VietNam Business

Sunday, December 12, 2010

Vietnam offers huge potential success: U.S. governor

Washington state governor Chris Gregoire helps promote American potato among Vietnamese students at a KFC outlet in HCMC on Thursday - Photo: Kinh Luan

HCMC - Washington state’s governor Christine Gregoire said Vietnam’s expanding economy is promising substantial potential success in the future for American companies, particularly those from her state.

Gregoire stressed the point in response to the Daily’s question about American companies’ interest in this emerging economy at her meeting with reporters in HCMC on Thursday to review the trade mission of the Washington state in Vietnam.

“We believe that the economy of Vietnam is growing rapidly and has a huge amount of potential success in the future,” she said. “So, there’s significant interest from American companies to either have a plant or start a company here.”

The rising interest was demonstrated by the participation of around 60 business, agriculture and education leaders in the trade delegation led by Gregoire to Vietnam. “We are here to promote trade,” she said, adding the aim was to promote sales of the state of Washington’s products to Vietnam and help more Vietnamese products go to the state.

Gregoire told reporters that Washington state’s number one trading partner was China and that Vietnam was emerging in the state’s list of trading partners.

“We have identified Vietnam as one of the fastest growing… greatest opportunities for trade between Washington state and Asian countries.”

Pepper, rice, cashew nut, tea, coffee and furniture are among the Vietnamese products exported to Washington. Gregoire said one of Vietnam’s most popular fruit in the state was the dragon fruit. “We do not have it (dragon fruit) so we are importing it and it is becoming very popular.”

Gregoire said she was not able to give a specific number regarding trade between Washington state and Vietnam, but stressed the trade was very balanced regarding agriculture.

Last year, Washington exported almost US$1 million worth of frozen potatoes, US$5 million of apples, some US$11 million of beef and US$2.5 million of milk powder to Vietnam. Washington is the second largest grower of potatoes in the United States and the number one exporter of frozen French fries.

Gregoire said Vietnam agreed to open up the market to fresh Washington potatoes this summer and “we are here now talking how we actually take that position to make the work on the ground.”

She said her state wanted to promote two-way trade with Vietnam. “We want Washington people to enjoy dragon fruit and Vietnamese people to enjoy cherries.”

The Washington delegates explored opportunities in a wide range of business scopes in Vietnam, including education, healthcare and other services. As for education, Gregoire said four universities came this time to attract more Vietnamese students and promote student and teacher exchange programs between the state and this country.

“We believe that trade cannot be built on economics alone but has to be built on a foundation of mutual respect and friendship. The best way to do that is to share education and students so we can learn the culture and the language, and have a better foundation,” Gregoire said.

Some 1,200 Vietnamese students are studying at universities in Washington, Gregoire said.

Over the past four days, Gregoire had a number of meetings with government and business leaders, including that with Prime Minister Nguyen Tan Dung in Hanoi on Monday before she went to Hue on Wednesday for the opening of a primary school sponsored by Boeing.

Top 1,000 corporate taxpayers named

HCMC – Vietnam Report Co. and the online newspaper VietnamNet have announced the 1,000 largest corporate income tax payers in the country in the V1000 list.

The rankings, announced for the first time in Vietnam, aim to identify enterprises for outstanding business performance and significant contributions to the country’s tax revenue for three consecutive years.

Data used to do the rankings was collected from business results and individual data by Vietnam Report, and Taxation magazine of the General Department of Taxation along with domestic and foreign consultants.

State-owned groups and corporations, especially in the telecom sector, remained the biggest tax contributors with MobiFone and Viettel coming first and second respectively in the list, followed by those in the construction-building materials, real estate and banking industries.

The private sector made a significant improvement in the overall ranking as the number of private firms on the list is equivalent to that in the State-run and foreign-invested sectors.

The ranking also shows enterprises in Hanoi and HCMC still took the lead in terms of ranking and quantity that make up 22.5% and 37.6%. Major taxpayers in the southern provinces of Dong Nai and Binh Duong account for 7.8% and 6.8% respectively.

According to Vietnam Report, the local economy is still dominated by a few large corporations. The top 200 enterprises contribute up to 80% of taxes collected from the 1,000 firms.

Meanwhile, other State-owned conglomerates such as Vietnam Post and Telecommunications Group and Vinashin are not on the V1000 list due to their tax payments of below VND9 billion or tax arrears. The rankings are based on the total corporate income tax paid between 2007 and 2009.

Top 10 corporate income tax contributors

No Company name

1. Vietnam Mobile Telecom Services Company (MobiFone)

2. Viettel Corporation (Viettel)

3. PetroVietnam Gas Corporation (PVG)

4. Bank for Foreign Trade of Vietnam (Vietcombank)

5. Vietnam Oil and Gas Group (PetroVietnam)

6. Vietnam National Coal and Mineral Industries Group (Vinacomin)

7. Vietnam Bank for Agriculture and Rural Development (Agribank)

8. Vietnam Bank for Industry and Trade (VietinBank)

9. Prudential Vietnam

10. Phu My Hung Corporation

Vietnam sees share offerings booming

HANOI – The State Securities Commission (SSC) this year has approved the largest ever number of share offerings by listed firms, sparking concerns of oversupply.

SSC as of the end of July had permitted enterprises issue around VND61 trillion worth of shares while it was only VND19.3 trillion in the whole 2009, said Bui Hoang Hai, deputy director of SSC’s Issuance Management Department.

Hai told a seminar in Hanoi last week that SSC had approved nearly 500 share issue applications this year.

In the first six months of 2010 alone, SSC had allowed listed organizations to issue VND18.6 trillion worth of shares to the public, VND1.1 trillion for their staffs and VND25 trillion for strategic shareholders. In addition, there were VND717 billion of shares offered via auctions at the stock exchanges, VND50 billion of bonus shares and VND86 billion worth of dividend stocks.

Hai said that many enterprises are seeking to offer huge amounts of shares this year as they failed to do so last year due to poor profits. Meanwhile, commercial banks also want to offer shares to increase capital given new regulations requiring them to spur capital to at least VND3 trillion each or get disbanded.

However, due to the lack of transparency on the part of listed firms, stock investors may face risks.

The quality of information released by listed companied in Vietnam is still poor. Most enterprises have no specific and long-term issuance strategies and announce information barely at compulsory requirements, Hai said.

“Some information is not trustworthy and may cause misunderstanding,” Hai said. There are enterprises providing information of business results or share prices on the basis of non-standard calculations. “Few enterprises have responsibility for what they say in the announcements,” he stressed.

While some enterprises release information regularly, others have no official websites and rarely send notices to stock watchdogs. “I think that many investors cannot receive the information either,” Hai said.

Hai also noted that while share issuance in the world aims to attract capital from new investors, listed enterprises in Vietnam primarily offer shares to existing shareholders.

David Gerald, president of the Singapore Securities Investors Association, advised investors at the seminar to study the stock market thoroughly.

“Don’t join the market if you have no knowledge. You have to check the issuing companies,” he said.

“We have to create an equity market where investors have responsibilities, knowledge and bear the blame for their decisions,” Gerald added.

Other experts said transparent information and proper release via the media could help Vietnamese enterprises maximize the value in their initial public offerings (IPO).

According to SSC, Vietnam’s stock market capitalization as of the end of August reached VND650 trillion, or US$33.5 billion, equivalent to one-third of the country’s gross domestic product.