the capital would mobilise nearly VND897.65 trillion (US$42.75 billion) this year, up 9.23 per cent since January.

Lending would also surge 6.45 per cent to VND623.96 trillion ($29.71 billion), say the forecasts, of which long-term loans were twice as popular as their short-term counterparts. Meanwhile credit in Vietnamese dong rose 10.78 per cent as loans in US dollars declined 3.56 per cent.

Bad debts of Ha Noi-based banks would fall from 5.12 to 4.11 per cent

Credit issued by Ha Noi-based commercial banks in the second half leapt faster than the first half, when the banks reported a credit growth of only 2.35 per cent.

Due to the low credit growth and the high bad debt in H1, director of the State Bank of Viet Nam's Ha Noi branch Nguyen Thi Mai Suong admitted in June that the capital's banking system was facing major challenges, adding that the credit growth of banks in the capital in the first half of the year was the lowest it had been for a decade.

Credit surged higher in the second half of the year as lending interest rates have decreased significantly as the year has wore on.

EVN to issue bonds to repay debts

The Electricity of Viet Nam (EVN) Group plans to issue bonds as a way to tackle its mounting debts.

Dinh Quang Tri, Deputy General Director of EVN, said at a Ha Noi press conference on Monday: "EVN is considering and working on procedures to issue bonds worth VND9,000 billion [US$435 million] in a period of 2-3 years to repay its debts for electricity purchase" .

According to the Electricity Regulatory Authority of Viet Nam, EVN lost VND56 ($0.0028) per 1kWh of electricity in 2011.

The authority said one of the main reasons for EVN losses was the unfavourable weather conditions which affected the hydroelectric plants' electricity production during the dry season.

Other reasons given included fluctuations in currency exchange and high fuel prices which increased production costs.

The authority's officials added that the Ministry of Industry and Trade is reviewing the electricity supply capacity for next year based on the balance of losses in order to submit to the Prime Minister a price adjustment plan for 2013.

"The price adjustment will try to lesson the effect on local production and customers' psychology," said Dang Huy Cuong, the authority's chief.

According to EVN, electricity production for the first 11 months of 2012 reached over 105 billion kWh, an increase of 13.4 per cent on the same period last year.

REE adjusts foreign ownership rate

Foreign ownership in Refrigeration Electrical Engineering Corp (REE) will be adjusted down from 49 per cent to 43.7 per cent of REE's charter capital from yesterday, the State Securities Commission announced. Foreign investors are allowed to sell but not buy unless they negotiate with one another.

Earlier, REE asked to block foreign ownership in the company to save foreign room for its upcoming issuance of convertible bonds. It plans to issue VND558 billion (US$26.7 million) worth of convertible bonds to Platinum Victory Pte Ltd, a wholly owned subsidiary of Singapore's auto distribution and retail giant Jardine Cycle&Carriage Ltd.

Bao Viet Fund to sell furniture firm stake

Bao Viet Securities Investment Fund has registered to sell nearly 3.42 million shares, equivalent to 8.68 per cent of its stake in the Truong Thanh Furniture Corp (TTF), from December 5 to January 3, 2013. The deal will be carried out by both order matching and negotiation methods.

Earlier in October, the fund registered to unload those shares but could not succeed because of lower-than-expected prices. From August to date, the fund has gradually decreased its holdings from 14.41 per cent to 8.68 per cent. During this time, TFF shares plunged 15 per cent from VND5,500 to VND3.700 a share. The shares are currently traded at VND4,500 a share.

Government bond auction raises US$33.5 million

Viet Nam Bank for Social Policy successfully sold VND700 billion (US$33.5 million) worth of Government bonds, or 85 per cent of its total call, on the Ha Noi Stock Exchange on Friday.

Three-year bonds worth VND500 billion ($23.9 million) were sold at an interest rate of 10.9 per cent per annum, while five-year bonds worth VND200 billion ($9.6 million) were sold at an interest rate of 11.1 per cent per annum.

Since the beginning of this year, the bank has raised Government-backed bonds worth a total of VND14.63 trillion ($700 million) through auctions.

Brewery company votes on selling shares

Ha Noi Alcohol Beer and Beverage Company, known as Habeco, will hold an unusual shareholders' meeting on December 7 to vote on whether the company can sell shares to Carlsberg Breweries A/S.

Carlsberg Breweries A/S will buy more than 30 million shares with voting rights, equivalent to 13 per cent of Habeco's charter capital, from state shareholders at the price of VND50,015 (US$2.39) a share. This sale, proposed by the Ministry of Industry and Trade, has been approved by the Government.

Isobar ventures into Viet Nam

Isobar, a leading digital communications agency within the Aegis Media group, has entered the Vietnamese market by appointing Emerald Digital Marketing as its official affiliate in the country.

This partnership marks the penetration of Isobar into Viet Nam, one of the fastest growing digital markets.

Emerald will help Isobar provide digital marketing services from consulting and strategic planning to social media.

Founded in 2009, Emerald has grown rapidly in Viet Nam, with a strong client list including Heineken, Samsung, BMW, Air France, Rhoto, Holcim and Ajinomoto.

Commercial banks warned on rising foreign competition

If local banks do not adopt proper strategies, the retail banking market in Viet Nam will soon be overtaken by foreign banks, experts have warned.

Speaking at a two-day ASEAN Bankers Forum in HCM City yesterday, several experts said that retail banking services had developed at a fast pace in other countries.

Le Thanh Tam, CEO of International Data Group, said that the competition in the field would become even more fierce as more foreign banks appear in the country.

He cited the case of Thailand, where the number of ATMs had risen quickly and consumer loan services had developed rapidly. Similar retail banking growth had occurred in Singapore, Malaysia and other countries as well.

Tam said that foreign banks offered flexible services by categorising customers. This was one reason the growth rate of credit cards soared in Singapore.

He said that Viet Nam had high potential for such banking services, as individual expenditures contributed up to 67 per cent of the nation's GDP. It is estimated that expenditures will be US$78 billion for 2012.

The country has 14,000 ATMs and more than 60 million ATM cards. However, the potential for retail banking still has not been exploited well.

The country, for example, has 18 banks offering internet banking services, but the rate of transactions remains low.

Local banks have invested a great deal of money in ATM booths, but usage remains ineffective, according to Le Thanh Tam, CEO of IDG ASEAN.

Tran Thi Hong Hanh, general secretary of the Viet Nam Banking Association, said that local commercial banks must build a better business strategy to survive in a competitive environment.

This was especially urgent, he said, because the country had become more integrated into the global economy.

Tran Xuan Hoang, deputy general director of the Bank for Investment and Development of Vietnam (BIDV), said that by 2015 BIDV was expected to become Viet Nam's leader in retail banking and reach the same level of other banks in the region.

However, he said one major challenge was the low rate of loyal or returning customers.

He added that the bank should improve services and update technology to better serve customers.

Pressure from harsh competitions also triggers booming investments in banking technologies in order to expand the distribution channels and improve service quality.

Moreover, with more than 40 per cent of the population having regular internet access, and with more than 3.5 million mobile phone users and 15.5 million home phone subscribers, Viet Nam has huge potential to develop technologically advanced financial services.

This poses a great opportunity as customers are setting higher expectations for quality of service.

Thus, there must be more reform on the banks' side, with an emphasis on information technology to enhance banking management efficiency and manage credit risks.

There is also a need to improve service functions and offer convenient payment methods, as well as modernise service channels.

The ASEAN Bankers Forum 2012 themed Retail Banking: Building Competitive Advantages That Engage And Retain Customers was organised by the Viet Nam Bank Association in collaboration with the International Data Group (IDG).

The forum provides an interactive platform for bankers and technology corporations to evaluate the growth opportunities for retail banking in Viet Nam. It also serves as a meeting point for Vietnamese bankers and bankers from ASEAN countries.

Rate cut urged to help firms

The country's prime interest rate should be cut from 9 per cent to 8 per cent to help enterprises gain access to loans more easily, the National Financial Advisory Committee said in their 11-month economic analysis on Monday.

This should be one of several drastic actions "bravely" taken by the Government soon, it said, pointing out three main arguments for an immediate rate cut.

Firstly, the interest rates of Government bonds tend to decline at the end of the year.

Secondly, inflation is being tightly controlled at below 8 per cent, which means that there is little difference between deposit interest rates and inflation rates.

There is no risk of deposits being withdrawn from the banking system as well, as other investment channels including gold, securities and property are too tough at present.

Thirdly, exchange rates are stable and people no longer prioritise holding foreign currencies.

The committee said it supposed that interest rate cuts didn't affect people depositing money at banks, citing that deposits had increased about 15 per cent this year although mobilising interest rates had been slashed by 5 per cent since the beginning of the year.

Government Office vice chairman Pham Viet Muon said the Government would look at falling consumer price indexes over the past months and hold a meeting this week to discuss interest rate adjustment.

He said that 7.5-8 per cent would be an ideal mobilising rate for now and if these levels were reached, banks would be able to set lending rates at 10 per cent.

The committee said interest reduction should be considered a prerequisite to helping enterprises solve difficulties. "The number of companies dissolving and halting their operations continued to increase in November and there is no sign that this will stop; firms are still facing challenges in all aspects," it said.

They added that sharply increasing costs of material, fuel and transportation were a major hindrance to business recovery. Enterprises have had to cope with high interest rates of over 15 per cent for over 30 months, and their financial costs increased nearly 25 per cent within the first quarter of the year, according to the committee's report.

While suggesting the nation control lending interests at no more than 150 per cent of the prime interest rate, the committee said the Government should speed up its guarantees for bank loans to facilitate credit flow.

The committee said the national economy had escaped from the bottom zone but the momentum for recovery was still uncertain with a lack of driving forces to push up total demand.

It noted that inflation had been slowed down due to weak demand and firm's lack of capacity to absorb capital, in addition to the Government's cautious policies.

As well as staying constant with the goals of controlling inflation and stabilising the economy, the Government needed to give clear messages to the people about banking restructuring and bad debt resolution, it said.

Singapore Airlines offers discounts

Singapore Airlines is offering 35 per cent discounts on flights from HCM City and Ha Noi to Australia, Europe, the US, and India to mark the fifth anniversary of the introduction of its Boeing A380 services.

The discounts are available for flights departing from January 5 to May 31 next year and bookings done from November 20 to December 20.

Fares start from VND18 million to Australia, VND21 million to Europe, VND13.5 million to India, and from VND30.6 million to the US.

From Singapore to London, Paris, Melbourne, Frankfurt, Sydney, Zurich and New York, customers can indulge themselves in the premium services offered on board A380 aircraft by one of the world's most popular airlines.

Fuji Xerox builds new factory

Fuji Xerox Co Ltd yesterday announced it would begin building a factory in the Viet Nam - Singapore Industrial Park in northern Hai Phong Province.

Construction of the $110 million factory – Fuji Xerox Hai Phong Co – will begin in January, to be in production in November.

The factory will manufacture digital colour multifunction devices and small-sized light-emitting diode (LED) printers and the like, with a capacity of around 2 million units per year. It will also produce components for these devices such as printed wiring boards and drum cartridge components.

Nation to negotiate Ukraine trade deal

Viet Nam and Ukraine will start negotiations for a free trade agreement (FTA) in January 2013 in a move to boost bilateral trade value.

The two countries' leaders made this decision during Deputy Prime Minister Hoang Trung Hai's recent visit to the European nation from December 1 to 4, where he met with Deputy Prime Minister Sergiy Tigipko and Prime Minister Mykola Azarov.

In the talks, both the Vietnamese and Ukrainian sides emphasized the need to complete the legal prerequisites for bilateral economic and trade co-operation by finalising negotiations on investment protection and plant and animal quarantine.

They agreed to strengthen co-operation in the areas of their respective strengths, such as energy, machinery manufacturing, aviation and technology transfer, and to make co-operation between specific pairs of localities (Binh Thuan and Kiev, Khanh Hoa and Kharkov, and Kien Giang and Kherson) more efficient.

Ukrainian leaders said their country was more than ready to get involved in energy projects in Viet Nam.

They valued the Vietnamese community's contributions and pledged to create favourable conditions for Vietnamese people to live in the country.

At a meeting with representatives of the Vietnamese community there, Hai said he hoped they would continue abiding by local laws, preserving traditional Vietnamese culture, and contributing to the friendship between the two nations.

The Party, State and Government of Viet Nam paid special attention to protecting Vietnamese people overseas in general and those in Ukraine in particular, and they would do their utmost to help Vietnamese nationals live, study and work in Ukraine, Hai said.

Nation hopes to become financial centre

Viet Nam is studying other countries' experiences with financial supervisory models in order to apply a suitable one domestically, so the opinions of leading experts from a modern financial center such as Switzerland would be highly valued, Deputy Prime Minister Vu Van Ninh said yesterday.

He made this statement while meeting with Daniel Zuberbuhler, former Vice Chairman of the Board of Directors Swiss Financial Market Supervisory Authority (FINMA), Daniel Patrick Senn, Head of Financial Services at KPMG and Andrej Motyl, the Swiss Ambassador to Viet Nam to exchange views on constructing Viet Nam's modern financial supervisory system.

According to the Swiss experts, each country has its own financial supervisory model that suits its particular economic structure. However, they suggested a national financial authority play a general supervisory role, making independent assessments and offering early warnings of any risk to the financial system.

They promised to help Viet Nam build a modern financial supervisory system that reached international standards and to conduct research on the country's current system in order to pinpoint areas where it could be improved.

Design of Thu Thiem 2 Bridge fixed

A leader of the HCMC government has decided on the design for the Thu Thiem 2 Bridge project after referring to many ideas of related agencies in a meeting on Monday.

Starting from the crossroad of Le Duan and Dinh Tien Hoang streets, the Thu Thiem 2 Bridge will be built over the crossroad of Ton Duc Thang and Nguyen Huu Canh streets. It will pass through Ba Son shipyard to connect with District 2 across the Saigon River.

Right from the meeting’s beginning, vice chairman Nguyen Huu Tin asked Vietnam Construction and Import-Export Corporation (Vinaconex) to present pros and cons of the three designing plans.

As the project owner and the designer of the bridge project under the format of build-transfer, Vinaconex decided to eliminate the first plan on setting two traffic lanes. The firm reasoned that the design is not appropriate with the scale of the bridge with the largest traffic volume among the four traffic routes linking the city with Thu Thiem Peninsula.

In the second plan, the idea of building a narrow approach road to the bridge to save the two rows of trees aged over 60 years was rejected by the consulting firm Vietnam Expressway Corporation (VEC) and other agencies, as the design will deteriorate sightseeing and restrict vision of vehicles whilst costing huge investment.

Vice chairman Tin therefore agreed with the proposal of Vinaconex picking the third choice. Under the design, the four lanes will start from Ton Duc Thang-Le Duan junction. The choice is good for nice architecture and low investment but it will increase traffic volume, thus making traffic regulation in the city more difficult.

On the other hand, the fact that the four lanes will go straight to the Le Duan –Dinh Tien Hoang junction requires both sides of the street to be expanded, meaning many existing century-old trees along Ton Duc Thang Street will be cut down.

The meeting then focused on whether it is necessary to set up a separate lane for pedestrians.

Tin noted a high possibility of accidents when people share a combined route. He said it would be a waste of space when setting aside three meters in width to make pedestrian lanes, explaining few people will use the 1.2-kilometer-long bridge.

He asked Vinaconex and VEC to reconsider dividing lanes, adding Vinaconex is able to expand the bridge further instead of the 19.3-meter width as planned.

Being the main route connecting the future Thu Thiem urban area in District 2 with the current city center in District 1, the bridge will have a length of 852.5 meters exclusive of approach roads, and a width of 19.3 meters along with four traffic lanes. It is expected to cost over VND2.3 trillion and is set to open to traffic in 2020.

DHL Forwarding pledges some more Vietnam investments

DHL Global Forwarding will continue to increase its investment in Vietnam, where the multinational shipping and delivery firm has experienced double-digit growth.

“I’m here to recognise the importance of Vietnam, a key market to visit this year,” said DHL Global Forwarding CEO Roger Crook during his visit to Vietnam last week.

“We see Vietnam as a very strong growth market. Our business here is very successful,” Crook said, adding that his company enjoyed double-digit growth in Vietnam in the recent years.

Crook said his firm would continue to increase investment in Vietnam to maintain its market leading position.

Crook also said he was seeing more multinational companies move their manufacturing facilities down to Vietnam from China and this meant business growth was set to grow more.

Regarding the increasing investment capital in Vietnam the future, Crook said it depended on Vietnam’s economic growth and his company’s growth.

The air, ocean and road freight firm’s key customer sectors in Vietnam include oil and gas, technology, retail (both exporters and importers), manufacturing and healthcare, said DHL Global Forwarding Vietnam CEO Clement Blanc.

Blanc said DHL already had a complete coverage needed to serve customers effectively across Vietnam, such as offices in the regional hubs of Ho Chi Minh City, Hanoi and Danang, northern Haiphong port city and southern Ba Ria-Vung Tau province, the nation’s energy hub. Late this August, the company launched its direct Less-than-Container-Load (LCL) service between Malaysia’s Port Kelang and Ho Chi Minh City.

Marc Meier, DHL’s global head for LCL management, said two-way trade between Vietnam and Malaysia exceeded $4 billion in value last year, but that measures to increase bilateral trade could push the value up to $10 billion this year.

Harbinger throws weight behind Ho Tram Strip

US-based private investment firm Harbinger Capital Partners will continue investing in the integrated Ho Tram Strip resort in southern Vietnam, expected to open early next year.

“Harbinger has been an investor in this project since its inception and our commitment to the project remains firm,” Philip Falcone, founder of Harbinger Capital Partners, said during his recent visit to the MGM Grand Ho Tram Beach site.

Harbinger Capital Partners is one of four financing partners at the $4 billion Ho Tram Strip project, which has been developed by Asia Coast Development Limited (ACDL) since 2008, with support from Pinnacle Entertainment, Bank for Investment and Development of Vietnam and HDBank.

Falcone said he was confident in the project and its plan to put Vietnam on the global stage as a home to some of the world’s best integrated resorts.

“The financing of the project remains on programme and Iam excited about all that can continue to be done here in Ho Tram in the years to come as the company continues to build out the project,” he said.

The project, located in southern-coastal Ba Ria-Vung Tau province, comprises five hotels and a gaming facility with 180 live tables and 2,000 slot machines. The first hotel, MGM Grand Ho Tram Beach, will open early next year with one 541-room five-star hotel tower, gaming facilities, meeting and convention space, nine restaurants, lounges and bars, a spa, three swimming pools and retail.

ACDL also announced last month that it had broken ground on the second phase of the MGM Grand Ho Tram Beach, which will include a second tower of 559 rooms and additional leisure facilities. The company’s Greg Norman-designed championship golf course is under construction and will open next year.

“We are currently completing the final fit out of the first phase of the MGM Grand Ho Tram Beach and are on track to hand over the building to MGM next month as planned,” said ACDL chief executive officer Lloyd Nathan.

“Every project has its challenges and to date our team has always found solutions. On that theme, we continue to work closely with the Vietnamese government in relation to a variety of matters, with a view to resolving any outstanding issues to enable the opening of our first resort early next year,” he added.

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