Vietnam has no devaluation plans

HANOI - The State Bank of Vietnam has no plans to adjust the dong exchange rate against the US dollar, even though the dong's value has been dropping on the unofficial market, a state-run newspaper reported on Tuesday.

"At present the State Bank does not have any plans for exchange rate adjustment," Governor Nguyen Van Giau was quoted by the Sai Gon Giai Phong daily as saying, rejecting market rumors of a dong devaluation.

The central bank has devalued the dong three times since November and speculation of another devaluation has been putting pressure on the currency, making businesses reluctant to sell dollars.

Dollar demand has also been rising as businesses need the currency for loan repayments and importers need dollars for settlements.

However, the dong edged up to VND19,870/19,920 per dollar on the unofficial market on Tuesday morning from VND19,920/19,970 on Monday, while it was steady at VND19,490/19,500 on the interbank market, with the selling rate at the permitted ceiling.

Victoria Kwakwa, the World Bank's representative in Vietnam, told reporters on Tuesday that "we think that broadly the government has been moving in the right direction" on monetary and fiscal policy.

However, she said more could be done by the authorities to communicate their policy stance and give more information on indicators, so as to build up confidence in overall macroeconomic management.

This would help "address some of the left-over expectations of inflation and continued instability that are underpinning some of the challenges".

The Bank's lead economist for Vietnam, Deepak Mishra, said he expected pressure on the dong to ease over time, but how the market reacted would depend on the government putting forward a "credible road map" for dealing with the problem.

The International Monetary Fund warned in September that Vietnam needed to concentrate on maintaining the level of the dong, and said that repeated comments from the government about the need to lower lending rates was counter-productive.

"A lack of coordination between monetary and fiscal policies, or the appearance thereof, would amplify market skepticism," it said.

Related Articles

• Saigon-Hanoi charity caravan heads north
• Hanoi T&T win first V-League after scoreless draw
• Workshop calls for longer-term plans to audit State entities
• Technology transfers debated
• ASEAN women plan to expand economic power

Indices slip on sluggish trade

Shares closed off slightly for a second day on the HCM Stock Exchange,
with the VN-Index slipping by 0.17 percent on Oct.18 to end the session
at 457.59 points.

Trades continued sluggish, with only 26.4 million shares changing hands, worth just 686.5 billion VND (32.3 million USD).

Vietnam Mechanisation Electrification and Construction (MCG), the
most-active share on the day with 1.6 million traded, was also the day's
top gainer, closing up 4.8 percent as its shareholders commenced a
planned purchase of 3.2 million shares.

Buying by
foreign investors began slowing down, as they just picked only a net of
about 100,000 shares on the HCM City market, worth a net of 11 billion
VND (564,102 USD). They were net buyers on the Hanoi market, but by
a volume of just 354,100 shares, worth only 8.2 billion VND (420,512
USD).

On the Hanoi Stock Exchange, the HNX-Index
also fell for a second day, ending the session down 0.67 percent to
118.89 points.

The value of trades grew by 4.2
percent over Oct. 15 to 371.2 billion VND (19 million USD), on a total
volume of 17.3 million shares. PetroVietnam Construction (PVX) was the
most-active share on the northern bourse, with 1.7 million traded.

Ocean Bank deputy director Nguyen Hong Hai said that stock markets
were coping with shortage of new capital inflows as both major
institutional investors saw not many changes in market situation.

Tightened credit contributed to limit capital inflows, even as the
number of shares listed on the market was expected to continue
increasing through the end of the year, Hai said.

Vietnam International Securities Co analysts predicted that indices
would fluctuate with a narrow band this week, as economic fundamentals
were sound enough to prevent a steep dip in the market./.

Related Articles

• Cashew traders yet to embrace trading center system
• PM foresees bright future for co-operation with Africa
• Belarus keen to enhance ties with Vietnam
• Dung Quat refinery faces year-end surplus
• Technology transfers debated

Demand for accounting/finance personnel remains “hot”

Accounting/finance ranked third amongst the top five functions with the
highest demand for executive positions during the first three quarters
of 2010, reported Navigos Group.

Of the total
demand for accounting/finance manpower, 25 percent was for finance
managers and directors, 4 percent for finance controllers and demand for
chief accountants and accountants was a substantial 38 percent and 33
percent respectively, according to a recent research carried by the
leading and largest recruiting firm in Vietnam .

Navigos Group’s Managing Director Nguyen Thi Van Anh said, “The most
recent monetary downturn was witness to the growing influence and
control that chief finance officers and finance leaders have in guiding
businesses through troubled times.”

“No longer just
bookkeepers for their firms, accounting and finance professionals are
regarded as business partners, skilled in areas of divesting and
restructuring businesses, developing financial models and analysing
financial forecasts, as well as developing back office transaction
processes that support cast flow and drive efficiencies in so many
areas,” the director said.

Le Thi Hong Len, Country
Manager of the Association of Chartered Certified Accountants (ACCA),
added that changes in the roles of professional accountants and the
finance function itself are partly a consequence of the downturn, and
partly an outcome of a growing recognition of the value that the finance
function and professional accountants can add to an organisation.

Len quoted the findings of an intensive survey conducted by ACCA in
105 countries last March, in which nearly 70 percent of respondents
considered it very important for organisations to have a formal
programme to develop the best financial talent.

Up
to 75 percent of the respondents suggested that talent management was an
important component in addressing financial skills shortages prevalent
in many organisations.

Navigos Group and ACCA
jointly hosted a seminar “Accounting/Finance Talent in 2010” in Hanoi
on October 19 to update the most current trend and how best to recruit
and develop accounting/finance talent in Vietnam .

The seminar brought together approximately 200 chief executive
officers (CEOs), chief finance officers (CFOs), human resources
directors and managers from domestic and multinational corporations.

A similar seminar will be held in the southern largest economic hub of Ho Chi Minh City on October 21./.

Related Articles

• Greenback firmer on signs of rising demand
• HCM City falls short on entertainment
• Preparations for congress reviewed
• Party reports come in from provinces
• Banks scramble for mid-level managers

Swiss businesses eye Hanoi market

A delegation of 22 Swiss businesses headed by Baumgartner from Credit
Suisse AG, one of the world’s leading banking and financial service
providers, met with the Hanoi People’s Committee on October 18 with the
aim to seek out investment opportunities in the capital city.

The businesses mainly operate in finance, banking, import-export,
investment management, tourism, industrial production and real estate.

Nguyen Huy Tuong, Vice Chairman of the Hanoi
People’s Committee, briefed the guests on the city’s potentials and
strengths after it was expanded in 2008, saying the city’s investment
policies have reaped positive outcomes.

According to
the municipal leader, Hanoi encourages investors in banking,
finance, tourism, clean technology and brain-intensive industries.

The aforementioned areas are of Switzerland ’s strengths, he said,
stressing that Hanoi will create favourable conditions for Swiss
business to invest in the city.

During the meeting,
the Swiss businesses said they are impressed by the rapid development of
Hanoi and the capital’s 1,000 year-old culture.

Baumgartner said through the gathering, the Swiss businesses get
useful information regarding investment and other areas of their
interest./.

Related Articles

• Ship battles through Tammy Nguyen’s eyes
• Market moves up sharply
• Vietnam has no devaluation plans
• Chau Doc’s curried fish vermicelli: Bun nuoc ken
• Indices slip on sluggish trade

Dung Quat oil refinery operates effectively

The Dung Quat Oil Refinery in the central province of Quang Ngai
is running effectively, helping ensure national energy security, a
conference was told on Oct. 18.

A report presented by
Minister of Industry and Trade Vu Huy Hoang at the event showed that the
plant now can meet about 30 percent of the domestic demand for
petroleum and that it has created a breakthrough in economic development
in Quang Ngai, helping boost economic growth in the central region and
the country.

Dung Quat Oil Refinery started its operation in February 2009, becoming the first petrochemical complex in Vietnam .

In a draft report on the implementation of the National Assembly
resolution on the first refinery, the NA’s Committee on Science,
Technology and Environment proposed the NA to recognise the completion
of the project at its upcoming 8th session.

The
committee also proposed that the Government map out plans to raise the
refinery’s capacity in order to develop the petrochemical industry in
conformity with the schemes to develop the Dung Quat Industrial Zone and
the central economy./.

Related Articles

• Dung Quat refinery faces year-end surplus
• Blue seas and unspoiled beaches
• Discovering French culture in Saigon
• HCM City falls short on entertainment
• Visit hell then heaven

Importers hit as banks slap fees on dollar sales

Banks are demanding additional fees to sell dollars that take official rates almost to black-market levels, causing importers anguish.

Many complain that they are forced to pay VND19,850 - VND19,900 for a dollar while the official rate is only VND19,500.

A Ho Chi Minh City-based fashion firm owner told Tuoi Tre she plans to buy $1 million to pay for imports during the year-end peak season, but would have to pay service fees of VND400 million (US$20,500), meaning the actual dollar rate will be VND19,900 and not VND19,500.

A paper importer said he will lose some VND2.8 billion on a consignment worth $7 million this month.

Asked about the fees, several banks explained they buy dollars from exporters at negotiated prices that are quite close to black-market rates due to the dollar shortage. They earn just VND5-VND10 per dollar, they claimed.

In what is a double whammy for buyers, banks do not issue invoices for the fee. “If there are no invoices, the fees will be treated as profits and taxed,” a director of a paper import company said.

It is unclear where Vietnam will get its dollars in the remaining months this year, Lao Dong (Labor) newspaper said.

It ruled out gold exports as a source saying the country recently began to import three tons of the precious metal to meet surging demand.

Around 56 tons were exported in the first eight months for $2 billion.

Mounting demand for the greenback to repay loans that will fall due at the peak year-end season is also expected to put pressure on the dollar rate.

The Ministry of Planning and Investment forecasts the trade deficit to reach $10.1billion this year.

The Asian Development Bank revealed last Friday that Vietnam’s forex reserves are enough for eight weeks’ imports, adding that they may not rise by much in the last quarter.

The country’s traditional sources like foreign direct investment, portfolio investment, and overseas remittances have not seen robust growth, the newspaper added.

Related Articles

• SE Asia should 'de-dollarize', but slowly: experts
• ADB finds dollars dull SE Asian financial controls
• Greenback firmer on signs of rising demand
• Banks scramble for mid-level managers
• Deposit rates inch down to reluctant 11%

BP sells $1.8bln of assets to Russian JV TNK-BP

Photo: Reuters

LONDON/MOSCOW - BP has agreed to sell a package of oil and gas fields in Vietnam and Venezuela to its Russian joint venture TNK-BP for US$1.8 billion as the London-based oil major raises cash to pay for its Gulf of Mexico oil spill.

BP said in a statement on Monday that the assets represented reserves of 270 million barrels of oil equivalent and production of 40,000 barrels of oil equivalent per day.

The sale brings to around $11.5 billion the amount BP has agreed from asset sales in recent months. The company has a divestment target of $25 billion to $30 billion over the next 18 months.

Analysts said the price was in line with their valuations for the assets, which they added were not strategic for BP.

"This allows BP to high-grade its portfolio," Iain Armstrong, oil analyst at Brewin Dolphin said.

The deal also sees TNK-BP realize its ambition of growing outside Russia, where it is the third-largest oil producer.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Mikhail Fridman, TNK-BP's executive chairman and one of the four Russia-connected billionaires who own the other half of TNK-BP.

The sale also represents the latest pull-back by big western oil companies from Venezuela.

In 2007 US oil giants Exxon Mobil and ConocoPhillips pulled out of Venezuela following socialist President Hugo Chavez's demand for majority control of oil projects, and in March this year Royal Dutch Shell said it and others were shunning the country's licensing rounds.

BP remains in talks with potential buyers for its interests on the North Slope of Alaska, including Prudhoe Bay, and Argentina-based Pan American Energy, sources familiar with the matter said.

The assets are worth around $7 billion and $7.5 billion, respectively, analysts said.

BP shares traded up 0.2 percent at 426 pence at 0915 GMT compared to a 0.1 percent rise in the STOXX Europe 600 Oil and Gas index.

TNK-BP, which produced 1.89 million boe per day in 2009, said it would use its own funds to finance the acquisitions and expects the transaction to be completed by first half 2011.

In Venezuela, the company will buy 40 percent of Petroperija and 26.6 percent of Bouqeronin oil field projects, majority owned by Venezuela's state-owned PDVSA oil company.

It will also acquire a 16.7 percent stake in the Petromanagas upgrader project, which processes tar-like Orinoco heavy crude into lighter synthetic oil that can be processed by traditional refineries.

In Vietnam, TNK-BP will acquire BP's 35 percent stake in an offshore gas condensate project; a 32.7 percent stake in the Nam Con Son gas pipeline and a 33.3 percent stake in the Phu My 3 power plant.

All three of these assets form an integrated gas and power project with a production capacity of 30,000 barrels of oil equivalent per day, on a working interest basis.