Fakes hurt Japan’s Pioneer

Sales of counterfeit electronics, such as DVD players and car speakers, are hurting Japan’s Pioneer Corp., damaging its revenue stream and reputation in Vietnam, a company executive said this week in Ho Chi Minh City.

John Hideo Seki, Pioneer Electronics AsiaCenter Manager, estimated at least US$6 million in potential revenue was lost because consumers bought counterfeits. For every Pioneer product sold in Vietnam, at least 13 counterfeit Pioneer items were sold, he said. Marcus Loh, another company official, said counterfeits had been reported on a small scale a few years ago but it took Pioneer some time to consult local law firms and work with authorities to find evidence of the practice. Hoang Cong Son, director of the HCMC Market Monitoring Department, said counterfeits of many famous brands were sold rampantly across the city but his department was understaffed. Vietnam Intellectual Property Company, Pioneer’s authorized legal agent in Vietnam, said intellectual property violators could face a 15 year prison sentence. Reported by Minh Quang

DHL Vietnam gives $35,000 to charity on 20th anniversary

Global express and logistics leader DHL marked its 20th anniversary in Vietnam with a US$35,000 contribution to the country’s two leading charities Saturday.

DHL announced the gifts at a ceremony in Ho Chi Minh City. The two charities, the Operation Smile Foundation (OSF) and the Saigon Children Charity (SCC), share a common goal of offering disadvantaged Vietnamese children access to greater opportunities. While OSF aims to transform the future of thousands of children by providing operations to correct cleft lips and palates, the SCC helps underprivileged children receive a proper education, DHL said. In partnership with the two charities, DHL will sponsor OSF surgeries for twenty children and donate twenty bicycles to underprivileged children through the SCC. “As we mark our 20th anniversary in Vietnam, we wanted to extend our support to less privileged children in Vietnam,” said Tim Baxter, general manager of DHL-VNPT Express Ltd. “We are pleased to support the work done by the OSF and SCC, and hope that our overall contribution of $35,000 to various social projects will positively impact the lives of these children.” DHL, which commenced services in 1988, was the first international air-express company to serve Vietnam. DHL Express serves over 40 locations in Vietnam and has the largest network in the industry. DHL Worldwide and the Vietnam Posts and Telecommunications Group (VNPT) formed the DHLVNPT Express Ltd. joint-venture company in January last year. Reported by Tue Ly

Business seminar closes in Ho Chi Minh City

A two-day seminar for small- and medium-sized business leaders in Ho Chi Minh City, co-organized by the Australia and New Zealand Banking Group and the Saigon Entrepreneur Club, have wrapped up Friday.

The seminar, “Staff Motivation and Preparing-Analyzing a Company’s Financial Statement,” drew more than 200 CEOs from the city-based companies. The event aims to develop management skills such as strategic planning, leadership, marketing, branding and financial analysts through a series of training sessions with small- and medium-seized enterprise (SME) leaders. Phil Crouch, general manager for retail banking at ANZ Vietnam, said, “We realize the business life is really busy, challenging and complex and we would like to show how ANZ can contribute our part to somehow make it easier for Vietnamese businesses by organizing this compact, practical and highly interactive two-day training seminar.” Some 70 percent of 63,000 Vietnamese SMEs surveyed by the Ministry of Planning and Investment recently said they needed more capital to operate or expand their businesses. More than 60 percent said recruiting quality human resources was a major challenge while 55 percent said it was difficult to retain talented employees. Reported by Vinh Bao

Vietnam among Asia Pacific’s top five business destinations

Vietnam ranks third in a list of top destinations for business expansion in the Asia-Pacific region, according to a survey by a global real estate management firm.

In the Jones Lang LaSalle survey of firms in 15 Asia-Pacific economies, China topped the list of favored destinations, followed by India, Vietnam, the Philippines and Singapore. Indonesia ranked sixth in the list ahead of Malaysia, Australia, Cambodia, Japan, the Republic of Korea, Thailand and Hong Kong, the Jakarta Post reported. The newspaper cited the survey as saying that 83 percent of multinationals surveyed said they would increase or maintain their current growth rates in the Asia-Pacific region, while 28 percent plan to accelerate the growth of their operations in the region in the second quarter of this year. Source: VNA

Vietnam inflation likely to ease, JPMorgan, HSBC say

Workers at a construction site in HCMC. Consumer prices increase 26.8 percent in June from a year earlier, with construction materials jumping 23.7 percent. Inflation in Vietnam is likely to slow, JPMorgan Chase & Co. and HSBC Holdings Plc. said, as food prices moderate and economic growth slows.

The annual inflation rate in Vietnam jumped to 26.8 percent in June, according to government figures released Sunday, up from 25.2 percent in May. The figure has not declined since January 2007. Prices rose 2.1 percent in June from the previous month after increasing 3.9 percent in May from April. “The monthly rise was more subdued than the previous month, largely reflecting lower rice prices,’’ Matthew Hildebrandt, an economist at JPMorgan Chase in Singapore, said in a note late last week. “Month-on-month increases in inflation should be more moderate, paving the way for stabilization and then modest reduction in over-year-ago inflation later this year.’’ The monthly inflation figure should be lower in July than in June, wrote Pieter van der Schaft, head of Asian rates strategy at HSBC in Hong Kong. “We expect a further improvement in headline inflation, potentially to a flat month-on-month reading,’’ wrote van der Schaft, in a report dated Friday. There are “clear signs of a slowdown in headline inflation,’’ according to HSBC. The inflation rate will decline to below 10 percent by 2010, Prime Minister Nguyen Tan Dung said in an interview last week. Slower inflation as well as evidence of a declining trend in Vietnam’s trade deficit may ease investor concerns about an overheating economy, Standard & Poor’s has said. Vietnam’s trade gap expanded at a slower rate through June than through May, according to figures released recently by the General Statistics Office in Hanoi. The trade deficit will probably show more improvement in July, according to van der Schaft of HSBC, who cited a lifting of restrictions on rice exports amid expectations of a possible record harvest. Vietnamese rice exports rose 6 percent by volume through June to 2.51 million tons, and surged 99 percent by value to $1.51 billion, according to government figures. The June economic figures were “modestly positive,” and sentiment toward Vietnamese markets was also buoyed by the government’s decision to widen the daily trading band for the nation’s currency to 2 percent on either side of a daily reference rate, said Hildebrandt in his note. The widening of the dong band “suggests increased confidence by the authorities in their official rate,’’ Hildebrandt wrote. Han Ngoc Vu, Hanoi-based general director of Vietnam International Commercial Joint-Stock Bank, known as VIB Bank, said “This is a good move by the central bank,” “The Vietnamese government doesn’t plan to let the dong depreciate, therefore the country isn’t going to make any policy that may disrupt the economy.” Although inflation is still high, the lower pace of consumer price increases in June shows the government’s measures to curb inflation are beginning to be effective, according to Vu. “The government has reaffirmed its tight demand-management policies to control inflation,” Pham Do Chi, chief economist of Ho Chi Minh City-based Vina Capital Investment Management Ltd., also said via an e-mail to Bloomberg late last week. “Inflationary pressures may be less in the second half of this year, with less pressure from food prices, thanks to the confirmed good harvest this year.” Source: Bloomberg

Stocks rally as trade deficit growth slows

Ho Chi Minh Stock Exchange continued recuperating Friday as trade deficit growth slowed this month.

The VN-Index, a gauge of the 156 stocks listed on the HOSE, rose every day this week. It gained 6.13 points, or 1.58 percent, to close at 392.61 Friday. The nation’s benchmark index rose a total 7.3 percent this week and was the only exchange in Asia to gain Friday. Trading volume remained high with more than eight million shares as 95 index members rose and 39 fell. The most actively traded stock on the market by volume, Saigon Thuong Tin Commercial Joint-Stock Bank (Sacombank), jumped 2.9 percent to 21,600 on the day. “Slower growth in both inflation and the trade deficit has showed that what the government has been doing so far has worked,” said Vo Huu Tuan, head of the Ho Chi Minh City Bao Viet Securities branch. “It made the market bullish and sustained gains in stocks.” Vietnam’s trade deficit expanded to US$14.8 billion in the first half of the year from $5.2 billion a year earlier, the General Statistics Office in Hanoi said late Thursday. The figure represented a slowing of year-on-year growth as the shortfall had more than tripled year-on-year through May. Vietnam’s central bank Friday doubled the trading band for the dong against the dollar to 2 percent on either side of a daily reference rate. “The wider band has increased dong liquidity and made it easier for foreign investors to convert their money into the local currency to buy stocks,” said Tuan. Foreigners remain net buyers Foreign investors continued to buy more than they sold Friday. They spent VND47 billion ($2.8 million) on shares while notching up VND12 billion ($723,894) in sales. PetroVietnam Fertilizer and Chemical Joint Stock Company, PV Drilling, dairy Vinamilk, technology firm FPT Corp and rubber manufacturer Dong Phu were among their favorite stocks for the day. The Hanoi stock exchange also ended the week on an upper as the HASTC-Index edged up 0.76 point, or 0.68 percent, to close at 112,68. Source: TN, Bloomberg

Nordic group backs local firm

Danish group BankInvest signed a partnership agreement with the International Consumer Products (ICP) Company in Ho Chi Minh City Friday.

The asset managing group will invest US$9.6 million in the local firm, which will use the capital to boost production, distribution and develop human resources. BankInvest, which will also advise the local firm, will share profits with ICP. The ratio and details of the agreement were not announced. ICP has a chartered capital of VND110 billion, or $6.6 million. BankInvest, founded in 1969, launched two funds, Private Equity New Markets (PENM) 1 and 2 in 2006. The funds, with a total capital of $300 million, have invested in eight local businesses including AAA Insurance, Duc Thanh Wood, Vietnam Fan, Eurowindow and Kim Son Fashion. Reported by Minh Quang

Inflation at 26.8 percent, but growth less rapid

Consumer prices in June soar 26.8 percent higher than a year earlier. Inflation “will be brought down to a single-digit figure in 2009 or early 2010,” Prime Minister Dung says. Consumer prices accelerated for a 16th month in June, suggesting the central bank may need to increase interest rates further to cool inflation that is running at the fastest pace in Asia.

Consumer prices rose 26.8 percent from a year earlier, the biggest jump since 1992, from a rate of 25.2 percent in May, according to figures released Thursday by the General Statistics Office. But figures from the General Statistics Office’s website on Thursday also showed that inflation growth had slowed, with consumer prices rising 2.1 percent in June from a month earlier, compared with a 3.9 percent month-on-month increase in May. Vietnam’s interest rates are already the highest in the region after the central bank increased borrowing costs three times this year. Faster inflation is adding pressure on the government to take more steps to prevent surging global food and energy prices from worsening living conditions for the country’s 85 million people. “Vietnam’s consumer prices aren’t going to go down very quickly,’’ said Sebastien Barbe, a Hong Kong-based strategist for the investment banking unit of France’s Credit Agricole SA. “Inflation will remain in double digits for several quarters. We expect them to increase interest rates further, by another 2 percentage points.’’ Record oil and commodity prices are fueling inflation around the world. Crude reached $139.89 a barrel on June 16, while prices of grains such as rice, corn, wheat and soybean reached unprecedented levels in 2008. Food, rice Food prices jumped 74.3 percent in June from a year earlier and 4.3 percent from May, the statistics office said. Prices in a broader food category that includes rice rose 45.6 percent from a year earlier. The government, which has made fighting inflation its priority, on June 3 cut the economic growth target for this year to 7 percent from 9 percent as it tries to slow price gains. Vietnam is aiming for 2009 growth of as much as 7.5 percent, according to a statement posted on the government’s website June 7. Growth quickened to 8.5 percent last year, the fastest in more than a decade. Prime Minister Nguyen Tan Dung has pledged to tame inflation as he seeks to restore investor confidence after the nation’s benchmark stock index lost more than half its value this year. Inflation “will be brought down to a single-digit figure in 2009 or early 2010,” Dung said in an interview to Bloomberg Television in Washington late Thursday. The government, which caps gasoline prices to keep fuel affordable for Vietnamese, won’t raise fuel costs in June and will take into account global crude levels when deciding on any increase in July, Finance Minister Vu Van Ninh said on June 15 at the World Economic Forum on East Asia in Kuala Lumpur. Capital controls The State Bank of Vietnam weakened the dong by 2 percent on June 11 to prevent currency speculation and raised interest rates to 14 percent from 12 percent to cool inflation. Stocks have slumped almost 60 percent this year, the world’s worst performance, and the dong is set for its biggest drop since 2001, falling 3.8 percent. Vietnam’s “extensive’’ capital controls and the management of its currency would prevent overseas investors from fleeing the nation even as inflation accelerates and economic growth slows, Ping Chew, the Singapore-based head of Asian sovereign and corporate ratings at Standard & Poor’s, said last week. The central bank announced Thursday that it would double the trading band for the dong. Starting Friday, the currency will be allowed to trade up to 2 percent on either side of a daily reference rate the central bank sets for the dong against the dollar. S&P was the first of three ratings companies to lower Vietnam’s credit outlook to negative, saying the country’s overheating economy was a risk to stability. Prices in the category that includes construction materials jumped 23.7 percent in June from a year earlier and 1.9 percent month-on-month. Prices in the category that includes transportation climbed 14.9 percent year-on-year. Source: TN, Bloomberg

Watchdog sounds alarm on electronics counterfeits in Vietnam

Fake electronic products, mostly from China, have become a headache for Japanese Pioneer Corporation in Vietnam, according to a local intellectual property consulting company.

Many counterfeit electronic goods, including automobile speakers and DVD players, are being sold under Pioneer name in Ho Chi Minh City, Nguyen Thi Huong, managing director of Vietnam Intellectual Property Joint-stock Company (VNIP), said. VNIP serves as Pioneer Corporation’s authorized legal agent in Vietnam. Huong said her company will hold a press briefing in HCMC to inform customers about the issue and consult them on how to distinguish between genuine products and counterfeits. The city’s Market Monitoring Department last month discovered that many shops in districts 5, 10 and 11 sold Pioneer replica products, she said. In one investigation, the agency unearthed 71 copycat automobile speakers in the shop of Kim Dung Company in District 5, and 185 cartons of Pioneer stickers in the company’s store in District 1. Huong said her firm conducted a survey and found that 15 of 20 shops in District 10’s Nhat Tao Market, a major wholesale electronic site, sold counterfeited Pioneer products. Most of the counterfeits are smuggled in from China, she said. There are reports alleging that counterfeits were made in Vietnam but her company has not found sufficient evidence to back the claim. Counterfeit products of many other famous electronic manufacturers could also be found in Nhat Tao Market and other open markets and shops in Vietnam, she said. The problem arose on a smaller scale several years ago, but has been worsening ever since, Huong said. She called on producers to take swift actions to prevent the issue from getting further out of hand. Reported by Minh Quang

Private investors want loans for infrastructure projects

The main contractor for the Phu My Bridge, which will connect HCMC’s districts 2 and 7, is a foreign consortium. Private companies feel that loan restrictions are leaving them out of big infrastructure projects, said participants at a seminar Wednesday.

Vu Quang Hoi, Chairman of the Binh Minh Import Export Production and Trade Co., Ltd. (Bitexco), said Vietnam’s most realizable infrastructure projects have been handed to state-run companies. Hoi said Vietnamese authorities do not allow private companies to access preferential loans from official development assistance (ODA) or loans from the Asian Development Bank and the World Bank (WB). He also said that the Vietnam Development Bank, which specializes in loaning for infrastructure projects, has set strict conditions and limits on loans for private enterprises. The bond market is also underdeveloped, said Hoi. Nguyen Khac Than, deputy general director of the Bank for Investment and Development of Vietnam (BIDV), said private companies want to have the same “rights” as state companies. A more competitive environment, a more perfect legal system, and a stable economy would be important factors to attracting private investment in infrastructure projects, Than said. WB representative Kamran M. Khan said the government should focus on developing the finance market and make clear all investment regulations. Hoi from Bitexco proposed that private enterprises investing in infrastructure projects be given the chance to apply for preferential loans from international finance organizations. He also said the Vietnam Development Bank should boost infrastructure development loans to private companies. BIDV’s Than said capital from the state budget, ODA, and government bonds would meet only 20-30 percent of the average yearly demand for infrastructure projects between now and 2020. The Ministry of Transport said in a recent report that it expected to need nearly VND166 trillion (US$9.99 billion) annually for its projects between now and 2020. It said the projects included the North-South High-Speed Railway, existing railway upgrades and local port improvements. The seminar was held by the Finance Ministry, the Ministry of Planning and Investment and the World Bank. Reported by Xuan Toan

Vietnam, US welcome burgeoning economic ties

US President George W. Bush (R) listens to Vietnam’s Prime Minister Nguyen Tan Dung during their meeting in the Oval Office of the White House in Washington on Tuesday. US President George W. Bush applauded Vietnam’s efforts to address its economic problems and called for bolstering the already strong bilateral trade at a meeting with Prime Minister Nguyen Tan Dung Tuesday.

Speaking to the press after their talks Tuesday (US time), he announced the two countries have agreed to begin talks for a bilateral investment treaty. He hailed the strides the Vietnamese government has been making toward containing inflation, which touched 25.2 percent year-on-year last month, and stabilizing the economy. Bush also fondly recalled his visit to Vietnam in November 2006 for the Asia-Pacific Economic Cooperation (APEC) summit, where he and his wife were welcomed with warmth and hospitality. PM Dung too appreciated the warm hospitality the Vietnamese entourage has received during its current visit. Treaty talks to boost trade With the two countries set for talks on the bilateral investment treaty, the accord is believed to “build on the already strong economic ties between the US and Vietnam, one of the fastest growing markets for US exports,” AFP quoted US Trade Representative Susan Schwab as saying. She said further that, once wrapped up, it would provide US investors in Vietnam key legal protections and enhanced market access with “important direct and collateral benefits for US exporters and consumers alike.” Also on Tuesday, Dung witnessed together with US Commerce Secretary Carlos Gutierrez the signing of several contracts and agreements. They would provide “expanded access for US companies to Vietnam’s growing market,” AFP cited the Commerce Department as saying. According to AFP, a memorandum of cooperation was also signed between Vietrade, the Vietnamese trade promotion agency, and the US Foreign and Commercial Service. The Commerce Department said the new business deals support jobs in the US and further increase US exports to Vietnam, which grew almost 73 percent in 2007 and more than 133 percent year last April from a year ago. American companies signing contracts with their Vietnamese counterparts were aluminum giant Alcoa, electronic communications manufacturer Motorola and travel technology firm Sabre Holdings. Alcoa and Gannon were among the 23 American companies that accompanied Gutierrez’s business development mission to Vietnam last November. Alcoa signed an agreement with Vietnam National Coal-Mineral Industries Group for developing the Vietnamese aluminum industry. Motorola and Vietnam Posts and Telecommunications Group signed contracts worth US$28 million for the expansion of a GSM mobile phone network across 12 northern Vietnamese provinces. Sabre Holdings and Vietnam Airlines signed a definitive memorandum of understanding for the purchase of an Internet-booking engine, e-commerce solution and a passenger services system. Two US companies received investment licenses for joint ventures: SSA Marine, for container terminals, and Gannon International, for a brewery and bottling facility. Other activities Also on Tuesday, Dung and his entourage met with leaders of the Republican and Democratic parties, the House Speaker Nancy Pelosi, Secretary of Defense Robert M. Gates and other officials from business groups and associations. Dung also spoke by telephone with John McCain, the presumptive Republican presidential nominee and senator, and held a meeting with visiting Filipino President Gloria Arroyo. On Wednesday, Dung held a meeting with overseas Vietnamese in the US, whom he described an integral part of the country. Vietnam and the US normalized diplomatic ties in 1995 and trade relations in 2001. Bilateral trade rose 30 percent last year to $12.5 billion. Dung’s began his four-day visit to the US on Monday. Last year, President Nguyen Minh Triet became the first head of state of reunified Vietnam to visit the US since the end of the Vietnam War. Former PM Phan Van Khai became, in 2005, the first government leader to visit the former foe. In 2000, Bill Clinton became the first US president to visit Vietnam since the war ended in 1975. SOME SIGNIFICANT POINTS IN THE JOINT COMMUNIQUÉ ISSUED BY THE TWO COUNTRIES: The two sides were unanimous about setting up a new dialogue mechanism on strategic issues pertaining to the economy, education, science, defense and security. Bush reiterated the US’ support for the sovereignty, security and territorial integrity of Vietnam. Besides the planned bilateral investment treaty, he said, the US would also seriously consider Vietnam’s proposal to participate in the US’ Generalized System of Preferences scheme. The US confirmed it is considering importing dragon fruit from Vietnam in the near future. The two sides agreed to increase cooperation in searching for soldiers missing in action (MIA) during the Vietnam War as well as cranking up support for victims of Agent Orange. The US promised to support Vietnam in developing education and combating climate change and rising sea levels. Source: Agencies

Fund may stabilize domestic oil and gas prices

Vietnam may allow a fund to stabilize domestic oil and gas costs because of “unpredictable increases” in global fuel prices, the Ministry of Industry and Trade said.

The government will help oil and gas companies to set up the fund at an appropriate time, Hoang Tho Xuan, director of the Domestic Policy Department at the ministry said Monday from Hanoi. “The budget will come from the businesses themselves, not from the state,’’ he said. In the statement, the government also ordered that the prices of electricity, clean water and bus fares be “kept stable” until the year-end. Source: Bloomberg

Dong loan demand seen weakening on high interest rates

Demand for dong loans is expected to decline in the next three months as businesses and consumers, strained by record high interest rates, start to cut back on spending, bankers have said.

“Companies with good performance on average can make only 20 – 30 percent earnings before interest and taxes, so few can afford to pay 21 percent in interest to the banks,” an analyst at Habubank in Hanoi said. “We are seeing a declining trend in new dong loans in the next three months as companies and consumers are forced to delay new projects or purchases,” he added. Most banks this week are charging 21 percent interest on dong loans, the ceiling rate regulated by the central bank, after it raised the base rate for the dong three times, taking it to 14 percent as from June 11. The base rate is used by banks to calculate dong loans and deposit rates. “Some banks have to pay as much as 19 percent per year to raise dong funds from deposits so they have to charge more to stay in business,” one banker at a foreign bank in Hanoi said. The central bank said in a weekly market report that most banks were now offering 17-18 percent for dong deposits. Outstanding bank loans in Vietnam were likely to be 20 percent higher at the end of the first half than a year earlier, but monthly loan growth would slow to 1.22 percent in June, according to a central bank report. The central bank, or the State Bank of Vietnam, did not give the credit growth for the first half of 2007 but loans surged 54 percent in the whole of 2007, so the 20 percent growth so far this year shows a dramatic fall after three rate increases since January by the central bank. The dong rose 0.1 percent to 16,603.00 Tuesday from 16,614.00 close Monday, according to data compiled by Bloomberg. The State Bank of Vietnam set a rate of 16,451 a dollar, compared with 16,452 Monday according to its website. The currency is allowed to trade up to 1 percent on either side of that rate. The dollar has gained nearly 20 percent over the past three months on the unofficial market, such as in gold shops, where residents buy and sell foreign currencies, as concerns rose over the government’s ability to cope with a record high trade deficit and double-digit inflation at 25.2 percent last month. Vietnam estimated its trade deficit would more than triple to $16.9 billion in the first half of this year as imports soar 64 percent. The central bank weekly report said the bank would continue this week to “undertake measures to stabilize the foreign exchange market.” The dong has now fallen 2.04 percent against the dollar since the end of 2007. The government’s stated policy is to allow the dong to rise or fall by up to 2 percent against the dollar in the whole of 2008. Source: Reuters

Vietnam PM arrives in the US

Prime Minister Nguyen Tan Dung arrived at Andrews Air Force Base on June 22 to begin his official visit to the US as guest of President George W. Bush.

The Vietnamese Government leader was welcomed by Deputy Assistant Secretary of State Scot Marciel, American Ambassador to Vietnam Michael Michalak, Vietnamese Ambassador to the US Le Cong Phung and others. As scheduled, PM Dung will meet several important US figures, including Wisconsin’s Secretary of Administration Michael Morgan and former Secretary of State M. Albright, who is foreign policy advisor for Democratic presidential candidate, Senator Barack Obama. The PM will have a working session with the Vietnam-US competitiveness consultancy council and meet representatives of leading US conglomerates. Source: VNA

Vietnam, US launch talks for investment treaty

US President George W. Bush (right) and Vietnamese Prime Minister Nguyen Tan Dung in the Oval Office of the White House in Washington, DC on June 24 Vietnam and the United States have agreed to launch talks for a bilateral investment treaty as their companies signed several deals during a visit by Vietnamese Prime Minister Nguyen Tan Dung.

The investment accord "will build on the already strong economic ties between the United States and Vietnam, one of the fastest growing markets for US exports," US Trade Representative Susan Schwab said on Tuesday. When concluded, it will provide US investors in Vietnam with key legal protections and enhanced market access with "important direct and collateral benefits for US exporters and consumers alike," she said. The two former battlefield enemies normalized trade relations in 2001. Two-way goods trade rose 30 percent to US$12.5 billion in 2007 from a year earlier. Dung also held talks with President George W. Bush on Tuesday and presided with US Commerce Secretary Carlos Gutierrez over the signing of contracts and other agreements. They would provide "expanded access for US companies to Vietnam's growing market," the Commerce Department said. A memorandum of cooperation was also signed between Vietrade, the Vietnam trade promotion agency, and the US Foreign and Commercial Service. The US Commerce Department said the new business deals support jobs in the United States and further increase US exports to Vietnam, which grew almost 73 percent in 2007 and more than 133 percent year in April from a year ago. Signing contracts with their Vietnamese counterparts were aluminum giant Alcoa, electronic communications manufacturer Motorola Inc. and travel technology firm Sabre Holdings. Alcoa and Gannon had been among the 23 US companies that accompanied Gutierrez's business development mission to Vietnam in November. Alcoa signed a cooperation agreement with Vietnam National Coal-Mineral Industries Group on aluminum industry development. Motorola and Vietnam Posts and Telecommunications Group signed contracts worth 28 million dollars for the expansion of a GSM mobile phone network across 12 northern provinces of Vietnam. Sabre Holdings and Vietnam Airlines Corporation signed a definitive memorandum of understanding for the purchase of an Internet-booking engine and e-commerce solution and a passenger services system. Two US companies received investment licenses for joint ventures: SSA Marine, for container terminals, and Gannon International, for a brewery and bottling facility. Source: AFP

Vietnam ship builder calls off POSCO steel JV

The 20,000-DWT Vinashin Bay ship is built by the state-owned shipbuilder Vinashin. State-run ship builder Vinashin has cancelled plans to invest $1 billion in a $5-billion steel mill joint venture with South Korean group POSCO, part of Vietnam's efforts to cut spending to reduce high inflation.

Vinashin Chairman Pham Thanh Binh said in a statement that in addition to the POSCO venture, it would also delay or suspend 40 other projects with a total investment of VND6.5 trillion ($395 million) to refocus on the group's core ship-building businesses. A POSCO spokesman told Reuters the company would proceed with the steel mill plan on its own. Prime Minister Nguyen Tan Dung, who is visiting the United States this week to promote trade and investment, last month ordered a reduction in recurrent expenses by about 10 percent and public investment drawn from the state budget. The government, grappling with seven consecutive months of double-digit inflation and a tripling trade deficit, ordered state-run businesses to change their business plans. Too many have diversified into non-core areas such as banking and property and needed to focus on their specialty, economists and the government said. Borrowing for the increased spending on big state-run projects has been cited by economists and monetary authorities as one of the causes of inflation. Credit growth was 54 percent last year and record amounts of foreign direct investment poured into the Communist Party-run Southeast Asian country. The International Monetary Fund recommended that in addition to tightening monetary polices to curb inflation Vietnam should send "a clear signal that the expenditure and borrowing by state-owned enterprises, especially the larger conglomerates, is being reined in, their investment projects prioritised, and their operations limited to their core business." In January, the government approved the proposal by POSCO to build the steel mill in Van Phong Bay, near the south-central resort town of Nha Trang. POSCO said in April it aimed to start construction of the plant in April 2009. The project had raised environmental concerns in one of Vietnam's most beautiful bays. Source: Reuters

Vietnam suspends gold imports on trade gap

Customers peruse jewelry at a local shop in Ho Chi Minh City. Vietnam, Asia’s second-largest gold investor, has suspended gold imports in June due to a widening trade gap, a World Gold Council (WGC) official said Monday, as the country battles with double-digit inflation.

Traditionally, Vietnamese use gold for savings, jewelry and real estate transactions, but when inflation is high many choose gold or the US dollar to hedge against inflation. “The government is very concerned. They have to reduce the trade balance deficit. Gold is one of the main imports,” said Huynh Trung Khanh, a consultant for the Vietnam chapter of World Gold Council. “So far, Vietnam has imported 60 tons of gold, with the value of US$1.8 billion (January-May). They have to temporarily suspend imports. The central bank has temporarily suspended fold imports until further notice, Khanh said. Vietnam’s annual inflation rate hit 25.2 percent in May, while the trade deficit has tripled this year. Following a year of overheating and high credit growth, 2008 has been strained for Vietnam, where macroeconomic stability was taken for granted as it boasted one of the world’s highest growth rates, averaging 7.5 percent a year since 2000. Speculation the dong will be devalued has weighed on the currency, while Vietnam stocks have fallen some 60 percent this year. The country imported around 30 tons of gold in January-May Gin 2007, according to the W figures. The central banks have given quotas to 40 banks and trading houses to import 73 tons of gold in 2008, up slightly from about 70 tons in 2007. “They have required companies and banks which have not imported yet to remit back their remaining quotas to the central bank,” said q Khanh. Gold powered to a record of $1,030.80 an ounce on March 17 on record-high crude oil, which raised fears of inflation and expectations of more rate cuts in the US, making the metal more attractive as an alternative investment. Gold has since corrected and stood around $905.85 Monday. “The suspension has been in place for some time,” said an official at the Vietnam Gold Traders Association, who asked not to be identified. He did not provide a date for the suspension. “Re-export of gold is not restricted but we have not seen any selling on the international market so far because a good, handsome profit can still be made in the local market,” the official said. Burgeoning gap Vietnam estimated its trade deficit would more than triple to $16.9 billion in the first half of this year as imports soared 64 percent, according to the Ministry of Planning and Investment. The government is expected later this week to release full data on trade and inflation. Imports in the first half of this year would surge to $45.5 billion while exports would rise 27 percent from the first six months of 2007 to $28.6 billion. The trade deficit was $5.2 billion during the first half of last year while the full-year trade deficit was $12.4 billion, according to government data. The Planning and Investment Ministry has forecast exports to rise 37 percent this year to $83 billion, above the government’s initial projection of 20-25 percent, but that the trade gap would widen to $30 billion. Source: Reuters

ACB offers compensation for gold exchange error

Asia Commercial Bank (ACB), which runs the Saigon Gold Exchange, told gold traders Monday that it would compensate them for losses they incurred due to a technical error that halted trading on the exchange last week.

“At 9:30 a.m. last Friday, the computer system slowed down so we switched to a backup one,” ACB general director Ly Xuan Hai recounted. “At 2:30 p.m. in the day, we decided to halt all transactions to search for the error.” Hai said the bank had received 89 complaints about the error from traders. “Our staff was too busy to respond to traders’ complaints in a timely manner on Friday. We deeply apologize for that,” he said. To resolve the problem, Hai suggested that traders whose transactions were undone due to the error wouldn’t have to pay the lending rate on loans they borrowed from ACB to trade gold. For those who could prove that their selling orders hadn’t been carried out during the stoppage, the bank would buy those selling amounts at the price of VND18.83 million ($1,134) per tael, matching the price recorded at 2:30 p.m. last Friday, when trading was officially halted. Some traders, however, disagreed with ACB’s suggestion, saying that the compensation price was too low. “I bought gold at more than VND19 million per tael but ACB will buy back at the lower price of VND18.83 million per tael,” said Nguyen Thi Hoa, a trader. “I will lose big.” One tael is equal to 37.5 grams. Le Phuoc Hiep, another trader, said similar issues had occurred at the exchange previously. “But it was strange this time that buying orders were matched while sales and cancellations didn’t go through,” he said. Reported by Thanh Xuan

FDI inflows remain buoyant despite economy

HCMC Chairman Le Hoang Quan (R) presents the license to Huang Mao Hsiung, chairman Teco Group and TA Associates Vietnam earlier this week Foreign investment in the first half of this year surged past figures for the whole of last year to a record US$31.6 billion, a government official has said.

Phan Huu Thang, director of the Foreign Investment Office, said five more major foreign projects, including a $6 billion oil refinery, would be licensed by the end of this month. Investments worth nearly $20.3 billion were pledged last year but only $4.6 billion has been actually disbursed. Planning and Investment Ministry officials said the government is working to improve this to $1 billion per month this year. “[It] is our top priority this year,” Thang said. The $6.2 billion Nghi Son Oil Refinery, a joint venture between PetroVietnam, which holds a 25.1 percent stake, and three Japanese and Kuwaiti partners, is the second largest foreign direct investment licensed this year. Taiwanese industrial giant Formosa Plastics plans to invest $7.87 billion in building the country’s largest steel mill in Vung Ang in the central Ha Tinh Province. The project was licensed last week. Thang said considerable investment would continue to pour in from North America, Europe and Japan though the economy was facing “temporary difficulties.” Inflation hit 25 percent year-on-year last month, pinching incomes and forcing many workers to strike for higher wages. But many of the strengths that attracted foreign investors in the first place remain intact. Half of the country’s 86 million citizens are aged under 30. Factory workers are paid as little as $50 a month for a 48-hour week, including Saturdays. Many provinces waive corporate tax for foreign investors for the first four years, and impose half the usual rate of 10 percent for the next several years. “The longer-term economic reform story that made Vietnam such an attractive destination for foreign direct investment in recent years remains a compelling one,” the IMF’s Benedict Bingham told a forum in Hanoi early this month. Thang said the Planning and Investment Ministry recently organized two investment promotion events in Tokyo and Osaka. “Japanese are very careful in making investment decisions but I did not see any reluctance during the meetings. “We will soon attract their investments in high technologies.” The country is becoming a promising destination for more high-tech investors, he said. A Vietnamese-Taiwanese joint venture last week got the green light for investing $1.25 billion in developing the Thu Thiem Software Park in Ho Chi Minh City. The investors aim to develop software for export, design circuits and chips, build infrastructure, commercial centers, offices and apartments for lease, train human resources and promote trade and investment. The Taiwanese partner is Teco Group, which developed the $3.5 billion Nankang Software Park in Taiwan, according to the Vietnamese partner, telecom firm Saigon Tel. But a recent survey by the Japan External Trade Organization found that Japanese enterprises have become less satisfied with the investment environment in Vietnam. With its approval rate dropping from 75.4 percent in 2006 to 41.7 percent last year, the country has fallen from first to fifth place among six Southeast Asian destinations that have attracted Japanese investments. Respondents were most concerned about the dearth of component manufacture, poor infrastructure for transport, communication and power, and red tape. Thang said the government is working with local administrations to resolve these issues. Source: TN, agency

Interest rate rise effective in slowing loan growth, data shows

Outstanding bank loans in Vietnam are likely to be 20 percent higher at the end of the first half than a year earlier, but monthly loan growth will slow to 1.22 percent in June, a central bank newspaper said on Friday.

The figures suggest the central bank has had some success in bringing down rampant credit growth in an overheating economy in which the annual inflation rate has soared to 25 percent. "Outstanding loans rising 19.99 percent is still higher than growth in the same period last year but it is on a gradual falling trend," the Banking Times newspaper, run by the State Bank of Vietnam, quoted a central bank report as saying. Credit growth in May compared with April was 2.25 percent, down from 3.36 percent in April and 3.78 percent in March, State Bank of Vietnam Governor Nguyen Van Giau told the National Assembly in May. The report did not give loan values but central bank figures released in late May suggested outstanding loans at the end of June would reach VND1,290 trillion (US$78.4 billion). The central bank did not give the credit growth for the first half of 2007 but loans surged 54 percent in the whole of 2007, so the 20 percent growth so far this year shows a dramatic fall after the central bank’s three rate increases this year. "This does suggest a moderation in growth, basically," said CSFB economist Joseph Lau, noting that average monthly credit growth was 3.5 percent in the first five months of 2008. "So, if June is sustained, then it does at least suggest some degree of moderation and some impact from the tightening measures you saw both in March and in May," he said. "But the key, I guess, is whether or not this is sustained through the second half." The central bank has drained money from the banking system through market operations and by raising banks' obligatory reserves. It also raised interest rates in January, May and earlier this month, aiming to restrict lending growth to 30 percent this year. In the second half of 2008 the central bank would "further implement the monetary tightening policy with flexibility to contribute to controlling inflation and stabilizing the money markets and the macroeconomics at the same time," it said in an action plan. The plan was discussed at a central bank meeting on Thursday before Governor Giau joined Finance Minister Vu Van Ninh to brief international investors and analysts on measures to tackle inflation, a weakening currency and a growing trade deficit in a video conference organized by Credit Suisse. At the conference the central bank said Vietnam had adequate resources to fill any external financing gaps. Vietnam has net foreign reserves of $20.7 billion, a senior Finance Ministry official told Reuters on Thursday. That is little changed from the figure of $20 billion given by the central bank for the end of 2007, which was nearly double the $12 billion at the end of 2006.

Italian shoemakers want tariff on Vietnamese rivals extended

A man shops for shoes in Ho Chi Minh City yesterday. Vietnamese footwear will soon be hit with higher tariffs in Europe due to a recent EU decision to drop the country from its preferential tax plan. Italian shoe producers are pushing for the European Commission (EC) to renew anti-dumping tariffs on non-athletic leather shoes imported to Europe from Vietnam, a Vietnamese trade official said.

The 10 percent anti-dumping tariff, due to expire on October 7, has been in effect since 2006 after the EC ruled leather shoes from Vietnam and China were being sold at “unfair prices” in the European market. The Italian Shoe Manufacturer's Association (ANCI) said imports from Vietnam and China were still hurting its 850 member companies. The ANCI said it would ask for the tariffs to be extended for five more years, the official of the Vietnam’s Ministry of Industry and Trade said. However, he said other groups of shoe producers in Italy disagreed with ANCI’s proposal. The EC will conduct an anti-dumping investigation on leather shoes imported from Vietnam and China to determine if the tariff will be renewed. The anti-dumping tariff is imposed on top of the EC’s import tariffs. Vietnamese leather shoes sold to the 27-member trade bloc have been limited to import tariffs of 3 to 5 percent under a preferential tariff program for poor countries. However, the commission is removing Vietnam’s footwear industry from this program next year, and Vietnamese footwear will attract tariffs of up to 10 percent. The 27-member European Union is Vietnam’s biggest shoe export market which last year contributed US$2.1 billion to the country’s total shoe export turnover of $4.5 billion. Reported by Minh Quang

EC pledges $31 million donation to Vietnam for social reform

The European Commission (EC) will provide Vietnam with 20 million euro (US$31 million) in non-refundable aid to assist in the implementation of social policy reform.

The Ambassador and Head of the EC Delegation in Vietnam, Sean Doyle, signed the financing agreement with Vietnamese Deputy Minister of Planning and Investment Cao Viet Sinh in Hanoi Thursday. The grant is part of 88.5 million euro from the EC and several European Union member countries to finance the World Bank’s 230 million euro Poverty Reduction Support Credit (PRSC6). The bank’s sixth PRSC aims to support Vietnamese policy reform agenda through budget support and policy dialogue and has a strong focus on social inclusion, health and education to foster growth and reduce poverty. The commission says that by supporting the PRSC it is delivering on its commitments to the Hanoi Core Statement on Aid Effectiveness Agenda. The EC said the aid contributes to a fruitful dialogue and coordination between the donor community and the Vietnamese Government on the broad policy reform agenda. PCA first round Vietnam and the European Union (EU) have just completed their first round of negotiations on the framework Partnership and Cooperation Agreement (PCA) in Brussels, Belgium. The Vietnamese delegation to the June 17-18 negotiations was led by Foreign Minister Assistant Doan Xuan Hung and the EU delegation was headed by Deputy Director Generalfor External Relations of the European Commission Joao Aguiar Machado. Vietnam and the EU discussed the content of the PCA in the spirit of friendship and mutual understanding and pledged to promote bilateral trade ties to serve mutual development. The EU committed to assisting Vietnam in narrowing the development gap among regions, reducing poverty and promoting sustainable development. The two sides agreed to set up the Science-Technology Cooperation Sub-Committee, devise a national food hygiene control program and carry out educational cooperation. They also decided on Vietnam’s participation status in the EU’s Bologne education and training process. Both sides agreed to a second round of negotiations in Hanoi, Vietnam, in September 2008. Source: TN, VNA

PM’s visit to US tipped to create windfalls

The US Ambassador to Vietnam Michael Michalak said he expected American and Vietnamese businesses to finalize many major contracts during Prime Minister Nguyen Tan Dung’s visit to the US next week.

Some of the deals signed during the June 23 to 26 visit could have a significant effect on the Vietnamese economy, Michalak told a press conference in Hanoi. Dung is scheduled to meet President George W. Bush at the White House on June 24. Michalek said Bush was looking forward to the meeting, adding that the two sides would discuss not only the economic relationship but also other issues, including regional security. The two countries’ leaders have exchanged several visits in the past four years. Former Prime Minister Phan Van Khai visited the US in 2005and President Nguyen Minh Triet last year, while Bush visited Vietnam in 2006. Dung and Bush met once last year at a session of the United Nations Security Council, Michalak said. He believed Dung’s visit would be successful and would raise the bilateral relationship to a new level. During his visit, Dung will meet a number of senior officials of the US administration as well as congress leaders. He will hold talks with Alan Greenspan, former Chairman of the US Federal Reserve, about Vietnam’s high inflation in Vietnam, Michalak said. Dung will meet the leaders of some major American firms and make a speech at Texas University. Michalak expected the two countries would also sign some agreements on cooperation in education and science and technology. Reported by Xuan Danh

Vietnam gov't issues another reassurance on inflation

A local bank teller counts US dollar notes in HCMC Vietnam’s top finance officials have repeated their reassurances that inflation will be brought under control and the nation’s trade commitments would be met.

The economic problems Vietnam was experiencing were “temporary and short-term” officials told a video conference linking Vietnamese government officials and investors in Hanoi, Ho Chi Minh City, Hong Kong and Singapore. The economy is being buffeted by high inflation and a widening trade deficit. The consumer price index rose 25.2 percent in May from a year earlier, its highest level since 1992. Vietnam’s trade deficit has more than tripled over the first five months of the year. Many fear the dong, the local currency, may lose value and the country’s foreign exchange reserves would be insufficient to withstand a financial crisis. High loan interest rates, a result of the central bank’s monetary tightening policy, have also left many businesses with cashflow problems. The central bank has raised the benchmark interest rate three times this year, allowing banks to charge up to 21 percent a year for loans and offer deposit interest rates of up to 18 percent a year. Finance Minister Vu Van Ninh, who earlier this week told global leaders the dong would not be depreciated, said global price hikes had been hurting the economy since last year. However, he admitted the government had been slow to realize risks and its own economic forecasting “had many shortcomings.” However, Ninh said the economic solutions package adopted in April was already showing good effects. The eight-point plan included a directive for government-wide spending to be cut by 10 percent. “Inflation and trade deficit have shown signs of declining in June,” he said. Deputy Minister of Industry and Trade Nguyen Thanh Bien said Vienam’s May exports increased to US$5.57 billion from April’s $5 billion while imports declined by $500 million to $7.66 billion from April. “The trend [of increased exports and decreased imports] will become more obvious towards the end of this year,” he said. Nguyen Van Giau, governor of the State Bank of Vietnam, said hard currency reserves were sufficient for the government to step in to support the value of the dong. “Vietnam’s foreign currency reserves are $20.7 billion,” he said. The dong has declined against the dollar for three straight months, the longest losing streak since August. The central bank set a reference rate of 16,452 to the dollar Friday. The currency is allowed to trade up to 1 percent above or below the rate. Giau said “psychological factors” had contributed to the dong’s decline. He said the central bank had worked with commercial banks to ensure reasonable forex rates for businesses. He admitted that the central bank’s loan interest rate of 14 percent, the highest in Asia, was impacting business operations, but “our target is to curb inflation.” “Businesses should cut spending and practice thrift to ensure competitiveness,” Giau said, promising to adjust the rates when inflation slowed. Ninh said the government had adopted multiple solutions to improve the economy, including accelerating privatization of state-owned companies. He said Vietnam would allow foreign investors to own more than a 40 percent stake of unlisted public companies in certain business areas. The government had facilitated an increase in local supplies of industrial and agricultural materials, including fuel, steel and fertilizer, to reduce the economy’s dependence on imports, Ninh said. The country’s first oil refinery is expected to begin operating mid next year in Quang Ngai Province. Ninh said it was expected to meet 45 percent of domestic demands of fuel. “In the middle and long term, we commit… to control inflation and stabilize the macro-economic factors to ensure economic growth,” he said. He pledged to “establish an enabling, open, fair and transparent environment that ensures the interests of both local and foreign investors.” Donors’ support Representatives of the World Bank and Asian Development Bank (ADB), two major aid donors of Vietnam, told the conference that their aid commitment would be mostly unchanged. Martin Rama, lead economist of the World Bank in Vietnam, said he expected the World Bank’s official development assistance (ODA) would remain stable. He said Vietnam also became eligible for loans from the International Bank for Reconstruction and Development (IBRD), which helps reduce poverty in average-income and developing countries that have reached a certain level of credit reliability. ADB Resident Mission Country Director Ayumi Konishi said the bank would continue its strong support of Vietnam. Source: Thanh Nien – Tuoi Tre

PM to visit the US, meet Bush

Prime Minister Nguyen Tan Dung will visit the US from June 23 to 26 at the invitation of President George W. Bush, the Ministry of Foreign Afairs said Wednesday.

The White House said, “President Bush will welcome Prime Minister Dung of Vietnam to the White House on June 24.” “The President welcomes the opportunity to talk to Prime Minister Dung about ways to advance our close bilateral cooperation on a broad range of issues, including ASEAN, the United Nations Security Council, food security and regional economic integration,” said the White House. Dung will also meet key figures in the Senate and the House of Representatives, and visit Houston, Texas, to open a Vietnamese consulate.

Vietnam's controls will avert crisis, Standard & Poor's says

A stack of Vietnamese 500,000 dong notes are displayed at a Bank for Foreign Trade of Vietnam, known as Vietcombank, in Hanoi, on Dec. 21, 2007. (Bloomberg) Vietnam's "extensive" capital controls and the management of its currency will prevent overseas investors from fleeing the nation even as inflation accelerates and economic growth slows, said Standard & Poor's.

Foreign funds are mostly limited to buying property and stocks, said Ping Chew, the Singapore-based head of Asian sovereign and corporate ratings at S&P, the first of three ratings firms to put the nation's debt on "negative" watch. Stocks have slumped 59 percent this year, the world's worst performance, and the dong is set for its biggest drop since 2001, falling 3.6 percent. "Vietnam is not in a currency crisis," Chew said in a June 17 interview. "There's definitely a bit of hot money that went in. But is it going to leave en masse like that which decimated Asia in 1997? I don't think so." S&P put the country's BB long-term foreign currency rating on "negative" watch May 2, saying the country's overheating economy was a risk to stability. That is two levels below investment grade. Vietnam's inflation rate rose to 25 percent in May as food and energy prices climbed and the trade deficit tripled in the first five months of the year. Foreign investors have cut their stock purchases in half this year to $334.2 million, according to data compiled by Bloomberg. Morgan Stanley last month said the dong was heading for a "currency crisis," citing a widening current-account deficit. Calyon, Credit Agricole SA's investment banking unit, said this month there was a threat of a balance of payments crisis and Citigroup Inc. said a banking crisis is the primary problem facing Vietnam. The dong traded at 16,616.50 per dollar as of 11:23 a.m. in Hanoi from 16,619.00 Wednesday, and is allowed to trade 1 percent either side of a reference set by the central bank each day. The State Bank of Vietnam weakened the dong by 2 percent on June 11 seeking to prevent currency speculation and raised rates to 14 percent from 12 percent to curb inflation. Forwards contracts are pricing in a 33 percent drop in the next year, after taking into account interest-rate differentials, according to offshore 12-month non-deliverable forwards at 24,900 per dollar. Forwards are agreements in which assets are bought and sold at current prices for future delivery. "Vietnam is turning into a very bad story," said Thomas Harr, a senior currency strategist from Standard Chartered Plc in Singapore. "The 2 percent devaluation a few weeks ago was not a good move. They should instead have been more aggressive on hiking rates to signal that they are committed to dealing with inflation." The dong won't stop falling until investors are convinced of the central bank's commitment to fight inflation, he said. Cracking down The impact of flagging confidence be limited as investors will "have difficulty" taking profits out of Vietnam, said Joseph Lau, an economist at Credit Suisse Group in Hong Kong. "Generally banks aren't allowed to trade the currency for speculation, you need to have a reason for it," said Lau. "It is difficult for a householder to purchase dollars legally, which is why when they do want to do it, they have to go through the black market." Vietnamese banks selling U.S. dollars at a higher rate than the official trading level will be fined and may have their trading licenses withdrawn, Vietnam News reported, citing an official at the central bank. While a "herd mentality" has led to a loss of confidence in the dong among some Vietnamese, the country's banking system is stable, said Dam Bich Thuy, Australia & New Zealand Banking Group Ltd.'s chief executive for Vietnam. ANZ has a 10 percent stake in Saigon Thuong Tin Commercial Joint-Stock Bank and a 12 percent stake in Saigon Securities Inc. Banking confidence "We see some people trying to get dollars, but then they still put their dollars back into the banks," Hanoi-based Thuy said. "They don't take money out and put it under the mattress." Vietnam's economy "is in reasonably good shape," buoyed by strong currency reserves, Alex Thursby, Asian-Pacific managing director for ANZ told reporters in Ho Chi Minh City. "I don't think there's a crisis." Vietnam's foreign currency reserves are about $20 billion to $22 billion, Credit Suisse's Lau said. By comparison, the market capitalization of companies on Vietnam's benchmark stock market, the VN Index, is $9.08 billion, the second smallest in Asia after Sri Lanka, according to data compiled by Bloomberg. "This is still a managed currency with extensive capital controls," said Chew at S&P, which issued a report today saying that Vietnam faces pressures but no crisis. "For the negative outlook to turn around, we need to see more tightening measures, we need to see them addressing lending problems in banks." Balance sheets Bank's non-performing loans may increase as the economy slows and the central bank raises lending costs, said Chew. The economy expanded 7.4 percent in the first quarter from a year earlier. Last year, gross domestic product grew 8.5 percent, the fastest pace since 1996. The balance sheets of banks in Vietnam may not reflect the state of the bad loans as the country has yet to adopt internationally accepted accounting standards, he said. Non- performing loans are debts which fall behind on interest payments or are unable to service principal repayments. Source: Bloomberg

Call for daily trading band to be widened

Watching the VN-Index trading board The stock market regulator should restore the intraday trading band to five percent to allow the index to recover from its six-month slump, analysts and fund managers said.

The VN-Index of 155 listed companies rose for a second straight day on Friday to close at 372.7 points after falling for six weeks in a row. The eight-year-old stock market has plunged 60 percent this year, making it the world’s worst-performing index. The intraday trading band was narrowed to slow the plunge. But now observers say the limit will restrict any recovery. “People out there are realizing that they do not need to throw the baby out with the bathwater,” Reuters quoted PXP Vietnam Asset Management director Kevin Snowball as saying last week. “If the regulators widen the trading band and the timing is right, it [the index] does have a chance to go up.” Among its latest proposed measures to boost the stock market, the Vietnam Association of Financial Investors suggested the State Securities Commission should set the daily limit that allows a 1 percent fall and a 3 percent rise. One Ho Chi Minh City analyst, who asked not to be named, said it was time to return to the previous cap of 5 percent. “After dropping for more than 25days in a row, two days of rising boosts investor confidence,” he said. “So I think it’s time to restore the previous trading band of 5 percent, which will attract more investors to the market. The band was narrowed to 1 percent on March 27 and widened to 2 percent on April 7. The daily trading limit on the Hanoi Securities Trading Center is 3 percent. Independent HCMC analyst Le Dat Chi said the best way to boost the market’s liquidity was to allow unrestricted matching of buy and sell orders. “Without a trading band, traders will have to carefully study the stocks they want to buy,” Chi said. “Removing the trading band and allowing unrestricted continuous matching will enable investors to see shares’ actual value.” At present, buy and sell orders are only matched if the bids fall within the trading band. But the managing director of fund manager VinaCapital, Andy Ho, disagreed, saying the fledgling stock market still needed a trading band limit. Ho recommended a return to the previous cap of 5 percent. Another expert said the trading band should be replaced by some mechanism to automatically halt stock transactions when share prices fall too low. Reported by Nguyen Hang

Stocks up on three day rally, trading band widened

Ho Chi Minh City stocks extended their winning streak to three days Monday as blue chips bounced back.

But the three-day rally hasn’t done much to dig the market out of the deep hole it has dug itself after falling for 25 straight trading sessions beginning in late April. The Ho Chi Minh Stock Exchange’s VN-Index gained 5.52 points, or 1.48 percent, to close at 378.2 Monday. Trading volume remained positive as more than 11 million shares changed hands while 136 of the market’s 155 listed stocks gained value and a mere 17 slipped. All 10 of the exchange’s largest companies by market capitalization rose in value on the day. The Vietnam Association of Securities Businesses had sent a request to the government to increase the daily trading limit to 5 percent on the Ho Chi Minh Stock Exchange and 10 percent on the Hanoi Securities Trading Center, said a Bloomberg report that cited association Chairman Le Van Chau Monday. “This has aroused investor sentiment and made them buy a lot more,” said Dai Viet Securities CEO Lam Minh Chanh, as quoted by Bloomberg. Wider trading band issued After trading closed, the State Securities Commission issued a decision Monday to adjust the intraday trading band for stocks and certificates of deposit. According to the State Securities Commission (SSC) announcement, the current trading band margin of the Ho Chi Minh Stock Exchange for both stocks and certificates of deposit will be raised from the current plus or minus 2 percent to plus or minus 3 percent. On the Hanoi Stock Trading Center (HASTC), the trading band will change from the current plus or minus 3 percent to plus or minus 4 percent. The new trading band margins will be applied beginning June 19. Foreigners begin selling As usual, HCMC’s foreign investors moved in the opposite direction as locals Monday, selling some VND16 billion (US$974,611) worth of shares Monday as values rebounded. After a long streak of net buying at low prices, foreigners sold off large quantities of Vinh Son Hydropower, Saigon Securities Inc., REE Corp., Cables and Telecommunications Material Joint Stock Company and Vinamilk. Hanoi’s stock exchange regained ground for the fourth straight day as the HASTC-Index gained 2.72 points, or 2.45 percent, to close at 113.81. Reported by Thanh Nien staff

Shoe exporters say higher EU tariffs will hurt

A man shops for shoes in Ho Chi Minh City yesterday. Vietnamese footwear will soon be hit with higher tariffs in Europe due to a recent EU decision to drop the country from its preferential tax plan. The European Union’s removal of Vietnam's footwear industry from a preferential tariff program for exports to the bloc will cost Vietnamese exporters over US$100 million in tax, the industry association has said.

The Vietnam Leather and Footwear Association (Lefaso) said in a press release Monday that the removal would hinder the ability of Vietnamese footwear exports to compete in Europe. The Generalized System of Preferences (GSP), as the program is known, will exclude Vietnamese shoemakers from the beginning of 2009, meaning they will have to pay tariffs of up to 10 percent instead of the current 5 percent. The decision was made after the EU realized that the Vietnamese footwear industry was one of the most competitive in the world, European officials said. Lefaso said the GSP, the European Commission’s special scheme for poor countries’ exports to the EU, has contributed to the growth of the industry in Vietnam. It said if Vietnam’s exports to the EU this year were the same as last year, or nearly $2.2 billion, Vietnamese companies would have to pay additional taxes worth nearly $110 million. Moreover, some EU partners could shift their orders to other regional countries who still enjoy the program’s benefits, Lefaso said. Nguyen Duc Thuan, chairman of Lefaso, called the decision “unfair” and said it would hurt the industry. He said the industry employs nearly one million workers, 80 percent of them women while 20 percent hail from the rural areas and work for modest wages. Diep Thanh Kiet, vice chairman of the Ho Chi Minh City Leather and Footwear Association, said small businesses would be the hardest hit. It would take a lot of time and money for footwear manufacturers to shift to other kinds of products while they were facing high material costs and scarce financial funds, he said. Kiet estimated that around 30 percent of Vietnam’s shoe workers would be affected by the EU decision. Thuan said Lefaso would ask the government to continue negotiating with the EU in hopes that the grouping would change its decision. Lefaso has asked its member-companies to try to cut costs, strengthen promotion programs and direct their products to other large export markets like the U.S. and Japan. Footwear ranks third in Vietnam in export value after crude oil and garments. Vietnam was the second largest footwear exporter to EU behind China last year, although its leather shoes have faced anti-dumping duties of 10 percent since 2006. Exports to the EU accounts for more than half of the Vietnamese footwear industry’s total exports every year, which was $4 billion last year and is expected to reach $4.5 billion this year. It also makes up 19.9 percent of the EU’s footwear imports and 49.1 percent of the turnover of all Vietnamese exports benefiting from the GSP. Ambassador Sean Doyle told a news conference in Hanoi last week that the EU would offer Vietnam a long-term tariff scheme for all products after the conclusion of its free trade talks with the Association of Southeast Asian Nations (ASEAN) at the end of 2009. Reported by Mai Phuong - Minh Quang

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Nation mourns reformist leader

Vietnamese top leaders (L-side) and family members (R-side) throw flower petals over the coffin of former Prime Minister Vo Van Kiet during his burial service at the Ho Chi Minh City Cemetery Sunday. Vietnam held an emotional public funeral Sunday to mourn the death of former Prime Minister Vo Van Kiet, one of the architects of Vietnam’s economic reforms as the country recovered from decades of war and isolation.

Tens of thousands of mourners lined the streets of Ho Chi Minh City to honor Kiet as a procession of military vehicles carried his coffin. Kiet died early Wednesday, aged 86. The country’s top leaders had earlier paid their respects to Kiet in Reunification Palace. Communist Party chief Nong Duc Manh headed a long line of mourners who filed past Kiet’s coffin from early Saturday. As his body lay in state, the palace hall was filled with incense smoke and funereal music played by an army band. At the funeral, Manh delivered a eulogy that paid tribute to Kiet’s lifetime of remarkable achievements. “The life of former PM Vo Van Kiet has set an exemplary model for the entire country and its people to follow,” Manh said. Deputy Prime Minister and Foreign Minister Pham Gia Khiem said Kiet “was very dynamic in setting policy in the renovation period and I think his contribution will stay with the Vietnamese people forever.” “Kiet was the person who opened the door to renewed US-Vietnamese relations and I think the people of Vietnam continue to benefit today from the openings that he introduced,” US Consul General Kenneth Fairfax said. He said Kiet was “a real source of pride for the people who are looking to push forward Vietnam and to bring it to the next level of development.” “He actively favored development and openness on all levels. He spoke about the economy, about the society (and) about the protection of the poor.” Polish Consul General Przemyslaw Jenke said Kiet “was one of these fortunate people who lived long enough to see his dream come true.” Heartfelt mourning Many people at the funeral could not stop their tears spilling down their cheeks as they paid final tribute to Kiet’s coffin. Outside the Reunification Palace, thousands of people from all walks of life gathered on Le Duan Street outside the palace to witness the historic event. Hanoian Dang Thi Cuoc, 74, said she tried to enter the palace four times Sunday before she could pay her respects to Kiet’s coffin. “I feel much luckier than many other people since I could get in the funeral site to see the picture of Kiet and pay tribute to him,” Cuoc told Thanh Nien. Nguyen Van Su, 80, sat on the ground outside the palace, saying he would only go home when he’d seen Kiet’s coffin. “I have come here twice but could not get to the palace,” Su said. “But I will stay here until Kiet’s coffin is brought past on its way to the cemetery.” In Kiet’s hometown in the Mekong Delta’s Vinh Long Province, people gathered at the local People’s Committee headquarters from the early morning to say goodbye to Kiet. Kiet was buried at 11.40 a.m. Sunday at the Ho Chi Minh City Cemetery. Prime Minister Nguyen Tan Dung bows to the coffin of former Prime Minister Vo Van Kiet during the official funeral service in HCMC Sunday Phan Luong Cam grieves at the coffin of her husband, the former Prime Minister Vo Van Kiet BRIEF BIOGRAPHY Kiet was born in 1922 in the Mekong Delta Province of Vinh Long. He joined the Communist Party in 1939 and fought in the long resistance war against French and then American military forces in Southern Vietnam. In 1976, he became Vice Secretary of the Party Committee of Ho Chi Minh City as well as Chairman of the HCMC People’s Committee. He later became Secretary of the HCMC Party Committee. He became prime minister in 1991 and held office until 1997. During his tenure, Kiet was hailed as the architect of the doi moi (renewal) market reforms of the late 1980s and 1990s that tackled dire poverty in Vietnam and ushered in an era of economic growth. Following Kiet’s death, the government declared two days of national mourning from Saturday, with flags to fly at half-mast. Source: TN, AFP

Vietnam says no plans for dong depreciation

A crain operator unloads ship container at Saigon Port, HCMC. Vietnam has imported inflation from outside because the country relies heavily on imports, according to Finance Minister Ninh. Vietnam doesn’t plan to let the dong depreciate because it would affect the economy, Finance Minister Vu Van Ninh said, repeating the fight against inflation was the government’s top priority.

Vietnam’s inflation rate, running at the fastest since 1992, may ease to below 10 percent next year as the government takes steps to cool surging prices, Ninh told participants at the World Economic Forum on East Asia in Kuala Lumpur Sunday. “We do not intend to depreciate the dong because it will have a great impact on our economy,” he said. Investment banks Morgan Stanley and Deutsche Bank AG have forecast the dong will be devalued, with forwards contracts pricing in a 29 percent drop over the next year. Vietnam’s central bank has increased borrowing costs three times this year to 14 percent, the highest in Asia, as the government tries to tame accelerating inflation by tightening credit and cutting the supply of money. On June 11, the government lowered the dong’s reference rate by 2 percent to prevent currency speculation. “Our economy has been impacted especially with high inflation,” Ninh said Sunday. The government’s biggest priority is to contain consumer price gains and “restore economic stability,” he said. Consumer prices surged 25 percent in May and analysts have warned the economy is at risk of a hard landing. The central bank increased interest rates on June 11 to 14 percent from 12 percent. It sets a daily reference rate that allows the currency to fluctuate by 1 percent on either side. Tighter monetary policy this year has affected the stock market, Ninh said. Vietnam’s benchmark VN-Index has slumped 60 percent this year, becoming the world’s worst-performing stock market. Political stability The country is experiencing “short-term” difficulty due to “shortcomings” in the economy, Ninh said. The government will need time to control inflation, which won’t be an easy task; Vietnam’s inflation is both “domestically rooted” and imported, he added. The government, which has maintained fuel subsidies to provide a safety net and ensure “political stability,” won’t raise fuel costs this month and will take into account global crude prices when deciding on any increase in July, Ninh said in comments translated from Vietnamese. “We have maintained petrol prices low, so step by step we’ll adjust the price,” he said. Vietnam may have to adjust oil and gasoline prices should global crude costs keep rising, Deputy Minister of Industry and Trade Nguyen Cam Tu said earlier this month. The government caps gasoline prices to keep fuel affordable for the country’s 85 million people. Trade deficit The nation’s trade deficit tripled in the first five months of the year to US$14.42 billion from $4.25 billion in the same period a year earlier. Standard & Poor’s, Moody’s Investors Service and Fitch Ratings have all lowered their outlook on Vietnam’s credit rating to negative since the beginning of May. Vietnam’s bank lending surged 50 percent last year as banks extended credit to retail investors and brokers to buy securities, and demand for mortgages increased as the real estate market boomed. The government sees “much potential for growth” and will continue to implement reforms including selling state-owned enterprises, Ninh said Sunday. Peter Brabeck-Letmathe, chairman of international food company Nestle SA, said at the forum it was possible for Vietnam’s economy to recover from its present difficulties. “I am quite convinced that the situation can be turned around in a relatively short period,” Bloomberg quoted Brabeck-Letmathe as saying. “In what I call short term, say 12 months.” “Vietnam will be back on its way to sustainable economic growth. “There is no reason that there should be a recession in Vietnam, frankly speaking.” Source: Bloomberg

EU boots Vietnamese out of footwear export scheme

An authorized Adidas outlet in HCMC. In April Adidas and Nike urged the EU not to remove Vietnam’s shoe industry from the preferential tariffs program that helps developing countries export to the bloc. Despite protests from Nike and Adidas, Vietnam shoemakers will have to pay higher duties on footwear exported to Europe.

The European Union is removing Vietnam’s footwear industry from a preferential tariff program for exports to the bloc after deciding the sector had become one of the most competitive in the world, officials said Friday. European Commission Ambassador Sean Doyle told a news conference in Hanoi that graduating out of the program that helps poor countries export their products “confirmed Vietnam’s success in diversifying its exports to the EU and reducing over-dependency on single commodities.” He said the EU was willing to offer Vietnam a long-term tariff regime for all sectors, including footwear, in talks on a free trade agreement between the EU and the Association of Southeast Asian Nations, of which Vietnam is one of 10 members. Leading sports shoe makers Adidas and Nike, which both have factories in Vietnam, have opposed the EU move, saying it would damage the industry on top of anti-dumping duties imposed on leather shoes from Vietnam and China in 2006. Footwear is Vietnam’s third-biggest export by value, after crude oil and garments. With its economy still considered “developing,” the government is also struggling to deal with a large trade imbalance and inflation running at 25 percent, the third highest inflation rate in Asia. Doyle said the EU decision, which had been expected for months, was not intended to penalize Vietnam, where the government’s market reforms focused on opening up trade and joining the World Trade Organization last year. “We would be in trouble with the WTO and some of Vietnam’s biggest competitors if we tried to extend the present arrangement,” the envoy said. A Vietnam trade official said the Generalized System of Preferences (GSP), as it is known, would be changed to Most Favored Nations status, meaning the tariffs would be raised to about 5 to 10 percent from 3 to 5 percent. Other exports that benefit from GSP were not affected. “It is very difficult to change the EU’s ruling on the treatment and some footwear businesses will have a hard time ahead,” said Dinh Van Hoi, deputy director of the Europe Department of the Trade and Industry Ministry. The footwear industry accounts for 1.25 percent of employment in Vietnam, representing about half a million workers, 80 percent of them women. Ninety percent of production is exported, with the EU the largest market – it earned 1.7 billion euros in export turnover in 2007. In April Adidas and Nike urged the EU not to remove Vietnam’s shoe industry from the preferential tariffs program that helps developing countries export to the bloc. “Removing GSP preferences for footwear would deal a blow to one of Vietnam’s key industries and undermine the country’s position as a competitive source of supply,” said Horst Widmann, president of the Federation of the European Sporting Goods Industry (FESI), in a statement. “The EU is punishing Vietnam twice,” Widmann said, saying the change in status on top of the anti-dumping duties was a blow for Vietnamese footwear sector. “This is absurd and clearly irresponsible given the country’s vulnerable position,” Widmann said. The Vietnam Leather and Footwear Association said it forecast leather and footwear exports to all countries would rise nearly 13 percent this year from last year to about $4.5 billion. Exports of the products in the first five months rose 13.4 percent from a year ago to $1.75 billion, accounting for 7.4 percent of Vietnam’s total exports. The Southeast Asian country’s major export markets include the US, the EU, Japan, Canada and Australia. The EU is Vietnam’s second largest export destination, absorbing 19.32 percent of Vietnamese exports, only second to the US at 21.43 percent. Source: Reuters

Philippines may buy Vietnamese rice in global search

Workers load rice for shipment at Ho Chi Minh City’s Saigon Port The Philippines, the world’s biggest rice importer, may buy supplies from Vietnam within a week under a government-to-government agreement, and is also in talks with seven other nations for shipments.

The country had received Vietnam’s offer, including the volume and price, Secretary Arthur Yap told reporters Friday in Manila, declining to provide details. “We’re still trying to see if we can negotiate a better price,” Yap said. The Philippines has embarked on a worldwide search for additional rice supplies to build stockpiles and ensure food security amid record prices. The surging costs of rice, other grains and fuels have stoked inflation, and triggered concern civil unrest may spread as the poor can’t afford basic goods. There were also talks on potential rice shipments with Indonesia, South Korea, China, Japan, Thailand, Pakistan and the US, Yap said. The Vietnamese government’s “offer has a seven-day validity,’’ he said. Rough-rice futures in the US surged to a record $25.07 per 100 pounds in April, driven by export curbs imposed by some producers, including Vietnam and India, and rising demand. The most-active contract on the Chicago Board of Trade, for delivery in September, gained 0.2 percent Friday to $18.73. The Philippines will release at least 1.2 million tons of rice into the market from state stockpiles between June and September to curb local prices, Yap said Friday. “We’ve prepared to release the rice in critical distribution areas,’’ he said Friday. Source: Bloomberg

Spanish firms exploring Vietnamese opportunities

A delegation of Spanish businesses will arrive in Vietnam late this month to explore business opportunities and seek local partners, said the Spanish Embassy in Hanoi Friday.

Senior leaders from 25 businesses will join the two-day mission led by the Spanish Council of Chambers of Commerce with the support of the Economic and Commercial Office of Spain in Ho Chi Minh City. The council brought another group of Spanish enterprises to Vietnam last week for a tour that ends today. The Spanish missions include representatives from Grupo Pascual and Instituto de Empresa as well as businesses in the chemicals, food, transport, wine and pharmacology sectors. Reported by Minh Quang

Vietnam sees high inflation easing in 2009

Vietnam's Finance Minister Vu Van Ninh speaks during the World Economic Forum on East Asia in Kuala Lumpur June 15, 2008 Inflation in Vietnam is expected to ease to single-digit levels next year, Finance Minister Vu Van Ninh said Sunday, vowing to tame surging price pressures that are straining the emerging Southeast Asian economy.

Vietnam is expected to post double-digit inflation this year, Ninh told an economic forum in the Malaysian capital, adding that fighting price pressures was at the top of the government's agenda. "This year inflation might be two digits," Ninh said. "In 2009, we hope we can reduce it to one-digit inflation." He did not elaborate on why he thought inflation would cool. The Vietnamese government is facing one of its biggest challenges with yearly inflation in double-digits for seven consecutive months, hitting 25.2 percent in May. Soaring imports have tripled the trade deficit this year to $14.4 billion, while the Vietnamese stock market has lost 60 percent this year, making it the world's worst performing market. Vietnam's central bank raised interest rates last week and lowered the value of the dong by 1.96 percent on Wednesday to try to fight double-digit inflation and currency speculation. But global credit ratings agencies and economists say it has not dealt quickly enough, nor strongly enough, to stem rising prices. "After analysis we find that we imported inflation from outside because we rely much on imports," Ninh said. "Second, we maintain a lower petrol price than other countries, lower than Laos and Cambodia. We will step by step adjust the price and apply other measures," he added, without elaborating. Source: Reuters

Hồ sơ tài trợ

Philippines may buy Vietnamese rice in global search

Workers load rice for shipment at Ho Chi Minh City’s Saigon Port The Philippines, the world’s biggest rice importer, may buy supplies from Vietnam within a week under a government-to-government agreement, and is also in talks with seven other nations for shipments.

The country had received Vietnam’s offer, including the volume and price, Secretary Arthur Yap told reporters Friday in Manila, declining to provide details. “We’re still trying to see if we can negotiate a better price,” Yap said. The Philippines has embarked on a worldwide search for additional rice supplies to build stockpiles and ensure food security amid record prices. The surging costs of rice, other grains and fuels have stoked inflation, and triggered concern civil unrest may spread as the poor can’t afford basic goods. There were also talks on potential rice shipments with Indonesia, South Korea, China, Japan, Thailand, Pakistan and the US, Yap said. The Vietnamese government’s “offer has a seven-day validity,’’ he said. Rough-rice futures in the US surged to a record $25.07 per 100 pounds in April, driven by export curbs imposed by some producers, including Vietnam and India, and rising demand. The most-active contract on the Chicago Board of Trade, for delivery in September, gained 0.2 percent Friday to $18.73. The Philippines will release at least 1.2 million tons of rice into the market from state stockpiles between June and September to curb local prices, Yap said Friday. “We’ve prepared to release the rice in critical distribution areas,’’ he said Friday. Source: Bloomberg

Stock halt 25-day slide that cut benchmark index 29 pct

Stocks rose Thursday, halting a 25-day slide that cut Vietnam’s benchmark index by 29 percent, on speculation central bank action to tame inflation will help restore investor confidence in the market.

The Ho Chi Minh Stock Exchange's VN-Index added less than 0.1 percent to close at 370.55, erasing an earlier decline of as much as 0.6 percent. PetroVietnam Fertilizer & Chemical Joint-Stock Co., the gauge's second-biggest company by value, led 89 that gained, while 55 fell and seven were unchanged. The index has plunged 60 percent this year, the most among 90 benchmark indexes tracked by Bloomberg, making the Vietnamese stock market the world's worst-performing one this year. The central bank on Wednesday increased interest rates to 14 percent from 12 percent to tame the fastest gain in consumer prices since at least 1992. Vietnam faces a potential currency crisis because of spiraling inflation, according to Deutsche Bank AG and Morgan Stanley. The rate increase “will be very good for the economy in the long term, and help to improve investor confidence,” said Le Ba Hoang Quang, Hanoi-based head of research at the securities unit of Saigon Thuong Tin Commercial Joint-Stock Bank. The benchmark's 14-day relative strength index, which shows how rapidly prices have advanced or dropped during a specified time period, was at 6.5 Thursday. A measure below 30 is seen as a signal stocks are about to rise. Foreign investors remained net buyers, pumping VND25 billion (US$1.6 million) into the market. Among their favorite stocks were Pha Lai Thermal Power, PetroVietnam Drilling And Well Services, FPT Corp., Saigon Securities Inc. and Vinh Son Hydropower. Hanoi’s stock exchange recovered for the second straight session, with the HASTC-Index edging up by 0.94 of a point, or 0.93 percent, to close at 109.48. Source: Bloomberg

Technology market to swell

Vietnam’s consumer technologies retail market is expected to expand this year by 27 percent year-on-year, market research firm GfK Asia said Thursday.

The Vietnamese arm of the global researcher said the market performed well last year but would do even better this year. GfK Asia said the consumer technology market’s five sectors – consumer electronics, home appliances, information technology, telecommunications and photography – were expected to generate sales of US$4.07 billion this year. Growth is expected to be driven mainly by information technology, home appliances and telecommunication, the research firm said. Reported by Minh Quang

Borrowers suffer as banks race to boost deposit interest rates

A saver makes a deposit at a VP Bank branch in Hanoi While savers are delighted with rising bank deposit interest rates, borrowers are being squeezed by an associated steep increase in loan interest rates.

The central bank raised the benchmark rate to 14 percent from 12 percent a year on Wednesday. The hike allowed banks to offer annual deposit rates of up to 21 percent a year. As banks raced to raise deposit rates, they also lifted lending rates and announced new fees for borrowers. One Ho Chi Minh City company director told Thanh Nien Thursday her firm’s bank had offered a loan of VND850 million (US$51,170) which had total interest payments of VND1 billion ($62,205). “The bank asked us to pay a security deposit worth 15 percent of the loan’s value,” she said. “The deposit interest rate for the security is equal to one for a checking account [the bank’s lowest deposit interest rate],” she said. A computer parts trader experienced a similar problem. A company representative said a bank had agreed to lend the firm VND2 billion ($120,409) with an interest rate of 1.9 percent per month [22.8 percent per year], including fees. But the lender Thursday informed the company it would raise the rate to 26 percent a year, including fees and asked the borrower to pay a security deposit worth 21 percent of the loan’s value. The bank offered a mere 3 percent per year on the security deposit. Despite the state bank banning banks from charging fees for borrowers and lifting the lending interest rate higher than 21 percent per year, the actual rate reportedly ranges from 22 percent per year to 24 percent per year. According to a source from commercial banks, lenders have various “technical approaches” to push the deposit interest rate above 21 percent per year without violating the central bank’s regulations. ‘Central bank should intervene’ Critics said banks liquidity, or amount of available cash, was still too low, which is why they were trying to attract more deposits with higher interest rates. Therefore, the central bank should halt the interest rate race by issuing bonds to finance loans to struggling banks. HCMC Economics University’s Dr. Tran Hoang Ngan warned banks shouldn’t ask borrowers to pay security deposits. “The central bank’s move [raising the benchmark rate] showed it was keeping close eye on the market,” Ngan said. “When the inflation is under control, the base rate is likely to be reduced.” Reported by Thanh Xuan-Hoang Ly

IVC – Cùng em đến trường

Chương trình được tổ chức trên tinh thần “San sẻ yêu thương – Tiếp bước đến trường”, mong muốn mang đến cho các em học sinh nghèo tại các trường tiểu học trong các khu vực Củ Chi, thành phố Hồ Chí Minh và Khánh Hòa một mùa tựu trường trọn vẹn, vui tươi và đầy ý nghĩa.
Những bộ sách giáo khoa cũ, tập trắng, dụng cụ học tập… nhận được từ sự đóng góp của tất cả mọi người sẽ là những món quà mà tất cả chúng ta mong muốn đem lại cho các em.


Nếu được nói về cảm xúc chương trình thì ko cách nào hay hơn là xem một vài hình ảnh của chương trình “IVC – Cùng em đến trường lần 1 năm 2007”. Sự thành công của chương trình lần 1 là động lực rất lớn giúp toàn bộ IVC quyết tâm thực hiện chương trình lần 2 này tốt hơn.

Hình 1: quyên góp tại bảo tàng HCM



Hình 2: Phân loại

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Hình 3: gói quà

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Hình 4: quyên góp trong Đầm Sen vào ngày hội Mùa hè xanh



Hình 5: trường Trung Lập Thượng tại Củ Chi

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Hình 6: trường Trung Lập Hạ tại Củ Chi



Hình 7: các trường tại Khánh Hòa

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Mọi người hãy cùng nhau chung tay, góp sức để chương trình lần này đến được với nhiều em nhỏ hơn, nhé!
Ko có gì khó khăn để giúp chương trình khi vào dịp cuối năm học, ai ai cũng phải dọn dẹp lại góc học tập của mình. Mọi người hãy nghĩ đến những em nhỏ với ước mơ được đến trường vẫn còn đang gặp nhiều khó khăn, mà đừng ngần ngại gọi cho Attu : 0905170072 . IVC sẽ đến tận nơi nhận quyên góp vào dịp cuối tuần. Hoặc cụ thể hơn, mọi người hãy đến Bảo tàng thành phố Hồ Chí Minh (65 Lý Tự Trọng Q.1) vào các ngày 29/6, 5-6/7, 12-13/7 để trực tiếp ủng hộ chương trình.
Cảm ơn các bạn rất nhiều.

Rất Cảm ơn các bạn!

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New pics of Paris Hilton

Google CEO talks of good, evil and monopoly fears

Eric Schmidt (R), Chairman and CEO of Google Inc., is interviewed by Ken Auletta, veteran media writer of the New Yorker magazine, at an event held by Syracuse University in San Francisco, California, June 11, 2008 Google Inc Chief Executive Eric Schmidt on Wednesday detailed his theory of competition in the Web industry while saying Google's famous mantra of "Don't be evil" is often misunderstood.

In an on-stage interview with writer Ken Auletta of the New Yorker magazine, Schmidt said "Don't be evil" is meant to provoke internal debate over what constitutes ethical corporate behavior, rather than representing an absolute moral position. "We don't have an 'Evilmeter' we can sort of apply -- you know -- what is good and what is evil," Schmidt said before an audience of media industry professionals at an event sponsored by Syracuse University's Newhouse School in San Francisco. On other fronts, Schmidt said Google was taking a patient view to making money from online video advertising, while it sees mobile phones attracting the most lucrative ad rates. Google is moving to transform YouTube, its popular online video-sharing site, into a money-maker via new forms of advertising it will unveil over the next year, Schmidt said. He was cautious about how profitable this might prove to be. For now, YouTube's video traffic consumes the majority of Google's outgoing network bandwidth. But he said it could possibly lead to the "creation of a whole new industry." "We don't yet know how we are going to make significant amounts of money on YouTube," Schmidt said. "But it seems obvious that we should be able to make some money from this." His optimism is based on two key facts: "We know people are watching it" and "We have the luxury of time to invest." Speaking of the emerging market for Web-based advertising on mobile phones, Schmidt said the vast majority of Google searches on mobile phones were done on Apple Inc's year-old iPhones, which prominently feature a Web browser. "Mobile looks like it will ultimately be the highest of ad rates," because ads can be targeted by user location, he said. DEBATING CORPORATE EVIL When he first joined Google as CEO seven years ago, Schmidt acknowledged thinking the "Don't be evil" phrase was a "joke" being played on him by founders Larry Page and Sergey Brin. Schmidt recalled sitting in Google's offices later in 2001 when an engineer interrupted a strategy discussion over a planned advertising product by saying, "That is evil." "It is like a bomb goes off in the room. Everything stopped. Everyone had a moral and ethical conversation, which by the way, stopped the product," Schmidt said. "So it is a cultural rule, a way of forcing a conversation, especially in areas which are ambiguous," he said of how the mission statement works in practice at Google. Schmidt reaffirmed that the company's primary goal is not to make money selling ads, whether it is banner ads or ads on Web searches, online video, TV and mobile phones. "The goal of the company is not to monetize everything, the goal is to change the world ... We don't start from monetization. We start from the perspective of what problems do we have," he said, referring to big, world-class problems. Apart from its main business, Google also backs, through its philanthropic arm, Google.org, efforts to develop renewable energy, prevent disease and promote government transparency. But with its growing dominance of the search market -- the starting point for many Internet users -- Google increasingly faces comparison to arch-rival Microsoft Corp, with its long-standing domination of the computer software market. Google has weathered criticism from human rights activists for doing business in China and over privacy issues that spring from the mountains of data its computers collect on Web users. THEORY OF COMPETITION Speaking to reporters following the interview with Auletta, Schmidt challenged the notion that Google dominated the Web. He said that while Google may dominate the market for text-search advertising against weaker cross-town rival Yahoo Inc, Yahoo is the leader in the hot online display ad market, preferred by corporate marketers for brand marketing. He noted it is a larger market than text-based search ads. Schmidt declined to comment on whether talks had cooled with Yahoo on an ad partnership deal that would pose an alternative to talks between Microsoft and Yahoo on various potential partnership deals, including ads. He argued mature industrial markets allow big players both to compete and cooperate, citing IBM (IBM.N) as a model. With an antitrust decree hovering over its head for decades, IBM evolved a strategy of becoming a components supplier that enabled many other high-tech companies to thrive. Schmidt contrasted this style of open competition to what amounts to a winner-take-all strategy by Microsoft to dominate the Windows software market and related business software. "The Microsoft model, where it is the only competition, is not, in fact, the model in mature industrial structures," Schmidt said. "The mature industrial structure is that 'piece parts' are built by people in reasonably fair and open ways." "You have to resolve in your mind the fact that there is competition and collaboration in mature industries." Source: Reuters

Sexy Girl in Bikini

Korean heartthrob wraps up Vietnam charity trip

Lee Young Ae hugs a teenager during her visit to the Thi Nghe Center for Orphans and Disabled Children Tuesday. The Korean movie star handed VND50 million (US$3,000) and gifts of milk, cookies and candies to the center. South Korean movie star Lee Young Ae, who has become an Asian heartthrob with her charming roles in multiple TV series, has concluded a two-day trip charity trip to Ho Chi Minh City.

She was here as a goodwill ambassador for the GS E&C Corp., an arm of the GS Group, one of Korea’s top conglomerates with a presence in Vietnam in retail, recreation and construction. Lee handed VND50 million (US$3,000) and gifts of milk, cookies and candies to the city-based Thi Nghe Center for Orphans and Disabled Children in Binh Thanh District. She also spoke to the local media before leaving for Incheon, Korea last night. Did you know anything about Vietnam before making this trip? Lee Young Ae: Although this is my first visit to Vietnam, I have learnt much about your country [in the past], especially when I did a commercial to be used in Vietnam in 1990. How did you feel on your first visit here? I visited Ben Thanh Market in the morning. Lots of people recognized me and I was happy to know that. I don’t feel like a stranger here. The local people are very friendly and lovely. I learnt something from this trip. What impressed you the most during last two days? I find the food here delicious. I’ll tell my friends about pho (beef noodle soup) when I get back. I will learn to cook pho soon. Your role in the TV drama “Dae Jang Geum” (or “Jewel in the Palace”) is very popular among fans here. Was that apparent? I know the series was very popular in Vietnam. Many people called me by the name of the character and asked to be photographed with me. I was very happy. You have not appeared in many other movies after your successful roles in Dae Jang Geum and Sympathy for Lady Vengeance… Right! Maybe I have been more selective, but I was involved in many other activities. I want to visit many places, meet many people. But I’m still waiting for my next role. LEE YOUNG AE’S CAREER Lee Young Ae (born January 31, 1971) first appeared on television in 1991. But it was not until 1995 that she began acting in TV dramas, soon attracting a large fan following. She won various television awards in the mid-1990s, and in 1996 made her film debut in the poorly-received Insh’Allah. In 2001 Lee continued to build on her film career, starring in the popular melodrama Last Present opposite Lee Jung-Jae, and also in the second feature by Hur Jin-Ho, director of the acclaimed Christmas in August. This film was released to great critical acclaim, and it won her the Best Actress prize at the local Blue Dragon awards. For the next few years, Lee did not appear in films, but in 2003 played the lead role in a hugely popular TV drama called Dae Jang-Geum, which revived her popularity. In 2005 it was screened in Hong Kong, where it became the most successful Korean drama ever to be screened in the territory. Lee’s return to the screen came in summer 2005 in Sympathy For Lady Vengeance, the last film in Park Chan-wook’s acclaimed trilogy of revenge films. Reported by Nguyen Van – Nghia Pham

ANZ Vietnam and local oil transporter swap interest

PetroVietnam Transportation Corporation inked a five-and-a-half-year interest rate swap deal with ANZ Vietnam Monday.

Interest rate swaps allow companies to exchange sets of cash flows. In this case, fixed interest rate payments are swapped for floating rate payments. Interest rate swaps are often used by corporate and institutional customers with medium to long term assets or liabilities to stabilize their interest revenue and expenses stream. ANZ Vietnam said it has previously undertaken interest rate swaps with Vinataxi, the Vietnam Technological and Commercial Join-Stock Bank (Techcombank) and the Bank for Investment and Development of Vietnam (BIDV). Established in 2002, PetroVietnam Transportation Corporation, PV Trans, was partially-privatized and listed on the HCM Stock Exchange last year. PV Trans expects to gain 30 percent of Vietnam’s crude oil transportation market share while investing US$2.25 billion in 20 more crude oil tankers until 2015. ANZ Bank Vietnam is one of the leading providers of capital market products in Vietnam. Reported by Vinh Bao

Maybank may increase stake in An Binh Bank

Malayan Banking Bhd., Malaysia’s biggest bank by assets, plans to increase its stake in Vietnam’s An Binh Bank, a 15-percent-owned Vietnamese venture, the Star reported, citing a company official.

The bank says the long-term outlook for the economy in Vietnam remains positive even after the recent slowdown, the report said, citing Abdul Wahid Omar, chief executive officer at the Malaysian bank, also known as Maybank. An Binh Bank, based in Ho Chi Minh City, said in a statement late last month, Maybank may increase its holding to 20 percent in 2009, pending Vietnamese government approval. Maybank valued the 15 percent stake at 430 million ringgit (US$133 million) in March. The Kuala Lumpur-based bank, is seeking a stronger foothold in Asia as competition intensifies at home, the lender said in a statement released in March. Source: Bloomberg

Foreigners continue to buy Vietnam stocks: JPMorgan executive

Foreign investors remained buyers on the Vietnamese stock market, David Fernandez, head of emerging markets research at JPMorgan Chase & Co., said in a television interview with Bloomberg in Singapore this week.

So, the worst is almost over? David Fernandez: I think so. I mean if you look at the data that have been coming out of Vietnam, they’ve deteriorated at an extremely rapid pace at the end of last year and that pace of deterioration accelerated into early this year; in particular, the inflation numbers as well as the fact that the trade deficit has ballooned in the first part of the year. A lot of analysts have taken these numbers and extrapolated them out and said that Vietnam is headed for a crisis situation. When we look at the numbers, we would say that what we see is that the maximum amount is likely close to a peak when it comes (in particular) to the trade deficit, which we think is probably going to narrow significantly in the second half of the year and that the inflation data are probably close to peaking as well. They have to still look at the fuel prices but once that’s done, you could probably still end the year at closer to 20 percent than the current level of 25 percent. But investors are not convinced — if you take a look at the benchmark, it continues to decline. How much lower can it go? Where’s the bottom? Well I think for the equities in Vietnam, I think everyone would agree that the past couple of years have been an extremely frothy time; valuations were at levels that were unreasonable and so it’s potentially still the case that as a broad market, they’re still paying on the equities side in Vietnam. But having said that, I think that talking to our investors who continue to want to get exposure, and if you look at the foreign numbers, foreigners continue to be buyers. These are buyers who are dedicated to Vietnam who are there for the long term. This correction could indeed potentially continue, given, again, the froth, especially with domestics buying into the market when they really had no business doing. So you could still have some negative effects in the equity market but foreigners I think will still want to keep buying it. I would look at other asset prices as really an indicator as to whether or not indeed the worst is over. Let’s talk about the dong. Is there concern the government will gradually devalue the dong to avoid a currency crisis? Well, it’s actually much worse - the market has started a price crisis in that there would be an immediate and very sharp devaluation of the currency. Several analysts have come out and said things need to happen and happen very quickly in terms of changing the value of the dong and devaluing it. In meetings I had last week with the government, [officials] indicated there’s no plan whatsoever to do that. Our analysis would agree that there’s really not only no pressure from a foreigner exit point of view on balance of payments for Vietnam to devalue the dong, but really there is no benefit for Vietnam from doing so. And so our sense is that no, they will not be doing anything in terms of any change in the currency regime there. What needs to be done for investor sentiment to return to Vietnam? Well I think this is a several-stage game and I think it’s important to get the stages right. People want to talk about the long list of things that Vietnam needs to do on a long-term basis – that’s fine, be it SOE (state-owned firm) reform, legal reform, other things that need to be done in order to sustain the long-term growth of Vietnam – but let’s get the stages right. First thing is to make sure that markets understand there is no plan whatsoever to devalue the dong and, more importantly, that not only words are used to shore up its value but also action is taken. Vietnam has run very large surpluses. They need to intervene more aggressively and to show the market they’re serious. Source: Bloomberg

Real estate offers returns, analyst says

Vietnam’s property market still offers returns for investors even as prices have fallen by as much as 40 percent this year, Professional Property Services said.

“Supply has lagged demand over the last two, three years and it still lags demand,” said Margaret Brooke, chief executive officer at the real estate consulting company. They need more offices, residential, they need very much more retail. The property market’s “fundamentals’’ remain intact even with slower sales in the next year, Brooke said in a Bloomberg Television interview last Friday, adding that investors have to take a longer-term view. Vietnam’s economy expanded 8.5 percent last year, the fastest pace since 1996, as demand for manufacturing and services rose after the country joined the World Trade Organization in January 2007. The growth forecast for 2008, which was cut this week to 7 percent from as much as 9 percent, still remains one of the highest in Southeast Asia. Vietnam is still a “strong market’’ with a lot of buyer interest, said Brooke, whose Hong Kong-based company has advise clients about the country’s property industry since the 1990s. Apartment prices in Ho Chi Minh City have declined by as much as 50 percent since January. Keppel Land, Singapore’s third-largest developer, said June 4 that the government is taking “proactive measures” to address its economic challenges and its Vietnam office leases and home sales remain “good.” Source: Bloomberg

Oil volatile as markets not well supplied: BP CEO

Oil prices are unstable because markets are not well supplied, and higher taxes in producing countries are not conducive to investing in new output, the head of energy major BP said on Monday.

"In a well functioning market where supply and demand are balanced, prices should be stable. Where prices are high, however, they show that supply is not responding adequately to rising demand ... and that is where we find ourselves today," CEO Tony Hayward told an oil and gas conference in the Malaysian capital. Oil prices soared more than $11 a barrel on Friday, their biggest one-day gain ever, hitting an all-time high of $139.12 on the back of a weak U.S. dollar and mounting tensions between Israel and Iran. U.S. light crude stood at $137.74 by 0332 GMT (11:32 p.m. EDT on Sunday), down 80 cents from Friday's settlement at $138.54. "The taxes governments take from the oil and gas industry have continued to increase across the world. I believe this is unsustainable and counterproductive. All it means is that you have less money to invest in new production," Hayward told the Asia Oil and Gas Conference. Hayward also criticized the use of subsidies to protect consumers from surging oil prices and said falling gasoline demand in recent months shows that consumers are responding to price rises and that the market is working. "In a high price environment, I don't believe these subsidies are sustainable. Not only do they put pressure on public finances they also discourage sensible fuel efficiency measures," Hayward said. Malaysia, which uses some of its huge oil and natural gas export revenues to subsidize some of the cheapest fuel prices in Asia, raised petrol prices by 41 percent and diesel by 63 percent last week, pledging to bring pump rates into line with international prices within the next few months. Hayward's comments came a week after Royal Dutch Shell (RDSa.L) Chief Executive Jeroen van der Veer said he did not see any shortage of physical oil supplies and that price volatility had a lot to do with psychology. Hayward said BP would invest $22 billion this year on new production, upgrading refineries and investing in alternative forms of energy, an increase of nearly 15 percent on 2007. Source: Reuters

PM assures on hard currency reserves, dong

An employee counts packages of US dollars in a Vietcombank branch in HCMC. Vietnam’s foreign exchange reserves are sufficient for the government to step in to help maintain the value of the dong, Prime Minister Nguyen Tan Dung has said, damping concern the currency will collapse.

The country is battling inflation of more than 25 percent, the fastest since at least 1992, spurring concern that the dong may lose value as the benchmark stock index extends its losing streak to a record. Rating agencies have lowered their outlook for the nation’s debt in the past month, citing a slow government response to inflation. The government last week cut the economic growth target this year to 7 percent from 9 percent as it tries to slow the pace of consumer price gains. It is aiming for 2009 growth of as much as 7.5 percent, according to a statement posted on the government’s website June 7. “With the foreign currency surplus, the government will be able to intervene to maintain the dong’s value and ensure imports,” the Prime Minister said in the statement. “The government is now clearly making public what it thinks the problems are, and which it is doing to solve them,” said Dominic Scriven, a director at Dragon Capital, a Ho Chi Minh City-based investment firm with more than US$1.5 billion under management. “The government is doing the right thing to help the dong regain its value.’’ The currency advanced 0.02 percent to 16,286.50 per dollar Tuesday. The dong has declined against the dollar for three straight months, the longest losing streak since August. The State Bank of Vietnam set a reference rate of 16,139 a dollar, compared with 16,132 Monday, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate. Record losing streak The Ho Chi Minh Stock Index fell 1.48 percent Tuesday, capping a record 24-day losing streak, on concern a widening trade deficit and inflation at a 16-year high will prompt overseas funds to sell local holdings, adding pressure on the dong to decline. The benchmark has lost 59 percent this year. The balance of payments showed a surplus of $1 billion in the first five months of the year, according to the government statement. The surplus will increase to as much as $3 billion for the whole year, Dung said. Morgan Stanley said on May 28 that Vietnam is headed for a “currency crisis” because the country’s current-account deficit may swell this year to an “unsustainably large’’ level. Deutsche Bank AG is also predicting a devaluation of the dong because of accelerating inflation. The trade gap widened to $14.42 billion in the first five months this year from $4.25 billion at the same time a year earlier, the General Statistics Office said. The Prime Minister’s statement was released following a meeting with David Fernandez, head of emerging-market research at JP Morgan Chase & Co. Minister of Planning and Investment Vo Hong Phuc said last week that the nation doesn’t yet need aid from groups such as the International Monetary Fund after Deutsche Bank predicted the country may be forced to seek an “IMF-style program’’ in coming months because of insufficient foreign-exchange reserves. The country’s foreign currency reserves have increased to about $22 billion from $19 billion as of the end of 2007, according to Nguyen Thanh Do, director of external financing at Vietnam’s Ministry of Finance. “The reserve will be much higher at the end of the year,’’ he said. BREAKDOWN OF THE CRACKDOWN ■ Vietnam will tighten up on illegal trading of foreign currencies to prevent hoarding of US dollars and stem a decline in the dong. ■ Central bank Governor Nguyen Van Giau asked the bank’s local offices to inspect the currency-trading activities of money changers after a “sudden” drop in the dong’s so-called free-market value, State Bank of Vietnam said in a statement on its website. ■ Money changers violating a ban on selling foreign currency will be “strictly punished,’’ it said. ■ Money changers in Vietnam are only allowed to buy foreign currencies from individuals, and are required to sell all their purchases to banks each day. ■ The government is concerned that a decline in the value of the dong on the free market, or trading outside of banks, may have been exacerbated by speculation among money changers. Source: Bloomberg

Steel demand may slow due to inflation, says expert

Workers load a steel truck in HCMC Vietnam’s steel demand growth may more than halve this year as the government tries to curb inflation, an industry analyst forecast.

“Vietnam has a big problem with inflation and apparent steel consumption growth may slow to 15 percent,’’ Jati Santiono, senior technical manager at the Southeast Asia Iron & Steel Institute, said Tuesday. Demand surged 43 percent in 2007 to 10.2 million tons. Prime Minister Nguyen Tan Dung is trying to restrain consumer prices that rose 25.2 percent last month by putting the fight against inflation ahead of promoting economic growth. The central bank has raised borrowing costs to the highest since 1998. “They have to tighten policy much more sharply,’’ Irene Cheung, a strategist at ABN Amro Bank NV, said Tuesday in an interview on Bloomberg Television. “Their inflation rate is much higher. In the case of Vietnam, it’s 25 percent.’’ Vietnam will cut state spending 10 percent this year to cool price gains, Minister of Planning and Investment Vo Hong Phuc said last Friday. State-owned enterprises must get prime ministerial approval to invest in property or financial markets, according to an announcement Monday. Steel demand in Thailand and Malaysia may also suffer, Santiono said at a conference in Singapore. “The Malaysian government announced they may cut mega projects, so demand will fall,’’ he said. “In Thailand, things are not settled politically, which may affect demand.’’ Thai steel demand was stagnant at 12 million tons last year and may not improve this year, he said. Steel sales in Malaysia may rise 7 percent this year, less than the 10 percent gain to 8.5 million tons last year, he said. Indonesian demand may rise 10 percent this year, following last year’s 12 percent rise to 7.1 million tons, he said. Source: Bloomberg

Gov’t requires state firms to get consent for investments

The state-owned shipbuilding Vinashin Group last year planned to invest in banking. Vietnam’s state-owned enterprises will need to get prime ministerial approval to invest in the financial and property markets, according to a statement posted on the government’s website.

Prime Minister Nguyen Tan Dung is trying to calm concerns that enterprises have over-invested in markets that aren’t linked directly to their businesses, according to the statement. The regulation, which comes into effect immediately, will apply to all 104 state-owned companies. Under a 2004 decree, they haven’t had to seek approval for investments. The restrictions may help prevent companies from inflating securities and property prices, helping to drive up inflation, according to Nguyen Son, Hanoi-based director of the market management department at the State Securities Commission. The Southeast Asian nation is battling inflation of more than 25 percent, the fastest since at least 1992. Gains in consumer prices may peak at about 30 percent in the fourth quarter, according to Don Lam, chief executive of VinaCapital Investment Management Ltd., a Ho Chi Minh City-based fund manager. The government last week cut the economic growth target for this year to 7 percent from 9 percent as it tries to slow inflation. Vietnam is aiming for 2009 growth of as much as 7.5 percent, according to a statement posted on the government website June 7. State enterprises are holding key areas of the economy and a large amount of national assets, according to a presentation by the Prime Minister to the National Assembly late last month. Sixty-three enterprises have invested about VND7.4 trillion (US$455 million) in setting up securities and financial investment funds, commercial banks, stock companies, and real-estate businesses. Source: Bloomberg

IMF says it isn’t in talks with Vietnam on loans

A woman pays for vegetables at a market in HCMC The International Monetary Fund (IMF) said it isn’t in talks on providing aid to Vietnam after Deutsche Bank AG predicted the country may be forced to seek a financial bailout from the agency.

An “IMF-style program will be needed in the coming months,” Chua Hak Bin, chief Asia strategist for Deutsche Bank Private Wealth Management in Singapore, said in research published last Monday. Concern is mounting that inflation exceeding 25 percent will hurt confidence in the Vietnamese dong, cutting foreign-exchange reserves and creating economic instability, forcing the country to look abroad for capital, JP Morgan Chase & Co. said in a May 30 note. Benedict Bingham, the IMF’s senior resident representative in Vietnam, said in a telephone interview last Tuesday from Hanoi, “We have had no discussions with the authorities on an IMF program, and there’s been no indication from the authorities that they would be interested in such a program. “At this point in time, Vietnam doesn’t need any such financial assistance,’’ Minister of Planning and Investment Vo Hong Phuc said Saturday in Sa Pa Town, northern Vietnam, after a meeting with donors including the World Bank and the IMF. State Bank of Vietnam deputy governor Nguyen Dong Tien said that any suggestions that Vietnam is currently seeking international financial assistance from the IMF are “not true.” “The government doesn’t think that our current economic situation requires any such assistance yet.” Forex reserves IMF loans may be required because Vietnam has insufficient foreign-exchange reserves to withstand a financial crisis, Deutsche Bank’s Chua said in a telephone interview last Tuesday. Matthew Hildebrandt, an economist at JPMorgan Chase Bank in Singapore, wrote in the May 30 note that a transfer of US$25 billion from the IMF or from one or more Asian central banks is “a possibility.” The country’s last loan program with the IMF was worth $427 million when it expired in April 2004 with less than half of the total package distributed, after a dispute over the auditing of the central bank. An improvement in the economy is critical to preventing investors from fleeing dong-denominated assets, JPMorgan said. Year-on-year inflation rate reached 25.2 percent in May, the highest level since at least 1992, while the trade deficit more than tripled over the first five months of the year. Morgan Stanley said in a May 28 note that the dong is poised to weaken in a manner similar to Thailand’s baht in 1997 because Vietnam’s current-account deficit may widen this year to an “unsustainably large” 7.5 percent of gross domestic product. In addition to a “sizeable” dong devaluation, an IMF program may include nationalizing insolvent banks and moving to a more flexible managed exchange-rate system, wrote Chua of Deutsche Bank. Source: Bloomberg

Modern Car 2

Modern Car

Vietnam, Norway to expand ties

Vietnam and Norway will boost their on-going cooperation in shipping, shipbuilding, oil and gas, hydro-electricity, fisheries, environmental protection, education and healthcare.

The plans were agreed on by visiting State President Nguyen Minh Triet and Norwegian Prime Minister Jens Stoltenberg during their talks in Oslo Friday. The national leaders also agreed to assist each other in culture exchange and tourism. Triet and Stoltenberg decided to accelerate and tap the potential of the two countries’ trade ties and discussed ways to encourage their businesspeople to establish stable long-term partnerships. They said the relationship between the two countries was growing well with frequent visits, notably the Norwegian King Harald V and Queen Sonja’s visit to Vietnam in 2004. President Triet said he valued the long term assistance the Norwegian government and people have provided Vietnam, especially in the periods of renovation and international integration. He stated that Vietnam treasures and wants to enhance traditional friendship and cooperation with the northern European country. The Vietnamese leader welcomed the Norwegian government’s recent adoption of a “Vietnam Strategy,” which he said was a crucial legal foundation to define priorities for future cooperation. Apart from bilateral issues, the two leaders compared notes on regional and international issues of mutual concern, particularly those on environmental protection and climate change. They agreed to strengthen coordination and support at international forums, particularly as Vietnam has joined the United Nations Security Council as a non-permanent member and the Norwegian Prime Minister acts as the co-chair of the UN Senior Committee. Ending the talks, the two leaders witnessed the signing of a series of agreements, including Norway’s assistance to upgrade water supply networks in northern Dien Bien Phu Town and build a new water supply system in northern Lai Chau Town. Source: VNA

Vietnam targets 2009 growth of 7-7.5 pct

Employees work on the assembly line of the Gree Vietnam air conditioner factory in Vietnam's southern Binh Duong province June 8, 2008 Vietnam, which cut its 2008 economic growth target because of double-digit inflation and a soaring trade deficit, expects growth in 2009 of 7-7.5 percent, the government said on Monday.

Last month, Hanoi cut its 2008 growth target to 7 percent from a previous 9 percent. Annual inflation has been in double digits for seven consecutive months and hit 25.2 percent in May, while soaring import costs have tripled the trade deficit to $14.4 billion so far this year. "The push towards an economic structure where industry and services have increasing shares will be continued," Prime Minister Nguyen Tan Dung said in a directive sent to ministries and government agencies on Monday citing the 2009 growth targets. Dung also called for more investment in the agricultural sectors and greater rice output next year to meet high export demand. Vietnam's market reforms have boosted growth and trade in the last decade, but the economy is showing strains of overheating, underlined by high credit growth in 2007. Like other countries, it is struggling to deal with higher prices of food and energy. The country's inflation is the third highest in Asia after Myanmar and Sri Lanka. Last week, Moody's downgraded its ratings outlook on Vietnam to negative from positive following similar moves by Fitch Ratings and Standard & Poor's to reflect the growing strains on the economy. But many economists believe Vietnam's long-term prospects remain sounds. "We remain of the view that the longer-term economic reform story that made Vietnam such an attractive destination for foreign direct investment in recent years remains a compelling one," Benedict Bingham, the International Monetary Fund representative in Vietnam told a donors conference last week. FDI pledges so far this year have reached more than $14 billion, government figures show, 16 months into its membership of the World Trade Organization. Source: Reuters

Funding for fishy businesses

The reversal of a central bank policy that limited commercial bank loans to tra and basa catfish exporters may not be enough to relieve the sector’s cash flow problems.

Under the new State Bank of Vietnam (SBV) policy, loans will mainly be granted to purchasing and processing businesses. Businesses can apply for loans if local authorities determine they have sufficient financial resources to make the repayments and have access to markets to sell their products. Commercial banks have also been asked to allow farmers who cannot sell their fish to defer repayment of the loans. Le Van Tho, director of the Can Tho Bank for Agriculture and Rural Development (Agribank), late last week said the bank had set aside VND100 billion (US$6 million) for loans to catfish and tra businesses. He said the bank had already approved loans of VND10 billion ($600,000) each to seven catfish businesses at a yearly interest rate of18 percent. Vo Dong Duc, director of Can Tho Import-Export Seafood Joint Stock Company (Caseamex), said his company was informed it would be given credit but it had not received any money yet. Duc said Caseamex needed VND60 billion ($3.7 million) every month and thus the credit of VND10 billion ($600,000) would be little help. Nguyen Van Son, chief of the An Giang Agribank’s credit department, said the bank had a credit fund of VND200 billion ($12 million) for catfish businesses and farmers. Son said the bank had allocated loans to businesses last Friday so that they could purchase and process 30,000 tons of catfish in the Mekong Delta An Giang Province. According to many catfish businesses, they still need more loans from banks in order to maintain production. It is estimated that catfish businesses in Can Tho City need a total of VND500 billion ($30 million) in loans and their counterparts in An Giang Province VND450 billion ($27 million). In a decision it released April 10, the SBV ordered banks to offer foreign currency loans only to importers and those making repayments of foreign loans or investments in foreign countries. Exporters are not pleased with the central bank’s move. Exporters said they had to pay high fees to convert their dollar earnings into dong because they had to repay their bank debts in dong. Local firms reacted nervously to the state bank’s decision since many can’t afford the dong-lending interest rates, which are extremely high. In related news, Luong Le Phuong, Deputy Minister of Agriculture and Rural Development, met with local officials, banks and catfish businesses in An Giang Province last Friday. Phuong said the ministry would recommend more government support for the tra catfish industry, one of the country’s most lucrative agricultural industries. Reported by Thanh Nien staff

Work starts on bridge linking HCMC, Dong Nai

The construction of a second bridge linking Dong Nai Province and Ho Chi Minh City began Saturday, with a total investment of more than VND1.8 trillion (US$111 million), expected to open by the end of next year.

At the ground-breaking ceremony, Deputy Prime Minister Hoang Trung Hai said the government encourages BOT investment projects in infrastructure. The bridge, over the Dong Nai River, which will connect Dong Nai’s Nhon Trach District and HCMC’s District 9, is constructed under the BOT (Build-Operate-Transfer) system. The first bridge, which was built before 1964, is currently overloaded, carrying 100,000 vehicles a day. Reported by Mai Vong

Formosa eyes Vietnam petrochemical project

Formosa Plastics Corp. plans to build a petrochemical complex in Vietnam, in addition to a proposed steel project, the Economic Daily News reported, citing unidentified industry sources.

The complex will cover an area as large as 6,000 hectares, more than triple the size of the company’s petrochemical base in Taiwan, the Chinese-language newspaper said. Formosa Plastics will invest US$8 billion in a steel project in Vietnam, the report said, without stating the cost of the petrochemical complex. Construction of the steel facility will commence by the month-end, the report said. Taipei-based Formosa, Taiwan’s biggest diversified industrial company, said on April 9 it plans to spend $2.57 billion to set up a steel plant in Vietnam and take a 95 percent stake in the venture. A new company may start building the mill with annual capacity of 7.5 million metric tons by the end of the year, K. H. Wu, president of Formosa Heavy Industries Corp., said in an interview. Formosa Plastics is expanding in Vietnam to cut costs and tap the Southeast Asian market. Source: Bloomberg

Coffee, after the war

Tran Tan Hung, a former soldier, mixes coffee at his Ho Chi Minh City drink stand, where customers who fought on both sides of the war gather for drinks and laughs A former soldier scarred by Agent Orange now enjoys a quiet life running a Ho Chi Minh City coffee stand.

The coffee seller pulls up his shirt to reveal two small rashes on his back. “They broke out a few days ago. I couldn’t sleep.” Tran Tan Hung, 64, says he has been feeling better in the days since the rash broke out. His wife applies traditional herbs to the rashes everyday. Hung, sitting next to his coffee cart that is filled with glasses and bottles, begins explaining the benefits of the herbs when his daughter comes to ask for money to pay the gas delivery man. “Bring him here. I’ll give him the money myself,” he says. The daughter runs off. The father’s eyes follow her. “She’s a smart kid,” he says. “She doesn’t have it.” “It” is Agent Orange poisoning. The toxin entered his body during the American war and has not shown its effects on his 12-year-old daughter. It affects his two sons, though. Both in their twenties, they are mentally retarded. It’s an old story: the US sprayed some 80 million liters of herbicides, including 20 million liters of Agent Orange on Vietnam during the war to defoliate trees, remove cover and destroy crops used by the Viet Cong, or the National Front for the Liberation of South Vietnam. Agent Orange, named after the color of the stripe on barrels in which it was stored, contained tetrachlorodibenzo-p-dioxin (known as TCDD), one of the most poisonous chemicals ever made by man. According to US military estimates, an estimated 2-4 million citizens and soldiers were affected by the chemical. Current data show that roughly 10 percent of the total land area in southern Vietnam was hit by Agent Orange. In some southern provinces, 50 percent of the land was completely stripped by the defoliant. It has caused cancer in those exposed directly to it while often afflicting children born to exposed parents with mental retardation. “We saw the planes spraying. It looked like mist over the forest,” Hung says. “The next day we woke up. The trees were all branches.” Originally from the northern port city of Hai Phong, Hung moved south to fight in 1964. His unit crossed the Truong Son mountain range, where the famous Ho Chi Minh Trail carried supplies from north to south. He fought small battles in the central highlands province of Lam Dong. He was then stationed in a forest at the edge of the mountain range as part of a logistics team. “We stayed there for 11 years, building roads and bridges, taking care of the warehouses,” Hung says. “The chemicals must have gotten into the streams. We drank water from the streams.” Some of his comrades are dead, some alive, and some he has not heard of since the war ended. For the past 18 years, Hung has sold coffee from a cart on a grassy median divider between two apartment buildings on Ho Chi Minh City’s Phan Xich Long Street. The cafe is popular in the neighborhood. Every morning, old men who fought on both sides of the war come for a cigarette and coffee. They sit until the sun is high. “He likes sunlight,” Hung says, thrusting his chin toward a man who does not budge when the first rays of noon sun splash on his bald head. The man is 70-year-old Pham Tan Loi, an interpreter for the Americans during the war. “Good thing I didn’t know him [Hung] then,” Loi says. “He would have shot me.” The two men look at each other and laugh. Last month, a Vietnamese testified before a US House of Representatives hearing on Agent Orange for the first time. The event was titled: “Our forgotten Responsibility: What Can We Do to Help Victims of Agent Orange?” “We don’t know what happens in the American political world, but ‘forgotten responsibility’? ‘Victims’?, That is acknowledging a lot,” said Dr. Nguyen Thi Ngoc Phuong, former president of HCMC-based Tu Du Women’s Hospital, after returning from the US Phuong said that for a long time, the US had denied responsibility for the damage Agent Orange did to the Vietnamese environment and people. In some places, especially former US military bases and storage sites such as the Da Nang and Bien Hoa airports, the soil and water are seriously polluted. Last year, President George W. Bush promised US$3 million to fund environmental clean-up. The funds have yet to be distributed. Vaughan C. Turekian, Chief International Officer for the American Association for the Advancement of Science, told the House hearing it would cost $15 million to remove dioxins from Da Nang alone. Phuong said some congressmen are interested. “They told me to give them a number,” she said. “This is a good sign.” A lawsuit the Vietnamese Organization for Victims of Agent Orange (VAVA) brought against the companies that manufactured the herbicides has been rejected by a US court of appeals. In 2005, the suit was dismissed by the US District Court for the Eastern District of New York on the ground that there was no legal basis for the plaintiff’s claims. “If we fail in this generation, we’ll continue to sue in the next,” Phuong, who is also VAVA’s vice chair, said. Hung says he has a “light case” of Agent Orange poisoning. The rashes rarely occur. “It got serious only once, in 1980. Mucus leaked from the rashes and covered my face.” He is healthy now. “But he’s old,” his wife says. “He can’t sell the coffee by himself.” Every morning, Hung’s sons carry the glasses and bottles from the apartment and set up the cart. “They can’t tell the time or one color from another,” Hung says of his sons. “But they’re very strong.” When business is slow, the young men sit on a stone bench in the park, sometimes talking, sometimes smiling. “He is lucky to have them,” the mother says. “They’re his arms and legs.” Hung tells his customers a piece of good news: the government has increased his sons’ monthly allowance. They receive VND318,000 (US$19.70) every month now. Hung gets VND374,000 ($23.17). “They’re almost catching up with me,” the father says, laughing. Reported by Thuy Linh

Investors complain about tourist zone hassles

Investors told a conference held in Nha Trang Friday that they had problems with paperwork while investing in the Cam Ranh Peninsula Tourist Zone.

They did not get clear guidance over documentation, zoning plans keep changing and land for their projects is not handed over in time, they complained. Khanh Hoa Province’s Department of Natural Resources and Environment has allotted land only to three out of 40 investors so far. Infrastructure in the 1,200 ha tourist area has not been completed yet, making investors apprehensive about going ahead with their projects. Infrastructure is now expected to be completed in 2010. Reported by Xuan Hoa