Vietnam Market News: November 2010

November 30, 2010

Better information security urged

HA NOI — Electronics enterprises were encouraged to implement measures to improve information security, respect customer privacy and increase the quality of their services in order to succeed in e-trading activities, a conference heard yesterday.

The conference themed "Customer protection in e-trade", which aims to raise awareness of customer protection in e-trading and contribute to the healthy and sustainable development of e-commerce in Viet Nam, opened yesterday in Ha Noi.

The event was organised by the Competition Administration Department and the Viet Nam E-Commerce Portal.

Nguyen Phuong Nam, deputy head of the department, said along with the robust development of internet services in Viet Nam, e-trading activities had grown significantly in recent times and had provided customers with many benefits.

"E-trade enables customers to access the global market to buy almost any type of products, with a variety of options and preferential prices thanks to reduced costs by avoiding middleman services," Nam said.

However, Nam warned that e-trade customers were still concerned about information security and had a fear of being exploited by unfair trade practices, unsecure payment methods and personal data leaks.

"These are some of the biggest challenges to e-commerce development in Viet Nam which Vietnamese authorities and e-commerce companies are striving to overcome," he said.

E-commerce has expanded significantly since people first began using the internet in Viet Nam electronic payments with their bank cards while the number of e-commerce websites, such as www.chodientu.vn and www.azshop.vn, has risen robustly.

Vu Thi Bach Nga, head of the department's customer protection section said in addition to its outstanding advantages, e-commerce had also brought about many risks for customers who did not have a clear understanding of e-commerce regulations and practices.

"E-commerce helps companies reduce the costs of production, marketing and sales as well as decrease transaction times. However, unsafe information security, user data leaks, ambiguity in pricing and product advertising have been damaging to customer rights as well," Nga said.

She urged companies to strictly adhere to current e-trade laws and regulations and strengthen customer belief in good e-trade practices by improving information security and the quality of their products and services.

E-trade customers also needed to do their part to raise their own awareness of good e-trade practices and increase their supervision of websites offering electronic products and services to protect their rights, Nga said

Source: vnagency.com.vn

State Bank keeps prime rate at 9%

HA NOI — The State Bank of Viet Nam has decided to hold the prime interest rate for the Vietnamese dong at 9 per cent for at least one month.

The discount rate remained unchanged at 7 per cent, while the refinancing and overnight interbank rates stayed at 9.

Earlier this month, the central bank raised the interest rate by 1 per cent to 9 per cent per year, the first increase in 11 months, following announcements of no dong-devaluation and seven measures to try to cool inflation in the closing months of the year.

Annual inflation in Viet Nam hit 11.09 per cent year -on- year in November, a 15-month record high as food prices soared after severe flooding in the central area killed scores of people and washed away crops and homes. Consumer demand also increased in the run up to Lunar New Year.

The consumer price index (CPI) is estimated to have risen 1.86 percent from October.

The latest CPI suggests that the average annual inflation, which the government had targeted at 8 per cent or less, may unavoidably be in the double digits.

Meanwhile, small commercial banks have hiked deposit rates to 13-14 per cent to attract customers who are seriously worried about the weakness of the dong.

Western Bank, Maritime Bank and HDBank are offering 13.5 per cent interest for one and two month term deposits while Saigonbank, SHB, SeAbank, and Western Bank are offering 13.4-13.6 per cent for mid-term deposits.

Large deposits may also receive a 1-2 per cent bonus.

At the same time, borrowing rates rose to 18-21 per cent per year.

Despite the central bank's attempts to cool the US dollar, the greenback remains expensive on the streets, rising to VND21,400-21,450, up VND100 on Sunday.

Source: vnagency.com.vn

Decree clarifies charter capital rules

The Government issued Decree No 102/2010/ND-CP on October 1, including regulations issued pursuant to the 2005 Law on Enterprises. Decree 102 replaces Decree No 139/2007/ND-CP of September 5, 2007 (Decree 139), getting rid of unreasonable provisions while clarifying confusing provisions on corporate governance.

In the five years since the Law on Enterprises was enacted, regulators have yet to provide a formal definition of charter capital, which has been interpreted in the meantime as being synonymous with share capital. A joint stock company often registers to increase charter capital immediately after its shareholders vote to issue additional shares. In fact, a decision to issue additional shares does not inevitably require an increase in charter capital. Rather, it only reflects the company's subjective intention, while the final impact on the equity of a company depends on whether the shares are sold.

In order to redress the problem of phantom capital that tends to arise in such cases, Decree No 102 introduces three new concepts related to a joint stock company's capital: "issuable shares," "issued shares" and "charter capital".

"Issuable shares" are defined as shares that have been authorised for issue by a General Shareholders Meeting. "Issued shares" are those which have been acquired (and paid for) by shareholders, while "charter capital" is defined as the total nominal value of issued shares.

At the time of that the company is formed and registers its establishment, charter capital is equal to the total value of shares that founding shareholders and common shareholders have committed to buy in the new company. This means that if shareholders have registered to buy all issuable shares, charter capital would be equal to the total nominal value of issuable shares. In case they have committed only to buy a portion of issuable shares, charter capital would be the total nominal value of subscribed shares. In such cases, the company may further offer the remaining shares for three years after obtaining the business registration certificate. Buyers of subscribed shares, meanwhile, are required to pay for the shares within 90 days of issuance of the certificate.

Until now, it has been commonly accepted that entities that jointly establish a joint stock company become the company's founding shareholders and are therefore barred from transfering shares during the first three years. Decree No 102 opens up the possibility, upon mutual agreement among the parties, that a joint stock company needs only a minimum of three founding shareholders upon its establishment, while other initial shareholders may not necessarily be designated as founders. Non-founding initial shareholders would no longer be subject to share-transfer restrictions.

The share transfer restrictions applicable to founding shareholders, furthermore, would be limited only to those shares to which the founding shareholders have subscribed at the time of business registration. In other words, founding shareholders would be free to transfer additional shares acquired after the initial establishment of the company.

Corporate governance

The new decree also makes changes to rules on shareholders and legal representatives.

Current law requires a company to document decisions of a board of directors with minutes of a board meeting signed by all members who attended the meeting. Problems have arisen when a non-cooperative member has refused to sign the minutes. Decree No 102 provides that, in case a member refuses to sign the minutes, the signature on the roll certifying his/her attendance will be considered his/her signature on the meeting minutes.

The new regulation also addresses problems of shareholders who refuse to sign a change to the company's shareholders list. The former requirement that all shareholders sign the approved change has been changed to allow the business registry to accept changes with missing signatures, allowing time for the shareholder whose signature is missing to file a written objection.

Another significant provision of Decree No 102 is that a shareholder or group of shareholders holding at least 1 per cent of the total common shares may file a petition with a court to commence a lawsuit against a business executive who has failed to properly perform obligations or has abused position or power for self-seeking purposes, causing damage to the lawful interests of the company. However, this shareholder or group of shareholders may only initiate a lawsuit after the company's Control Board has rejected their request for legal action.

Decree No 102 also makes provisions for the failure of a company's legal representative to assign power of attorney upon the representative's absence. The lawful representative is required to reside in Viet Nam and, if absent from Viet Nam for more than 30 days, must make a written power of attorney for another person to perform his/her duties. Without such a power of attorney, the Board of Directors must appoint another person to act as the company's lawful representative.

Decree No 102 took effect on November 11 and includes some parallel provisions applicable to limited liability companies and other business forms.

Source: vnagency.com.vn

Trade fair opens in HCM City

HCM CITY — The annual international trade fair, Viet Nam Expo, will open today until Saturday, providing opportunities for local and foreign businesses to find partners.

More than 250 companies from Viet Nam, Algeria, mainland China, Hong Kong, India, South Korea, Nigeria, the US among others will display their products and services at the Saigon Exhibition and Convention Centre.

Exhibits include industrial machinery and equipment, printing technology, building materials, electrical, electronic, IT and telecommunication products, farm produce, processed food, garments, handicrafts and cosmetics.

The expo organiser, the Viet Nam National Trade Fair and Advertising Company (VINEXAD), will arrange a Nigeria-Viet Nam trade and investment forum tomorrow.

On December 3 there will be a tour for exhibitors to visit HCM City's industrial parks and factories.

During the four-day event, there will also be direct business to business sessions

The expo venue is at 799 Nguyen Van Linh Avenue, Phu My Hung New Urban Area in the city's District 7.

Source: vnagency.com.vn

Logistics firms urged to increase knowledge of trade terminology

HCM CITY — Vietnamese businesses need to have a thorough understanding of Incoterms 2010 and World Trade Organisation commitments in the logistic sector to limit risks in international trade, a meeting held yesterday in HCM City heard.

Lawyer Vo Nhat Thang, of the Viet Nam International Arbitration Centre (VIAC), said the newly revised version of standardised trade terms used in international sales contracts, Incoterms 2010, would help traders avoid costly misunderstandings by clarifying the tasks, costs, and risks involved in the delivery of goods.

The International Chamber of Commerce released Incoterms 2010 in September. Incoterms (short for International Commercial Terms) define the responsibilities of buyers and sellers for the delivery of goods under sales contracts.

Incoterms 2010 will take effect on January 1 next year. Since the last revision, Incoterms 2000, there have been a number of changes in both global and domestic trade.

In contrast to the previous four classes E, F, C and D, Incoterms will now separate into two groups, those applicable to all modes of transport and those only applicable to sea and inland waterway transportation.

Rules for any mode of transport include ex works, free carrier, carriage paid to, carriage and insurance paid to, delivered at terminal, delivered duty paid, and delivered at place.

Rules for waterway transport are Free Alongside Ship, Free on Board, Cost Freight, and Cost Insurance Freight.

There will now be a total of 11 terms instead of 13, with two new additions, Delivered At Place and Delivered At Terminal.

Previously, there was an Incoterms-related dispute involving four Vietnamese businesses in 2006 that imported animal feed worth $1.4 million due to unclear terms in the contract and limited understanding of Incoterms, Thang said.

At the seminar, Vu Xuan Phong, deputy director of VIAC, pointed out benefits of multi-modal transport to businesses and hoped it would be expanded nationwide. It would help them to reduce transportation costs, risks and curtail transportation times and shorten capital stagnancy.

He provided information about the ASEAN framework agreement on multimodal transport and Decree No.87 issued last year on responsibilities, provisions and license granting for multimodal transport businesses.

Nguyen Tuong, deputy head of the Ministry of Transport's International Cooperation Department, has been helping Vietnamese businesses improve their understanding about Viet Nam's WTO commitments in the logistics sector.

Accordingly, after five years of WTO integration, Viet Nam will allow wholly foreign-owned maritime and logistics companies to set up in Viet Nam and operate equally in the country.

Experts said the country should consider hastening development of a professional, local logistics industry.

The meeting was organised by the Viet Nam Supply Chain in collaboration with HCM City Investment and Trade Promotion Centre, the Viet Nam Ship Agents and Brokers Association and the Viet Nam Freight Forwarders Association.

Source: vnagency.com.vn

PM orders price stabilisation effort during holidays

HA NOI — Prime Minister Nguyen Tan Dung yesterday issued a Directive to call for stronger production and price stabilisation during the upcoming Lunar New Year Holiday.

Under Directive 2164/CT-TTg, ministries, sectors and localities must focus on removing legal barriers and create favourable conditions for businesses to expand production to ensure smooth provision of key commodities like rice, poultry, meat, vegetables, milk, construction materials, medicines and travel services.

The Ministry of Finance was assigned to co-ordinate with other relevant ministries and localities to maintain the prices of coal, electricity and petrol.

The State Bank of Viet Nam must take strong measures to stabilise the prices of gold and foreign currencies as well as interest rates.

Severe punishments will be given to those who speculate or corner gold and foreign currencies on the market.

Inspections will be tightened against speculation, smuggling, and trade fraud, and criminal prosecution will be applied if necessary.

So far of this year, the Government has already implemented measures to develop production, and ensure price stabilisation, and the balance of supply and demand for goods and services.

The national average consumer price index in 11 months exceeded the annual forecast with a year-on-year increase of 8.96 per cent.

At the beginning of this year, the Government targeted a nationwide CPI of eight per cent.

In November alone, Viet Nam's CPI rose 1.86 per cent over the previous month. This figure increased by 11.09 per cent over November 2009, and 9.58 per cent over December 2009.

In the Directive, Dung said the cause of the problem was a few organisations and individuals that did not take price management seriously.

Source: vnagency.com.vn

Nation targets 5% poverty rate by 2020

HA NOI — Viet Nam aims to reduce the poverty rate to five per cent or less by the beginning of the next decade from the current estimated rate of 9.45 per cent under a draft resolution on directing sustainable poverty reduction during the 2011-20 period.

Drafted by the Ministry of Labour, Invalids and Social Affairs, the resolution is expected to be approved by the Prime Minister later this year.

"The resolution also targets stable employment and diversified income generation activities for poor labourers and seeks to increase per capita income in poor families by 3-3.5 times by 2020," said Deputy Minister Nguyen Trong Dam yesterday at an information sharing and consultation workshop on the resolution.

When finalised, the resolution is expected to guarantee basic conditions for housing, clean water and access to health care, education, vocational training and legal assistance. It will also ensure economic resources such as funds, land, technology and markets, as well as quality infrastructure for production and living practices in poor districts and communes, particularly those in remote, mountainous and particularly-difficult areas.

"Priority will be given to ethnic minority people, women, children, old people and the disabled," he said.

Major policies for poor people include policies that provide preferential credit, free and employment-oriented vocational training, free agricultural-forestry-fishery extension services, fee exemptions and reductions for education, and other support for poor people.

Funds will also be allocated to upgrade medical infrastructure to guarantee basic health services to poor people and suitable interventions will be designed to mobilise and use social resources and the State budget for poor patients suffering fatal diseases. The funds will support medical costs and meals when patients are moved for higher levels of treatment.

Policies on housing and clean water, legal support for poor people and accessibility to cultural and information services are also included in the draft.

Deputy Director of the ministry's Social Sponsor Department Ngo Truong Thi said the resolution was needed because although significant achievements in poverty reduction have been reached and recognised by the international community, the results were still not really sustainable.

"The gap between rich and poor is increasing and the poverty rate in many localities remains high," he said.

Many limitations remained to the implementation of poverty reduction objectives, such as overlaps, disconnection and inconsistencies between policy mechanisms and resources. These were combined with challenges in reaching poverty reduction objectives such as the risks that come with international integration, impacts of climate change and mid-income pitfalls, he said.

To perfect the resolution, Le Thi Thanh Huyen from the United Nations Population Fund in Viet Nam said the resolution should also target other vulnerable groups such as HIV/AIDS patients and people with disabilities.

Cross-cutting issues such as the development of transport and communication systems, and infrastructure in remote and mountainous areas should also be included and linked with the poverty reduction programme, she said.

For example, how could poor farmers sell the items they produced thanks to Government support programmes without infrastructure development, she said.

"It is also essential to effectively co-ordinate poverty reduction programmes with other similar programmes to ensure sustainable and comprehensive results," she said.

She also suggested more specific policies for ethnic minority people such as mobile healthcare services as they have difficulty accessing basic social services as a result of language barriers and transport conditions.

A representative from the United Nations Children's Fund in Viet Nam, Nguyen Thi Van Anh, pointed out the need for the resolution to include more policies to support children under six years old, such as policies to improve health care, education and curb malnutrition to help improve their quality of life.

Viet Nam was one of among 39 countries ranked with a high stunted growth rate, and the poor accounted for a large part of this number, she said.

Nguyen Thi Thu Thuy from Caritas Switzerland, which provides emergency disaster relief and co-operates with partners around the globe to implement reconstruction projects and promote sustainable development, said the resolution has yet to clearly map out measures to ensure the sustainability of poverty reduction.

It was essential to not only create jobs for the poor but it was even more important to ensure sustainable poverty reduction, she said.

She also pointed to the need to train poverty reduction programme officials in different ways in order to gain access to different types of poor people to avoid misunderstandings and complexities, as the poor came from different cultural and social characteristics.

There are around 3.3 million poor people nationwide, according to the ministry.

Source: vnagency.com.vn

IT experts discuss support for businesses

HA NOI — The Viet Nam Chamber of Commerce and Industry (VCCI) held a meeting yesterday to gather opinions from experts about the second phase of its IT support project for enterprises.

At the meeting, Pham Gia Tuc, VCCI's vice president and general secretary, said this second phase from 2011-15 would be a necessary step to further develop the project after its successful first phase in the 2006-10 period. Many enterprises, especially small and medium sized businesses, expected the project to continue, he said.

Le Van Loi, director of VCCI's Institute of Information Technology for Business (ITB), said the second phase would continue activities from the first phase, solve problems that occurred during the phase one implementation, and add new programmes that were suitable with business developments and information technology (IT) trends at home and abroad.

Key activities during the second phase will include improving awareness of the role and effects of IT application in business; IT consulting for enterprise production and operations; IT training programmes for businesses; development of e-commerce; and proposals on policy and regulations that create advantages for IT use in business.

During the meeting, representatives from relevant ministries, industries and associations expressed their agreement with the plan for phase two activities.

Nguyen Minh Hong, deputy minister of information and communications, said during the second phase, the ITB, which implemented the project in the first phase and would continue in the second phase, should have measures to maintain the State-owned electronic trading floors that it built in cities and provinces.

Hong said the institute should plan to use IT when doing business, including in its management, customer relations and human resources activities.

"The institute should launch an online forum for enterprises to discuss and learn from the IT experiences of other companies and experts to use in their own production and business activities," Hong said.

The representative from the Ministry of Home Affair said the plan currently only focused on small – and medium-sized enterprises, while craft villages and households businesses also needed support from the project.

"So, the project should pay attention to craft villages and household businesses to help them integrate into the world of business as the State targets development of e-commerce in all economic sectors," he said.

The project should include specific targets for different economic sectors, such as State-owned enterprises, foreign-invested enterprises and private enterprises, the representative of the General Department of Tax said.

Loi said the first phase of the project was beneficial to Viet Nam's business community. The project built five national level e-commerce floors and 15 others in cities and provinces.

E-commerce service

Also yesterday, VCCI opened the VCCI E-Commerce Service Provider (VCCI-ESP) which will provide e-commerce services to enterprises.

Offered services include business to business, business to customer, e-payment, e-commerce training, information security for business and digital signatures.

The centre would play an intermediate role between businesses and the centre's partners to help business approach suitable e-commerce solutions and effective online trading support tools, save money and improve their competitiveness, Loi said.

The partners are the Viet Nam Commercial University, the Ministry of Industry and Commerce's Viet Nam Research Institute of Electronics, Informatics and Automation (Vielina), the Viet Nam Datacommunication Company (VDC), SmartLink Card Joint Stock Company, the Hoa Binh Software Solution Joint Stock Company and the McAfee Company.

Source: vnagency.com.vn

VN-Index rises for sixth day

HA NOI — Nearly 100 penny stocks hit their ceiling prices on the HCM City Stock Exchange yesterday, helping the VN-Index finish up for the sixth consecutive day – and with the highest trading volume since mid-September.

Gains were capped, however, by the more modest performance by blue chips and some profit-taking by investors.

The VN-Index closed at 451.59 points, up 1.17 per cent over the previous session, with the volume of trades reaching nearly 67 million shares, worth a total of VND1.38 trillion (US$69 million).

High-performing penny stocks included Alphanam (ALP), Nam Viet Seafood (ANV), Da Nang Rubber (DRC), Dien Quang Lamp (DQC), Gemadept (GMD), Thong Nhat Rubber (TNC), Tai Nguyen Co (TNT), Vitaco Petrolimex Transport (VTO) and Vinaship (VNA).

Investors also rushed to buy back Vien Dong Pharmaceutical (DVD), the price of which had been rocked on Monday by accusations of trading violations against its chairman, Le Van Dung. DVD rose to its ceiling price at VND49,200 (US$2.46) per share on an enormous volume of 617,000 shares traded, compared to a typical average of only 100,000 for this share.

On the Ha Noi Stock Exchange, the HN-Index also rose by over 3 per cent yesterday to close at 108.43 points, with 300 out of 354 listed shares gaining.

PetroVietnam Construction (PVX) was again the most-active share nationwide, with 7.8 million changing hands.

Trang An Securities Co analyst Ngo Minh Duc said high volumes yesterday on both exchanges demonstrated that a number of investors were moving to realise profits.

"However," Duc said, "the market still lacks support of from economic factors – the high exchange rate and interest rates, a big trade deficit, and poor business performance by listed firms. It would actually be risky if investors continued rushing to buy shares at their ceiling prices tomorrow."

He pointed to 480 as the next strong resistance mark for the VN-Index.

Source: vnagency.com.vn

November 29, 2010

IBM chosen for cloud computing

HA NOI — Viet Nam's developing ICT industry was given a boost last Friday when the Viet Nam National Institute of Software and Digital Content Industry (NISCI) selected IBM to provide hardware and software to develop a new cloud computing lab.

The Ministry of Information and Communications' NISCI is responsible for industry-related digital content planning, policy-making and strategy implementation in Viet Nam. It is also tasked with implementing information technology innovations and recommending relevant solutions to different Government agencies.

The institute had adopted cloud computing as a non-disruptive approach to their IT-based services, said Hoang Le Minh, head of the NISCI.

The new cloud computing lab will allow NISCI to assist local government IT organisations decrease testing time by up to 50 per cent. As a result, the institute will be able to focus on digital content delivery as well as training and development of high level IT resources for the local ICT industry.

"Cloud computing is an enabler of business transformation at which both Vietnamese and the world's ICT is targeting," Minh said.

He said he believed that IBM would be a trusted business partner which could support the institute in fulfilling its cloud research and testing tasks.

In 2008, IBM co-operated with the Ministry of Science and Technology in establishing the Vieât Nam Information for Science and Technology Advance Innovation Portal, an open pilot programme based on cloud computing.

Source: vnagency.com.vn

Banks struggle to boost charter capital

HA NOI — The State Bank of Viet Nam has reminded smaller commercial banks that they must meet the year-end deadline to increase charter capital to at least VND3 trillion (US$142.86 million) or face forced merger, acquisition or closure.

The State Bank also ordered its branches to strictly supervise the compliance of smaller banks, which must report progress to municipal central bank branches on a weekly basis. All branches must then report back to the central bank by December 12.

By the end of October, all 22 commercial banks not yet in compliance had received State Bank approval to increase register capital from an average of nearly VND1.6 trillion ($73.8 million) to an average of VND3.5 trillion ($166.7 million).

Eleven of these banks had received State Securities Commission approval to raise the additonal funds by offering shares.

With just one month to go, however, some market watchers believed that raising capital in this manner is unlikely at this time due to the gloomy state of the financial markets.

The director of the State Bank branch in HCM City, Ho Huu Hanh, told VNExpress that three banks in HCM City were facing difficulties raising sufficient capital after State shareholders withdrew their investment.

Navibank, for example, has been listed on the Ha Noi Stock Exchange since September under the code NVB, but its share price has fallen below the face value of VND10,000 to about VND8,000 per share, casting doubts on its ability to raise the funds needed to increase its charter capital from VND1 trillion to VND3 trillion.

State-owned garment maker Vinatex, which had held an 11-per-cent interest in Navibank, had complicated the matter further by recently withdrawing its investment in the bank.

DaiA Bank, VietA Bank, GiaDinh Bank and HDBank were all reportedly in similar predicaments.

With small commercial banks needing to attract an estimated VND30 trillion ($1.56 billion) in additional investment in order to survive, inter-investment among them may be the only option for survival, said Nguyen Van Thuan, head of the banking and finance department of HCM City Open University.

The State Bank has previously extended the deadline for commercial banks to meet the higher capital requirements. Commercial banks were required by law to register capital of at least VND1 trillion ($52 million) by the end of 2008, but only 28 banks had met the requirement by the deadline. Another 10 managed to meet it only as late as the end of 2009, with the central bank granting permission for the delayed compliance.

This time, however, the State Bank is saying the deadline is hard-and-fast because banks have had four years to prepare for the charter capital increase. The State Bank has vowed to close these banks down or force them into mergers with other institutions if they fail to meet the capital requirements by year's end.

The policy was aimed at eliminating weaker banks and strengthening the overall quality and security of the financial system.

Source: vnagency.com.vn

New luxury villas to open in Da Nang

DA NANG — Ariyana Co said the first 30 of its 131 new luxury Furama villas would be available for occupancy next April.

The Furama Villas complex, for which France's Archipel Co and Australia's Smec Co are acting as consultants, will occupy a 11-ha site along the coast of central Da Nang City.

Each villa has two to four bedrooms and covers an area of 300-400 square metres.

More apartments for the Mekong

HCM CITY — Hoang Quan Real Estate JSC last week kicked off construction of a 22-storey building and apartment complex in Cai Rang District in Can Tho City, with a total investment of VND255 billion (US$12.75 million).

The project, covering 2,771sq.m is expected to be completed in two years.

Viet Nam establishes tuna association

HA NOI — The Viet Nam Tuna Association (Vinatuna) was established in Khanh Hoa province last Saturday.

With 36 members, Vinatuna aims to support its members in developing professional activities, improving operational efficiency and protecting the rights of its members in Viet Nam.

Between 2006 and 2010, 208,000 tonnes of tuna were sold, with a total export turnover of US$720 million.

Viet Nam, Laos target trade promotion

HA NOI — The Viet Nam-Lao Investment and Trade Promotion Conference was held in Pakse District, Champasak Province last Friday.

Firms from the two countries discussed and agreed on co-operation methods in growing rubber,agriculture processing and forestry products and information sharing, as well as generating jobs and boosting the two countries' export turnovers.

Saigontourist opens four-star hotel

HCM CITY — Saigontourist's Que Huong Liberty Joint-Stock Company yesterday opened a four-star hotel and began building two others, all in HCM City's District 1.

The four-star Liberty Central Hotel at 177-179 Le Thanh Ton Street will be managed by Saigontourist while the five-star Pullman Sai Gon Centre Hotel at 142 Tran Hung Dao Street and four-star Novotel Sai Gon Centre Hotel at 165 Hai Ba Trung Street will be managed by the French hotel group Accor.

Total investment for the three hotels is US$113 million. The Pullman is expected to open in 2013, and the Novotel in mid-2012.

$8m gas cylinder plant opened in Hai Phong

HA NOI — Minh Quang Investment Ltd opened a liquefied petroleum gas (LPG) cylinder plant at Dinh Vu Industrial Zone, in the northern port city of Hai Phong yesterday.

With a total investment capital of VND156 billion (US$8.2 million), the Minh Quang LPG cylinder plant will produce 200,000 cylinders per year for both residential and industrial use.

Minh Quang Investment Ltd has also invested VND290 billion ($14.5 million) on the construction of a LPG storage and gas cylinder plant in the zone.

Construction begins on delta's largest complex

HCM CITY — No8 Investment and Construction JSC (CIC8) has started the construction of a building complex in the Hung Phu urban area of Can Tho city.

With total investment of VND2,373 billion (US$118.6 million), the complex will cover 72.000sq.m and is scheduled for completion in 2014.

It will consist of 16 buildings, 4,000 apartments, parks, healthcare services and education and sports centres. When completed, it will be the largest of 20 building complexes in the Cuu Long (Mekong) Delta region.

Viet Nam, China Expo to open in Cultural Palace

HA NOÏI — Viet Nam-China Expo 2010 will be held at the Ha Noi Friendship and Cultural Palace from December 1-6.

The exhibition will house 400 stalls showcasing handicraft products, gold and jewellery and agricultural products such as fertiliser and insecticide.

Source: vnagency.com.vn

Shortage may lead to pricey coconuts

HCM CITY – Coconut processing firms in Ben Tre Province, a major coconut producer in Viet Nam, are facing a severe shortage of raw materials for production as more fruit has been sold to China.

Tu Nhung, a coconut trader in Ben Tre Province's Mo Cay District, says in the early morning she drives a cargo boat to the fields and by noon, with her boat laden with fruit, she heads to Ham Luong River. There, many boats from China are waiting to buy coconuts.

"Local firms only buy coconuts that weigh a minimum of 900 grammes each while Chinese traders buy all of them, from small to large ones, and offer the same price as local companies," she explains.

Many other local traders do the same.

To cope with the situation, local processors must raise their offers to compete with Chinese traders, who have driven up coconut prices in the province, says Nguyen Minh Tam of Thanh Long Coconut Candy Company.

The price currently stands at VND100,000 for 12 coconuts compared to VND40,000-VND50,000 a month ago, he says.

Despite offering higher prices, local coconut processing companies have not collected enough coconuts needed for production.

In addition, the coconut output this season has been low, equal to 30-40 per cent of the previous crop, which makes the coconut shortage in the province more serious, says La Van Be, deputy director of Ben Tre Province's Department of Industry and Trade.

To cope with the material shortage in the province, coconut processors have rushed to other neighbouring provinces as Tien Giang, Vinh Long and Tra Vinh to collect coconuts, pushing up prices in these localities as well.

Many coconut processing companies have complained that they could not run at full capacity, and some have stopped operations because they were unable to collect enough materials for processing.

To rescue coconut processors in Ben Tre, Be says the province should conduct a survey on the consumption capacity of local processors in order to ensure supply for the sector.

Ben Tre is home to about 50,000ha of coconut, accounting for more than 30 per cent of the province's total agricultural land, yielding about 360 million coconuts a year.

More than 1,000 establishments that produce and trade coconut-based products are operating in the province, according to the provincial Department of Industry and Trade.

Coconuts are one of the provincies key export items, the department says, noting that coconut exports are estimated to reach US$150 million this year compared to $92 million in 2008.

Source: vnagency.com.vn

Demand for LPG will lead to more imports and searches

HA NOI — The country would have to increase gas imports and implement more gas exploitation projects to offset a shortage of roughly 3 billion cubic metres by 2015, said Do Khang Ninh, general director of the country's key gas supplier PV Gas.

Ninh said that the local demand for gas, especially from power plants, was increasing rapidly and was much higher than the domestic supply, estimating that the domestic supply accounted for roughly 8 billion cubic metres against the annual demand of nearly 10 billion cubic metres.

In Viet Nam, gas is used to generate 36 billion kWh of power and produce 800,000 tonnes of fertiliser, 100,000 tonnes of oil, and 700,000 tonnes of liquefied petroleum gas per year.

Ninh said that local gas- fuelled power plants forecast a severe shortage of gas during next year's dry season, adding that 20 million cubic metres of gas was used per day at power and fertiliser plants.

The country's existing gas exploitation projects have already been fully operational and the demand is estimated to reach roughly 13 billion cubic metres by 2015 and 17 billion cubic metres by 2025, according to Ninh.

Meanwhile, the progress of new gas exploitation projects has been slower than expected. Domestic gas prices have been strongly volatile, discouraging the private sector from investing in the industry.

As a result, the nation will have to increase imports to meet the high demands forecasted in the coming years.

According to the Ministry of Industry and Trade, Viet Nam has total gas reserves of around 700 billion cubic metres but has only extracted about 90 billion cubic metres.

Following recent surveys conducted by PV Gas with foreign partners off the coast of the central region, Da Nang, Dong Hoi and Quang Binh were identified as having high gas potential.

PV Gas said it would keep checking those localities and possibly drill next year.

Source: vnagency.com.vn

Lack of storage blamed for gas hike

CM CITY — The State should offer incentives to businesses to encourage the building of large liquid petroleum gas (LPG) ware-houses to help stabilise gas prices, Dr Nguyen Si Thang, chairman of the Viet Nam Gas Association (VGA) said.

LPG is used as a cooking fuel for households, a material for the petrochemical industry and a clean fuel for vehicles.

The current gas price hike had become a financial burden for consumers, economists said.

The hike was due to gas warehouses failing nationwide to store enough LPG for domestic consumption.

Thang said Viet Nam had a total of 31 LPG warehouses with a capacity of 500-4,000 tonnes each. Four had a capacity of more than 3,000 tonnes each.

When the gas price is inexpensive, businesses are not able to import a large volume of LPG directly from the Middle East and Australia, and are forced to rebuy from regional countries, including China and Singapore.

In November, the power joint-stock company VinaBenny (joint-venture between PetroViet Nam Southern Gas Joint Stock Co and the Japan's Marubeni Company) built Viet Nam's biggest LPG warehouse with a capacity of 84,000 tonnes in Long An Province and a total investment of nearly US$250 billion.

Once completed, the warehouse is expected to contribute to reducing gas prices by importing a large volume of gas from the Middle East and Australia.

Gas price fluctuations are also heavily dependent on the world market. Currently, the domestic gas volume meets about 40 per cent of market demand.

The volume is supplied by Dinh Co gas processing plant and Dung Quat oil refinery.

The gas market suffers from illegal production, trading, extraction and transportation.

Excessive speculation also occurs among gas businesses, leading to higher prices, particularly when the imported gas does not arrive on time.

According to local market management departments, gas sold under false brandnames currently accounts for 30 per cent, causing losses of more than VND80 billion ($4 million) to the State budget.

It has also seriously affected consumers' interests and health.

Viet Nam has 24 gas businesses that meet the standard provided by Decree No107 issued by the Government last year .

Together with strengthening warehouse construction, relevant agencies need to tighten management of gas businesses in the market to stabilise gas prices.

According to VGA, LPG consumption demand has increased sharply from 400,000 tonnes in 2000 to 1.2 million tonnes this year.

It is forecast to reach 1.5 million tonnes and 2 million tonnes by 2015 and 2020, respectively.

On November 1, the price of a 12-kg gas canister increased by VND25,000 to nearly VND300,000. The price is forecast to continue to increase next month.

Source: vnagency.com.vn

Stocks rally on revived trading

HA NOI — The VN-Index regained some lost ground in the final 30 minutes of trading yesterday on the HCM City Stock Exchange, closing up nearly 1.5 per cent to 446.36 points – and marking a fifth consecutive day of modest gains.

Earlier in yesterday's session, investors had become hesitant when the Index flirted with the resistance level of 440, but active trading at the end of session helped the Index push through.

By the end of the day's trades, advancers outnumbered decliners by 163-52.

The volume of trades rose to nearly 45 million shares, about a million higher than Friday's session, but the combined value of trades reached just VND895.5 billion (US$44.8 million), about VND105 billion lower than in the previous session.

Tran Hoa, director of analysis for the iTrade Corporation, attributed the rising Index over the past five days to bargain share prices and an assist from foreign investors.

"However, inflation and high interest rates are two major factors threatening the market, and it will not be easy for indices to establish a sustainable uptrend in the mid-term," Hoa said, predicting that investors would continue to wait for additional details on Government policies to stabilise the economy.

Shares in the construction materials and real estate sectors made the strongest showing, including developer Vincom (VIC), up 2.5 per cent; Hoa Phat Group (HPG), up 4.2 per cent; and Kinh Bac Urban Development (KBC), up 5 per cent.

PetroVietnam Finance (PVF) and Sai Gon Securities Inc (SSI) also each rose by nearly 5 per cent. Viet Nam Electricity (VNE) was the most-active share, however, with only 1.6 million traded.

Vien Dong Pharmaceutical (DVD) plunged to its floor price of VND46,900 per share following news that its chairman, Le Van Dung, had been detained by police for alleged manipulation of the company's share price. State Securities Commission chairmanVu Bang meanwhile vowed that regulators would co-ordinate with the police to clarify the extent of the alleged violation.

On the Ha Noi Stock Exchange yesterday, the HNX-Index rose by an even more impressive 3.59 per cent to close at 105.22. The volume trades outstripped the HCM City market, reaching 48.8 million shares, while advancers outnumbered decliners by 282-39.

Viet Nam Construction Import-Export Co (VCG), PetroVietnam Construction (PVX), Kim Long Securities Co (KLS), VNDirect Securities Co (VND), and Sai Gon Thuong Tin Real Estate Co (SCR) all rose to their ceiling prices.

PVX was the most-active share nationwide with 4.8 million traded. PVX closed up 1.3 per cent to VND21,000 per share.

Source: vnagency.com.vn

November 28, 2010

Tissue paper demand to rise

HCM CITY — Paper tissue consumption in Viet Nam is expected to increase annually at a rate of 12.5 per cent until 2015, reaching 150,000 tonnes, according to speakers at a conference on paper consumption held recently in HCM City.

Nguyen Hoang Nam, sales director for the Sai Gon Paper Joint-Stock Company, said by then per capita tissue consumption would reach one kilo a year.

Per capita tissue consumption in Viet Nam in 2007 was about 0.48 kilos, while in Japan it was 14.25 kilos, Taiwan-13.62 kilos ,and Thailand -x1.08 kilos.

With the economy growing, demand for higher grade tissue will increase, and, as a result, a shortage could occur in the next five years, he said.

The market for consumer paper, including toilet tissue, napkin tissue and facial tissue, has great diversity in design, type, brands and original source.

According to the latest statistics compiled by Nielsen, a market research company, there are about 432 consumer paper brands on the domestic market.

They vary in quality and many are made from materials or by technologies that do not ensure hygiene and safety, especially for children.

Dr Vu Ngoc Bao, general secretary of the Viet Nam Paper and Pulp Association, said that many small businesses still use chlorine during their production process.

In addition, fake and imitation goods are another issue, said Nguyen Lam Vien, deputy chairman of the High-Quality Vietnamese Goods Club.

Many large tissue brands have complained of the increasing number of goods that copy their products.

To ensure consumer health and more transparency for the market, the Government should develop regulations on the paper-tissue market so that agencies can better control the market, many delegates at the conference said.

Currently, only Vietnamese standards are applied in classifying consumer paper products, Bao said.

Cao Tien Vi, director of the Sai Gon Paper Joint-Stock Company, said Decree 97 issued last August on fake goods contains stiff provisions that punish violators, but many violators had not been charged because of a lack of inspection staff.

Phan Thi Viet Thu, general secretary of HCM City's Consumer Protection Association, said consumers should boycott poor quality paper products.

In addition, she suggested that consumers use toilet tissue for its proper function, and avoid using it to clean tables, household appliances or mouths and hands after eating.

To avoid buying fake paper, Vi said customers should buy products at reputable supermarkets or distributors of paper products.

Source: vnagency.com.vn

City bent on thwarting seasonal price hikes

HCM CITY — The municipal administration has pledged it will ensure sufficient supplies of essential commodities and no "pricing fever" during the year-end festive season.

The commitment was made by the HCM City People's Committee at its monthly meeting held late last week.

The administration and related agencies would strictly penalise speculative actions, and implement other measures to stabilise prices, officials said at the meeting.

There are now 2,200 sales points participating in the price stabilisation programme launched on June 21 that are located all over the city, including rural areas.

The Department of Industry and Trade proposed at the meeting that the People's Committee add fisheries products to the eight essential commodities listed in the programme and ensure their sales at all participating outlets.

Officials of the city's Finance Department said there were some obstacles that could reduce the effectiveness of the price stabilisation programme.

Many shops participating in the programme did not have enough commodities to sell, while there were signs some of them were hoarding goods and waiting for an opportunity to increase prices, they said.

The department said it would strengthen inspections of participating establishments and impose severe punishments for any violation found.

Deputy Chairman of the People's Committee Le Minh Tri asked departments and branches, as well as inter-sector inspection teams in urban and rural districts not to stop the price stabilisation programme after Tet (Lunar New Year). They should continue the programme even after the holiday season, Tri said, adding that usually there was a scarcity of commodities around that time.

In December and during the Tan Mao Tet festival, relevant agencies should strengthen its monitoring tasks, particularly at open markets and retail outlets, to make sure that there would be no shortages of commodities and no price fluctuations during these times, Tri said.

Speaking at the meeting, Ho Huu Hanh, director of the State Bank of Viet Nam's HCM City branch , said sharp increase in deposit interest rates had seen lending rates go up to as high as 21 per cent in some places.

Enterprises in the city dared not borrow at such rates because of concerns their profits would be insufficient to cover borrowing costs.

A representative of central enterprises in the city suggested the Government tell city-based banks to offer support policies for enterprises.

This would be an indirect measure to support local consumers, the representative said.

Source: vnagency.com.vn

Overseas investments struggle

HCM CITY — The rate of return on overseas investments by Vietnamese firms has been very poor, although the investment volume has risen steadily over the last few years, officials say.

The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment says local enterprises have transferred a total of US$1.79 billion to invest in foreign countries since 1989, when Viet Nam began investing abroad.

But profit repatriated to Viet Nam was $39 million in the last 21 years, a return of just 0.46 per cent, the agency estimates.

However, the actual figure may be higher since many investors have not reported their business performance to the authorities, says Bui Quoc Trung, FIA deputy director.

In addition, investors often reinvest in their projects, and thus profit repatriation is lower than expected. He also notes that although Vietnamese firms started investing abroad in 1989, overseas investment only took off in a significant way in 2006.

Local firms have invested in 410 projects abroad since 2006 with a total registered capital of $7.05 billion.

In the 1989-99 period, only 17 projects with a combined capital of $13.6 million were licensed.

The Viet Nam Oil and Gas Group (PetroVietnam) has so far invested $1.05 billion abroad and repatriated profits of more than $31 million.

Business focus

The low rate of return has raised concerns about the efficiency of overseas investment.

One expert has said although it is true that country has more than profit motives when it promotes Vietnamese investment in other countries, both the Government and the companies should consider financial efficiency before starting a project.

Another official from the Ministry of Finance says local firms should invest overseas only if the investment offers higher profits than at home, if the project can provide materials that cannot be found in Viet Nam, or if there is a supply shortage of those materials in the country.

Otherwise, enterprises should not invest abroad, especially in the current situation when local companies are short of capital.

Trung of FIA says that in the long-term, investment efficiency could improve, but some adjustments need to be made in the short term.

There has been an imbalance between cash outflow and inflow from overseas projects. With a large amount of capital expected to go out of Viet Nam, the capital source for local investment will certainly be affected and there will be added pressure on national balance of payment.

This will affect directly the country's macroeconomic balance, and therefore, proper measures are necessary to harmonise overseas and local investments, he adds.

According to the Ministry of Planning and Investment, by the end of last year, Viet Nam had invested in 465 projects worth $7.73 billion in more than 50 countries and territories.

Processing and manufacturing industries ranked first with 102 projects worth $429 million.

With nearly 170 projects worth $3.16 billion, Laos has so far been the most attractive destination for Vietnamese investors.

Russia follows with 17 projects totaling $1.71 billion.

Source: vnagency.com.vn

Minister praises role of fund in keeping petrol prices down

HA NOI — If it were not for the price stabilisation fund, petrol and oil would cost VND1,500-2,200 per litre more, said Finance Minister Vu Van Ninh.

Ninh said the fund was governed by the Ordinance on Price and that it limited the number of times petrol and oil prices could be raised.

Under Decree 84, traders can increase their retail prices by 7 per cent if world prices rise by a similar amount within 30 consecutive days. If world prices rise by 7-12 per cent, traders are permitted to increase prices by 7 per cent plus 60 per cent of the surplus. The balance will come from the petrol price stabilisation fund.

If world prices increase more than 12 per cent, the State will reduce the import tax. Since October, world prices surged several times, forcing the Government to intervene, Ninh said.

If the price of petrol and oil on the domestic market jumped by VND1,500-VND2,200 per litre, it would have a negative impact on standards of living and business, he said.

Petrol and oil prices in Viet Nam were lower than those in other countries in the region, he said. In Singapore, a litre of petrol costs VND26,000, while in China and Laos its costs VND20,000. Meanwhile, in Cambodia, a litre of petrol costs VND21,000 and VND19,800 per litre in Thailand.

Ninh said that when the world price of petrol and oil surged, dealers were not allowed to increase local prices straight away. A litre of petrol in Viet Nam costs VND16,400-VND16,900, a litre of diesel costs VND14,750 while a litre of kerosene is VND15,100 and fuel oil costs VND12,990 per litre.

Source: vnagency.com.vn

Hue paves the way for investment

HCM CITY — Thua Thien Hue Province has given more preferential treatment to both domestic and foreign investors in its aim to become a city managed by central government, speakers at a conference said yesterday.

More than 250 businesses from HCM City and southern provinces attended the conference, held here by the Thua Thien Hue People's Committee.

Nguyen Van Cao, chairman of the committee, said the province aimed to become a centre of commerce, service and international transactions as well as one of the traffic hubs of the Central Highlands and the nation.

Under a plan by the Politburo, the city and region will become a centre for culture as well as science, technology and health services by 2020.

Dang Xuan Quang, deputy head of Foreign Investment Agency, said: "To further improve its investment climate, the province needs to make public and simplify its administrative procedures and improve its infrastructure system, especially the road, sea and aviation infrastructure, and improve its workforce quality."

He said close links should exist between schools, businesses and research institutions to improve training.

Le Dinh Khanh, deputy director of Thua Thien Hue Department of Planning and Investment, said areas to call for investment included eco-tourism, entertainment, tourism resorts and international standard 4-5 star hotels; hi-tech parks, industrial villages and new urban areas; and education and financial services.

The province has encouraged more investment in industries such as IT, bio-technology, electronics, hi-tech, manufacturing and engineering, production of materials for agriculture, forestry and aquaculture as well as handicrafts.

Among its investment policies, the province has offered incentives in industrial zones to help the projects finish on time.

Investors can lease land at a rate that is on average 0.65 per cent of the annual rate issued by the province.

The province has seven industrial parks and the Chan May-Lang Co economic zone, the key point for attracting investment.

A representative of a consulting company Akitek Tengarra, speaking at the meeting, pointed out that the tourism development plan of Thua Thien Hue by 2025 calls for 10 key projects that are expected to attract more investment.

The projects include a Phu Bai airport, an eco-village in Lap An lagoon with 12 hotels and 500 three-star villas, a resort in Bach Ma Hill, and a Meeting-Incentive-Conference-Exhibition (MICE) project.

Dang Cong Luan, director of the HCM City Department of Home Affairs, said enhanced transparency on land prices, administrative procedures and site clearance would create favourable conditions for investors.

"Thua Thien Hue will become an attractive investment destination in the near future," he said.

At the seminar, the provincial People's Committee granted investment licences to three companies, the International Transport Development and Investment Joint Stock Co, Viet Phuong Investment Group and Phong Phu Joint Stock General Co.

Two memorandum of understanding on project investment research have also been signed.

The province has a coastline of 128 km length and 22,000 ha of lagoons; Thuan An seaport and Chan May deep seaport can take vessels with capacity of 50,000 tonnes.

Thua Thien Hue's territorial waters have more than 500 types of fish and species of seafood of high economic value.

More than 100 mineral sites exist, with large reserves such as limestone, black and grey granite.

Areas of acacia plantation forest as raw material comprise 60,000ha and the areas of rubber 19.000ha.

Thua Thien Hue is located at the end of the East-West economic corridor connecting Myanmar-Northeast Thailand-Laos and Central Viet Nam.

Source: vnagency.com.vn

Penny stocks help lift markets

HA NOI — Active trading by local investors helped lift the nation's stock markets last week, with the VN-Index rising by a cumulative 3.15 per cent over the course of the week to close on Friday at 439.94 points.

Gains were across-the-board on the HCM City Stock Exchange and were not limited solely to blue chips, said analysts of Tai Viet Securities Co. Penny shares had a solid week, with Sao Vang Rubber Co (SRC) rising 21.5 per cent to VND19,800 per share, recovering from year-long low of VND15,500 on November 16.

Ben Tre Forestry and Seafood Products Import-Export Co (FBT) rose by 17.9 per cent over the previous week, while Seafood Co No 4 (TS4) gained 16.3 per cent.

"The rebound of penny stocks reflects the return of local investors who are seeking profitability after news of a soaring inflation rate and trade deficit and low foreign investment figures," said Nguyen Quang Minh, an analyst with a HCM City securities firm.

The average daily volume of trades on the HCM City market last week was 3.1 per cent higher than in the previous week, reaching 32.5 million shares and an average daily value of VND704.9 billion ($33.6 million).

Sacombank (STB) was the most-active share, with a cumulative total of 7.9 million shares traded during the week.

A profit-seeking trend would continue to stimulate investor interest in the coming week and contribute to a short-term recovery in early December, Minh predicted.

But the head of the brokerage department for a Ha Noi-based securities firm, who asked to remained anonymous, expressed scepticism towards the prospects for a market recovery due to the dismal economic figures.

Credit to stock investors wouldn't be eased anytime soon, he said, and listed companies were struggling against high borrowing costs and dwindling profitablity.

On the Ha Noi Stock Exchange last week, the HNX-Index rose 2.4 per cent over the previous Friday's close to 101.57 points. The average daily value of trades was VND567.6 billion ($27 million), on an average volume of 32.8 million shares, an increase of nearly 25 per cent over the previous week.

HCM City Securities Co analysts also said that rising interest rates were continuing to cast a pall over market sentiment. — VNS

"We have now hit bottom for the time being," they wrote, adding that further gains were possible but that economic concerns would act as a drag on share values.

Source: vnagency.com.vn

Fund enters venture with Japan partner

HCM CITY — CapitaLand Viet Nam Investments Pte Ltd (CVI) has entered into a US$200 million joint venture with Japan's Mitsubishi Estate Asia Pte Ltd (MEA) and an affiliate of GIC Real Estate, the real estate investment arm of Government of Singapore Investment Corporation, to invest in prime real estate development projects in HCM City and Ha Noi.

CVI, which is a wholly-owned subsidiary of CapitaLand (Viet Nam) Holdings Pte Ltd, will take up a 50-per- cent stake in the joint venture, while the balance will be held in equal proportions by MEA and the affiliate of GIC Real Estate.

MEA is a wholly-owned subsidiary of Mitsubishi Estate Company Limited.

CVI will inject a pipeline of projects into the joint venture, while CapitaLand will undertake project management for these projects.

The first project will be an approximately 34,000sq.m site located in HCM City's Thanh My Loi Ward in District 2.

The first phase of this project will be a residential development that will offer 962 apartments supported by approximately 7,700sq.m of retail space.

CVI has also identified an approximately 14,000sq.m site in the Mo Lao New Urban Area in Ha Noi's Ha Dong District that the joint venture will undertake when the land is acquired. The project will comprise four residential towers with about 960 apartments.

"CapitaLand is confident of the growth prospects of the real estate sector in Vietä Nam as the country's real estate sector is supported by strong economic growth, stable government, rapid urbanisation and a young and growing population," said Chen Lian Pang, CEO of CapitaLand (Viet Nam) Holdings.

"As the country's urbanisation gathers pace and its middle class grows in tandem with the improving economy, demand for housing in major cities is set to rise. We will continue to explore new opportunities to further expand our presence in other real estate segments here and target to grow our business in Viet Nam from the current total assets base of US$336 million to around $1.68 billion over next three to five years."

Currently, CapitaLand Group has projects in HCM City, Ha Noi, Hai Phong and Da Nang, with over 4,500 apartments for sale in the development pipeline, plus another 1,300 serviced units.

Source: vnagency.com.vn

IPOs die on vine in dismal climate

HA NOI — Many companies that have registered to auction shares on the HCM City Stock Exchange in recent weeks have had to cancel plans after finding that no investors had registered to participate in the auctions.

Few firms have also been successful with initial public offerings (IPOs) in the current depressed climate on the stock market. Over 10 companies made IPOs on the HCM City market this month, but only two firms sold out the shares offered – and many failed to attract investors at all.

Tien Len Steel Corporation, which had been scheduled to hold its IPO last Thursday, has become the latest to cancel its IPO due to lack of investor interest, joining Satra Tien Giang Trading Co and Soc Trang Printing Enterprise in the list of companies that have recently cancelled their offers.

Meanwhile, PetroVietnam Gas – an affiliate of the PetroVietnam – sold 61 million shares in its IPO last week, or 64 per cent of the shares offered in what had been viewed as the nation's biggest IPO this year. This result could be still considered a success in the current market downtrend, with PVGas earning about VND1.9 trillion (US$95 million) through the IPO and shares achieving a price of VND31,000 ($1.55) per share.

Among other firms that have recently carried out IPO plans, An Thinh-Vinatex Construction Investment Co sold about 70 per cent of its shares – but only three investors joined in the auction. An Giang Agriculture and Food Import Export Co sold 47 per cent of its offered share, while HCM City Finance and Investment Co sold just 32.5 per cent. Participants in these recent IPOs were mostly long-term or strategic investors.

"Capital is still tending to be withdrawn from the stock market at the current time, if otherwise sound, cheap shares can't attract investors, it will all the more difficult for new companies to attract interest," said Au Viet Securities Co deputy general director Le Anh Thi. — VNS

"If the prices of auctioned shares are not much cheaper than those of many listed shares, and if investors have money they want to invest, they are going to prefer investing in already listed stocks due to their higher liquidity," agreed analysts at SJC Securities Co.

Source: vnagency.com.vn

Penny stocks help lift markets

Ben Tre Forestry and Seafood Products Import-Export Co (FBT) rose by 17.9 per cent over the previous week, while Seafood Co No 4 (TS4) gained 16.3 per cent.

Sacombank (STB) was the most-active share, with a cumulative total of 7.9 million shares traded during the week.

A profit-seeking trend would continue to stimulate investor interest in the coming week and contribute to a short-term recovery in early December, Minh predicted.

Credit to stock investors wouldn't be eased anytime soon, he said, and listed companies were struggling against high borrowing costs and dwindling profitablity.

HCM City Securities Co analysts also said that rising interest rates were continuing to cast a pall over market sentiment. — VNS

"We have now hit bottom for the time being," they wrote, adding that further gains were possible but that economic concerns would act as a drag on share values.

Source: vnagency.com.vn

November 26, 2010

Heavy sales hold back VN-Index

HA NOI — Accelerated sales put the brakes on shares yesterday on the HCM City Stock Exchange, causing the VN-Index to close essentially unchanged at 439.94 points.

The volume of transactions soared to 44.4 million shares, however, with a combined value of over VND1 trillion (US$50.5 million).

In a sign of the speculative nature of trades, the most-active share on the HCM City market was a penny stock, Viet Nam Electricity Construction Co (VNE), which racked up a volume of 2.9 million shares and finishing the session at VND10,300 per share, an increase of 4 per cent.

Meanwhile, most blue chips closed down, including PetroVietnam Finance (PVF) down 4.87 per cent; software producer FPT, down 2.14 per cent; Phu My Fertilisers (DPM), down 0.85 per cent; and Ocean Group (OGC) and Sacombank (STB), each down 0.45 per cent.

"The 440-resistance mark seemed to put a big brake on trading yesterday," said Nguyen Duy Phong, a member of an online stock forum. "Profit-taking pressure increased as shares purchased late last week arrived in investor accounts today, due to T+4 settlement period."

On the Ha Noi Stock Exchange yesterday, the HNX-Index finished the day off by nearly half-a-per cent to close at 101.57 points. The value of trades reached VND727.2 billion ($34.6 million) on a volume of 40.4 million shares.

PetroVietnam Construction (PVX) was again the most-active share nationwide, with 3.1 million changing hands.

Nguyen Dinh Loc, head of investment for a HCM City-based securities firm, said that profit-taking yesterday could confirm that the market has hit bottom and that a return of investors to the market next week had become more likely.

"But the prediction is for cautious going," Loc added.

Source: vnagency.com.vn