Shares backslide on both bourses to begin week

The VN-Index opened on a positive note this morning but the market backslid to close at 457.13 at the end of today's session.

On the HCM City bourse, the market's value decreased by 15 per cent to VND801.3 billion (US$40.1 million), after 32.6 million shares changed hands.

About 154 shares declined in value, while 55 shares advanced.

While most blue chips tumbled, three - Ocean Group (OGC), Masan Group (MSN) and property developer Vincom (VIC) - were among the stocks that rallied, of which the latter two rose to their ceiling price.

Sai Gon Securities Inc (SSI) became the most active stock on the southern bourse with more than 2 million shares exchanged. SSI closed up 1.2 per cent over Friday's value to VND25,000 ($1.25) a share.

In Ha Noi, the HNX-Index fell by 2.72 per cent to close today's session at 109.73.

Trading volume fell 23.2 per cent to 22.5 million shares, worth VND426 billion ($21.3 million).

Losers largely outnumbered gainers by 216-73.

Kim Long Securities (KLS) and PetroVietnam Construction (PVX) continued to be the most heavily-traded shares on the northern bourse, with more than two million shares of each stock exchanged. KLS fell by 1.6 per cent to close at VND12,400 ($0.62) and PVX dropped by 1.8 per cent to VND21,300 ($1.07).

Banks cap deposit interest rates at 12 per cent

Commercial banks began increasing their deposit interest rates to 12 per cent per year, in accordance with an agreement that was implemented late last week.

Viet Nam Banks Association's members also agreed to cap deposit interest rates at 12 per cent, instead of at the previous 11 per cent.

Small banks worry that if both big banks and commercial banks issue deposits at the same interest rates, small banks will not be able to compete with bigger lenders.

Because of higher input cost, banks also plan to raise lending interest rates for short-term loans to 12.75-14 per cent per year, instead of at 12-13.5 per cent.

Businesses urged to use ‘green' materials

Vietnamese businesses should expand production and use of non-baked construction materials as they are more energy efficient and environmentally friendly, an expert has said.

The traditional baked bricks destroy agricultural land, require large amounts of fuel, and harm the environment and human health.

According to Thai Duy Sam from the Ministry of Construction's Building Material Institute the use of non-baked materials not only helps avoid these disadvantages but is also eco-friendly due to the use of recycled industrial waste.

Waste like cinder, cement and grit are used to make the materials.

By 2020 annual demand for bricks in the country will rise to 41 billion-43 billion.

If they are all made from clay, 57 million-60 million cubic metres of earth and up to 5.6 million tonnes of coal will be required.

Under a plan to develop their production, the country envisages using 20-25 per cent of non-baked bricks for construction by 2015 and 30-40 per cent by 2020.

Last year the rate was 8-8.5 per cent. If the 2020 target is achieved, every year 15 million-20 million tonnes of industrial waste will be recycled for construction and 1,000ha of agricultural land saved.

In the same year kilns are sought to be completely eliminated though it is unclear how the demand for bricks will be met.

To encourage production of non-baked materials, the Government is offering businesses import tax and corporate tax breaks.

It has also ordered the Ministry of Construction and other ministries to find technological solutions so that all industrial waste generated in the country can be used to make non-baked materials.

Production of non-baked bricks is mainly in the small-scale sector. There are around 1,200 production facilities that churn out 1.7 billion bricks a year.

Tran Van Huynh, chairman of the Viet Nam Construction Materials Association, said due to their economic benefits, non-baked bricks are becoming globally popular.

The hurdles to making a wholesale switch to non-baked materials include the entrenched nature of the habit of using traditional bricks and lack of incentives for making them.

The lack of policies on the production and use of non-baked bricks, construction standards, and prices is causing difficulties in using them for designers and architects.

Cashew industry to assist farmers

A technical support centre for the cashew industry will be set up to help farmers acquaint themselves with new technologies applicable to the growing and processing of cashews, according to the Viet Nam Cashew Association.

"The centre will be a non-profit body. It will cost an estimated VND150-200 million (US$7,000-10,000) to run the centre which will be provided by the association," said general secretary of the association Dang Hoang Giang.

Giang added that one of the main aims of the centre would be educating farmers on new planting and harvesting techniques.

The centre would co-operate with the Viet Nam Superintendence and Inspection Joint Stock Company and the Viet Nam Superintendence and Inspection of Coffee and Products for Export and Import Joint Stock Company as well as provinces to help the industry reach a world standard.

"Reducing losses from inefficient harvesting will be one of the most important functions of the centre. It will also help farmers reach recognised food safety standards," said Giang.

He explained that farmers lost a total of nearly 4,000 tonnes of raw cashews during harvest time but they were unaware of the problem.

A report by the Ministry of Agriculture and Rural Development said that Viet Nam exported around 160,000 tonnes of cashew nuts worth $888 million in the first 10 months of this year. The figures amount to a year-on-year increase of 9.2 per cent in volume and nearly 30 per cent in value.

The increase is attributed to the high price which is now about $5,500 per tonne, $900 more than last year.

"With October's figures, it is likely the industry will be able to reach the goal of $1 billion for the year and continue to be the world's leading cashew nut exporter," said Giang.

The association estimated the total raw cashew yield for the year would be about 300,000 tonnes, 50,000 tonnes less than last year's crop due to bad weather.

The Vietnamese cashew processing industry accounts for about 700,000-800,000 tonnes per year, so it is necessary to import raw cashews to make up the shortfall.

Since the beginning of this year, the country has imported 250,000 tonnes of raw cashews, mostly from African countries and Indonesia.

City targets 11% rise in foreign tourists

The HCM City Department of Culture, Sports, and Tourism has set a target of attracting 3.5 million international visitors next year, an 11 per cent increase over this year.

The department also set a target of VND49 trillion (US$2.45 billion) in tourism revenues next year, a 20 per cent rise year on year, said its deputy director, La Quoc Khanh.

To achieve the targets, Khanh said the city should continue to launch campaigns to raise the quality of tourism services and exploit new tours and services.

It would also train human resources for service industries, promote its image, and set up links with international tourism-related agencies like the Tourism Promotion Organisation for Asian-Pacific Cities, he said.

This year 3.1 million international tourists are expected to visit the city, 11 per cent higher than the target and 20 per cent up from last year, he said.

Tourism revenues are expected to top VND41 trillion ($2.1 billion), slightly above the target and 17 per cent up from last year, he added.

Payment balance signals resilience

Viet Nam's balance of payments has shown signs of resilience in 2010, in two areas in particular, according to the latest report issued by Standard Chartered Bank.

The average monthly trade deficit was contained at US$960 million during the first nine months of the year, compared with $2.2 billion in 2008.

Stable commodity prices in 2010 have been helpful in this regard, as the cost of imports, especially steel, petrol and petrochemicals, has remained broadly stable. A pick-up in overseas workers' remittances was also helping to limit the current account deficit, reported the bank.

Capital inflows from foreign direct investment (FDI) and official development assistance (ODA) are improving, and this has been helpful to fund the current account deficit.

Notwithstanding potential inflation and trade deficit pressures, the bank expects Viet Nam to be the third fastest growing economy in Asia in 2011, after China and India, with forecast growth rates of 6.7 per cent in 2010 and 7.2 per cent next year.

Edward Lee, the bank's Regional Head of Rates Strategy for Asia, said the government should focus on stabilising the macro-economy and the State Bank of Viet Nam needed to adjust monetary policy based on the economy's demands.

Lee said he believed that Viet Nam would tighten monetary policy to curb inflation and build market confidence if the nation foresees higher inflation in 2011 due to stronger GDP growth and growing food prices on the global market.
Source: VNS