VietNam Business

Saturday, January 1, 2011

Workshop increases Vietnam-India strategic partnership

Vietnam and India have a great potential for cooperation in services, pharmaceuticals, oil refinery, transport, agriculture, information technology, tourism, education and production of fine art articles, said a recent workshop in New Delhi.

Trade and economic ties between India and Vietnam have seen a rapid growth in recent years with two-way trade rising from US$489.2 million in 2003 to over $2 billion in 2009, participants stressed at the workshop entitled India-Vietnam strategic partnership: tapping potential for expanding cooperation.

The two countries expect to bring the bilateral trade to $2.55 billion this year. Vietnam’s exports to India are mainly tea, coffee, rubber, coal, computer hardware and electronic appliances, while its imports from India steel, livestock feeding, pharmaceuticals, machinery equipment, cotton, leather and textile products and pesticide.

However, participants stressed Vietnam and India have yet to fully tap their potential in trade and economic ties, urging the two countries to overcome existing difficulties, such as tax levels, customs procedure and transport.

iPhone 4 flies off shelf on first sales day in Vietnam

iPhone 4 flies off shelf on first sales day in Vietnam Apple’s latest iPhone completely sold out by Thursday morning when it was officially distributed in Vietnam for the first time.

Local telecom giants Vinaphone and Viettel said they imported only 500 phones each and this first batch was sold out completely after just a few hours, according to a report posted on the news website VnExpress.

Long lines of people waiting to buy the phone gathered in front of Vinaphone and Viettel stores in Hanoi and Ho Chi Minh City at around 7 a.m. As there were not enough phones to sell, many customers went home empty-handed and angry, VnExpress said.

Pham Ngoc Tu, Vinaphone marketing manager, said that demand was much higher than expected. He said his company will import another 300 phones next week.

The iPhone 4 was launched in the US in June. Although the smartphone has been available at phone shops around the country for months, it was only distributed officially in Vietnam via Vinaphone and Viettel for the first time this week.

Official prices are set at VND13.4 million for the 16 gigabyte version and VND15.6 million for the 32 GB model. Prices at these official outlets are VND2-3 million lower than prices at small-scale phone shops.

Vinaphone and Viettel began selling the previous versions 3G and 3GS of the iPhone in March.

iPhone 4 flies off shelf on first sales day in Vietnam

iPhone 4 flies off shelf on first sales day in Vietnam Apple’s latest iPhone completely sold out by Thursday morning when it was officially distributed in Vietnam for the first time.

Pham Ngoc Tu, Vinaphone marketing manager, said that demand was much higher than expected. He said his company will import another 300 phones next week.

Vinaphone and Viettel began selling the previous versions 3G and 3GS of the iPhone in March.

Business briefs

• Pledged foreign direct investment into property projects in Vietnam dropped by 12.7 percent in the first nine months from a year earlier, according to figures from the Foreign Investment Agency. Of the total US$12.2 billion committed foreign investment in the first nine months of this year, $8.05 billion has been disbursed.

• Banks have been slow in lowering interest rates because they are investing more in government bonds, said Nguyen Van Giau, the central bank’s governor. Banks can make profits from high yields on government bonds, he said. About VND48 trillion ($2.46 billion) of bonds have been issued so far this year, five to six times the usual amount over the same period in previous years.

• The Asian Development Bank said it has approved a $630 million loan to help reform Vietnam’s state-owned enterprises (SOEs). The multi-tranche facility aims to improve the efficiency of SOEs and enhance corporate governance to spur Vietnam’s economic growth, the Manila-based bank said in a statement.

• Loans in Vietnam by the end of September were estimated to rise 19.5 percent from the end of 2009, in line with an annual target of 25 percent credit growth. The projection was based on expansion of 19.27 percent as of September 27, State Bank of Vietnam Governor Nguyen Van Giau said. “Compared with the 25-percent target for 2010, (such growth) is not low,” he said.

• TNK-BP, BP Plc’s venture with a group of Russian billionaires, will make a proposal to buy BP’s share in an offshore natural gas project in Vietnam. BP, Europe’s largest oil producer by volume, plans to sell $30 billion of assets in 18 months to cover costs linked to the Gulf of Mexico oil spill, the worst in US history. BP said in July it plans to sell interests in the Nam Con Son gas project in Vietnam.

• The State Bank of Vietnam said on Wednesday it would relax compulsory reserve requirements for banks that made significant loans for agriculture or rural development as a way to mobilize funding for the countryside. Banks with loans for the agricultural sector or rural development totaling 70 percent or more of outstanding loans would only be required to hold 5 percent of normal reserve levels, which depend on deposit terms, it said in a statement.

• Commercial banks will reduce deposit rates to as low as 11 percent by October 15 from the current 11.2 percent after the central bank’s recent easing of lending rules, Duong Thu Huong, chairwoman of the Vietnam Banks Association. Banks will have greater scope to lend after the central bank said it would allow them to use 25 percent of non-term deposits made by businesses for loans.

• Vietnam will start planting crops for genetically modified food between 2011 and 2015 with the goal of increasing the planting area of crops like genetically modified corn, cotton and soybeans to 30 to 50 percent of the country’s total by 2020, based on a government directive in 2006.

Property investors dominate rich-list

Property investors dominate rich-list Most of the ten richest people on the Vietnamese stock market are real estate moguls.

Doan Nguyen Duc, chairman of Hoang Anh Gia Lai, reclaimed his top position on the list after falling to number two last year. As of Monday, his stockholdings were valued at more than VND10.5 trillion (US$541 million), according to data compiled by Thanh Nien.

Duc was followed by Pham Nhat Vuong, board member of both Vinpearl JSC and Vincom JSC, and Dang Thanh Tam, chairman of Kinh Bac Urban Development.

Three new investors who made their debut in this year’s top ten are also leaders of large real estate firms: chairman of Ocean Group Ha Van Tham, chairman of Phat Dat Real Estate Development Nguyen Van Dat, and chairwoman of Quoc Cuong Gia Lai JSC Nguyen Thi Nhu Loan.

Dat told Thanh Nien that he was happy to make the top ten. This meant his efforts so far have paid off and he is now recognized by shareholders and investors, he said. The goal for his company was to continue to expand its business and generate more profit, Dat added.

Analysts said the domination of property stock investors in the top ten meant that the sector still remains attractive. Meanwhile, some bank and technology stockholders lost their places in the list due to stock transfers and sharp declines in these stocks.

Together, the ten richest investors by stockholdings owned more than VND45 trillion ($2.3 billion) worth of stock, up 10 percent from last year. This is equivalent to 6.5 percent of the total capitalization of Vietnam’s stock market.

Two people in the top ten, Duc and chairman of Hoa Phat Group Tran Dinh Long (ranked fourth on the list), are the first private aircraft owners in Vietnam.

Economist Le Dang Doanh said it was normal to rank people based on their wealth in other countries, but it is a new trend in Vietnam, and hence some people were still uneasy about the practice.

“But I think it’s necessary to promote transparency,” he said. “Rich people should be acknowledged by society.”

Doanh said information disclosure will also improve the reputation of a company and give investors more confidence.

Vietnam has around 600 listed companies on two stock exchanges in Ho Chi Minh City and Hanoi. The exchanges’ total capitalization is equal to 40 percent of the country’s gross domestic product.

Economic growth accelerated in the third quarter, expanding 7.16 percent compared to 6.4 percent in the second quarter, according to figures released on Tuesday by the General Statistics Office.