Foreign investors find property market attractive

Foreign investors have shown rising interest in Vietnam’s property market due to a lack of alternative markets and the nation’s attractive rental yields, said a CapitaLand senior executive.

With the lacklustre performance of real estate markets in the region, Vietnam has the high possibility of taking over other regional property markets. The real estate market of regional countries such as Malaysia, Singapore and China are not doing well, said Chen Lian Pang, Chief Executive Officer of CapitaLand Vietnam, told the media in HCMC recently.

He described the Myanmar housing boom as a “bubble” with “no fundamentals to support that kind of pricing.”

Such favourable conditions are supplemented by the high rental yield in Vietnam as compared to other countries in the region, he said. “[In Vietnam] easily you can get 6% or 7% rental yield.”

In other regional countries such as Singapore, rental yields are “2 to 3%” and bank interest rates are “a-point-something percent”. Therefore, he added, from the investor’s angle on rental yield it is attractive here in Vietnam.

Supported by strong economic growth, young workforce, and government policies aimed to open up the market, Vietnam is becoming one of the most exciting countries in the region to invest. Structural reforms and a stabilised economy will allow Vietnam to have greater opportunities for economic development. Currently, Vietnam is Asia’s fifth strongest growing economy.

However, Chen made clear that bureaucracy and processes needed to be streamlined and simplified to attract larger numbers of foreign investors.

Foreign investors also need to take some risk of dong depreciation when investing in Vietnam, which has caused uncertainties. “I do not know which way it will go,” Chen said.

Chen, however, said he is confident that a lot of infrastructure was being built in Vietnam by the Government, and these efforts would translate into upcoming developments in District 2, HCMC and Long Thanh, Dong Nai Province with the construction of a new international airport.

“The growth is in this direction and real estate will follow the infrastructure development, so this is the right area,” he said.

CapitaLand, one of Asia’s largest real estate companies headquartered and listed in Singapore, has launched several residential projects in Vietnam with Vista Verde being its fourth. CapitaLand’s other prime residential developments in Vietnam include The Vista, ParcSpring, both in District 2, HCMC, and the Mulberry Lane in Ha Dong District, Hanoi.

Illegal hotel complex threatens dam safety

An illegal hotel complex under construction in central Ha Tinh Province is threatening the integrity of a nearby dam, but local authorities are dodging responsibility.

Builders have been told to stop work on the complex near Hamlet 11 of Ky Thinh Commune in Ky Anh District, but construction continues on the hotel and office development, stirring public outcry.

The main investor, Hung Dung Limited Company, which allegedly has no license for the work, began construction six months ago and the complex is nearing completion.

The development has encroached on land near the Tau Voi dam, which provides water to the Vung Ang economic zone and Ky Anh Township.

Residents are worried the dam may break due to the construction work.

Provincial authorities have inspected the construction site. Vo Kim Cu, secretary of the provincial Party Committee, criticised communal and district cadres and requested them to demolish the complex in May.

Local residents suspected communal and district officials turned blind eyes to the illegal construction. However, Nguyen Van Bong, former chairman of the district People’s Committee, passed on the responsibility to communal authorities, who "did did not tell us about the complex until it was almost finished."

Luong Van Dinh, chairman of the communal People’s Committee, said the committee had fulfilled its responsibility and the investor should be held accountable.

“We’ve twice requested Hung Dung Limited Company to stop construction but it did not comply. We’ve also reported the case to the district government, but they have taken no action,” Dinh said.

The case has been passed up to the provincial government.

Wood, rubber businesses eye win-win cooperation

Businesses from the wood and rubber sectors are looking to reach agreements for their mutual benefit.

Such a trend is taking place because the wood processing industry is encountering material shortages while the rubber industry is seeking more markets due to price reductions.

According to the General Department of Customs, by the end of April, Vietnam exported 252,416 tonnes of rubber worth about 360.67 million USD.

The figures represented a year-on-year rise of 33.9 percent in volume but a decline of 3.3 percent in value against the same period last year.

Notably, the average price for export rubber in the first four months of this year stood at 1,429 USD per tonne, down up to nearly 28 percent.

In fact, the price of rubber has strongly declined in recent years, from about 5,000 USD per tonnes in 2011 to over 1,400 USD per tonnes at present.

Businesses, therefore, have to take into account a number of measures to overcome the current difficulties. One of the effective solutions is to focus on rubber wood processing.

The volume of rubber wood for processing is increasing, said Tran Thi Thuy Hoa, Office Manager of the Vietnam Rubber Association, adding that the Vietnam Rubber Industry Group will exploit 8-9 million cubic metres of timber from about 30,000 ha of rubber trees which could not produce latex.

Meanwhile, the wood processing industry has seen strong but unsustainable growth due to a lack of material.

Vietnam imports timber from 60-70 nations around the world and mainly from the US, Laos, Cambodia and the EU, according to Vice Chairman cum Secretary General of the Vietnam Wood and Forestry Product Association, Nguyen Ton Quyen.

In that context, the cooperation between the wood and rubber sectors is expected to benefit the two sides. Many businesses from the two sectors have shown their good will to shake hands on such collaboration.

This is also seen as an effective solution since Vietnamese-made home decorations made of rubber wood are popular in the US and Japan.

Normally, a rubber tree could be extracted for latex for about 18-25 years. After that, businesses will start to exploit rubber wood and conduct recultivation.

Therefore, if it is possible to set up a strong connection between the wood and rubber sectors, the wood processing businesses will have a stable source of material while the rubber partners will have a stable source of revenue.

Hanoi’s six-month economic growth expected to reach four-year high

Hanoi economy is expected to grow at 7.8 percent during the first half of this year - the fastest pace in four years, reported the Ha Noi Moi (New Hanoi) daily newspaper.

The gross domestic product expansion in the first six months has seen nearly all sectors with a higher growth pace than 2014, according to a draft report read at a regular meeting of the municipal People’s Committee on June 4.

Industrial production rebounded with an expected value increase of 6.7 percent while budget revenue will exceed 72.43 trillion VND (3.33 billion USD), excluding collections from dividends and remaining profits of State-owned companies.

The draft reveals that the capital city succeeded in ensuring demand and supply balance of goods and price stability, especially during the Lunar New Year holiday in mid-February.

Hanoi still faced major problems despite such substantial progress, said Chairman of the municipal People’s Committee Nguyen The Thao, pointing out business bottlenecks, export declines and the prevalence of small-scale foreign-invested projects.

He added sluggish basic construction and administrative reform, along with mismanagement of land, construction and investment.

He stressed that for the remainder of the year, municipal agencies need to continue addressing business difficulties, improving the investment climate and harnessing resources to complete key projects.

More attention should also be paid to solving pressing civil issues, ensuring social welfares, creating jobs and reducing the rate of low-income households, Thao noted.

RoK Government urges ratification of FTA with Vietnam

The Government of the Republic of Korea (RoK) asked the National Assembly on June 4 to ratify a recently signed free trade agreement (FTA) with Vietnam.

Bills on the ratification of FTAs with China and New Zealand were also submitted to the parliament.

The RoK Ministry of Industry, Trade and Energy said the Government will do its utmost to enact the three trade pacts before the end of the year to reap their benefits as soon as possible.

According to a Government study, its FTA with Vietnam is expected to help boost the RoK's gross domestic product (GDP) by 0.01 percent over the first decade following its implementation.

In comparison, estimated GDP gains of 0.96 percent and 0.03 percent are expected from the deals with China and New Zealand, respectively.

Confidence among Vietnam-based European firms down slightly

Business confidence, outlook and expectations for the future among European businesses in Vietnam in the first quarter of 2015 declined slightly from the end of last year, according to the European Chamber of Commerce in Vietnam (EuroCham).

During the first quarter of 2015, the EuroCham Business Climate Index (BCI) decreased to 75 from 78 at the end of 2014.

The overall score still expresses a relatively positive perception of the current and future business environment in the market.

Participants perceiving the situation as “good” shifted from 52 percent in the previous quarter to 45 percent. Those with a “neutral” view remained largely unchanged at 31 percent while “very poor” conditions were reported by 2 percent. In contrast, the number of respondents that reported excellent conditions rose to 11 percent.

Macroeconomic-speaking, 63 percent of respondents reported “stabilisation and improvement”, a rise from last quarter’s 59 percent. Participants expecting the situation “not to change” also shifted from 20 percent to 25 percent.

The noticeable decline was in the number of those that expected “deterioration of the macroeconomic conditions” from 21 percent to 12 percent.

In terms of the new regulations in Vietnam’s enterprise law and investment law, 41 percent of the participants said they were unaware of the details of the new regulations and 21 percent were uninformed and unaware that there were new regulations.

Respondents expected that over the next six months, the market would see a slight reduction in inflation from 5.78 percent to 5.25 percent.

While 65 percent reported that they believed inflation would have a slight impact on their business, another 17 percent feared significant impact.

For investment plans in the medium term, the largest group remains unchanged at 41 percent saying they would consider increasing their investment in Vietnam “slightly”. This is followed by the second largest group at 35 percent expecting to “maintain” their level of investment.

Grabtaxi continues expansion in Vietnam

Malaysia-based taxi-booking mobile app company Grabtaxi continued its expansion plan in Vietnam with the launch of its trial service in Da Nang City on June 3, after its success in Ho Chi Minh City and Hanoi.

In Da Nang, Grabtaxi has signed cooperation agreement with Phu Hoang Transportation and Service Joint Stock Company, the owner of Tien Sa Taxi with more than 700 new model cabs, to deploy the services.

Nguyen Van Hien, representative of Tien Sa Taxi, said: "We realise that both customers and drivers benefit from the service. Applying GPS technology to choose the nearest taxi will help reduce customers' waiting time and enable drivers to reduce costs and increase earnings." The mobile app can be downloaded from the Apple App Store and the Google Play Store to smart phones and tablets with the iOS and Android operating systems.

Credit institution assets rise again

The performance of credit institutions has shown improvement, with their total assets increasing after a sharp drop in January.

According to the State Bank of Vietnam's (SBV's) latest report, the total assets of the credit institution system amounted to more than 6,449 trillion VND (297 billion USD) by the end of March, up 58.849 trillion VND (2.71 billion USD) against the end of February.

However, if compared with the end of 2014, the total assets still declined 1.01 percent.

The total charter capital of the system also inched up 0.31 percent to 436.998 trillion VND (20.1 billion USD), while the total equity capital rose 5.4 percent to 523.779 trillion VND (24.1 billion USD).

The system showed a return on equity of 6.43 percent, up 0.94 percent from the end of 2014. The respective figures were at 8.2 percent for State-owned commercial banks, 5.6 percent for joint-stock commercial banks, 4.29 percent for foreign and joint venture banks and 10.25 percent for financial leasing companies, all rising from the end of 2014.

The system's return on assets reached 0.57 percent, up 0.06 percent from the end of 2014.

The capital adequacy ratio (CAR) of the system also increased to 13.46 percent, up from 13.42 percent at the end of February and 12.75 percent at the end of 2014. The CAR allowed by the central bank is only 9 percent.

By the end of March 2015, the system's ratio of short-term capital used for medium- and long-term loans was 25.47 percent.

Equitisation makes slow progress

A total of 186 State-owned enterprises (SOEs) had been equitised by the end of May, which means another 246 SOEs should complete the process by the end of this year in order to meet the set plan, it was announced at a press conference on June 5.

Dang Quyet Tien, Deputy Director of the Corporate Finance Agency under the Finance Ministry, said progress was slow and remained a challenge for the Government.

He emphasized that although the privatisation of SOEs must adhere to the Government's timeline, the quality of the work must be high to ensure the firms are financially healthy.

Government agencies would sort out SOEs ready for Intial Public Offerings (IPO) from those that were not, Tien said.

"Only those that meet the financial standards will be able to hold their IPOs, or they will be transformed into joint-stock companies", he said.

More specifically, those that are transformed into joint-stock companies will have to plan for IPO within 12 months, he said, adding that those joint-stock companies will have to declare themselves bankrupt or be sold if they fail to make IPO plans.

According to the Finance Ministry representative, the leaders of companies and industries will be made more accountable for the equitisation progress.

If the companies continue to delay their equitisation, the directors will be removed, Tien said.

He admitted he is uncertain if all the transformations could be completed by the end of this year, but promised that the Government would speed up the work.

The Finance Ministry reported that by the end of the first quarter, State-owned corporations and groups had divested 8.2 trillion VND (379.6 million USD) from non-core business operation.

Some19.5 trillion more VND (902.7 million USD) need to be divested in the remaining months of this year, including 12 trillion VND (555 million USD) that were invested in banking and real-estate sector.

Vietnam, Italy step up cooperation on industry

Many Italian industrial associations said they are ready to transfer technology to Vietnamese partners in the production of leather shoes, garments, wooden furniture and automatic machines at a round-table conference held in Italy’s northern Vigevano town on June 7.

At the meeting, coorganised by the General Confederation of Italian Industry (Confindustria) and the Trade Office at the Vietnamese Embassy in Italy, Commercial Counsellor Bui Vuong Anh from the Vietnamese Embassy highlighted opportunities for foreign enterprises when investing in Vietnamese market, saying that Vietnam has recently signed two free trade agreements with the Republic of Korea and the Eurasian Economic Union.

Representatives from Italian industry associations made recommendations on specific contents for cooperation including technology transfer. In particular, UCIMU, the Italian automation systems and ancillary products manufacturers’ association, was interested in establishing joint venture for production and technology transfer in Vietnam.

The conference was held in the framework of a programme to promote economic collaboration activities as signed between the Vietnamese Ministry of Industry and Trade and Italy’s Ministry of Economic Development last November at the first meeting of the mixed commission for economic cooperation.

Detailed collaboration in the four sectors will be discussed at the committee’s second meeting in September in Italy.-VNA

Lawmakers urge business reform to optimize

National Assembly deputies expect that Free Trade Agreements (FTAs) will give local enterprises both opportunities and challenges, forcing them to reform if they are to survive and grow.

Vietnam recently signed FTAs with the Republic of Korea and the Eurasia Economic Union (EAEU) while more pacts are expected to sign in the upcoming time.

According to Cao Sy Kiem, a NA deputy representing Thai Binh province and chairman of the Small- and Medium-Sized Enterprises (SMEs), the EAEU is a dynamic and potential area with markets suitable with Vietnamese goods.

The FTA with the EAEU will open up new market, new circumstances and new chances for Vietnam’s economy to grow further, he said.

Vietnam can find good chances for the export of agro-products. Besides that, Vietnam’s abundant workforce and production capacity can meet requirements of the market and partners in the region, he said.

However, the deputy is concerned that domestic businesses lag behind their peers in the target region and the world in terms of management capacity, the quality of workforce, productivity, and technology level. These limitations might push up the price of goods, affect product quality and therefore reduce competitiveness.

Kiem said that three problems should be addressed promptly to help improve domestic businesses’ performance. Firstly, the country must reform institutions such as taxation, exchange rate, interests and business freedom to meet the requirement of new markets and new partners.

Secondly, the application of technology should be boosted and thirdly, training a workforce and a pool of managers able to use new technologies.

Kiem advised enterprises, especially SMEs, to actively take measures to make them more competitive.

Do Van Ve, member of the NA’s Commission for Science, Technology and Environment, said local enterprises have made preparations over the past years for the international economic integration.

FTAs always brings both advantages and disadvantages. FTAs offer more markets for Vietnam’s exports thanks to tax incentives and allow local enterprises to learn a lot from developed countries from management to marketing.

However, Ve said, limitations in technology, productivity, and the quality of workforce will reduce the competitiveness of the local products.

Ve proposed that the Government should create favourable conditions through mechanisms and policies to help enterprise grow to become international players.

Seafood exporters urged to work harder to win EU market

Vietnam’s seafood sector needs to work to meet strict food safety requirements in the EU to penetrate the potential market more substantially, asserted experts.

Although the volume of Vietnamese seafood exported to the EU market has been rising, food safety violations have also increased, they noted at a conference on harmonising food safety and quarantine regulations of Vietnam and the EU in Ho Chi Minh City on June 4.

According to Claudio Dordi, technical assistance Team Leader at the European Trade Policy and Investment Support Project (EU-MUTRAP) in Vietnam, Vietnamese seafood is likely to become more competitive in the EU market as a free trade agreement between Vietnam and the union is expected to be signed soon, allowing Vietnamese exporters to enjoy remarkable tax reductions.

However, the technical standards in the market will remain unchanged, he said, suggesting that Vietnamese businesses should stay active in familiarising themselves with the regulations.

Vietnamese seafood has been listed among the top products in the EU, however, the number of warned and returned seafood batches have risen. In 2012, 64 seafood products were returned, a sharp rise from 2002’s figure of 26. From 2010 to May this year, 183 seafood batches received warning, with 41 batches in last year alone.

According to Le Thanh Hoa, Vice Director of the Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point (SPS Vietnam), most batches subject to warning failed to meet physical, chemical or biological standards.

EU countries apply a common GlobalGAP (good agriculture practice) standard on imported products, while Vietnamese seafood still produces at the lower VietGAP standard, he noted.

Meanwhile, Nguyen Tu Cuong, Head of the Seafood Development Committee at the Vietnam Fisheries Association, said there are a series of strict requirements from EU countries, including those on materials, chemical compositions and labels.

He advised businesses to change their production and business habits to improve market credit while enhancing added value to their products.

Dordi also suggested Vietnamese seafood exporters pay more attention to labelling with a view to raising added value and promoting Vietnam’s seafood trademark.

According to the Ministry of Agriculture and Rural Development, Vietnam’s standards are lower than those of the EU; building a new standard system closer to that of the EU would enhance trade collaboration with the EU.

After the conference, EU-MUTRAP experts are scheduled to draft a report detailing EU SPS policies and analysing shortages in Vietnam’s regulations to make recommendations on necessary adjustments in the future.

Competitive neutrality spotlighted at ASEAN Competition Conference

The fifth ASEAN Competition Conference was held in Ho Chi Minh City on June 4 and 5, focusing on measures to ensure neutrality in competition law enforcement and maintaining a level playing field between public and private businesses.

Themed “Advancing Competition Policy and Law Post-2015: Progress, Opportunities and Challenges”, the event is intended to improve the efficiency of implementing competition laws and build a healthy business climate in the region.

Deputy Minister of Industry and Trade Tran Tuan Anh said the ASEAN has put forth goals towards a common competitive environment such as strengthening the capacity of competition management agencies, reviewing and updating contents in the competition law and building competition cooperation mechanisms in the region.

He added that member states should be well-aware of the issue to create healthy and harmonious competition in the region.

The regional group will bring out plans and initiatives for member nations to build their own competition policies and move towards agreement on fundamental principals in the field, he said.

Meanwhile, Director General of the Directorate of Domestic Trade under Cambodia’s Ministry of Trade Penn Sovicheat highlighted 2015 as an important milestone for the ASEAN on its journey towards deeper economic integration through the establishment of the ASEAN Economic Community (AEC).

Member nations will strengthen their commitments to competition within the framework of the master plan of the AEC Blueprint 2009, he said, noting that seven of the 10 member states issued laws on competition and six nations have established competition agencies.

To date, over 90 percent of the tariffs among ASEAN countries have decreased to zero percent.

The involved parties will pay special attention to reducing non-tariff and technical barriers and promoting trade moving forward.

Competition policy constitutes an important part of the ASEAN Vision for regional economic integration.

Vietnamese products introduced at Singapore supermarket chain

Vietnamese products are being introduced at NTUC FairPrice, Singapore’s biggest supermarket chain, from June 4-17.

This is the second time the event has been organised, and a number of new staples are being offered on this occasion, including frozen fish fillets, sapodillas and coconuts.

Vice Chairman of the Singaporean Parliament and Managing Director of NTUC FairPrice Seah Kian Peng stated he has visited Vietnam several times, during which “pho” (noodle) and coffee are his favourite foods, leading him to want to introduce Vietnam’s quality products to consumers in Singapore.

Vietnamese Ambassador to Singapore Nguyen Tien Minh affirmed that the event is part of efforts to expand the presence of Vietnamese goods in the choosy Singaporean market.

Looking forward, the Vietnamese Embassy will work to bring more Singaporean enterprises to Vietnam to assist in applying Singaporean standards in Vietnam during the production process.

Trade Counsellor at the Vietnamese Embassy Nguyen Viet Chi suggested Vietnam’s small- and medium-sized enterprises take advantage of opportunities brought by the formation of the ASEAN Economic Community by the end of this year to expand exports to Singapore.

Trade between the two countries has seen an average growth rate of 12 percent a year with Vietnam’s export turnover to Singapore reaching 4 billion SGD (2.9 billion USD).

In early 2015, Vietnam became one of the 10 biggest trade partners of Singapore for the first time.

Forum talks effective agricultural production

Representatives of farmers, businesses, scientists and authorities in the southwest provinces of Tien Giang, Ben Tre and Dong Thap will gather at a forum on June 8 to seek effective agricultural production methods.

The schedule was released on June 5 in Hanoi by the Centre for Agricultural Promotion under the Ministry of Agricultural and Rural Development.

The five-day event aims to help reduce production costs, enhance advanced technology application and push demand-driven production.

Director of the Centre Dao Van Ho highlighted the event as an opportunity for stakeholders to share experiences and information about potential markets, production skills and technology application.

Ngo The Hien from the Ministry underscored the importance of the connection between businesses and farmers, saying incentives and regulations should be introduced to ensure a productive relationship between them.

Cooperatives will play an effective role in linking businesses and farmers, Hien added.

GAP’s members eye financial investment

An eight-member delegation of Global Alliance Partners (GAP) arrived in HCMC on Wednesday to sound out financial investment opportunities, especially in the infrastructure, manufacturing and agriculture sectors, the head of the organization said.

Speaking to reporters in HCMC on Wednesday, GAP chairman Bernard Pouliot said that most members of GAP as well-established financial service providers were interested in the local market, seeing Vietnam as a growth market for business and investment operations.

“So the members are now here to gauge the market and look for investment opportunities in Vietnam,” he said, adding Vietnam was a highly attractive country.

Pouliot, who also serves as chairman of Quam Financial Services Group (Hong Kong), mentioned several investment funds under GAP’s umbrella that are ready to flow capital into Vietnam.

Capital Partners in Japan, which is a member of GAP and has established a US$250-million fund for two years, has plans to invest more in Vietnam, after it arranged a successful partnership with Dragon Capital as one of the biggest asset managers in Vietnam, he said.

Pouliot said that his group also had a Quam Opportunities Fund worth US$20 million that has invested in several projects in Malaysia, Thailand and the Philippines but not in Vietnam. However, Quam will increase more capital for its fund to invest in the country in the coming time.

“We are excited to see our expansion in Asia, especially in Vietnam. Vietnam is amongst many popular emerging markets for investment,” he said.

The two funds will invest into Vietnam though consultancy of Vietnam’s Thanh Cong Securities Joint Stock Company (TCSC), which is a member of GAP, he said.

Thailand’s Seamico Securities Public Company Limited, a partner of GAP, has become a foreign strategic investor of TCSC with a stake of nearly 19%.

Chaipatr Srivisarvacha, executive and CEO of the Thai Company, said that it had plans to invest more in Vietnam by injecting more capital into TCSC. He disclosed that his company would raise its stake in TCSC to 49% from the current nearly 19%.

TCSC founded by Thanh Cong Group is now one of the top 15 securities companies in the local market with chartered capital of more than VND350 billion.

Chaipatr Srivisarvacha said he believed in Vietnam’s economic development in the future and that Vietnam was one of a few countries that are developing with economic positives in the face of the global economic crisis. “That is the reason why Seamico wants to invest more in Vietnam,” he said.

Through Seamico, one of the top five largest listed securities companies in Thailand, TCSC is becoming a member of GAP, which has connected TCSC to its worldwide network from Vietnam to Hong Kong, China, Japan, the U.S., the U.K., UAE, and Thailand.

The GAP delegation on Wednesday also visited some industrial parks in HCMC and surrounding provinces including the Vietnam-Singapore Industrial Park and Song Than Industrial Park in Binh Duong Province, and Tan Thuan Processing Export Zone in HCMC.

GAP (http://www.globalalliancepartners.com) is an international network of like-minded financial services that aim to leverage existing execution platforms to expand cross-border capabilities covering private equity, pre-IPO and funds management placement opportunities.

Its members are all well-established financial services firms in their respective home markets.

U.S. companies on track to speed up business with Vietnam

President of the US-ASEAN Trade Council Mathew P. Daley bet that in three years, the U.S. would become Vietnam’s largest single foreign investor.

Last year, Daley predicted that this would happen in a year or two, but he admitted on Wednesday that the economic downturn had been slowing things down.

“But I am quite serious about making a wager with everybody,” Daley said at a press conference about an on-going annual two-day trip by American companies to explore business in Vietnam.

Daley said in the first quarter of this year, the U.S. accounted for over half of the total US$6 billion registered foreign direct investment in Vietnam, and was thus “on track” to become a powerful force here.

At present, the U.S. ranks only 10th in terms of aggregate investments in Vietnam, but this, he said, was changing, because both U.S.-Vietnam political relationships and the local economy were brightening.

Daley said he remained optimistic even though trade, the current Doha round of global trade negotiations included, was not a priority with the Obama administration which is occupied by such issues as the wars in Afghanistan and Iraq and healthcare reform.

As far as free trade policies went, he said, the political consensus in the U.S. in recent years had come “undone” and there was going to be “a need to re-establish that consensus.”

Stuart Dean, who heads General Electrics in Southeast Asia, said at the briefing that Vietnam, like much of Asia, was a very attractive destination for American investors because it still had “a lot of growth.”

The Vietnamese central and local governments, particularly, were very friendly and receptive with manufacturing investors, he said.

An example was that GE had got the permit to build a manufacturing facility in Haiphong in just days after requesting it.

Speedy government approval was also what Chevron was expecting.

President of Chevron Vietnam Hank Tomlinson told the press his company was in final talks with PetroVietnam on a 20-year-long project to build offshore gas facilities to generate electricity for the Mekong Delta.

Tomlinson said Chevron had already invested US$300 million in this project, and once the project reached its final approval stage, it would need a total direct investment of over US$4 billion, two and a half billion of which would come from Chevron.

“This would make us a single largest investor in Vietnam,” he said.

This year’s delegation, made up of 16 major corporations, will meet with Prime Minister Nguyen Tan Dung to discuss partnerships in such fields as agriculture, infrastructure and energy.

Surfing financial and stock info on cell-phones

Vietstock, a financial information provider, on Thursday introduced a new service called Vietstock mobile which allows investors to surf comprehensive finance and stock information on their mobile phones.

Under the new service, Vietstock will help investors install software for Nokia mobile phone. Then, mobile users will be provided all finance and securities information from Vietstock Mobile.

Under the Vietstock’s commitment, users are provided financial and securities information relating to the investor community on a timely basis and updated information hour to hour. Monthly charge for the service is VND60,000.

Nguyen Van Duong, chairman of Vietstock, said in a statement that they would offer one month free of charge and planned to launch other useful services next time.

Founded in 2000, Vietstock is a finance and securities info gate with one million visitors a day. For further information about the service, investors can visit the website http://www.vietstock.com.vn

Central bank will take measures to stabilize forex market

The State Bank of Vietnam (SBV) on Thursday said on its website that it would take measures to stabilize the forex market in the coming time, ensuring that the country will have sufficient capacity to balance demand and supply of the U.S. dollar.

Among the measures, SBV deputy governor Nguyen Van Binh said the central bank would forcefully use the cross-currency swap method to help credit institutions have more capital in Vietnam dong and find outlets for lenders’ excessive deposited capital in the greenback. In addition, that will increase dollar sources for the central bank to stabilize the forex market, Binh said.

Besides, the central bank has sent documents to ask collaboration of provincial authorities to keep watch of illegal dollar trade and prevent speculation.

Binh admitted that there had been an imbalance between demand and supply of the dollar.

“In the past three weeks, banks have not been able to meet high demand by importers for buying the U.S. dollar, and only one month after the forex trading band is widened from 3% to 5%, all banks have to quote the buying price on a par with the selling price, signaling short supply,” he said.

Many enterprises, Binh noted, have found it hard to buy dollars and also have to buy the greenback at a price higher than the ceiling price permitted by the central bank.

Although Vietnam enjoys a trade surplus in the first four months of the year, enterprises’ demand for the foreign currency could not be met. The deputy governor pointed to two reasons.

The first reason is psychology-driven. People and enterprises know that the economy faces challenges this year given the global financial meltdown and foreign capital sources will fall, thus prompting the dollar speculation, he said.

Meanwhile, exporters having income in the dollar simply hold it back or sell just a little to banks while importers rush to buy dollars, coupled with part of the public shifting to savings from Vietnam dong to the foreign currency, Binh said.

Indeed, deposits in the U.S. dollar at credit institutions have increased continuously in the first four months of the year, rising 3.35% as of late April compared to early this year. “That is abnormal,” said Binh.

The second reason is attributed to the Government’s economic stimulus packages. Binh explained that with four percentage points in subsidies, the lending rate on Vietnam dong has been reduced to 5%-6% a year, equivalent to banks’ lending rate in the U.S. dollar. This has discouraged enterprises from borrowing dollar funds, but to ask for Vietnam dong loans before converting the capital into the greenback later.

While the overall outstanding loans by late April increased by 11.6% from early this year, credits in the U.S. dollar fell 2.5%, Binh said.

Despite the situation of dollar imbalance, Binh brushed aside the possibility of Vietnam dong depreciation.

“There is no reason to expect a strong depreciation of Vietnam dong against the U.S. dollar in the coming time,” he said.

EPC contract for polyester plant inked

The Dinh Vu Petrochemical and Fiber Joint Stock Co. (PVTex Dinh Vu), an affiliate of PetroVietnam, on Thursday awarded an overall contract for building Dinh Vu Polyester Fiber Plant in Hai Phong City to a consortium of Hyundai Engineering Co., LG International Corp. and Petrovietnam Construction Joint Stock Co.

Under the Engineering-Procurement-Construction (EPC) contract worth US$250 million signed in Hanoi on Thursday, the contractor will develop all facilities and install production lines for the polyester factory within 25 months, including three months of test-run and handover.

Works under the EPC contract include all technology workshops and supportive facilities, material import pipelines, and other auxiliary facilities, and the contractor must ensure to bring the factory in Dinh Vu IP on stream by July 2011.

The consortium, led by Huyndai Engineering Co. Ltd., is responsible for all the pre-stage EPC jobs of the factory and post-stage jobs including workforce training and equipment supply for the operation and maintenance of the plant during the first operational years.

The project, owned by PVTex Dinh Vu, is part of the general roadmap for Vietnam’s chemical sector development until 2010 approved by the Prime Minister. The plant, the first of its kind in the northern region, costs about US$325 million and will have the daily capacity of 500 tons of fiber.

The establishment of the plant will serve the textile-garment sector for manufacturing high quality fibers for all kinds of garment products and help reduce dependence on import, thus contributing to the development of Vietnam’s apparel industry. It will also help raise the added-value for Vietnamese-tapped crude oil and other by-products and create the momentum for the development of the artificial fiber manufacturing sector in Vietnam.

Asia, Europe to face economic crisis together

Finding solutions to the global financial and economic crisis will top the agenda of the upcoming meeting between Asian and European foreign ministers in Hanoi, Vietnam’s deputy foreign minister Doan Xuan Hung said on Thursday.

“Economic cooperation within the Asia-Europe Meeting hasn’t been progressing as fast as members want it to be,” Hung said at a press conference about the 9th ASEM foreign ministers meeting to take place on May 25-26 at the National Convention Center.

Thus, this meeting, to serve as a stepping stone toward an ASEM summit to be held in Brussels next year, is hoped to forge closer ties within this 45-member strong forum which Hung said was facing “certain difficulties.”

Hung said Vietnam, one of ASEM’s founding members, has been “very active” in bringing members together.

It was Vietnam that proposed that ASEM foreign ministers discuss economic partnerships this time.

And at the meeting, the host country would bring to the table its specific plan for Asia-Europe economic cooperation and a network to cope with climate change, he said.

Climate change, food security and other global issues will also be addressed at the meeting, which will also include bilateral discussions among participants.

There will also be an Asia-Europe film festival, a journalists’ seminar and a photo exhibition on “creative economies” all in Hanoi on the sidelines.

Hung was optimistic about the future partnerships between Asia and Europe, despite such setbacks as the European Union’s recent decision to halt the Free Trade Agreement negotiations with ASEAN. “There will be a new approach to this issue,” Hung told the press.

A total of 30 foreign ministers have confirmed attendance and the rest will send deputies, he said.

The 13-year-old ASEM forum, which includes 27 EU countries, ASEAN and other Asian countries like China, South Korea, and Japan, together accounts for 58% of the world population and half of the global GDP.

Indian firms’ interest in Vietnam remains very strong, diplomat says

Indian companies still maintain their great interest in Vietnam and continue to look for opportunities to realize investment projects and boost trade in this market, the consul general of India in HCMC said.

Jitendra Nath Misra confirmed the strong interest of Indian companies in Vietnam at a news briefing held in HCMC on Thursday to introduce “The Relationship between India and Southeast Asia: A Strategic Commitment or Regional Integration” conference.

“The interest of Indian investors in Vietnam is very strong, even in the current difficult time,” Misra told the Daily after the press conference. Misra gave an example that the chairman of Tata International reassured that the group took a strategic view of staying long in Vietnam by continuing its investment in a multi-billion- dollar steel project in northern Vietnam.

“Once they get the land, they will start the project. So Indian companies are not withdrawing because of the (global) crisis,” Misra said. He added that Indian sugar companies including KCP had increased their investment in Vietnam in recent years.

New Indian companies have come recently. Misra said during the crisis time, an Indian US$4.4-million factory had gone online in Binh Duong Province to process Vietnamese pepper for export.

Misra told the press conference that Vietnam was the top destination for Indian investment in Southeast Asia. He revealed six Indian delegations operating in diverse scopes of business had visited Vietnam so far this year and five more were arriving in the next months to explore Vietnam. Last year, 12 Indian business groups came to gauge this market.

Dhananjay Kumar, chairman of the Indian Chamber of Commerce (Incham) in Vietnam, said Indian companies came to Vietnam to see how they were able to contribute to stronger trade growth between the two countries.

Last year saw two-way trade between India and Vietnam reach US$2.48 billion, up 62% over 2007. In September 2008, the two countries already achieved the target of US$2 billion in annual trade set by their prime ministers for the year 2010.

Speaking at the Asia-Europe Meeting (ASEM) Business Forum in HCMC earlier this month, Misra said India attached the highest importance to developing relations with Vietnam within the framework of India’s Look East Policy.

Also on Thursday in HCMC, Misra reiterated Vietnam was a strategic and reliable partner of India. He highlighted Vietnam’s important role in helping India establish stronger links with the whole Southeast Asian region, which will be discussed at the international conference taking place at the University of Social Sciences and Humanities on May 15 and 16.

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