Leaders of Europe's major economies said a global solution was needed to the current financial crisis.

German Chancellor Angela Merkel highlighted that leaders faced an "extraordinary international crisis".

But leaders including UK Prime Minister Gordon Brown warned against reverting to protectionism in such a difficult economic climate.

The Berlin gathering is a precursor to the next meeting of the G20 group of major developed and developing countries in London on 2 April, which aims to rewrite the rules of the global financial system.

French President Nicolas Sarkozy said participants at the London summit would bear a "historical responsibility" to reform the global system.

"We have to succeed and we cannot accept that anything or anyone gets in the way of that summit. If we fail there will be no safety net," he said.

'Supervision'

However, despite the encouraging words from key leaders, Czech Prime Minister Mirek Topolanek, whose country currently holds the EU's rotating presidency, voiced concern at what he saw as divisions between Europe's major economies.

"If I put it very tenderly, the divergence in opinions was rather big," the AFP news agency reported him saying as he headed back to Prague.

"It was obvious that the four countries representing the EU in the G20 [France, Germany, Britain, Italy] do not have the same opinion on a number of issues."

Mr Brown said there was a need to create an economy that is based on the "soundest principles", saying the world needed a "global new deal".

Leaders said there was a need for international institutions, including the International Monetary Fund, to play a greater role not just to help countries in financial trouble but to prevent countries from getting into such difficulties.

Mr Brown said leaders had agreed that the IMF needed access to at least $500bn (£348bn).

The comments in Berlin come amid ongoing volatility in world financial markets and uncertainty over the future of some of the world's key banks.

Ms Merkel said: "We are making a commitment that all financial markets, products, and participants - including hedge funds and rating agencies - are of course subject to supervision and regulation."

Details on such a plan need to be worked out before the meeting in London, she added.

Hedge funds, which typically attract wealthy private investors, have been criticised for their lack of transparency and oversight.

Bonuses

As well as greater supervision of all financial markets and instruments, leaders underlined the need to reassess the issue of pay at finance firms.

Mr Sarkozy added said people could "no longer tolerate the reward package system for traders and bankers".

There has been much criticism of bankers' bonuses, which have been high despite their bank's poor performance.

Leaders also said they wanted to crack down on tax havens.

Ms Merkel said: "As far as uncooperative players, tax havens or areas where non-transparent business is carried out are concerned, we need to develop sanction mechanisms. These must be made very concrete," she said

She added that a list would be drawn up "clearly showing which the unco-operative jurisdictions are."

Different opinions

French, Italian, Spanish, Dutch, UK and German leaders are hoping to take a common approach at the London summit.

But analysts say reaching agreement among EU powers will not be easy.

Both Mr Topolanek and the European Commission have voiced concern at attempts by France, Italy and Spain to shelter their car industries from the effects of the downturn.

Mr Sarkozy has suggested that in order to secure government aid, French carmakers should move production out of their East European factories and back to France.

Such disagreements are threatening to prevent Europe speaking with one voice, says the BBC's Rob Cameron in Berlin.

On March 24 the Hanoi exchange will auction two-year government notes to raise another $100 million, with an issue date of March 26.

Proceeds from the dollar-denominated bonds will be used to finance import contracts for equipment for thermal power plants, Deputy Finance Minister Nguyen Cong Nghiep has said.

"By the end of 2009 and from the beginning of 2010, Vietnam will return to its growth path and the difficulties from the end of 2007 will be settled by the end of 2009. So our growth has been delayed by two years," Deputy Prime Minister Nguyen Sinh Hung told reporters in Hanoi ahead of a two-day business roundtable.

Asked why he was confident the revival will be so quick, Hung said Vietnam had a new economy that had posted strong growth in the past.

He also cited the quality of its labor force and the general attractiveness of its domestic market as factors that would help the economy recover quickly.

He said the strength of domestic demand "will certainly" push economic growth in Vietnam before the rest of the world was out of the woods.

The government's response to last year's overheating put the country in a good position to weather the global crisis

Martin Rama, WB's acting director in Vietnam

Vietnam projects annual gross domestic product growth of 6.5 percent this year after a slowdown to 6.2 percent in 2008 from 8.48 percent in 2007.

Earlier this month, a state newspaper quoted a forecast by an arm of the Planning and Investment Ministry for growth in the first quarter of this year to slow to between 4 percent and 4.5 percent from a year earlier.

The World Bank's acting director in Vietnam said his expectations for economic growth this year had been revised down to 5.5 percent from the 6.5 percent forecast late last year.

But Martin Rama said the government's response to last year's overheating put the country in a good position to weather the global crisis.

"There was a lot of adjustment, a lot of good work done last year and that positions Vietnam better than other countries," Rama told reporters on the sidelines of the conference.

No one could imagine that the Japanese automobile manufacturer would offer such a ‘soft’ price. The oil-engine version of Fortuner G has the price of $34,300/car, while the petrol-engine version has the price of $41,000. The price levels prove to be much lower than the price levels of $50,000-60,000 for most imports.

Toyota seems to have prepared well for the ‘Fortuner’ phenomenon with a very impressive marketing campaign. In general, manufacturers always keep the launching of new models secret until the last minutes. However, the appearance of Fortuner was heralded by press agencies in November 2008 and the advertisement campaign was kicked off a couple of weeks before the official launch.

The marketing campaign has brought satisfactory results. Just in the first 10 days of February, the number of orders, according to Toyota, reached nearly 1,000 cars.

In order to compete with Fortuner, Vidamco has set a price for its Captiva diesel LTZ at $34,200, $100 lower than Fortuner. Experts say this is a daring move by Vidamco. If the manufacturer sets the prices overly high, it will not be able to sell products, while if it sets the prices low, it will suffer losses.

Meanwhile, Ford Vietnam has not made any move with Everest model, as the representative of the US automobile manufacturer said that its business is still going well. However, in the long term, when the luxury tax goes into effect, Everest will have to take actions to compete with other rivals.

While the ‘Fortuner fever’ has not subsided, consumers have heard other good news about Ranger, the best seller for pick-up models. Ranger of Ford is imported from Thailand, like Triton of Vinastar and Hilux of Toyota. However, the announced price for Ranger has surprised Vinastar, the rival.

Ranger has prices of between $25,600-30,800, while Ranger 2.5L oil engine has the prices from $28,140-30,870. Ford has a lot of experience with pick-up models and a stable number of clients, while Vinastar has just entered the segment.

Toyota has not made any move with Hilux. However, once the big manufacturer jumps on the bandwagon, the pick up market will certainly be more bustling.

The domestic gold price is standing at VND19,600,000/tael, while the exchange rate of the US dollar on the global market is experiencing strong fluctuations.

Being affected  by surging prices in the global market, the domestic gold price on March 2 rose by VND100,000/tael compared to last weekend to reach between VND19,500,000-VND19,650,000/tael

SJC gold was trade at between VND19,530,000-VND19,600,000/tael, while the Bao Tin Minh Chau product was sold at VND19,630,000/tael.

On the global market, gold prices surpassed the VND20,000,000/tael mark, or VND400,000/tael higher than the domestic price. Most transactions were related to selling.

Dongfang Electric Corporation of China and Voith Siemens of Germany will provide equipment and technical service for the A Luoi hydro-electric power project under a VND685.5 billion contract, which will be implemented in 32 months from March 2009.

The A Luoi hydro-electric power plant is built on the A Sap river, about 70 km from the former imperial city of Hue, with a total investment of more that VND3.23 trillion.

The Prime Minister has assigned the Ministry of Agriculture and Rural Development to draft a project to renovate and expand the existing system of rice storage depots to reach a total storage capacity of 4 million tonnes.

The project will be carried out in two phases: the restoration of old depots capable of holding 1.2 million tonnes of rice, and the construction of new depots to accommodate an additional 2.8 million tonnes.

These depots will be located in areas which have convenient transport and seaports, such as Long An, Dong Thap, An Giang, Can Tho and Ho Chi Minh City.

The southern province of Tien Giang has exported nearly 7,500 tonnes of rice so far this year, up 72% compared to the same period last year, at an average price of US$400 a tonne.

The local authorities have urged local rice traders to expand their markets, along with increasing the purchase of rice for local farmers.

Thach Khe Iron Joint Stock Company has been licensed by the Ministry of Natural Resources and the Environment to explore iron ore at the Thach Khe iron ore mine in three communes in Thach Ha district, Ha Tinh province.

Accordingly, the company is allowed to explore iron ore on a total area of 527 hectares at a depth of 550 metres underground for 30 years. The first four years will be for basic construction. From the fifth to the tenth year, the company is permitted to explore 5 million tonnes of iron ore a year and double the output from the 11th year onward.

The exploited iron ore will be supplied to the processing plant with a capacity of 2-4 million tonnes of steel billet a year, which has also been invested by the Thach Khe Iron Joint Stock Company.

For Ha, choosing an attractive place for her family to visit is the most interesting part of Tet preparations. As the 37-year-old chief accountant of a bank in Hanoi, she puts in long hours – as many as 12 – at the office every day, and she reckons her break is well-deserved.

“My family wants to make use of the occasion to relax after one year of hard work. In addition, my son could learn swimming,” Ha says.

She knows there is a world of difference between the way she prepares for Tet and what her mother used to do during her childhood.

“My mother used to struggle to make some delicious food and get some new clothes for us every Tet. Now, we don’t have to worry about food, since meat and fish, which were on the dining table only at family parties or Tet during my childhood, have become a common part of our daily meals.”

Vietnam's strong economic development has seen the emergence of middle class and high-income groups of people that can afford a luxurious lifestyle, which has spilled over into how they welcome Tet.

Most of these people, especially in big cities like Hanoi, Hai Phong and Ho Chi Minh, no longer make the banh chung (square cakes made from glutinous rice, pork and green beans), lean pork paste and fruit jams during the Tet season.

Modernization means they have neither the time nor the inclination for such activities.

Spending many hours at offices and factories leaves little time for cooking at home, and everything. Expensive imported items and locally-made food products that serve many budget levels are available in the market. From street vendors, groceries stores, and regional markets to plush upmarket trade centers, the options are plentiful if you have money.

Already clogged with motorbikes and an increasing number of cars, streets in the cities are snarled on pre-Tet days as people rush to markets, supermarkets, trade centers and other shops.

“The number of customers coming here during the Tet shopping season has increased many times over ordinary days. We have prepared more goods and mobilized more staff to serve them,” says Nguyet Anh, an employee of the Trang Tien Plaza in Hanoi.

At a supermarket in the plaza, streams of customers with shopping carts loaded with foods, beverages, cosmetics and garments cram through its narrow doorways.

“In my mother’s generation, cooking used to be one of their joys during Tet. Now, we don’t want to spend much time on it [cooking]. We want to spend Tet relaxing,” says nurse Nguyen Thi Hanh, 27, while choosing some semi-processed chicken.

People today also spend more time decorating their houses with flowers and bonsai for Tet.

Many have spent hundreds of dollars on bonsai plants and trees with beautiful shapes for the holiday, which falls on January 26 this year.

People in the north have a tradition of displaying peach blossoms and kumquat trees while those in the south display ochna plants that bloom yellow flowers during Tet.

This year, many people in the south have chosen peach blossoms and kumquat bonsai mainly grown in Hanoi and the northern provinces of Bac Giang and Hung Yen, as well as that of ochna plants grown in southern localities, says gardener Nguyen Duc Minh, as he waters trees pruned in the shapes of pyramids, dragons, phoenixes and even waterfalls.

There are other changes in the way Tet is celebrated, including one indispensable activity, which is to visit relatives and not leave without eating or drinking. That custom is changing now.

Instead of welcoming Tet at home, many people are choosing beaches, including Nha Trang, Phan Thiet, Phu Quoc and Tuan Chau, while others prefer to travel abroad, mainly to regional countries like China, Singapore, Thailand and Malaysia.

Another Tet tradition that has changed a lot in recent years is the offering of gifts. Previously, Tet gifts were locally-produced wine bottles and boxes of jams as offerings to parents, relatives and bosses as a sign of affection and respect.

Now, many people choose to buy expensive gifts for their superiors with some presents destined for officials worth thousands of dollars.

Amidst all the changes, there is a constant. Every New Year is awaited with expectations and hopes of greater joy and prosperity in the coming year.

Reported by Bao Anh

Russia says it will resume pumping gas through Ukraine to Europe, following the completion of a monitoring deal.

The state-run energy company, Gazprom, said supplies would resume on Tuesday morning, if there were no obstacles.

Hundreds of thousands of people in Europe have been left without gas since Russia turned off the taps over a contractual dispute with Ukraine.

The BBC European Affairs correspondent says the underlying causes of the crisis are still unresolved.

Disagreement remains over much Ukraine should pay Russia for its gas, and what Russia should pay Ukraine in return for transporting gas to Europe.

Russia shut off the gas last Wednesday after it accused Kiev of stealing gas meant for other European customers.

Hundreds of thousands of people in 15 European countries are now hoping for relief, after almost a week of suffering bitterly cold winter temperatures without any heating.

'Down to work'

Under the deal agreed on Monday, EU and Russian observers will monitor supplies from pumping stations on Ukraine's eastern and western borders, in order to calm Russian fears that Ukraine is siphoning off gas for its own use. Ukraine has denied this allegation.

Gazprom Chief Executive Alexei Miller told Russian Prime Minister Vladimir Putin he proposed restarting gas deliveries at 0800 (0700 GMT) on Tuesday.

Mr Putin replied: "Good, let's get down to work".

Despite a deal signed by Russia, Ukraine and the Czech presidency of the EU, it may be some time before supplies return to normal.

Analysts say that in theory, supplies could return to normal within 24 hours but a more likely time frame is 36 to 48 hours.

Earlier, Ukraine had dropped provisos it wanted to add to the agreement.

Welcoming the deal, Ukraine's Deputy Prime Minister Hryhoriy Nemyria said Ukraine had "never been the obstacle for the delivery of the Russian gas to the European Union".

"The six days' war between Gazprom and the EU customers is going to come to an end," he said.

Major shortages

The agreement may be greeted with scepticism in some of the hardest-hit countries, says the BBC's Gabriel Gatehouse in Kiev, after the same deal fell through last week.

Russian President Dmitry Medvedev had emphasised that Russian gas to Europe via Ukraine would flow only when monitors were in place and a transit deal had been signed by all parties.

While a number of EU teams are already in position, others are not, and Russian monitors have still to deploy to stations in western Ukraine, our correspondent says.

Russia cut gas supplies to Ukraine on New Year's Day, saying it would pump only enough for customers further down the pipeline.

But then Moscow accused Ukraine of siphoning off gas intended for third countries and it restricted supplies even further.

Ukraine denied the claim, but the flow of Russian gas ceased completely on 7 January, leaving many European countries with major shortages.

The EU gets a quarter of its gas supplies from Russia - 80% of which passes through Ukraine - and more than 15 countries across central Europe have been hit by the shutdown of Russian supplies.

Serbia and Bosnia-Hercegovina are among the worst hit as many homes rely on heating stations that only run on gas.

In 1975, the hotel was renamed the Doc Lap ( Independence ) Hotel.

In October 1992, the Saigon-Tourist Holding Company and Glynhill Investment Vietnam, a subsidiary of Lai Sun Hong Kong & Keck Seng , established a joint venture project called the Chains Caravelle Hotel Company.

In 1998, an elegant 24-storey tower was built to complement the original 10-storey building.

Many special guests have been invited for the hotel’s 50th anniversary celebration today including two renowned wartime journalists Peter Arnett and Robert Wiener.

The hotel is also marking the occasion with a 50 percent discount on room rates through December 31, 2009 for bookings made online from May 1-31 at www.caravellehotel.com.

Reported by Vinh Bao

Commercial banks have raised interest rates on dong deposits or are offering cash bonuses to mobilize the funds needed to lend under the government's economic stimulus package.

Partly private Saigon-Hanoi Bank raised the rates by 0.1 to 0.3 percent for deposits of between two and 24 months on April 27. The Hanoi-based lender pays 8.8 percent for 12-month deposits.

Ho Chi Minh City-based Eximbank said from Monday it would pay cash bonuses of VND200,000 (US$11) to

VND1 million ($56) to depositors, depending on the deposit term and amount invested.

Maritime Bank launched a campaign on April 20 offering depositors 9.3 percent on 48-month deposits and scratch cards that come with gifts like microwave ovens and orange juicers.

Last month, the government said it would subsidize bank loans to companies and individuals for up to two years - up from the initial eight months - as part of its efforts to stimulate economic growth.

In the first quarter, the economy expanded 3.1 percent, less than half the 7.5 percent pace recorded a year earlier.

Deposit rate hikes would not affect the stability of the banking system thanks to the central bank’s surveillance, Duong Thu Huong, general secretary of the Vietnam Banks Association, said.

On interbank markets, interest rates on loans from overnight to two months rose while rates on loans from three months to one year remained unchanged from a week ago, according to Reuters data.

The overnight lending rate edged up to 6.33 percent from 6.26 percent last Monday, while 12-month loans were unchanged at 8.61 percent.

The State Bank of , the central bank, said it would keep its key interest rates unchanged in May, holding the base rate at 7 percent, the discount rate at 5 percent and the refinancing rate at 7 percent.

On the dollar front, fixings on interbank dollar loans eased slightly after reported a trade surplus of $800 million in the first four months of the year.

Rates on overnight dollar loans eased to 0.43 percent on Monday from 0.45 percent a week ago, and the six-month lending rate dropped to 2.23 percent from 2.27 percent last Monday.

Loans expand 11 percent

The total outstanding loans at banks have risen 11.16 percent this year, according to a statement posted on the government’s website Monday.

The economy would probably continue to “face difficulties on declining exports and slowing foreign capital inflows” in the coming months, and the central bank would manage monetary policy to “ease it suitably and cautiously,” the central bank’s Governor Nguyen Van Giau said in the statement.

Monetary policy would also be managed to ensure a balance between implementing the government’s stimulus packages and stabilizing prices as well as ensuring the safety of credit institutions, he said.

Commercial banks lent a combined VND255 trillion ($14.3 billion) to businesses as of April 23 under the subsidy program, the central bank said on its website.

Source: TN, Agencies

Meanwhile the world gold price May 1 fell by $5 to stand at $881.2 per ounce. Gold is expected to drop to $850 per ounce in the coming days. Domestic gold is also forecasted to fall but not as much as world prices.

Gas suppliers in Ho Chi Minh City said that from May 1, gas will fall on average by VND10,000 a cylinder.  

SP Gas, Vina Gas and Gia Dinh Gas 12 kilogram gas cylinders costs VND183,000.

 Domestic gas prices continue to fall in line with world gas prices, falling $10 to stand at $390 a ton. 
Domestic gas has fallen by VND22,000 per 12 kilogram cylinder since beginning of March.

By staff writers – Translated by H.Mien

1.819 million tonnes of rice exported so far. In the first ten days of April, businesses exported 234,625 tonnes of rice, raising the total amount to 1.819 million tonnes since the beginning of this year, the Vietnam Food Association announced on April 14.

Their total export earnings have reached more than US$736.661 million.

Currently, export prices hover around US$460 per tonne for 5 percent broken rice, US$430-440 per tonne for 15 percent broken rice and US$415 per tonne for 25 percent broken rice.

Vietinbank to issue long-term valuable papers for 2009

The Vietnam Bank for Industry and Trade (VietinBank) has been approved to issue long-term valuable papers with a total face value of VND 10 trillion and US$400 million for 2009.

This is according to a decision signed on April 13 by the governor of the State Bank of .

Vietinbank has the right to determine the yield of these papers in line with the SBV’s decision on the management mechanism of the base interest rate in VND.

The bank is also requested to comply with the SBV’s regulations on issuing valuable papers in the domestic market.

Vietinbank is responsible for using the proceeds from the issuance in an effective and safe manner and in accordance with the SBV’s guidance and applicable regulations.

Young entrepreneurs join hand to fight economic recession

More than a hundred young Vietnamese entrepreneurs participated in a seminar held in Nha Trang city in Khanh Hoa province on April 13 to discuss measures to help fight economic recession.

The event was jointly held by the Governmental Office, the Vietnam Youth League and the Vietnam Young Entrepreneurs Association.

The participating young entrepreneurs stressed the importance of policy dialogues to promote linkage between the government and enterprises in order to better implement economic policies, creating the best environment for enterprises to contributing to national development and increasing enterprises’ competitiveness on the international market.

They also put forward their current difficulties and raised their proposals to accelerate their activities.

Addressing the seminar, Deputy Prime Minister Nguyen Sinh Hung emphasised that Vietnamese enterprises and the government should promote two-way co-operation and asked enterprises to make proper proposals to the government. The government helped enterprises maintain their production and trading activities and enterprises should pool their efforts to create more jobs for workers, said the Deputy PM.

VND 20,000 billion to fund investment promotion activities in 2009

The Ministry of Planning and Investment has recently approved a budget of VND 20,000 billion to support investment promotion activities in 2009 under the National Investment Promotion Programme for 2009.

The programme includes a series of activities such as organising domestic and foreign investment promotion conferences, holding survey missions, training and enhancing capacity for investment promotion and building investment promotion document…

In the second quarter of 2009, the Ministry of Planning and Investment will hold domestic investment promotion conferences, focusing on infrastructure development projects, water drainage and waste processing, housing programme for needy people; conferences on investment attraction to the Central Highlands and the and the investment promotion conference on tea processing.

In the third and fourth quarter of 2009, the investment promotion conferences on human resource development for the central coastal provinces and northern provinces of the central region will be organised. In addition, the programme will help southern and southwestern provinces to promote investment, trade, culture, sport and tourism. The Cuu Long river delta’s economic co-operation forum is also organised.

On the other hand, more than VND 9,000 billion from the National Investment Promotion Programme in 2008 will be added to 2009. This amount of money is to organise domestic and foreign investment promotion conferences and build project information, investment promotion document and websites in order to boost international co-operation and promote trade to foreign countries.

Apparel export to on the rise

’s apparel export value to has surged recently against diminished exportation to the and the European Union.

’s apparel industry reached US$138 million in export turnover within the first two months of this year, a 27% year-on-year increase, according to the Vietnam Trade Office in . The northeast Asian country reduced tariffs on many apparel products from after the Vietnam-Japan Economic Partnership Agreement was signed last year.

Moreover, the Japanese yen has appreciated against the U.S. dollar and has announced to seek another Asian garment supplier besides due to rising prices.

Towel, T-shirt, shirt and underwear exports to increased by 128%, 102%, 35% and 26% respectively within the first two months of the year.

VND 800 billion for Bau Sen building project in Ba Ria – Vung Tau

Ba Ria-Vung Tau Urban Development and Construction Joint Stock Company (UDEC) has kicked off the Bau Sen buildings project which has a total investment capital of over VND 800 billion.

The project is built on a total area of 10,000 square metres within the 400,000 square metre Bau Sen Park project. It consists of a trade centre, luxury apartments as well as resettlement apartments for local people who have had to move to give lands to projects in Ba Ria – Vung Tau.

The Bau Sen buildings is designed to have 25 storeys with two towers and modern technical infrastructure facilities.

Over 218 trillion loaned under the interest rate support program

A total of VND 218.4 trillion has been loaned by the whole banking industry under the interest rate support program as of April 10, according to the State Bank of .

The figure is VND 16.3 trillion higher (equivalent to 8.06%) compared to the figure released one week earlier on April 3.

Specifically, State-owned commercial banks and the Central People’s Credit Fund have disbursed VND 162 trillion (up VND 11.3 trillion) while joint stock commercial banks have allocated VND 46 trillion. Joint venture banks, foreign banks branches and wholly-owned foreign banks have loaned about VND 9.7 trillion and financial companies, VND 371 billion.

VND 110 billion to upgrade rural infrastructure

The Asian Development Bank (ADB) and the French Development Agency (AFD) have granted US$7 million (equivalent VND 110 billion) to build infrastructure facilities in Kon Plong, Tu Mo Rong and Ngoc Hoi districts of Kon Tum province (Central Highlands), according to the Management Board of the Integrated Rural Development Project in the Central Provinces .

Accordingly, a 41km rural road and Lac Bong irrigation works will be built in Ngoc Yeu commune, Tu Mo Rong district.

The project is scheduled to start in the fourth quarter of 2009.

Ben Tre exports green-skin grapefruit

More than 100 tonnes of green-skin grapefruit were exported from southern Ben Tre province last year.

Dam Van Hung, fruit trader from My Phuong Trung commune in the Mo Cay district of Ben Tre province exported a consignment of green-skin grapefruit to Hongkong, the , and at a price 30 percent higher than on the domestic market.

His business also collects more than 2 tonnes of green-skin grapefruit in Tien Giang, Vinh Long and Tra Vinh provinces and supplies the fruit to the domestic market across the country.

Da Nang to host real estate expo

The central city of Da Nang is preparing to host an exhibition on estate in mid July.

Le Canh Duong, deputy director of the Da Nang Investment Promotion Centre, said the centre has completed plans to hold the Da Nang Real Estate Exhibition 2009 from July 16-18.

The three-day exhibition will help to warm up the city’s real estate market during the current period of economic slowdown, Duong said, introducing investors to real estate projects in the city, investment environment and challenges, as well as Vietnam’s development policy, procedures for selling or leasing property and market values.

Duong said the exhibition will also help the investors develop strategies for property projects in the city, as well as seek partners and new investment opportunities.

The exhibition is expected to attract the participation of 15-25 firms to market their services and issue calls for investment in real estate development projects.

Da Nang currently has about 30 major real estate projects seeking investment, including new urban areas, office buildings, residential complexes, golf courses, and tourism properties.

The city has already attracted US$1.8 billion investment funds for 46 projects in the tourism industry over the past two years, according to the Da Nang culture, sport and tourism department.

tries to convince to lift dragon fruit ban

The Ministry of Industry and Trade will continue to ask to allow entry of Vietnamese dragon fruit that are not treated against fruit fly by using irradiation or heat treatment methods.

The ministry said April 13 it would negotiate with to accept fruits grown using safe processes approved under VietGap, EuroGap, and GlobalGap and other methods to keep out the pest.

The country lacks facilities to apply heat treatment and only has one irradiation facility.

Since March 2009 has banned import of Vietnamese dragon fruit after listing the country among nine suffering from a fruit fly epidemic.

was earlier ’s largest market for the fruit, buying 30 percent of its exports.

Cocoa prices shoot up in Ben Tre Province

The price of cocoa bean has risen to VND38,000 a kilogram in Ben Tre Province , twice the normal level in recent years, Nguyen Thi Kim Loan, head of British company ED & F Man’s warehousing department, said.

Insufficient supply has pushed up global cocoa prices, she added.

Ben Tre grows cocoa on around 4,000 hectares of which 2,000 hectares are now ready for harvest and likely to have an average yield of one to 2.5 tons a hectare.

Trade centre for Vietnamese community made debuts in Germany

A trade centre of the Vietnamese community in officially opened in Magdeburg city, on April 11.

The 28.000 sq.m ASIA Markt trade centre includes a 16,000 sq.m stall, displaying and supplying various kinds of products such as textile and garment, footwear, furniture and food…

In addition, the centre also consists of a sports and culture center, an area for studying the Vietnamese language and a meeting hall of Vietnamese organizations in such as awar veteran association, a women's association, and a culture and arts club.

showcases famous trademarks

Famous Vietnamese brand names in 2008 will be spotlighted in a ceremony in Hanoi on April 20 to promote the country’s products during international integration.

The event, co-hosted by the Vietnam Chamber of Commerce and Industry (VCCI) and world leading market research companies, also falls on Vietnamese Trademarks Day, which was officially approved by the Prime Minister one year ago.

It is aimed at raising corporate awareness of the importance of the issue and also to honour organizations and individuals that have made a positive contribution to developing Vietnamese trademarks.

Trademarks that are recognized by the public and popular with consumers play a vital role in developing an enterprise sustainably, especially during the country’s current integration into the global economy.

The biennial programme assesses consumer knowledge about trademarks widely available in .

In 2006, VCCI linked up with Nielsen to announce the 500 best known brands to Vietnamese consumers.

French cash pours in for firms

French finance company Proparco will provide ’s Techcom-bank with a US$15 million loan to be used for assistance to small and medium-sized enterprises.

An agreement, signed in Ha Noi last Friday, also provided for the bank to receive help in monitoring the social and environmental impacts of the projects it finances.

With more than 28,000 customers, which are small-and medium-sized firms, the bank provides financial services from loans for import-export activities to payment and account services, plus sponsoring suppliers and distributors.

Proparco, an arm of the French Development Agency, has given financial assistance to several infrastructure and export production projects in .

The loan reflects Proparco’s commitment to the country’s private economic sector and the agency’s push for the development and modernisation of the financial sector, a spokesman said.

The agency had so far provided US$1.2 billion to the State and private businesses in .

Cheap apartments turn out expensive

Real estate offices and real estate trading centres have been mushrooming in recent months.

After a long time of hibernation, the Hanoi real estate market has seen signs of warming up. Real estate prices have surged by 20-30% just in the past one or two months.

In the Van Khe new urban area, which now is getting special attention from people who want apartments for accommodations and investors, real estate offices and real estate trading centres have been mushrooming in recent months.

However, when VietNamNet’s reporters asked for information about low-cost apartments, all real estate offices and centres here said that the cheapest apartments were VND1bil.

One of the office staff advised the reporters to seek apartments at Xa La urban area, which were cheaper than in the Van Khe area.

A staff of My Dinh II Real Estate Centre told reporters that in fact, sometimes, buyers still can find apartments priced at VND700-800mil, but they need to wait for someone to sell.

However, the staff said that it is not advisable to hunt for cheap apartments, because the apartments here mostly belong to projects in which investors have the right to adjust sale prices any time.

The staff said that in some cases, people thought they could purchase apartments at low prices, but the apartments turned out to be expensive as the investors later adjusted the sale prices.

The reporters were advised to purchase apartments of projects in which investors had made contracts already and could not adjust sale prices. However, the prices of such apartments are relatively high. Besides the original price of VND12.5mil/sq m, buyers have to pay VND250mil more for every apartment. This means that even the smallest apartment would cost one billion VND.

Purchasing houses for accommodations? Wait

A real estate broker in the Van Khe new urban area, who asked to remain anonymous, related that since Tet, the prices of villas and land in the urban area have increased by VDN3-4mil/sq m, while the prices of apartments have surged by VND1.5-2mil/sq m.

He said that a lot of people have rushed here to seek to purchase real estate, but very few transactions have been successful so far, because the sale prices have been pushed up to overly high levels.

He added that many people think that it is now the best time to purchase real estate after a long time of the market’s hibernation, especially apartments in new urban areas, which are far from the centres, and thus have ‘soft’ prices.

However, seeing the high demand, speculators have been trying to push prices up.

The broker said that most people who seek houses now really want accommodations, and they mostly seek apartments priced between VND600mil and VND800mil.

Real estate prices have also been skyrocketing in Dich Vong new urban area in the last two months. Nguyen The Ngoc from Anh Duc Finance Investment Company, whose head office is on Nguyen Phong Sac road, said that the land price in the area has increased by VND5mil/sq m.

Ngoc said that before Tet, his centre had no visitors, while a lot of visitors are coming these days, 20 people per day. However, very few transactions are completed.

Nguyen Thi Hoa from Thang Long Finance Investment Company also said that the prices in Dich Vong area have been skyrocketing since Tet.

She related that before Tet, her company purchased three apartments in a project on Nguyen Phong Sac road at VND15mil/sq m. The price was considered very high at that moment, but it has surged to VND18mil now, though the project is still under construction.

Hoa said that those who really want to buy apartments for accommodations should wait for some more time. She believes that when more and more projects get support from the demand stimulus packages real estate prices will go down.

An artist’s impression of the Ben Thanh – Suoi Tien metro in Ho Chi Minh City to be developed with foreign investment. The Government has announced six measures to attract FDI, which has fallen sharply due to the global economic crisis.  

Resolution 13/NQ-CP says the crisis has been slowing down foreign investment around the world, especially , and lists the following measures to mitigate the problem:

• Review all FDI policies to make amendments or supplements if necessary to offer new incentives to investors in some areas and speed up disbursement

• Publicly announce investment plans and programs the Government has approved, speed up land acquisition and site clearance for projects and strictly comply with investment planning regulations.

• Re-examine, amend, and finalize plans to develop infrastructure by 2020, mobilize resources for infrastructure development, improve the competitiveness of ports, and call for more investment in ports situated in major economic zones.

• Review and finalize regulations on investment cooperation in the field of education and training to create favorable conditions for attracting FDI into workers’ training, revamp the workforce to better fit the country’s economic needs, and improve the skills of workers and farmers – especially those whose lands have been acquired for projects.

• Improve coordination between the Government and local authorities to enhance oversight of FDI activities. Importantly, improve coordination in issuing licenses, managing FDI projects, training FDI managers, and decentralizing management.

• Study and develop common investment policies for multinationals as well as specific policies for each of them and their key partners, provide more detailed information about projects seeking FDI by 2010, and set up agencies in charge of promoting investment at the central and local levels.

The resolution says the government will also continue to speed up administrative reform, step up the fight against corruption, strengthen dialogue between official agencies and investors – particularly through regular business forums -- and make inspections more efficient.

Source: SGGP,VNA – Translated by Quang Minh

By late afternoon of April 12, the $ transactions had been staying firm at VND 18,000/US $1.00 (purchase) and VND 18,030/US $1.00 (sale). As such, after two days the dollar price increased sharply by VND 70/US $1.00 (both sale and purchase prices).

In general, the VND/US $1.00 exchange rate increased by VND 170/US $1.00, or 17 times higher than the increase of the previous week. Despite the sharp dollar price increases, the transactions on the black market remained modest in terms of quantity.

This has been attributed to the fact that people expect the dollar price to increase further in the time to come, which prompts them not to make transactions at this moment. Meanwhile, no one wants to sell dollars now as they want to keep dollars in anticipation of the exchange rate fluctuations.

Meanwhile, the VND/US$ exchange rate on the interbank market has been lowered continuously. The exchange rates announced by the State Bank of for April 11 were VND 16,938/US $1.00, down by VND 2/US $1.00 over the transaction day in early previous week. The State Bank of reported that the VND/US$ sale exchange rates quoted by commercial banks last week hovered around VND 17,785-17,790/US$1, while the purchase rate was between VND 17,720-17,770/US $1.00.

As such, the exchange rate performance in the official market proves to be quite contradictory to the one in the black market: while it keeps going down in the former, it has been going up in the latter.

In the world’s market, the greenback has been devaluating against other hard foreign currencies, especially the euro. According to the State Bank of in March alone, the greenback lost 7.8% of its value against the euro.

However, the greenback price increase in the black market proves to come contrary to the interest rate tendency.

Quick reports by commercial banks showed that the VND interest rates on the interbank market tend to increase in all terms, except the unchanged three-month term loans. The highest interest rate increase was 2.5% per annum for 12 month term loans.

Meanwhile, the $ interest rates tend to decrease in all terms of loans. The highest interest rate now is 2.13% per annum for 3 month term loans, while the rates of other terms are hovering around 0.4%-1.2%.

In theory, as the gold and stock markets are warming up, people will sell dollars to make investments in stocks, thus leading to less attractiveness of the dollar and the devaluation of the currency.

However, the dollar price keeps increasing in the black market, which has been explained by the fact that businessmen are collecting dollars to import gold, once the domestic price is still higher by VND 60,000/tael than the world’s price.

Meanwhile, Bui Kien Thanh, Senior Advisor to KHM Inc, General Director of IAMC, said that the dollar price increase in the last time was the result of the pressure on devaluating the VND which appeared last year.

The expert said that the action by the State Bank of to lower the interbank exchange rate cannot reassure the market. Businesses nowadays also do not want US dollar loans for fear of the exchange rate fluctuations.

VietNamNet/DTCK

Attended the ceremony, among others, was Deputy Prime Minister Hoang Trung Hai, who has requested the plant’s investors pay due attention to environmental protection while carrying out the project.

The report must be submitted to the Prime Minister in the second quarter of this year, according to the decision.
VietNamNet/VNA

Nhon Trach 1 Power Plant, which has a capacity of 450MW, started providing power last year. Costruction of Nhon Trach Gas-Fired Plant 2 will be completed within 30 months.

PetroVietnam signed an EPC (engineering, procurement and construction) contract, worth $1.2 billion, to build the 1,200KW Vung Ang 1 Power Plant with the Lilama.

PVP, PetroVietnam and Lilama also signed an EPC contract to build the 750KW Nhon Trach 2, worth $524 million.

The two plans were approved by the Prime Minister.

Vung Ang 1 thermo-electricity plant in Ky Loi Commune, Ha Tinh Province will be the largest power plant in and is expected to be completed in 2012. The plant aims to supply 6.1 billion KWh of electricity per year.

The Nhon Trach Plant, in southern of Dong Nai, will be carried out in two phases: construction of Plant No. 1, with a capacity of 450 MW, was completed in 2008, and Plant No. 2, with 750 MW, which is scheduled to be completed in 2011.

The two projects will provide 11.7 billion KWh per year.

By H.Vy – Translated by Thanh Huong

It is estimated that over 6,000 cars have been imported under the form of complete built unit (CBU) in the first three months of the year, which had the import turnover of nearly US $102 million.

The CBU imports in the first two months of the year were 3,500 cars worth US $62 million.

In March 2009 alone, according to GSO, the CBU import volume increased slightly with 2,500 cars imported and the import turnover of US $60 million, nearly equal to the turnover of the two previous months.

As such, if comparing with the same period of the last year, CBU imports saw the decrease of 71.2% in quantities and 72.4% in import turnover.

In the first quarter of 2008, imported some 15,000 cars with the import turnover of US $293 million.

The figures about imports and import turnover showed that the import car market in the first quarter of 2009 sharply reflects the tax policies of the Government of Vietnam.

The imports decreased sharply in the first two months of the year, when the domestic market fell gloomy due to the influences of the global economic recession. However, the imports increased again in March, especially in terms of value.

The increase in imports in March has been attributed to the fact that the luxury tax will take effect as of April 1. In order to avoid the tax, businesses and people have been trying to purchase cars, including imports, before the new tax comes into effect.

As the result of the new tax luxury tax rates, from April 1 the prices of 6-9 seated cars and the car models with five seats and less which have a high cylinder capacity of over 3,000 cubic metres are expected to increase drastically. As for import cars, these will be luxurious and super luxurious models.

It is expected that from April, if there is no big change in tax policies, import cars will be on the decrease which was seen in the first two months of the year.

VietNamNet/TBKTVN

April CPI has increased by 9.32% compared to the same period last year and the average index in the first four months in 2009 is reported to have increased by 13.14% compared to the same period last year.

Of the ten groups of goods and services calculated, nine groups have seen increases in prices.

The prices of food and food stuff group have gone up by 0.43% against March while prices of means of transport and communication which saw consecutive decreases in previous months, have increased by 0.48%. Prices of beverage and cigarette and housing and construction materials both have risen by 0.45%.

CPI of the culture, sport and entertainment group is the only one that have decreased, at 0.64%.

The Ministry of Industry and Trade says it will focus on stabilizing fuel prices (Photo: SGGP)

The ministry has asked the Ministry of Finance to delay establishment of the Price Stabilization Fund, which would be maintained from fuel surcharge.

It also called for properly regulating oil firms’ repayment of a loan they got from the State budget to cover their losses last year 2008 when global crude prices crossed $140, and soon compensate them for the losses they suffered by importing diesel also last year.

The ministry said global oil prices have increased since mid-March. A barrel of Ron gasoline imported by cost US$59.5 at the end of March, diesel 0.05S fluctuated between $63 and 64, and kerosene was $62.6.

At the average global prices in the last 20 days, domestic firms incurred a loss of nearly VND1,000 a liter on Ron 92 gasoline and VND500 on diesel. 

By Viet Lan – Translated by Hoang Yen

eBay, the company that runs online auction and shopping website ebay.com, is seeking support from the Vietnamese government and businesses to promote its services in the country.

Duong told Thanh Nien Daily Thursday eBay wants the agency to act as a bridge with local businesses. It would offer local trading space in its website, he said.

eBay focuses on businesses in garments, shoes, handicrafts, furniture and computers. It is establishing relations with forwarders and bankers in the country to facilitate online trade, he said.

But he said the firm would found it difficult in since the country lacks facilities for delivery and payments.

Last year eBay announced an alliance with Vietnamese software company PeaceSoft, which runs chodientu.vn, an online market website.

Reported by Minh Quang

Farmers harvest rice in the Mekong Delta

Over 1.74 million tons were shipped, 71 percent higher than last year’s period. In March alone 700,000 tons were exported for $315 million.

According to the Vietnam Food Association, prices have risen slightly in March. The FOB price for a ton of rice, including 5 percent broken, edged up to $435-460 though 25 percent broken remains at $400-410.

The Government has set an export target for the whole year of 4.5 to 5 million tons but companies have registered to export 3.6 million tons in just the first six months.

The Ministry of Agriculture and Rural Development has estimated that the Mekong Delta’s 2008-09 winter-spring crop will yield 9.6--9.8 million tons.

By staff writers – Translated by H.Mien

This is the first decrease of the CPI so far this year. In general, the CPI in March has increased by 1.32% compared to December 2008 and the average CPI in the first quarter has increased by 14.47% compared to the same period last year.

The decrease of the CPI in March is partly due to the quite high increase of CPI in February which fell in the Tet (Lunar New Year) holiday. After Tet, local people’s demands for goods and services have reduced sharply.

In addition, many people have tightened their spending, thus stabilising prices of goods and services.

The domestic economy continues to suffer from the global financial crisis and economic downturn. The decreases in prices of materials and fuels such as petrol, oil and steel have also affected the domestic market.

In the country, due to economic difficulties, many workers have lost their jobs. Therefore, the incomes of  part of the population have been cut down, leading to the decrease in consumption of the local people.

Groups of commodities that saw CPI decreases include transport, post and communication services, down 0.55%; food and restaurant services, down 0.46%, and sports, culture and entertainment services, down 0.12%, construction materials, 0.73%.

Other commodities groups saw slight increases, with beverages and cigarettes seeing the highest CPI rise of 0.35%.

In March, the gold price index increased 5.44% and the $ price index was up by 0.19% against the previous month.

Fuel from Dung Quat, the country’s first oil refinery, has been sold in central provinces with the refinery’s construction nearly complete.

Workers at Dung Quat Oil Refinery (Photo: SGGP)

This morning, Saigon Jewelry Holding Company (SJC) listed its buying and selling prices in Hanoi at VND 20.70 million and VND 20.77 million a tael respectively. Accordingly, buying price was increased by VND 10,000 a tael and selling price stayed unchanged compared to the yesterday’s prices.

Gold prices listed by Bao Tin Minh Chau Jewelry Company were VND 20.68 million a tael for buying and VND 20.74 million a tael for selling which stayed the same as the former prices.

Currently, the world gold price is fluctuating around US$954 an ounce and it is predicted to continue to increase this week.

NhanDan Online

UK-based research and advisory firm Economist Intelligence Unit has forecast Vietnam’s GDP growth to plunge to 0.3 percent this year from 6.2 percent last year.

Justin Wood, director of Economist Intelligence Unit’s Southeast Asia Corporate Network, pegs Vietnam’s growth at 0.3 percent this year. He is in Ha Noi for an annual roundtable global business leaders hold with the Government.

Justin Wood, director of EIU’s Southeast Asia Corporate Network, told reporters in Ha Noi on March 16 ahead of a two-day Business Roundtable that after 20 years of healthy development, 2009 would be an especially tough year for Vietnam.

Yet, it would be one of very few Asian countries to actually achieve economic growth, with most others set to see their GDPs shrink, he said.

Demand for Vietnam’s exports would be hit hard by the downturn, he warned. Inward remittances from overseas Vietnamese would fall, he said, as would FDI, which is likely to fall by 70 percent.

The property market has already slumped in major cities, and the number of unemployed people would almost double this year, he said, to over 8 percent from less than 5 percent last year.

This year would also be difficult for the credit market because banks would hesitate to offer loans to avoid risks during a recession, he said.

Mr. Wood is the co-chair of the roundtable that opened March 17.

Charles Goddard, EIU’s editorial director and another co-chair, said “Vietnam’s growth reached unsustainable levels in 2008.”

“Inflation hit 30 percent during 2008, a widening current account deficit put strong downward pressure on the currency, and constraints like lack of infrastructure and weak regulations all took their toll.”

If the challenges of 2008 were tough, those of 2009 would be even harder for the government, he warned, since the global economy has crashed into a serious recession.

Advice

(From R) Justin Wood, who is also the co-chair of the roundtable; Charles Goddard, EIU’s editorial director and another co-chair; Nigel Waters, country head of Nokia Siemens in Vietnam; and Thomas Tobin, chief executive officer of HSBC Vietnam, at a press briefing before the roundtable, on March 16.

Mr. Wood said investors are particular about infrastructure (power and transport) and skilled workers and Vietnam needs to improve these factors to improve its competitiveness.

“The World Bank has forecast that Vietnam will rank 92nd in the world in terms of investment environment in 2009, while it ranked 87th in 2008.”

“Though Vietnam has tried to improve the investment environment, its environment has not been attractive compared to other Asian countries,” he said.

The country also needs to step up its anti-corruption efforts and simplify taxation procedures. While an enterprise spends only 30 hours a year handling tax issues in Singapore, it has to spend 1,000 hours in Vietnam, he said.

The Government faces great pressure since it does not only have to cope with the economic recession but also has to ensure social welfare.

The experts who have gathered for the roundtable said the Government “must not lost sight of the longer-term challenges, namely upgrading infrastructure, stamping out corruption, and improving the policies and institutions that oversee the economy and financial system.”

Thomas Tobin, chief executive officer of HSBC Vietnam, said the country remains an attractive investment destination.

“The global financial storm has raged in almost all countries in the world, and Vietnam is not an exception. Inflation and unemployment are challenges. We appreciate the Government’s drastic measures. The country’s inflation rate will reduce to 4 percent in mid-2009, then increase, and stabilize at 11 percent by the end of 2010,” he said.

The Roundtable with the Government of Vietnam, the first of which was held last year, is organized by the Foreign Ministry's The Gioi & Vietnam (world & Vietnam) magazine and British publication The Economist’s Economist Conferences.

The conference on positioning Vietnam for the future is being attended by over 300 local and international business leaders. It is sponsored by HSBC and Nokia Siemens Networks, among others.

A delegation of leaders of Japanese businesses representing the country’s chemical, energy, transport and infrastructure construction industries is currently visiting Vietnam to identify opportunities for cultural-economic exchange and investment.

The delegation, led by Masahiro Iwashita, President of the Japan-Vietnam Economic Cooperation Committee of the International Friendship Exchange Council (FEC) of Japan, was received by Deputy Prime Minister Nguyen Sinh Hung on March 13.

The Vietnamese Deputy PM welcomed their visit and expressed his pleasure at the recent positive development of the two countries’ relations across all levels and fields.

Hung said that the global economic crisis has had a negative impact on both countries but has also created new business opportunities.

He said he believed that the visit would contribute to strengthening the friendship and comprehensive cooperation between the two countries and pledged that the Vietnamese Government would create favourable conditions for FEC members who invest in Vietnam.
FEC, a Japanese non-profit organisation, was established in 1985 and has more than 1,500 members who are former diplomatic officials, economists, businessmen and intellectuals.

FEC’s operations are based on the criteria of peace, prosperity, globalisation, person-to-person diplomacy, and improving relations with other Asian countries.

With exports, foreign direct investment and remittances all falling this year, the government should make efforts to control the current account deficit to improve investor confidence, the Belgian ambassador has said.

Speaking at a conference titled “Doing Business in Vietnam - What’s Next?” in Hanoi Wednesday, Hubert Cooreman said: “Now is the time for Vietnam to concentrate on building on its strengths to ensure it can take advantage of its relative stability and emerge in a positive position as the world economy starts to recover.” The government has adopted the correct measures to accelerate structural changes in the economy to enhance productivity and maximize retention of the nation’s growth potential, he said. Creative approaches are required to meet the nation’s infrastructure and human resources needs.

The transfer of best practices and the willingness to learn from success stories elsewhere in the world would be vital in ensuring that Vietnam is able to emerge from both the global crisis and its own economic integration process as a true regional leader, he said. Pham Quang Thu from the Ministry of Industry and Trade said Vietnam, like many other developing countries, has built an export-oriented economy. The government’s policy is to strengthen exports and encourage foreign investment in labor-intensive export industries. It has also encouraged foreign investments in certain fields like telecommunications, tourism and retail, he said. Bui Quoc Trung, deputy head of the Foreign Investment Agency, said Vietnam has improved its infrastructure and legal system and accelerated administrative reforms. Reported by Ngan Anh

This week the HCM City People’s Committee is expected to license a massive urban project by Berjaya ’s Land Berhad. The property developer will pour US$3.5 billion into the 880-ha Viet Nam International University Township in Cu Chi District.

This is set to give a strong boost to the prediction by Phan Huu Thang, head of the Foreign Investment Agency, that FDI is likely to outpace the $35 billion target for the second half of the year.

The figure for the first six months was $31.6 billion, a 3.7-fold increase compared with the same period last year, showing, according to Thang, that confidence in the development sector is intact.

"The FDI increase in the context of ’s supposed economic difficulties proves foreign investors’ great confidence in the business environment," he noted.

An encouraging factor has been that work began on many major projects immediately after being licensed, with almost $5 billion being disbursed to date, the largest amount for the period ever. The disbursement figure for the whole year is expected to top $12 billion.

But one problem for investors is finding quality human resources, especially for big projects that require thousands of workers. Thang said this also requires building housing and recruiting workers before building factories.

"We found it to be the new trend and went to Shenzhen, , to learn about its. In case of projects of around $10 billion, housing for workers and necessary infrastructure would be developed in the form of a small town."

This model is likely to be applied in for large projects, especially those by investors from the Middle East.

Securities management

The Government announced new regulations last week to improve management of the securities market to ensure sustainable growth.

It said companies have to register their initial public offerings with the State Securities Commission (SSC), failing which they will be cancelled and the issuers fined.

Institutions planning private placement to increase their charter capital must register with other agencies – the State Bank in case of joint stock banks and financial joint stock companies, and the Ministry of Finance in case of joint stock insurers.

The SSC will oversee private placements by public firms and securities joint stock companies, and planning and investment departments in cities and provinces will be in charge of other businesses. Public companies are joint stock companies with a charter capital of VND10 billion and above.

Enterprises without a legal status in the country will not be allowed to issue shares, except cases that fall under ’s international commitment.

Public companies including listed ones are required to be audited, make public disclosures, and follow corporate governance norms as stipulated by the Securities Law and other regulations.

Institutions and individuals are banned from organising unauthorised securities trading.

Release of information, sales and purchases of stakes, and prices appearing in the media must all conform to regulations.

Under the Government’s instructions, the Ministry of Finance will assist the SSC to draft a plan this year to sell shares in public companies.

State-owned enterprises are prohibited from contributing to the establishment or buying shares of investment funds or securities companies.

Any participation in the stock market by them must not create any negative impact on their production or business activities.

Last week the VN Index increase rose on all five days, gaining a total of almost 27 points. Is this the effect of the Government’s move?

Inflation control successes

The Government’s efforts to control inflation appear to be working, with the price pressure showing signs of easing.

The June consumer price index (CPI) was up 2.14 per cent month-on-month, compared to 3.92 per cent in May, and officials and experts project the slowdown to continue in July and the rest of the year.

In the commodity basket for calculating CPI, food and foodstuff prices, however, increased 4.29 per cent in June compared to 2.19 per cent in May.

Nguyen Minh Phong, head of research at the Ha Noi Institute for Socio-Economic Development Studies, thinks the inflation may come down to 1.5 per cent in July. But there may not be a sharp decline because global commodity and oil prices are still in an upward trend.

Deputy Minister of Planning and Investment Cao Viet Sinh expects the price rise to slow down in the coming months since the second half is usually not the high season for imports.

Without giving specific numbers, he said pressure on food prices would reduce with the bumper crop that is being harvested.

The commitment by the Government to control prices of certain essential commodities and services until the end of the year would also help, he said.

Party General Secretary Nong Duc Manh said that is determined to boost friendship and co-operation with .

The Vietnamese Party leader made the statement yesterday while receiving visiting Mexican Labour Party (MLP) General Secretary Alberto Anaya Gutierrez in Ha Noi.

Manh congratulated Gutierrez on his re-election to the leading position at the Party’s 7th Congress.

Manh expressed his belief that the MLP would achieve greater success in the struggle for the benefit and happiness of the people.

He briefed his guest on achievements as well as challenges facing and expressed his thanks for the support given to by the Mexican Party and people.

For his part, the Mexican Party leader said he believed that under the sound leadership of the Communist Party of Viet Nam (CPV), the Vietnamese people would overcome difficulties to gain greater achievements in national construction and protection.

Gutierrez affirmed ’s determination in fostering the solidarity, friendship and co-operation between the two parties and peoples.

Earlier, a delegation of the MLP held talks with a delegation of the CPV, led by Truong Tan Sang, Politburo member and permanent member of the Secretariat of the CPV Central Committee.

The two sides exchanged views on international issues of common concern, and discussed measures to enhance co-operation between the two parties and countries.

While in , the Mexican delegation visited the Ho Chi Minh Mausoleum and worked with the Commission for Foreign Relations of the Party Central Committee and the National Assembly Commission for Foreign Relations.

Farmers in some parts of the southern province of Dong Nai have stopped using Vedagro, a brand of organic fertiliser supplied by monosodium glutamate manufacturer Vedan.

They suspect it has caused the failure of cassava for the last year.

Many farmers in the communes of Long Duc 1, Long Duc 2 and Tam Phuoc in Long Thanh District allege the failure was due to the long-term impact Vedagro has on the land.

They were all using it for seven years and got good yields. Many said they used to earn an average of VND10 million a year from a hectare of cassava.

A sales agent in Tam Phuoc Commune, who declined to be named, said no cassava farmer had bought Vedagro in the last five months. The agent, who had sold the fertiliser for nine years, said he used to sell 8,000 to 9,000 tonnes of Vedagro per crop.

"It withered most herbs and plants but nourished cassava well," he said. "Fed with Vedagro, cassava grew well and produced big bulbs."

Dong Nai farmers also used to apply the fertiliser to cashew and cajeput trees.

Nguyen Van Hieu, owner of a 10-ha farm in Long Duc 1 Commune, said he had chosen Vedagro because it was cheaper than other fertilisers.

Nguyen Khac Toa, chairman of the Phuoc Binh Commune People’s Committee in Long Thanh District, was quoted by Sai Gon Tiep Thi (Sai Gon Marketing) newspaper, as saying, "In our commune, when it rained, Vedagro was washed into breeding ponds, killing large numbers of fish."

Last year in Long Thanh District, leaves on cassava trees turned yellow as if sprayed with toxins. Farmers lost the entire crop.

Some farmers who believed they had not used enough fertiliser used more Vedagro, but to no avail. Their plants produced just some tiny bulbs.

Officials from the provincial agricultural promotion centre sent to Long Thanh District carried out inspections and later asked farmers to use a different fertiliser for the next crop. But this did not result in a better crop either.

It is likely to take time for authorities to identify the cause of the soil’s sudden infertility after centuries of supporting crops. But pending their investigation, it is the farmers who suffer.

Ministry wants higher tax

The Ministry of Agriculture and Rural Development has recommended higher import tariffs on livestock products and animal feed to protect the domestic industry.

It wants the rate on fresh and frozen pork to be raised from the current 20 per cent to 25 per cent and 29 per cent, and on poultry and eggs from 12 per cent to 40 per cent.

On poultry legs and wings it wants 20 per cent instead of 12 per cent, and on buffalo meat and beef, 15 per cent instead of 12 per cent.

Prof. Nguyen Dang Vang of the ministry’s Livestock Breeding Institute said the import of 118,000 tonnes of livestock and poultry this year were to blame for the difficulties farmers faced.

Decreased tariffs had helped boost the imports, he said.

The Government cut the taxes on this group of goods sooner than stipulated by the country’s WTO commitments. does not have to cut the tariff on beef to 14 per cent until 2012, but it has already slashed the rate to 12 per cent. It has to cut the tariff on fresh and frozen pork to 25 per cent, but it has reduced it to 20 per cent.

Prof Dr Le Hong Man, deputy chairman of the Viet Nam Poultry Livestock Association said the tax hikes, if approved, would rescue the animal husbandry sector.

Retail oil prices still same

Though oil prices have fallen to below US$100 per barrel, retail prices in remain unchanged.

A92 petrol still costs VND17,000 (US$1.03) per litre, which means importers earn a profit of VND2,500 on every litre they import now.

Vuong Thai Dung, deputy director general of the Viet Nam National Petroleum Corporation (Petrolimex), said any reduction in prices would be considered when global prices remain down for 20 days.

Importers estimate they have made a cumulative loss of nearly VND3 trillion ($181.8 million) since the beginning of this year.

Nguyen Thanh Huong, deputy director of the Ministry of Finance’s Price Management Department, said enterprises had not sought to lower retail prices yet since they were still selling petroleum imported at high prices last month.

Vuong Dinh Dung, director of the Military Petroleum Company, said the companies were waiting to liquidate their old stocks before reducing prices.

The Price Management Department estimated it would take importers six months to offset their accumulated losses of VND3 trillion if they make a profit of VND1,500 per litre.

Huong said the tax on oil imports was now 5 per cent and the rate would be adjusted periodically based on global price movements.

Iceland, Hungary and Ukraine were forced last year to appeal to the organisation for aid.

IMF chief Dominique Strauss-Kahn has warned that a second round of nations will be forced to seek IMF cash.

Separately, Germany's finance minister said Germany might consider bailing out smaller European nations.

Germany's Finance Minister Peer Steinbrueck described the suggestion that the eurozone could fall apart as "totally absurd" and promised that if other member states got into trouble, "we will show ourselves to be capable of acting".

Mr Steinbrueck's comments strengthened the euro against the dollar. One euro was worth $1.2760 by late afternoon from $1.2511 on Wednesday.

Mr Strauss-Kahn said that the crisis was "far from over".

"There's a real possibility that in the coming weeks or months another couple, or maybe more than that, countries will need some support, especially emerging countries," said Mr Strauss-Kahn.

He did not specify which countries might ask for help.

'Early warning'

Mr Strauss-Kahn also said that the IMF was among the institutions which gave an "early warning" about the upcoming crisis "two or three years ago".

"[But] because when you are a head of a government or a finance minister and the sky is still blue, and you have a guy coming from the outside telling you: 'The sky is blue, but what is going to happen in one year is terrible', you say: 'OK, lets wait for one year'. It's absolutely understandable," he said.

Mr Strauss-Kahn said there was a need for stronger multilateral institutions, with more legitimacy.

European measures

Given the risks facing the Eastern European economies, if Berlin does decide to support them, that will weigh on [Germany's] finances Yuji Saito, Societe Generale

Many Eastern European countries have been in trouble in recent months amid the global financial and economic crisis, as their economies plummeted from boom to bust.

German Chancellor Angela Merkel met EU Commission President Jose Manuel Barroso amid speculation that Germany may announce measures to help some other European economies.

But she declined to comment specifially on the matter saying after the meeting: "The eurozone has, in fact, proven its worth in this financial crisis."

Debating currency

Poland's finance minister said his country was considering adopting the single currency to help weather the downturn.

"Secure public finances and a quick adoption of the euro are the best way out of the crisis for Poland," Jacek Rostowski told members of parliament.

However, central bank head Slawomir Skrzypek said on Wednesday that Poland was not ready to set out on the path to the eurozone.

He cited the weakness of the zloty, which has dropped more than 12% against the euro since the beginning of the year.

Sir Allen, who disappeared from public view on Tuesday when he was accused by the SEC of an $8bn (£5.6bn) fraud, is believed to be in the Richmond area.

He is not in custody and has not been charged with any criminal violations.

The SEC filed a civil case in court describing the case as a "fraud of shocking magnitude".

FBI spokesman Richard Kolko said that FBI agents, acting at the request of the SEC (Securities and Exchange Commission), had served the papers on Sir Allen in Fredericksburg, Virginia.

Sir Allen is accused of luring investors with promises of improbable and unsubstantiated high returns on certificates of deposit and other investments.

The SEC needed to serve the papers to ensure that he turned in his passport and was made aware of the proceedings against him, the BBC's Richard Lister reports from Washington.

'Very depressed'

Stressing that Sir Allen had not been arrested, Mr Kolko said he did not know if he had actually surrendered his passport.

Giving few details, he said that agents from the FBI's office in Richmond, Virginia, had "located and identified Stanford Financial Group chairman Allen Stanford in the Fredericksburg, Virginia area".

The papers were served about 1345 local time (1845 GMT) on Thursday as Sir Allen sat in a car, and the authorities do not believe he had been purposely hiding from them, an unnamed law enforcement source told the Associated Press.

ABC News quoted one of the billionaire's lobbyists, Ben Barnes, as saying that Sir Allen had been "very depressed".

He had sought to end a federal manhunt for him by directly approaching officials at the US justice department, Mr Barnes added.

Sir Allen's father, James Stanford, told AP in Mexia, Texas, that he hoped the allegations against his son were untrue.

"I have no earthly knowledge of it," said the 81-year-old, listed as chairman emeritus and a director for Stanford Financial Group.

"I would be totally surprised if there would be truth to it. And disappointed, heartbroken."

Asked what advice he would give his son, he said: "Do the right thing."

States intervene

Earlier, Peru and Venezuela became the latest countries to intervene in local banks controlled by the Stanford group.

Peru's securities regulator suspended local operations of the Stanford Financial Group for 30 days and Venezuela said it would take control of Stanford Bank Venezuela.

Panama, Ecuador and Antigua also took action after the accusations against Sir Allen were reported.

Regulators were hoping to calm customers worried about investments as queues of worried investors have formed at banks associated with him in the US, the Caribbean and Latin America.

The request was made in a lawsuit filed earlier in the day in Miami as part of a tax fraud investigation.

The Obama administration wants UBS to turn over information on American customers who hid accounts from US authorities, in violation of tax laws.

A deal on Wednesday provides access to about 250 to 300 UBS customers who used Swiss bank secrecy laws to hide assets.

"At a time when millions of Americans are losing their jobs, their homes, and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civil and legal duty to pay taxes," the acting assistant attorney general, John DiCicco, said in a statement.

Bank chairman Peter Kurer said UBS accepted "full responsibility" for helping its US clients hide assets from the Internal Revenue Service.

But the bank said it had a defence against the enforcement of the summons to hand over account details, and that it would vigorously contest the enforcement of the summons in the civil proceeding.

On Wednesday UBS agreed to pay $780m (£549m) to the US government to settle allegations that it had defrauded US tax authorities, after being accused of conspiring to create sham accounts to hide clients' assets.

Switzerland has strict bank secrecy laws but the country's financial regulator ordered UBS to hand over some client data to the US government.

In his weekly radio and internet address, President Obama said the typical American family would gain by at least $65 (£46) a month.

He also pledged to cut America's trillion-dollar deficit.

The tax cuts announced on Saturday are part of a $787bn stimulus plan that Mr Obama signed into law this week.

The plan, aimed at reviving the US economy amid a global economic crisis, is split into 36% for tax cuts and 64% percent allocated for spending on social programmes.

Mr Obama said the US treasury had already begun directing employers to reduce the amount of taxes claimed from pay cheques.

The savings will reach 95% of American families, he said.

"Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans," the president said.

Challenges ahead

Mr Obama said work must now start on trying to stabilise the banking system, stem the fall in house prices and get budget deficits under control.

We can't borrow and spend our way back to prosperity Republican Dave Camp Obama diary: The first 100 days US Senate approves stimulus plan

He announced that he would call a fiscal summit on Monday to discuss an inherited deficit of $1.3tn.

An unnamed US official was later quoted as saying Mr Obama intended to cut the deficit in half by the end of his first term.

This would be done by scaling back on the war in Iraq, increasing taxes on those earning more than $250,000 a year and making government more efficient, the official said.

Mr Obama said he would address the nation about his priorities on Tuesday before issuing a budget on Thursday.

"I'll release a budget that's sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline," he said.

However, he also warned of the challenges ahead.

"As important as it was that I was able to sign this plan into law, it is only a first step on the road to economic recovery.

"None of this will be easy. The road ahead will be long and full of hazards," he added.

"But I am confident that we, as a people, have the strength and wisdom to carry out this strategy and overcome this crisis."

The stimulus plan, which was approved by Congress just over a week ago, aims to save or create 3.5 million jobs, boost consumer spending and rebuild infrastructure.

Over the past week, Mr Obama has also announced measures to assist families facing foreclosures, and those struggling to meet mortgage payments.

But Republicans, only three of whom voted for the stimulus package in Congress despite calls by Mr Obama for bipartisan support, have said the new tax cuts are insufficient.

They have also complained that the president's spending plans will leave the US economy saddled with debt for years to come.

"We can't borrow and spend our way back to prosperity," Republican Dave Camp said in his party's weekly address.

The new size of the multilateral fund is expected to be $120bn (£83.7bn), up from $80bn proposed in 2008, regional grouping Asean said.

Emergency funds would be made available to enable nations to borrow foreign currency on a short-term basis.

The plan was agreed at a meeting of Asean finance minister in Thailand.

It is hoped final agreement on the fund will be reached in May, said ministers.

Last year, the ten members of the Association of South-East Asian Nations (Asean) promised to make bilateral currency swap arrangements available to each other under the so-called Chiang Mai Initiative.

Japan, China and South Korea also joined the scheme.

"The Chiang Mai is important because it gives a signal to everybody in Asia and outside Asia that if there was a big crisis, there is financing available," said Jean Pierre Verbiest, Asian Development Bank country director for Thailand.

Asian nations have typically relied heavily on exports and have as a result been hard hit by the global slowdown.

The automobile market was red hot in the period just before April 1, when people rushed to purchase seven passenger SUV-type cars of 2000 cc or less before a new higher tax rate on such cars took effect. After April 1, five passenger cars have been selling well.

Nguyen Duy Nghiem, the owner of a company that sells imported cars in HCM City , said that like other industries, the auto industry has suffered from the global economi recession, but just a little. A lot of people still buy cars with their profits from gold, dollar and stock investment deals.

“Many of my customers purchase cars after they sell their fish and shrimp farming crops,” he said.

The Vietnam Automobile Manufacturers’ Association (VAMA) showed that the car sales increased significantly in the first three months of the year. The association’s members sold 3,800 vehicles in January, 6,600 in February and 11,400 in March.

The markets for other luxury items, like watches, perfume and furnishings, also are vibrant. High-end motor scooters (20-40 million VND) have still been selling well since the beginning of the year.

With demand high for scooters like ‘Click,’ ‘Air Blade’ and ‘Lead,’ customers have to place orders in advance and get deliveries later. “I was able to buy a Click at 29.5 million VND only after I visited seven motorbike shops. Most shops told me that they had no more motorbikes to sell,” said Tham Thuy Hang in Bien Hoa City .

According to Pham Van Vui, a senior executive of VMEP, the manufacturer of ‘SYM’ motorbikes in Dong Nai, sales have exceeded forecasts. VMEP expected to sell 8,000-9,000 motorbikes a month but has sold 12,000.

General Director Nguyen Thi Dien of An Phuoc Garment Company said that the sales of fashionable goods designed for high income earners remain stable. The company’s brandname products continue to sell for high prices.

Dien said that despite the recession, high income earners do not hesitate to spend money on high quality, well-designed clothes.

According to Tran Anh Tuan, a strategy, marketing and branding expert, the ‘economic recession storm’ has had big impacts on medium and low income earners. However, the ‘storm’ has not reached out those, who have monthly incomes of 30 million VND and more.

 “These people have stable jobs and income, and they help luxury brands do well,” Tuan said.

VietNamNet/Dat Viet

Bumper crops for Mekong Delta

Compared with the previous winter-spring crop, farmers paid more attention to the quality of produce and seeds and have reaped the benefits, said Dr. Pham Van Du, Deputy Bureau of Cultivation Bureau.

According to Dr. Du, land used for farming rice will probably increase this year due to the Government’s economic stimulus package, which included maintaining the price of rice at VND4,200 - 4,500 per kilo.

Most Mekong Delta provinces have had bumper crops with equally good prices. In some places rice productivity rose to 7.8 tons per hectare, with rice for export selling at VND4,800 per kilo.

Famers in the region are expected to reap profits of around VND13-20 million (US$743-1143) per hectare.

Number of bank loans increases

The State Bank of May 4 said that amount of money lent in bank loans in April increased by 4.86 percent over the previous month, and 11.16 percent compared with the end of 2008.

The total means of payment in April increased by 3.43 percent over March and by 11.4 percent compared with the end of 2008.

Cash transactions increased by 0.6 percent over March and increased by 19.37 percent over the end of 2008.

Bank deposits in April increased by 3.74 percent over the previous month and by 9.88 percent compared with 2008.

Imported vehicles get special tariffs

Special-purpose vehicles imported from , , , , and will enjoy preferential import tariffs from now until 2012, according to the Ministry of Finance.

The cut, a part of the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Agreement which came into force last December, is aimed to enable more goods and services to reach ASEAN and Japanese consumers at lower prices.

According to the ministry, special-purpose trucks with loading capacity from 24 tonnes to 45 tonnes will have an import tariff of 18 per cent; trucks from 20 tonnes to 24 tonnes, 20 per cent; from 10 tonnes to 20 tonnes, 30 per cent; from five tonnes to 10 tonnes, 60 per cent; and less than five tonnes, 80 per cent.

Meanwhile, funeral vehicles and prisoner transport vehicles, which saw a preferential tariff of 9 per cent from last December until March this year, will get a reduction of 8 per cent, 7 per cent and 6 per cent between April 2009-March 2010, April 2010-March 2011 and April 2011-March 2012, respectively.

Cranes, drilling vehicles and fire engines will see an import tariff of zero per cent from now until 2012.

Fertiliser stockpile keeps supply stable

The Ministry of Industry and Trade said fertiliser supply for the winter-spring rice crop was stable and their prices fell slightly during the first quarter.

Abundant supply in the country and a drop in global prices have helped the farmers, it said.

The ministry said the country still has about 2 million tonnes of fertiliser stockpiled through significant imports over the last few months of last year. Therefore, imports in the first quarter went down by 3 per cent over the same period last year at a little over 1 million tonnes.

The demand for fertilisers for the coming summer-autumn rice crop will be about 1.84 million tonnes, including 400,000 tonnes of urea, 170,000 tonnes of SA, 200,000 tonnes of Kali, 160,000 tonnes of DAP and 910,000 tonnes of NPK, the ministry estimated.

The current stock of fertiliser can meet the demand comfortably, it said.

Due to the significant stockpile of imported fertiliser, domestic plants have not fully exploited their production capacity in the first months of this year.

Production of phosphorous fertiliser fell by 15 per cent to 342,600 tonnes, and that of NPK fertiliser by 25.2 per cent to 341,000 tonnes.

Footwear exports to rise

ranks second among footwear exporters to after , according to the Federation of Spanish Footwear Industries (FICE).

The country exported 33.1 million pairs of shoes to for 271.8 million euro in 2008, a year-on-year rise of 10.5 per cent in volume and 23.4 per cent in value.

According to FICE, ’s footwear accounted for 9.6 per cent of the volume and 14.6 per cent of the value of the southern European nation’s total imports.

continued to dominate the Spanish market last year with 243.6 million pairs of shoes valued at 613.7 million euro shipped to the southern European market. ’s footwear exports made up 70.6 per cent of the volume and 33 per cent of the value of ’s total imports.

FICE statistics showed that imported 345.03 million pairs of shoes worth more than 1.8 billion euro in 2008, a decrease of 2.2 per cent in volume, but an increase of more than 6 per cent in value.

In addition to and , also imports footwear from , , , , and .

Rest area opens on HCMC-Da Lat highway

’s largest rest area opened April 28 in Dong Nai Province on Highway 20 connecting Ho Chi Minh City and Da Lat.

Tan Phu cost the Tin Nghia Company around VND70 billion ($4 million) to build and has a filling station, guest house, supermarket, and restaurant locating.

Lua Viet Tour Company, Dong Nai Tourist Company, Viet Tour, and Vietravel have already registered to use the rest area for tours from HCM City to Da Lat.

Hanoi medical, pharmaceutical exhibition set for mid-May

Medical equipment and pharmaceutical products will be on show at a trade exhibition from May 13 to 16 in Ha Noi.

More than 200 medical firms from , , , , , , , , , and the will participate in the 16th Vietnam International Medical and Pharmaceutical Exhibition, organized by Vietnam National Trade Fair & Advertising.

The organizers have also put aside a space for free consultation and examination.

Dak Lak: coffee export turnover down 30% against the same period in 2008

Coffee export of Dak Lak province has gone down sharply.

In the first four months of 2009, the province has exported 125,000 tonnes of coffee seeds with export turnover of US$192 million, a 30% decrease compared to the same period last year.

Due to the successive fall of the world coffee price which even dropped to US$1,436 a tonne, the domestic coffee price dropped to VND 23,000 a kg.

Meanwhile, the same time last year, coffee price trading at the London market fluctuated at high level and stood at US$2,355 per tonne and the domestic prices were also high at VND 34,000 – 43,200 per kg.

The weather in the Central Highlands is becoming favourable with the first rains, thus compensating the watering cost for coffee growers.

Gemadept says Q1 profit down 19 percent

General Forwarding & Agency Joint Stock Co., ’s biggest listed freight-forwarding company, said pretax profit fell 19 percent in the first quarter because of a decline in the value of its stock investments.

The profit fell to VND33 billion (US$1.85 million) in the January-March period, from VND40.6 billion a year earlier, CEO Do Van Minh said in a telephone interview from Ho Chi Minh City Monday.

Gemadept, as the company is commonly known, had to make a provision of VND6 billion for losses on its own stock investments in the first three months, Duc said. “However, the profit was still higher than our expectation,” he said, adding that it had expected a 30 percent decline in profit.

The HCMC-based company’s revenues dropped 7 percent to VND407.8 billion, he added.

Investors shun illiquid small caps despite solid results

Despite good first quarter results, small-cap stocks are not attractive since a majority of investors engage in day trading and find it easier to trade blue chips.

Khanh Hoi Import Export Joint-Stock Co. (KHA), based in Ho Chi Minh City , posted a profit of VND7.9 billion (US$444,190) in the first quarter, 188 percent higher year on year despite the economic slowdown.

But at the end of April, the stock was traded at VND12,000-14,000 on the Ho Chi Minh Stock Exchange, not much higher than its April 1 price of VND12,200.

Hanoi-based Dien Hong Printing Joint-Stock Company (DHI)’s first quarter results were even more impressive, rising more than four times year on year to VND223 million.

But DHI made minor gains on the Hanoi Securities Trading Center last month, closing at VND9,700 on April 29, up just VND1,100 from April 1.

Many other small-cap stocks like But Son Cement Packing Joint-Stock Company (BBS) and Doan Xa Port Joint-Stock Company (DXP) also posted modest gains despite solid first quarter earnings.

Hoan, a Saigon Securities Inc. client, said most investors are day traders who prefer large caps for their liquidity.

Of 90 listed companies that have announced both first quarter and last year’s results so far, 48 reported lower profits than the year ago period.

But in the last month only 18 listed firms saw their prices fall.

Saigon Securities Inc., the country’s biggest publicly traded brokerage, said its net income fell 74 percent year on year in the first quarter to VND30 billion, with turnover falling to VND105 billion from VND351 billion.

But its share advanced 36 percent in April against a 11 percent rise for the VN-Index.

PV

The State Bank of has lowered its key rate to 7 percent from 14 percent in October. Standard Chartered Plc predicted a month ago that policy makers would further reduce the rate to 5 percent by the end of June, in an attempt to bolster economic growth.

“Given the government’s needs and that we’re starting to see dong liquidity tightening in the market, rates at the moment appear to have hit a floor,” said Peter Tebbutt, a Hong Kong-based senior director at Fitch, in an interview Thursday in Ho Chi Minh City. “If anything, they may go up a bit.”

A government subsidy on loans, intended to help boost economic growth from the 3.1 percent first-quarter pace, has sparked a “new credit boom” in Vietnam, Citigroup Inc. said last month. Lending jumped about 11 percent from January to April, marking a sharp acceleration from a first-quarter increase of 3 percent, according to Fitch estimates.

The subsidy program “appears from April’s numbers to be too successful,” said Tebbutt. “It seems to be driving loan growth too much.”

The State Bank of has apparently resisted government pressure for now to lower interest rates further, according to Sabine Bauer, a Hong-Kong based Fitch director.

Defending their ground

“The central bank in this regard has proved to be a strong voice,” Bauer said Thursday in HCMC. “In this debate, on the base rate, they have so far defended their ground.”

In addition to delaying potential non-performing loans, the Vietnamese government subsidy program may also have resulted in some borrowing being used to invest in property or stocks; in the creation of some fake projects to take advantage of the scheme; or in banks using “circular loans” to profit from it, according to Citigroup.

“The banks’ responsibility is to ensure that these are loans made to projects which are viable,” Bauer said. “But having said that, it’s very difficult for them to monitor where the money actually goes.”

In a report released last week on ’s banking industry, Fitch said “moral suasion” has encouraged banks to keep lending rates low, with authorities attempting to ensure a “reasonable level” of loan growth.

Still, with the spread between lending and deposit rates narrowing, the dong depreciating, and international demand for Vietnamese goods weakening, credit costs are set to rise, Fitch said in the report.

“You have the interest-rate subsidy, you have quite strong loans growth,” Tebbutt said. “Then you could possibly start getting inflation coming back. And you’ve got a government that needs to borrow a lot of money this year, particularly for its fiscal stimulus program. So with everyone borrowing, rates will go up.”

Source: Bloomberg

VietNamNet Bridge – While government agencies give optimistic predictions about Vietnam’s economic recovery in the near future, acting Director of the Economic Institute Tran Dinh Thien says that it would be better to keep a cautious optimism as economic uncertainties still exist in the world.

Some experts say that ’s economy has begun recovering and regaining growth. Do you think that the experts prove to be too optimistic with the conclusion, as there are many negative forecasts about the world’s economic performance in the time to come?

’s economy has shown signs of recovery, beginning a rise up in January, February, March and April, and we hope that the tendency will continue in the time to come. However, while we are optimistic, we should also pay attention to warning factors. The world’s economy remains in uncertainties, and there exist factors which may badly affect ’s economy.

It seems that the latest forecasts about the world’s economy show gloomier pictures, while , a highly-open economy, has been relying on the world’s economy.

Meanwhile, we still cannot measures exactly the important indicators of the national economy, especially business’ statuses and purchasing power.

There have been signs about the better situation of employment. However, we still cannot measure all the influences on employment in trade villages, which have been suffering from the lower demand of export markets.

Moreover, import turnover in the first four months of the year decreased by 41% over the same period of last year, which means that input materials for production will be lower in the next quarters of the year. The 41% decrease in import turnover proves to be a big figure, equal to 35% of total GDP of Vietnam.

Meanwhile, the export decreases show that ’s export markets have not recovered yet.

You have pointed out a lot of factors which may have bad impacts on ’s economy. Why do state agencies and independent experts still give optimistic forecasts?

We have a lot of advantages which have been mentioned in the last time. For example, the agriculture sector is believed will enjoy advantages.

In the government’s demand stimulus packages, the high determination can also create confidence. And as you see, the confidence has been clearly restored as we heard at recent workshops.

Another reason is the actual efficiency of the demand stimulus packages. Of course, we should not expect that the packages will bring the desired effects immediately.

You may have heard that some experts do not believe in the efficiency of the loan programmes. Many enterprises have been using the money they borrow under the interest rate subsidy programme to pay old debts, which is called ‘debt turnover’. What do you think about that?

In ‘debt turnover’, businesses liquidate old debts before the debts become mature, in order to get new loans.

I have to remind you that we are in abnormal conditions, so we need uncommon measures.

I think that we should allow some enterprises, not all of them, to implement the ‘debt turnover’. It is necessary to find out which enterprises deserve this. I mean that we should allow ‘debt turnover’, but with conditions. We need to provide a way out for businesses. The businesses that need to be allowed to perform ‘debt turnover’ should be the ones which have potential for development and feasible business projects. High inflation and high lending interest rates are not the fault of businesses, but they have made them suffer.

VietNamNet/VnMedia

Le Cong Minh, general director of Saigon Port , said that the number of imported shipments in the first four months of this year has risen by 43 percent year-on-year, of which the amount of bulk cargo accounts to 80 percent.

In the middle of April, up to 50 ships wanted to unload at Saigon Port on the same day, while the port is only able to receive around 25 ships, he said.

Some ships are spending days lining up to wait to enter the port. According to the Saigon Port ’s docking schedule, there are nine ships waiting to enter the port by May 15.

The question is why goods keep arriving to Saigon Port while there are a lot of other ports in the area, such as Ben Nghe, Lotus, Tan Thuan Dong and Dong Nai.

Some shipping experts said that unloading bulk cargo takes a lot time and effort but makes only a small profit. According to the Vietnam Seaports Association, the cost for unloading and packing a ton of bulk cargo is from VND44,000 to VND48,000. The port’s profits are around VND1,400 per ton. Meanwhile, it earns around VND7,500 for each ton from unloading a 20-foot-container weighing 20 tons.

The port would choose to unload highly profitable shipments instead of the lower ones. The state-owned port, however, can hardly refuse these kinds of goods, as it has unloaded bulk cargo for years.

Goods, such as cassava, fertilizers, cattle-feed and rice bran, are piling up and has caused huge losses to many businesses. The port’s management said May 13 that it will exempt the firms from paying storehouse rent.

Questions have been raised as to whether this is the right solution.

will concentrate on building deep-water ports for container ships in the coming decades, said Pham Anh Tuan, project manager of Portcoast Consultant Corp., which is developing ’s ports by 2050, adding that the number of seaports receiving bulk cargos would be reduced.

Meanwhile, as an agricultural country, always has a demand for imported fertilizers and pesticides and exports agricultural produce, so it also needs more seaports that accept bulk cargos.

Only the ministries of Transport and Planning and Investment, and other relevant ministries, can control the activities of the seaports to make them suitable for the country’s economic situation, experts said.

By Ng.Khoa, Th.Tuyet – Translated by Thuy Doan

Gold prices top VND20 million mark.

An employee of the sales department of Bao Tin Minh Chau Gold Trading Company in Hanoi said more customers came to sell gold than buy it.

Most customers said they were selling because the price was high now and they expected it would fall again.

Gold traders in Hanoi said prices in the global market rose to $934 per ounce on Friday before dropping to $928 per ounce later, causing gold prices to rise in .

Vietnam Gold Business General Director Tran Thanh Hai said, “People have reasons to expect gold prices will drop because the stimulus policies of the governments of the and other countries might help the global economy recover, sending prices down.”

Longer morning stock market hours aim to promote liquidity

Stock market trading hours will be extended by 15 minutes in the morning from next month following the State Securities Commission approval.

The longer trading hours will help activate transactions and promote market liquidity, commission Market Development Department head Nguyen Son said.

The commission is working with stock exchanges and the securities depository centre to revise the capacity of technical and payment systems for the longer trading hours, Son said.

Previously, the commission planned to lengthen the trading hours to the whole afternoon which would have helped investors catch up with what was happening in the world market, he said.

"But the extra session needed more advancing technical and payment systems which take time to get working well."

In the attempt to promote investment activities in equity market, the commission submitted a draft on a trading method to the Ministry of Finance in which it allowed investors to open more than one account and sell or buy in the same session.

At present, an investor has only one account open in one securities firm and each investor is allowed to sell or buy shares in a single session.

PetroVietnam gets government green light for gas price hike

Vietnam Oil and Gas Group, or PetroVietnam (PVN), has received the government’s approval to raise the price at which it sells gas to power plants to counter a slowdown in its earnings caused by higher maintenance costs.

With effect from June 1, PVN said it would increase its gas price from US$2 to $2.80 per one million BTU, or British Thermal Unit, a measure of thermal heat energy.

The increase follows a slide in PVN’s margins from selling to power plants in the southeastern region, with the return on investment in gas production declining from 21.7 percent in 2007 to 18.7 percent last year.

The rate is expected to drop further to 10.3 percent this year.

PVN said higher maintenance costs and a tax hike of 2.2 US cents to 7.2 cents per cubic meter this year is the main cause of the falling margins.

The new price is reasonable, Thoi bao Kinh te Saigon said, citing the Ministry of Industry and Trade.

Power plants’ operating costs are expected to increase by an average of around VND238 billion ($13.4 million) this year, Tuoi Tre newspaper said.

The average power price was increased by 8.9 percent to VND948.5 for a kilowatt-hour on March 1.

The state power company Electricity of Vietnam, the country’s biggest gas consumer, has yet to respond to the news of the gas-price hike, Thoi bao Kinh te Saigon reported.

Slow payers worry tea exporters

Tea exports reached 32,000 tonnes worth a total of US$40 million in the first four months of the year, according to the Viet Nam Tea Association.

The figures represent an increase of 116 per cent in volume and 114 per cent in value against the same period last year.

Tea is one of the country’s few products which have seen an increase in export value this year despite the global economic recession, according to the association.

However, tea producers are also facing difficulties as most export contracts have delayed payments.

Several importers have also proposed prolonging the delivery of export contracts.

To deal with the problem, the association says the Government should have incentive policies, including credit policies, to support tea producers and traders.

The association estimates that tea exports will continue to increase this year, with a target of 117,000 tonnes, up 13 per cent against last year.

To reach this target, tea producers need to improve the quality of tea, its hygiene and food safety, says the association.

The association says tea producers should replace traditional processing facilities with advanced technology to help improve the quality and value of tea products and reduce production costs.

Besides maintaining its current markets, the tea industry needs to expand its outlet to other countries, including , , , the , and , according to the association.

now exports tea products to 110 countries and territories under the trademark of CheViet.

The country has 35 provinces which grow a total of 131,500ha of tea with an annual average output of 6.5 tonnes of fresh tea per hectare.

HCMC people want income tax law delayed until 2010

Ho Chi Minh City ’s people have suggested delaying implementation of the 2007 Law on Personal Income Tax until January 1, 2010, according to the city’s National Assembly (NA) delegates.

They feel the prime minister should order the Ministry of Finance in coordination with the Ministry of Labor, Invalids and Social Affairs to study the real situation on the ground and submit to the government a report seeking the NA’s opinion on delaying the law.

Voters have also petitioned the NA and its agencies to increase their supervision and suggested the government present a report on the performance of the Law on Social Insurance at the seventh-tenure NA’s fifth meeting scheduled to begin next Wednesday.

The petitions from city voters have been collected and will be presented at the upcoming NA meeting.

Spanish architectural firm opens office in HCM City

Spanish architectural firm Global Architecture Local Office opened an office in HCM City , its first in Asia , on Wednesday.

GALO Viet Nam would focus on city planning and living space, including hotels and resorts, accoring to the company’s general director, Carlos Garcia Lorente.

"To prepare one’s personal vision for the urban design and development of a city, one must have a good sense of what the city currently is," Lorente said.

The firm opened the office after several trips to assess ’s economic performance and its design and construction industry last year.

Lorente said the description of one’s personal image of a city was important as a means to determine differences in perceptions of images.

"While I might find HCM City to be a very stimulating intensive environment, my neighbours might think [it] is too messy and chaotic.

"It is these differences in perceptions that are important to lay out and explore to determine the basis for change in the environment that people can agree upon and make happen."

GALO did not have any favourite projects or sectors when it came to undertaking work in this country, he said.

"We will not consider office buildings because it’s a bad time to invest in projects of this sort due to the global recession," he said, however.

Bernando de Pablo, general director of GALO Architects International, said the company would help bring Spanish investors to in the next few years.

Chau My Anh, deputy president of the HCM City Architecture Association, said Vietnamese architects would now have the opportunity to learn from their Spanish colleagues’ experience.

Property network to help investors

A network of real estate trading floors in the north which opens in Ha Noi today was tipped to be a strong force in the domestic market.

Establishment of the network was based on five firms, including Viet Nam Vreex Real Estate Trading Floor Joint Stock Company, Housing Group, Viglacera Land, Thang Long Aviation Service Joint Stock Company and Eurowindow Holding.

The network’s management board would be responsible for organising activities for the 52 members who had joined so far.

Vreex chairman Phan Thanh Mai, who is head of the board, said establishing the network was timely.

It would develop under State standards and had the capacity to help real estate investors and traders share information and reduce risks.

The State could check trading processes and legal procedures of property on the network, he said.

Thang Long Aviation chairman Pham Ngoc Thanh, who is the board’s secretary, said a proliferation of real estate trading floors existed with many associated problems.

The network would solve the troubles, connect the trading floors and boost trading activities between businesses, investors and customers, Thanh said.

Former national resources and environment deputy minister Dang Hung Vo said the network would ensure the property market developed transparently.

Unfinished paper mill sends farmers broke

Farmers in three districts in southern Long An Province say they have lost more than VND40 billion (US$2.2 million) after growing jute since a paper mill that contracted to buy it remains unfinished two years after the original deadline.

In 2006 work began on the Phuong Nam Paper Mill in Thanh Hoa District, and it was to have been finished in 2007.

Equipped to produce 100,000 tonnes of paper powder annually from jute, it committed to buy 600,000 tonnes of jute every year. For the purpose, farmers in Thanh Hoa, Tan Thanh and Moc Hoa districts planted the crop on 9,000ha of exhausted rice paddies in 2006.

They expected a yield of 50–60 tonnes and an income of VND5-7 million on every hectare.

But at harvest time, the mill was still under construction and farmers had to sell to traders at much lower prices than those promised.

Many farmers stopped growing jute and returned to growing rice. As a result, by May 2008 the whole province had had only 1,500ha under jute.

Meanwhile, the delay continued due to lack of funds and the paper mill is now due for completion only in September this year.

It has already used up the entire budget of VND1.9 trillion (US$112 million) but is only around 70 per cent complete. A further VND500 billion is needed to finish it.

The provincial People’s Committee has asked the Government for funds from the stimulus package or lend the money on easy terms.

Prime Minister Nguyen Tan Dung has ordered the ministries of Science and Technology, Industry and Trade, Agriculture and Rural Development and Finance to evaluate the project.

From a problem of plenty it is now headed towards a shortage — to supply the mill with 600,000 tonnes of jute annually, the province needs to have 15,000ha under jute. But it has just 1,500ha.

PM asked to okay $292 mln loan for new urban area

The Ho Chi Minh City administration has asked the government to allow the Bank for Investment and Development of Vietnam to grant a VND5 trillion loan (US$292.4 million) loan to a new urban development project.

The funds are to be used to pay compensation for properties taken over by the Thu Thiem New Urban Area Investment and Development project in District 2.

People’s Committee Chairman Le Hoang Quan has said city authorities will direct concerned agencies to manage and carefully supervise the use of the capital in compliance with regulations.

The city will also collect income from the project to repay the loan on schedule, Quan said.

The city has spent more than VND3.47 trillion ($202.92 million) to compensate for 6,244 properties since 2002. This year it needs about VND20 trillion ($1.17 billion) to complete the compensation payments for the project, according to the committee.

Saigon Co-op celebrates its 20th anniversary

’s leading retailer, Saigon Co-op, has been awarded the third-class Independence Medal by President Triet for its contribution to economic development and building socialism on its 20th anniversary held May 16 in Ho Chi Minh City .

Saigon Co-op has been developed into one of the biggest retailers in the country. After 20 years of building and development the supermarket has become a leading retailer in and been listed in the top 500 retailers in Asia .

Saigon Co-op has broadened its activity to many fields with a focus on retailing with 35 supermarkets and tens of convenience stores nationwide.

Saigon Co-op is planning to open a further 65 supermarkets in the country by 2015.

Also attending the anniversary celebrations were Nguyen Van Dua, deputy secretary of the HCM City Party Committee and Nguyen Thanh Tai, deputy chairman of the city People’s Committee.

Exports to increase sharply

’s export turnover to reached more than US$72 million in the first quarter of this year, up 37.5 percent compared to the same period last year.

Major export items are rice, milk, tea, garments and textiles, footwear and seafood, according to ’s trade office in . 

’s trade counselor in , Dang Ngoc Quang, said that is a large market and a traditional partner of . Currently, is in the process of national reconstruction and stabilization, so the country’s demand for imports will continue to increase.

Mr Quang added that will once again one of ’s leading import markets in the African- Southwest Asian region with major potential items such as rice, milk, tea and seafood.

Vietnamese enterprises had established relations with previously and they now only need to re-set up distribution channels and seek partners in , said Mr Quang.

PV

VietNamNet Bridge – It is still too early to talk about the recovery of the real estate market. However, experts say that the stronger credit flow is warming up the market.

Market warming up

The real estate market now has opportunities to improve liquidity.

Credit growth has been increasing steadily with the credit by early May having increased by 11% over the end of 2008. Nearly VND280 trillion worth of loans under the interest rate subsidy programme have been pumped into the national economy just in the last two months. It is expected that medium- and long-term outstanding loans under the interest rate subsidy programme will also increase in the time to come. Some of the capital will flow into the real estate market.

Moreover, the sum of VND49 trillion worth of capital for the social housing programme will be allocated by the government to localities. Some of the foreign direct investment in real estate will be disbursed. Individual investors will also inject their money in the real estate sector when they see the warming of the real estate market and believe that the market will escape from its depths.

Trinh, a real estate broker in Hanoi , related that the demand for real estate has become big since the beginning of the year. Houses and land plots in advantageous positions with prices of less than VND3 billion have been selling well. Trinh believes that if the VN Index keeps rising, a lot of investors will transfer profit from stock investments to the real estate market.

The current credit policies (interest rates, loan deposit) applied by commercial banks have become more flexible. Both joint-stock and state-owned banks plan to push up loans to fund individuals’ house and land purchases, especially apartments in the projects funded by the banks themselves.

Some experts believe that when the real estate market heats up, this will influence the stock market, thus making the real estate market cool down.

Short-term forecasts

Dr Tran Kim Chung from the Central Institute of Economic Management (CIEM) said that the real estate market in the time to come will see ups and downs, but no big fluctuations, though there will be different fluctuations in market segments.

Houses and apartments with medium prices at real estate projects will sell well.

The second market segment which is expected to be bustling in the time to come is lower-priced land plots and houses (less than VND1 billion). The products of the social housing programe will also be bustling, while the fourth segment, high-grade apartments, will be quiet, at least from now to the first quarter of 2010.

According to Associate Prof Dr Hoang Van Cuong from the Hanoi Economics University , when the real estate market is quiet, and real estate prices decrease, it is the time to develop the lower-priced housing programme. However, Cuong said that the final target of the real estate investment stimulus programme is to revive the market segments with high liquidity, and to prepare a supply of real estate for the future, when the economy recovers.

Cuong said that the investment stimulus should aim at subjects which have capital capability, while encouraging people with money to inject money in business. Meanwhile, low-income earners should not be seen as subjects who can help stimulate investment and curb economic downturn.

VietNamNet/LD

The State Bank of Vietnam announced the information on its website late on May 22, stating that the figures were as of May 21. The amount grew 3.25 percent compared to a week earlier.

The government decided in January to use VND17 trillion ($956.13 million) from an economic stimulus package to provide a 4-percent interest subsidy on loans to companies that export, import or produce essential goods.

It later extended the program until the end of 2011, and expanded the list of beneficiaries.

The government has launched a package of economic stimulus measures worth about $8 billion. Vietnam is trying to accelerate growth in the economy, which expanded 3.1 percent in the first quarter, the slowest pace since at least 1991.

In another statement released last Friday, the central bank asked local banks to expand credit effectively in support of economic growth, but at the same time it warned the banking system against lowering lending standards.

The central bank urged commercial lenders to “tightly control” loans for property projects and stock investment to ensure the safety of the credit system, it said in the statement. Lending needs to be focused on production, small- and medium-sized companies and major government projects, it said.

Source: TN, Bloomberg

The difference in the growth rates shows that the domestic market significantly contributed to the economic growth. Even during the Southeast Asian financial crisis of 1997, retail sales remained on an upward trend.

It rose 5.7 percent in 1998 and 4.1 percent in 1999 against a GDP rise of 5.8 percent and 4.8 percent.
Retail sales between 2001 and 2005 rose by an average of 10.3 percent a year, far in excess of GDP growth which averaged a mere 7.5 percent in the period.

In 2006 and 2007, retail sales surged by an average of 14.5 percent annually, double the GDP growth of 8.4 percent in the period.

In money terms, it rose from US$10.8 billion in 1997 to $45.7 billion in 2007.

Sales of consumer products increased from 81.4 percent of total retail sales in 1997 to 83.4 percent in 2000.

But by 2007 they had slumped to 77 percent, but remained at a hefty $35.2 billion as the size of the overall retail market had skyrocketed.

The Red River Delta, Mekong Delta and southeastern region accounted for 75.9 percent of the retail market.

By Nguyen Van Son * Nguyen Van Son is an economist.

Source: SGTT

The economy expanded 3.1 percent in the first quarter, according to the Hanoi-based General Statistics Office. The market has rallied 81 percent since reaching a four-year low on February 24, becoming Asia’s best performer in the period. The measure had dropped 66 percent in 2008.

Cheah King Yoong, head of investment research at Ho Chi Minh City-based Kim Eng Securities, said, “The country is awash with domestic liquidity because of wealth creation due to its strong economic growth.”

The interest rate cuts have helped trigger the advance in stocks this year, he said. Total outstanding loans increased 15 percent from January to mid-May, Vietnamese Deputy Prime Minister Nguyen Sinh Hung said on May 20.

“We may be one of the few nations to have positive growth, and fundamentals are not that bad,” Cheah said.

Domestic money is “trapped” in the country with the currency controls, and those funds have been invested in the stock market, Cheah said. It is difficult to estimate the volume of domestic funds since fewer than 20 percent of Vietnamese have bank accounts.

Where’s the VN-Index headed?

“We cautiously expected the VNIndex to end this year at 450-470,” said Johan Nyvene, general director of the Ho Chi Minh City Securities Co.

The VN-Index on the Ho Chi Minh Stock Exchange has gained 35.7 percent so far this year.

He said the market is unlikely to fall back into negative territory since the economic turmoil was not as severe as investors had expected and corporate earnings in the early part of the year only fell slightly.

Many investment funds are sitting on a pile of cash and recent surges in gold prices would cause a large amount of cash to pour into stocks, he said.

But Nyvene warned that the upward trend may not last long.

“Most listed companies’ first-quarter results have been released. There is only some news that can support the market’s winning streak. The VN-Index has broken above the resistance level of 420, but we expect the market to make a sharp correction from now until the end of the year,” he said.

Domestic investors are withdrawing from the property and gold markets to jump in stocks, according to State Securities Commission Vice Chairwoman Vu Thi Kim Lien.

The number of new trading accounts at brokerages has surged by more than 20,000 this year, she said.

Foreign investors have meanwhile started buying heavily after dumping shares early this year, she said. They bought for a net US$21.6 million through last month and in the first week of this month.

“The rallying market is reflecting investor speculation of a domestic and international economic recovery this year. But the recent surge on the market seems to come from over-optimism,” she said.

Nyvene said long-term investors should buy blue chips making consistent profits, such as dairy firm Vinamilk, oil firm PV Drilling and PetroVietnam Fertilizer and Chemical.

“If you opt for short-term buying, financial, property and technology stocks are the best choice as they usually move up sharply during a rally,” he said.

Source: Bloomberg, DTCK

The projections accompanied the 2009 International Energy Outlook that the US Energy Information Administration released in Washington Wednesday.

A report on Vietnam last month by the International Monetary Fund cited an anticipated drop in oil production “in the longer run,” while the World Bank last year identified “production capacity constraints” as hampering the country’s industry. Vietnam is opening new areas to exploration as it attempts to reverse the production decline.

“There are some doubts about Vietnam’s ability to maintain its peak production level,” said Victor Shum, a Singapore-based senior principal at oil industry consultants Purvin & Gertz Inc., in a telephone interview Thursday. “The EIA projection is an optimistic outlook.”

Vietnamese oil production has declined each year since peaking in 2004 at about 427,000 barrels a day, according to BP Plc. Through the first five months of this year, Vietnam produced about 6.95 million tons, or about 345,000 barrels a day, according to preliminary estimates from the General Statistics Office in Hanoi.

Other scenarios

Vietnam could maintain production of 400,000 barrels a day through 2030 in a low oil price scenario, according to the Energy Information Administration. In a high oil price scenario, Vietnamese production would be expected to slip to about 300,000 barrels a day by 2025, said the organization.

Vietnam’s major oil field, operated by a Russian -Vietnamese venture, has been declining in output after more than two decades of production.

But last year, ConocoPhillips, Nippon Oil Corp., Soco International Plc and Talisman Energy Inc. all began production from new Vietnam oil fields in which they hold shares. Premier Oil Plc, Soco and Talisman are among companies planning new output.

“There’s a fair amount of exploration going on in Vietnam and no one has really started with the deepwater areas yet,” said Tony Foster, Hanoi-based Vietnam managing partner for the law firm Freshfields Bruckhaus Deringer, whose clients include oil companies. “A lot depends on the outcome of China’s power play in the area.”

BP said in March that it would withdraw from a Vietnamese exploration area. The government in Hanoi said in 2007 that projects involving BP off its coast are in Vietnamese territory, after China cited concern over “actions” by its neighbor in the area. BP declined to comment in March on whether the territorial dispute influenced its decision.

Source: Bloomberg

Made-in China products here, there and everywhere…

 
China-made are selling at a supermarket in HCM City.

Chinese media recently reported the results of a survey made by Guangdong authorities which said that 46.5 percent of clothes produced in the province have been found as containing excesses of toxic substances, including formaldehyde, which can cause skin and respiratory infections. Thirty-two percent of clothes have been found as containing too much formaldehyde and toxic heavy metals.

Reporters of the Vietnamese newspaper Nguoi Lao Dong made a quick survey of the market in HCM City right after the news was released and found out that China-made products, especially ones made in Guangdong, are flooding the HCM City market.

According to petty merchants at markets in HCM City, no less than 40 percent of the clothes targeting medium and medium-high income earners are sourced from China. These include trousers, jeans, T-shirts and many other products, which have the same prices as locally-made products.

Saleswomen at Tan Binh Market said that China-made products are favoured by domestic consumers because their prices are ‘soft’. The price of every model decreases by a half after just a few months. For example, a model of T-shirt now favoured by the city’s youth was initially priced at 150,000 dong but is now selling like hot cakes at 80,000 dong. Vietnam-made products of the same kind are selling at 50-60,000 dong, but domestic consumers seem largely indifferent.

Thien Phuong, the director of a HCM City-based garment company, said that she frequently drops into markets and supermarkets to keep an eye on clothes sales and she can see China-made goods selling very well because they have diverse colours and designs, especially the products priced at over 150,000 dong.

“Sellers say the products are made in Hong Kong, Thailand or South Korea, but I know 80 percent of the products are made in China,” Phuong said.

The above newspaper also reported that China-made toys are selling everywhere in HCM City, from pavement shops to Binh Tay, Kim Bien, Tan Binh and Ba Chieu markets.

Tran Thai Hung, the owner of a toy shop on February 3 road, said that 100 percent of toys on sale at his shop are made in China. Hung said that other shops are also selling Chinese toys. “Salesmen say the products are sourced from Japan, US or South Korea because they want to sell them at high prices. In fact, these are made-in-China toys,” he added.

Cuc, a toy merchant next to Binh Tay Market, also affirmed that nearly all the toys in the area come from China, while there are only a few toys from the US or Japan which are very expensive. Similarly, products for children’s use like nipples, feeding bottles, cups and footwear also come from China.

How are China-made goods getting to markets?

Thanh, a petty merchant at An Dong Market, related that most China-made goods available in HCM City are from Guangdong. Traders either go directly to Guangdong to bring goods to Vietnam for resale, or get goods from wholesalers in the border province of Lang Son.

“Big merchants always make deals directly with suppliers in Guangdong,” Thanh said.

She went on to say that she gets goods once every one or two weeks from wholesalers, totalling 200-300 million dong worth each time. At first, merchants go to Guangdong to meet suppliers and visit their shops, but after that, they just place orders by phone.

Vietnamese merchants all say that Guang Zhou, the chief city of Guangdong, is considered the ‘paradise’ of imitation brand name goods. Products carrying brand names of Louis Vuitton, Prada and Burbery are produced there and then carried to neighbouring countries, including Vietnam. Previously, goods from Guangdong went to Hanoi first and then moved on to HCM City. However, over the last six months, merchants in HCM City themselves have been going to Guangdong to bring goods directly to HCM City for resale.

VietNamNet/NLD

At a bustling café in the centre of district 1 in HCM City, a man was telling his friends at the same table that as the VN Index kept rising, those investors who injected 1 billion dong in stocks two months ago now could get 2 billion dong. Other men expressed regret that they did not dare spend money at that time.

A few moments later, a real estate broker called the writer of this story, saying that the owner of an apartment had changed his mind about the asking price of a particular apartment, and wanted more money.

“Prices will go up sharply. People are now earning big money from stock investment deals and they will pour money in real estate, which will lead to real estate prices skyrocketing,” the broker said.

The excitement of investors in the stock market these days recalls the seething atmosphere of the market two years ago, when nearly all people and all families rushed to surf securities or real estate investments, when getting rich quickly was the prevailing topic of all discussions.

However, just some days after the peak of the excitement, Vietnamese people faced inflation of up to 30 percent, while a lot of other people worried themselves sick over the freezing real estate and stock markets.

Now, while the world’s economy has yet to escape from recession and Vietnam’s economy is still facing big difficulties, the dream of getting rich overnight has once again returned to hold court in the minds of many people.

Meanwhile, even the most optimistic economists dare not say that the global economy has recovered. The winner of the 2008 Nobel Prize for Economics, Paul Krugman, though saying that the worst period for the US and world’s economy is over, still predicts a period of stagnancy ahead.

In Vietnam, economic indicators are not good enough to make experts more optimistic. Vietnam still has difficulties with exports, which is the main foreign currency earner. Reports about unemployment are causing concerns, while investments have decreased.

Meanwhile, capital keeps flowing strongly into the stock market these days with the average trading volume of 2 trillion dong per day.

Experts say that this is not a surprise at all, because volatility proves to be in the nature of newly-emerging markets like Vietnam. The market can go up very quickly but also can fall very dramatically.

And the real estate market is the same.

“I hope people have realised that markets do not go up all the time,” said Brett Allston, Managing Director of Savills Vietnam.

He added that while he thinks the return of the stock market could help the real estate market, he hopes the real estate market will not see prices increase dramatically like in the past, because dramatic price increases are never stable.

VietNamNet/SGTT

The company held the inaugural ceremony at the brand new Saigon Port-PSA deepwater container terminal located on Ba Ria-Vung Tau Province’s Cai Mep River.

The new service will cut two days off the transit time between Vietnam and the west coast of the US, taking just 15 days to reach Seattle and 16 days to reach Los Angeles.

In another first for Vietnam, the company said it had loaded 53-foot containers onto the service vessel, the APL Denver, including products shipped by global sportswear maker Nike, for its first direct service from Vietnam to Seattle today.

The 53-footers, which have been used only in China and Vietnam, have about 60 percent more capacity than standard 40-foot containers.

Speaking at the press briefing, APL’s Senior Vice President for Pan American Trade, Bob Sappio, said, “Vietnam is among a select few countries that expects to record export growth in 2009. The PS1 service will help Vietnam grow as a vibrant manufacturing and export centre with an increasingly vital role to play in global trade.”

APL already makes weekly calls covering the entire country from Ho Chi Minh City, Da Nang and Hai Phong.

These services connect via feeder ships to strategic hubs and then into APL’s global network, which calls at all major locations within Asia, the Middle East, Europe and the US.

APL is a unit of Singapore-based Neptune Orient Lines (NOL), a global shipping, logistics and marine terminals company.

It became the first Singapore-based transportation and logistics firm to establish its wholly owned operations in Vietnam in 2007.

NOL is also the main investor in the Vietnam International Container Terminal (VICT) in HCMC, which became the country’s first purpose-built container handling facility when it opened in 1998.

Reported by Vinh Bao

Vietnam was the only country surveyed where more than half of companies expected trade volumes to rise in the next three months, said the banking group.

The report said 54 percent of the 300 Vietnamese small- and medium-sized businesses (SMEs) surveyed by market researcher TNS anticipated an increase in trade volumes, the highest proportion in the region, while 19 percent expected a decrease in the category.

About 42 percent of Chinese exporters surveyed and 40 percent of those in India anticipated trade growth over the next three months. Some 31 percent of Chinese firms expected trade volumes to remain at current levels, according to the bank’s Trade Confidence Index issued Wednesday.

Nguyen Thanh Ha, head of HSBC Bank Vietnam’s Trade and Supply Chain said SMEs in Vietnam felt that Vietnam’s long-term prospects were strong. Ha said the country’s pro-business government, improving infrastructure and legal frameworks, a young and motivated workforce, and strategic geographical location were all conducive to trade growth.

The survey received responses from more than 2,100 key decision makers at trade-oriented SMEs and mid-market businesses in Australia, China, India, Singapore, the United Arab Emirates (UAE) and Vietnam.

“I think Asia will pick up more quickly than the rest of the world,” Lawrence Webb, HSBC's global head for trade and supply chain, said at a media briefing. “Intra-regional trade within Asia will be the spur to that recovery.”

Webb said US$700 billion worth of stimulus throughout Asia, much of it in China, since the global financial crisis hit the region last summer was starting to filter through to the broader economy, generating demand for commodities and other products.

“We are seeing some quite big export flows between China and India and China and Vietnam, for example, and that gives an opportunity for many companies to diversify (their markets).”

But more developed markets of Hong Kong, Singapore and Australia were less optimistic as exports were significantly down and the recession continues to impact overall economic activity and sentiment, according to the report.

“Demand in the United States and Europe is still low,” said Webb, adding that developing economies reported brighter prospects for trade because in many cases their economies were not as heavily reliant on Western markets as the more mature markets in the survey.

“In mainland China, India and Vietnam, government measures to stimulate the domestic economy are also buoying business confidence. In addition, these developing markets are expected to recover faster from the downturn and continue to grow in 2010,” he said.

The majority of respondents across Asia expected no change in the level of risk they faced from buyers defaulting on their payments or from suppliers not honoring their trade agreements, said the survey.

When asked what they would do to cover themselves against non-payment risks, more than half of businesses in India, 43 percent in Vietnam and less than 27 percent in the UAE and Australia cited greater use of trade finance through their banks as the top strategy, the bank said.

One-third of respondents in mainland China and one-seventh in Vietnam said they would rely on export credit insurance.

More than half the respondents in Vietnam, the largest portion in the survey, said they would need more trade finance over the next three months, in line with their bullish outlook on trade.

Reported by Minh Quang (With input from Reuters)

Good business results
 
DongA Bank reportedly earned the profit of 329 billion dong through May 2009, fulfilling 43.9 percent of its 2009 target (750 billion dong). Sacombank has reported the pretax profit of 660 billion dong after provisioning for finance investments and credit risks (the profit figure does not include profit from member companies of Sacombank group).

Smaller banks like TienPhong Bank and HDBank also reported satisfactory pretax profit of 133 billion dong and 75 billion dong, respectively.

Though the gap between deposit and lending interest rates is narrow and they can’t earn a lot of money from loans, banks say that the income from credit still accounted for 50 percent of their total profit in the first five months of the year.

Currently, banks have opportunities to expand consumer credit as no ceiling lending interest rate is set for consumer loaning. Meanwhile, the demand for loans to fund house and land purchases has increased. Bankers say that if the market in the next six months of the year does not see wild changes, banks may be able to fulfill yearly business targets. When the national economy recovers, the demand for capital will increase from businesses.

Banks have every reason to cherish hopes

ACB’s pretax profit by May 15 had reportedly reached 692 billion. The bank hopes to obtain the profit of 1,100 billion in the first six months of the year, and 2,700 billion dong in pretax profit in 2009.

According to DongA Bank, the bank’s outstanding loans by the end of May had reached 26,999 billion dong, an increase of 23.2 percent over the same period of 2008. DongA’s Deputy General Director Phung Duy Khuong said that since the bank launched new credit products, the bank’s outstanding loans have increased sharply because of the increasing capital demand from students.

Commercial banks have been adjusting input interest rates with the deposit interest rates nearly hitting 10 percent per annum in order to attract more idle capital from the public.

VietNamNet/LD

The VN-Index closed at 478.72 last Friday, up 67.08 points or 16.3 per cent compared with the previous week. After five weeks of continual increases, the HCM City exchange hit its peak since last September.

About 50.3 million stocks were traded in each session, equivalent to the previous week. But, the trading value increased by 8.6 per cent due to rising stock prices, reaching VND1.73 trillion (US$96.1 million) per session.

The HaSTC-Index closed at 169.52, increasing 25.39 or 17.62 per cent. The average trading volume reached a record figure of over 1 trillion, with 33.36 million stocks changing hands per session, reflecting an increase of 13.7 per cent and 28.7 per cent respectively over the previous week.

After four weeks of gains, many securities companies gave cautious forecasts on market adjustments last week; however, analysts and investors were surprised to see blue-chips or penny stocks increasing in bulk.

The strong gains stemmed from cash resources and investors confident of an uptrend. The flourishing global stock market also created more support for the local market.

Last Friday, the VN-Index and the HaSTC-Index recognised their highest increases, with 20.53 points, or 4.48 per cent, and 11.12 points, or 6.35 per cent, respectively, so far this year.

The VN-Index easily overcame the technical thresholds of 432 and 445 to gradually approach the psychological 500-point zone.

However, foreign investors became net sellers in two sessions last Thursday and Friday, ahead of a powerful increase in the market. They were net buyers in the four previous sessions.

Many securities firms predicted the continuous gains of the market this week.

The FPT Securities Co reported, "The resistance point of the VN-Index is not defined and the index may range between 450-550, and it also may see a strong increase in the short-term."

According to Thang Long Securities Company, the trading volume was an indicator for the upcoming days. The rising volume gave the assumption that not many people would believe in the new uptrend and continue to sell. But last Friday's performance saw a decline in volume, meaning that confidence was high and the declined volume was due to limited offers.

"We should start being cautious, as any high volume would immediately mean market hesitation, and we need to watch this move closely. The volume would likely climb to around 493-496. The market would shortly resume its rally, as seen recently after some hesitation," Thang Long Co said.

VietNamNet/Viet Nam News

A VietNamNet reporter followed a technician to witness how the BlackBerry cell phone, called a “BlackBerry dolly”, is reproduced in Vietnam.

In around ten minutes, a BlackBerry 8320 was assembled completely, with mainboard worth 1 million dong, cover 400,000 dong, screen 180,000, battery 120,000 and some spare parts, totaling 2 million dong or $110. Putting the newly-assembly BlackBerry cell phone besides an authentic BlackBerry phone, one could not tell them apart, except for from the case.

Assemblers said that if components were imported in big batches, the price of the made-in-Vietnam BlackBerry would be even lower.

These phones are sold at 3.2 to 4 million dong per unit, with warranties of 6 months to 12 months, and sold under the guise of having been brought in from another country, not officially imported.

BlackBerry cell phones are advertised on many websites, such as 5giay, handheld, muare and others at similar prices. They also appear at all mobile stores in Hanoi.

The use of BlackBerry has become a trend in Vietnam, following Paris Hilton, Linsay Lohan and US President Barack Obama. Most Vietnamese users don’t pay much attention to the advantages of BlackBerry, only its fashionable aspects and reasonable price.

For this reason, the market for BlackBerry assembled in Vietnam continues to widen.

Vuong Long

Ninh said that because the Ministry of Finance (MOF) did not approve enterprises’ proposal to raise retail petrol prices does not mean that it will let enterprises suffer losses.

He said that though the Government has rejected the proposal on raising retail petrol prices, it has agreed to delay tax payment and enterprises’ contributions to funds in order to help ease enterprises’ difficulties.

Ninh admitted that petrol importers may incur losses at certain moments, when oil and petrol price increases. However, he said that domestic prices cannot be adjusted every day when the world’s petrol price goes up and down. He said that it is necessary to keep close watch over the world prices for 20-30 days before making a decision.

He affirmed that a petrol price increase should be approved only if there is no alternative.

Prior to that, in Instruction No 172 announcing the Prime Minister’s decision on regulating the petrol price, the Prime Minister assigned the Ministries of Finance and Industry and Trade to keep close watch over the world’s prices to regulate the domestic prices based on the market principle, provided that the price adjustments do not cause overly big impacts on people’s lives.

In order to do that, the Prime Minister allows the Ministry of Finance to apply necessary measures. It can make a decision on slashing import taxes on petrol and oil products, or delaying enterprises’ contributions to the petrol price stabilisation fund.

Meanwhile, Petrolimex, which is holding 60 percent of the petrol market share and complaining about big losses, has critically responded to ministries’ decision on rejecting the proposal on raising the retail petrol price.

According to Vuong Thai Dung, Deputy General Director of Petrolimex, the corporation is incurring the loss of over 2,000 dong for every litre of petrol sold, 2,000 dong for every litre of diesel and 3,000 per kilogramme of mazut sold. The low sale prices have made Petrolimex incur the loss of 50-60 billion dong per day.

Dung said that in the first five months of the year, the car petrol price has increased by 55 percent, while the domestic price has increased by 14 percent only. Similarly, the diesel price has increased by 27 percent in the world, while the domestic price decreased by 5 percent; the kerosene price has increased by 21 percent, while the domestic price remains unchanged. Especially, mazut has risen by 55 percent, while the domestic price has increased by 6 percent only.

How has Petrolimex been doing?

Vuong Thai Dung: I have to remind you that on September 16, 2008, the Government decided that the domestic petrol price will perform in accordance with the market mechanism rules. However, in fact, the retail petrol price is still being defined by government agencies, while enterprises do not have the right to set retail prices.

The prices in the world’s market have been escalating. The domestic retail prices at many different moments do not truly reflect the world’s prices. Meanwhile, the dollar price has increased by five percent.

After the latest petrol price increase of 500 dong per litre on May 8, Petrolimex has two times sought permission from the Ministries of Finance and Industry and Trade to raise retail prices, but the price increases were rejected, why?

Vuong Thai Dung: Our proposal was not considered thoroughly by government agencies. We have received repeated instructions from the ministries that they do not agree on the price increase, and that it is necessary to keep close watch over the world’s prices for some more time. However, the world’s price keeps rising – how much longer will we have to wait?

Government agencies said that tax has been lowered to help enterprises, but in fact, tax has been lowered by five percent only, or just several hundred dong, not enough to offset losses. Moreover, any tax cut decisions always take time to take effect.

What will happen if ministries still follow the same way in regulating petrol prices?

Vuong Thai Dung: This would lead to many consequences. First, it would compound enterprises’ losses. Second, consumers would not have enough information about prices. Third, the gap between the domestic and regional prices would become wider.

VietNamNet/TBKTVN

Steel mill project licensed
A Taiwanese-Japanese joint venture project to build a US$1.15 billion steel mill in southern Ba Ria-Vung Tau Province was licensed yesterday.

The steel mill will be built on 109 ha in the My Xuan A2 Industrial Zone. Several investors are funding the project, including the China Steel Group from Taiwan, but Sumitomo Metal Industries and the Sumitomo Corporation from Japan are the majority partners.

Once operational in 2013, the steel mill is expected to produce 1.6 million tonnes of steel products annually, including steel plates, hot- and cold-rolled steel, as well as steel coils to service the ship-building industry. It will also supply the mechanical engineering, automobile and electricity/electronics industries and is expected to employ around 1,000 local workers.

The China Steel Sumikin Viet Nam Company is currently the province’s largest steel project, followed by a $1.12 billion project invested in by the Posco Group from the Republic of Korea.

Viet Nam, Saudi Arabia talk food-for-oil deal

Saudi Arabia has agreed to help Viet Nam ensure its energy supplies in a time of high demand. Viet Nam, in turn, will help secure food security in Saudi Arabia.

This was announced at a meeting of experts from both sides in Ha Noi yesterday.

Efforts already made between Viet Nam and Saudi Arabia indicated there was room for more dynamic co-operation in trade and investment between the two countries, said Minister of Industry and Trade Vu Huy Hoang yesterday.

Speaking at a reception for the Saudi Minister of Petroleum and Mineral Resources, Ali Ibrahim Al Naimi, Hoang said this could include co-operation in oil, gas and minerals.

"Saudi Arabia has many experiences in the development of energy and stands ready to become a long-term partner with Viet Nam," Hoang said.

Hoang asked the Arabian kingdom to recognise that Viet Nam now had a full market economy. He suggested an early start for negotiations on investment and transport co-operation - and pushed for more exchanges of delegations.

He also outlined ideas to help enterprises explore for oil and gas and build refineries.

The Saudi minister said his country also wanted to explore co-operation in developing infrastructure - and in engineering, civil construction and energy.

US firm to manage luxury resorts in Da Nang, Da Lat

The Sai Gon Invest Group has hired a US-based company to manage two five-star resorts it plans in Da Nang and Da Lat, with the two parties signing a tetter of intent in HCM City yesterday.

Once the final agreement is completed at the end of this year, Starwood Hotels & Resorts Worldwide Inc will take over the Le Meridien Da Nang Resort & Spa and Sheraton Da Lat Resort at the construction stage.

Kinh Bac Urban Development Corporation, a unit of SGI, will invest US$100 million to build the Le Meridien Da Nang Resort & Spa on an 8.4-hectare site and another $40 million for the Sheraton Da Lat Resort in downtown Da Lat.

"Construction is planned to begin next year and the two properties will be ready by 2013, when the financial crisis would have blown over," Dang Thi Hoang Phuong, chief executive officer of SGI, said at the signing ceremony.

"Starwood is interested in the two luxury resorts because Viet Nam is a promising tourism place," said Matthew Fry, senior vice president of Starwood Asia Pacific Hotels & Resort.

Starwood manages 940 hotels in 97 nations around the world, employing 145,000 people. In Viet Nam, it manages Sheraton hotels in Ha Noi and HCM City. The SGI owns 20 industrial and high-tech parks built at a cost of more than $2 billion, and three resorts in Binh Thuan province, Da Lat, and Da Nang.

Ground services firm wins airports award

The International Air Transport Association (IATA) has recognised the outstanding achievements of the Viet Nam Air Navigation Services Corporation, the Civil Aviation Authority of Singapore, Geneva International Airport and Malaysia Airports Holdings Berhad by giving out their prestigious Eagle Awards.

The Eagle Awards honour air navigation service providers (ANSPs) and airports for outstanding performance in customer satisfaction, cost efficiency and continuous improvement. Awards are granted based on the recommendations of the independent Eagle Awards Panel.

"Eagle Awards are highly-valued recognitions of airports and ANSPs. All parts of the aviation value chain must play their part in meeting the intense challenges of this economic crisis," said Kotaite. He noted that the panel paid special attention not only to good performance, but also to proactive responses to the economic downturn.

"All four winners today have gone beyond the strict and challenging criteria of the Eagle Awards for high service standards and cost efficiency. They have also responded effectively and innovatively to the needs of their airline customers at this time of unprecedented financial turmoil. They put the customer first and delivered value for money. The industry partners are role models for all infrastructure providers," said Giovanni Bisignani, IATA’s director general and CEO.

The Viet Nam Air Navigation Services Corporation (VANSCORP) received the award "Most Improved ANSP". It was credited for investing in modern technology in line with the ICAO Roadmap for Air Traffic Communication, Navigation and Surveillance.

"VANSCORP has improved greatly in its 15-year history and is characterised by a strong culture of reliability, efficiency and customer orientation. In addition to maintaining strong relationship with its airline customers, VANSCORP also takes an active role in regional initiatives," said Bisignani.

Air, sea services get zero VAT

The Ministry of Finance is to scrap value added tax from next month on aviation and maritime services.

The new rate will replace the current one of between 5-10 per cent on ticket prices, airport ground services, transport contracts on international route and freight handling.

The Viet Nam Aviation Department said the tax exemption would help to offset additional costs incurred by airlines and passengers during the global economic crisis and higher fuel prices.

Domestic carriers have sustained huge losses since the crisis began that have been only slightly alleviated by the Government’s decision to allow airlines to set their own prices.

Vietnam Airlines, the national-flag carrier, has made little profit despite introducing cost-saving measures.

Airlines are hoping to make further cost savings when four new air routes open next month, allowing them to cut flying times and save fuel.

The aviation authority estimates that with the four new routes, carriers could potentially save about 28 flying minutes, equivalent to US$11,200 flying up and down the country.

Tighter controls put on overseas bonds

A new Government decree issued last week puts stricer requirements on the issuance of State and corporate bonds on international capital markets.

Under Decree No 53/2009/ND-CP, bonds can be issued overseas only to raise capital for key national projects with demonstrable effectiveness and capacity to repay borrowed funds.

But the decree also recognises the right of Vietnamese enterprises, in addition to the Government, to directly issue bonds on the international market on the principles of freedom of contract and corporate responsibility for the effective use of borrow