SBV licenses gold imports, gold prices slightly down

The State Bank of Vietnam officially licensed some local enterprises to import 10 tons of gold, or over 200,000 taels, pulling local gold prices down VND300,000 a tael to VND32.8million a tael on Thursday.

The gold import quota is 200-300 kilograms each, and the license will valid through next Tuesday.

Earlier, local gold prices climbed to its lifetime record high of VND33.2 million a tael after an brief ease back to VND32.7million a tael.

The enterprises were given quota for local gold-trading firms to import gold include Sai Gon Jewelry Holding Co (SJC), Phu Nhuan Jewelry Joint Stock Co (PNJ), Agribank Gold, Silver and Gemstone Co, and Sacombank Jewelry Co Ltd (SBJ) among others.

It is estimated that 36 tons of gold were exported in the first six months of the year, according to the General Statistics Office.

Domestic gold prices Wednesday soared to a new record of VND33 million per tael (US$1,690), an increase of VND1.4 million ($72) per tael over previously-quoted price, as speculators created a run on gold shops.

A tael is equivalent to 1.2 ounces.

The gold-selling districts in Hanoi and Ho Chi Minh City were thronged with people and saw prices change at least four times in the morning, with Sai Gon Jewelry Co (SJC), Sacombank Jewelry Co, Bao Tin Minh Chau, Agribank Jewelry Co and Phu Nhuan Jewelry Co quoting buy/sell prices at VND32.85/33 million.

Domestic gold prices have increased by over 24.4 percent since January, when prices stood at about VND26.5 million ($1,360).

The increase made domestic gold price be VND1 million ($51.28) higher than global gold price, which ignites concerns involving gold smuggling to take profits. Domestic price is normally just VND200,000-300,000 higher than global price.

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Developers focus on lower-cost housing

Property developers remain optimistic and are focusing on the medium –
and low-cost housing segments though demand has yet to recover from a
prolonged slump.

Hugo Slade, deputy director of market research company Vietnam Cushman
& Wakefield, said so far this year, 46 development projects with
8,550 apartments costing an average of 15.5 million VND per square metre
came into the market.

Developers continued to launch
their products despite low demand caused by high interest rates and
tortuous loan procedures for buying houses, he added.

According to the director of a property company who wished to remain
unnamed, since the market has been dull for two years, most developers
have run out of money.

Among those are Happy Plaza in Binh
Chanh District which consists of 600 apartments priced at 12.5
million-13.5 million VND per square metre and with an average size of
60sq.m.

Thu Duc Housing Development Joint Stock Co is
confident that the medium-priced apartment segment will continue to do
well for at least the next 10 years and has begun the Truong Tho
apartment project at an average price of 15.5 million VND per square
metre.

It has sold all 120 units in the first phase and kicked off sale for the second phase on September 24.

Van Phat Hung Joint Stock Co plans to initially offer 110 apartments in
its La Casa tower in District 7. It is building a total of 2,000 units
there.

Foreign property developers have begun to show
interest in the medium-priced segment unlike earlier when they were
completely focused on the luxury segment.

An executive at
Singapore-owned CapitaLand Co said the company will start building
apartments costing less than 20 million VND per square metre.

He did not mention a time frame but said it was to diversify the firm's offerings in the Vietnamese market.

Small apartments priced at 400 million VND - 800 million VND are the
most in demand, property brokers said, adding 80 percent of successful
housing transactions are in the medium – and low-cost segment./.

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Petrol stockpiled as imports continue

The quickest way to help lower stockpiles of refined petroleum products
produced by the Dung Quat Oil Refinery would be to minimise petrol
imports, PetroVietnam general director Pham Dinh Thuc said on Oct. 7.

Domestic petrol consumption has ended up 10 percent lower than
predictions for this year, while production at the Dung Quat Oil
Refinery was now exceeding the year's plan by 25 percent, Thuc said.

In the fourth quarter of this year, the refinery was expected to
produce about 1.9 million tonnes of petrol, while domestic petrol
distributors such as PVOil, Petec and Petrolimex have registered to buy
only 430,000 tonnes from the refinery.

As a result, stockpiles have reached 75,000 tonnes and are predicted to mount to 727,000 tonnes by the end of the year.

Domestic importers could revise their signed contracts to import fuel
and buy up the difference from Dung Quat, Thuc suggested.

However, Petrolimex deputy director Dam Thi Huyen said PetroVietnam
should anticipate petrol consumption needs in light of import contracts
already signed by domestic distributors, who would have to pay heavy
damages if the breached the agreements.

Thuc suggested these importers might be able to re-export products to other buyers, even if they can't break their contracts.

The Dung Quat Oil Refinery faced difficulties during its first period
of operation, and it had been expected to operate at only 80 percent of
initial capacity this year. PetroVietnam has urged importers to prepare
to receive locally-produced petrol in the near future./.

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Vietnam’s exports to US continue to rise

The US Department of Commerce has announced that Vietnam’s exports to the US in the first seven months of the year earned US$7.9 billion, an increase of 14 percent over the same period last year.

Garments and textiles lead amongst Vietnam ’s major export items to the US , making $3.2 billion, a year-on-year increase of 12 percent and followed by wooden products and furniture with $985 million, up 27 percent and footwear, $910 million up 9.6 percent.

Farm produce is still one of Vietnam ’s top five leading export items, ranking in $455 million, up 30.7 percent and seafood, $366 million, up 5.9 percent.

Also under the reviewed period, Vietnam’s imports from the US were worth $2 billion, an increase of 19.8 percent, bringing the import-export turnover between the two countries to $9.9 billion, an increase of 15.1 percent over the same period last year.

The Vietnamese Embassy’s Office of Commercial Bureau estimates that Vietnam’s export turnover to the US will hit $14.2 billion by the end of this year, a year-on year increase of 15 percent.

 

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Energy-saving products grow in popularity

Energy-saving air-conditioners and compactflourescent lights have
become more and more popular in the HCM City market, experts have said.

At the beginning of the year, local and international producers,
including Panasonic, Sanyo, Samsung and Hitachi, launched
inverter-technology products that save up to 20-60 percent of
electricity consumption.

From January to August, 546,654
air conditioners with a capacity of up to 15,000BTU have been sold in
HCM City. Of those, 35-50 percent used inverter technology, according to
figures compiled from electronic-goods shops.

At the HCM
City-based Wonder Buy electronic-goods centre, 35 percent of all air
conditioners sold were of the inverter type, while at Best Carings 60
percent of air-conditioner sales had inverter technology.

Like energy-savings air conditioners, compact-fluorescent lights that can help save power are also popular in the market.

Compact-fluorescent light bulbs, which can cut energy use from 40W to 38W, are widely on sale.

Customers are now becoming familiar with the use of compact-flourescent lights instead of the more common incandescent bulbs.

Five years ago, Dutch-based Philips Vietnam introduced
compact-flourescent lights to the market. Most of them can save at least
10 percent of electricity consumption.

Recently, the Dien Quang Company has also focused on making compact lights that can help save power.

Nguyen Thanh Toan of HCM City Power Saving Centre said total energy
savings would depend on the customers' use and other factors.

Toan said that, for instance, an air conditioner works of 9,000BTU
capacity and power consumption of 750W per hour could save up to 30
percent of electricity consumption.

Toan also said that some air conditioners could save up to 60 percent of electricity consumption.

The owner of the Cong Danh air-conditioner shop in Go Vap District said
the price of an air conditioner with converter technology is about 2
million VND – 3 million VND (100 USD) higher than other
air-conditioners.

But savings over the long run would compensate for the higher initial price, he added.

The price of compact fluorescent lights is not expensive, but it has
high quality and is popular with customers, according to the owner of
Huynh Nga electronic shop in the city's Thu Duc district./.

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Central bank may allow gold imports

Gold trading enterprises may be allowed to import gold if domestic
prices continue to surge, says the head of the State Bank of Vietnam's
Foreign Exchange Department Nguyen Quang Huy.

The statement was made on Oct. 7 after domestic gold prices soared in
the afternoon. One tael of gold (equivalent to 1.2 troy ounces) costs
33.05 million VND (1,690 USD), a record high.

"The central
bank may consider allowing dealers to import a suitable quota to
stabilise market prices in line with global changes," Huy said.

He added that the sudden surge in gold prices was caused by the
increase in global prices, which are now at a record high of 1,349 USD
per ounce. Speculation and psychological worries also likely effected
the inflation.

As of Oct. 7 afternoon, the price of gold
in the domestic market was 1 million VND (51.28 USD) per tael higher
than the global price.

"The imbalance between supply and
demand is making gold prices ‘crazy'," said Huynh Trung Khanh,
International Gold Council's senior consultant official in Vietnam. "The
supply is drying up."

In July, the State Bank allowed
enterprises to import seven tonnes of gold. However, dealers said the
volume was unable to meet the market's growing demand.

In
August, the Vietnam Gold Trading Association asked the central bank to
allow them to import more gold bars to process, but the proposal was
rejected.

The increase in the price of gold caused the US
dollar's exchange rate to increase to 19,850 VND on Oct. 7 from 19,750
VND on Tuesday./.

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Foreign investors boost City shares

Shares made only modest gains on the HCM Stock Exchange Oct. 7, on
sluggish trading totalling just 36.5 million shares, worth only 977
billion VND (50 million USD).

The VN-Index closed up just 0.29 percent to 462.05 points after reaching as high as 467 points earlier in the session.

Heavy purchases by foreign investors in many blue chips helped lift
some shares, such as software giant FPT, developers Hoang Anh Gia Lai
(HAG), Masan Group (MSN) and Vincom (VIC), insurer Bao Viet Holdings
(BVH) and Phu My Fertilisers (DPM), but decliners outnumbered advancers
overall by 163-58.

Foreign investors accounted for over
half of overall market value on Oct. 7, responsible for transactions
totalling nearly 11.5 million shares and worth about 473.5 billion VND
(24.3 million USD). They were net buyers by a volume of nearly 6.7
million shares and a value of 301.2 billion VND (15.4 million USD).

Beta Securities Co analysts commented that Oct. 7's market gains were
entirely due to heavy foreign buys in blue chips and were not
sustainable.

Strong fluctuations on the foreign currency
market drove several institutional investors to increase securities
investments to disperse risk, added analysts from Saigon Securities Inc.

On the Hanoi Stock Exchange, which saw less impact from
foreign investors, the HNX-Index declined 1.78 percent on the day to
close at 122.62.

The volume of trades dropped by 20
percent from Oct. 6's session to about 23 million shares, with a value
of nearly 539 billion VND (27.6 million USD).

Losers
outnumbered gainers by 208-76, with PetroVietnam Construction (PVX)
again being the most-active share on a volume of 2.7 million. PVX closed
down 0.44 percent to 22,700 VND (1.15 USD).

Of the 10
leading shares by capitalisation on the northern bourse, Bao Viet
Securities (BVS), Tien Phong Plastics (NTP), PetroVietnam Insurance
(PVI) and PetroVietnam Technical Services (PVS) rallied.

Dramatic hikes in gold prices and the rising value of the US dollar on
the black market has spooked many domestic investors over the stability
of the economy, said Bao Viet Securities Co analyst Nguyen Duc Thi.

"There is no positive news currently supporting investor psychology,
and the market has not given any signs of a stable uptrend," Thi said./.

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