Steel sales slip in September

Steel sales in September surprised experts by dropping 41 percent over August to 283,000 tonnes.

"September's decline was not expected. We forecast that the price of
steel ingots would go through the 600 USD per tonne mark but instead it
dropped to 580 USD," said the Vietnam Steel Association's Deputy
Chairman Nguyen Tien Nghi.

Nghi added that due to
the low price of pig iron on the world market, Vietnamese consumers are
still waiting for further reductions.

Because of this, the decline has continued into the first few days of this month.

Meanwhile, he added, traders have been selling off their steel stocks.

Due to the situation, many companies and agencies have cut prices by
roughly 300,000 VND (15 USD) per tonne to stimulate the market.

According to a report by the association, the price, excluding
value-added tax, is now standing at about 13.6 million VND (697 USD) per
tonne.

The association said the situation would
steady itself in the second half of October, as the rainy season ends
and demand for construction steel picks up.

"In
addition, when steel stocks are sold out, traders will be forced to
renew their supplies and consumption will increase," Nghi said.

He added that demand on the world market is also increasing which would help push the price back up.

Talking about sales for the whole year, Nghi optimistically said that they would increase by 15 percent over last year.

"Because of high consumption in previous months, the dip in September
will not affect sales for the whole year," he explained.

Last year, the country consumed nearly 4.2 million tonnes of steel./.

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Markets sort mixed economic signals

HCM CITY — Mixed macroeconomic signals and continued lateral movement of stock markets continued in September, but one of the most positive signs was estimated GDP growth of 7.16 per cent for the third quarter, according to a monthly review released by the company Viet Nam Asset Management yesterday.

The GDP rate during September contributed to the combined growth of the first nine months to 6.52 per cent.

The full-year GDP growth target was revised up to 6.7-6.8 per cent, given that the last quarter is usually the most robust period of economic activity.

For the first nine months, industrial production was up 13.8 per cent while retail sales revenue soared 25.4 per cent compared to the same period last year.

While economic growth is edging up, inflation and exchange rates are likely to become issues in the last three months of the year.

The September consumer price index (CPI) came in at 1.31 per cent month-on-month and 8.92 per cent year-on-year.

This was the first month-on-month increase of over 1 per cent since this February.

The sharp acceleration was driven by higher prices of foods, construction materials, gas and education fees, with the latter caused by a seasonal effect.

The exchange rate is another concern, as the unofficial rate, after months of converging with the official rate, suddenly heated up in September, trading at 1 per cent above the upper limit of the official trading band.

The recent fluctuation of the exchange rate in the unofficial market was primarily attributed to strong increases in gold prices in the last two months, accelerating inflation and widening the trade deficit.

The mix of a record-high gold price, an unexpected rise in September's CPI, and the divergence of official and unofficial exchange rates has once again sparked fears of inflation and further devaluation toward the year-end.

The securities market continued its prolonged lateral movement when the VN-Index closed the month at 454.52, almost flat against September.

The report suggests that despite the potential catalyst from corporate earnings in the third quarter, investors will likely remain cautious in October because of a stocks oversupply and mixed macroeconomic signals.

"We are still upholding our long-term interest in the consumer, IT, telecom and pharmaceutical sectors. For short-term seasonal play, we are closely watching natural rubber and some high-dividend defensive stocks. Overall, we strongly advise investors to look closely at individual firm's performances rather than choosing a specific industry," the report said. — VNS

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Supermarkets report strong earnings in Big Sale month

Customers flood a food counter at the Big C Hoang Van Thu Supermarket. Food and cosmetics items were more sought after during the Big Sale month - Photo: Minh Tam

HCMC – Many supermarkets in HCMC have reported strong sales in September when the Big Sale month was launched citywide by the city’s Department of Industry and Trade.

Most supermarkets witnessed 15% to 30% growth in September sales against the previous month, but some saw the growth rate close to 50%. Store chain operators attributed the high growth rate to deep discounts – between 5% and 50% - on thousands of items during the month.

Saigon Co.op, which is the biggest domestic store chain operator, said its revenue surged 45% in September against August, and even 50% higher compared to that in the year-earlier period.

“Consumers spent more during the month,” said a representative of Saigon Co.op.

Maximark chain has not had the growth figures for its stores in HCMC, but the chain’s revenue from all stores including in Nha Trang and Can Tho expanded 15% year-on-year, said Nguyen Thi Phuong Thao, head of Maximark Cong Hoa.

Thao said Maximart launched the promotion not only in HCMC but chain-wide.

Duong Thi Quynh Trang, external relations manager of Big C, said the number of shoppers grew by 30% in September. “This is quite an upbeat figure, proving the attraction of the promotion month to consumers,” Trang told the Daily.

During festive days like the National Day on September 2, all supermarkets saw a shopping spree, and many stores had to extend the working hour by another 30 minutes, or mobilized more cashiers.

Several traders attributed the revenue rise to a new trend being established in the city, saying the sales promotion month has been launched for years, thus helping customers familiarize themselves with the shopping seasons of big discounts.

Apart from supermarkets, other trade centers and commercial facilities have not yet reported their September figures. The HCMC Department of Industry and Trade expects to have the final figures about the promotion month in the next few days.

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GDP accelerates to 6.52% in three quarters

CPI increases 1.31 % in September

HCMC – Vietnam’s gross domestic product growth rate has accelerated to 6.52% year-on-year in the January-September period, and the economy is headed for 6.7% for the whole year, the Ministry of Planning and Investment said on Monday.

In its report released on Monday for a regular meeting, the ministry noted that the economy has gained growth momentum, with the GDP growth rate moving faster one quarter after another, according to local media covering the meeting.

In fact, the economy posted an annualized GDP growth rate of 5.83% in the first quarter, 6.4% in the second quarter, and now 6.52% for the three quarters combined. This rate is higher than the targeted 6.5% growth rate endorsed by the National Assembly early this year.

Construction and manufacturing as a whole posted the strongest growth, at 7.29% year-on-year in the January-September period, followed by the service sector with 7.24%, while agriculture inched up 2.89%. The growth rates of all the three sectors are higher than those in the same period of last year, according to the ministry’s report.

While maintaining an upbeat tone about the economy this year, the ministry also highlights challenges to be addressed in the rest of the year. These include the uptrend of prices at home and abroad -- which may stoke up inflation -- the high interest rate charged by commercial banks that makes life harder for enterprises, and high trade deficit.

* September’s consumer price index surged 1.31 % against the previous month, attributed mainly to a dramatic increase of education services prices and depreciation of Vietnam Dong against the U.S. dollar, the General Statistics Office reported on Friday.

CPI in August increased by 0.23 % over the previous month, so increases in September were earlier forecast at between 0.8 and 1 %.

CPI in this month rose 6.46% compared to December, 2009. Vietnam targets to curb inflation this year at 7% to 8%, but this target is difficult to reach due to an uptrend in commodities prices in the rest of the year and higher import demands.

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Consumer price index leaps 1.31% in September

HA NOI — The consumer price index in September soared dramatically by 1.31 per cent over last month, a leap that was three times greater than forecasts by the Market Watch Team.

The CPI rise sparked concerns that the year would end with a high annual inflation rate.

Do Thi Ngoc, an expert from the General Statistics Office, said the high increase in CPI this month was part of a trend in annual cyclical inflation fluctuations in Viet Nam.

On aggregate, the CPI rose 8.92 per cent over the last 12 months, and 8.64 per cent in comparison with the first nine months of last year.

Ngoc said two of the reasons for the strong increase in CPI during September were a rise of 2.32 per cent in food prices and a hike of 12.02 per cent in education services, while school fees increased by three to four times in 36 cities and provinces.

Another reason was an increase of 2.1 per cent in the depreciation of the Vietnamese dong compared to the US dollar, which in turn, hit a series of imported products, including construction steel, fuel and gasoline.

In addition, outbreaks of blue-ear pig disease also caused food and meat prices to soar.

A long National holiday spurred consumption and domestic tourism, a sector that saw price rises of nearly 0.8 per cent in food and restaurant services.

Gold saw a robust increase of 3.58 per cent in price this month, a rise of 37.39 per cent in comparison with the same period last year. Meanwhile, the US dollar increased 1.61 and 7.08 per cent, respectively.

Only post and telecommunications groups saw a decline in prices of 0.07 per cent this month.

Several provinces saw a high CPI, including Khanh Hoa (2.79 per cent); Thua Thien-Hue (1.89 per cent) and Can Tho (2.97 per cent).

The GSO's experts also predicted that from now until the end of the year, the CPI will fluctuate due to increases in essential commodities prices, a continuous depreciation of the Vietnamese dong compared to the US dollar and price hikes for input materials for production and import products.

Also, consumption will soar next month during celebrations of 1,000 years since the foundation of Ha Noi, along with Christmas and the new year. Therefore, CPI for the year will likely be higher than 8.5 per cent.

CPI rises in major cities

The CPI in HCM City increased by 0.97 per cent compared to last month, after two consecutive months of decline, according to the city's Statistics Office.

The city's CPI in September rose 7.59 per cent compared to the same month last year.

Since the beginning of the year, the CPI has increased 5.54 per cent.

September was also the only month of the year that the prices of all 11 commodity groups in the price basket increased against last month.

Of the 11 commodity groups, the education category saw the highest increase of 5.57 per cent as September is the traditional start of the new school year. Most schools have raised tuition fees for the new school year.

The culture-sports-entertainment sector had the second-highest increase with 1.51 per cent, followed by the transport with 1.13 per cent.

Meanwhile, the CPI in Ha Noi also increased by 0.96 per cent compared to last month, according to the Ha Noi Statistics Office.

Ha Noi's CPI in September increased by 9.05 per cent compared to the same period last year.

In September, gold prices were up 3.57 per cent over last month and the US dollar rose by 1.35 per cent against the Vietnamese dong.

Dr Tran Hoang Ngan, deputy rector of the University of Economics in HCM City, said that if the trade deficit was not managed more effectively, the time period between the rise of the US dollar against the Vietnamese dong would eventually become shorter, affecting macroeconomic stability, production and trade. — VNS

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September CPI records highest rise in decade

Photo: Tuoi Tre

The country’s Consumer Price Index (CPI) in September went up by 1.31 percent over the previous month, the highest level for September of any year since 2000.

According to the General Statistics Office, the September CPI rose 8.92 percent over September 2009, increasing between 0.34-12.02 percent in 10 out of 11 groups of commodities.

The most significant increase was seen in educational products and services, generating 12.02 percent, followed by housing and construction materials, up 1.08 percent. Meanwhile, transport posted an increase of 0.91 percent, with restaurants and related services, up 0.79 percent.

Commodities and other services saw a 0.57 percent increase, while entertainment and tourism services were up by 0.48 percent and drinks and tobacco up 0.44 percent.

The prices of medicines and medical services rose by 0.35 percent.

Slight increases were seen in prices of garment and textiles, headwear and footwear, up by 0.34 percent, and household utensils and appliances, up 0.34 percent.

However, prices of post and telecoms continued to decrease, down by 0.07 percent.

Experts said the record increase of September CPI was due to many impacts, especially the increased prices of educational products at the beginning of the 2010-2011 school year.

In addition, the prices of many materials and essential commodities on world markets saw large increases, and the exchange rate between the Vietnamese dong and the US dollar was adjusted as the dollar strengthened.

The price of gas in September rose by nearly 6 percent or VND14,000 per 12kg cylinder over August. In mid-September, the price of steel in the south was up VND300,000 per tonne after it had increased five times in August.

Sharp increases in food and restaurant-related services, especially prices of rice - increasing 2.32 percent - markedly contributed to CPI rise. Moreover, people had a long holiday for National Day and the Mid-Autumn festival, and with both occurring in September, this increased demand for tourism, entertainment and shopping.

The CPI of the two economic hubs, Hanoi and Ho Chi Minh City increased nearly 1 percent against August - despite measures to stabilize eight essential goods - and exerted a dramatic impact on the country’s CPI.

In September, prices of gold and US dollars on the black market saw sharp increases. Gold prices went up by 3.58 percent from August, and by 34.35 percent against September 2009.

Meanwhile, the US dollar price rose 1.61 percent against August and 7.35 percent against September 2009.

However, experts have warned that the goal of maintaining inflation at 8 percent is not easy as the country will continue to face complicated impacts, including instability of the world economy, as well as epidemics and natural disasters. In addition, CPI regularly increases in the fourth quarter of every year.

Ministries, sectors and localities are urged to closely control prices of goods and services with support from the government and obey price registration and declaration instructions.

Experts also warned that the fourth quarter was the time for payment of imports of commodities and materials for production, and it is necessary to have flexible measures on exchange and bank interest rates to ease difficulties for enterprises in order to ensure the balance between demand and supply, and effectively curb price surges.

 

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September CPI records highest rise in decade

The country’s Consumer Price Index (CPI) in September went up by 1.31
percent over the previous month, the highest level for September of any
year since 2000.

According to the General Statistics Office, the September CPI rose 8.92
percent over September 2009, increasing between 0.34-12.02 percent in 10
out of 11 groups of commodities.

The most
significant increase was seen in educational products and services,
generating 12.02 percent, followed by housing and construction
materials, up 1.08 percent. Meanwhile, transport posted an increase of
0.91 percent, with restaurants and related services, up 0.79 percent.

Commodities
and other services saw a 0.57 percent increase, while entertainment and
tourism services were up by 0.48 percent and drinks and tobacco up 0.44
percent.

The prices of medicines and medical services rose by 0.35 percent.

Slight
increases were seen in prices of garment and textiles, headwear and
footwear, up by 0.34 percent, and household utensils and appliances, up
0.34 percent.

However, prices of post and telecoms continued to decrease, down by 0.07 percent.

Experts
said the record increase of September CPI was due to many impacts,
especially the increased prices of educational products at the beginning
of the 2010-2011 school year.

In addition, the prices of many
materials and essential commodities on world markets saw large
increases, and the exchange rate between the Vietnamese dong and the US
dollar was adjusted as the dollar strengthened.

The price of gas
in September rose by nearly 6 percent or 14,000 VND per 12kg cylinder
over August. In mid-September, the price of steel in the south was up
300,000 VND per tonne after it had increased five times in August.

Sharp
increases in food and restaurant-related services, especially prices of
rice - increasing 2.32 percent - markedly contributed to CPI rise.
Moreover, people had a long holiday for National Day and the Mid-Autumn
festival, and with both occurring in September, this increased demand
for tourism, entertainment and shopping.

The CPI of the two
economic hubs, Hanoi and Ho Chi Minh City increased nearly 1
percent against August - despite measures to stabilize eight essential
goods - and exerted a dramatic impact on the country’s CPI.

In
September, prices of gold and US dollars on the black market saw sharp
increases. Gold prices went up by 3.58 percent from August, and by 34.35
percent against September 2009.

Meanwhile, the US dollar price rose 1.61 percent against August and 7.35 percent against September 2009.

However,
experts have warned that the goal of maintaining inflation at 8 percent
is not easy as the country will continue to face complicated impacts,
including instability of the world economy, as well as epidemics and
natural disasters. In addition, CPI regularly increases in the fourth
quarter of every year.

Ministries, sectors and localities are
urged to closely control prices of goods and services with support from
the government and obey price registration and declaration instructions.

Experts
also warned that the fourth quarter was the time for payment of imports
of commodities and materials for production, and it is necessary to
have flexible measures on exchange and bank interest rates to ease
difficulties for enterprises in order to ensure the balance between
demand and supply, and effectively curb price surges./.

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Vietnam inflation quickens for first time in 6 mths

HANOI - Annual inflation in Vietnam accelerated this month for the first time since March, propelled by an increase in school fees and food costs.

The consumer price index rose 8.92 percent in September from a year earlier -- the biggest annual rise in seven months -- and 1.31 percent from August, government data showed.

The increase ended the cooling trend of the past half year, but economists chalked it up to mostly to one-off factors.

Education costs leapt 15.56 percent in September from the same month last year and 12 percent from August, the data showed. Increases in tuition and fees were behind the rise.

Dragon Capital, a Vietnam-focused fund management company, said education accounted for 0.7 percent, or more than half, of the monthly figure.

"A spike is often seen from this factor in September as children head back to school, though it is usually lower -- since 2005, average inflation for the month has been 0.5 percent," it said in a report ahead of the data.

In addition to education, the central bank's August currency devaluation of 2 percent and the mid-Autumn festival were also contributors, said Matt Hildebrandt, who follows the Vietnamese economy for JP Morgan in Singapore.

He expected monthly increases in inflation to be larger than the "subdued" numbers leading up to September.

"We do caution that there is concern that seasonal flooding later this year and the usual end-of-year holiday demand could put upward pressure on food prices in coming months," he wrote.

Vu Dinh Anh, deputy director of the Finance Ministry's Price and Market Research Institute, said the monthly increase of 1.31 percent was the highest September reading since 1995, adding that higher rice prices had been an important factor.

Food related items have the highest weighting in Vietnam's inflation basket of about 40 percent.

Export floor prices for rice were increased in August and again in September, leading to higher domestic prices in the Mekong Delta, where most of Vietnam's rice is grown.

"It is uncertain whether the CPI will rise at a fast pace in the last three months, as it depends on reaction of the market to this news, and the credit growth rate that the central bank will release at the end of this month," Anh said.

"If credit rises at a faster pace than expected, the inflationary pressures may remain high in the last quarter."

The authorities have been trying to coax commercial banks to lower lending rates, but several factors have been conspiring against the effort and rates remain in the 11-15.5 percent range, according to the State Bank of Vietnam.

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September inflation set for small rise

HA NOI — Inflation is unlikely to increase sharply in September despite some factors likely to exert upward pressure on the index.

Recent estimates indicated that the consumer price index (CPI) this month would record a month-on-month increase of one per cent.

However, official sources said that a CPI increase of one per cent was unlikely because price rises in some essential goods were less than previously estimated.

The Ministry of Industry and Trade's Domestic Market Management Team expected September's CPI to increase by just 0.3-0.4 per cent against August.

Crude oil registered a slight reduction, but many other essential goods continued to increase in price, including sugar, fertiliser, food and catering services, animal feed, milk, medicines, consumer goods and steel ingots.

So far this month, rice prices had increased by VND1,000 per kilo in the first week but saw a slight reduction of VND200-300 per kilo in the second week.

With the onset of the rainy season, food prices would increase in some places which had experienced heavy rain, storms and flood, said the team.

An increase in the interbank rate early this month had also pushed prices of imported products up, so a future rise in the CPI could be possible.

The new school year started in September, and increased school fees saw educational products and related services rise.

However, the prices would have little effect on the CPI because this spending accounted for only 5.72 per cent of total household expenditure, constituting the CPI.

Meanwhile, recent sharp increases in the price of gold and US dollar would not affect the CPI this month, as the index excluded the prices of those products, the team said.

The team believed many factors would lead to an increased CPI, but the rise would not be sharp due to the Government's effective policies on curbing inflation. — VNS

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