State bank decision stabilises markets

Shares advanced on the nation's stock exchanges on Sept. 28 as the
central bank's final decision on Circular No 13 helped settle investor
psychology.

The State Bank of Vietnam's decision, issued late Monday, allows banks
to lend 25 percent of their non-term deposits and count State Treasury
and loans from other credit institutions of terms of three months or
longer as part of their reserves for lending.

The
decision is expected to help ease the capital crunch that banks feared
due to Circular No 13's stricter capital adequacy requirements, which
will take effect on Friday as previously announced.

The central bank on Sept. 28 also decided to keep the prime interest rate at 8 percent for an 11th consecutive month.

On the HCM Stock Exchange, the VN-Index closed up 1.1 percent to
455.13 points. Market value rose by 10 percent over Monday's session to
slightly over 1 trillion VND (53.8 million USD) on a volume of almost 39
million shares.

Advancers outnumbered decliners by
150-57, with Sacombank (STB) the most-active share with over 3 million
changing hands. STB rose for a second day and closed up 1.2 percent to
17,000 VND (0.87 USD) per share.

Of the 10 leading
shares by capitalisation, nine posted gains, with insurer Bao Viet
Holdings (BVH) and property developer Vincom (VIC) rising to their
ceiling price.

Ha Thanh Securities Co's head of
analysis and investment, Tran Van Don, said the impacts of Circular No
13 had dissipated and the market was unlikely to react dramatically.

Many investors remained watchful, Don said, noting the modest increase in trading volume and value on Sept. 28.

He predicted that rising inflation would cause banks difficulties in
lowering interest rates, putting further pressure on the markets.

Duong Hong Ha, chief analyst of Tri Viet Securities Co, agreed the
domestic stock market was unlikely to see any explosive development in
light of rising inflation, high interest rates and a large volume of new
shares to list by year's end.

On the Hanoi Stock
Exchange, the HNX-Index advanced on Sept. 28 by a modest 0.18 percent to
close at 130.17 points. Volume hit 34.6 million shares worth 981.6
billion VND (50.3 million USD) – an increase by 39.5 percent in volume
and nearly 60 percent in value – while gainers outnumbered losers by
203-72. /.

Related Articles

• Vietnam to relax bank lending rules to boost loans
• Central bank eases credit rules
• Banks scramble for mid-level managers
• Vietnam secure 2-1 win over Malaysia in Eximbank Cup
• Greenback firmer on signs of rising demand

Binh Dinh to host first forest product festival

The first Vietnam Forest Product Festival will take place in Quy Nhon, the central coastal city of Binh Dinh Province, from March 26-29, 2011.

The Ministry of Agriculture and Rural Development, the Vietnam Timber and Forest Product Association (VIFORES) and the provincial People’s Committee announced the event on Tuesday in Ho Chi Minh City.

Le Huu Loc, deputy chairman of the provincial People’s Committee said that over 400 domestic and international organizations are expected to attend with 700 pavilions.

Besides, seminars to promote trade in this field as well as cultural and culinary festivals will also be held, he added.

Hua Duc Nhi, Deputy Minister of Agriculture and Rural Development said that the festival aims to highlight the contributions of the forestry sector and step up the cooperation among forestry businesses both at home and abroad.

According to the VIFORES, wood products export is scheduled to reach US$3.1 billion this year, becoming one of five major hard currency earners of the country.

Vietnam currently ranks second in Southeast Asia in term of wood products export. Its products are shipped to 120 countries worldwide.

Related Articles

• Timber-product exporters sign $3b deals
• Spanish firms see Vietnam as good production base
• PetroVietnam pumps first crude in Russia
• Weightlifter grabs Vietnam’s first Olympic gold at Youth Games
• Hanoi T&T win first V-League after scoreless draw

PM Dung urges inspectors to be incorruptible

Photo: VNA

Prime Minister Nguyen Tan Dung has emphasized transparency in the inspection mechanism and the legal system so as to avoid abuse of loop holes for self-interest.

Dung made the requirement at a meeting to mark the 65th founding anniversary of the Vietnam Inspectorate and receive the Gold Star Order in Hanoi on Tuesday.

He said the inspection force should continue with upgrading relevant mechanisms and procedures as well as improving the quality of the work for settling petitions and claims and corruption control.

“Efforts should be made to remove problems and limitations in the legal system in order to eliminate the attempt to abuse legal loop holes for illegitimate interests and negative phenomena,” said the government leader.

The Gold Star Order, the highest decoration of the Vietnamese Government, was presented to the inspectorate in recognition of the force’s contributions to detecting and punishing negative phenomena and corruption.

Dung also recognized inspectors’ efforts in discovering numerous problems and limitations in the existing policies and mechanisms as well as their recommendations for adjustments of these weak points, thus contributing to improving the quality of state management in various fields.

“The work of receiving ordinary people, dealing with letters of petition and solving citizens’ complaints and petitions have increasingly improved, thus protecting people’s legitimate rights and ensuring management disciplines, political security and social order,” he concluded.

Over the past five years, the inspectorate has uncovered nearly VND47.4 trillion (about US$2.4 billion) and over $7 million misappropriated in economic cases. The force has helped take back over VND18 trillion and almost $994,000 for the state coffer.

Related Articles

• SMEs believe in decisive role for national development
• HCMC urges efforts to save Dong Nai River
• PPI gets land for residential development
• PM foresees bright future for co-operation with Africa
• Party reports come in from provinces

IFC helps Bac Ninh reduce environmental pollution

The International Finance Corp (IFC) will work with the Bac Ninh Natural Resources and Environment Department to seek cooperation for reducing environmental pollution at the provincial traditional craft villages, said IFC Vice President Dorothy Berry.

At a working session with authorities of the northern province of Bac Ninh on Tuesday, Dorothy Berry said the Bac Ninh should prioritize the settlement of urgent environmental pollution issue in its traditional craft villages.

Both the host and guest agreed that Bac Ninh’s business and investment environment has been considerably improved thanks to bilateral cooperation programs on the simplification of procedures and enhancement of inter-branch coordination in settling construction investment and land access procedures.

Bac Ninh ranked 10th in the Vietnam province competitiveness index (PCI) in 2009 and is among three leading localities in business environment improvement.

Chairman of the Bac Ninh Provincial People’s Committee Tran Van Tuy proposed the IFC continue cooperating with his province in helping its all eight districts setting up a one-stop business section.

Also on same day, the IFC delegation made a fact-finding tour of the Phong Khe paper craft village in Bac Ninh City where IFC and the province are discussing cooperation possibilities for experimentally reducing environmental pollution.

Related Articles

• Greenback firmer on signs of rising demand
• HCMC urges efforts to save Dong Nai River
• Sugar firm fined for untreated wastewater discharge
• ASEAN's socio-cultural issues promoted at Da Nang meeting
• Preparations for congress reviewed

ADB ups stable Vietnam’s economic outlook

The Asian Development Bank has raised Vietnam’s GDP growth forecast for this year and next year by 0.2 percent to 6.7 percent and 7 percent due to the country’s efforts to maintain economic stability.

Vietnam has successfully shifted from the strong fiscal and monetary stimulus to tackle the global recession last year to a more balanced policy to stabilize financial and economic conditions, it says in its annual flagship publication, the Asian Development Outlook Update, which was released in Hanoi Tuesday.

The steps taken by the government to stabilize the economy have contributed to an improvement in the economic growth: GDP grew by 6.2 percent in the first half of this year compared to 3.9 percent in the same period last year.

Policy tightening and a good rice harvest have helped pull back inflation from 9.5 percent year on year in March to 8.2 percent in July and August.

The trade deficit has narrowed from $8.1 billion in July-December 2009 to an estimated $3.8 billion in the first half and the current account deficit from $8 billion to $2.7 billion.

The current account deficit, as a ratio to GDP, is forecast to narrow from 7.5 percent in 2010 to 5.4 percent in 2011 due to the shrinking trade deficit and increasing remittances and tourist arrivals.

The balance of payments situation has been improving due to higher foreign direct investment.

The bank is optimistic about the inflation situation since the country’s economy and world oil and commodities prices have been stable. It has cut down its earlier estimation of 10 percent inflation this year to 8.5 percent and from 8 percent to 7.5 percent next year.

However, it foresees a risk to the economy if there is a premature easing of monetary or fiscal policies or a perception of looser policy by financial markets and domestic investors.

“An early easing, or the perception of a relaxation, could derail the macroeconomic stabilization efforts, putting inflation on an upward trajectory and pressure on external accounts.”

So the authorities should maintain a firm and consistent policy stance, and communicate such a position effectively to the market until inflation is clearly on a downward track and foreign reserves increase, the bank warns. The other major challenge is to raise the efficiency of the economy and reduce supply-side constraints through structural reforms.

Ayumi Konishi, ADB’s country managing director for Vietnam, said at the release that the government should be very cautious about maintaining macroeconomic stability and effectively inform the people about the policies while promoting further reform.

The most important factor is providing quality and up-to-date information to businesses and potential investors, he added.

Last year, it ratified a total credit of $16.1 billion for the country’s loans, non-refundable and technical assistance projects.

The Asian Development Outlook and other ADB reports analyze the economic conditions and prospects in Asia and the Pacific and are issued every April and September.

Vietnam will host the ADB’s 44th annual summit in Hanoi next May.

Related Articles

• Vietnam’s economic growth quickened to 7.16 pct
• Dollar demand stable, though pressures remain
• Party reports come in from provinces
• Spanish firms see Vietnam as good production base
• China’s National Day marked in Vietnam

High-tech multinationals invest in Vietnam

Many giant corporations like Intel of the US, Nidec of Japan and Robert Bosch of Germany are pouring more money into the high-tech field in Ho Chi Minh City.

Intel Vietnam , for example, has opened its plant, one of the largest in the Asia-Pacific region that makes and tests electronic chips.

The plant, which is located in the Sai Gon Hi-Tech Park (SHTP) in District 9, began operating its first production line for test purposes earlier this year.

Le Thi Thanh My, deputy head of the management board of the SHTP, said since July Intel had exported goods for more than 30 orders.

In addition, Germany Robert Bosch Vietnam next month will put into operation the Centre for Research and Production of Software, one of only two centres of the company in the Asia-Pacific region. The other centre, located in India , employs 70,000 engineers.

Vo Quang Hue, managing director of Robert Bosch Vietnam Company, said the company had also disbursed 24 million euros (US$31.2 million) out of the total committed capital of 55 million euros ($71.5 million) for a project to develop an assembly-line plant to make automatic automobile gear boxes.

The plant, in Dong Nai southern province's Long Thanh district, has a capacity of 2.3 million products per year.

Robert Bosch Vietnam will develop the second phase of the project and disburse the entire capital of 55 million euros by 2015.

Vietnam is the only market in Southeast Asia in which Robert Bosch has invested in all three areas of operation, including sales, production and research.

According to Lu Thanh Phong, deputy director of HCMC's Department of Planning and Investment, of the 3,000 foreign direct investment (FDI) projects with a total capital of $37 billion in the city, Japanese businesses account for 397 projects. They operate in mechanics, spare parts production, food processing and others.

Japan has been cautious in expanding its investment in the hi-tech field in HCM City due to limited capital resources.

However, many Japanese corporations that produce semi-conducting spare parts had increased their investment in HCM City recently, Phong said.

According to Nagamori Shigennobu, chairman of the Japan-based Nidec Corporation, Nidec will continue to invest in research and development at the SHTP.

Nidec has developed three projects and recently received a licence for another project. Total capital for the projects at the park is $500 million.

Nagamori Shigennobu has also committed to encouraging small and medium-sized Japanese businesses to invest in the park. Most of the businesses make spare parts for Nidec products.

With more high-tech projects in the pipeline, Vietnam has more opportunities to promote investment and enhance its competitiveness capacity in the field.

Hue said Vietnam has advantages over other countries in the region due to its low labour costs and good location for transporting products to other countries in Southeast Asia and other parts of the world.

Vietnam should create the most favourable conditions for foreign corporations so that they can produce and export hi-tech products here, Hue added.

Related Articles

• Ninh Thuan seeks new investor for US$9.8-billion steel project
• Vietnam, RoK step up investment cooperation
• Intel to fund high-tech computer lab at RMIT
• IFC: Vietnam needs to increase PPP to support economy
• ASEAN Tourism Investment Forum opens in HCM City

SCIC to sell capital in 90 State-owned enterprises

Photo: Reuters

The State Capital Investment Corporation (SCIC), the representative of state-owned capital at state-owned enterprises, expects by the end of this year to sell capital at 90 state-owned enterprises, the corporation said.

The 90 enterprises are small and medium-sized companies with capital of no more than several billions of Vietnamese dong each.

The plan to sell the state-owned capital for the remainder of the year, is expected to be carried out successfully as the global economy recovers. This year, the corporation has targeted to sell capital at 170 state-owned enterprises.

However, a representative from one of 15 securities companies that trade in stake divestment, said the SCIC should ensure more diversity and flexibility in selling capital, especially after the experiences gained in divestment in previous years.

At present, the SCIC sells state-owned capital under public auctions and securities companies act as consultants and trading agencies at the auctions.

To have effective auctions, the corporation has been urged to improve production and business at enterprises to ensure the quality of securities before they are sold at auction. The timing of auctions is also crucial.

In coming years, the selling of state-owned capital would be one of the major tasks of the corporation as state-owned capital at state-owned enterprises is reduced in industries that do not need a great deal of State control.

The State plans to focus capital spending on key economic industries, said SCIC deputy director Hoang Nguyen Hoc.

The corporation's target is to hold state-owned capital at only 100 state-owned enterprises by 2012.

So far this year, the corporation has sold capital at 81 state-owned enterprises.

Last year, the corporation sold state-owned capital at 238 enterprises, a record high against previous years. It gained the good result because the state created favourable conditions for the sales.

 

Related Articles

• ADB provides US$630 million for SOE reform
• PM sets agenda for insolvent shipbuilder
• Regulations require toys to display safety stamps
• ADB supports SOE reform in Vietnam
• VietABank to issue 137 million shares