TNK-BP expands eastern front with Conoco Vietnam bid

Russia's TNK-BP, developing a gas project in Vietnam acquired from its major shareholder BP, has also bid for ConocoPhillips assets in the Asian country, TNK-BP's head of upstream operations Alexander Dodds said on Monday.

"We did put a bid in," Dodds told a news briefing in response to a question.

TNK-BP, a 50-50 joint venture between BP and a quartet of Soviet-born businessmen, has already taken over some gas assets in the South China Sea from its British co-owner and expressed its interest in expanding in Vietnam.

It has said it will bid for one block of nine blocks on offer by the Vietnamese government in a tender which opens this week.

State oil and gas group Petrovietnam has already said it will bid for the ConocoPhillips assets, three oil fields and one gas field which are further north in the South China Sea.

Their location at a fair distance from TNK-BP's Vietnamese base means they are likely to be a low priority for the Russian producer, but the bid offers more evidence that TNK-BP's expansion drive will not end with the first round of purchases.

TNK-BP, which produces about 1.8 million barrels per day of oil equivalent, mostly at declining Soviet-era fields in Western Siberia, is going further afield to boost production to compensate for output losses in that region, which averaged 5 percent last year.

It is deploying often-expensive new technology at some of Russia's oldest fields, and at the same time planning to launch new production in the latter half of the decade in Yamal, an Arctic peninsula which is Russia's next energy frontier.

The foreign projects are yet another way of hedging declines in Russia.

TNK-BP management has board approval to pursue operations in three countries outside the former Soviet Union: Vietnam and Venezuela, where it bought assets from BP as it sold down its portfolio to pay damages for the Macondo disaster; and Brazil, where it bought into an exploration business.

Dodds said he may present the company's board with new upstream opportunities outside its existing asset base.

"You never say never," he said. "If something came to the table that was interesting, it is our responsibility to get the shareholders to look at it. If they want to pursue that is their call."

TNK has also said that it would like to apply some of the skills acquired at foreign projects to improve its operations in Russia, offering Venezuela's experience with heavy oil as an example to be followed at its Arctic Russkoye field despite differences in climate.

For now, greenfields account for one in seven barrels of output, it said in a presentation. Next up is gas from the Rospan field, due to start in 2015, then oil from another Yamal field, Suzun, in 2017.

Francis Sommer, vice president for production and technology, said capital spending was likely to rise about 10 percent next year from this year's estimated $4.6 billion to fund output growth.

"Greenfield (spending) comes in big chunks," he said. "There might be a big spend on Rospan in a certain year."

The government is in the process of re-engineering the tax regime to make upstream investment, particularly in brownfields, more attractive.

"The brownfield issue is a challenging one for us," Dodds said. "There is huge potential left in these fields (but) it will take money to develop."

The company says it can reduce those declines to 2 percent per year, but analysts who recently visited its Samotlor field, one of the world's largest, said 1 percent seemed possible with use of new technologies and drilling approaches.

"If you can change the recovery factor by just a little, it's actually a large volume of oil," Sommer said.

Vietnam, Laos cooperate in combating illegal smuggling of wood products

Nearly 100 delegates from Vietnam and Lao gathered at a seminar in the central province of Thua Thien-Hue on December 6 to discuss how to improve the management of conservation areas and control the illegal smuggling of wood products.

This is part of the EUR7 million German-funded project being implemented by the World Wildlife Fund (WWF) Greater Mekong in three conservation areas in Quang Nam, Thua Thien-Hue and XeSap National Conservation Park.

The seminar aims to reduce losses in exploiting and transporting wood products and prevent deforestation in the border areas between Laos’ southern region and Vietnam’s central region.

Delegates shared experience in managing conservation areas as well as cooperating in preserving biodiversity of forests between the two countries.

They agreed on a trans-national action plan to improve the management of conservations areas, control the illegal smuggling of wood products across the border and prevent deforestation in the two countries.

Cambodia-Laos-Vietnam tourism trade fair 2011 opens

Cambodia-Laos-Vietnam tourism trade fair 2011 opened in Attapeu province, southern Laos on December 6.

Present the event were leaders of 13 provinces in the development triangle and business representatives from the three countries.

Khamphan Phommathath, Chief of Attapeu province, said the fair aims to boost trade relations between the three countries and build the area into a triangle of friendship and solidarity.

At the fair, businesses from Laos and Cambodia showcase their goods, including agricultural products, silver objects, brocade, and rattan furniture.

Meanwhile, Vietnam’s Kon Tum, Gia Lai, Dak Lak, Dak Nong and Binh Phuoc provinces display their coffee, peanut and soy-bean along with art and handicraft items.

Retail sector urged to reap profits online

The internet, social network and mobile phone will open new opportunities for Vietnam’s retail industry as consumers choose more high-tech products, according to an industry official.

“Retailers who are not concerned about the use of the internet or social networks in marketing communication will be out of the current global digital battle,” said Dinh Thi My Loan, general secretary and vice-chairwoman of the Vietnam Retailer Association.

The conference was organized at the Vietnam Forum-Consumer in Focus on December 6 by the Nielsen company to discuss influences on consumption and retailers’ strategies for changes in consumer purchases.

According to FTA Market Research and Consultant Co, consumers have shown interest in sectors that use digital marketing, including textile and garments, fashion, household appliances, cosmetics and travel services.

Under the influence of science, technology and e-commerce, online shopping and TV shopping will become more popular with customers, Loan said.

By May this year, there were nearly 640 supermarkets and 100 shopping centres and by the end of this year, the country will have a total of nearly 8,600 markets, so, they should focus on offering green or safe products, which will help give them a competitive advantage over other competitors at a time when there is increasing alarm about food safety and hygiene, Loan said.

They should also conduct research into consumer trends and improve their service quality to develop appropriate strategies.

Chang Park, executive director of analytics and consulting of Nielsen Greater China, cited another cause for low consumption power that is rising electricity and fuel prices.

According to a Nielsen survey, Vietnam’s consumer confidence stood at 96 points for the third quarter of this year, dipping seven points since the beginning of the year.

Nguyen Anh Duc, deputy CEO of Saigon Union of Trading Co-operative (Saigon Coop), said that the domestic retail market seemed to reach saturation.

Japanese trader Marubeni opens affiliate in City

Japan-based Marubeni Corporation on December 6 announced the establishment of Marubeni Vietnam Company Limited in HCM City.

It said the establishment of the new company aims to enhance its activities in the growing domestic demand in Vietnam.

The general trading corporation set up its representative offices in Hanoi and HCM City in 1991 and another office in Quang Ngai province in 2009.

It is active in many fields including food, chemicals, pulp, energy, metals, mineral resources and machinery. It has also undertaken projects related to infrastructure such as power plants, communication networks and other factories.

Apart from its main function of international trading, Marubeni Vietnam has also engaged in domestic business activities, the company said in a press release.

Ministry reviews livelihoods in marine areas

The Ministry of Agriculture and Rural Development (MARD) reviewed the implementation of Sustainable Livelihoods in and around Marine Protected Areas (LMPA) programme in the 2006–2011 period in Hanoi on December 6.

As part of the Denmark–Vietnam Development Cooperation Programme in the environmental field, the US$4.8 million LMPA programme aims to protect and restore valuable marine resources while ensuring the livelihoods of communities living in and around marine protected areas (MPAs).

LMPA Director Pham Trong Yen said that over the past years, LMPA has supported the establishment of Phu Quoc, Con Co and Hon Cau MPAs, perfected five-year management plans for Cu Lao Cham, Con Co and Phu Quoc, built MPA managerial capacity for 1,500 senior managers and provided practical training for locals.

The project has helped improve local people’s living conditions by putting in place water supply facilities, toilets, waste treatment systems and island tourism services.

At the event, delegates highlighted the importance of finance and livelihoods in the marine preservation work. They also stressed the importance of formulating regulations on maintaining sustainable community-level support, creating added value for commodities and services and focusing on new ways to earn a living at household level.

Five-in-one exhibition for HCM City

Five exhibitions will be held simultaneously at HCM City’s Tan Binh Exhibition and Convention Centre from December 7-10.

Around 200 local and foreign businesses will display machinery materials and products used in mining, construction, energy, electricity, packaging, rubber, plastics, wood processing, paper, petrochemicals, paints, and chemicals.

Seminars and conferences will be held on the sidelines to update local businesses on new trends in technology and materials.

The exhibitions will offer both Vietnamese and foreign companies to explore business opportunities, technology exchanges, quality improvement and competitiveness, the Vietnam Advertising and Fair Exhibition JS Company, one of the organizers, said.

Vietnam prioritizes FTA with EU

Vietnam considers implementing its free trade agreement (FTA) with the European Union (EU) a key and practical step in its trade policy to realize development goals in bilateral ties.

Finance Minister Vuong Dinh made the statement at the ninth Vietnam-EU Inter parliament meeting in Brussels on December 5.

He said the bloc makes up a considerable proportion of Vietnam’s total trade. It is Vietnam’s third largest trade partner and the second biggest importer. In turn, the Southeast Asian nation imports essential consumer goods and production commodities from the EU.

Strengthening Vietnam-EU economic links will offer opportunities for both sides, said Hue.

He introduced the Vietnamese government’s measures to rein in inflation, cut public investments, limit the import of luxury products and address public debts.

He said the Vietnam National Assembly recently approved a resolution on economic restructuring, targeting public investment, the financial and banking system, and State-owned enterprises, with a particular focus on State corporations and economic groups.  

The move will help speed up the implementation of Vietnam-EU agreements on economic, investment and trade cooperation, said Hue.

The Minister proposed that the EU show more specific and substantial commitments to the Association of Southeast Asian Nations (ASEAN) and Vietnam in particular.

HCM City economy grows at 10.3pct in 2011

HCM City has achieved a GDP growth rate of 10.3 percent this year despite numerous difficulties of the national economy.

The figure was unveiled at a year-end session of the Municipal People’s Council on December 6.  

More than half of the GDP was contributed by the trade and services sectors, according to a report delivered by a representative of the Municipal People’s Committee.

The city generated over 265,000 jobs and reduced the unemployment rate to below 5 percent while effectively implementing other social welfare policies. Nearly 37,000 poor families accessed credits to develop household economies to overcome difficult times.

The Municipal People’s Council acknowledged the administration’s efforts in securing comparatively high growth, but said high inflation caused the growth to slow down and the Consumer Price Index (CPI) to go up, negatively affecting business production and people’s daily lives.

During the three-day event, deputies will make an in-depth analysis of causes and lessons learnt from the implementation of development tasks in 2011, and set targets for 2012. They will also question some key administration officials about issues of voter concern.

Medi-Pharm Expo opens in Hanoi

Over 150 companies from 18 countries and territories are participating in the 18th Vietnam Medi-Pharm Expo, which opened in Hanoi on December 6.

The expo introduces Vietnam’s latest medical and pharmaceutical achievements and displays a wide range of pharmaceutical products and modern medical equipment.

This year features special stalls on ophthalmology co-organized by the Vietnam Ophthalmology Association and the Central Eye Hospital.

A number of activities are scheduled during the expo including a seminar on Vietnam’s medicine and pharmacy market, a presentation on 3D and X-ray machines, and a conference on new treatments.

The Vietnam Medi-Pharm Expo will last until December 9.

Vietnamese farming model replicated in Cuba

Cuba plans to expand its rice cultivation to 40,000 hectares using Vietnamese farming technology, announced Roberto Cabello, a representative from Cuba’s Ministry of Agriculture.

The expansion is under an agricultural cooperation programme between the two countries.

Vietnam has transferred its rice cultivation technology to Cuba since 2002 and three stages of the project have been completed so far with positive results.

The fourth stage will be deployed in the 2011-2015 period to ensure the rice supply for the country.

Cuba currently imports about 60 percent of the total 1 million tonnes of rice consumed in the country annually. Vietnam supplies 400,000 tonnes to this Latin American nation each year.

Vietnam Int’l Agriculture Fair held in Can Tho

Around 270 domestic and foreign businesses have joined in the 2011 Vietnam International Fair, which opened in the Mekong Delta city of Can Tho on December 6.  

On display are machines, production lines for processing and preserving agricultural products after harvest, food for animal, fish and shrimp, rice, vegetables and fruit, animals, fertilizers and pesticides.

Also showcased at the fair are bio-technology advances in agricultural and aquatic farming and new products from Thailand, Chile, the US, India, Denmark, Norway, the Netherlands, Cuba, Indonesia, France, Germany, China, Singapore and Japan.

Other activities include a farmer contest, a conference on the role of agriculture in building a chain of farming values, trade promotions and signing ceremonies for technology transfer projects.

Tet may not be one to remember for workers

Workers will see skinny traditional Lunar New Year bonuses this year due to the nation’s economic vulnerabilities.

Firms are yet to declare bonus figures for Tet, however, the executives of many firms told VIR Tet bonus this year would be meager amounts due to a hostile business climate.

Vinh Cat Trade Services Company Limited deputy director Nguyen Quoc Han said his firm’s Tet bonus might possibly be halved against last year.

A trade union official in the railway sector said many labourers had quit jobs due to low wages amid escalating product and service costs in the past year. “It is really a hard task to offer the labourers a decent Tet bonus in current context of uncertain economy,” said the official.

According to deputy Minister of Labour, Invalids and Social Affairs Pham Minh Huan, the ministry sent dispatches to localities asking management to report on the Tet bonus situation.

Huan, however, said Tet bonuses would not be encouraging. “Businesses have their backs to the wall, so how can they offer their labourers high bonus,” said Huan.

“We just came to survey some firms in the area and found they were in a more critical situation than in previous years. Bonus reward mechanisms are there, firms can set their bonus based on actual business performance,” said head of Quang Ninh Labour, Invalids and Social Affairs Department’s labour section Do Thi Xanh.

Xanh assumed most firms would still offer their employees an extra month’s salary.

Huan encouraged other localities to follow the example of Ho Chi Minh City Labour, Invalids and Social Affairs which had joined efforts with trade union organisations at various levels to negotiate with firms to raise labourers’ bonuses.

A construction firm director said: “Rewarding workers with a Tet bonus is a way to have labourers dedicate themselves to company development.”

The firm would maintain Tet bonus at last year’s level plus 10-15 per cent price depreciation though the firm saw 50 per cent nosedive in sales and profit figures compared to last year.

Lotteria offers slices of pie

South Korea’s fast food giant Lotteria is eager for franchising deals in Vietnam.

In the coming period, Lotteria will simultaneously carry out its investment and franchising strategy aiming at growing its presence in the Vietnamese market.

The company said it had completed legal setup stage as well as human resource preparations relevant to franchising activities. Accordingly, the company seeks to boost the number of Lotteria shops in the country to 200 within the next five years.

Lotteria reportedly had the idea of franchising its brand to Vietnamese firms back in 2007 after it opened 30 shops in the country. However, according to Lotteria Southeast Asia general director Rho Il Silk the current time was appropriate for the company to do franchise when its target of opening 100 shops in Vietnam was already achieved.

“This is a good time for Lotteria to embrace franchising since the size of Vietnam’s fast food market quickly increases with a potential customer base on the back of relatively stable rental space and lower manpower costs than selling Vietnamese ‘Pho’ (noodles),” said brand consulting firm Left Brain Connectors chairman Pham Viet Anh.

The company has reportedly pumped around $20 million into developing Vietnam-based Lotteria shop chains. The fee for a Lotteria shop franchising is set at around $250,000, tantamount to investment cost of a Lotteria shop. Good space is one of priority factors set by Lotteria in franchising transactions.

Reality shows that franchising has been commonplace in the country within the past decade.

Like KFC, Lotteria is a fairly successful model when eyeing an average 30-40 per cent annual growth in the Vietnamese market whereas diverse foreign pizza brands were not yet carved a niche in the Vietnamese market.

After 13 years in Vietnam, South Korea’s Lotteria brand currently occupies good positions in Ho Chi Minh City and Hanoi. It opened the 100th shop in late November 2011 in Ho Chi Minh City’s District 8.

Quality food safety in reach

A toolkit is to help enterprises implement a food safety management system.

With a continuing series of activities in support of improving Vietnamese enterprises’ competitiveness in agricultural and dairy products, the SAFE VIETNAM project, funded by TUV Rheinland Group and DEG (German Development Finance Institute) in collaboration with Asia Society for Social Improvement and Sustainable Transformation (ASSIST), has been conducting a software toolkit for “self-implementation of a food safety management system”. In particular, the information and documents are associated in a compact and clear structure, to help users find and access information easily.

The toolkit’s launch will be an effective solution to mitigate current business problems. During the project, members said that they had difficulties in updating regulations, standards and new knowledge relating to food hygiene and safety.

Acknowledging this concern, the Project Management Board decided the toolkit’s content would be a quality food safety management model according to ISO 22000:2007 and TCVN 5603:2008. The technical documents relate to quality of food hygiene and safety, the regulations relate to standards and technical testing methods for agricultural and dairy products, the legal documents relate to the quality of food hygiene and safety and training materials for Food Safety Awareness, Food Safety Professionals, Food Safety Managers and materials to train the trainers.

In addition, guidelines for self-assessment have been built-in as a part of the toolkit to help producers strengthen the quality of their company-controlled activities. The toolkit is available on CD, as well as at www.safevn.vn to create more convenience for users and a diverse number of people interested in accessing the toolkit. To download the documents from the website, users need a login account. The Project Management Board will provide accounts for people in the agricultural and dairy product fields.

In addition to the 34 companies involved in the project, the toolkit has also been given to other firms in the industry. Some companies outside the industry also expressed their interest in receiving the toolkit for their reference, to improve their knowledge of food hygiene and safety, and to use the training materials to train officers and employees who work directly with food.

Specifically, firms in the fields of textiles, leather shoes, and food container production have adapted the toolkit. This reveals that food hygiene and safety issues have become increasingly important in manufacturing and the sustainable development of Vietnamese enterprises.

It can be said that the toolkit is a means of great support for businesses to build their own food hygiene and safety management systems or apply prerequisite programmes to improve their ability in supplying safe food to consumers. From the toolkit, users can find more valuable guides through legal documents, standards, regulations and other instructional documents.

Based on actual producing ability and personnel, producers can determine which contents in the toolkit to be applied. This serves as a flexible means to enhance the autonomy and self-renewal of enterprises and improve the actual situation of food hygiene and safety management.

The toolkit also creates a multipliable effect in improving the awareness and knowledge of food hygiene and safety, creating impacts and widely influencing on the fields of food safety and hygiene throughout the country. Helping manufacturers become more aware about food hygiene and safety throughout the entire supply chain, creates quality products.

With updated and practical information, the content of the toolkit will bring much new value for users, upgrade understanding, improve the ability to apply food hygiene and safety standards throughout the system, and contribute to meet the expectations of existing markets and allow Vietnamese enterprises to approach potential international markets.

Abbot’s powdered milk price increases 9%

Prices of all imported powdered milk products of Abbott have risen by 9% since on Monday, starting a new price race among brands in the local market, said the exclusive importer and distributor of Abbott.

Vu Gia Khuyen, director of 3A Pharma Co., Ltd. as the official distributor, attributed the price hike to the local inflation rate shooting to 18% for the whole year and the volatile import market that have pushed up input costs of business and production activities.

“Actually, we had managed to maintain the retail price despite a sharp increase in the price of imported materials in previous months but now we have no choice but to increase the price like many other companies,” Khuyen told the Daily.

Regarding the information saying that the world market’s prices have continuously decreased, Khuyen said the price of materials in Europe has risen.

The most recent price adjustment of Abbott had been made earlier this year as a result of surging foreign exchange rates while other producers had increased the price a couple of months ago, he added.

According to a milk vendor on Nguyen Thong Street in HCMC’s District 3, milk manufacturers now tend to increase the price without prior notice. He reckoned that the price of Abbott’s milk products will increase even higher and will likely discourage the local demand.

The source revealed that the South Korean XO products would be on sale with new prices from tomorrow.

Similarly, a representative of Lotte Mart asserted that his enterprise had received a price hike notice from the three brands of Abbott, Enfa and XO. He confirmed that Abbot’s increase was the highest at 9-10% with Enfa and XO’s increase at around 5-6%.

The representative of Lotte Mart also reported that his system will sell out milk products in stock at the current prices and only apply new prices for new arrivals.
 
Deposit rate to fall next year: expert

The deposit interest rate will most likely fall early next year to 12% or so as the inflation has braced for the downtrend lately, said Le Xuan Nghia, vice chairman of the National Financial Supervisory Committee.

Nghia, who is a well-known expert on financial and banking issues, ruled out the possibility of the annual deposit rate to plunge to 12% this month as rumored from the current cap of 14% as the central bank had to weigh different outstanding factors.

Many observers reckoned that the inflation rate has ebbed to below 1% a month over the past few months, and that would lead the central bank and the Government to consider slashing mobilization rates to 12% within this month.

However, Nghia said “it is impossible to revise down deposit rates in such a hasty way.”

He told the Daily that the upsurge in loans in foreign currencies has put high pressure on the foreign exchange rate, especially when borrowers rush to buy the U.S. dollar to repay debts that are due. Hence, a yearly deposit rate of 12% is merely an orientation for next year’s local monetary policy, not something that must be done now, Nghia added.

A lower interest rate ceiling will also put certain banks with liquidity problems in new difficulties to attract funds. In fact, the central bank has applied numerous measures to support liquidity for small banks as well as cash-strapped commercial lenders.

Nghia believed that what the central bank should do now is to remove the deposit rate cap rather than merely to lower the rate.

According to Nghia, the removal will allow small credit institutions to raise deposit rates to entice depositors but this will be adjusted by the market in the long term. Meanwhile, Nghia preferred the lending rate ceiling since it creates more benefits for corporate borrowers and the whole economy.

Besides, he proposed setting up different credit growth rates suitable for local banks with different scales, adding that it is better to replace these restrictions with Capital Adequacy Ratio (CAR) requirements.
 
Trade deficit going down

Vietnam’s trade deficit is narrowing down and is estimated at US$10 billion for the whole year, equivalent to 10.2% of export revenue compared to a proportion of almost 20% allowed by the National Assembly.

Speaking at an online briefing organized on Monday, Minister of Industry and Trade Vu Huy Hoang said import expenditure is projected to reach US$106 billion while export value will amount to US$96 billion.

Hoang said export earnings this year would grow by 33% from a year earlier, which is the highest growth rate in the past five years. A trade imbalance of US$10 billion in this year indicates a downtrend since the trade gap topped at over US$12 billion in each of the last two years.   

Despite good export performance, Vietnamese enterprises are facing numerous problems, including high interest rates, material shortage, soaring input costs and the lack of labor force, asserted the ministry.

“Many enterprises in the city proposed the Government to cut down the interest rate, stabilize the exchange rate, and reduce income tax in a bid to help them cope with current economic woes,” Huynh Khanh Hiep, deputy head of the HCMC Department of Industry and Trade, said at the meeting.
 
Economic integration threatens rural sector

While integrating into the global economy, the nation must not ignore investment in the rural and agricultural sectors, said the general director of the Institute of Policy and Strategy of the Ministry of Agriculture and Rural Development, Dang Kim Son, at a conference here yesterday.

The conference was held to review the first annual work plan of the Beyond WTO Programme's second phase. Participants addressed the societal consequences of economic integration for rural areas and discussed ways to strengthen the institutions of the market economy overall.

Farmers were the most vulnerable group when markets fluctuated as they were outside the social safety net, Son said, urging the Government to adopt policies to support the incomes of farmers, especially in times of crisis.

The domestic and international economic environment has changed considerably since Viet Nam joined the World Trade Organisation (WTO), the head of the Beyond WTO Programme's steering committee, Nguyen Van Long, told the conference.

Under the circumstances of global crisis, it was necessary to build strong national institutions to maximise the benefits of integration and minimise the side effects of globalisation, Long said. To deal with difficulties, the Vietnamese Government has focused its policies on stabilising the economy and improving its competitiveness, he added.

"While building a market economy, we have to reposition the role of the State and the role of the market," said the head of the legal department of the Viet Nam Chamber of Commerce and Industry, Tran Huu Huynh.

In a recessionary period, the State needed to interfere into the market more deeply but still needed to ensure healthy operation of the market economy, Huynh said.

He suggested that the Viet Nam Competition Authority and the Market Management Department no longer be placed under the authority of the Ministry of Industry and Trade, which was the ministry which also managed production sectors.

Trinh Anh Tuan, head of the International Co-operation Board under the Viet Nam Competition Authority, agreed, saying that the independence of the authority needed to be ensured in light of the ministry's management of State-owned enterprises which held a large share of the market in production sectors and which remained one of the major obstacles in the process of persuading other countries to recognise Viet Nam's market economy.

The Beyond WTO Programme was developed in response to a request from the Vietnamese Government for donor support to help with managing economic integration into the global economy and the transition to a market economy in the period following Viet Nam's accession to the WTO.

The second phase of the programme, launched in September 2009, has focused on capacity building for management and co-ordination of integration; support implementation for provincial action plans; and management of the multi-donor trust fund (MDTF).

The programme has been funded by the Australian Agency for International Development (AusAID) and the UK Department for International Development (DFID).

Petrol commission rates may rise

The Ministry of Industry and Trade (MoIT) has proposed an increase in petrol sales agent commission amidst economic difficulties.

During an online meeting between the MoIT and its various departments on Monday, Minister Vu Huy Hoang said that petrol enterprises were facing many difficulties and that commission was not sufficient.

Current fixed commission rates came in at VND600 per litre of petrol, diesel and kerosene, and VND400 per litre of fuel oil.

When world petrol and oil prices increased, the Government had called on dealers to keep stability in sales and supply, Hoang said.

Petrol dealers managed to implement the State's policy despite suffering losses, he said.

At the end of last month, the Ministry of Finance reported that Petrolimex and its member companies had a total loss of VND1.84 trillion (US$87.6 million), mainly due to an exchange rate increase between the Vietnamese dong and US dollar. A loss of VND516 billion ($24.57 million) was blamed on the high commission Petrolimex paid its agents.

Nguyen Cam Tu, deputy minister of Industry and Trade, said that the ministry was only responsible for managing sources and prices and that the decision would have to be made by the Ministry of Finance.

Meanwhile, Nguyen Minh Phong, an expert from the Ha Noi Socio-Economy Research Institute, said that the MoIT proposal came due to the interest of petrol traders.

Commission was capable of pushing prices up to the disadvantage of consumers, Phong said.

The State should let petrol dealers compete for commission, he added, noting that if dealers wanted to survive, they must improve management and reduce costs and let commission be determined by market rules.

Securities firm to rate investment funds

Woori CBV Securities Co, a major provider of indices for Viet Nam's financial markets, has announced a fund-rating system, a first for Viet Nam, which will rate investment funds with Vietnamese holdings listed on international exchanges.

Funds would be categorised into different groups based on their sizes, styles and risk levels, according to Woori CBV. They would need to meet such minimum criteria as a track record of at least three years and total assets under management of at least US$10 million.

Among the 11 qualified funds, only JF Vietnam Opportunities Fund, managed by JP Morgan Asset Management and with assets under management of $117.2 million, has received the highest rating of five stars. At the other end of the spectrum, the FTSE Vietnam Index Fund, with assets under management valued at about $222 million, received one star for its performance.

Total assets under management of all rated funds reached $2 billion by the end of November, with VinaCapital's Vietnam Opportunity Fund, with assets under management of over $740 million, accounting for over 30 per cent of the combined total asset value. The VinaCapital fund earned a four-star rating.

"Amid global financial crisis, funds are experiencing very hard times on the local stock market and only a few of them can manage to post relatively positive performances," the Woori CBV research team wrote in a report. "More than 80 per cent of rated funds are ranked below average with negative final scores."

The Vietnam Fund Ratings system is a quantitative-based rating system which evaluates risk, return and efficiency. The model focused on six factors with weighting ratios subject to market conditions in each time period. The ratings report will be updated on a monthly basis.

All currently rated funds are listed on stock exchange outside of Viet Nam, but funds listed on domestic exchanges would be rated in the future, Woori CBV said.