Business briefs

• Vietnam’s exports this year may grow 19-21 percent while imports could rise 16-17 percent from 2009, said Le Van Duoc, director of the Industry and Trade Ministry’s Planning Department. Exports could rise 10 percent in 2011 to US$74.8 billion, while imports could increase 9.7 percent to $89.4 billion, creating a trade deficit of $14.6 billion, the Planning and Investment Ministry has projected.

• The government on Tuesday named a new chief executive officer for state-owned shipbuilder Vinashin, the fourth head of the group over the past two months. Truong Van Tuyen, former deputy general director of Vietnam Oil and Gas Group was appointed, replacing acting chief executive Nguyen Quoc Anh, who took the post on August 30. The two predecessors, Pham Thanh Binh and Tran Quang Vu, were suspended amid a financial investigation into the company.

• Major state-owned companies will receive a total capital injection of VND5.18 trillion ($265.9 million) to develop infrastructure projects in 2011, news website VnExpress reported on Tuesday, citing the Ministry of Planning and Investment. The capital includes VND3.5 trillion for oil and gas group PetroVietnam, VND45 billion for the Vietnam National Shipping Lines, VND1.33 trillion for Vietnam Railways, and VND215 billion for Electricity of Vietnam.

• The government has ordered the Ministry of Industry and Trade to take measures to reduce power cuts and ensure all power plants run at their full capacity. The ministry was also asked to supervise prices set by power producers in an attempt to make pricing more transparent.

• Inflation in Vietnam may rise 1.56 percent in the final three months of the year as commodity prices are stabilized, Hoang Trung Hai, deputy prime minister, said in a statement on the government’s website on Wednesday.

• Gold prices in Vietnam have exceeded world prices as investors accumulated the metal to repay bank loans taken out several months ago, which they had sold for cash, said Tran Thanh Hai, director of the Vietnam Gold Business Corp. Domestic gold prices hit a record VND33 million ($1,690) per tael on Wednesday, up 4.4 percent from the previous day. One tael is about 1.2 ounces of gold.

• The central bank may allow businesses to import gold to “stabilize the market” so that domestic prices will move closer to the international trend, online newswire VnEconomy reported, citing Nguyen Quang Huy, head of the State Bank of Vietnam’s department for foreign-currency management. Any imports will be based on a “suitable volume and timeframe,” the report cited Huy as saying.

• Air Mekong, a local private air carrier that has partnered with Skywest Inc., will start domestic flights on October 9, said Doan Quoc Viet, chairman of the carrier. The company will use four CRJ-900 aircraft produced by Montreal-based Bombardier Inc. for its flights.

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Easing of safety rules sparks lending rush

Local banks are taking advantage of the central bank’s recent relaxation of bank safety regulations to boost lending and meet the year’s credit growth target after a sluggish nine months.

The general director of a Ho Chi Minh City-based lender said the bank had faced difficulties in attracting deposits during the first nine months. Besides, it had to set aside reserves to meet strict safety requirements supposed to take effect this month.

Now that the rules have been amended, his bank wants to focus on lending, after posting a credit growth of only 5 percent over the last nine months, he said.

Do Minh Toan, deputy general director of the Asia Commercial Bank, said the bank will focus on businesses in the agricultural sector who are in need of funds to purchase rice and other crops. These clients can help increase the bank’s credit growth, he said.

Other bankers have said they are targeting corporate clients, especially exporters.

Dam The Thai, deputy general director of the HD Bank, said the competition between banks is getting harsh. His bank will slightly lower its lending rates this month to make sure it can retain and get more customers, he said.

The Vietnam Banks Association has asked members to reduce deposit rates to no more than 11 percent by October 15, according to a statement on the central bank’s website on Monday.

For non-term deposits and deposits of less than three months, the association asked commercial banks to make a bigger reduction to create a “suitable” interest-rate curve to attract long-term funds, according to the statement. Members were also asked to lower dollar-deposit rates and to cut borrowing costs to spur lending, according to the statement.

This call for interest rate cuts came after the State Bank of Vietnam adjusted safety rules last week, allowing banks greater scope to lend. Among the adjustments is permission to use 25 percent of non-term deposits made by businesses for lending, starting October 1.

Economist Le Tham Duong of the Ho Chi Minh City Banking University said dong-denominated loans have expanded at a slow pace so far this year. As a result, local banks will compete for clients in the next months, which will help bring interest rates down.

Duong said to speed up this process, the government should increase money supply and lower the yields on government bonds to less than 10 percent a year. When banks cut back their investments in government bonds, they would pay more attention to lending to businesses, he said.

The Vietnam Banks Association has requested that the central bank cut its refinancing rate, discount rate and interest rates in open market operations to help banks lower their interest rates. The central bank on September 27 set its refinancing rate at 8 percent and its discount rate at 6 percent.

Loans are estimated to have risen 19.5 percent in the January to September period. Vietnam has set an annual target of 25 percent credit growth for this year.

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Easing of safety rules sparks lending rush

Local banks are taking advantage of the central bank’s recent relaxation of bank safety regulations to boost lending and meet the year’s credit growth target after a sluggish nine months.

The general director of a Ho Chi Minh City-based lender said the bank had faced difficulties in attracting deposits during the first nine months. Besides, it had to set aside reserves to meet strict safety requirements supposed to take effect this month.

Now that the rules have been amended, his bank wants to focus on lending, after posting a credit growth of only 5 percent over the last nine months, he said.

Do Minh Toan, deputy general director of the Asia Commercial Bank, said the bank will focus on businesses in the agricultural sector who are in need of funds to purchase rice and other crops. These clients can help increase the bank’s credit growth, he said.

Other bankers have said they are targeting corporate clients, especially exporters.

Dam The Thai, deputy general director of the HD Bank, said the competition between banks is getting harsh. His bank will slightly lower its lending rates this month to make sure it can retain and get more customers, he said.

The Vietnam Banks Association has asked members to reduce deposit rates to no more than 11 percent by October 15, according to a statement on the central bank’s website on Monday.

For non-term deposits and deposits of less than three months, the association asked commercial banks to make a bigger reduction to create a “suitable” interest-rate curve to attract long-term funds, according to the statement. Members were also asked to lower dollar-deposit rates and to cut borrowing costs to spur lending, according to the statement.

This call for interest rate cuts came after the State Bank of Vietnam adjusted safety rules last week, allowing banks greater scope to lend. Among the adjustments is permission to use 25 percent of non-term deposits made by businesses for lending, starting October 1.

Economist Le Tham Duong of the Ho Chi Minh City Banking University said dong-denominated loans have expanded at a slow pace so far this year. As a result, local banks will compete for clients in the next months, which will help bring interest rates down.

Duong said to speed up this process, the government should increase money supply and lower the yields on government bonds to less than 10 percent a year. When banks cut back their investments in government bonds, they would pay more attention to lending to businesses, he said.

The Vietnam Banks Association has requested that the central bank cut its refinancing rate, discount rate and interest rates in open market operations to help banks lower their interest rates. The central bank on September 27 set its refinancing rate at 8 percent and its discount rate at 6 percent.

Loans are estimated to have risen 19.5 percent in the January to September period. Vietnam has set an annual target of 25 percent credit growth for this year.

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Seminar seeks ways to better ODA management

Vietnam needs to improve legal frameworks and institutions in its
efforts to better the use of official development assistance (ODA), said
an expert.

Head of an independent evaluation
delegation Marcus Cox put forth the suggestion at a seminar which was
held in Hanoi on Oct. 8 to get feedback about a draft report on the
performance of the Paris Declaration and Hanoi Core Statement on Aid
Effectiveness.

Cox recommended Vietnam build the capacity of sector-level managers and utilise more objective assessment tools.

The draft report pointed out the fact that Vietnam ’s national
development programme and its rapid growth have not relied on ODA aid
capital, but the nation is still facing a lot of challenges in terms of
institutions, making plans and decentralisation of power in ODA
management.

A number of delegates said the report
should give out specific figures and more detailed analyses of new aid
methods, refundable and non-refundable aid.

Meanwhile, a representative from the National Assembly Office emphasised
the necessity to enhance technical management rather than
administrative measures, saying it is one of the most effective way to
manage ODA.

The workshop was co-hosted by the Ministry of Planning and Investment and the Aid Effectiveness Forum (AEF).

Vietnam is one of 24 countries worldwide participating in the 2
nd phase of evaluation on the implementation of the Paris Declaration
on Aid Effectiveness./.

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Prince Andrew returns to deepen UK-Vietnam ties

HCMC - Prince Andrew will come back to Vietnam tomorrow to represent the United Kingdom at the 1,000th grand celebrations of Thang Long-Hanoi and to further speed up bilateral trade and investment relations with Vietnam.

The UK Embassy in Hanoi said on Thursday that Prince Andrew would visit Vietnam from tomorrow to next Wednesday in his capacity as the UK Special Representative for International Trade and Investment.

The Duke of York’s upcoming visit aims to raise the UK’s profile as a major trading and investment partner of Vietnam, about one month after the UK and Vietnam inked a strategic partnership to spur multi-faceted cooperation.

As scheduled, Prince Andrew will attend a gala dinner tomorrow and the parade at Ba Dinh Square the day after in Hanoi. As a guest of the Vietnamese Government, he will call on the country’s President and Prime Minister and be at a lunch hosted by Deputy Prime Minister cum Foreign Minister Pham Gia Khiem.

The dignitary will attend the opening of the British University of Vietnam and the launch of the Duke of York Scholarship as well as the inauguration of the Oxford University Clinical Research Unit at the National Hospital for Tropical Diseases, of Standard Chartered Bank’s latest branch and Savills’ new premises.

Prince Andrew will deliver the closing remarks at a seminar on public private partnerships to help promote the concept and the expertise of the UK as a provider of PPP solutions before traveling to HCMC next week to meet with municipal authorities.

In HCMC, Prince Andrew will have meetings with British companies on urban development, financial services and the oil and gas industry. Also on the agenda is a meeting with Vietnamese entrepreneurs, which also highlights further investment opportunities for British companies in Vietnam, and encourage Vietnam to regard the UK as the main business gateway into Europe.

Prime Minister Nguyen Tan Dung’s first-ever visit to the UK in March 2008 laid a firm foundation for further UK-Vietnam cooperation. Last year saw UK's imports from Vietnam reach some US$1.8 billion and exports to this country stand at about US$348 million.

The UK is Vietnam’s third largest European Union investor after France and the Netherlands, with 126 projects worth over US$2.2 billion as of June 2010, according to the Ministry of Planning and Investment.

Prince Andrew was in Vietnam in October last year to meet with Prime Minister Dung and other high-ranking officials and to launch the third UK-Vietnam Joint Economic and Trade Committee (JETCO) meeting in Hanoi.

He also visited Vietnam in 1999, 2006 and then 2008 when he witnessed a ceremony awarding local incorporation licenses to Standard Chartered and HSBC banks.

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Hundreds of companies told to register prices

HCMC – The Ministry of Finance has announced on its website a list of more than 150 companies that are required to register prices for their products in compliance with a circular on price stabilization.

The listed companies must register with the authorities the prices of their products, including imports in accordance with Circular No.122/2010/TT-BTC issued on August 12, and are obliged to stick to the registered prices.

In the list, there are seven companies providing dairy products for children under six, including FrieslandCampina Vietnam, Nestlé Vietnam Ltd., Mead Johnson Nutrition Vietnam and Meiji Vietnam.  

The list also comprises many manufacturers of cement, steel, liquefied petroleum gas, chemical fertilizer, plant protection chemical, veterinary medicine, salt, and sugar, and service providers like seaports and aviation.  

The ministry said it had made the list of the companies and sent announcements to them before the circular took effect on October 1.

The full list is available on the ministry’s website at http://www.mof.gov.vn/portal/pls/portal/docs/1080266.DOC.  

Earlier, Nguyen Tien Thoa, director of the ministry’s Price Management Department, was quoted on the Government’s website in September as saying that the circular did not contradict the country’s commitments to the World Trade Organization. The comment was made after foreign-invested companies and some ambassadors to Vietnam complained that the price management regulations would discourage investors.

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Grand celebrations, floods cause scarcity of air tickets

VALC gets fourth ATR72-500

HCMC - Air tickets for flights between HCMC and Hanoi have become scarce as demand for air travel on this route is rising because of the ongoing 1,000th birthday festival of Thang Long-Hanoi and flooding impacts in central Vietnam.

Vietnam Airlines on Thursday started to increase flight frequencies between the two biggest cities of Vietnam, especially those from HCMC to Hanoi, where the grand celebrations are taking place until October 10. For this reason, the airline adds 13 flights to this route until Monday.

The national flag carrier operated two more flights from HCMC to Hanoi on Thursday, five on Friday, one on each of Saturday and Sunday, and four more services from Hanoi to HCMC on October 11.

Besides the millennial celebrations, Vietnam Airlines has decided to increase frequencies because flooding in certain parts of central Vietnam has impacted travel by road and rail in the region, pushing the demand for air travel higher.

Vietnam Airlines said that with the extra services, it operated 32 daily flights on average on the HCMC-Hanoi route until Monday and offered 8,860 seats a day to the market.

Jetstar Pacific will not increase flight frequencies on the HCMC-Hanoi route as this low-cost carrier cannot arrange its aircraft reasonably on the fact that the demand is much higher for air travel from HCMC to Hanoi than the opposite direction on the same days.

A Jetstar Pacific executive told the Daily on the phone on Thursday that it had sold out all the air tickets for its flights from HCMC to Hanoi until October 9, and the tickets for the services on October 10 are running out. Almost all the tickets for the flights on the opposite direction on Monday and Tuesday have been booked.

Jetstar Pacific operates 10 flights between HCMC and the capital city, using Airbus A320s with 180 seats and Boeing 737-400s with 168 seats. The country’s second largest airline now has one Airbus and five Boeing aircraft.

Air Mekong cannot give much help in the air ticket shortage as the start-up airline will launch services this Saturday, with around two flights for the HCMC-Hanoi route using Bombardier CRJ-900s configured with 90 Deluxe and Economy-class seats.

The private airline is expected to receive an air operator certificate (AOC) from the Civil Aviation Administration of Vietnam in Phu Quoc Airport in the Mekong Delta province of Kien Giang on Friday, and announce its maiden services on Saturday.

Initially, Air Mekong will conduct 26 daily flights by four Bombardier CRJ-900s before increasing frequencies to 34 daily services flights on 10 domestic air routes to the airports in HCMC, Hanoi, Phu Quoc, Con Dao, Pleiku, Buon Ma Thuot and Dalat, and the central city of Danang.

* Vietnam Aircraft Leasing Join Stock Co. (VALC) on Thursday took delivery of a fourth ATR72-500 plane in France’s city of Toulouse as part of a batch of five aircraft of this type the local company already ordered from manufacturer ATR.

VALC will get the fifth ATR72-500 in December this year in the US$100 million-plus deal between the company and French Avion de Transport Regional (ATR). All the aircraft will be leased to Vietnam Airlines.

Tran Long, general director of VALC, said the company was completing procedures to receive 10 Airbus A321-200s from the European aircraft maker in 2012 and 2013. Again, these planes will be put into service by Vietnam Airlines.

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