TNK-BP to acquire BP's Vietnam, Venezuela assets

Russian oil company TNK-BP said on Monday it had agreed a deal with its part-owner BP to acquire the troubled British oil giant's assets in Vietnam and Venezuela for US$1.8 billion.

TNK-BP, Russia's third-biggest oil company, is owned 50 percent by BP and 50 percent by a group of Russian billionaires including banking magnate Mikhail Fridman known collectively as Alfa Access-Renova (AAR).

The divestment is in line with a plan by BP to sell up to $30 billion (€21.2 billion) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.

"Today's agreement is further evidence of the rapid progress BP is making towards the divestment target we set out in July," BP's new chief executive, Robert Dudley, said in a statement

Dudley, who replaced Tony Hayward after the oil spill catastrophe, said that the acquisition would give TNK-BP a solid foundation to build its business outside Russia.

TNK-BP almost imploded during a venomous shareholder conflict between the co-owners in 2008 but the dispute was patched up when shareholders agreed to appoint Maxim Barsky chief executive effective from January 1, 2011, with Fridman taking the reins in the interim.

Ironically, Dudley was ousted as TNK-BP chief executive at the height of the conflict. With relations now smooth, Hayward has been nominated as non-executive director at TNK-BP after his departure from BP.

TNK-BP, which operates huge oil fields in Siberia and accounts for 16 percent of Russian production, has long been considered one of BP's crown jewels.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Fridman, who is serving as acting chief executive of the company, in a TNK-BP statement.

TNK-BP said a deposit of $1 billion will be made by October 29 with final payment upon completion.

"Subject to government approvals and the fulfilment of other agreed pre-closing conditions, the companies expect the transaction to be completed in the first half of 2011."

According to the terms of the agreements, in Venezuela TNK-BP will acquire from BP a 16.7 percent equity stake in the PetroMonagas SA extra heavy oil producer, a 40 percent stake in Petroperija SA which operates the DZO field, and a 26.7 percent stake in Boqueron SA.

The deal comes after Russian and Venezuela on Friday signed a memorandum of understanding supporting the acquisition, at a ceremony in the Kremlin attended by Venezuelan President Hugo Chavez and Russia's Dmitry Medvedev.

In Vietnam, TNK-BP will acquire from BP a 35-percent stake in an upstream offshore gas production block containing the Lan Tay and Lan Do gas condensate fields, a 32.7-percent stake in the Nam Con Son Pipeline and Terminal, and a 33.3-percent stake in the Phu My 3 power plant.

The acquisitions of the assets in Venezuela and Vietnam will bring TNK-BP net proved and probable reserves of 290 million barrels of oil equivalent, it said.

TNK-BP has also expressed interest in acquiring BP's assets in Algeria and the issue was discussed earlier this month during a visit by Medvedev to the North African country.

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TNK-BP to acquire BP's Vietnam, Venezuela assets

Russian oil company TNK-BP said on Monday it had agreed a deal with its part-owner BP to acquire the troubled British oil giant's assets in Vietnam and Venezuela for US$1.8 billion.

TNK-BP, Russia's third-biggest oil company, is owned 50 percent by BP and 50 percent by a group of Russian billionaires including banking magnate Mikhail Fridman known collectively as Alfa Access-Renova (AAR).

The divestment is in line with a plan by BP to sell up to $30 billion (€21.2 billion) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.

"Today's agreement is further evidence of the rapid progress BP is making towards the divestment target we set out in July," BP's new chief executive, Robert Dudley, said in a statement

Dudley, who replaced Tony Hayward after the oil spill catastrophe, said that the acquisition would give TNK-BP a solid foundation to build its business outside Russia.

TNK-BP almost imploded during a venomous shareholder conflict between the co-owners in 2008 but the dispute was patched up when shareholders agreed to appoint Maxim Barsky chief executive effective from January 1, 2011, with Fridman taking the reins in the interim.

Ironically, Dudley was ousted as TNK-BP chief executive at the height of the conflict. With relations now smooth, Hayward has been nominated as non-executive director at TNK-BP after his departure from BP.

TNK-BP, which operates huge oil fields in Siberia and accounts for 16 percent of Russian production, has long been considered one of BP's crown jewels.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Fridman, who is serving as acting chief executive of the company, in a TNK-BP statement.

TNK-BP said a deposit of $1 billion will be made by October 29 with final payment upon completion.

"Subject to government approvals and the fulfilment of other agreed pre-closing conditions, the companies expect the transaction to be completed in the first half of 2011."

According to the terms of the agreements, in Venezuela TNK-BP will acquire from BP a 16.7 percent equity stake in the PetroMonagas SA extra heavy oil producer, a 40 percent stake in Petroperija SA which operates the DZO field, and a 26.7 percent stake in Boqueron SA.

The deal comes after Russian and Venezuela on Friday signed a memorandum of understanding supporting the acquisition, at a ceremony in the Kremlin attended by Venezuelan President Hugo Chavez and Russia's Dmitry Medvedev.

In Vietnam, TNK-BP will acquire from BP a 35-percent stake in an upstream offshore gas production block containing the Lan Tay and Lan Do gas condensate fields, a 32.7-percent stake in the Nam Con Son Pipeline and Terminal, and a 33.3-percent stake in the Phu My 3 power plant.

The acquisitions of the assets in Venezuela and Vietnam will bring TNK-BP net proved and probable reserves of 290 million barrels of oil equivalent, it said.

TNK-BP has also expressed interest in acquiring BP's assets in Algeria and the issue was discussed earlier this month during a visit by Medvedev to the North African country.

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Vietnam 2010 trade gap seen at $13.5 bln

HANOI - Vietnam on Wednesday projected a stubbornly wide US$13.5 billion trade deficit this year despite a rise in exports of 19.1 percent, three times the initial target, adding to pressure on the authorities to devalue the dong again.

Prime Minister Nguyen Tan Dung, reading a report to the opening session of the National Assembly, also forecast economic growth of 7.2 percent in the fourth quarter from a year before, after 7.16 percent in the third quarter.

The government report seen by Reuters forecast gross domestic product would rise next year by between 7 percent and 7.5 percent, following a projected 6.7 percent this year.

This year's projected trade deficit would be up 9.8 percent from the $12.3 billion gap in 2009. A Reuters poll of 12 economists this month had forecast $12.2 billion for this year.

Vietnam's large trade and budget deficits, plus low foreign exchange reserves, make it vulnerable to another devaluation in the dong, which is pegged to the US dollar.

The central bank devalued the currency on Aug. 17 for the third time since November, cutting the reference rate by 2 percent in what it said was a bid to control the trade deficit.

Speculation of another devaluation has been putting pressure on the currency, making businesses reluctant to sell dollars.

State Bank of Vietnam Governor Nguyen Van Giau was quoted on Tuesday as saying the central bank had no plans to adjust the rate even though the dong has been dropping on the unofficial market, according to a state-run newspaper.

Inflation would be at around 7 percent in 2011, the government report said. The government is aiming for 8 percent this year.

With imports in 2010 seen climbing 16.5 percent, the trade deficit would stay below 20 percent of the country's export revenue, it said.

The government targets for 2011 need approval by parliament, which had approved a target for exports to grow 6 percent this year.

Dung said he expected foreign debt this year to rise to 42.2 percent of gross domestic product from 30 percent last year. Government debt would be 44.5 percent of GDP while public debt would hit 56.7 percent of GDP, he said in the report.

Vietnam's credit growth is expected to be 25 percent this year and money supply would grow 20 percent from 2009, fuelling economic growth of 6.7 percent for the whole year, Dung said.

He estimated the bad debt ratio for the whole of 2010 would be kept below 3 percent of loans, against 2.03 percent at the end of 2009.

The annual trade deficit for 2011 would be kept at less than 20 percent of exports, while the budget deficit would be 5.5 percent of GDP, Dung said in televised remarks.

Vietnam's investment for development is projected to be equivalent to 40 percent of GDP in 2011, slightly lower than this year when investment would jump 12.9 percent from last year and make up 41 percent of GDP.

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Volume up, shares off in HCM City

The Wall Street rally overnight could not prevent the VN-Index from shedding 0.73 percent on Oct. 19 to close at 454.25.

About 198 of 268 listed stocks on the HCM City Stock Exchange declined
will – 22 hitting the floor price. They were Hari Hamico Mineral (KSS),
down 1.5 percent to 29,400 VND; Sao Vang Rubber (SVR) and Tai Nguyen
Corp (TNT), each down 1.2 percent to 24,300 VND and 23,500 VND,
respectively.

Only three blue chips managed to gain,
including property trader Vincom (VIC), up 3.17 percent; Masan Group
(MSN), up 0.9 percent; and Bao Viet Holdings (BVH), up 0.79 percent.
Foreigners were the main force behind stock rallies, buying 187,190 BVH
shares, 97,250 VIC shares and 23,630 MSN shares.

Total volume on the day's trade on the southern market rose to 32 million shares, worth 880.2 billion VND (45.1 million USD).

In Hanoi , the HNX-Index surged 1.96 percent to 116.56 points, with decliners outnumbering advancers by 253 to 39.

No blue chips gained, while only two stocks hit the ceiling – Hanoi
Textbooks Printing (TPH), up 0.5 percent to 8,700 VND; and PetroVietnam
Southern Gas (PGS), up 2.5 percent to 38,300 VND.

Volume
of trade reached 27.8 million shares, up from 17.3 million on October
18, posting a turnover of 587.5 billion VND (44 million USD).

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Demand for accounting/finance personnel remains “hot”

Accounting/finance ranked third amongst the top five functions with the
highest demand for executive positions during the first three quarters
of 2010, reported Navigos Group.

Of the total
demand for accounting/finance manpower, 25 percent was for finance
managers and directors, 4 percent for finance controllers and demand for
chief accountants and accountants was a substantial 38 percent and 33
percent respectively, according to a recent research carried by the
leading and largest recruiting firm in Vietnam .

Navigos Group’s Managing Director Nguyen Thi Van Anh said, “The most
recent monetary downturn was witness to the growing influence and
control that chief finance officers and finance leaders have in guiding
businesses through troubled times.”

“No longer just
bookkeepers for their firms, accounting and finance professionals are
regarded as business partners, skilled in areas of divesting and
restructuring businesses, developing financial models and analysing
financial forecasts, as well as developing back office transaction
processes that support cast flow and drive efficiencies in so many
areas,” the director said.

Le Thi Hong Len, Country
Manager of the Association of Chartered Certified Accountants (ACCA),
added that changes in the roles of professional accountants and the
finance function itself are partly a consequence of the downturn, and
partly an outcome of a growing recognition of the value that the finance
function and professional accountants can add to an organisation.

Len quoted the findings of an intensive survey conducted by ACCA in
105 countries last March, in which nearly 70 percent of respondents
considered it very important for organisations to have a formal
programme to develop the best financial talent.

Up
to 75 percent of the respondents suggested that talent management was an
important component in addressing financial skills shortages prevalent
in many organisations.

Navigos Group and ACCA
jointly hosted a seminar “Accounting/Finance Talent in 2010” in Hanoi
on October 19 to update the most current trend and how best to recruit
and develop accounting/finance talent in Vietnam .

The seminar brought together approximately 200 chief executive
officers (CEOs), chief finance officers (CFOs), human resources
directors and managers from domestic and multinational corporations.

A similar seminar will be held in the southern largest economic hub of Ho Chi Minh City on October 21./.

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BP sells $1.8bln of assets to Russian JV TNK-BP

Photo: Reuters

LONDON/MOSCOW - BP has agreed to sell a package of oil and gas fields in Vietnam and Venezuela to its Russian joint venture TNK-BP for US$1.8 billion as the London-based oil major raises cash to pay for its Gulf of Mexico oil spill.

BP said in a statement on Monday that the assets represented reserves of 270 million barrels of oil equivalent and production of 40,000 barrels of oil equivalent per day.

The sale brings to around $11.5 billion the amount BP has agreed from asset sales in recent months. The company has a divestment target of $25 billion to $30 billion over the next 18 months.

Analysts said the price was in line with their valuations for the assets, which they added were not strategic for BP.

"This allows BP to high-grade its portfolio," Iain Armstrong, oil analyst at Brewin Dolphin said.

The deal also sees TNK-BP realize its ambition of growing outside Russia, where it is the third-largest oil producer.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Mikhail Fridman, TNK-BP's executive chairman and one of the four Russia-connected billionaires who own the other half of TNK-BP.

The sale also represents the latest pull-back by big western oil companies from Venezuela.

In 2007 US oil giants Exxon Mobil and ConocoPhillips pulled out of Venezuela following socialist President Hugo Chavez's demand for majority control of oil projects, and in March this year Royal Dutch Shell said it and others were shunning the country's licensing rounds.

BP remains in talks with potential buyers for its interests on the North Slope of Alaska, including Prudhoe Bay, and Argentina-based Pan American Energy, sources familiar with the matter said.

The assets are worth around $7 billion and $7.5 billion, respectively, analysts said.

BP shares traded up 0.2 percent at 426 pence at 0915 GMT compared to a 0.1 percent rise in the STOXX Europe 600 Oil and Gas index.

TNK-BP, which produced 1.89 million boe per day in 2009, said it would use its own funds to finance the acquisitions and expects the transaction to be completed by first half 2011.

In Venezuela, the company will buy 40 percent of Petroperija and 26.6 percent of Bouqeronin oil field projects, majority owned by Venezuela's state-owned PDVSA oil company.

It will also acquire a 16.7 percent stake in the Petromanagas upgrader project, which processes tar-like Orinoco heavy crude into lighter synthetic oil that can be processed by traditional refineries.

In Vietnam, TNK-BP will acquire BP's 35 percent stake in an offshore gas condensate project; a 32.7 percent stake in the Nam Con Son gas pipeline and a 33.3 percent stake in the Phu My 3 power plant.

All three of these assets form an integrated gas and power project with a production capacity of 30,000 barrels of oil equivalent per day, on a working interest basis.

Seminar discusses strategies for business growth held in Hanoi

Recruiting firm Navigos Group and the Associations of Chartered Certified Accountants (ACCA) Tuesday held a seminar discussing strategies for business growth in Melia Hotel, Hanoi.

The event, joined by 200 CEOs, CFOs, human resource managers from domestic and multinational companies and guest speakers from ANZ, Aon, Ford Vietnam and the hosts, focuses on the importance of qualified accounting/finance professionals to an organization’s financial management, and the greater strategic role being assumed by accounting/finance professionals.

According to recent research carried out by Navigos Group, accounting/finance ranked third amongst the top five functions with the highest demand for executive positions during the first three quarters of 2010.

Of the total demand for accounting/finance manpower, 25 percent was for finance managers and directors, 4 percent for finance controllers and demand for chief accountants and accountants was a substantial 38 percent and 33 percent respectively.

When segmented by industry requirements, the research revealed that demand for accounting/finance manpower was highest in the banking/finance sector at 46 percent, followed by 32 percent in trading/services and 22 percent in manufacturing/engineering/construction.

“The most recent monetary downturn was witness to the growing influence and control that CFOs and finance leaders have in guiding businesses through troubled times,” Nguyen Thi Van Anh, Managing Director of Navigos Group, said.

“No longer just bookkeepers for their firms, accounting and finance professionals are regarded as business partners, skilled in areas of divesting and restructuring businesses, developing financial models and analyzing financial forecasts, as well as developing back office transaction processes that support cash flow and drive efficiencies in so many areas,” she added.

“Changes in the roles of professional accountants and the finance function itself are partly a consequence of the downturn, and partly an outcome of a growing recognition of the value that the finance function and professional accountants can add to an organization,” Le Thi Hong Len, Country Manager of ACCA Vietnam, said.

ACCA found in its March survey in 105 countries that nearly 70 percent of respondents considered it very important for organizations to have a formal program to develop the best financial talent and 75 percent suggested that talent management was an important component in addressing financial skills shortages prevalent in many organizations.

The ACCA survey also indicated that 76 percent of respondents believed the primary objective of a talent management program is to retain key staff, while 60 percent felt another important objective is to attract and recruit candidates with promising potential.

“Since late 2008, the recession has provided the finance function with an unparalleled opportunity to shape and influence business. However, this opportunity can only be grasped if organizations and finance leaders invest in the skills and capabilities required to develop, manage and protect the integrity of these vital functions,” Reza Ali, Head of Business Development, Emerging Markets, Asia, said.

“Talent management practices for finance professionals need further development and must include elements for talent identification, development, deployment and retention,” he added.

In a related survey conducted by Navigos Group in September 2010, 41 percent of the more than 3,000 polled said that a poor work environment is the number one reason why employees leave a company. Unprofessional line-managers and inadequate remuneration packages were the following reasons with 37 percent and 22 percent, respectively.

Conversely, another Navigos Group survey revealed that 48 percent of respondents ranked development opportunities as the most important criteria for accepting a job offer and employer brand was regarded as the second most determining factor with 30 percent of the vote.

The combined results of these surveys point towards a strong confidence in the ability of a talent management program to contribute significantly to long term organizational growth and development.

Consensus amongst many in attendance is that the seminar provided an excellent opportunity for panelists and members of the audience to exchange information, ideas, and experiences across a broad spectrum of industries.

So, each must determine the role accounting/finance talent will play in their organization and how best to implement a talent management program that will enable them to find the right fit, as well as develop and retain the talent that will consistently contribute to organizational objectives.

A second seminar on the same topic, “Accounting/Finance Talent in 2010 – the Foundation for Growth”, will be held Thursday at the New World Hotel in Ho Chi Minh City with the participation of more than 200 client guests.

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Seminar discusses business strategies held in Hanoi

Recruiting firm Navigos Group and the Associations of Chartered Certified Accountants (ACCA) Tuesday held a seminar discussing strategies for business growth in Melia Hotel, Hanoi.

The event, joined by 200 CEOs, CFOs, human resource managers from domestic and multinational companies and guest speakers from ANZ, Aon, Ford Vietnam and the hosts, focuses on the importance of qualified accounting/finance professionals to an organization’s financial management, and the greater strategic role being assumed by accounting/finance professionals.

According to recent research carried out by Navigos Group, accounting/finance ranked third amongst the top five functions with the highest demand for executive positions during the first three quarters of 2010.

Of the total demand for accounting/finance manpower, 25 percent was for finance managers and directors, 4 percent for finance controllers and demand for chief accountants and accountants was a substantial 38 percent and 33 percent respectively.

When segmented by industry requirements, the research revealed that demand for accounting/finance manpower was highest in the banking/finance sector at 46 percent, followed by 32 percent in trading/services and 22 percent in manufacturing/engineering/construction.

“The most recent monetary downturn was witness to the growing influence and control that CFOs and finance leaders have in guiding businesses through troubled times,” Nguyen Thi Van Anh, Managing Director of Navigos Group, said.

“No longer just bookkeepers for their firms, accounting and finance professionals are regarded as business partners, skilled in areas of divesting and restructuring businesses, developing financial models and analyzing financial forecasts, as well as developing back office transaction processes that support cash flow and drive efficiencies in so many areas,” she added.

“Changes in the roles of professional accountants and the finance function itself are partly a consequence of the downturn, and partly an outcome of a growing recognition of the value that the finance function and professional accountants can add to an organization,” Le Thi Hong Len, Country Manager of ACCA Vietnam, said.

ACCA found in its March survey in 105 countries that nearly 70 percent of respondents considered it very important for organizations to have a formal program to develop the best financial talent and 75 percent suggested that talent management was an important component in addressing financial skills shortages prevalent in many organizations.

The ACCA survey also indicated that 76 percent of respondents believed the primary objective of a talent management program is to retain key staff, while 60 percent felt another important objective is to attract and recruit candidates with promising potential.

“Since late 2008, the recession has provided the finance function with an unparalleled opportunity to shape and influence business. However, this opportunity can only be grasped if organizations and finance leaders invest in the skills and capabilities required to develop, manage and protect the integrity of these vital functions,” Reza Ali, Head of Business Development, Emerging Markets, Asia, said.

“Talent management practices for finance professionals need further development and must include elements for talent identification, development, deployment and retention,” he added.

In a related survey conducted by Navigos Group in September 2010, 41 percent of the more than 3,000 polled said that a poor work environment is the number one reason why employees leave a company. Unprofessional line-managers and inadequate remuneration packages were the following reasons with 37 percent and 22 percent, respectively.

Conversely, another Navigos Group survey revealed that 48 percent of respondents ranked development opportunities as the most important criteria for accepting a job offer and employer brand was regarded as the second most determining factor with 30 percent of the vote.

The combined results of these surveys point towards a strong confidence in the ability of a talent management program to contribute significantly to long term organizational growth and development.

Consensus amongst many in attendance is that the seminar provided an excellent opportunity for panelists and members of the audience to exchange information, ideas, and experiences across a broad spectrum of industries.

So, each must determine the role accounting/finance talent will play in their organization and how best to implement a talent management program that will enable them to find the right fit, as well as develop and retain the talent that will consistently contribute to organizational objectives.

A second seminar on the same topic, “Accounting/Finance Talent in 2010 – the Foundation for Growth”, will be held Thursday at the New World Hotel in Ho Chi Minh City with the participation of more than 200 client guests.

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BP sells Vietnam energy assets to Russian group

Russia’s third largest oil and gas company TNK-BP announced on
October 18 that the company had reached an agreement to buy assets worth
about 1.8 billion USD from British oil company BP in Vietnam and
Venezuela.

The deal is part of a series of sales BP is making to help pay for oil
spill damages in the Gulf of Mexico. It will be financed entirely by
TNK-BP, which is owned 50-50 by BP and a group of Russian tycoons.

Under the deal, in Venezuela, TNK-BP will buy BP’s 16.7 percent stake
of PetroMonagas SA and 26.7 percent stake of Boqueron SA.

In Vietnam, the company will acquire BP’s 35 percent of stake in a
upstream offshore gas project including Lan Tay and Lan Do gas fields, a
32.7 percent stake in Nam Con Son Pipeline and Terminal, and a 33.3
percent stake in Phu My 3 power plant.

“The
acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's
strategic expansion in the global energy market,” TNK-BP CEO Mikhail
Fridman said. He also expressed his company’s interest in buying BP
assets in Algeria./.

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Asian markets slip as Bernanke fails to lift sentiment

Photo: Reuters

HONG KONG - Asian stocks fell Monday as traders were underwhelmed by the US Federal Reserve's strongest indication yet that it will inject cash into the economy.

The dollar edged down towards last week's 15-year low on the expected US pump-priming measures, while dealers also looked ahead to a meeting of G20 finance ministers to be held in South Korea at the weekend.

Hong Kong lost 1.21 percent, or 288.25 points, to end at 23,469.38 and Sydney ended down 0.79 percent, or 37.1 points, at 4,651.9.

Tokyo closed 1.76 points lower at 9,498.49 and Seoul slipped 1.41 percent, or 26.87 points, to 1,875.42.

Shanghai gave up 0.54 percent, or 15.93 points, to finish at 2,955.23.

Markets got an anemic lead from Wall Street, where the Dow edged down 0.29 percent on Friday despite Fed chairman Ben Bernanke saying the central bank was ready to take steps to boost the economy.

Bernanke said the current inflation rate was too low and raised the specter of deflation, which would send prices and wages spiraling downwards and force firms to the wall. Unemployment is already sky-high in the United States, with one in 10 people out of work.

"The risk of deflation is higher than desirable," he said.

The Fed was "prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate".

Bernanke's comments raised already elevated expectations that the Fed is ready to pump billions into the financial system, in what is known as quantitative easing, effectively printing money.

However, IG Markets strategist Ben Potter said: "US leads were fairly mixed in terms of economic data and Bernanke didn't shed too much light."

"He sounded a bit cautious, so the market's thinking perhaps he will do any quantitative easing in smaller chunks," he told Dow Jones Newswires.

The dollar edged down in Tokyo trade. It was quoted at 81.15 yen, slipping from 81.44 yen in New York late Friday and heading towards last week's 15-year-low of 80.88 yen.

The Australian dollar was sitting at 98.33 US cents in European trade after it reached parity for the first time last week.

Profit-taking saw the Aussie dip back Monday after it peaked at $1.003 late Friday, the first time it has reached US parity since it was floated in December 1983.

The euro bought $1.3883 in Tokyo afternoon trade, down from $1.3973 dollars in New York late Friday. The European single currency briefly shot up to $1.4159, its highest since January 26, in New York.

The yen's gains have been capped by Japanese authorities' threats to intervene in the currency markets for a second time in just over a month.

Tokyo stepped into the markets for the first time in six years on September 15, selling the yen in a bid to shore up the country's key export sector.

"The dollar is drawing buy-backs against the euro and Australian dollar," said Tsunemasa Tsukada, chief manager at the currency sales desk of Mitsubishi UFJ Trust and Banking.

"I believe the longer-term trend is a weak dollar but some adjustment moves (on the dollar's recent plunge) are going on," Tsukada said.

The possibility of intervention comes amid growing fears of a currency war in which nations weaken their units to bolster their exporters and in turn give a much-needed boost to their economies.

The International Monetary Fund was holding a meeting with central bank officials from around the world to discuss the issue and try to plot a course for sustainable global recovery.

The meeting, hosted by the People's Bank of China in Shanghai, comes ahead of this week's Group of 20 meeting in South Korea, where currency reform is expected to dominate talks.

On oil markets New York's main contract, light sweet crude for November delivery eased 51 cents to $80.74 a barrel and Brent North Sea crude for December was 60 cents lower at $81.85 a barrel.

Gold closed at $1,356.00-$1,357.00 an ounce in Hong Kong, down from Friday's close of $1,378.50-$1,379.50.

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Asian markets slip as Bernanke fails to lift sentiment

Photo: Reuters

HONG KONG - Asian stocks fell Monday as traders were underwhelmed by the US Federal Reserve's strongest indication yet that it will inject cash into the economy.

The dollar edged down towards last week's 15-year low on the expected US pump-priming measures, while dealers also looked ahead to a meeting of G20 finance ministers to be held in South Korea at the weekend.

Hong Kong lost 1.21 percent, or 288.25 points, to end at 23,469.38 and Sydney ended down 0.79 percent, or 37.1 points, at 4,651.9.

Tokyo closed 1.76 points lower at 9,498.49 and Seoul slipped 1.41 percent, or 26.87 points, to 1,875.42.

Shanghai gave up 0.54 percent, or 15.93 points, to finish at 2,955.23.

Markets got an anemic lead from Wall Street, where the Dow edged down 0.29 percent on Friday despite Fed chairman Ben Bernanke saying the central bank was ready to take steps to boost the economy.

Bernanke said the current inflation rate was too low and raised the specter of deflation, which would send prices and wages spiraling downwards and force firms to the wall. Unemployment is already sky-high in the United States, with one in 10 people out of work.

"The risk of deflation is higher than desirable," he said.

The Fed was "prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate".

Bernanke's comments raised already elevated expectations that the Fed is ready to pump billions into the financial system, in what is known as quantitative easing, effectively printing money.

However, IG Markets strategist Ben Potter said: "US leads were fairly mixed in terms of economic data and Bernanke didn't shed too much light."

"He sounded a bit cautious, so the market's thinking perhaps he will do any quantitative easing in smaller chunks," he told Dow Jones Newswires.

The dollar edged down in Tokyo trade. It was quoted at 81.15 yen, slipping from 81.44 yen in New York late Friday and heading towards last week's 15-year-low of 80.88 yen.

The Australian dollar was sitting at 98.33 US cents in European trade after it reached parity for the first time last week.

Profit-taking saw the Aussie dip back Monday after it peaked at $1.003 late Friday, the first time it has reached US parity since it was floated in December 1983.

The euro bought $1.3883 in Tokyo afternoon trade, down from $1.3973 dollars in New York late Friday. The European single currency briefly shot up to $1.4159, its highest since January 26, in New York.

The yen's gains have been capped by Japanese authorities' threats to intervene in the currency markets for a second time in just over a month.

Tokyo stepped into the markets for the first time in six years on September 15, selling the yen in a bid to shore up the country's key export sector.

"The dollar is drawing buy-backs against the euro and Australian dollar," said Tsunemasa Tsukada, chief manager at the currency sales desk of Mitsubishi UFJ Trust and Banking.

"I believe the longer-term trend is a weak dollar but some adjustment moves (on the dollar's recent plunge) are going on," Tsukada said.

The possibility of intervention comes amid growing fears of a currency war in which nations weaken their units to bolster their exporters and in turn give a much-needed boost to their economies.

The International Monetary Fund was holding a meeting with central bank officials from around the world to discuss the issue and try to plot a course for sustainable global recovery.

The meeting, hosted by the People's Bank of China in Shanghai, comes ahead of this week's Group of 20 meeting in South Korea, where currency reform is expected to dominate talks.

On oil markets New York's main contract, light sweet crude for November delivery eased 51 cents to $80.74 a barrel and Brent North Sea crude for December was 60 cents lower at $81.85 a barrel.

Gold closed at $1,356.00-$1,357.00 an ounce in Hong Kong, down from Friday's close of $1,378.50-$1,379.50.

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Banks begin to cut back interest rates

Photo: Tuoi Tre

Many commercial banks Friday started to cut their deposit interest rates by 0.2 percentage points to 11 percent per year in compliance with a recent agreement.

The agreement, made between the Viet Nam Banks Association (VNBA) and the State Bank of Vietnam, asks banks to cut their interest rates to no more than 11 percent, instead of 11.2 percent.

The move is designed to urge banks to cut capital input costs and help enterprises access more credit.

Asia Commercial Bank (ACB) is the first bank to apply the new interest rate on 36 month deposits. Interest rates for one week to 24 month deposits range from 9.9 to 10.88 percent per year.

But ACB will give depositors cash as a bonus, which is equal to 0.15 percent of their primary deposit.

Earlier this week, Techcombank, DaiA Bank, HDBank also cut their deposit interests rates to below 11.2 percent.

As inflation pressures continue to grow during the final months of the year interest rate cuts would be executed with prudence with respect to the market’s behavior and the depositor’s expectations, said VNBA.

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Recent price increases raise inflation jitters

Prices of consumer goods saw the most rapid hike in four monthsp this September, raising fears about spiking inflation late this year.

Prime Minister Nguyen Tan Dung has asked ministries and relevant authorities to “intensify” measures to stabilize commodity prices and help the country maintain its economic and inflation targets.

He ordered the Ministry of Industry and Trade to study production and distribution systems to ensure a balance between the supply and demand of essential commodities and services through the end of the year. The country will also make efforts to keep prices of electricity and coal stable.

In Hanoi, prices on some 300 items, including confectionery products, milk and sugar, rose by 3 to 10 percent in September, according to the Hanoi Supermarket Association.

The association’s chairman Vu Vinh Phu said the prices of essential food items have increased two or three times compared to those of two to three years ago. In the same period, local incomes have risen by just 25 percent.

Phu said the prices of consumer goods will see stronger increases from now until Tet in January 2011 due to holiday demand. “Prices of hundreds of consumer products increase every day,” he said.

Consumer prices climbed 8.92 percent in September from a year earlier, compared with an 8.18 percent advance in August, according to a report issued by the General Statistics Office. Prices rose 1.31 percent in September over the previous month.

Nguyen Thi Ngoc Van, head of the office’s general department, said factors such as the increase in the price of gasoline and school fees, which contributed to rising inflation last month, will continue to affect the consumer prices in the months ahead.

The devaluation of the Vietnamese dong will further drive the price of imported products higher, raising business input costs as well as consumer prices, she said.

“Most imported products have seen a price hike since the dollar increase,” said Vu Thi Hau, deputy director of Nhat Nam Company, which owns the supermarket chain, Fivimart. “But food prices experience bigger year-end increases than other products.”

Vu Dinh Anh, deputy director of the Institute of Market and Price Research, said the demand for imported products is expected to increase from now until the end of this year, while the dollar exchange rate is also expected to rise at both commercial banks and black market exchange locations.

This will only add to the inflationary pressures on the country’s economy.

Nguyen Xuan Phuc, chairman of the Government Office, said Vietnam will continue to tighten control over consumer prices through the end of the year as the country strives to keep inflation at 8 percent. He said it is necessary to keep an eye on milk and medicine prices in particular.

In a recent report, the Asian Development Bank predicted that Vietnam’s inflation would reach 8.5 percent this year and 7.5 percent next year.

These forecasts are down slightly from April’s outlook, owing to improvements in macroeconomic conditions and moderate growth in credit, the bank found. However, large swings in inflation, together with expectations of dong devaluation, suggest that even the forecasts are not firmly anchored.

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Recent price increases raise inflation jitters

Prices of consumer goods saw the most rapid hike in four monthsp this September, raising fears about spiking inflation late this year.

Prime Minister Nguyen Tan Dung has asked ministries and relevant authorities to “intensify” measures to stabilize commodity prices and help the country maintain its economic and inflation targets.

He ordered the Ministry of Industry and Trade to study production and distribution systems to ensure a balance between the supply and demand of essential commodities and services through the end of the year. The country will also make efforts to keep prices of electricity and coal stable.

In Hanoi, prices on some 300 items, including confectionery products, milk and sugar, rose by 3 to 10 percent in September, according to the Hanoi Supermarket Association.

The association’s chairman Vu Vinh Phu said the prices of essential food items have increased two or three times compared to those of two to three years ago. In the same period, local incomes have risen by just 25 percent.

Phu said the prices of consumer goods will see stronger increases from now until Tet in January 2011 due to holiday demand. “Prices of hundreds of consumer products increase every day,” he said.

Consumer prices climbed 8.92 percent in September from a year earlier, compared with an 8.18 percent advance in August, according to a report issued by the General Statistics Office. Prices rose 1.31 percent in September over the previous month.

Nguyen Thi Ngoc Van, head of the office’s general department, said factors such as the increase in the price of gasoline and school fees, which contributed to rising inflation last month, will continue to affect the consumer prices in the months ahead.

The devaluation of the Vietnamese dong will further drive the price of imported products higher, raising business input costs as well as consumer prices, she said.

“Most imported products have seen a price hike since the dollar increase,” said Vu Thi Hau, deputy director of Nhat Nam Company, which owns the supermarket chain, Fivimart. “But food prices experience bigger year-end increases than other products.”

Vu Dinh Anh, deputy director of the Institute of Market and Price Research, said the demand for imported products is expected to increase from now until the end of this year, while the dollar exchange rate is also expected to rise at both commercial banks and black market exchange locations.

This will only add to the inflationary pressures on the country’s economy.

Nguyen Xuan Phuc, chairman of the Government Office, said Vietnam will continue to tighten control over consumer prices through the end of the year as the country strives to keep inflation at 8 percent. He said it is necessary to keep an eye on milk and medicine prices in particular.

In a recent report, the Asian Development Bank predicted that Vietnam’s inflation would reach 8.5 percent this year and 7.5 percent next year.

These forecasts are down slightly from April’s outlook, owing to improvements in macroeconomic conditions and moderate growth in credit, the bank found. However, large swings in inflation, together with expectations of dong devaluation, suggest that even the forecasts are not firmly anchored.

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Vietnam GDP growth seen at 6.7 pct in 2010

HANOI - Vietnam's ruling party estimated on Thursday gross domestic product growth this year would reach 6.7 percent, exceeding the government's official target of 6.5 percent.

Next year's economic growth target would be 7-7.5 percent while exports would be targeted to expand 10 percent, said a report issued after a meeting of the party's ruling Central Committee.

"The economy has recovered quickly. The pace of growth has become more and more stable closer to the end of the year, and GDP for the whole year is estimated to reach 6.7 percent," said the report on the government website, www.chinhphu.vn.

Economic growth accelerated to an annual rate of 7.16 percent in the third quarter from 6.4 percent in the second, the government statistics office said late last month. The economy grew 6.52 percent in the first nine months from a year ago.

Vietnam has been among the fastest growing economies in Asia, and last month the Party forecast GDP growth to average between 7.5 percent and 8 percent for the next five years.

It also forecast exports to rise an average 12 percent annually between 2011 and 2015.

Thursday's report said consumer price inflation would be 7-8 percent this year. The official target is for inflation not to exceed 8 percent, although a Reuters poll of economists put the figure at 8.5 percent.

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Foreign investors drive market

Active trading by foreign investors helped the VN-Index register a
second day of gains, closing the day's trade at 458.66 points.

The index rose 0.21 percent, with 84 of the 267 listed stocks on the southern market advancing.

Many blue chips continued to rally thanks to consolidation by foreign
investors, such as Phu My Fertilisers (DPM), up 0.6 percent; Bao Viet
Holdings (BVH), 1 percent; the Corporation for Financing and Promoting
Technology (FPT), 0.5 percent ; and VietinBank (CTG), 1.06 percent.

Foreign investors on Oct. 14 pumped 114.96 billion VND (5.9 million
USD) into the southern market to own 3.03 million shares, including
144,350 BVH shares, 221,380 DPM shares and 188,120 REE shares.

Yet, the total trading volume stayed low at 23 million shares, down
3.7 percent from on Oct.13, for a meagre value of 594.4 billion VND
(30.5 million USD).

The Hanoi Stock Exchange's
HNX-Index inched up 0.05 percent to close at 120.45 points, helped by
rallies of banking and securities stocks.

They
included Asia Commercial Bank (ACB), up 0.36 percent; APEC Securities,
3.20 percent; Bao Viet Securities (BVS), 1.60 percent; Kim Long
Securities, 0.72 percent; and Sai Gon-Hanoi Bank (SHB), 0.88 percent.

Trading volume reached only 19.5 million shares, worth a total of 421.6 billion VND (21.6 million USD)./.

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Visiting Indian pharmaceutical firms seek local partners

Seventeen Indian pharmaceutical enterprises on Oct. 14 met with HCM
City partners during a trade-exchange programme to seek more
opportunities in the field.

The companies produce a wide range of pharmaceutical goods, including health food and veterinary medicine.

Pharmaceuticals are one of the major products that India exports to Vietnam .

Two-way trade between the two countries was more than 2 billion USD in 2009, with an annual growth of 20 percent.

From 2008-10, the Vietnamese pharmaceutical industry increased turnover by 12 percent annually.

Last year, the industry sold around 700 million USD of drugs on the
local market. The rest, which amounted to 50 percent of sales, was
imported medicine.

Vietnam also exported 40 million USD worth of drugs last year, an increase of 20 percent compared to 2008.

However, the local pharmaceutical industry is expected to continue to
produce only basic medicines, and will not manufacture specialised drugs
for heart or cancer diseases.

Most of the raw materials are imported from China (25 percent) and India (21 percent).

Last year, Vietnam spent 1.17 billion USD on imported medicines.

Demand for medicine per capita increased from 6 USD in 2001 to 16.5 USD in 2008, and is expected to reach to 25 USD in 2015./.

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Vietnam coffee exporters seek funds for new crop

HANOI - Coffee exporters in Vietnam, the world's second largest producer of the commodity, are trying to raise funds via stock listings or share auctions ahead of a major robusta crop as banks tighten lending to avoid bad debt.

Coffee output from the 2010/2011 harvest due to start late this month could rise 2.3 percent to 19.77 million bags, or 1.19 million tons, a Reuters poll showed on Tuesday.

Exporters and domestic processors would need $1.76 billion to buy all the beans from the harvest, based on Thursday's domestic market price of 28.9 million dong a ton.

Bankers and coffee exporters say corporate demand for cash for bean purchases often stays high in the fourth quarter, especially in November or December, when the harvest peaks.

Daklak Investment Export-Import Corp, or Inexim Daklak, one of the country's top coffee exporters, hoped to raise at least $1.2 million by auctioning 1.65 million shares early next month on the Hanoi stock market, the exchange said on Thursday.

Harvest starts next month

The company is based in Daklak, Vietnam's largest coffee growing province, where the harvest will start next month. Inexim often buys half of its annual coffee exports in December.

Another arabica exporter, Thai Hoa Vietnam Group Co, planned a listing on the Hanoi stock market to raise funds for expansion after arabica prices hit a 13-year high recently, its chairman and chief executive Nguyen Van An said.

Share auctions and listing on the stock market are separate processes in Vietnam and many companies often choose to sell shares via auction before making their debut on the exchange.

"Banks have limits this year in using short-term deposits for medium- and long-term loans, meaning investment in agricultural businesses is limited, so we have to look for another way to get funds," An told Reuters.

From Jan. 1, 2010, the central bank cut the ratio of short-term deposits banks could use for medium- and long-term loans to 30 percent from 40 percent.

Exporters in the red

Banks have also become more cautious after many Vietnamese coffee firms made losses in the first quarter of 2010, as they signed export contracts late last year with forward shipments, then failed to buy beans locally after prices rose.

"Lending now has to be selective as banks want to avoid bad debt and risks," said a bank executive in Ho Chi Minh City, Vietnam's largest coffee trading market.

Several major banks which announced lending packages for coffee business last year have yet to renew their offers, even though the new coffee crop year has begun this month, she noted.

Only a small lender, Ho Chi Minh City-based HD Bank, said it would extend credit worth 2 trillion dong from next month to coffee companies and farmers.

In February the central bank told Agribank, Vietnam's largest lender dealing mostly in agriculture, to slow lending this year to a rate of at least 20 percent, after its loans jumped 24.4 percent in 2009, as the country tried to rein in inflation.

Vietnam, the world's second largest coffee producer after Brazil, has nearly 150 companies that export coffee, but 80 percent of shipments are handled by 20 companies, led by Vinacafe, Intimex, Thai Hoa Vietnam, Simexco and Inexim Daklak.

In the 2009/2010 season, its coffee export rose 5.3 percent from the previous year to an estimated 1.19 million tons, or 19.87 million 60-kg bags, government data showed.

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Vietnam coffee exporters seek funds for new crop

HANOI - Coffee exporters in Vietnam, the world's second largest producer of the commodity, are trying to raise funds via stock listings or share auctions ahead of a major robusta crop as banks tighten lending to avoid bad debt.

Coffee output from the 2010/2011 harvest due to start late this month could rise 2.3 percent to 19.77 million bags, or 1.19 million tons, a Reuters poll showed on Tuesday.

Exporters and domestic processors would need $1.76 billion to buy all the beans from the harvest, based on Thursday's domestic market price of 28.9 million dong a ton.

Bankers and coffee exporters say corporate demand for cash for bean purchases often stays high in the fourth quarter, especially in November or December, when the harvest peaks.

Daklak Investment Export-Import Corp, or Inexim Daklak, one of the country's top coffee exporters, hoped to raise at least $1.2 million by auctioning 1.65 million shares early next month on the Hanoi stock market, the exchange said on Thursday.

Harvest starts next month

The company is based in Daklak, Vietnam's largest coffee growing province, where the harvest will start next month. Inexim often buys half of its annual coffee exports in December.

Another arabica exporter, Thai Hoa Vietnam Group Co, planned a listing on the Hanoi stock market to raise funds for expansion after arabica prices hit a 13-year high recently, its chairman and chief executive Nguyen Van An said.

Share auctions and listing on the stock market are separate processes in Vietnam and many companies often choose to sell shares via auction before making their debut on the exchange.

"Banks have limits this year in using short-term deposits for medium- and long-term loans, meaning investment in agricultural businesses is limited, so we have to look for another way to get funds," An told Reuters.

From Jan. 1, 2010, the central bank cut the ratio of short-term deposits banks could use for medium- and long-term loans to 30 percent from 40 percent.

Exporters in the red

Banks have also become more cautious after many Vietnamese coffee firms made losses in the first quarter of 2010, as they signed export contracts late last year with forward shipments, then failed to buy beans locally after prices rose.

"Lending now has to be selective as banks want to avoid bad debt and risks," said a bank executive in Ho Chi Minh City, Vietnam's largest coffee trading market.

Several major banks which announced lending packages for coffee business last year have yet to renew their offers, even though the new coffee crop year has begun this month, she noted.

Only a small lender, Ho Chi Minh City-based HD Bank, said it would extend credit worth 2 trillion dong from next month to coffee companies and farmers.

In February the central bank told Agribank, Vietnam's largest lender dealing mostly in agriculture, to slow lending this year to a rate of at least 20 percent, after its loans jumped 24.4 percent in 2009, as the country tried to rein in inflation.

Vietnam, the world's second largest coffee producer after Brazil, has nearly 150 companies that export coffee, but 80 percent of shipments are handled by 20 companies, led by Vinacafe, Intimex, Thai Hoa Vietnam, Simexco and Inexim Daklak.

In the 2009/2010 season, its coffee export rose 5.3 percent from the previous year to an estimated 1.19 million tons, or 19.87 million 60-kg bags, government data showed.

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Domestic firms gain confidence in business outlook: survey

Domestic firms are pinning high hope on business outlook since Vietnam’s business confidence index (BCI) bounded back in the third quarter, up three points over the last quarter and 37 points against the third quarter in 2008.

The survey, conducted by Vietnam World Vest Base Financial Intelligence Services and PetroVietnam Finance Investment and Consultancy Co, was carried out on 262 companies in 11 domestic key industries, of which over 70 percent were medium and small-sized businesses.

The result signaled a recovery and improved investment potential for Vietnam’s economy in the near future, compared with the first six months of the year.

Over 70 percent of them believed that Vietnam's economy was better than a year ago and nearly 73 percent of businesses believe their profits will rise in the next 12 months. The number of businesses who were optimistic about the prospects for profit growth was around 10.8 percent in the first quarter’s BCI survey.

About 77.23 percent of surveyed enterprises surveyed said that the general economy of Vietnam is now better than the previous 12 months.

When asked to make a forecast about the country’s economy in the next 12 months, 84.35 percent of those interviewed said the economy would be better and none believed they would see a worse economy than during the past six months.

Compared with the second quarter, the number of optimistic businesses increased by 7.19 percent and that of pessimistic ones decreased by 1.85 percent.

As many as 60 percent would increase their employment and invest more in fixed assets while 72 percent believed that their revenues and profits would rise in the next 12 months, the survey said.

But the number of businesses who were worried about revenues and profits were up 0.06 percent and 1.96 percent over the last quarter.

The result also showed that many domestic businesses were still concerned about the adverse effects to their business operations of inflation and fluctuations in the exchange rate between the US dollar and Vietnamese dong.

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