Seminar highlights Doha talks’ impacts on Vietnam

Photo: VNA

The Doha round of negotiations and impacts on Vietnam was the main topic of a seminar held in the central coastal province of Khanh Hoa on Friday.

The workshop, hosted by the Department of Multilateral Trade Policy under the Ministry of Industry and Trade, brought together more than 30 delegates, including businesspeople, managers and experts from both in and outside the country.

Prof. Claudio Dordi, chief consultant of the Multilateral Trade Assistance Policy Program Phase III (MUTRAP III), said if the Doha talks wrap up early, it will offer Vietnam chances to expand markets for its key exports such as garments.

It will also help the country narrow the gap between applied and compulsory tariffs and improve its regulations regarding anti-dumping and agricultural subsidies, Dordi said.

This view was shared by Deputy Director of the Department of Multilateral Trade Policy Luong Hoai Thai, who said Vietnam would gain more benefits if the Doha negotiations end soon.

Local businesses need to be clearly aware of the content of the talks, work out proper trade policies and revise their trade plans to make the best of new commitments to opening markets by WTO member economies, Thai added.

Participants also pointed out the fact that Vietnam might be ineligible to enjoy exemption regulations intended for new WTO members if the talks continue. Vietnam would also face more difficulties during negotiations as new issues arise, they said.

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Japan says further yen gains should be stopped

Foreign exchange broker stand in front of a television screen showing Japan's Finance Minister Yoshihiko Noda speaking to the media in Tokyo September 15, 2010.

Photo: Reuters

TOKYO - Further gains in the yen should be stopped and Japan will maintain close coordination with the US and UN if it intervenes in the foreign exchange market to curb its currency's rise, Japan's foreign minister was quoted as saying.

In an interview with the Wall Street Journal on the sidelines of a U.N. General Assembly meeting in New York, Foreign Minister Seiji Maehara said he did not expect joint intervention involving other countries.

Japan intervened in the foreign exchange market on Sept. 15 to curb the rising yen, which was at 15-year highs against the dollar. It was the first time Tokyo had stepped into the currency market in six years.

Maehara, in excerpts of the interview also published online late on Friday, said the yen had strengthened more than indicated by the actual strength of the Japanese economy.

"So with a very strong determination on the part of the Japanese government, any further appreciation of the yen should be stopped," Maehara, who has no direct responsibility for currency policy, was quoted as saying.

"Going forward, there may be a possibility for the Japanese government to show its very determined intent" to keep the currency from strengthening, Maehara was quoted as saying.

Tokyo would keep its economic partners informed of its actions, he was quoted as saying.

The dollar is trading at about 84.20 yen after falling to a 15-year low of 82.87 yen on Sept. 15, shortly before Japanese authorities intervened to stop yen strength from damaging a fragile economic recovery.

A sudden slide in the yen against the dollar on Friday stirred suspicions Japan had intervened for a second time this month.

But the yen later recovered and Japanese Prime Minister Naoto Kan said on Friday he was unaware of any new market intervention by Tokyo.

Kan, just re-elected as leader of the ruling party, faces a weak economy and a divided parliament, so is keen to be seen as proactive in efforts to curb the strength in the yen, which has hurt Japan's stock market and sparked the ire of exporters.

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Funding shortfall hits City highway

A plan to upgrade and expand National Highway 13, which connects HCM City with neighbouring Binh Duong Province, has been postponed due to a lack of capital. — VNA/VNS Photo Quach Lam

HCM CITY — A project to upgrade and expand National Highway 13 has been delayed because the city lacks capital to speed up work, a senior transportation official says.

Meanwhile, many transport companies have complained that the delay is costing them money because of heavy traffic congestion.

The highway is the main road connecting HCM City and neighbouring Binh Duong Province, and it receives a large number of vehicles, including container trucks, everyday.

The upgrade and expansion project was initiated to deal with the heavy traffic congestion on the highway.

However, the city lacks capital for this project because the number of infrastructure projects being implemented in the city are stretching its finances, said Bui Xuan Cuong, deputy director of the city's Department of Transport.

Duong Quang Chau, deputy investment director of HCM City Infrastructure Investment JSC, said the project included four sections.

In its first phase, it would upgrade the Binh Trieu 1 and 2 bridges. In the second, it would expand the highway section from the bridges to the Binh Phuoc intersection; construct a five-street intersection at the beginning of the highway; and expand the Nguyen Xi and Ung Van Khiem streets.

But the last three sections can be completed only if the Binh Thanh and Thu Duc districts finished site clearance work, for which they needed VND5 trillion (US$256 million) from the city budget. The city has allocated the two districts just VND500 million ($26,000) each for the 2010 financial year.

Meanwhile, the highway has become much more crowded since many vehicles are transporting materials to feed industrial park and processing zone construction in Binh Duong.

Dinh Nam Dinh, deputy chairman of the HCM City Cargo Transport Association, said many transport companies were hit hard by the congestion. "A vehicle used to make two trips from HCM City to Binh Duong and back each day, but now it takes three days to do this," he said.

Dang Duc Tiep, director of the Dang Tien Transport Company, said transport companies were suffering losses because cargo owners were levying fines for late delivery. The losses are huge when cargo from Binh Duong to HCM City is too late for marine shipment and we have to ship them by air, he said.

Cuong said capital for this project should be prioritised. The Department of Transport has so far attempted to reduce congestion on the highway by breaking up traffic in several directions, but such measures have not been sufficient to ease the problem. — VNS

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HCM City meets socio-economic targets

HCM CITY — HCM City has reached its socio-economic targets that were set during the first nine months of this year, city leaders told a meeting held in the city on Thursday.

According to figures from HCM City Department of Planning and Investment, the city GDP for the period is more than VND304.5 trillion (US$15.9 billion), an increase of 11.2 per cent over the same period last year.

The service sector accounted for 53.6 per cent, a surge of 11.2 per cent; industry and construction 45.5 per cent, a rise of 11.2 per cent; and agriculture 0.9 per cent, an increase of 6 per cent, compared to the same period last year.

Total revenue for retail products and the service sector reached VND270 trillion ($14.06 billion), a 31.2 per cent rise over the same period last year.

Other figures such as industrial and agricultural production value, tourism revenue, consumer goods and passenger transportation and banks' mobilised capital have surged considerably compared to last year.

During the first nine months, the total export turnover of the city, excluding crude oil, reached $12.126 billion, an increase of 10.7 per cent over last year.

However, the total import turnover reached nearly $15.5 billion, a rise of 12.6 per cent.

In addition, the total city budget reached nearly VND11.7 trillion ($600 million), an increase of 26.2 per cent.

Total investment capital reached VND95.2 trillion, an increase of 17.7 per cent.

At present, the city has 216 licensed foreign direct investment (FDI) projects with a total investment capital of more than $1.63 billion.

The city has attracted about VND46 trillion in Official Development Assistance (ODA).

During the last nine months, HCM City has offered jobs for 222,500 labourers, reaching 82.24 per cent of the target set.

The number of poor households has fallen to 7.1 per cent of the total population.

New targets

The city has proposed eight solutions to ensure socio-economic targets this year.

The city will continue to operate the programme to stabilise prices for essential products, and improve the management and oversight of the market in the city.

The city will also promote trade and urge companies to hasten the speed for disbursement of projects or works whose capital is sourced from the city budget.

It will continue to reform administrative procedures, creating the most favourable conditions for residents and businesses.

It will also ensure food safety and hygiene as well as disease prevention.

HCM City has also set a target for 2011.

For example, it will continue to increase the quality and competitiveness capacity of the economy in the context of global integration.

It will mobilise all parts of the society to invest in and develop infrastructure as well as protect the environment.

In 2011, it targets to increase the GDP by 12 per cent, exports by 11 per cent.

Total capital for socio-economic development will reach VND200.4 trillion, and the city budget will reach VND160.5 trillion. The city also aims to focus on foreign affair activities and improve the standard of living for its residents. — VNS

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Experience shared to make IPOs less exclusive

Photo: Reuters

Issuing shares in Vietnam differed from procedures in other countries as Vietnamese companies offered shares exclusively to existing shareholders rather than seeking new ones, said State Securities Commission at a conference in Hanoi on Thursday.

The SSC drew attention to this distinction at the at the "Steps preparing for a successful IPO of enterprises" conference jointly held by itself, the business and financial news Bloomberg and Singapore's Mileage Communications Group.

When collecting opinions of existing shareholders, almost all investors volunteered to buy additional shares, which led to successes for the majority of share issuers, said Bui Hoang Hai, deputy director of the SSC.

"This can be considered a method to force existing shareholders to buy additional shares," he added.

In other nations, shares are usually auctioned off to new shareholders, the public or strategic investors. To ensure success, issuers must then be transparent with all financial information and reports to demonstrate their potential and improve their image in the eyes of investors, Hai said.

Vietnamese enterprises actually did not pay much attention to how best to attract investors so as to make IPO successfully, he said.

To prepare for IPO, most companies only submit a prospectus and documents to meet the minimum requirements. "To make a successful IPO, companies need to map out long-term strategies," Hai said.

Nguyen Ngoc Canh, director of SSC's international co-operation department, said in the context of the slowed local stock market, firms were faced with many difficulties for their IPO despite profitable company performance.

Canh emphasized the crucial role professional consultants and securities firms play in helping issuers create transparent and comprehensive documents and financial reports as well as advising better management and business strategies.

"Issuers could publicize information in a timely manner and investors could understand more about their businesses, as a result they could auction shares or make IPO effectively," Canh said.

Yah Boh Tiong, chairman of Mileage Communications Group, advised firms to facilitate strong communication with shareholders, raise investor awareness of company profiles and business performance.

Strategies to improve companies' images should be undertaken carefully throughout three phases, including before IPO, leading up to IPO and post-IPO, Tiong said.

Chairman of the Singapore Securities Investors Association David Gerald said that it was essential to create knowledgeable investors through education and information, promote corporate transparency and corporate governance and safeguard investors' rights.

"Good corporate governance practices translate into good corporate performance," he said.

According to the SSC, the aggregate value of all shares issued to the public, employees, strategic partners and those auctioned at stock exchanges by companies in the first half of this year reached about VND74.96 trillion (US$3.84 billion).

The conference drew about 100 businessmen, security companies, as well as local and international experts.

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Consumer price index leaps 1.31% in September

HA NOI — The consumer price index in September soared dramatically by 1.31 per cent over last month, a leap that was three times greater than forecasts by the Market Watch Team.

The CPI rise sparked concerns that the year would end with a high annual inflation rate.

Do Thi Ngoc, an expert from the General Statistics Office, said the high increase in CPI this month was part of a trend in annual cyclical inflation fluctuations in Viet Nam.

On aggregate, the CPI rose 8.92 per cent over the last 12 months, and 8.64 per cent in comparison with the first nine months of last year.

Ngoc said two of the reasons for the strong increase in CPI during September were a rise of 2.32 per cent in food prices and a hike of 12.02 per cent in education services, while school fees increased by three to four times in 36 cities and provinces.

Another reason was an increase of 2.1 per cent in the depreciation of the Vietnamese dong compared to the US dollar, which in turn, hit a series of imported products, including construction steel, fuel and gasoline.

In addition, outbreaks of blue-ear pig disease also caused food and meat prices to soar.

A long National holiday spurred consumption and domestic tourism, a sector that saw price rises of nearly 0.8 per cent in food and restaurant services.

Gold saw a robust increase of 3.58 per cent in price this month, a rise of 37.39 per cent in comparison with the same period last year. Meanwhile, the US dollar increased 1.61 and 7.08 per cent, respectively.

Only post and telecommunications groups saw a decline in prices of 0.07 per cent this month.

Several provinces saw a high CPI, including Khanh Hoa (2.79 per cent); Thua Thien-Hue (1.89 per cent) and Can Tho (2.97 per cent).

The GSO's experts also predicted that from now until the end of the year, the CPI will fluctuate due to increases in essential commodities prices, a continuous depreciation of the Vietnamese dong compared to the US dollar and price hikes for input materials for production and import products.

Also, consumption will soar next month during celebrations of 1,000 years since the foundation of Ha Noi, along with Christmas and the new year. Therefore, CPI for the year will likely be higher than 8.5 per cent.

CPI rises in major cities

The CPI in HCM City increased by 0.97 per cent compared to last month, after two consecutive months of decline, according to the city's Statistics Office.

The city's CPI in September rose 7.59 per cent compared to the same month last year.

Since the beginning of the year, the CPI has increased 5.54 per cent.

September was also the only month of the year that the prices of all 11 commodity groups in the price basket increased against last month.

Of the 11 commodity groups, the education category saw the highest increase of 5.57 per cent as September is the traditional start of the new school year. Most schools have raised tuition fees for the new school year.

The culture-sports-entertainment sector had the second-highest increase with 1.51 per cent, followed by the transport with 1.13 per cent.

Meanwhile, the CPI in Ha Noi also increased by 0.96 per cent compared to last month, according to the Ha Noi Statistics Office.

Ha Noi's CPI in September increased by 9.05 per cent compared to the same period last year.

In September, gold prices were up 3.57 per cent over last month and the US dollar rose by 1.35 per cent against the Vietnamese dong.

Dr Tran Hoang Ngan, deputy rector of the University of Economics in HCM City, said that if the trade deficit was not managed more effectively, the time period between the rise of the US dollar against the Vietnamese dong would eventually become shorter, affecting macroeconomic stability, production and trade. — VNS

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FDI disbursement tops $8b first nine months

Vehicle parts production at the Taiwan-invested Viet Nam Precision Industrial No1 Co in northern Vinh Phuc Province. — VNA/VNS Photo Tran Viet

HA NOI — Disbursement of foreign investment during the first nine months of this year surpassed US$8 billion, an increase of 4.8 per cent year-on- year, according to the Foreign Investment Agency (FIA).

However, the disbursement which hit $800 million in September was $50 million lower than that of the previous month, and far behind the average disbursement rate of about $900 million for each month since the beginning of this year.

During the nine-month period, the nation attracted $12.19 billion in foreign direct investment (FDI), 87.3 per cent of the amount during the same period last year. Earlier, the country had set a target of drawing $22 to $25 billion in FDI this year.

Up to 720 new projects were licensed during the period, worth a combined $11.4 billion, an increase of 37.3 per cent over same period last year.

There was a decline in additional investment to existing projects, the FIA said, adding that 153 projects had registered to increase capital by a combined $783 million, only 13.8 per cent of the same period last year.

An FIA representative yesterday refused to make further comments on the drastic decrease.

Netherlands was the leading source of foreign investment in Viet Nam, investing $2.2 billion, followed by South Korea with $2 billion and the US with $1.87 billion.

The processing and manufacturing sector held the lion's share of FDI, gobbling up $3.65 billion, or 30.2 per cent of the registered total.

Business advantages were described as one of the main reasons for the large influx of FDI into the sector. The foreign-invested sector posted a nine-month export turnover of $27.4 billion, a year-on-year rise of 26.5 per cent or equivalent to 53 per cent of the country's total export value.

Meanwhile, FDI in the electric and gas production and distribution sector reached $2.94 billion, accounting for 24 per cent of all FDI.

With a high average investment capital of $150 million per project, the real estate sector ranked third in FDI attraction with $2.75 billion, making up 22.6 per cent of the total.

The southern province of Ba Ria-Vung Tau was the top destination for foreign investment, attracting $2.23 billion. It was followed by the northern province of Quang Ninh with $2.15 billion, HCM City with over $1.8 billion and central Nghe An Province with $1 billion. — VNS

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