Gas climbs to highest price this year

The retail price of gas surged by VND30,000 (US$1.44) per 12kg canister of household gas from Monday – the highest price increase this year, according to the Viet Nam Gas Association.

A 12kg canister from Sai Gon Petro, Petrolimex, Gas Sai Gon, MT Gas, Hong Ha Gas and Thai Duong Gas were being sold from VND378,000 to VND390,000 ($18.09-18.66).

Deputy head of business department of Sai Gon Petro Do Trung Thanh explained the price hike was mainly attributable to increased global gas prices.

Thanh said the May delivery gas price on the world market increased to $970 per tonne, up by $87.5 per tonne compared to the previous month, forcing domestic firms to dramatically adjust prices.

Industry insiders said in addition to rising world gas prices, costs of other inputs including transportation and oil prices also pushed up domestic retail prices. Transportation costs doubled from $80 to $160 per tonne, while world oil prices continued rising as global political instability and natural disasters had led to unstable supply of fuel, including gas.

This increase spells the fifth occasion this year that domestic retail gas prices have increased. Gas prices only reduced once in early February by VND22,000-25,000 ($1.05-1.20) per 12kg canister, but this 10-day downward adjustment ended after the State Bank of Viet Nam devalued the dong against the US dollar.

Gold price maintains holiday high

Domestic gold price yesterday steadily hovered around VND38 million (US$ 1,853) per tael, ignoring the zigzagging Comex world gold price.

Shops in Ha Noi and HCM City trading bullion branded by Sai Gon Jewellery, Sacombank, Bao Tin Minh Chau Jewellery, Agribank Jewellery and Phu Nhuan Jewellery, quoted buy/sell prices at VND37.90-38.10 million per tael yesterday, unchanged on close prices last week. (One tael equals to 1.2 troy ounces).

Bullion traders estimate that domestic gold prices have risen by 32 per cent during the last 12 months.

Local gold traders reported that trading was very quiet during the holidays after the central bank late last week officially issued a circular restricting the lending and saving of gold at commercial banks.

"We will continue to observe the market and will intervene to stabilise the market," Deputy Governor Nguyen Dong Tien told reporters in Ha Noi.

After dipping by 4 per cent on Monday, gold reached a record $1,577.4 per ounce yesterday on the world market as investors weighed the news of Osama bin Laden's death against other factors including low US interest rates and global inflation concerns.

In line with quiet bullion trading, the US dollar was also exchanged at VND20,550-20,650 on the open market, while commercial banks quoted the dollar at VND20,570-20,720.

Japan lauded for ODA funding

Party Central Committee Secretariat standing member Truong Tan Sang highly valued the role of the Japanese Ministry of Finance in maintaining the high levels of official development assistance (ODA) funding to Viet Nam in recent years.

The funds had contributed practically and effectively to Viet Nam's economic development and raised the living standards of Vietnamese people, Sang told Japanese Minister of Finance Yoshihiko Noda and Japan Bank for International Co-operation (JIBIC) president and CEO Hiroshi Watanabe yesterday during their working visit to Viet Nam.

Sang highlighted Viet Nam's efforts to implement proper financial and monetary policies to improve the quality and stability of economic growth.

He expressed his desire to strengthen co-operation and exchange experience in economic policies, financial management, and human resources and training between the two ministries of finance.

He also highly valued the contribution of JBIC in supporting the implementation of strategic projects in Viet Nam. He also expressed his hope that JBIC would continue supporting investment projects in the form of public-private partnerships, under the partnership for regional peace and prosperity which has been established between the two countries.

The Japanese guests strongly praised the efforts of the Vietnamese Government to curb inflation and voiced Japan's commitment to provide ODA funding as under the strategic partnership between Viet Nam and Japan.

Watanabe said the co-operation would also support Japanese businesses to enlarge their operations in Viet Nam and give financial aid to infrastructure and industrial development projects.

Work begins on FPT urban area in Da Nang

The nation's leading IT firm, Financing and Promoting Technology Corporation (FPT), breaks ground yesterday for a new urban area in the central city of Da Nang.

Located in Ngu Hanh Son District, the 181ha FPT City is designed by US-based urban planning firm Skidmore, Owings&Merrill (SOM).

The city would be built to international standards with special attention paid to making it environmentally friendly, FPT officials said.

More than half the area would be utilised to create green spaces with a system of lakes and canals designed to prevent flooding.

The project would take advantage of FPT's strengths in information technology, telecommunications, energy-saving and green technologies, the officials said.

FPT City Da Nang will have commercial and financial centres, offices, hotels, shopping, entertainment and sports complexes, clinics and a luxury residential area with apartments and villas.

The city also has a man-made fresh water lake on an area of seven ha.

An education centre comprising schools, the FPT University and the FPT Software Technology Research and Training Centre will also be built. "This will be a model for FPT to develop other urban areas nationwide," said Bui Thien Canh, general director of the FPT City Da Nang Joint-Stock Company.

In another development, the Financing and Promoting Technology Corporation (FPT) Technology Research Institute and FPT University have signed a memorandum of understanding with Japan's Tohoku University's Space Robotics Laboratory to make electronic equipment that monitors cameras on Japanese micro-satellite RISESAT.

Experts from Tohoku and Hokkaido universities had earlier worked with FPT Technology Research Institute, Ha Noi National University and Space Technology Institute on the opportunity for Vietnamese scientists to join the manufacturing and application of the 50kg RISESAT and to equip it with a camera to observe the Earth.

The RISESAT is set for launch at the end of 2013, and Viet Nam's use of the satellite will be proportionate to the contribution it has made to the project.

State Bank raises several key rates

The State Bank of Viet Nam yesterday announced an increase in several key interest rates, effective tomorrow. The refinancing rate will increase from 13 per cent to 14 per cent per year and the rediscount rate will also increase by 1 per cent to 13 per cent. Both interbank overnight rate and the rate for short-term loans to cover the clearance transactions between the central bank and commercial banks have also been set at 14 per cent per year. This is the fourth time this year the central bank has adjusted interest rates.

Dealers urged to hold line on petrol

The Ministry of Finance yesterday issued a document asking petrol distributors and dealers not to increase retail prices. The ministry said it had received requests from petrol traders asking to adjust prices but, after consulting with the Ministry of Industry and Trade, the Ministry of Finance said it needed more time to monitor the evolution of world oild prices before making a proper decision. The two ministries have also formally denied recent rumours on the internet that retail petrol prices would rise to VND24,000 (US$1.15) per litre.

Vietinbank, Viettel join forces

Military-run mobile phone service provider Viettel signed a comprehensive co-operation agreement with Vietinbank on Thursday under which the two will co-operate in areas including investment, payments, capital mobilisation, and financing, as well as making contributions of capital to each other to support and expand business operations. Viettel's general director, Maj Gen Hoang Anh Xuan, said Viettel would borrow from Vietinbank to develop operations in Laos and Cambodia instead of accepting high-interest financing from foreign banks.

Fisheries group sets ‘gold' standard

The Viet Nam Fisheries Society will confer the Gold Quality of Viet Nam's Fisheries award on 100 businesses and individuals in the fisheries industry. The 10 top candidates will receive certificates from the Ministry of Agriculture and Rural Development. The programme covers seafood exploitation, processing, export, and breeding, as well as fisheries training and research. Selection will be based on economic and social efficiency, uses of technology, and community responsibility.

Mekong Expo opens in Can Tho

The 2011 Mekong Expo, with the theme of Co-operation, Investment and Development for the Mekong River Delta, opened on Thursday in the southern city of Can Tho.

The seven-day expo has drawn participation of enterprises from not only Delta region but also HCM City, Da Nang and the provinces of Tay Ninh, Lam Dong, Khanh Hoa, Binh Thuan, Binh Duong, and Dong Nai.

The enterprises are showcasing electronics, consumer goods and services, equipment serving industry, environmental processes, food products and handicrafts.

Work begins on $24m plant

Work began on a VND505 billion (US$24 million) pharmaceutical plant in the Cuu Long (Mekong) Delta province of Hau Giang yesterday.

Invested in by the Hau Giang Pharmaceutical JSC, the plant will be located on an area of over 8ha in the Tan Phu Thanh Industrial Park in Chau Thanh A District's Tan Phu Thanh Commune. It will be able to produce 3 billion tablets per year after its construction is completed by the end of next year. Its production, which complies the Good Manufacturing Practice (GMP) standards by the World Health Organisation, will help meet the local customers' demand for pharmaceutical and for export as well.

Office equipment expo opens

An office sales and investment exhibition, which opened yesterday in the capital, has created interest among investors and tenants.

The ultimate mission of the exhibition was to solve a critical issue in the office segment-matching demand with supply, said expo organiser Knight Frank.

Hoang Anh Gia Lai to issue bonds

The HCM City Stock Exchange-listed Hoang Anh Gia Lai Group plans to issue US$200 million worth international bonds next month at a coupon of "less than 10 per cent," chairman Doan Nguyen Duc said.

The money will be used to restructure the group's short – and medium-term dong debts that carry much higher interest rates than dollar loans and fund some of its projects, including rubber plantations in Cambodia, Laos, and Viet Nam.

The issue of the five-year bond has been approved by the State Bank of Viet Nam and the State Securities Commission, he said.

It will be underwritten by international financial services group Credit Suisse and listed on the Singapore Stock Exchange.

Duc expected the issue to be completed by mid-May.

The issue would help the company mobilise a large amount of money that it can hardly raise in this country while also enhancing its prestige, he said.

HAGL expects by 2012 to plant 51,000ha of rubber.

Its rubber research institute is expected to begin functioning this year-end, attracting researchers from Thailand and Malaysia where the rubber industry is more developed than in Viet Nam.

HAGL's annual shareholder meeting in HCM City on Tuesday agreed to keep this year's pre-tax profit target unchanged from last year's VND3 trillion ($144 million) due to the continued lull in the real estate market.

HAGL has interests in property, mining, rubber, and hydropower.

Masan affiliate to get parent option

HCM City-listed Masan Group will give an option to shareholders in its affiliate Masan Consumer to purchase ordinary shares or depository receipts in the parent group.

The option, approved by the group's general shareholders meeting on Monday, would affect about 100 current investors, especially Masan Consumer's strategic partner MC Holdings II (Cayman) Ltd or its subsidiaries, which hold stakes in Masan Consumer.

The option would allow the MC Holdings and its subsidiaries to convert Masan Consumer stakes into Masan Group (MSN) shares in the event that Masan Consumer has not listed shares by the first quarter of 2017, said Masan Group chairman Nguyen Dang Quang.

The amount and price of new shares would then be fixed on the approval of both Masan Group and MC Holdings, with the price based on the value of stakes that MC Holdings held in Masan Consumer at the time of the new issue compared to the market value of comparable shares of MSN.

Masan Group shareholders also approved a plan on Monday to offer 10 million shares to employees at face value price this year or early next year under the group's Employee Stock Ownership Plan (ESOP).

Group shareholders also voted on Monday not to receive a dividend on 2010 earnings, allowing the group to retain a net profit of VND2.7 trillion (US$128.6 million). The 2010 profit will be used to grow the Group existing and any new business. In a plan approved by shareholders, the group would invest VND582 billion (US$27.7 million) in its Binh Duong plant and $150 million in the Nui Phao mine.

Group CEO Madhur Maini was unable to reveal further group merger and acquisition (M&A) plans but was certain that MSN would not invest in small-scale companies. He also confirmed that the group had no intention to buy land.

Masan Group has projected earnings this year of VND8 trillion ($381 million) and a net profit of VND2.4 trillion ($114.3 million), representing growth of 43.2 and 31.2 per cent, respectively, over 2010.

VCCI supports business restructuring

The Vietnam Chamber of Commerce and Industry (VCCI) has assisted enterprises in Thanh Hoa and Ninh Binh provinces in creating visions, strategic orientations and targets for their business operations.

VCCI aims to help local businesses restructure, obtain loans, and ensure sustainable development. It will also assist the provinces to improve the investment climate and promote its administrative reform.

As planned, the Chamber will implement activities to increase competitiveness and develop human resources, with a focus on training business managers. It will also provide local businesses with forecasts about changes in the business environment and help them reduce production costs by exempting fees for granting certificates of origin for exports.

Race to bring sky high inflation back to earth

With inflation reaching an 18-month high in April, the State Bank has rushed to bring in new tightening measures.

On April 29, the monetary authority issued Decision No.929//QD-NHNN which raised both the refinancing and overnight lending rates by 1 per cent to 14 per cent

This is similar to the March 31 move when the refinancing and overnight lending rates were increased by 1 per cent, on that occasion to 13 per cent.

The move comes nearly a month after an earlier hiking of the refinancing and discount rates to 12 per cent from 11 and 7 per cent respectively - aggressive moves to improve macro-economic stability.

Nguyen Thi Kim Thanh, head of the Banking Strategy Institute, said the moves made at the end of almost every month were clear evidence of the government’s determination to rein in inflation.

“Stubborn inflation has tied the authority’s hands and tightening might be the best solution,” said Thanh.

Last week, Vietnam’s General Statistic Office released macroeconomic data showing the consumer price index (CPI) rose by 3.32 per cent month-on-month in April, driving year-on-year CPI to 17.5 per cent, the highest level since December, 2009.

The office explained that the Ministry of Industry and Trade’s decision to raise petrol prices by 10-15 per cent on March 30 was one of the major factors affecting the CPI increase.

The decision saw A92 petrol prices surge by 10 per cent to VND21,300 per litre while diesel prices climbed 15.3 per cent to VND21,100 per litre.

According to calculations done by economic analysts at Viet Capital Securities, a 10-15 per cent increase in petrol could directly add 0.36 per cent to CPI, with most of that rise appearing in the April figure and the rest in May’s number.

“Considering prices at the pump were 10-15 per cent below imported gasoline prices and that the government had removed all duties on imported petrol, the state had little choice but to increase market prices. As it attempts to reduce its budget deficit, the government will avoid subsidising gasoline imports. Although this will enable the country to move closer towards market mechanisms in the long run, the short-term effect will obviously [be an] increase in domestic prices,” said analysts.

Duong Thu Huong, general secretary of the Vietnam Banking Association, said that the tightening of monetary policy was in line with inflationary movements.

“However, hiking the reserve requirement is not an appropriate at this point of time as it could seriously hurt the banking system’s liquidity,” said Huong.

By end of last week, dong liquidity remained low with the overnight lending rate via the interbank market fluctuating at a high 18-19 per cent, per year.

Red carpet greets S. African businesses: stateswoman

Vice State President Nguyen Thi Doan assured South African investors of good conditions to gain success in Vietnam at a business forum in Johannesburg on May 3.

Doan, who is on an official visit to South Africa, told 40 businesses from Vietnam and over 100 local businesses that the Vietnamese Government always welcomes and provides the best available conditions for investors from South Africa to make profits in Vietnam.

She pointed out some major advantages such as political stability and increasingly transparent and opening investment climate, which will create fair opportunities and level playground for all foreign investors.

Doan called on the two countries’ business circles to further tap potential in trade, investment, labour, tourism, agriculture and education to match political relations.

“Businesses from the two countries should take initiative in grasping information and conducting market surveys so as to issue appropriate investment policy in the future,” said the vice president.

She added that the two Governments would take stronger measures to increase two-way trade revenues to $1 billion.

South Africa is Vietnam’s leading trade partner in the black continent with two way trade revenues reaching the all time high level of $640.31 million in 2010, representing a year on year increase of 26.7 per cent,

Vietnam’s export revenues to South Africa multiplied from just $1.2 million in 1992 to $487.6 million in 2010.

Vietnam needs $300 billion for development

Vietnam has great potential for strong development in the medium and long term, said Asian Development Bank (ADB) President Haruhiko Kurado at the Vietnam Business Summit in Hanoi on May 3.

Despite the global economic downturn, Vietnam’s economy still grow 6.78 per cent in 2010 with a total import-export value of $157 billion, five times higher than 2000. Since the Law on Foreign Investment in Vietnam was issued in 1987, 92 countries and territories have invested with more than 12,463 projects in Vietnam worth $194.6 billion, including implemented capital of nearly $80 billion.

Vietnam needs around $300 billion for development investment in the 2011-2015 period, said Deputy Prime Minister Hoang Trung Hai on May 3 at the Vietnam Business Summit (VBS) under the framework of the 44th ADB annual meeting in Hanoi. Vietnam gives top priority to improving the business environment, restructuring development models, developing diverse markets, such as securities, services, labour, science and technology in order to liberalise investment and trade and make full use of domestic and foreign resources.

Mr Hai said the international community praised Vietnam’s development potential in the medium and long term periods and international donors provided a record high of nearly $8 billion in ODA capital in 2010. This is a significant lever to further development in Vietnam.

Vietnam is one of countries that has received the most aid from the Asian Development Fund (ADF) and loans from the ADB.

Despite achieving significant results, Vietnam is still facing a lot of challenges and economic obstacles, for example the quality of growth, productivity, efficiency and competitive edge are low, the macroeconomic balance is not stable, and the market institutions and quality of human resources and infrastructure hinder development. There are also other issues such as narrowing the development gap with countries in the region and overcoming the difficulties middle income countries face.

ADB President Haruhiko Kurado said international economic integration opens capital and technological opportunities for Vietnam and its partners but it also brings many challenges, from macro policies to business management. He said he believes in strong development for Vietnam in the medium and long term periods.

Vietnam has an abundant labour force with its population of 88 million, however, the country should pay more attention to dealing with the shortage of skilled workers and inadequate infrastructure, said Kuroda. He emphasized the important role of the private economic sector which contributes 47 per cent of the GDP and generates jobs for 1.5 million people. To make full use of this sector, Vietnam should make more administrative reform and strengthen the ability to access land and credit. ADB praised Vietnam’s Project 30 to simplify administrative procedures, Mr Kuroda said.

Professor Kenochi Ohno said Vietnam will have to devise policies to promote intellectuals and sustainable development in the future. The country has to invest a lot to gain 1 per cent growth but labour productivity still remains the same. He gave examples of other countries’ lessons from which Vietnam can learn, and three issues the country should deal with: inconsistent policies, poor coordination among ministries and departments, and inefficient cooperation among participants.

Economic experts warned Vietnam to avoid the common “traps” of middle income countries.

Some participants said that Vietnam should invest in the country’s strong fields such as human resources. However, Mr Hai also said 50 per cent of exported Vietnamese agricultural products are raw and farmers are not able to make a better living even though productivity has increased. Vietnam will have to continue to invest to raise added value and help farmers improve their lives, Hai said.

Regarding Vietnam’s attracting FDI in fields that require a lot of workers, Mr Hai affirmed that the country has to implement these projects in order to generate jobs for local people in the initial period, then it can to shift to other fields with higher added value.

Domestic steel prices drop substantially

The Vietnam Steel Association (VSA) disclosed that domestic steel prices have suddenly dropped by VND200, 000- 300,000 per ton compared to the beginning of the year. 

After two months, the price of steel has declined by VND300, 000 ($14) per ton.

According to Nguyen Tien Nghi, Deputy Chairman of VSA, the main reason for the fall of domestic steel price is the cancellation of public investments and the halt of unnecessary projects.

In addition, steel prices the world over have decreased and many investors have cut investments in construction in response to the Government’s policy to minimise inflation.

Steel companies had to reduce their prices to increase market demand, Nghi said.

He also predicted that the price would continue to fall in the following months as the policy had proved effective.

In the first two months of the year, Viet Nam consumed more than 900,000 tons of steel. Total sales in March were an estimated 400,000 tons, a month-on-month decline of 75,000 tons.

Mekong Expo 2011 opens in Can Tho Province

The Mekong Expo Exhibition 2011 opened in Can Tho Province with nearly 400 stalls representing businesses across the Mekong Delta region and the neighbouring provinces.  

Businesses from the Mekong Delta provinces, Ho Chi Minh City, Tay Ninh, Lam Dong, Khanh Hoa, Dong Nai and Da Nang participated in the expo.

The expo highlighted the economic achievements and the specialities of each province and city, as well as displayed the fine arts, handicrafts, machinery, technology, foods and various equipments of the regions.

During the expo, there will be a Banh Xeo making contest with 50 participating cooks.

Le Thi Kim Thu, Director of the Can Tho International Exhibition and Fair Company, said the annual event provides a good opportunity for producers, distributors and suppliers to seek partners and promote their domestic products.