Dai-ichi Life Vietnam sees premiums up 51%

HCMC - Dai-ichi Life Insurance Company of Vietnam reported on Tuesday strong year-on-year growth of 51% in new business premiums to nearly VND230 billion (US$11.8 million) in the January-September period, almost the same as the total of last year.

The Japanese life insurer said its third-quarter premiums hit a high of nearly VND110 billion, giving it confidence in achieving the business target of 2010 and strengthening its position in the life insurance market in Vietnam.

“Our target for 2010 is to grow by at least 50% for new business sales premiums, and to earn higher profits than in 2009,” Takashi Fujii, chairman and general director of Dai-ichi Life Vietnam, said in a statement.

Fujii said the higher-than-expected business performance supported the company’s plans to continue sales office network expansion across the country and enhance the relationships with strategic partners.

Fujii credited the business success in the three quarters to the company’s big investment in infrastructure, new products to meet the diverse needs of customers, and the quality of customer service to match the demand.

Dai-ichi Life Vietnam is pressing ahead with a plan to expand its office network with emphasis on general agency offices. With 14,500 staff and agencies at 56 offices nationwide, the company is now serving more than 510,000 customers and ready for a bigger share of the market.

Dai-ichi Life Vietnam said it would focus on strengthening cooperation with partners in the banking industry and new investments as one of the ways the company was pursuing to improve its business efficiency.

Vietnam is the first foreign market for the Japan-based Dai-ichi Life Insurance Co. Ltd. to expand life insurance business by establishing a wholly-owned subsidiary. In January 2008, Vietnam’s Ministry of Finance allowed Dai-ichi Life Vietnam to increase its charter capital from US$25 million to US$72 million, after one year of its official operations in this market.

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Toyota Vietnam introduces new Corolla Altis

Toyota Vietnam president Akito Tachibana (2nd, R) and others pose for a photo at the launch of the new Corolla Altis version in HCMC on Tuesday - Photo: Quoc Hung

HCMC - Toyota Motor Vietnam on Tuesday introduced the new Corolla Altis 2010 equipped with technology comparable to high-end Toyota models.

Michihiro Sato, chief engineer of Corolla Altis, said the car had been improved by using the new ZR engine with Dual VVT-i and ACIS (Acoustic Control Induction System) and the new Super CVT-i (Continuously Variable Transmission) to provide smooth driving and fuel efficiency.

Altis 1.8CVT consumes 6.8 liters per 100km and Altis 2.0CVT consumes 7.2 liters per 100 km thanks to the engine technology.

“We do believe that with the advanced and dynamic character with power train and the cool and premium design, our customers will enjoy driving the new Altis,” he said.

In particular, the Super CVT-i also adopts 7-speed sports sequential shift which allows drivers to proactively control the speed ratio like a manual transmission.

The new Corolla Altis comes with three types – Altis 2.0V (CVT), Altis 1.8G (CVT) and Altis 1.8G (M/T) and four colors – medium silver metallic, silver metallic, beige metallic and black mica. It sells for VND675 to VND786 million per unit, including VAT.

Toyota Vietnam president Akito Tachibana said at the introduction of the automobile in HCMC on Tuesday that his company was looking to initially sell 550 units per month.

The new car will be available at the company’s dealer network nationwide from Wednesday.

The first Corolla Altis was launched in Vietnam in 1996 and to date total sales have amounted to more than 26,400 units, accounting for 54% of the market share.

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Typhoon Megi forces cancellation of Hong Kong-Vietnam yacht race

Flooding, typhoon hit tour operators

HCMC – The organizer of an international yacht race from Hong Kong to Vietnam has shelved the competition scheduled to take place on Wednesday.

The Royal Hong Kong Yacht Club said the VinaCapital Hong Kong to Vietnam Race had been canceled due to the approaching super typhoon Megi, which has battered the Philippines on its course to the East Sea.

The organizer said it regarded safety as the first priority for all its events, particularly for its international Category 1 Offshore events. It would be unthinkable to send the boats to stormy high seas, it said in a statement.

However, the organizer said that competitors and the club are fully supportive of running the race in the middle of next October. The date is expected to be set soon to allow international competitors to plan their racing calendars.

Vu Duy Vu, deputy director of the race’s local partner Saigontourist Travel Service Co., has confirmed the cancellation.

“We completed all preparatory activities for the race but we had to cancel it for safety reasons,” he told the Daily on Tuesday.

Earlier, the central Government had allowed Saigontourist Holding Company, the parent company of Saigontourist Travel Service Co., to combine with the foreign partner to organize the 656km race from Wednesday to next Wednesday.

The event has been taking place every two years since 2004.

* In related news, local travel firms said they have stopped selling tours to Quang Binh Province known for the World Heritage-listed Phong Nha-Ke Bang National Park which is home to the longest underground rivers and the largest caverns, as the severe flooding in the central region is still unpredictable.

“We have stopped selling tours to Quang Binh since last week. Tours to other destinations in the central region like Danang and Hue are still selling as normal but fewer tourists are purchasing such tours,” Tran Quoc Bao, head of the domestic department of Saigontourist Travel Company, told the Daily on Tuesday.

Tour operators said that the hardest hit provinces, including Quang Binh, Ha Tinh and Nghe An, are not favorite tourist destinations like others nearby such as Danang, Hue, and Hoi An, so flooding has left little impact.

However, tour operators are concerned about the bad impact of the new super typhoon Megi, which might prompt tourists to cancel all tours to the region.

Fiditourist already feels the impact, as the company on Tuesday received a request from a big group of tourists for cancellation of a tour of the coastal city of Nha Trang.

“The tourists’ final decision has yet to come but we will lose more if the tour is cancelled because Vietnam Airlines is asking for full charges of the cancellation,” said Nguyen Ngoc An, head of the domestic department of Fiditourist.

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Dollar rises to record vs dong on unofficial market

HCMC – The U.S. dollar surged to a new record high of VND20,000 per dollar on the unofficial market on Tuesday and as a result businesses are seeking to hold on to the greenback for fear of foreign exchange risk.

The dollar on the underground market on Tuesday afternoon traded at VND19,980 for buying and VND20,020 for selling, up VND50 from the previous day and VND170 from late last week.

Reportedly rumors that the central bank would continue devaluing the Vietnam dong were behind the dollar rally on the unofficial market on Monday. However, the central bank governor, Nguyen Van Giau, on Tuesday affirmed in Saigon Giai Phong newspaper that there would be no more dong devaluation but his message did not appease the market.

The central bank has yet to take a single move to ease the dollar fervor. Commercial banks on Tuesday quoted the dollar selling price at VND19,500 per dollar although no companies could buy the dollar at that price.

Corporate clients must now pay extra fees to buy dollars at banks, virtually appreciating the dollar versus the dong. 

There are no official reasons for the dollar jump but market watchers said shaky confidence in the local currency had led to volatility on the foreign exchange market, so any rumors could drive the dong down.

When the dong fell to VND20,000 per dollar, the dollar price in futures contracts on Asian markets on Tuesday afternoon was VND19,950 for one month and VND21,520 for one year.

There are signs that enterprises are holding on to dollar funds on their bank accounts. A source from the State-owned bank BIDV told the Daily BIDV’s dollar purchases had dipped strongly recently, because corporate customers declined to sell.

Individuals are also speculating on the dollar, the source said.

According to a report by the central bank’s HCMC Branch by late August, dollar purchases from enterprises accounted for 40% of the city-based banks’ total.

If enterprises had sold the dollar to banks last week, it would have lost VND500 for each dollar. Therefore, no one wants to sell dollars to banks given the continued price increase of the dollar on the unofficial market, the source said.

Meanwhile, companies having dollar debt are rushing to buy dollars for premature payment.

Outstanding dollar loans rose sharply in the first nine months of this year, and in HCMC alone, dollar credit expanded by a whopping 36.4%.

Dollar supply is in decline while dollar demand is sharply up, leading to a sudden imbalance on the foreign exchange market, the source said. However, the source affirmed BIDV could meet all legitimate corporate needs for dollars.

Meanwhile, the general director of a joint-stock bank told the Daily that dollar funds were ample but prohibitively high prices really mattered.

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PetroVietnam mulls purchase of BP assets

HCMC - Vietnam Oil and Gas Group, or PetroVietnam, is considering buying BP’s stakes in their joint projects in the country. 

Phung Dinh Thuc, director general of PetroVietnam, told the Daily via the phone on Tuesday about his company’s plan a day after BP’s announcement that it had reached agreement to sell its upstream businesses and associated interests in Venezuela and Vietnam to its Russian joint venture for a total of US$1.8 billion.  

TNK-BP, Russia’s third largest oil company, is owned equally by BP and AAR Consortium grouping Alfa Group, Access Industries and Renova.  

“On Wednesday they informed us directly of the agreement. They said TNK-BP has been up to now their only partner chosen to make direct negotiations, and suggest the Russian company as purchaser,” Thuc said.  

“BP has not let us know about the price of its stakes, but it’s certainly equivalent  to the price offered by TNK-BP. If the price is reasonable for us, we will make a decision to buy the assets,” the director general added.  

BP wanted to sell its assets in its Vietnam-based projects in a bid to make divestments of US$30 billion by the end of 2011 to pay for damages in the Gulf of Mexico oil spill.

However, PetroVietnam as a partner in such projects has some preferential rights, Thuc said, adding that within 60 days upon being informed of the agreement, the Vietnam group has the right to buy the stakes as well as to veto the deal.

Thuc explained the group could disapprove the deal if BP’s partner doesn’t have good technology and competence.

A representative of BP in Vietnam on Tuesday also confirmed the agreement, adding that BP needs regulatory approval from Vietnam’s Government to sell its assets in the country.  

BP said the deal with its equal joint venture will help retain an economic interest in these assets and ensure the interests of BP’s shareholders.  

BP’s stakes put up for sale include a 35% interest in offshore block 06.1, currently operated by BP, 370 kilometers offshore south-east Vietnam and containing the Lan Tay and Lan Do gas fields.  

In addition, BP has a 32.67% interest in the 370 kilometer PetroVietnam-operated Nam Con Son pipeline that transports gas onshore from the Lan Tay and Rong Doi fields, and a 33.3% stake in the joint venture that owns and operates the 739MW Phu My 3 power plant in Ba Ria-Vung Tau Province.  

TNK-BP has agreed to pay US$1.8 billion in cash for the assets. Under the agreement, TNK-BP will pay BP a total deposit of US$1 billion on October 29, with the balance due upon completion of the sale expected in the first half of next year.  

The agreement is said not to affect BP’s other business activities in Vietnam, including a significant lubricants blending and marketing business.

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Mekong Capital reduces stake in restaurant owner

HCMC – Fund manager Mekong Capital has announced that its Mekong Enterprise Fund II is in the process of selling part of its stake in Golden Gate Joint Stock Company, which runs the mushroom hotpot restaurant chain named Ashima, to a financial investor.

After the transaction, the fund will reduce its ownership in the company from 14.9% to 11.6%. The divestment results in a gross return multiple of 3.6 times and an internal rate of return of approximately 72.2% on the shares sold by the fund.

Chris Freund, managing partner of Mekong Capital said in a statement that the divestment was aimed to realize profits despite Golden Gate’s impressive growth.

“We are delighted with the performance of Golden Gate, which has grown from around five restaurants at the time we invested in April 2008 to around 30 now. We remain very excited about the long term future of the company, but as a lot of value had been created in a short period, we saw this as an opportunity to realize some of our profits while maintaining a stake in the company,” he said.

Golden Gate now operates six Ashima restaurants in HCMC and Hanoi. In 2009, the company launched a new product of conveyor hotpot express restaurant named Kichi Kichi to address the casual dining market segment.

By October 2010, Golden Gate had expanded the Kichi Kichi restaurant chain to 22 outlets in Hanoi, HCMC and Singapore.

The US$50-million Mekong Enterprise Fund II is a private equity fund focusing on equity investments in unlisted companies in Vietnam. The fund has completely disbursed its capital.

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Unusual cash stocks pressuring Vietnam's dong: WB

An unusually large amount of money held outside Vietnam's official foreign exchange reserves is continuing to pressure the dong while most other regional currencies strengthen, the World Bank said Tuesday.

"While many currencies are experiencing appreciation of their exchange rate, in the case of Vietnam the reverse is true," the World Bank's lead economist in Vietnam, Deepak Mishra, told reporters.

Vietnam in August devalued the dong for the third time since late last year, saying it was trying to control the trade deficit.

The official exchange rate is at VND18,932 per US dollar, down from VND17,034 or more than 11 percent since late November when the series of devaluations began.

In contrast, regional exchange rates are 10-15 percent stronger than before the 2008 global financial crisis, the Bank said Tuesday in its latest East Asia and Pacific Economic Update.

It said East Asia's success in leading the global recovery has attracted a surge of capital that has inflated the currencies, spelling a risk to exports and future growth.

Vietnam's recovery has also been rapid, but uneven, the Bank said. It noted "the current account deficit remains high and households and firms appear to continue to stockpile foreign currency and gold, putting persistent pressure on the local currency."

Mishra, in a briefing for reporters, said Vietnam has enough foreign exchange to pay for its current account deficit but "the real issue" is the amount of foreign exchange held in such forms as savings that are not with the State Bank of Vietnam.

This figure amounts to about 12 percent of gross domestic product (GDP), he said, adding: "That's the reason why there's pressure on the exchange rate."

But he said it is not easy to say the dong is necessarily overvalued.

In its latest report, the Bank estimated Vietnam's full-year real GDP growth at 6.5 percent, inflation at 8.0 percent, and a current account deficit of US$9.3 billion.

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