VietNam Business: December 2010

Friday, December 31, 2010

ADB ups growth forecast for Vietnam

ADB ups growth forecast for Vietnam The Asian Development Bank (ADB) has upped its economic growth forecast for Vietnam this year to 6.7 percent from the 6.5 percent it projected in April.

It has also raised the growth forecast for 2011 to 7 percent from 6.8 percent previously, while lowering inflation projection to 8.5 percent this year and 7.5 percent next year, according to the Asian Development Outlook 2010 Update released by the bank on Tuesday.

“The shift from strong fiscal and monetary stimulus implemented during the global recession to a more balanced policy stance helped to stabilize financial and economic conditions and, together with the global economic recovery, paved the way for solid economic growth this year,” said the report.

Vietnam’s third-quarter growth hit 7.16 percent, well above the government’s target of 6.5 percent for the full year, government data said on Tuesday.

Gross domestic product (GDP) in the country, which aims to become an industrialized nation by 2020, expanded 5.8 percent in the same July-September period last year, the General Statistics Office said.

Vietnam’s nine-month economic growth was 6.52 percent, a “relatively high rise” compared with last year’s 4.62 percent over the same period, the agency said. It said the economy had become “rather stable towards a positive trend.”

Talking to the press on Tuesday, ADB’s Vietnam Country Director Ayumi Konishi said, “Vietnam should continue its efforts to ensure a better understanding of its policy stance by the public at large, supported by greater and timely availability of information and statistics.”

“This applies not only to the government but also to the corporate sector. In order to promote better corporate governance of public and private enterprises, quality and timeliness of information to be made available to the owners or shareholders and potential future investors will be the key,” Konishi added.

Most of the fiscal stimulus measures implemented during the global financial crisis expired at the end of 2009. Reflecting a somewhat more restrained fiscal stance, the government is targeting a 2010 budget deficit equivalent to 6.2 percent of GDP, narrower than the actual deficit in 2009 of 7 percent, said the ADB’s report.

Lei Lei Song, senior economist at the ADB, said on Tuesday that Vietnam’s growth resulted from an improved external environment and government stabilizing measures brought in last year to address macroeconomic imbalances.

Song warned of risks to Vietnam’s economic development as the dong is expected to be further devalued and inflation remains much higher than in other countries. This may erode the confidence of consumers and investors, Song said.

According to ADB, policy tightening and a good rice harvest contributed to the pulling back of inflation to 8.2 percent in July and August, although it increased to 8.9 percent in September.

Sizable trade deficits and relatively high inflation, coupled with residents switching from local-currency assets into US dollars and gold, continued to put downward pressure on the dong exchange rate, the bank said. From last November to August 2010, the dong was devalued three times, by a total of about 11 percent against the US dollar.

HSBC expands to central region

Thomas Tobin (3rd, R), CEO of HSBC Vietnam, and colleagues cut the ribbon at the opening of the bank’s Danang branch on Thursday - Photo: Courtesy of HSBC

HCMC – HSBC Vietnam on Thursday opened a branch in Danang City to expand its geographical reach to the central region.

This is the second branch which the foreign bank has set up this year. The bank’s first branch debuted in Can Tho City in southern Vietnam’s Mekong Delta just last week.

Thomas Tobin, CEO of HSBC Vietnam, said in a statement, “Given Danang’s positioning as one of the country’s fastest-growing economic centers, as well as one of the most attractive hubs for foreign investment, we are looking forward to playing a role in this dynamic city’s exciting business sector.”

With the new branch at the Indochina Riverside Tower, 74 Bach Dang Street, Hai Chau District, corporate customers in Danang and neighboring provinces can gain access to HSBC’s business banking products, including commercial banking, global banking, payment and cash management, and trade finance, among others.

HSBC also has a range of personal financial services available for individual clients, including deposits and savings account transactions, loan products, international credit and debit cards.

Like other outlets across Vietnam, the Danang branch is launching a nationwide “Great Offers” promotion, offering customers discounts, bonus interest rates, and gifts across HSBC’s personal financial services products until October 31 this year.

Countries of CLMV join hands for tourism development

Vo Anh Tai (R ), director of Saigontourist Travel Service Co., talks with foreign partners at the International Travel Expo in HCMC’s District 7 - Photo: Dao Loan

HCMC - High-ranking tourism officials of Cambodia, Laos, Myanmar and Vietnam, often referred to as CLMV, on Thursday announced in HCMC that they had agreed to join hands in many activities to develop tourism in the four countries.

The four tourism ministers agreed on the cooperation on Wednesday in a meeting as part of the sixth International Travel Expo in HCMC, which kicked off in HCMC on Thursday.

Tran Chien Thang, Vietnamese Deputy Minister of Culture, Sports and Tourism, said that the four sides would join hands in marketing activities, in organizing tourism investment forums, and developing human resources.

The four ministers also agreed on concerted efforts to make transport easier for citizens and international tourists to travel to and from the countries, and would seek ways to links tours between the four destinations. Efforts would also be made to open air routes linking the region’s world heritage sites.

The four ministers also agreed to organize the ministerial meeting in every two years to further discussions about the cooperation.

“We want to use the tourism industry as a lever to reduce poverty,” said Somphong Mongkhonvilay, tourism minister of Laos.

Tourism cooperation among the three countries of Cambodia, Laos, and Vietnam was formally initiated in 2007, when the three tourism ministers signed an agreement to this effect. The cooperation is now further widened with the participation of Myanmar this year.

The Laos minister said that the three countries were doing well in joint promotion activities, in organizing caravan tours, and making transport easier for citizens and international tourists.

“The number of flights between the three destinations is increasing. Overland transportation is easier. We are talking with the Governments to open more border gates for tourists to travel through,” he said.

Tourism officials said transportation is very important to help develop the tourism industry.

“Making transport easier is very important especially for visitors from outside the region. We should help them get visas in international border gates. We are talking with Governments to build more highways for better transportation,” said Thong Khon, Cambodia’s tourism minister.

The tourism ministers of Laos and Cambodia said that international tourists to the two countries can make visa procedures at international gates. Meanwhile, for Vietnam, tourists can get visa at the embassy or at international gates, but in the second way local travel firms must be there to assist such visitors.

The travel expo kicked off on Thursday at the Saigon Convention and Exhibition Center in District 7. Along with the exhibition, buyers and sellers are continuing business meetings there.

Container scanner runs at low capacity

A customs officer inspects a container using the scanner at Cat Lai Port in HCMC - Photo: Vu Thuoc

HCMC – The country’s first container scanner at Cat Lai Port in HCMC is operating at 40% capacity due to patchy container transport services at the port, according to the customs.

Ton Thanh Phong, deputy head of the Saigon Port Customs Office – Zone 1, the operator of the scanner, said the US$9.6-million equipment just scanned around 40 containers a day as less-than-expected containers were carried to the site where the scanner is located for inspection.

Following some technical glitches, the scanner funded by Japan is now in good condition but there are less-than-required trucks for transporting containers to the scanner. “New Port Co. has six or seven trucks used for this activity, so goods owners have to queue,” said Phong.

He said a number of goods owners had hired trucks or used their own vehicles to quicken the customs clearance process at the port. “The customs office has asked New Port Co. to add more container trucks to speed up the scanning process.”

A high fee is another problem. Phong said the fee for traditional customs inspections which require containers to be unsealed was VND436,000 per container but that for the scanner service is VND350,000 per 20-foot container and VND510,000 per 40-foot container.

The scanner helps shorten the period of customs inspection by four to six times and easily detect smuggled and prohibited goods.

Haiphong Port is expected to receive a similar scanner, also funded by Japan, in the first quarter of next year, according Hoang Viet Cuong, deputy head of the General Department of Customs.

This equipment will be used at other ports in the future, he said but declined to elaborate.

In related customs news, HCMC from early November will expand electronic customs procedures at five more agencies, raising the total number of customs units with e-customs to eight.

The e-customs had already been applied at Cat Lai, Tan Cang ports and Linh Trung Export Processing Zone.

The department will organize four one-day training classes on e-customs declaration skills for enterprises at Him Lam Co. in Binh Thanh District from October 12. Around 1,500 enterprises are expected to join the classes.

City officials reveal solutions to traffic congestion

A new high-rise building going up in downtown HCMC. The HCMC Institute for Development Studies (HIDS) is going to work with relevant agencies to find measures to cope with chronic traffic congestion, especially in the downtown area where more and more buildings are springing up - Photo: Le Toan

HCMC - The HCMC Institute for Development Studies (HIDS) has been assigned to team up with relevant agencies to map out proactive measures to deal with chronic traffic jams in this economic hub of Vietnam.

The measures would likely cover restriction on bikes and skyscraper buildings in downtown areas as well as a brake on HCMC’s population as revealed by HIDS president Nguyen Trong Hoa and Tran Chi Dung, director of the city’s Department of Urban Planning and Architecture.

Hoa and Dung answered a host of queries in relation to the city’s urban planning vision to 2025 from companies and organizations at a business luncheon held in here on Wednesday by the European Chamber of Commerce (EuroCham) in Vietnam.

Hoa said HIDS was working on policies to restrict bikes in downtown areas and impose fees on vehicles running into the central business district, while earmarking prioritized streets for buses. He stressed these policies would probably result in public outcry but would be a must to ensure sustainable development for the city.

Dung of the department confirmed public transport network took one of the focuses of the HCMC government and this was proved by substantial investment in buses over the past year. But, public transport means can meet a mere 7% of the demand compared to 20-30% as targeted.

In its development strategy, the city will have modern subway, monorail and tram systems to lure citizens to public transport means, and investment capital is being sought from different sources, including official development assistance (ODA) loans to translate these projects into reality.

Dung said more ODA loans had been pledged from Europe for metro developments in HCMC. The first metro route stretching over 19 kilometers from Ben Thanh Market to Suoi Tien has its depot constructed and is scheduled to go online in 2015.

Hoa of HIDS said the chronic traffic congestion in HCMC would be eased when six planned metro routes are in place. However, he said this would be possible if the city’s population was capped at 10 million.

An adjusted master zoning plan for HCMC until 2025 envisages the city’s population at 10 million and the number of non-residents at 2.5 million. In that year, up to 7.4 million of the citizens will live in the central area and the rest in outlying districts.

HCMC’s residential area will be limited at 90,000-100,000 hectares by 2025 and the central districts account for some 49,000 hectares. Hoa said as the city’s land could not be widened, its citizens should not be more than 10 million.

“Ten million citizens will be the maximum population that HCMC can endure in terms of accommodation and traffic movement, given the roads, beltways, bypasses, bridges, schools, hospital and houses the city has now and in the future,” Hoa explained.

At the luncheon, the audience also raised questions about licensing new high-rise buildings in downtown area and its impact on traffic jams. Hoa said new projects would be approved in accordance with a new zoning plan for the central business district.

“New high-rise developments will continue to go up in downtown area but their licensing will be weighed carefully,” Hoa said. He added it was difficult for the department to consider new projects in the absence of the zoning plan.

Dung expected the zoning plan would be completed and passed by the end of this year. He said more than 100 of the some 255 high-rise projects would be approved and developed.

“We and the HCMC planning and architecture council will consider every new project before making the report to the city leaders to seek appropriate measures to meet the needs of investors,” Dung said.

Italy seeks cooperation in transport, energy and environment

Italian firms interested in Vietnam agriculture

Representatives of an Italian food processing firm meet local businesspeople at a B2B session in HCMC on Thursday - Photo: Nguyen Huy

HCMC – A delegation of Italian engineering companies and contractors in the transport, energy and environment sectors will start a three-day visit to Vietnam this Sunday to sound out business opportunities here.

The Italian Trade Commission (ITC) Trade Promotion Section at the Italian Embassy says in a statement that it will hold several events in Hanoi including a ministerial-level seminar on October 4 and business-to-business (B2B) meetings the following day.

The Vietnam trip aims to present Italian companies from the transport, energy and environment sectors and cooperation opportunities with Vietnamese businesses.

According to ITC, over the past five years infrastructure investments in Vietnam have not kept pace with its average annual GDP growth of 7.3%. Citing official sources, it said the country would need about US$165 billion to upgrade its infrastructure over the next five years to meet development goals.

A comprehensive study done by the ITC shows the current projects, which will be completed by 2015, in the key sectors of transportation, energy, environment and infrastructure are worth US$85 billion. Besides, Vietnam is encouraging public-private partnerships in infrastructure development.

Therefore, Italian companies in the relevant sectors are exploring opportunities in Vietnam and interested in projects to build underground car parks, traffic management systems, highways and green energy facilities.

“Vietnam’s steady growth needs increased investment in infrastructure, as acknowledged by the Vietnamese government and by foreign and domestic investors. The seminar will be an excellent chance for Vietnamese companies to forge business and investment opportunities with Italian partners,” Marco Saladini, Italian trade commissioner in Vietnam, said in a statement.

The delegation includes four engineering companies – Ideas, Majone and Partners, Molinaro Architettura and Studio Roberto Cortesi, one provider of energy production and transmission products and technologies – Finmeccanica, one major general contractor –n Cmc di Ravenna, one contractor specializing in hydraulic works – Seli, and one company providing turn-key solutions for environmental protection – Perteco.

* Italian enterprises in the food processing sector had a business matching event with Vietnamese companies in HCMC on Thursday.

Marco Saladini, Italian trade commissioner in Vietnam, said at the incorporated business matching and seminar in the city that Italy would promote Italian machinery for food and vegetable processing in Vietnam.

“As there is a strongly growing market for Italian goods in Vietnam with a population of 86 million and GDP growth of about 7%,” he said.

The Italian Trade Commission (ITC) targets fostering technological and business collaboration among Italian and Vietnamese enterprises in the field through this event.

Workshop increases Vietnam-India strategic partnership

Vietnam and India have a great potential for cooperation in services,
pharmaceuticals, oil refinery, transport, agriculture, information
technology, tourism, education and production of fine art articles, said
a workshop in New Delhi.

Trade and economic ties between India
and Vietnam have seen a rapid growth in recent years with two-way
trade rising from 489.2 million USD in 2003 to over 2 billion USD in
2009, participants stressed at the September 30 workshop entitled
India-Vietnam strategic partnership: tapping potential for expanding
cooperation.

The two countries expect to bring the bilateral
trade to 2.55 billion USD this year. Vietnam’s exports to India are
mainly tea, coffee, rubber, coal, computer hardware and electronic
appliances, while its imports from India steel, livestock feeding,
pharmaceuticals, machinery equipment, cotton, leather and textile
products and pesticide.

However, participants stressed Vietnam
and India have yet to fully tap their potential in trade and
economic ties, urging the two countries to overcome existing
difficulties, such as tax levels, customs procedure and transport./.

Footwear sector plans to develop supporting industry

The Vietnam Leather and Footwear Association (Lefaso) has submitted to
the government a strategy to develop the sector from now till 2020 with a
vision for 2015, focusing on the supporting and material industry.

According
to Lefaso President Nguyen Duc Thuan, the strategy aims at ending the
sector’s dependence on foreign materials and technologies and shifting
from sub-contracting.

Under the strategy, the sector will need
18.8 trillion VND (989 million USD) to produce shoetrees and models and
expand production of materials including leather and leatherette.

The
plan is expected to help the sector to earn 8.5 billion USD from
exports by 2015 and 11 billion USD by 2020 with the localisation rate of
65-75 percent from 50 percent at present.

Thuan explained that
the strategy was prompted by the fact that the sector has been suffering
from a serious shortage of materials for many years, due to a lack of
supporting industry.

At present, the country has only 30
enterprises, including five with foreign investment capital, producing
tanned leather, the main material for the footwear sector. Those
enterprises can meet only 30 percent of the demands for materials of
domestic footwear enterprises.

The Lefaso leader further said
that the sector has also to cope with the EU’s anti-dumping tax on
Vietnam’s footwear products.

In an effort to boost exports,
Lefaso has carried out many promotion activities, including hosting the
29th international conference of the Asian footwear sector and the
international fair of footwear materials and machines.

At
present, Vietnamese shoe makers have got orders for exports to fill
until the first quarter of 2011, as customers are shifting their
attention from China to Vietnam.

In the first nine months
of the year, the sector earned over 3.6 billion USD from exports, a
year-on-year increase of 23 percent. The figure is expected to hit over 5
billion USD by the end of the year./.

Gov’t gives visa fee exemption for tourists

HCMC – Visa fees will be exempted for all international travelers coming to Vietnam as organized by international travel companies who have registered to join the national marketing campaign named Vietnam – Your Destination.

Deputy Prime Minister Nguyen Sinh Hung has just announced the Government decision, which offers visa fee exemption between now and the end of this year.

Vu The Binh, head of the Travel Department under the Vietnam National Administration of Tourism (VNAT), told the Daily on Thursday that the tourism sector would have a good opportunity to woo more visitors to the country in the next three months because all of the country’s international travel companies were joining the marketing program.

“Along with the diplomatic channel, we will send the good information directly to overseas partners to encourage more foreign guests to come,” he said.

VNAT has reported that more than 383,000 foreign visitors visited the country in September, bringing the total number of foreign arrivals to over 3.73 million in the year to date, up 34.2% year on year.

The top ten markets of the country’s inbound tourism sector are China, South Korea, the U.S., Japan, Taiwan, Australia, Cambodia, Thailand, Malaysia, and France. Arrivals from these markets alone hit nearly 2.79 million, while arrivals from the remaining markets total 942.000.

Thursday, December 30, 2010

Binh Dinh to hold first forestry festival next year

HCMC – The central province of Binh Dinh will organize the first forestry festival in Quy Nhon City from March 26 to 29 to create a venue for stakeholders to propose ways to develop the sector.

Le Huu Loc, deputy chairman of the province, said at the press conference in HCMC early this week that the event would be a convergence point for scientists, enterprises and managers to suggest solutions for forestry development from planting to processing and consumption.

This is a joint effort of the province, the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, and the provincial Forestry Association.

The province, Loc said, would also take the occasion to honor contributors to forestry development and promote business links between local exporters and international buyers, probably from North America, Western Europe, Russia, Japan, China and Thailand.

The festival will feature a showcase of forestry products at 700 stands of 400 local and international businesses.

Binh Dinh – which belongs to the central focal economic zone, about 670 kilometers northeast of HCMC and 1,065 kilometers southeast of Hanoi – has 150 wood processors, most of them exporters, with annual output of 150,000 cubic meters of refined woodwork and more than 300,000 cubic meters of chip wood.

Last year, Binh Dinh exports US$250 million worth of wooden goods, 60% of the province’s total export revenue.

City hires bidding consultant for second metro route

HCMC – The HCMC government has allowed the Management Authority for Urban Railways (MAUR) to hire a domestic firm as bidding consultant for the design and inspection package of the city’s second metro line project.

MAUR deputy head Nguyen Van Quoc said hiring a local enterprise would help the city reduce costs after the city had to revise capital for the first metro route. He was confident the job could be done well by local enterprises, he said.

The organization will advance money from its operation expenditure to cover hiring charges. Selection of the consultant would be completed within this year and the city would begin the package in early 2011.

Construction of the metro line, starting from the planned Ben Thanh Terminal in District 1 and ending in Tham Luong Depot in District 12, began in August at a total cost of VND23.6 trillion. It was funded by official development assistance (ODA) loans of the Asian Development Bank, the European Investment Bank, and German development bank KfW, as well as the government budget.

The 11.3 kilometer first phase will include a one-kilometer feeder line leading to the Tham Luong Depot, 9.3 kilometers of underground track and almost one kilometer of elevated track. The project will be implemented from 2011 to 2015 and start operating in 2016.

Market slightly rebounds

HCMC – The local market bounced back slightly on Thursday given strong demand for large caps at the end of the session. The VN-Index rose 1.58 points, or 0.35%, against the previous day to close at 454.52.

The market opened slightly in the red and traded for much of the day in a very narrow three-point range around Wednesday’s close before jumping 1.5 points at the close.

Liquidity also increased strongly as 40.6 million shares worth VND1.2 trillion were traded, surging by 22.4% and 34.8% against the session earlier respectively. On the Hochiminh Stock Exchange, bids rose 11.7% to 63.5 million shares while offers dropped 12.4% from the previous day to nearly 62.8 million shares.

The number of losers was more than twice that of advancers at 145 to 68, of which six issues went to the ceiling prices and nine others plunged to the floor prices.

Ocean Group Co. (OGC) once again led the market in terms of liquidity, ending the day down 1.9% to VND31,600 per share with 1.8 million shares traded, followed by Thuan Thao Corp. (GTT), gaining 4.5% from the previous session to VND11,500 on the volume of 855,000 shares.

Vimedimex Medi-Pharma Co. (VMD) began trading 8.1 million shares on the bourse on Thursday but it dropped 20% against the preference price to VND32,000 per share on the volume of around 164,000 shares.

Foreigners turned strong net buyers, acquiring 5.4 million shares worth VND190 billion and offloading 1.8 million shares worth VND54 billion. They accounted for 18.4% and 5.2% of the market’s buying and selling value respectively.

The Hanoi market fell for the third consecutive session on Thursday and turnover dipped to VND630 billion. The HNX-Index dropped 0.12 point, or 0.09%, from the previous session and ended the day at 127.29.

Only 74 stocks rose while 221 stocks lost ground, of which six stocks went to the ceiling prices while 10 stocks dropped to the floor prices. Foreigners were slight net buyers and accounted for 0.66% of the buying value and 0.6% of the selling value.

Fiachra Mac Cana, managing director of HCMC Securities Corp., said the markets closed mixed with the HNX-Index continuing to decline while the southern bourse moved higher. Trading volumes were unchanged overall as a dip in the northern bourse was offset by higher volumes in the southern market.

Sentiment, however, remained fragile as a weakening currency in the unofficial market coupled with higher gold prices dogged investors, he commented.

Vietnam International Securities Co. (VIS) said the 450-point level seemed to be especially firm for the VN-Index in the coming time when supply would far outpace demand on the market.

“The index traded narrowly around the level in recent sessions despite supporting news from the macro economy, which showed that investors were still very cautious. The market may move flat around the 455-point level within the next few days,” VIS predicted.

Wood imports eat up furniture makers’ profits

Vietnamese wooden furniture makers’ profits are less than 5 percent since 80 percent of the raw materials have to be imported, according to the Vietnam Timber and Forest Product Association.

The dependence on imports is pinching them especially after the prices of timber in main supply markets like China, the US, and New Zealand have spiraled by 15-30 percent this year.

Pine and oak have seen the greatest rise, Tran Duc Sinh, the chairman of Viforest, as the association is known, said.

Exports of wooden furniture were worth $1.82 billion in the first eight months, up 20 percent year on year.

The industry hopes to increase that to $3.1 billion for the year and has enough export orders on hand to hit the target.

However, more than 6.4 million cubic meters of wood is required for that while domestic supply is only around 1.6 million cubic meters.

Besides, since the local supply is sourced mostly from young forests, the wood quality is low and only really suitable for the paper industry.

The Vietnamese government limits commercial logging to 300,000 cubic meters a year to prevent over-exploitation.

But in 2012 it will be calculated differently, ensuring domestic supply will partially replace imports, Thoi Bao Kinh Te Sai Gon Online (The Saigon Economic Times Online) quoted Pham Minh Thoa of the General Forestry Department as saying.

Local supply will also be augmented under a pilot project on sustainable forestry exploitation and management, following the international Forest Stewardship Council (FSC) model, she said.

FSC certification is required by major furniture importers like the US and European countries as a measure against illegal logging but, a condition most Vietnamese timber suppliers have yet to meet.

Vietnam ranks second in Southeast Asia in terms of wood products export, shipping its goods to 120 countries.

Speculators cause domestic gold hike

The price of gold on the local market has risen due to possible speculation rather than a supply shortage, according to Nguyen Van Giau, governor of the State Bank of Vietnam (SBV).

The global gold price set new records in the past few days, as did the domestic gold market.

The SBV and the Vietnam Gold Association had kept a close watch on the market in the last few days, and discovered there was no shortage of gold, Giau said, adding that speculation was possibly the cause for the price rise.

Domestic gold prices in August and the first half of September were lower than the world price. But currently the domestic price is VND400,000 per tael higher than the global price.

The SBV was working with other agencies, including the police and market management, to discover the reasons behind the price hikes.

"With this kind of sensitive item, our policy is not to completely ban gold imports, but gold companies are not permitted to import any volume they want," Giau said.

"We are establishing a management framework for gold trading and imports so that it is suitable with a market economy. We will collect ideas from ministries and industries when we complete it."

Nguyen The Hung, general director of the Vietnam Gold Investment and Trading Co, said the gold price on the domestic market would be equal or even lower than the world price if the SBV permitted gold importers to import gold.

However, the government has stopped granting permits for gold imports, which indicates that it no longer considers gold an essential item, according to an expert.

In addition, the higher gold price had not affected people's lives since few people conducted their transactions in gold, he said.

The gold price on the domestic market on Thursday morning fell to VND31.15 million (US$1,597) per tael (1.2 ounces) after it reached a record of more than VND31.3 million ($1,605 USD) per tael on Wednesday, following an upward trend in global gold prices.

On Thursday morning, SBJ gold was also bought and sold at VND31.15 million ($1,597) and VND31.18 million ($1,599) per tael, respectively.

Sai Gon Jewelry Holding Co on the same day bought the precious metal at VND31.14 million and sold it at VND31.18 million VND per tael, a reduction of 130,000 – 170,000 VND against Wednesday.

Most gold shops in Ho Chi Minh City Wednesday raised their price by more than VND700,000 ($21.3) over the previous day’s price to VND31.25-31.36 million per tael.

The global gold price on that day reached an all-time high of $1,313 an ounce on speculation that a global economic recovery would stoke inflation. In Asia, the metal slightly fell to $1,309 an ounce in the morning.

The weakening of the US dollar on the world market has also contributed to the gold price hike, analysts have said.

Speculators cause domestic gold hike