Monday, January 10, 2011

Central bank asks for foreign exchange reports

The State Bank of Vietnam has asked credit institutions to provide reports concerning outstanding loans and investments that involve US dollars.

The State Bank is requesting the information so that the institution can begin drafting a monetary policy for the latter months of the year.

Lenders were also told to draw up plans concerning how they will use their foreign currency reserves to pay debt during this year's final quarter and next year's first quarter.

The report must be completed and delivered to the State Bank this Friday.

By the end of September, total outstanding loans in foreign currencies at banks in Ho Chi Minh City were VND186.1 trillion (US$9.5 billion), up 36 per cent against the same period last year.

The US dollar credit growth during September increased by 6.1 percent against August, while the month-on-month dollar credit growth in August was up just 1 percent against July.

In an unusual move, loans in foreign currencies exceeded mobilized capital. Financial experts explained that banks had a surplus of US dollars that they received from mother companies or foreign credit institutions.

This is the second time the central bank has asked for such reports.

In May, commercial banks and financial companies were ordered to provide a detailed report about their foreign exchange operations to help reduce the country's trade deficit and improve Vietnam's payment balance.

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Time right for Vietnam to woo Japan: economist

A Japanese economist who advises the Vietnamese Ministry of Planning and Investment has said Vietnam should take advantage of the current economic and political situation to boost exports to Japan and attract Japanese investment.

With the yen’s relentless rise taking it to a 15-year high against the dollar last month, Vietnam’s exports to Japan are cheaper while Japanese investors are doing business more aggressively overseas, Kyoshiro Ichikawa told Tuoi Tre in an exclusive interview.

The recent territorial tension between China and Japan will surely make Japanese investors think twice about pouring more money in China and they are likely to partially or wholly relocate their investments and production facilities to Vietnam, he said.

The yen is likely to rise further in the short term since US economic recovery is slower than expected, he said.

But he allayed the fears that the appreciating yen will mean Vietnam’s official development assistance debt to Japan will rise since the appreciation is a short-term phenomenon.

Japan ODA commitments to Vietnam are worth over 1.394 trillion yen.

It used to be the equivalent of $14 billion but has risen to nearly $16.3 billion. In terms of the depreciating dong, it has risen from VND251 trillion to VND304.5 trillion.

Projects funded by ODA loans and yen-denominated commercial loans will be affected adversely by the currency appreciation, the ministry had said earlier.

Japan is one of Vietnam’s largest trading partners.

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Time right for Vietnam to woo Japan: economist

A Japanese economist who advises the Vietnamese Ministry of Planning and Investment has said Vietnam should take advantage of the current economic and political situation to boost exports to Japan and attract Japanese investment.

With the yen’s relentless rise taking it to a 15-year high against the dollar last month, Vietnam’s exports to Japan are cheaper while Japanese investors are doing business more aggressively overseas, Kyoshiro Ichikawa told Tuoi Tre in an exclusive interview.

The recent territorial tension between China and Japan will surely make Japanese investors think twice about pouring more money in China and they are likely to partially or wholly relocate their investments and production facilities to Vietnam, he said.

The yen is likely to rise further in the short term since US economic recovery is slower than expected, he said.

But he allayed the fears that the appreciating yen will mean Vietnam’s official development assistance debt to Japan will rise since the appreciation is a short-term phenomenon.

Japan ODA commitments to Vietnam are worth over 1.394 trillion yen.

It used to be the equivalent of $14 billion but has risen to nearly $16.3 billion. In terms of the depreciating dong, it has risen from VND251 trillion to VND304.5 trillion.

Projects funded by ODA loans and yen-denominated commercial loans will be affected adversely by the currency appreciation, the ministry had said earlier.

Japan is one of Vietnam’s largest trading partners.

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Sunday, January 9, 2011

High gold price fails to deter shoppers

Demand for gold jewelry on the domestic market has not significantly changed despite the fact that the cost of gold has climbed to its highest ever level, according to industry experts.

"In recent days, we have had a large number of customers across the country," said General Director of Bao Tin Minh Chau Joint Stock Co Vu Minh Chau.

Chau added that as the wedding season approached, his company had seen no change in customer volume.

Sai Gon Jewelry Holdings Co (SJC) reported business had remained unchanged.

"The number of people buying wedding jewelry still remains high. However, the number of customers shopping for everyday jewelry is down 20 percent," said Tran Thi Ngoc Suong, head of SJC's Jewelry Department.

To maintain customer volume, gold companies have designed a variety of new products comprising less gold.

"Our company has introduced many new products. We cut down the gold weight so that more customers can afford them," said Chau.

He added that with only about VND1 million (US$52), customers could buy a wedding ring.

"We use modern technology, which helps us produce light weight gold jewelry," he added.

The company has also organized a number of discount promotional programs.

These new methods seem to be working for the gold companies, attracting large numbers of mid-income earners.

"It is a clever choice to buy cheaper wedding jewelry with good design when the gold price is so high," said Van Anh, a customer.

The price of gold on the domestic market has significantly increased. It climbed to VND31.64 million ($1.600) per tael (1.2 troy ounces) on Monday.

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ASEAN Summit helps increase intra-bloc strength

The ASEAN Summit to be held in Hanoi from October 28-30 will help consolidate the bloc’s economic strength, said ASEAN Secretary-General Surin Pitsuwan Monday.

He earlier said ASEAN will hold a high-level meeting with its leading trade partners, including China, Japan, the Republic of Korea and India .

The association also plans to organise a special high-level meeting with Russia , Australia , New Zealand and UN Secretary-General Ban Ki-moon, he added.

The meetings on the sidelines of the summit will include the fifth East Asian Summit (EAS) and the ASEAN Business and Investment Summit (ASEAN-BIS), he said, adding that the US and Russia Secretaries of State have been invited to attend the ASEAN Summit as observers.

According to the association’s leader, a master plan on ASEAN connectivity will be submitted to ten ASEAN leaders at the summit in Hanoi . The plan includes important policies on regional infrastructure development, especially in transport, energy and information technology, as well as people-to-people exchange activities through tourism, cultural exchange and education.

Meanwhile, the first meeting of ASEAN defence ministers with eight dialogue countries (ASEAN+8) scheduled for October 12 in Hanoi aims to encourage regional cooperation in security issues, including maritime security, anti-terrorism, peacekeeping, army medicine and disaster rescue, he said.

 

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ASEAN Summit helps increase intra-bloc strength

The ASEAN Summit to be held in Hanoi from October 28-30 will help consolidate the bloc’s economic strength, said ASEAN Secretary-General Surin Pitsuwan Monday.

He earlier said ASEAN will hold a high-level meeting with its leading trade partners, including China, Japan, the Republic of Korea and India .

The association also plans to organise a special high-level meeting with Russia , Australia , New Zealand and UN Secretary-General Ban Ki-moon, he added.

The meetings on the sidelines of the summit will include the fifth East Asian Summit (EAS) and the ASEAN Business and Investment Summit (ASEAN-BIS), he said, adding that the US and Russia Secretaries of State have been invited to attend the ASEAN Summit as observers.

According to the association’s leader, a master plan on ASEAN connectivity will be submitted to ten ASEAN leaders at the summit in Hanoi . The plan includes important policies on regional infrastructure development, especially in transport, energy and information technology, as well as people-to-people exchange activities through tourism, cultural exchange and education.

Meanwhile, the first meeting of ASEAN defence ministers with eight dialogue countries (ASEAN+8) scheduled for October 12 in Hanoi aims to encourage regional cooperation in security issues, including maritime security, anti-terrorism, peacekeeping, army medicine and disaster rescue, he said.

 

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HCMC: Small projects gain additional capital

In contrast to the decreasing trend in large-scale investment projects,
many small and medium sized projects in Ho Chi Minh City received
supplementary capital in September.


According to HCM City ’s Department of Planning and Investment
(HCDPI), an additional 169 million USD was injected into 65 FDI
projects, mainly in industrial production, services and retail, an
average extra investment of 15 million USD per project.


This positive sign confirmed the improved confidence of small and
medium investors in the Vietnamese market’s development potential and
stability.


The Yuki Vietnam Company, that
manufactures parts for industrial sewing machines, invested an
additional 5 million USD to expand its workshops and purchase new
machinery and equipment. This is the third increase in the company’s
capital since 1994, raising its total investment in Vietnam to 20
million USD.


According to their Managing Director
Tsunoda Shinji, the company’s annual revenue in Vietnam currently stands
at around 16 million USD and is expected to increase to 24-26 million
USD in the near future. Its products are exported to India ,
Bangladesh and Indonesia .


The company is
urgently applying for a permit to sell directly in Vietnam , he said,
adding that at present, around 50 percent of Vietnamese garments
businesses use Yuki sewing machines.


Besides Yuki,
the company Lotteria has also upped its investment by 7 million USD to
expand its network of fast food shops while the retailer Giant South
Asia has spent 15 million USD more on its warehouses and outlets.


However, this increase in production still faces several
difficulties, including a shortage of skilled workers. It requires
investors to have training plans 3-5 years before they decide to
increase their capital.


According to HCDPI’s
Deputy Director Lu Thanh Phong, in 2009, around 115 FDI projects in the
city, mostly small and medium sized, received extra investments of 317
million USD, up 1.8 percent against the previous year.


While holding the upper hand in attracting additional investments,
small and medium FDI projects have also recorded a rapid rate of
disbursement, said Nguyen Tan Phuoc, the Deputy Head of HCM City ’s
Export, Processing and Industrial Zone Authority./.

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