VietNam Business

Tuesday, October 5, 2010

Asia stocks rise as US data soothes fears

Photo: Reuters

TOKYO - Asian stocks rose to a two-week high, with Japan's Nikkei briefly rising more than 2 percent, as strong US manufacturing data further soothed worries about the global economy.

The dollar and the yen began the day on the defensive, while commodities gained, helping make materials shares some of the strongest performers across the region as gold steadied after a two-month top hit on Wednesday.

The Institute for Supply Management said its index of US factory activity rose to 56.3 in August from 55.5 in July, much higher than forecast by economists.

Coming on the heels of strong Chinese manufacturing data and stronger-than-expected growth in Australia, the numbers eased investor fears about the pace of global economic recovery and helped Wall Street to its best day in eight weeks.

But gains in Asian stocks, which were also boosted by gains in tech shares, appeared capped by wariness about whether the global economy is truly on the path to recovery, as well as concern about closely watched US nonfarm payrolls data on Friday.

"It's too early to say worries about a double-dip recession in the economy have been wiped away just because China's PMI, Australia's GDP and US data weren't bad," said Masahiko Sato, an executive director at Nomura Securities' equity marketing department.

"But stocks may become more resilient to poor economic indicators going forward and gain further if money that had shifted to bonds on extreme concern over the economy comes back to equities, early signs of which have likely appeared in US, Germany and U.K. bonds after yesterday's data."

The MSCI index of Asia Pacific stocks outside Japan rose 0.8 percent to its highest level since mid-August.

Japan's benchmark Nikkei rose more than 2 percent at one point, moving further away from a 16-month low hit on Wednesday, helped by what some market players said was buying by domestic institutional investors at lows and buying of futures by foreign players.

But the Nikkei pared gains to 1.2 percent by midday. It lost 7.5 percent in August and is down roughly 14 percent on the year.

Seoul shares rose 0.3 percent, boosted by tech stocks, with market players saying foreign investors, cheered by the rise on Wall Street, could turn strong buyers.

Australian stocks rose 0.8 percent to a three-week high, with miners such as Rio Tinto gaining after copper prices rose to a four-month high.

Steady dollar

The dollar index, a gauge of the greenback's performance against a basket of six major currencies, was steady on the day at 82.528 after falling 0.9 percent on Wednesday, marking its biggest one-day fall in six weeks.

The dollar edged down 0.2 percent to 84.27 yen but still stayed above a 15-year low of 83.58 yen hit last week.

Through the ISM data boosted higher-yielding currencies such as the Australian dollar, investors have now turned hesitant about taking fresh positions ahead of the European Central Bank's policy meeting later in the day and Friday's closely watched monthly US job report, a trader said.

Spot gold edged up to $1,246.70 an ounce, after hitting $1,254.65 on Wednesday, its highest since June 28.

Oil held onto most of the previous session's gain of 2.8 percent after the strong manufacturing data in top consumers the US and China raised hopes record oil inventories will draw down.

US crude for October delivery was steady at $73.91 a barrel after a jump of nearly $2 on Wednesday.

Chip revenue expected to grow 31.5 percent in 2010

Photo: AFP

WASHINGTON - Worldwide semiconductor revenue is expected to grow 31.5 percent this year to US$300 billion, technology research firm Gartner said Wednesday.

Gartner also forecast computer chip revenue of $314 billion in 2011, a 4.6 percent increase over this year. Worldwide semiconductor revenue totaled $228 billion last year.

"Semiconductor growth in the first half of 2010 was very strong, but it is becoming increasingly clear that the industry cannot maintain the momentum in the second half of 2010 and into 2011," Gartner research vice president Bryan Lewis said.

"While the impact of the European credit crisis has subsided, the global economic recovery is slowing, and there is concern that electronic equipment vendors are adopting a cautious stance, ready to cut production at the first signs of slowing customer orders," Lewis said in a statement.

Gartner said the personal computer supply chain "is showing the most evidence of a correction" and the outlook for consumer PC purchases in the third quarter is below seasonal growth.

"However, surging sales of media tablets are partially offsetting the weakness in consumer PCs, as they've begun to prove themselves a popular substitute for netbooks," Gartner said.

The Semiconductor Industry Association reported Monday that year-to-date semiconductor sales of $169.2 billion were up 46.7 percent from the $115.3 billion in the first seven months of last year.

The SIA said it expected chip industry growth of 28.4 percent this year.

Sony unveils new e-readers, adds touchscreen to all models

A journalist checks out a Sony e-reader device

Photo: AFP

WASHINGTON – Sony, battling Amazon and Apple in the electronic book reader race, unveiled its latest devices on Wednesday and expanded their availability to Australia, China, Italy, Japan and Spain.

Sony cut the size and weight of all three of its e-readers while expanding the use of touchscreens to all models -- allowing users to turn pages with a swipe of the finger like the Apple iPad.

The Japanese electronics giant increased the price of its cheapest e-reader, the Reader Pocket Edition, by 29 dollars while adding a touchscreen.

At 179 dollars, the Reader Pocket Edition, which features a five-inch screen, is 40 dollars more than Amazon's cheapest Kindle e-reader and 30 dollars more than US bookstore chain Barnes & Noble's device, the Nook.

The cheapest iPad costs 499 dollars but boasts a color screen and other features while the Sony Reader and the Kindle both use black-and-white e-ink technology.

The new Reader Touch Edition features a six-inch touchscreen and costs 229 dollars while the new Reader Daily Edition has a seven-inch touchscreen and Wi-Fi or 3G connectivity and costs 299 dollars.

Steve Haber, president of Sony's Digital Reading Business Division, said the company was also targeting "previously untapped markets."

"We take a thoughtful approach to country expansion, including Italy, Spain, Australia, Japan and China, working with local bookstores to ensure content is compatible, relevant and in the appropriate language for each market," he said.

Sony also said it was developing applications for the iPhone and Android mobile platform to allow users to read books from its Reader Store on those devices.

Sony said the new Reader Pocket Edition and new Reader Touch Edition are available immediately while the new Reader Daily Edition will be out in time for end-of-the-year holidays.

Amazon unveiled two new versions of the Kindle in late July, including one that sells for 139 dollars, its lowest price yet.

Staples announced Tuesday it will begin selling the Kindle this year, making the US office supply chain the second brick-and-mortar store to offer the device after retail giant Target.

Opportunities for garment, footwear industries

Photo: Tuoi Tre

As China took the second rank in world economies from Japan, experts described the event as an opportunity for small economies depending on outsourcing, including Vietnam.

Experts predict that China would reduce outsourcing activity in industries using large numbers of workers, such as garment and textiles, and boost development of products with high added value.

The country may lose its advantages of competitiveness in materials and low production costs and face pay increases.

Diep Thanh Kiet, Deputy President of the Vietnam Leather and Footwear Association, forecast that with cheap labour costs, Vietnam would be able to take a large volume of orders in garment and textile, leather and footwear and furniture.

Until now, most Vietnamese garment and textile exporters had enough orders for 2010, and some stopped receiving new orders to give priority to already signed contracts. In addition, prices of export items increased 15 percent over last year in US, Japanese and European markets.

The increase in Vietnam’s export turnover is also credited to the country’s implementation of economic and trade agreements with other countries.

Vietnam’s garment and textile exports to the Republic of Korea increased 80 percent thanks to the tax reduction under the ASEAN-RoK Free Trade Agreement. Meanwhile, the Vietnam-Japan Economic and Trade Agreement helped Vietnam’s garment and textile exports to Japan increase 15 percent over the same period last year.

In the first eight months of this year, Vietnam earned nearly US$6.9 billion from garment and textile exports.

Kiet said that many customers selected Vietnamese footwear instead of Chinese ones for their high quality and reasonable prices.

The country obtained an export turnover of more than $3.2 billion from footwear exports, a year-on-year increase of 18.8 percent. Of this figure, almost $700 million was earned from the US.

However, Kiet showed his worry about the capacity of Vietnamese enterprises if they receive orders transferring from China, which exports about 8 billion pairs of shoes a year. He said for Vietnam to take just 10 percent of that amount, local footwear industry must double its production capacity.

For the garment and textile sector, the lesson will be the same. This means the sector must increase its capacity by 2.5 times to receive 10 percent of orders from China. In 2009, China exported $150 billion worth of garments and textiles, while Vietnam exported $9.2 billion.

To take those opportunities, experts said Vietnamese garment and textile and footwear industries must promptly overcome outstanding problems in human resources, materials and technology to raise capacity and the competitiveness for their products.

High disbursement shows positive economic signs

Photo: Tuoi Tre

A positive trend in economic development is reflected in the high disbursement of investment and development project funds.

Statistics show that an estimated VND92.1 trillion (US$4.7 billion) was disbursed from the State budget for development projects in the first eight months of the year, making up almost 74 percent of the annual plan.

Disbursement of Official Development Assistance (ODA) commitments reached over $1.8 billion, or 74.5 percent of the annual target and 13.5 percent increase year on year.

Foreign Direct Investment (FDI) saw up to $7.25 billion disbursed, representing an increase of 3.6 percent over the same period last year.

The Ministry of Planning and Investment (MPI) forecast that development investment this year is expected to reach VND800 trillion, accounting for 41.37 percent of gross domestic product and representing a growth of 12.9 percent year on year.

Once the disbursement is reached, it would be the second consecutive year Vietnam has surpassed the annual target for development investment, said MPI.

The trend was of primary importance for Vietnam since the country is largely dependent on investment for economic growth, the ministry explained.

The figures have shown the great efforts made by the Government, ministries, industries and local administrations to mobilise different financial sources for development amid post-crisis economic difficulties worldwide.

The figures were evidence of investors’ and partners’ confidence in Vietnam’s potential for growth, MPI said.

Problems, however, remain with cumbersome administrative procedures and limited management competence.

Experts have called on responsible agencies to move promptly in reviewing and adjusting relevant policies and streamlining administrative procedures in an effort to increase the country’s capacity to absorb investment.

The Director of the National Centre for Socio-Economic Information and Forecast, Le Dinh An, said measures to lure FDI should be associated with economic restructuring and geared to concrete industries and products.

Such an orientation should be also applied to ODA fundraising, he added.

National Assembly Vice Chairman Nguyen Duc Kien proposed an early orientation for mobilising and using ODA at a workshop in July.

He also called for relevant agencies to make objective evaluations of national debts in support of mobilising financial sources for economic development.

High disbursement shows positive economic signs