VietinBank sells 10% stake to IFC

HCMC – Vietnam Bank for Industry and Trade, or VietinBank, on Sunday evening inked a cooperation deal with International Finance Corporation (IFC) including the sale of a 10% stake to the foreign institution at the value of US$190 million.

Pham Huy Hung, chairman of VietinBank, confirmed the information above with the Daily via the phone on Sunday.

In addition, the deal also includes a loan worth US$110 million from IFC to VietinBank with a term of ten years and interest rate equivalent to the Libor rate plus 1.5 percentage points a year, said Hung. After the stake transfer, the chartered capital of VietinBank will increase to VND21 trillion, or some US$1.05 billion, he added.

As of late June, the bank got approval from the State Securities Commission to issue 392 million shares, including 76.9 million shares to pay dividend existing shareholders and 315.1 million shares sold to shareholders.

Hung also told the Daily that by the end of this year, VietinBank will also sell another 15% stake to Canada-based Bank of Nova Scotia, bringing its chartered capital to about VND26 trillion.

VietinBank is the second State-owned bank of Vietnam going public after Vietcombank. It completed the initial public offering in July last year and then listed on the Hochiminh Stock Exchange under the code of CTG. The bank shares were traded at VND18,700 each last Friday, compared to VND40,100 each on the first trading day on July 16 last year.

In the first half of this year, VietinBank obtained nearly VND2.2 trillion in pre-tax profits.

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Ba Ria-Vung Tau says no to steel projects

HCMC – The southern province of Ba Ria-Vung Tau will not license new steel projects from now on as such projects consume much electric power and water, which proves a big burden for the locality, said a leader of the province.

Ho Van Nien, vice chairman of the province, told the Daily late last week that because the province is facing a severe shortage of power and water for industrial production, so it will definitely reject new steel projects in the coming years.

As observed by the Daily, Ba Ria-Vung Tau is having the most licensed steel projects in the country with 18 projects, including 10 projects outside the national master plan for steel industry development approved by the Government. Steel projects in the province have a total capacity of some 3.7 million tons of ingots and 3.3 million tons of other steel products.

Nien said that to cut down the unwanted steel projects in the locality, the province has just required related agencies to consider revoking four steel projects that are moving at a snail’s pace. However, he did not mention the names of the four steel projects that will possibly be cancelled in the coming days.

Nien said that the axe could fall on more steel projects beside the four just mentioned, adding that the provincial government would only retain those steel projects that produce high-grade products.

“In the time to come, the province will call investors for projects that consume less power and water due to the limited supply capacity in the province,” he said.

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Auto sales drop 17% in September

HCMC - Sales of locally assembled automobiles in Vietnam fell 17% year-on-year to more than 9,140 units in September, although it was up nearly 500 units from August, the Vietnam Automobile Manufacturers’ Association (VAMA) said.

VAMA reported that in September, sales of sport utility vehicles (SUV) and multi-purpose vehicles (MPV) were down 19% to about 1,980 units, while the number of passenger cars fell a staggering 21% to 2,754 units. The number of commercial vehicles sold also shrank 14% year-on-year to more than 4,400 units.

Toyota Vietnam saw a slight decrease in sales to nearly 2,630 units last month from more than 2,800 units a year ago, down 6%. However, it still led the market in sales, holding a market share of 28.8%.

Ford, Isuzu, Honda, Visuco (Suzuki), Vinastar (Mitsubishi), GM-Daewoo, Mercedes-Benz and Vinamotor all suffered a slump in sales last month. Isuzu Vietnam sold 133 units, down 46% year-on-year; Honda Vietnam just over 190 units, down 47%; Ford Vietnam 545 units, down 41%; and Mercedes-Benz Vietnam 225 units, down 18%.

However, domestic automakers, including Truong Hai and Vinacomin – Vinacoal, witnessed the sharpest sales increases in September. Truong Hai’s sales increased by 382 units, or over 21%, to 2,190 units, while the little-known automaker Vinacomin – Vinacoal saw sales climb up from 13 units to 23 units.

VAMA members sold nearly 78,180 units in the January-September period, down 3% year-on-year. The SUV/MPV vehicle segment was hardest hit with sales sliding a hefty 14% to more than 16,280 units. Toyota alone sold more than 21,600 units in the nine months.

Similarly, some 4,000 cars were imported to the country in September, worth US$90 million, according to the General Statistics Office (GSO) estimate. Compared with last month, the numbers marked a 20% decrease in volume and 2.17% decline in value.

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Auto sales drop 17% in September

HCMC - Sales of locally assembled automobiles in Vietnam fell 17% year-on-year to more than 9,140 units in September, although it was up nearly 500 units from August, the Vietnam Automobile Manufacturers’ Association (VAMA) said.

VAMA reported that in September, sales of sport utility vehicles (SUV) and multi-purpose vehicles (MPV) were down 19% to about 1,980 units, while the number of passenger cars fell a staggering 21% to 2,754 units. The number of commercial vehicles sold also shrank 14% year-on-year to more than 4,400 units.

Toyota Vietnam saw a slight decrease in sales to nearly 2,630 units last month from more than 2,800 units a year ago, down 6%. However, it still led the market in sales, holding a market share of 28.8%.

Ford, Isuzu, Honda, Visuco (Suzuki), Vinastar (Mitsubishi), GM-Daewoo, Mercedes-Benz and Vinamotor all suffered a slump in sales last month. Isuzu Vietnam sold 133 units, down 46% year-on-year; Honda Vietnam just over 190 units, down 47%; Ford Vietnam 545 units, down 41%; and Mercedes-Benz Vietnam 225 units, down 18%.

However, domestic automakers, including Truong Hai and Vinacomin – Vinacoal, witnessed the sharpest sales increases in September. Truong Hai’s sales increased by 382 units, or over 21%, to 2,190 units, while the little-known automaker Vinacomin – Vinacoal saw sales climb up from 13 units to 23 units.

VAMA members sold nearly 78,180 units in the January-September period, down 3% year-on-year. The SUV/MPV vehicle segment was hardest hit with sales sliding a hefty 14% to more than 16,280 units. Toyota alone sold more than 21,600 units in the nine months.

Similarly, some 4,000 cars were imported to the country in September, worth US$90 million, according to the General Statistics Office (GSO) estimate. Compared with last month, the numbers marked a 20% decrease in volume and 2.17% decline in value.

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Air Mekong starts maiden commercial flights

Passengers disembark from the Air Mekong’s plane as it lands on Phu Quoc Island last Friday - Photo: Dinh Dung

HCMC – Vietnam’s Air Mekong officially launched its maiden domestic commercial flights last Friday, taking its first step into the local airline market after two years of preparation.

The country’s third private carrier marked its presence in the market with eight domestic routes, including Hanoi – Phu Quoc, HCMC – Phu Quoc, and Hanoi – HCMC. There are also routes from Hanoi to Danang, Nha Trang, Dalat, and routes from HCMC to Danang, Nha Trang, Dalat, Con Dao, Buon Ma Thuot, Haiphong and Vinh.

The airline, which uses a red-headed crane symbol as its logo, uses four three-year-old Bombardier CRJ-900s, chartered from the U.S.-based Sky West Leasing Inc. to provide 26 daily domestic flights.

These planes are configured with 10 deluxe-class and 80 economy-class seats. Doan Quoc Viet, board chairman of Air Mekong, said at a ceremony to receive the Aircraft Operator Certificate (AOC) held in Phu Quoc Island last week that the carrier’s strategy was to expand its network to different destinations in the country.

An AOC is required for any air carrier to operation commercial flights. Viet explained the reason to have chosen Bombardier CRJ-900s for starting up business, saying that the jet-engine airplanes could land on almost all runways in the country thanks to their small size.

He said Air Mekong’s strategy was not to compete for market share by cutting fares, but rather by improving the quality of service. It operates as a traditional airline, concentrating on the segment of economy-class passengers.

The start-up carrier is upbeat about the maiden flights’ seat occupancy as the number of tickets booked for the first flights has gone beyond its expectation of 1,000 tickets launched in a promotion program, according to the chairman.

The airline offers a VND400,000 fare for a single trip from HCMC to Con Dao, Phu Quoc, Pleiku and Buon Ma Thuot, VND800,000 for a trip from Hanoi to HCMC, Dalat, Pleiku, and Buon Ma Thuot, and VND1.2 million for a journey from the capital city of Hanoi to Phu Quoc Island.

Viet said Air Mekong planned to increase its daily frequencies to 34 flights on 10 air routes next month, a time when demand for air travel begins to pick up within Vietnam. He also revealed the carrier’s expansion plan, saying that Air Mekong targeted to increase its fleet to 10 airplanes next year, and would offer international flights to some neighboring countries in the next two years.

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VN starts FTA talks with Customs Union members

The Free Trade Agreement (FTA) between Vietnam and the Customs Union
of Russia, Belarus and Kazakhstan will bring economic, trade,
service and investment benefits to all parties.

The
head of the European Market Department under the Ministry of Industry
and Trade, Dang Hoang Hai, made this claim to reporters on the sidelines
of the first session of the FTA research group in Hanoi on Oct. 11.

The meeting was an important start to allow the
parties to implement the next steps for the signing of the agreement, he
said.

He added that the FTA between Vietnam and the
Customs Union of Russia, Belarus and Kazakhstan would open up
prospects for a large free trade area and tighten the traditional and
strategic relations between them.

In his opinion,
Russia was interested in FTA with Vietnam as the Southeast Asian
country may develop a strategic position that helps Russia restore its
presence in Asia, particularly in the Southeast Asia region.

The
FTA enables Vietnam to boost its agricultural, seafood and garment
products to Russia , and Russia to export fertiliser, oil and gas,
atomic energy, heavy industry and cars to Vietnam .

“We
hope the FTA will help improve Vietnam-Russia trade ties,” Hai said,
adding that two-way trade between the two countries is expected to reach
3 billion USD in 2011 and 10 billion USD in the near future.

In order to boost strategic relations between the two countries, as
well as between Vietnam and the Customs Union of Russia, Belarus and
Kazakhstan , leaders of Vietnam and Russia agreed to sign an
FTA.

Following the roadmap, negotiations will cover three main issues of tariffs, service, plus investment and intellectual property./.

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Rice exports up in both quantity and value

The Vietnam Food Association (VFA) expects a boost in earnings from rice exports as world demand and prices surge.

VFA President Truong Thanh Phong said rice exporters have so far this
year earned 2.56 billion USD from exporting over 5.5 million tonnes of
rice, representing an increase of over 14 percent in value and almost 12
percent in quantity over the previous year.

Vietnam
is among a few major rice exporters to enjoy such a rosy situation,
with Thailand , India and Pakistan suffering a decrease in rice
exports.

Abnormal climatic conditions caused bad
harvests in many countries. Indonesia , for example, had to drop its
plan to export rice and was forced to import food instead due to bad
harvests. In September alone, the Islamic country imported 300,000
tonnes of rice from Vietnam and 200,000 tonnes from Thailand .

Rice reserves in Africa are depleting, pushing the continent towards
importing rice. Poor harvests in many republics of the former Soviet
Union have inflated world wheat prices and shifted some demand from
wheat to rice, causing more pressure on world rice prices, said
economists.

FOB prices for Vietnamese rice averaged
422.67 USD per tonne in the first nine months of the year, up by 16.43
USD year on year

Rice exporters have signed contracts
of 6.8 million tonnes against 6.5-6.6 million tonnes previously planned
for the whole year.

Enterprises are expected to sign
contracts for the export of an additional 3 million tonnes of rice and
ship another 2 million tonnes in the fourth quarter of the year.

As a result, Vietnam is likely to export between 7.2 and 7.5
million tonnes of rice this year, breaking its record of 6 million
tonnes in 2009./.

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