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DONG UPDATES-------------6-9-08
Vietnamese Skeptical of Currency Assurances
By James Hookway
Vietnam's Prime Minister Nguyen Tan Dung said last week he is confident the country won't have to devalue its currency.
Ordinary Vietnamese aren't so sure, pushing black-market rates for the dollar to new highs as concerns spread about Vietnam's inflation-wracked economy, especially with oil prices surging.
The country has been hit by a wave of strikes as it grapples with the impact of seven months of double-digit inflation, which hit an annualized rate of 25.2% in May. The stock market has collapsed as investors switch to gold.
On Friday, it cost 18,500 Vietnamese dong to buy $1 on Vietnam's informal ----------
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Vietnam May Intervene to Maintain the Value of Dong (Update3)
By Nguyen Dieu Tu Uyen
June 9 (Bloomberg) -- Vietnam has enough foreign-exchange reserves for the government to step in to maintain the value of the dong, said Prime Minister Nguyen Tan Dung, acting to damp concern the currency will collapse.
``With the foreign-currency surplus, the government will be able to intervene to maintain the dong's value and ensure imports,'' Dung said a statement posted on the government's Web site.
The Southeast Asian nation is battling inflation of more than 25 percent, the fastest since at least 1992, spurring concern that the dong may lose value as the benchmark stock index extends a record losing streak. Rating agencies have lowered their outlook for the nation's debt in the past month, citing a slow government response to inflation.
``The government is now clearly making public what it thinks the problems are, and what it is doing to solve them,'' said Dominic Scriven, a director at Dragon Capital, a Ho Chi Minh City-based investment firm with more than $1.5 billion under management. ``The government is doing the right thing to help the dong regain its value.''
The government last week cut the economic growth target for this year to 7 percent from 9 percent as it tries to slow the pace of consumer price gains. Vietnam is aiming for 2009 growth of as much as 7.5 percent, according to a statement posted on the government's Web site June 7.
Vietnam's balance of payments showed a surplus of $1 billion in the first five months of the year, according to the government statement. The excess will increase to as much as $3 billion for the whole year, Dung said.
Record Losses
The Ho Chi Minh Stock Exchange's benchmark VN Index fell 1.3 percent today, capping a record 23-day losing streak, on concern a widening trade deficit and inflation at a 16-year high will prompt overseas funds to sell local holdings, adding pressure on the dong to decline. The benchmark has lost 59 percent this year.
Morgan Stanley said on May 28 that Vietnam is headed for a ``currency crisis'' because the current-account deficit may swell this year to an ``unsustainably large'' level. Deutsche Bank AG also predicts a dong devaluation because of quickening inflation.
Vietnam's trade gap widened to $14.42 billion in the first five months this year from $4.25 billion at the same time a year earlier, the General Statistics Office said on May 26.
The Prime Minister's statement was released following a meeting with David Fernandez, head of emerging-market research at JPMorgan Chase & Co.
Devaluation `Unlikely'
``Our own view is that Vietnam is close to the peak of the recent bad macro news on inflation and the trade deficit,'' Singapore-based Fernandez said in a research note meeting after the meeting. ``A currency devaluation is unlikely to occur due to foreign-capital flight.''
The dong advanced to as high as 16,246.50 per dollar before closing 0.1 percent lower at 16,290.50 as of 6 p.m. in Hanoi, according to data compiled by Bloomberg. The dong has declined against the dollar for three straight months, the longest losing streak since August.
The State Bank of Vietnam today set a reference rate of 16,132 a dollar, compared with 16,124 on June 6, according to its Web site. The currency is allowed to trade up to 1 percent on either side of the rate.
Minister of Planning and Investment Vo Hong Phuc said last week that the nation doesn't yet need aid from groups such as the International Monetary Fund after Deutsche Bank predicted the country may be forced to seek an ``IMF-style program'' in coming months because of insufficient foreign-exchange reserves.
The country's foreign currency reserves have increased to about $22 billion from $19 billion as of the end of 2007, according to Nguyen Thanh Do, director of external financing at Vietnam's Ministry of Finance. ``The reserves will be much higher at the end of the year,'' Do said.
To contact the reporter on this story: Nguyen Dieu Tu Uyen in Hanoi at Uyen1@bloomberg.net
Last Updated: June 9, 2008 07:54 EDT
UPDATE 1-Vietnam says no plans for currency devaluation
Fri Jun 6, 2008 3:26pm IST
HANOI, June 6 (Reuters) - Vietnam's government has no plans to devalue the dong in spite of the forwards markets pricing in a sharp depreciation in the value of the currency one year from now, the country's second-largest bank BIDV said on Friday.
The government also has sufficient foreign currency reserves to meet investors' demands to convert their funds into dollars, Prime Minister Nguyen Tan Dung was quoted as saying in the bank's statement.
Vietnam will strive to reduce its inflation to single digits by 2010, Dung told BIDV Chairman Tran Bac Ha and JPMorgan's Head of Economic and Sovereign Research, David Fernandez, at a meeting on Thursday, BIDV said.
Vietnam's economy and the dong are under pressure from inflation running at more than 25 percent and rising imports.
The country's overall balance of payments for the first five months of the year was a surplus $1 billion, Dung said.
"Given the current forex surplus, the prime minister believed that the dollar/dong trading band should be adjusted in a flexible manner in both directions," the statement quoted Dung as saying of the current daily band of +/-1 percent.
In the short term, the band could be changed to come close to the +/- 2 percent as projected by the government, he said.
Analysts said the remarks would help calm market jitters over recent volatility.
"I think the market has seen some dramatic moves (in Vietnam) recently, and the comments are aimed at trying to calm down the market's nerves over how policy makers are dealing with the inflation problem," said David Mann, currency strategist at Standard Chartered Bank in Hong Kong.
"We are expecting more of a smooth weakening of the dong than the NDF market suggests -- some market expectations do appear to be overdone."
VOLATILITY
Earlier on Friday, BIDV called on the central bank to take more action to stabilise the dong as it fell to fresh lows under pressure from rising import prices [ID:nHAN269583].
In offshore non-deliverable forwards PNDG, the dong firmed to 22,800/23,800 per dollar on one-year term by 0848 GMT, implying the currency will be worth around 30 percent less in a year's time.
The dong's <VND=> spot rate was at 16,283/16,285 per dollar.
Dung said offshore markets which priced in a fall of between 20 and 40 percent in forwards deals had no grounds doing so.
He said the State Bank of Vietnam would step up its measures to intervene in the markets.
"The government will soon publish its foreign exchange reserves in dollars," the BIDV statement said, adding that Dung has asked the State Bank of Vietnam to publish the reserves on a regular basis to win the public's trust.
Dung assured the two bankers at the meeting that Vietnam would not conduct any policy to control foreign portfolio investments, which would contravene the country's commitments toward integration and the market economy it pursues.
Mann of Standard Chartered said rising oil prices have had a major impact on the economy and inflation was likely to climb.
"We are still expecting inflation, which is quite high right now, to go even higher in the third quarter," Mann said. "But we think it will start coming off by the fourth quarter and the first quarter of next year."
(Reporting by Ho Binh Minh and Kevin Yao, editing by Jacqueline Wong)
ietnam dong hits fresh lows as bank calls for actionReuters,
Friday June 6 2008 By Ho Binh Minh
HANOI, June 6 (Reuters) - Vietnam's second-biggest lender called on the central bank on Friday to take more action to stabilise the dong as it fell to fresh lows under pressure from rising import prices.
Ratings agencies have turned negative on the outlook for Vietnam, arguing policy makers are not doing enough to combat the Communist country's 25-percent inflation and swelling trade and current account deficits.
The State Bank of Vietnam, or central bank, set its official daily rate for the dong at 16,124 per dollar on Friday, its lowest level in more than six months. The currency is down just 0.06 percent so far this year.
But the gap between the official rate and the rate the currency is traded at on the black market and offshore is widening, prompting state-run BIDV, Vietnam's second-largest lender, to call for action from the central bank.
"The State Bank should deploy stronger measures to intervene in the market," BIDV Chairman Tran Bac Ha said in a statement sent to Reuters.
On the black market in Hanoi, the dong was changing hands on Thursday at a record low of 18,500 dong per dollar, nearly 13 percent below the official rate.
Offshore non-deliverable forwards were betting the dong would drop in a year's time to 23,500/24,500 per dollar, suggesting a depreciation of around 32.2 percent, deeper than 30 percent indicated on Tuesday.
"The exchange rate fluctuation on the free market in recent days is mainly due to psychological and speculative factors," the central bank said in a statement.
Onshore foreign exchange markets can trade the dong within a band of plus or minus 1 percent from the daily official rate.
FLEXIBLE POLICY
The central bank has said it pursues a flexible exchange rate while the government has said that during 2008 it would allow only a 2 percent annual appreciation or depreciation of the dong.
Given the soaring price of imports, such as raw materials, Vietnam's trade deficit more than trebled to $14.4 billion in the first five months of 2008, higher than the $12.4 billion deficit for the whole of 2007.
BIDV said the dollar rose due to strong demand from importers, especially to pay for oil products, steel and medicine.
It also said importers of luxurious goods and cars have to buy dollars from the free markets, contributing to the rise in the U.S. currency. Regulations don't encourage banks to issue foreign exchange to importers of luxury goods, including cars.
In the past few weeks Fitch Ratings has downgraded its outlook on Vietnam's credit rating to negative from stable and Moody's Investors Service has cut the outlook to negative from positive.
Both agencies highlighted growing economic imbalances.
"The policy response has been both too slow and too small as real policy interest rates remain deeply negative even following their recent increase," Fitch said.
Vietnam has carried out a number of policy measures to try to combat the growing threat of inflation, including raising official interest rates and tightening bank reserves requirements to tighten cash in the banking system.
However, a state-imposed limits on commercial banks mean that deposit and lending interest rates are well below the level of inflation. (Editing by Neil Fullick
Forex policy as fickle as weather
00:04' 15/05/2008 (GMT+7)
VietNamNet Bridge – While the State Bank of Vietnam (SBV) affirms that the foreign currency market has been stabilized, commercial banks still complain that they cannot buy dollars and the central bank has to put billions of dollars into circulation.
In March 2008, SBV’s forex policy saw a change: it let the VND revaluate against the dollar. As the result, the dollar depreciated sharply at that time, once dropping to VND15,882/US$1.
However, the policy could not last for long time. The dollar value unexpectedly increased sharply, forcing the central bank to pump dollars into circulation to restrain the price increases.
The dollar shortage is now not so serious and obvious on the market, but it has been threatening the commercial banks that are keen on import-export payment services. Those banks complain that they cannot buy enough dollars to sell to clients due to the fixed exchange rates. Importers and commercial banks can pay more to get dollars from dollar holders, but they dare not do that.
The only dollar supply source importers and banks are relying on is the central bank. However, the supplies from the source just come in dribs and drabs.
Businesses and individual dollar holders, who can be the big dollar suppliers to banks, now tend to keep dollars in hands as the tool of saving assets.
Analysts said that people now tend to keep dollars for fear about the trade deficit. According to the Ministry of Planning and Investment, Vietnam’s trade deficit reached $11bil in the first four months of the year ($18.26bil worth of export turnover and $29.36bil worth of import turnover), or 60.8% of export turnover. The prediction that the US may stop slashing US$ interest rates has also prompted people to keep dollars as the dollar value may increase again.
The trade deficit showed the signs of slight decreases in April 2008, and will decrease further if the Government takes drastic measures to control imports. However, the drastic measures may cause other side effects.
The demand for dollars is increasing also because of the more expensive imports (petrol, steel and fertilizer). It is expected that the trade deficit may hit $20bil or higher, therefore, the dollar shortage always ‘lies in wait’.
Commercial banks have been trying to buy more dollars and attract dollar capital. Many banks have raised the US$ deposit interest rate to over 6% (higher than the ceiling interest rate agreed among banks). However, the dollar capital flowing to banks remains modest.
What will VND/US$ exchange rate be like?
Analysts said that the most important factor that decides the VND/US$ exchange rate is the trade deficit level. The Government is attempting to raise taxes and use technical barriers to limit imports.
A foreign banker in Vietnam gave an optimistic forecast about Vietnam’s trade deficit this year. It said that Vietnamese enterprises imported big quantities of steel and equipment in the first months of the year (up by 56% over the last year’s same period), and they won’t do that in the remaining months, which also means that the trade gap will be improved in the coming months.
In principle, the deficit of dollars due to the trade gap can be offset by other supplies of dollars (foreign investment, official development assistance capital and overseas remittance). The Ministry of Planning and Investment is trying to speed up the disbursement of foreign direct investment.
The VND/US$ exchange rate is also decided by another factor, the health of the dollar. The currency, which once depreciated in the world market, is now showing the signs of recovery.
Which forex policy is best?
Experts said that the State Bank of Vietnam was not good at regulating the foreign exchange policy. That explained why the market once saw the dollar excess at one time and then the dollar shortage at other time.
In March 2008, the State Bank said that the VND revaluation will make imports cheaper, which can help curb inflation. Realizing that the central banks would not keep the weak VND any more to encourage export, businesses and people rushed to sell dollars. As a result, the dollars were in excess with hundreds of millions of dollars unable to find buyers. Meanwhile, the State Bank ignored the demand to sell dollars from businesses and the public, and exporters had to claim directly to the Prime Minister.
Just a couple of weeks later, the dollar witnessed an upturn. The State Bank had to sell dollars to stabilize the market (the sold volume was $1.2bil in April). However, it is clear that the central bank is applying the new forex policy under which the VND is weakening against the dollar.
(Source: Tuoi tre
Economic difficulties just temporary: Deputy PM
16:53' 06/06/2008 (GMT+7)
VietNamNet Bridge – “The current economic difficulties are just temporary. Only speculators are leaving Vietnam at this moment, while investors are staying here to continue their business,” said Deputy Prime Minister Hoang Trung Hai at 'Doing Business in Vietnam' held in Hanoi on June 5.
Deputy Prime Minister Hoang Trung Hai
Speaking before several hundred foreign and domestic businesses at the forum, an event under the framework of the Global Summit of Women 2008, the Deputy Prime Minister emphasised that the government of Vietnam is strictly respecting the commitments it made to the international community.
It is speeding up the completion of administrative procedural reforms in order to create more favourable conditions for investors.
Hai said that Vietnam attaches great importance to quality standards in implementing its plan on socio-economic development, striving for a sustainable development and the improvement of competitiveness for businesses and the national economy.
“Vietnam is trying to create favourable conditions for the development of all kinds of businesses under all kinds of economic sectors,” Hai said.
The Deputy PM said that Vietnam is applying fair policies for both foreign and domestic businesses. Every year, Vietnam has 50,000 more businesses with the total capital of $30bil. This shows the dynamism of the business environment in Vietnam with a lot of opportunities.
“Vietnam considers foreign enterprises a part of the national economy. Co-workers and I are here to listen and discuss with you about all the issues you are interested in,” Hai said.
Participants at the business forum
Regarding the performance of the national economy currently, Deputy Prime Minister Hoang Trung Hai said that high inflation, high trade deficit and the low liquidity of the banking system are the biggest challenges for the national economy.
At the business forum, Charly Madan, General Director of Citibank Vietnam, expressed his concern about Vietnam’s economy.
Vietnam has obtained high economic growth rates in the last few years, but it is now facing a macroeconomic imbalance which has been worrying investors. “What will the government do to help investors?” he asked.
Hai said that the government has drawn up eight basic measures to stabilise the macroeconomy. One of the measures is to cut public investments. The government has asked relevant ministries to delay or cancel projects which are not really necessary or urgent. Meanwhile, Vietnam is taking necessary measures to limit imports of luxury products.
Le Thi Thanh Thuy, a domestic businesswoman, said that Vietnam now has to compete with a lot of foreign enterprises. “What will the government do to help domestic businesses improve their competitiveness?” she asked.
Hai affirmed that the government has been taking necessary measures to support businesses. Most recently, the Ministry of Construction proposed abolishing seven of the 13 current construction procedures. The government will release the documents further decentralising investment management, in order to simplify administrative procedures.
However, Hai believes that the improvement of competitiveness will depend a lot on businesses themselves. He related that he knew Vietnamese entrepreneurs were flying to Africa to seek new markets.
Speaking at the Business Forum, the chairman of the Vietnam Chamber of Commerce and Industry (VCCI) also said that the government of Vietnam has been taking a lot of measures to stabilise the national economy and curb inflation. The measures have been supported by the business community and they are showing effects.
Foreign investment in Vietnam steadily increased in the first five months of the year, especially in projects initiated by strategic investors. This shows that domestic and foreign investors are still confident that the current difficulties are just temporary, while the potentials are very big here, in Vietnam, in the long term.
(Source: VNE
US$ price soars to VND18,500/US$1
16:49' 05/06/2008 (GMT+7)
VietNamNet Bridge – The dollar price has officially surpassed the VND18,000/US$1 threshold, selling at VND18,500/US$1,prompting further gold price increases after the falls following the world’s price decreases.
The foreign currency market this morning saw another peak of the price increase wave with the selling price hitting $18,500/US$1.
Quoc Trinh Gold and Foreign Exchange Shop on Ha Trung street in Hanoi this morning quoted the prices of VND17,900 (purchasing) and VND18,200/US$1. Meanwhile, Phu Quy Gold Shop on Tran Nhan Tong street in Hanoi offered the prices of VND18,000 and VND18,500/US$1, respectively. The highest peak was VND400/US$1 higher than the previous day’s level.
Meanwhile, the exchange rate on the interbank market announced by the State Bank of Vietnam this morning also saw another increase of VND10/US$1 over yesterday morning, at VND16,117/US41.
Dr Cao Sy Kiem, former Governor of the State Bank of Vietnam, has attributed the dollar’s dramatic price increases recently to speculation. Meanwhile, people themselves have been making the situation worse as they have been rushing to buy dollars to hoard up for fear that the prices will go up further. Kiem has advised people not to panic about the price increases, as the black market does not represent Vietnam’s foreign currency market.
At the government’s annual press conference on June 2, Deputy Governor of the State Bank of Vietnam Nguyen Dong Tien affirmed that the government’s policy is to stabilise the VND’s value, and that the VND will not go up or down by more than 2% compared to 2007.
Tien said that people should be cautious with deals on the black market, and rely on the official information provided by state agencies.
The sharp dollar price increases have led gold prices to increase by nearly VND50,000/tael over yesterday, despite the continued falls of the world’s gold prices in the last two consecutive trading sessions.
SJC Gold in Hanoi is now being offered at VND18.28-VND18.38mil/tael, while Bao Tin Minh Chau is offering gold for VND18.2-18.4mil/tael.
On the ACB gold trading floor, gold is being traded at VND18.34mil/tael with 192,000 taels of gold successfully transacted this morning, worth VND3,515bil.
Banks are continuing to raise US$ deposit interest rates. An Binh Bank, for example, is now offering the interest rate of 7.6% at the highest, becoming the bank that offers the highest rate now in the market.
The dollar price has been increasing sharply, hitting the highest peak in the last three weeks. At 11 am this morning, in Asia’s market, the US$ was traded at US$1.5835/EUR1.
(Source: Dan tri, VietNamNet)
State Bank holds line on interest rates
(03-06-2008)
HA NOI — The State Bank of Viet Nam announced yesterday it would retain benchmark rates in place, with the 12-per-cent prime rate, 13-per-cent refinancing rate and 11-per-cent discount rate all left unchanged.
Since the last rate increase on May 19, bank officials said, market lending rates have been becoming more stable, ranging from 15.6-18 per cent per year for short-term loans through State-owned banks, and from 17-18 per cent yearly for mid and long-terms loans.
Borrowing costs for short-term loans through private commercial banks stretch from 14.8-18 per cent annually, and from 16.8-18 per cent for mid and long-terms loans.
Lending rates cannot pass a maximum of 18 per year by law. However, there are still concerns about additional fees and costs charged by banks, pushing the real lending rate to over 20 per cent.
Meanwhile, interbank rates over the past two weeks have fluctuated at 12-18 per cent.
Dong deposits
Deposit interest rates have also shown signs of levelling out.
State-owned banks were offering about 3.6 per cent per year for non-term deposits, 12.71 per cent for three-month term deposits, 12.97 per cent for six months and 13.39 per cent for one year.
Private commercial banks were offering consumers slightly better deals, with 4.38 per cent on standard deposits and up to 14.23 per cent on six-month term deposits. None so far have popped their heads over the 15-per-cent barrier, despite a legal limit of 18 per cent. — VNS
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EMERGING MARKETS REPORT
Vietnam stocks tank again; Moody's cuts outlook
Ratings agency cites need to get inflation, balance-of-payments under control
By Barbara Kollmeyer, MarketWatch
Last update: 3:36 p.m. EDT June 4, 2008Comments: 4LOS ANGELES (MarketWatch)
-- Stocks in Vietnam hit fresh two-year lows on Wednesday, as investors fretted about runaway inflation and Moody's Investors Services cut its outlook on the country's key ratings from positive to negative.
The ratings agency, which now is the third of the three major ratings agencies to cut their outlook on Vietnam, cited "policy shortcomings in addressing inflationary and balance-of-payments pressures." The outlook cuts affect the Ba3 long-term government foreign and local-currency ratings and the B1 foreign-currency bank deposit ceiling.
"The economic imbalances now emerging are greater than anticipated, thereby derailing the improving trend previously evident in the country's credit fundamentals," said Tom Byrne, Moody's senior vice president. "Rising inflation is proving very difficult to control, and pressures have rapidly built up on the balance of payments."
'For the authorities, the dilemma now is how to dampen growth without throwing the economy into recession or damaging the environment for FDI (foreign direct investment).'
— Tom Byrne, Moody's
Inflation hit 25% in May, which Moody's blamed on overheated growth driven by "excessive credit expansion" and large "off-budget" spending on development.
Shares in Hanoi fell below 400 points on Wednesday, closing down nearly 1.4% at 395.66, the lowest level since August 2006. Shares were also pressured after the stock exchange said many listed firms hadn't yet established provisional funds to cover losses, according to a report in the London Guardian newspaper.
Vietnam, considered a frontier emerging market, is now the worst performer in its asset class, with stocks nearly halved in value so far this year. See also Where has the mania for Vietnamese stocks gone?
"For the authorities, the dilemma now is how to dampen growth without throwing the economy into recession or damaging the environment for FDI (foreign direct investment)," said Byrne.
Cameron Brandt, global markets analyst at EPFR Global, said the move on ratings is a timely one by Moody's "For the most part it reads to me as a warning to Vietnam rather than this has already happened, and the one real red flag I saw in that was their assertion that actual direct foreign investment flows are beginning to seriously lag."
Moody's noted that direct investment tallied up to more than 9% of gross domestic product in 2007, financing the country's current account deficit for that year. This year so far, inflows have doubled to more than $15 billion, but have lagged a spike in trade and current account deficits for the first quarter.
Moody's said the measured policy response officials in Vietnam have taken this year was further bolstered in May, notably towards reining in credit growth and stabilizing the deposit base of the banking system. It said authorities have expressed intent to tighten further if needed.
"The months ahead will test their resolve in dealing more effectively with inflation and the gaping current account deficit, but for now, macroeconomic and balance-of-payments trends are unsustainable," said Byrne.
He added that Vietnam's high level of foreign exchange reserves is helping buffer fallout from "the abrupt shift now seen in foreign portfolio investor sentiment," but trade and current account deficits could "overwhelm the availability of more stable, long-term financing for the balance of payments, and may put substantial pressure on reserves and the exchange rate."
The ratings agency said Vietnam's credit fundamentals are still favorable with its peers, and long-term prospects will survive if they can put a stronger policy framework into place. Persistently high inflation and large current account deficits could overwhelm the country's capacity to absorb such a shock and further pressure the government's rating, warned Byrne.
"For the rating outlook to improve, we would need to see an end to high inflation, demonstrated stability in the banking system, and a decline in the current account deficit towards a level which can be financed by stable long-term capital inflows," said Byrne.
In or out of the money?
While Vietnam may scream buyer beware for the average retail investor, Brandt said dedicated funds both in the U.S. and Europe are viewing the downward spiral of the Vietnamese equity market as a buying opportunity.
"Vietnam country funds that we track have so far this year attracted more fresh money than has been pulled out of them," he said.
However, the assets of these funds are suffering, given the rough year for stocks, he said, Funds started the year out with $1.4 billion under management, which is now around $814 million.
"Just looking at the numbers that are being driven by investors outside Vietnam, they seem to indicate certainly quite a few people with money who believe the bottom has been hit. They're buying aggressively on dips that you would expect to be scaring people out of this. There are still people who believe Vietnam has value and there hasn't been a wholesale retreat from Vietnam given the market performance," he said.
"If you invest carefully instead of taking a broad brush approach, there are likely to be companies that do well regardless of the domestic background, ones that are geared to a U.S. or Chinese export cycle, serving those particular markets local companies," he said.
Transparency remains an issue for Vietnam, he said, notably official data that is shrouded in secrecy and the fact the government is now going after private business journalists. "Lots of numbers you'd normally base a rational decision on are shaky or just not there," he said.
Indeed, Moody's Byrne noted that it's extremely difficult gauge Vietnam's external payments situation given the secrecy surrounding the international liquidity position of the State Bank of Vietnam, which undermines confidence in analyzing the country's current credit conditions.
Barbara Kollmeyer is an editor for MarketWatch in Los Angeles.
NEVER GOING TO HAPPEN. NOT IN A MILLION YEARS,.
Much different at least in my thinking. I mean if this one world Government is going to happen for real ... I know it is, this is just a step towards it.
the overall picture is we are getting hammered in every way. Since they have done these things below ... what's to say they have not secretly setup the SEC rules on pinks and otc's to allow the CEO and partners, to literally collapse the backs of the people so to gain control and make us a slave. After all the ENRON, California Power Grid, and many other major investigations were in that third building (#7) when it went down six hours after the Twin Towers went down
Vietnam May Accelerate Dong's Decline, Goldman Says (Update2)
By Patricia Lui
June 3 (Bloomberg) -- Vietnam may speed up the pace of the dong's decline to prevent the currency from becoming ``excessively overvalued'' because of soaring inflation, according to Goldman Sachs Group Inc.
Deutsche Bank AG said the currency will weaken as much as 30 percent in the coming months, extending this year's 1.5 percent loss. Consumer prices have risen at the fastest pace in 16 years while the trade deficit has tripled in the four months through April on surging import costs. Forwards show traders are betting the currency will slump 26 percent in 12 months.
``They will be in more trouble'' if they don't consider speeding up the pace of the dong's decline, said Helen Qiao, a Hong Kong-based economist at Goldman in an interview today. ``We are thinking that this is the direction policy makers are moving toward.''
The dong was at 16,255 per dollar as of 4 p.m. in Hanoi, according to data compiled by Bloomberg. Twelve-month offshore non-deliverable forward contracts show traders are betting the U.S. dollar will buy 21,850 dong in a year. Such contracts, settled in dollars, are used by traders to bet on currencies they can't freely convert.
``The probability of the central bank being forced into taking an abrupt and sharp nominal devaluation in the near term is still low,'' wrote Qiao in a report published today. The dong will avoid the scale of devaluation like the Thai baht in 1997, Qiao said, because portfolio inflows and remittances will limit the increase in the trade deficit.
IMF Program
Deutsche's Singapore-based analyst Hak-Bin Chua disagreed with Goldman and echoed Morgan Stanley's forecast of an impending ``currency crisis.''
``An IMF-style program will be needed in coming months,'' Chua wrote in a report dated yesterday. ``This will involve further monetary tightening, sizeable dong devaluation, nationalizing insolvent banks and establishing an asset management entity to carve out bad loans.''
Goldman's Qiao declined to cite a forecast for the currency's accelerated pace of declines, and said Goldman is keeping to its forecasts set in May for the dong to trade at 16,220, 16,260 and 16,400 for three, six and 12 months.
``If inflation deteriorates further for a sustained period, local capital might flee into gold and the dollar, putting the domestic monetary system under stress,'' she wrote in the note. The State Bank of Vietnam may rein in inflation by extending price controls, fiscal measures and tighter controls on credit, Goldman said.
To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net
Last Updated: June 3, 2008 06:54 EDT
well after talking to some friends about the DONG Investment, The General feeling is NOT TOO.I don't see this going any where for a very long time. JMO.
Yeah that would make those who sold today....chasers~
it may take serious outcomes like them to address their finacial turmoil
News Digest
(27-05-2008)
Deputy PM salutes Moody Credit Ratings executive during visit
HA NOI – Permanent Deputy Prime Minister Nguyen Sinh Hung yesterday received Moody’s Credit Ratings Council President Thomas Byrne who is on a working visit to Viet Nam.
Deputy PM Hung informed his guest of the country’s macro-economy and comprehensive solutions taken by the Government to control inflation, ensure social welfare and maintain economic growth.
"Viet Nam places top priority on the fight against inflation and has adjusted the economic growth target," Hung said.
The Deputy PM said Viet Nam was determined to overcome challenges to maintain economic growth and deal with social and environmental issues, like hunger eradication and poverty reduction for the goal of sustainable development.
As a globally leading provider of independent credit ratings, research and financial information to capital markets, Moody’s has conducted credit ratings for Viet Nam since 1995.
Last year, the US-based company released a positive report on Viet Nam’s prospects.
Deputy Prime Minister greets US General Electric official
HA NOI – Deputy Prime Minister Pham Gia Khiem has applauded US General Electric’s (GE) efforts and long-term plans in Viet Nam.
The Deputy PM, who doubles as Foreign Minister, had separate meetings with GE’s senior vice president Brackett Denniston and the vice president and Senior counsel of International Law and Policy, Karan K Bhatia, in Ha Noi yesterday.
The senior leader and GE officials discussed cooperation between Viet Nam and GE and other areas of common concern.
Deputy PM Khiem praised vice president Bhatia’s contributions to Viet Nam-US bilateral relations, particularly the vice president’s work as US deputy trade representative in 2005.
Bhatia chaired Viet Nam-US negotiations and signed a bilateral agreement for Viet Nam to join the World Trade Organisation. He also led a campaign for Permanent Normal Trade Relations status for Viet Nam and signed a framework agreement on trade and investment between the two countries. — VNS
Go to Google News
A market stall owner (right) sells food at a local market in Hanoi, Vietnam where inflation hit 25 percent in May
inflation hits 25 percent in May
1 day ago
HANOI (AFP) — Vietnamese consumer prices surged by over 25 percent in May compared to the same month last year, a trend driven mainly by sharply higher food prices, the communist government said on Tuesday.
Prices shot up an estimated 3.91 percent between April and May alone, a period that saw panic-shopping for rice as prices surged, the highest month-to-month rise since 1995, said the General Statistics Office (GSO).
Food and beverage costs rose by over 42 percent year-on-year, with rice up almost 68 percent in May compared to a year earlier, said the GSO.
Housing and construction materials rose 23 percent, clothing and footwear prices were up 9.5 percent, pharmaceuticals and health care increased by 8.2 percent, and the cost of household goods and appliances rose by 7.5 percent.
For the first five months of the year, prices rose by 15.96 percent.
Inflation -- driven by record high global oil and food prices -- has hit much of Asia this year and stoked public anger and fears of food shortages in Vietnam, a country of 86 million people.
In late April, many supermarkets ran out of rice in Ho Chi Minh City and other cities as consumers, worried by rumours of looming shortages, queued to stock up on rice, further driving up retail prices.
Prime Minister Nguyen Tan Dung in an urgent message said that Vietnam, the world's number-two rice exporter, has enough stocks to meet domestic and export demand and warned speculators of "severe punishment."
Rising prices have outpaced wage increases and fuelled industrial unrest in Vietnam. Factories were hit by 295 labour strikes in the first three months of 2008, the official labour union reported according to the Lao Dong newspaper.
NEWS for today-
------------------------------------------------
Many Viet Nam products may enter US duty-free
(24-05-2008)
Crude oil, exploited at Bach Ho Field, is one of Viet Nam’s major export products to the US which could benefit from the Generalised System of Preferences (GSP). — VNA/VNS Photo Tran Am
HA NOI — Many Products from Viet Nam may be able to start entering the US market free of import duties sometime this year, says the Ministry of Industry and Trade (MoIT).
Under the US’s Generalised System of Preferences (GSP), potentially duty-free products from developing and underdeveloped countries are given preferential duty-free entry in order to enhance the benefited countries’ trade and economic growth.
Viet Nam was exporting thousands of potentially duty-free products, the ministry said.
Nguyen Hong Duong, deputy director of the MoIT’s American Market Department, said the ministry had recently officially proposed the US include several of Viet Nam’s exports under the GSP. He estimated that it would take three or four months before they would be included under the system, if the proposal was approved.
A ministry expert who declined to be named said he believed that Viet Nam would qualify for the GSP in light of its WTO membership and normalised trade relations with the US. Trade ties with the US had strongly developed in recent years, he said, as evidenced by the signing of the Viet Nam-US Bilateral Trade Agreement (BTA) and the Viet Nam-US Trade and Investment Framework Agreement (TIFA).
He said Viet Nam’s progress in instituting a market economy would also help its case.
During the first ministerial-level meeting under the TIFA Council late last year, Vietnamese officials for the first time brought up the GSP, calling for the US to apply the regulation to Viet Nam’s agricultural and processed goods in light of the enormous trade potential between the two nations.
Currently, about 4,650 products exported to the US from 144 countries and territories, including Thailand, Indonesia, the Philippines and Russia, qualified for the GSP, according to the US Trade Representative.
To qualify, the benefited commodities must be directly imported from the benefited country to the US and at least 35 per cent of content must be produced in the exporting country.
Vietnamese commercial counsellor to the US Ngo Van Thoan said that without the GSP, Vietnamese exports to the US were disadvantaged in competition with goods from other developing countries that benefit.
GSP-benefited commodities include crude oil, industrial materials and light industrial products and agricultural produce. The US president selects commodities and countries to benefit from the GSP annually, pursuant to proposals from the US Trade Representative and the US International Trade Commission.
Duong said Viet Nam’s exports to the US last year were worth $10 billion and the figure was expected to rise to $11 billion this year. In the first quarter of this year, the country earned $2.3 billion from exports to the US market. — VNS
--------------------------------------------------------------------------------
So just WHAT do you think they plan on DOING?? And When?
viet central bank loosing control! so now reval!to gain it back!
The central bank would be "maintaining the fixed exchange rate with a moderate downward crawl against the U.S. dollar in 2008-2009," economist Helen Qiao at Goldman Sachs in Hong Kong said in a report issued on Monday.
Annual inflation has jumped in Vietnam to more than 20 percent and the central bank has carried out a number of measures to tighten liquidity to try to stem the rise in prices.
Vietnam has said it wants to keep its credit growth this year at 30 percent with an economic expansion of 7 percent, after loans rose 54 percent last year, helping to fuel economic growth of 8.5 percent. (Reporting by Ho Binh Minh; editing by Neil Fullick)
i will fly to viet nam and put my 500m dong in a 12% account
1.00 USD = 16,175.00 VND
United States Dollars Vietnam Dong
1 USD = 16,175.00 VND 1 VND = 0.0000618238 USD
Currency Converter Results
Wednesday, May 21, 2008
1 US Dollar(s) = 16181 Vietnamese Dong(s)
1 VND = 6.18009e-05 USD
1 USD = 16181 VND
Good Morning, Vietnam
Thirty-three years after the fall of Saigon, a lot has changed--but not enough.
by Duncan Currie
05/15/2008 12:00:00 AM
April 30 marked the 33rd anniversary of Saigon's fall to the North Vietnamese Communists. The former capital of South Vietnam is now called Ho Chi Minh City, a name that better reflects Vietnam's past than its present and future. As John O'Sullivan has observed, "A Martian landing in Saigon or Hanoi today with no knowledge of history since 1970 would assume that the South must have won the war. These cities have all the boutiques and designer labels of London or Venice--and more homegrown entrepreneurial vitality than both."
Though it is much smaller than China, and thus gets far less global attention, Vietnam has become one of the developing world's great economic success stories. Over the past two decades, it has transformed itself from an impoverished basket-case into a robust Asian tiger.
Just look at the numbers. Vietnam's economy has grown by more than 8 percent for three straight years. Since the government launched its doi moi economic reforms in 1986, tens of millions of Vietnamese have emerged from abject poverty. By the end of 2007, the World Bank reports, Vietnam's stock market capitalization had "reached 43 percent of GDP," compared to only "1.5 percent two years earlier." Meanwhile, "foreign direct investment commitments almost doubled" in 2007, "non-oil exports grew by 27 percent," and "international reserves increased by over $10 billion to $21.6 billion, equivalent to 30.2 percent of GDP or 3.3 months worth of imports." The country's leaders seem eager to expand foreign trade (Vietnam officially joined the World Trade Organization last year), boost investment opportunities, and support private entrepreneurship.
"Vietnam is racing to be more like the United States every day," says Daniel Griswold, a trade policy analyst at the Cato Institute. In recent years, its fast-growing information technology sector has played a key role in luring foreign capital and spurring further liberalization. Truong Gia Binh, the CEO of Vietnamese software giant FPT, may well be the country's richest person. "The opening up of Vietnam because of technology is remarkable," says Carl Thayer, a Vietnam expert at the University of New South Wales at the Australian Defense Force Academy. Moving forward, Thayer reckons that "Vietnam is going to keep opening and opening and opening."
To be sure, it remains a developing country with big swathes of rural poverty. Still, Vietnam's long-term progress is extraordinary. "As recently as 1993, 58 percent of the population lived in poverty, compared to 37 percent in 1998 and 29 percent in 2002," the World Bank has noted. "This amounts to halving the share of poverty in less than a decade. Or, put differently, almost a third of the total population was lifted out of poverty in less than ten years." Indeed, "by 2002, its poverty rate was substantially lower than that of other countries at the same development level. Thus, the 'speed' at which poverty was reduced in Vietnam was much faster than the average speed across developing countries."
The Vietnamese miracle traces its roots back to the mid-1980s, when the country was paralyzed by an economic crisis. "It was basically an emergency situation," says Edmund Malesky, a Vietnam expert at the University of California, San Diego. In 1986, the Communist party decided to embark on a bold path of market-oriented reform. Hanoi moved gradually to de-collectivize agriculture, loosen restrictions on free enterprise, enlarge the private sector, liberalize prices, and promote foreign trade and investment.
"It really helps when you can see the other system fail abjectly," says Malcolm Gillis, board chairman of the Vietnam Education Foundation. The post-1986 Vietnamese reforms were similar to those embraced by China after 1978. As Malesky points out, Vietnam already had a significant non-state sector prior to 1986. For years, individual entrepreneurs had been plugging the gaps in a central planning regime. The country had also permitted experiments with local markets selling agricultural products.
Today, Vietnam boasts a vibrant urban economy. "The middle classes of the Socialist Republic of Vietnam have taken quite well to capitalism," Reuters reported in November 2006. "Whether it is families dining at fancy restaurants, businessmen buying luxury cars, or people shopping for vanity items, conspicuous consumption is popular, especially in Ho Chi Minh City and Hanoi."
Foreign direct investment (FDI) in Vietnam surged in the early 1990s, declined during and after the 1997-98 Asian financial crisis, and has simply exploded over the past few years. It reached a record level in 2007. In its latest FDI Confidence Index, the consulting firm A.T. Kearney ranked Vietnam as the world's 12th most attractive destination for FDI, which was Vietnam's "highest ranking ever" in the Index.
"I just find the place alive," says Gillis. "Alive with innovation." The importance of demography can't be overlooked. It is estimated that more than two-thirds of Vietnam's 85 million people are below the age of 35. Such youthfulness "makes for a very dynamic country," says Raymond Burghardt, who served as U.S. ambassador to Vietnam from 2001 to 2004.
The youth factor also helps explain why Vietnam has become so pro-American. Most Vietnamese have no real memory of the war. But they do recognize how U.S. investment has helped their country, and, as Malesky puts it, their "aspirational ethos" encourages a positive view of U.S. influence. Young Vietnamese also seem enamored of American popular culture.
"The admiration for the U.S. is on the soft-power side," says Thayer. "America has enormous appeal." When Microsoft founder Bill Gates visited the country in April 2006, he got a hero's welcome. In certain Hanoi bookstores, says Burghardt, "there's a whole section devoted to Bill Gates." Burghardt reckons that Vietnam is now among the most pro-American countries in Southeast Asia. "There are people who are bitter towards us," he admits, "but it is a remarkably small percentage."
After the Soviet Union collapsed, Hanoi made the pragmatic decision to bolster its diplomatic connections in Southeast Asia and normalize relations with the United States. The U.S. and Vietnam signed a bilateral trade agreement in 2000, and two-way trade has since ballooned. There has also been significant progress on bilateral security cooperation. The Vietnamese are worried about China's growing regional influence, says Burghardt. At the same time, they don't want to be seen as joining the U.S. in an "anti-China" alliance.
"They're definitely triangulating now," says Malesky, in hopes of maintaining close links with both Washington and Beijing. The issue of those Vietnamese who were harmed by the wartime defoliant Agent Orange (which Burghardt calls "the last ghost left over from the war") remains a sore point for Hanoi. Still, Burghardt says he is "basically optimistic" that U.S.-Vietnamese relations "will continue to improve."
Of course, as long as the Vietnamese government remains a one-party dictatorship that persecutes democracy advocates, independent journalists, religious worshippers, and ethnic minorities, the process of upgrading bilateral relations will be hampered. Hanoi recognizes this, and in recent years it has taken steps to assuage U.S. concerns. In November 2006, the State Department removed Vietnam from its list of the worst abusers of religious freedom. But many activists felt that was a mistake. Earlier this month, the U.S. Commission on International Religious Freedom released a report arguing that, while Vietnam has made "noticeable progress," the Bush administration acted prematurely in changing the country's designation.
In its latest survey of freedom around the world, Freedom House gave Vietnam its lowest rating (a 7 out of 7) for "political rights" and its third-lowest rating (a 5 out of 7) for "civil liberties." The latter score put Vietnam ahead of China but behind Malaysia, Singapore, and Thailand. Overall, Freedom House classified Vietnam as "not free."
"This is still a Leninist political system," says Burghardt. Though the country's dissident movement is courageous, its ranks are small. Vietnam has nothing approaching the "volatile intellectual atmosphere" that China had in the late 1980s (prior to the Tiananmen Square massacre). "People are quite proud of what the country's done," Burghardt explains, and they give the ruling party credit for overhauling the economy and improving living standards.
Interestingly, Malesky says that Vietnam has been more ambitious than China in experimenting with "intra-party democracy." He also says that the government bureaucracy is more independent of the Communist party in Vietnam than it is in China. However, China has done more to promote legal reform.
"There's a considerable group in Vietnam that still fears peaceful evolution," says Thayer. "There's still an ideological residue that hasn't gone away." He emphasizes that "the Communist party is not unified," with some members more sympathetic to liberalization than others. As the economy changes, more and more Vietnamese will enter the middle class and the ranks of private entrepreneurs will continue to swell. "These people are going to demand a say in political decision-making," Thayer argues. "The system cannot deny their voice."
Maybe--but how long will it take? In a recent report on Vietnam, Economist correspondent Peter Collins wrote that "even as the government tolerates a wide range of outside influences, it still tries to keep control over all things political and cultural." As Burghardt says regretfully, "real political reform is going to be very slow in Vietnam."
Duncan Currie is managing editor of The American.
© Copyright 2008, News Corporation, Weekly Standard, All Rights Reserved.
HANOI, May 21 (Reuters) - The Vietnamese government has urged the central bank to allow a flexible exchange rate by allowing the dong <VND=> to move 2 percent up or down against the dollar, it said in a statement.
The central bank "must control the appreciation or the depreciation of the Vietnamese dong within +/- 2 percent," the statement issued late on Tuesday said, re-stating a policy first announced in early March.
"The government's instruction applies for the whole year while the central bank has not made any change to the current band," an official in the central bank's Foreign Exchange Management Department said.
On a daily basis, the central bank allows the dollar/dong exchange rate to move up or down 1 percent either side of an official rate announced daily.
It widened the band on March 10 to up or down 1 percent from up or down 0.75 percent.
The central bank would be "maintaining the fixed exchange rate with a moderate downward crawl against the U.S. dollar in 2008-2009," economist Helen Qiao at Goldman Sachs in Hong Kong said in a report issued on Monday.
Annual inflation has jumped in Vietnam to more than 20 percent and the central bank has carried out a number of measures to tighten liquidity to try to stem the rise in prices.
Vietnam has said it wants to keep its credit growth this year at 30 percent with an economic expansion of 7 percent, after loans rose 54 percent last year, helping to fuel economic growth of 8.5 percent. (Reporting by Ho Binh Minh; editing by Neil Fullick)
News -May 21,08
I do like this part=" It should also focus on improving the foreign exchange,"-----------------------------------------------
Investment should be targeted to hi-tech, support industries
(21-05-2008)
Viet Nam Chamber of Commerce and Industry president Vu Tien Loc spoke to Thoi bao Kinh te Viet Nam (Vietnam Economic Times) about the country’s investment environment.
How does the business community view the current investment environment in the context of recent economic fluctuations?
Obviously economic changes in the past few months have been a valuable experience for many investors and enterprises in planning their strategy and trading purposes.
Recent events have forced businesses to re-examine their operations and focus more on quality, efficiency and competitiveness.
In the past few months, short-term investment with high profit in the stock, estate and gold markets has not created much added value for the country.
When capital is not spent on developing technology and auxiliary industries, it does not have a stable effect on society.
Do you think that the economic fluctuations will produce more difficulties together with existing obstacles such as low capital availability and slow investment procedures?
In its annual report, the Government has admitted that inflation, rising consumer prices and the excess of imports over exports, together with sudden changes in the monetary market, stock market and real estate market have had negative impacts on the production, trading and investment environment.
That’s why the Government should focus on smoothing big obstacles like administrative procedures, capital lending, cash distribution and tax and customs procedures. It should also focus on improving the foreign exchange, reducing non-official expenses for enterprises, help enterprises improve technology and develop essential industries and additional industries as well as exports.
In particular, businesses should spotlight human resources, an area which is revealing more weaknesses as the economy takes in more investment capital.
What do you think is the most important piece of advice the Government can give businesses now?
As well as the above-mentioned easy trading environment, the most important thing to do is make markets transparent, easy to predict and reduce expenses. It’s also important to have well-controlled markets to get rid of speculation and market bubbles.
Trading strategy and enterprises’ capital should also aim to boost competitiveness, improve technology and increase product value.
Will the Government’s plan to have 500,000 more businesses in Viet Nam by 2010 be affected by the current economic climate?
I still believe the plan is feasible. The important thing is to adapt our way of doing things to the new situation.
Our economy is going through a difficult stage right now but we still have more than 3 million household businesses. And when the State applies various measures to stabilise the macro economy, limit inflation, especially when the bubbles in the stock market and estate market burst, I believe that investors will find more realistic investment opportunities.
What do you think about the proposed changes in tax policies for businesses currently being discussed at the National Assembly?
All of the proposed changes are good news for the country’s trading environment. With the new Value Added Tax Law, enterprises will have simple, clear, transparent and more equal tax policies.
In the new law on income tax, the State will cut duties for businesses, enabling them to invest in equipment and production development.
What do you think about Viet Nam’s potential economic development in the next few years?
I think Viet Nam’s long-term future is bright and in the next three years, the economy will return to its normal growth rate.
There are still many potential factors for economic development and the present difficulties are short-term. My opinion is also shared by many international economic organisations. — VNS
NEWS TODAY--May 18,08
British market offers untapped potential for Viet Nam exports
(17-05-2008)
An engineer operates the Nam Con Son gas pipe, which was jointly built by the Viet Nam National Oil and Gas Group and foreign companies, including the UK’s BP Group. Viet Nam’s bilateral trade with the UK reached $1.7 billion last year. — VNA/VNS Ha Thai
HA NOI — There’s plenty of room for more Vietnamese products and services in the UK market, commercial expert Laurie Burns told a conference held yesterday in Ha Noi to provide Vietnamese exporters with updated information about the British market.
In order to better tap into this potential market, she said, Vietnamese enterprises should pay more attention to researching tastes of UK consumers and their consumption trends, in order to better design products for UK consumers.
She also urged domestic firms to negotiate suitable payment methods and focus on packing and shipping methods aimed at minimising costs as well as concentrate on improving product quality improvement and diversifying designs to make products more competitive.
Exporters needed to be more active in finding customers by participating trade promotion activities and international trade fairs and exhibitions, she said, citing the Spring Fair Birmingham 2009, the biggest gift and home trade event in the UK, as a good example.
The five-day fair, beginning next February 1, was expected to bring together some of the worlds leading brands with more than 80,000 product buyers in the UK. It would be a valuable venue in which Vietnamese businesses could advertise products and seek new business contracts, Burns said.
Yesterday’s conference in Ha Noi was organised by the Ha Noi Trade Promotion Centre.
The UK is one of Viet Nam’s seven top trade partners with bilateral trade reaching US$1.7 billion in 2007. Viet Nam exports footwear, garments, wood furniture, seafood and coffee, and imports hi-tech products, telecommunications equipment, aviation components, and medicines from the UK. — VNS
LAX-Heck DEAD is more like it, sounds like they can't get er done.
That's cool. I'll give it another year most likely. But I agree with you. Way to lax.
I have lost faith in this 1. I don't believe there will be a revalue, this country is to lax in complience to WTO regs.
I plan on disposing of all dong.
Imports drive US dollar over dong
(09-05-2008)
HA NOI — The US dollar has continued to stren-gthen against the dong.
An increase in demand for imports is blamed for the rise.
Vietcombank’s listed USD/VND exchange rate was 16,130/16,147, the highest for the year on Wednesday with the interbank rate at VND15,987.
It meant a selling price in the upper range of the +/-1 per cent trading band.
Bank rates listed yesterday were up about 0.76 per cent against early this year and about 0.11 per cent against Friday, May 2.
The dollar supply is always limited from April to August every year when demand is strong due to imports," a treasury officer at a big Ha Noi commercial bank told Viet Nam News yesterday.
"But it’s just the beginning of the year and we really lack dollars. The shortfall is becoming critical," he said.
Other banks reported a similar shortage and said the number of their borrowers was falling except for importers; customers who have to make due international payments and investors in the international market.
A reliable source told Viet Nam News that interest of 15 per cent for very short-term loans was being charged to limit dollar lending.
Not as good as gold
The State Bank of Viet Nam’s decision to allow gold dealers and banks to import an extra 3.5 tonnes of the precious metal this year has also been blamed for the strong dollar demand.
The shortage of greenbacks is even obvious in the open market where the currency traded at VND16,400 yesterday.
"People rushed to buy the US dollar today," said Ha Noi-based Bao Tin Minh Chau Jewellery Co senior dealer Nguyen Huu Dang.
"Very few came here to sell.
"It’s ‘hottest’ trading day since the beginning of this year and I think the trend will continue because the US dollar has gained against the euro in the international market."
The State Bank of Viet Nam confirmed last month that it would keep selling the greenback to commercial banks to support for their liquidity and to stabilise the money market.
Now the central bank does not seem to have anticipated the extent of the rise in the dollar against the dong. — VNS
---------------------------------------------------------------
Viet Nam hopes for stronger ties with WB
(08-05-2008)
HA NOI — Viet Nam always hopes for more effective and practical cooperation with the World Bank (WB), especially in infrastructure construction and human resource training, Prime Minister Nguyen Tan Dung said .
Dung spoke of the aspirations at a reception for WB Country Director Ajay Chhiber in Ha Noi yesterday to mark the end of his term of office in Viet Nam .
The PM praised the WB official’s contributions, which helped strengthen ties between Viet Nam and the bank, particularly in infrastructure investment, energy, poverty reduction and policy consultancy.
Dung said he hoped WB would continue giving preferential loans to Viet Nam for development, as well as consultancy on macroeconomic policy.
He proposed the two sides co-ordinate to organise a donors’ meeting in June and carry out assistance programmes for the 2009-10 fiscal year and infrastructure investment projects.
Ajay Chhiber said he would continue to help Viet Nam and make preparations for the donors’ meeting and spoke of his experience coordinating with relevant Vietnamese agencies to build four large universities, the Da Nang-Quang Ngai highway and two energy projects.
Ajay Chhiber said the adjustment of the growth rate by the Vietnamese government was necessary in the context of the world economy and added that he would support Viet Nam in infrastructure investment and policy consultancy. — VNS
Live rates at 2008.05.06 18:10:05 UTC
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1000000 Iraqi Dinar(s) = 831.463 US Dollar(s)
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1 IQD = 0.000831463 USD
Banks lift interest lid 1 per cent
(29-04-2008)
HA NOI — The Viet Nam Banks Association (VNBA) yesterday announced a new 12 per cent lid on deposit interest rates in document No 171/HHNH-NV sent to commercial banks.
The new cap is effective from today. Twelve per cent interest, instead of 11 per cent previously, would be paid at the end of the term for dong deposits of six months and over. The new rate would apply to all mobilisation tools including certificates of deposit, bonds and savings.
Dong deposits of less than six months stand to earn 11.5 per cent interest a year, instead of 10.5 per cent previously, also payable at the end of the term. Meanwhile, deposits in the greenback will receive 6 per cent interest.
Initially, the new rates were approved by only 10 out of Viet Nam’s 38 banks. However, after much deliberation 37 out of the 38 banks approved the new caps, saying they were reasonable. VNBA explained that the new rates are a natural consequence of commercial banks’ lacklustre efforts to mobilise capital in the first quarter, up a modest 4.14 per cent from the end of 2007.
Since the implementation of the 11 per cent ceiling at the start of this month, the absence of liquidity has been a key concern.
The number of deposits has fallen while trillions of dong have been withdrawn from banks. Skyrocketing lending rates, tightened monetary policy and VNBA’s ceiling interest rates have left banks desperate for more deposits.
Many banks, therefore, are unlikely to maintain a rate of 11 per cent interest.
VNBA said the 12 per cent cap was necessary as inflation rises to 21.42 per cent year-on-year in April. The association hopes the new measures will aid a move towards a real positive interest rate.
In other news, the VNBA held a meeting yesterday to dicsuss the regulations governing bank’s promotional campaigns. Results of the meeting are pending. — VNS
Nation could make more use of WTO benefits: NA report
(06-05-2008)
HA NOI — Full use has not been made of the benefits from Viet Nam’s World Trade Organisation commitments, a new National Assembly External Affairs Committee survey shows.
The failure was despite the visible positive impact of the commitments.
The results of the two-month-long survey of 20 cities and provinces as well as industries and ministries were published in Ha Noi yesterday.
They show that the WTO commitments have contributed significantly to the attraction of domestic and foreign investment; trade revenue and a shift in economic structure in localities where they have been properly implemented.
The survey also found that WTO commitments have boosted administrative reform with the introduction of simpler and more transparent procedures,
But numerous improvements from the building of action plans to the publicising of activities; document checking and mechanisms for reform are still required.
Personnel training has proved confused, inactive and unreliable.
External Affairs Committee chairman and survey overseer Ngo Duc Manh attributed the failure to benefit from the commitments to a lack of comprehensive and close co-operation between the State and enterprises; between central and local authorities; localities in the economic regions and among local agencies.
Authorities at all-levels were confused about identifying and choosing the best measures to exploit and promote the benefits of the WTO commitments, he said.
They had not been able to put socio-economic development programmes and projects into the context of WTO integration so as to properly identify the opportunities and challenges.
Economists agree
Senior economists Pham Chi Lan and Tran Dinh Thien agreed that Viet Nam lacked a broad vision for regional co-operation and a specific action programme in which the State’s co-ordination and strong co-operation among ministries, industries and localities would be crucial.
It was time to encourage a broader economic space so as not to pursue scattered and small-scale businesses, they argued.
They reiterated that the bottlenecks in economic development were poor infrastructure and the lack of skilled personnel.
The bottlenecks posed not a few challenges to the implementation of the WTO commitments.
The duo advised that publicity to raise awareness about Viet Nam’s WTO commitments should suit each industry and locality with local officials the key to the process.
The External Affairs Committee has now proposed that the National Assembly and its committees quicken improvement in the quality of their legislative work and perfect the laws to better meet WTO requirements and regulations.
The committee also wants more research into the impact WTO entry will have on the most vulnerable such as residents of rural Viet Nam, including farmers, so that appropriate remedial policies can be introduced.
The Viet Nam Support for Trade Acceleration, or STAR, project provided technical support for the survey. — VNS
S&P lowers credit rating for Viet Nam
(06-05-2008)
HA NOI — Standard & Poor’s has lowered Viet Nam’s credit rating from stable to negative, reflecting doubts in the global community about the country’s capacity to cool down its overheated economy.
However, other ratings’ agencies have not changed their positions on Viet Nam. Moody’s maintains a positive outlook, placing a Ba3 rating on the country’s long-term debt in both foreign and local currencies. And Fitch rates Viet Nam’s outlook as stable.
S&P affirmed Viet Nam’s credit rating at BB/B for foreign currency and BB+/B for local currency, noting "good prospects for sustained economic growth" driven in part by a wave of foreign investment.
The credit rating agency cautioned, however, that Viet Nam’s ratings could be lowered if a banking system crisis arose.
It said excessive credit growth had resulted from a loosely regulated banking system, especially smaller commercial banks that had lent aggressively to build market share while ignoring the risks, and lending for stock investments, real-estate developments and projects of State-owned enterprises with little prospects for profit.
Viet Nam, one of Asia’s fastest-growing economies, has been struggling with skyrocketing inflation, which hit a 17-year high of 21 per cent year-on-year in April, and a mounting trade deficit of US$7.4 billion brought on by booming fuel, steel and capital equipment imports.
Tackling the dual problems of high inflation and a huge trade deficit has left the nation’s top regulators scratching their heads and have forced the Government to cut the growth target this year from 8.5 per cent to 7.5 per cent.
To battle inflation, the State Bank of Viet Nam has tightened monetary policy, imposing higher compulsory reserve ratios on banks, raising interest rates, and limiting loans on securities and real-estate investment.
S&P also said the ratings outlook could improve "on indications that the economy was rising to a sustainable growth path".
Analysts are worried that any further downgrading of Viet Nam’s credit rating could have a negative impact on foreign capital inflows. — VNS
No Idea, I have my DONG MILLIONS tucked away in the Bank .
We'll have to wait it out and Pray it's a Nice Revaluation.
WOW. I wonder what it will increase to. Any idea?
MORE DONG NEWS----
Gradual VND revaluation better than shocking jump
VietNamNet Bridge – VietNamNet briefs an article by Nguyen Dinh Bich, Senior Economist at the Trade Research Institute, about the VND/US$ exchange rate policy, published in Thoi bao Kinh te Vietnam. Bich thinks that a gradual VND revaluation is better than a shocking jump.
The government and state management agencies have not announced the official treatment for the VND/US$ exchange rate. However, it seems that those advocating the scenario of the dramatic VND revaluation have gained the upper hand.
The Vietnam Association of Financial Investors (VAFI) and other experts have proposed widening the forex trading band from 1% currently to 3-4% or even 5%, which means that the central bank needs to revaluate the VND in order to clear away the tie-up in the monetary market. Currently, banks are refusing to buy dollars from exporters, because they have to buy at high prices following the current forex policy applied by the State Bank of Vietnam.
However, the too wide trading bands may be the overdose to the national economy. The conclusion was released after considering the factors as follows.
First, this would put on the emergency brake on the export train. Figures released by the Ministry of Industry and Trade several days ago show that enterprises have been struggling to fulfill their export plans.
In order to export nearly $60bil worth of turnover this year, Vietnam has to gain the export turnover of $5bil every month. Meanwhile, exports fetched $13bil only in the first quarter.
This means that the ‘export train’ is slowing down; if the State Bank widens the forex trading band as suggested, i.e. the dollar’s value declines more sharply, exporters will go bankrupt.
Vice versa, the ‘import train’ is speeding up, pushing the trade deficit to a new record high.
Also according to the Ministry of Industry and Trade, in January, import turnover was $5bil only, while the figure jumped to $8.2bil in February and then $7.3bil in March, raising total import turnover to $20.5bil in the first three months of the year. This represents the increase of 68.7% over the same period of last year, and three times more than the export growth rate.
The overly wide trading band will be the main factor in preventing Vietnam from reaching its economic targets. As such, though the VND revaluation is unavoidable, the revaluation process needs to be carried out step by step so that the national economy has enough time to adapt to it.
If policy makers impatiently apply drastic policies by sharply devaluating the dollar, this will cause immeasurable socio-economic consequences.
Chairman of HSBC David Eldon also said on the sideline of the Asia Banker conference that no country can have a healthy market overnight with just quick actions.
(Source: TBKTVN)
[In trang]
Bài báo trên VietNamNet Bridge:
http://english.vietnamnet.vn/biz/2008/03/775209/
Xuất bản lúc: 07:33 26/03/2008
@ VietNamNet
http://english.vietnamnet.vn/biz/2008/03/775209/
FURTHER DONG NEWS-----
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Standard Chartered advises exchange-rate caution
(29-04-2008)
HA NOI — Viet Nam should ensure the exchange rate for the dong is balanced against the need to reduce its burgeoning trade deficit, warns Standard Chartered Bank in its latest report.
"We expect the USD/VND to move sideways in coming months until the trade deficit situation improves," the bank’s senior Southeast Asian researcher, Tai Hui, writes in the report.
The economist forecasts a USD/VND surge to 16,500, or a 2.35 per cent depreciation of the dong, by the end of this year.
Depreciation of the dong could be expected to make imports more expensive and so prevent a balance of payments crisis amid the priority effort to defeat inflation.
But an Economic Management Institute senior economist told Viet Nam News that devaluation of the dong was unlikely to reduce the import bill.
Viet Nam had to buy refined petroleum, fertiliser, construction materials, and spare parts to maintain and develop its economy, he said.
As a developing country, it could not reduce its demand for these imports.
Viet Nam’s first-quarter trade deficit grew by an astonishing 66 per cent to US$7.4 billion against the three months of last year.
Oil, steel and capital goods were responsible for the jump.
The growth in exports was 23.3 per cent.
Standard Chartered warns that any sharp reversal in capital inflow could make Viet Nam – with its modest foreign exchange reserves of about $20-25 billion – vulnerable to an external payment crisis.
Any weakening of the dong will be similar to China’s action to help reduce its trade deficit of late 1993 and early 1994, the report says.
"This is an extreme measure and would cause significant volatility in the economy," says Tai Hui.
Catch-22
The trade deficit is a catch 22 for the Viet Nam Government.
A weakened dong might narrow the widening trade deficit and prevent an external payment crisis with any sharp reversal of capital inflows.
But a strong dong is needed to curb the price of imports and control inflation.
Year-on-year inflation was at 21.42 per cent for April against a year-on-year increase of 19.39 per cent for March.
The Standard Chartered report argues that while exchange-rate policy is used as the first defence against inflation in many countries, in Viet Nam the central bank uses it to signal intent rather than to control commercial lending rates.
The bank believes that the exchange rate is no longer an exclusive tool to fight inflation.
It says further hikes in the base interest rate and bank reserve requirements; an open market with strict investment management; higher agricultural output and stabilised prices for primary commodities such as food, petroleum, medicines, steel and fertiliser was likely to be more effective. — VNS
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Post your thoughts on these articles. Rick c
DONG CURRENCY NEWS========
Dong advances after central bank sets stronger rate
The Vietnamese dong advanced after the central bank set a stronger reference rate for trading.
The State Bank of Vietnam Friday set a reference rate of VND15,961 versus the dollar, compared with VND15,963 Thursday, according to its website.
The currency is allowed to trade up to 1 percent on either side of that rate.
The Dong rose 0.06 percent to VND16,110.50 a dollar, according to data compiled by Bloomberg.
Vietnam’s benchmark bonds Friday fell for a sixth day on speculation the government’s measures to stem inflation are reducing cash used by banks to invest in debt.
The yield on the five-year note climbed 6 basis points to 9.88 percent, according to a daily fixing price from banks, compiled by Bloomberg.
A basis point is 0.01 percentage point.
Source: Bloomberg
Story from Thanh Nien News
Published: 26 April, 2008, 10:44:22 (GMT+7)
Copyright Thanh Nien News
Central region becoming investor drawcard
10:21' 26/04/2008 (GMT+7)
VietNamNet Bridge - Central Vietnam is emerging as an attractive investment destination with a series of million-USD projects currently underway or slated for construction.
Construction of an ecological resort worth 1 billion USD will begin on April 30 at the Chan May-Lang Co Economic Zone (IZ) in Thua Thien-Hue province.
Phong Nha Cave
Funded by Singapore ’s Banyan Tree Group, the resort will feature 10 five-star hotels, an international conference hall and a modern entertainment centre when it opens in 2014. It is the largest of its kind in the province.
VinaCapital recently broke ground for the central region’s biggest trade complex in neighbouring Danang city. The 325-million-USD complex is the group’s fourth project in the city. The first three projects, currently under construction, are worth 800 million USD in total.
Moves to invest in the central region are seen as clear evidence of the strong appeal of the area, which also features pristine beaches and world cultural and natural heritage sites including Phong Nha-Ke Bang National Park , the former imperial city of Hue , ancient Hoi An town and My Son sanctuary .
VinaCapital Managing Director Brook Taylor said the central region has great potential for development and has experienced rapid change that has created vast opportunities for foreign investors, particularly in information technology, health care and tourism infrastructure.
Local firms are also jostling for their place in the race to invest in the region, with Hanoi-based Finance and Business Development Joint Stock Company (FBS) emerging as a strong competitor. FBS has prioritised the region in its investment strategy with a special focus on real estate in project areas.
In addition to Chan May-Lang Co Economic Zone, other regional industrial zones have also enticed investors at home and abroad. The Dung Quat Industrial Zone in Quang Ngai province topped the list with 90 projects capitalised at 4.4 billion USD.
The industrial zone is followed by Vung Ang in Ha Tinh province, Quang Nam province’s Chu Lai, as well as Nghi Son and Nhon Hoi in Binh Dinh province.
Statistics released by the Ministry of Planning and Investment show that since the introduction of the Foreign Investment Law in 1988, the region has licensed 631 foreign-invested projects with a combined registered capital of more than 10 billion USD, accounting for around 10 percent of the country’s total amount.
In 2007 alone, foreign investment injected 4.2 billion USD into regional provinces and cities, comprising 20.6 percent of Vietnam ’s total volume.
Deputy Minister of Planning and Investment Nguyen Bich Dat says that to make full use of the region’s potential, it should focus on developing infrastructure and human resources, expanding inter-provincial tourism and trade cooperation, and building a strong legal framework to create more opportunities for foreign investors.
That is really good news. What came to mind while reading that was how this will solidify the country much better as it goes forward. Soon the fellow in the mountain villages will be seeing the Toyota Prius replacing the Water Buffalo as a way to drive down to the Mall:O) Sure it will take awhile for the mountain villages but it will not take that long for the Urban population. Like China, the bikes are being replaced left and right with automobiles and they will be drinking oil before hybrids.
"Boasting a transmission capacity equivalent to 10,000 telephone, Internet and data transmission channels or 120 digital television channels, VINASAT-1 will bring telecom, Internet and television services to people in remote, mountainous areas and islands in Viet Nam."
Prime Minister receives Lockheed Martin GM
(21-04-2008)
Representatives of Lockheed Martin present a souvenir to PM Dung at the satellite Vinasat-1 launching ceremony on Saturday. — VNA/VNS Photo Duc Tam
Ha Noi — Prime Minister Nguyen Tan Dung said that the successful lift-off of Vinasat-1 has broadened co-operation opportunities between Viet Nam and Lockheed Martin and the US more generally.
Dung made the statement while receiving general manager Marshall Byrd of Lockheed Martin in Ha Noi on Saturday. Lockheed Martin built Viet Nam’s first satellite, Vinasat-1.
The Government leader said he was pleased at the fine development of the Viet Nam-US relationship, especially the signing of the bilateral trade agreement after which two-way trade and investment increased sharply.
He asserted that the Government was actively implementing co-operation agreements that had already been signed on economics, trade, investment, science-technology, education and training.
General manager Byrd spoke highly of Viet Nam’s economic development and expressed hopes of promoting long-term co-operation with Vietnamese partners.
He also affirmed his support of Viet Nam in developing its post and telecommunications infrastructure.
After the country’s satellite was sucessfully launched on Saturday morning, PM Dung said, "The VINASAT-1 project is politically, economically and socially important for the country and represents Viet Nam’s claim for national sovereignty in outer space."
PM Dung stated that VINASAT-1 provided an important telecommunications channel linking Viet Nam with other nations.
The launch makes Viet Nam the 93rd country in the world and the sixth in the region having deployed its own satellite in space.
Boasting a transmission capacity equivalent to 10,000 telephone, Internet and data transmission channels or 120 digital television channels, VINASAT-1 will bring telecom, Internet and television services to people in remote, mountainous areas and islands in Viet Nam.
VINASAT-1 is 4 metres in height and 2,600kg in weight. It has a prospective life of 15-20 years and was built by the US’s Lockheed Martin at a cost of close to US$300 million.
The satellite is scheduled to reach 132 degrees east in space, a position that Viet Nam registered with the International Telecommunications Union in 1999, eight days after the launch.
Lockheed Martin plans to complete the handover to the Viet Nam Post and Telecommunications General Corporation (VNPT) to put the satellite into use in June this year. — VNS
U.S.$42.36 million contract signed for Lao power project
(19-04-2008)
HA NOI — A US$42.36 million contract to supply electrical equipment and technical services for Vietnamese-run hydropower project in Laos was signed here yesterday between Sekaman 3 Co Ltd of the Viet Nam-Laos Electrical Joint Stock Company and Vatech-Hydro GmbH of Austria.
Vatech-Hydro GmbH beat four other bidders to supply electrical turbines for the 250 MW capacity plant.
The project will be built in Dakchung district of Sekong province at a cost of US$273.1 million. It will be capable of producing more than 1 billion kWh of power, of which 90 per cent will be sold to Viet Nam.
The project is scheduled for completion in September, 2010. — VNS
Still plugging along here, just a matter of time for sure.
Business Beat
(14-04-2008)
State-owned corporations fight to survive
by Pham Hoang Nam
What once seemed like sound financial decisions is turning out to be potentially disastrous for the national economy as State-owned corporations try to maintain solvency despite having invested 37 per cent (US$8 billion) of their capital into real estate, banking and the stock market.
At last month’s meeting with officials from the national government, representatives from the International Monetary Fund (IMF) said State-owned corporations and groups need to focus on their major businesses, and warned that the local financial market is being hurt by small banks.
With high inflation, this investment scheme will leave corporations short on capital for their own needs.
That’s what has happened to the Southern Riverway Corporation, which invested 50.2 per cent of its capital elsewhere, and Ha Noi Transportation Corporation, which channelled 27.5 per cent of its capital into other industries.
Now, both corporations are having difficulties seeking new loans. On top of bad capital allocation, they have to deal with the tightening of monetary and credit policies by the State Bank.
Corporations in the coal, electricity and petroleum industries have made huge profits in telecommunications, finance and banking, but are facing sharp reductions in their own productivity. This could have major repercussions for the national economy and security.
According to estimates, the average corporation makes a profit of 15 to 18 per cent annually. If it invests outside its core business too much, the modest profits would not be enough to compensate for losses from those investments.
To head off a potential disaster that could affect the national economy, Prime Minister Nguyen Tan Dung has asked all state-owned corporations and groups to cap their outside investments at under 30 per cent. Banking groups cannot allocate more than 15 per cent of their capital elsewhere.
The Ministry of Finance will review investments for all state-owned corporations and groups later this month.
Securities competition
The downturn in the Vietnamese stock market will force some of the 100 securities companies to drop out this year.
A bullish stock market in late 2006 and early 2007 led to a mushrooming of securities companies. Many ended the year 2007 with huge profits.
The tide is turning as stock and finance experts predict a wave of sales and mergers this year.
Companies with a registered capital base of VND50 to 300 billion (US$3-20 million) will face fierce competition in attracting customers from stronger companies or companies that have the backing of powerful foreign investors.
These weak companies are looking good for the picking.
In the last two months, there were eight buy-outs by foreign investors who acquired up to 49 per cent of the controlling stake.
If they don’t get bought out, financially troubled companies could face bankruptcy.
Despite the dire circumstances, the State Securities Commission has received more than 20 applications to open new companies.
Big corporations and groups are still investing in the stock market, which is expected to grow 50 per cent annually.
The Dragon Capital Fund predicts that by 2010, the Vietnamese stock market will attract $100 billion with 1 million accounts and 500 securities companies.
Trade deficit
In the first quarter of this year, the trade deficit stood at a shocking $7.36 billion, already 50 per cent of last year’s total trade deficit .
At that rate, the trade deficit could reach a record $28 billion by the end of the year.
On top of that, WTO requirements will force Viet Nam to cut taxes on lots of goods this year and next.
The increased trade deficit means that Viet Nam is importing inflation. Too high a trade deficit will exact a huge cost, causing instability for the national economy.
To prevent that from happening, the government has organised a special meeting with ministry officials to reduce imports and increase exports.
But that’s easier said than done. Export companies are facing a weak dollar and an unbelievably high export target from the government of $59.25 billion.
The Ministry of Trade will submit soon a list of what kind of goods should be imported, limited or banned.
The trade deficit has become a "chronic disease" for a weak economy like Viet Nam.
Airline protests
The Association of Airlines in
Viet Nam has submitted a complaint to the government about the significant increase in airport service and fuel prices.
Starting April 1, all airports increased their service costs four- to nine-fold.
A few days before that, Viet Nam Aviation Petrol Company (Vinapco) announced higher petrol prices. It refused to fill up 30 Pacific Airlines aircrafts because of a dispute between the two parties over the price hike until the government stepped in.
The higher prices dealt a blow to the budget airline, which has been fiercely competing with Viet Nam Airlines by offering lower fares.
The kicker is that the national carrier owns Vinapco and has close relations with all of the airports.
Therefore, the increase expenditures slapped on Pacific Airlines and other airlines have not affected Vietnam Airlines. The carrier could actually gain a competitive edge.
Deputy Prime Minister Hoang Trung Hai on Friday asked the Ministry of Transport not to let the Viet Nam Aviation Petrol Company (Vinapco) interrupt any flight.
Hai asked the ministry to find out who was responsible and submit the findings to Prime Minister Nguyen Tan Dung within this month. — VNS
NEWS for TODAY----
MPI holds Viet Nam investment forum
(12-04-2008)
HCM CITY — Representatives of large US companies met with Vietnamese officials at the Viet Nam Investment Forum organised by the Vietnamese Ministry of Planning and Investment in New York on Thursday.
MPI Minister Vo Hong Phuc said Viet Nam’s dynamic economy and favourable conditions for production and export make it one of the best destinations for investment in Southeast Asia.
Phuc said recent foreign direct investment in Viet Nam has amounted to US$98 billion, including $21 billion committed in 2007. Foreign investment currently accounts for 25 to 30 percent of the nation’s total investments.
He added Viet Nam wants foreign investment in the manufacturing, hi-tech, material production, energy, infrastructure, property development and financial and banking industries.
He outlined the Vietnamese Government’s programmes to promote investment, with a focus on making laws adhere to World Trade Organisation standards, upgrading infrastructure and developing human resources.
American companies have cited the country’s socio-political stability, efforts at legal reform and young workforce as reasons to invest.
The forum is part of a three-day tour of the US to promote investment and business in Viet Nam.
Accompanied by Vietnamese government officials and entrepreneurs, Phuc visited New York, Houston, and Washington D.C during the trip that began on Wednesday.
He met with the Viet Nam Partners group and representatives of several US giants, including Morgan Stanley and Raytheon, at the headquarters of the Viet Nam representative mission to the UN in New York. — VNS
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NEWS for TODAY---------
Vegetable, fruit to earn $1 billion by 2015
23:11' 12/04/2008 (GMT+7)
VietNamNet Bridge - Deputy Minister of Trade and Industry Tran Duc Minh has said Viet Nam expects to earn 1 billion USD from vegetable, flower and fruit exports by 2015.
At present, the country earns around 300 million USD annually from these exports.
According to the Ministry of Agriculture and Rural Development (MARD), Vietnam earned 76 million USD from vegetable and fruit exports in the first quarter of this year, a 28 percent increase compared with the same period last year.
Vietnam’s consumption of these products has remained stable, and Japan, mainland China, Taiwan, Russia and the US are the five largest markets for export. Among them, mainland China is a crucial market, buying 60 percent of all exported vegetables and fruit from Viet Nam.
Emerging export markets include Thailand, Hong Kong and Singapore as well as European Union countries.
However, the fruit and vegetable sector still faces certain limitations. Produce volume tends to be inconsistent. Farmers’ production scales are small to begin with. Each household has between 200 and 300 sq.m of vegetables and 1,000 sq.m of fruit. The small scale makes it difficult to apply advanced technology which could help stabilise supply and improve produce quality.
Storage facilities are also in poor condition, which makes transport and shipping delays even more difficult for farmers already struggling with crop production.
MARD has begun to co-operate with many domestic and foreign organizations to find effective development methods for these sectors. A successful model exists between Metro Cash and Carry Vietnam Co and the agricultural sector in Ho Chi Minh City and southern provinces. Officials help train farmers to raise their production volume, improve business expertise and build warehouses to international standards. The company also provides assistance with domestic consumption and exports.
Nguyen Thi Ninh, an official from the HCM City Department of Agriculture and Rural Development, said the department had a project for 2008-10 to help enterprises export vegetables, flowers and fruit from HCM City and nearby provinces to the European market. The project will also train farmers on how to promote exports, gauge the market and build business strategies.
MARD will focus on developing 10 kinds of fruit trees for export: orange, tangerine, grapefruit, pineapple, mango, longan and blue dragon, among others. In addition, scientists are replacing low quality strains with high quality ones, such as the Hoa Loc and Chin Hoa mango.
To encourage farmers to develop orchards in planned regions, the Ministry of Trade and Industry has asked the State to prioritise tax policies on fruit production and businesses. This would involve exempting value-added taxes for co-operatives and enterprises that trade fruit and exempting agricultural taxes for farmers with orchards.
(Source: VNA)
BUSINESS IN BRIEF -
17:19' 10/04/2008 (GMT+7)
Stock indexes tumble on both bourses
Both the Ho Chi Minh City and Hanoi bourses suffered big losses as most shares plunged to their floor prices during the April 10 trading session.
The VN-Index at the Ho Chi Minh City Stock Exchange (HoSE) dipped 6.32 points or 1.14 percent to finish at 545.73 points.
More than 10 million shares, worth over 447 billion VND, changed hands with 90 percent hitting floor prices.
Hau Giang Pharmaceuticals (DHG) topped the list of losers by having 3,000 VND wiped off its listed price, followed by Binh Dinh Minerals (BMC), Kinh Do Corp (KDC), North Kinhdo (NKD) and Tu Liem Urban Development (NTL-PT), all losing 2,000 VND per share.
Foreign investors bought over 3.6 million shares of 65 codes, including Phu My Nitrogenous Fertiliser (DPM), Vinamilk (VNM) and Pha Lai Thermal Power (PPC).
The Hanoi Securities Trading Centre’s HaSTC-Index experienced the third consecutive fall after losing 4.17 points or 2.16 percent to end at 189.04 points.
More than 1 million shares were sold at over 52 billion VND, declining by 120 billion VND against the previous session.
Vietnam signs deals with Israeli banks
The Ministry of Finance signed loan agreement frameworks with Israeli banks Hapoalim B.M and Leumi Le-Israel in Hanoi on April 10.
The move is part of the implementation of a 150 million USD financial cooperation protocol that was set up between the two governments on October 25, 2007.
The agreement, which is the first of its kind, is considered as an important step in facilitating partnership amongst businesses from Vietnam and Israel .
In particular, the Middle East country expects the loans will allow their domestic firms easier participation in the high technology, health care and telecommunications industries in Vietnam.
Vinalines sets high target for 2008
Vietnam National Shipping Lines (Vinalines) plans to invest about 3 billion USD in development through 2010, Vinalines Director Mai Van Phuc said.
The money would mostly be invested in the building and development of its flotilla, the upgrade of seaport infrastructure and the development of transport service, Phuc added.
Vinalines is currently building new ships and buying second-hand ones from foreign partners to increase its total ship capacity from 2.1 million tonnes by the end of 2007 to 2.8 million tonnes by the end of 2008, and up to 5 million tonnes by 2010.
Current ships will gradually be replaced with more modern vessels. Ships with a capacity of 25,000-30,000 tonnes will be replaced by those with 50,000-70,000 tonne capacity.
Phuc said that Vinalines would have 11 projects related to seaport infrastructure development in 2008, including Hai Phong’s Lach Huyen International Seaport, Ho Chi Minh City ’s Hiep Phuoc Seaport and the second phase of the Tien Sa seaport project in Da Nang .
Regarding Vinalines’ biggest seaport infrastructure project in 2008 – the construction of the Van Phong International Ship Container Terminal – Phuc recently confirmed in the Giao Thong Van Tai (Traffic and Transport) Newspaper that the project would be launched this June.
The building of Vietnam’s first international ship container terminal was supposed to have started on January 25 this year, but the work was delayed to allow the Republic of Korea’s Posco to build a 5 billion USD steel mill in the vicinity.
Vinalines will also invest in upgrading Nha Rong and Khanh Hoi ports in HCM City , along with Song Han port in Da Nang, into tourism seaports with developed cargo storage systems and logistical services. In the future, Vinalines will build three logistical service centres in the north, centre and south of the country.
In order to garner proper finances for its investment projects, Vinalines plans to diversify its capital mobilisation channels, including loans from domestic and foreign financial institutions and loans from State, building its plans to issue construction and enterprise bonds to the domestic and international markets, as well as towards establishing financial companies.
Phuc conceded that the lack of a qualified human resource department would be a challenge for Vinalines’ development plans. “The Vinalines has been passive in human resource training,” he said.
The corporation has set a long-term plan by cooperating with the University of Maritime for human resource training to establish a maritime human resource training centre in the central province of Nghe An.
In 2007, Vinalines had a total transported cargo of 24.9 million tonnes of cargo. Revenues reached 14.6 trillion VND (912.5 million USD), an increase of 26-51 percent over 2006. By the end of 2007, the total capacity of Vinalines’ flotilla was estimated at 2.1 million tonnes, accounting for about 60 percent of the nation’s total shipping capacity.
The corporation is currently preparing to open representative office in key Vietnamese export markets such as Japan, the EU, and the US.
This year, the corporation is expected to complete its restructuring process.
Canadian firm given go ahead for tourism project
The southern coastal province of Ba Ria-Vung Tau has licensed the ACDL Group from Canada to build a 4.2 billion USD tourism complex.
The Asian Coast project will cover 160 ha in Phuoc Thuan commune, Xuyen Moc district, making it the largest of its kind in Vietnam . The complex will include a resort, an entertainment centre, an international conference and exhibition area and a 9,000-room hotel.
Vice Chairman of the provincial People’s Committee Ho Van Nien said the province will complete all administrative procedures for the project before April 30.
Rice bowls enjoy bumper harvest
Farmers in the Mekong Delta and southeast region, the nation’s largest rice producers, expect to harvest 9.9 million tonnes of rice for the winter-spring crop, an increase of over 373,000 tonnes compared to the same crop last year.
They have finished harvesting 1.4 million ha of rice fields, which yielded 6.1 tonnes per ha on average, up by 0.77 tonnes. The remaining 230,000 ha are now in the earring stage.
The region also recorded a surge of almost 25,000 ha in productive rice fields compared to the previous winter-spring crop.
World prestigious bodies laud Vietnam’s economic success
World Trade Organisation (WTO) Director General Pascal Lamy has praised Vietnam ’s execution of its commitments to the world’s largest economic body.
Vietnam has recorded a number of economic achievements in its one-year membership, especially in trade, foreign investment and tourism, the WTO chief said at his meeting on April 9 with out-going Ambassador Ngo Quang Xuan, Head of the Vietnam Mission at the United Nations, WTO and other international organisations headquartered in Geneva, Switzerland.
At another farewell meeting with Xuan, Managing Director of the World Economic Fund (WEF) Borge Brende also said he was impressed by Vietnam ’s economic achievements in 2007 as well as its contributions to Davos and regional economic forums.
Vietnam should consider and be prepared to host an East Asian high-level forum by 2010, proposed the WEF chief.
Sacombank profits rise 44% in Q1
Sacombank earned 435 billion VND (27.1 million USD) in pre-tax profit in the first quarter of the year, an increase of 44 percent year-on-year.
The bank also attained total assets of 75.2 trillion VND (4.7 billion USD), jumping 135 percent from the corresponding period last year. It also has a total outstanding loan of 41.6 trillion VND.
This year the bank plans to earn 2 trillion VND in pre-tax profit while pursuing a total outstanding loan of 46 trillion VND. It is also expected to raise its charter capital to 6.04 trillion VND, and pays a dividend of 15 percent to sharesholders.
EU helps develop tourism human resources
The European Union (EU) will provide 10.8 million Euro towards a 12 million Euro project to develop tourism human resources in Vietnam, said the Vietnam National Tourism Administration (VNAT).
The project was made public at an April 7-8 seminar in Hanoi to introduce European markets, including France , the Netherlands and Belgium , to the tourism sector.
The seminar aimed to help Vietnamese tour operators study European tourists’ tastes, update resources and share industry experience, thus improving service levels.
Similar seminars are scheduled to be held in central Danang city from April 10-14 and in Ho Chi Minh City from April 14-15.
Techcombank profits hit 13.75 million USD in Q1
The Technological and Commercial Bank of Vietnam (Techcombank) on April 8 announced pre-tax profits of 220 billion VND (13.75 million USD) from the first quarter of the year.
By the end of March Techcombank’s total assets reached 46.22 trillion VND (2.9 billion USD), doubling last year’s figure.
Singapore travel firm enters joint venture
Ho Chi Minh City-based travel agency T&T and Singapore-based JTB Pte. Ltd., a wholly-owned subsidiary of Japan ’s JTB group, have agreed to set up a travel joint venture.
The new company, JTB-TNT Co Ltd, will come into existence on May 1 and will provide inbound travel and other services specified in the licence it received last month.
The new joint venture would focus on the Japanese market where the JTB group was entrenched, said Nguyen Van Tan, president of the joint venture.
Vietnam to deal with energy challenge
Raising the efficiency in using energy is one of three major tasks set by the Vietnamese government in line with its orientation of national energy policy by 2020 with a vision towards 2050.
The statement was made Deputy Prime Minister Hoang Trung Hai at a two-day seminar on energy policies held in Ho Chi Minh City on April 9-10.
The Deputy Prime Minister Hoang Trung Hai said: “Vietnam is coping with various challenges, including the energy problem. The country will hardly develop sustainably if it cannot tackle these challenges.”
According to him, two other main tasks are how to meet the increasing demands of energy to serve the country’s socio-economic development, and to protect environment alongside with the energy production and utilisation.
Addressing the event, French Ambassador to Vietnam Herve Bolot agreed that energy saving and improvement of efficiency in energy utilisation are important issues for developing countries, including Vietnam.
He also said France is willing to share experiences in this field with Vietnam.
Discussions at the seminar focus on the energy utilisation and management in the world and Vietnam . It introduces France’s experiences in energy management and several Southeast Asian countries’ energy saving policies.
It also puts on table issues of housing, urban transport development, urban services management, recycled energy utilisation, as well as potential for Vietnam-France cooperation in energy.
The seminar is co-held by the Ministry of Industry and Trade, the French Embassy, the French Development Agency and the French Agency for Energy and Environment Management.
Vietnam Expo kicks off, deals available
The 18th Vietnam International Trade Fair, Vietnam Expo, opened in Hanoi on April 9 with a large range of goods displayed by as many as 300 foreign companies and nearly 200 domestic firms.
Right on the opening day, the Heber-Biotec company from Cuba reached a deal worth 3 million USD with the Hanoi Pharmaceutical Company, while the Vietnam Petroleum Financial Company agreed on a financial cooperation pact with the Song Da Transport and Trade Joint Stock Company and the Viet Duc Song Da Investment Joint Stock Company.
Vice Minister of Industry and Trade Nguyen Thanh Bien said Vietnam Expo, held annually, is one of Vietnam’s key trade promotion activities, aiming to provide opportunities for local businesses to expand foreign outlets and reach long-term deals with partners inside and outside the country.
Rasciel Alvarez Correa, Director of the Vietnam Representative Office of the Quality Couriers International (QCI), which has been in Vietnam since 1994, said he found Vietnam Expo a reliable place to seek for investment deals with both Vietnamese and foreign businesses.
The QCI is running two affiliates providing consultancy for big construction projects in Hanoi and Ho Chi Minh City , including the trans-national Ho Chi Minh Highway and the Thu Thiem bridge.
Nguyen Huu Anh, Vice Director of the Hanoi-based Phong Chau Company, which has attended Vietnam Expo several times, said the event has helped his company find more customers and increase export earnings. Last year, the Phong Chau company raked in around 2 million USD from handicrafts exports.
The Vietnam Expo 2008 boasts 700 booths where a diversity of goods, ranging from machinery and equipments for light and heavy industries, home appliances, consumer goods, to IT solutions are on display.
Themed “Vietnam-Integration and Development”, the event will run through April 12.
HCM City to build 200 million USD tramcar route
The southern economic hub of Ho Chi Minh City will outlay 200 million USD to build a 12.5 km pneumatic tyred tramcar route through the city.
The municipal People’s Committee signed on April 9 a memorandum of understanding to carry out the project with the Hanoi Construction Corp. and a joint venture between Titanium Management ( Malaysia ) and Thanh Danh Construction and Trading Co. Ltd.
The project will cover construction of 23 stop stations and four overpasses. Fifteen tramcars, capable of carrying 238 passengers, supplied by the French group TRANSLOHR will be used on the route.
The project is scheduled to begin in July 2009 and become operational in January 2012.
Foreign investors show interest in stock market
Foreign investors bought close to 2.9 million out of 10.9 million shares and capital fund certificates put into transactions during the April 9 trading session.
Shares in energy, fertiliser, finance and banking, seafood and foodstuff companies were popular with foreign investors. Among those were Pha Lai Thermal Power (PPC), Phu My Nitrogenous Fertiliser (DPM), Saigon Securities Inc. (SSI), Vinamilk (VNM) and FPT Corp. (FPT).
As of April 9, the VN-Index at the Ho Chi Minh City Stock Exchange (HoSE) has experienced increases for the 11 consecutive sessions. The day’s index stopped at 552.05 points, up 3.49 points or 0.6 percent against the previous session, with over 11 million shares traded, worth 544.6 billion VND.
The southern bourse witnessed 61 stocks rally for gains, 10 remain unchanged and 82 decline.
STB of Sacombank and PPC of Pha Lai Thermal Power Plant both enjoyed an increase of 700 VND per share to 40,400 VND and 40,700 VND respectively while DPM of Phu My Nitrogenous Fertiliser Plant rose 1,000 VND to 53,000 VND per share.
STB also led the market in terms of transaction volume with nearly 2 million shared being traded, followed by DPM with 911,220 shares and SSI with 858,950 shares.
In opposition to the southern bourse’s upward trend, the HaSTC-Index at the Hanoi Securities Trading Centre dropped 4.34 points or 2.2 percent to finish at 193.21 points. More than 3.6 million shares, worth over 172 billion VND, were traded.
Consumer electronics expo kicks off in Hanoi
Foreign giants and domestic companies specialising in information technology (IT), telecom and consumer electronics have gathered at the Vietnam Consumer Electronics Expo 2008 (VCE 2008), which opened in Hanoi on April 9.
Jointly organised by the International Data Group (IDG) and Hanoi ICT Association, the exhibition includes 200 stands from big brands such as Canon, Intel, Sony and Panasonic alongside local companies.
The 5,000 sq.m floor space of the expo is divided into four main areas, showcasing communication and network equipment, multimedia entertainment, computer and electronics, and software.
The four-day event expects to attract more than 150,000 visitors. It will also be attended by guest delegations from the ten countries participating in the ASEAN Electronics Forum and members of the Singapore Business Federation.
Int’l garment industry expo opens in HCM City
Close to 400 companies from 27 countries and territories worldwide are showcasing their products at an international textile and garment industry expo which opened in Ho Chi Minh City on April 9.
During the four-day event, leading garment equipment manufacturers from Europe and Asia will introduce various types of equipment and accessories to representatives of Vietnam’s garment industry.
In 2007, Vietnam earned 7.8 billion USD from garment exports, making it the world’s ninth largest garment exporter, said the Chairman of the Vietnam Textile and Garment Group (Vinatex), Le Quoc An.
The country ranked third among garment exporters to the US market, he added.
Vietnam is striving to export 9.5 billion USD worth of textile and garment products this year.
(Source: VNA)
NEWS for TODAY.4-10-08
VN market has caught up: Minister
(10-04-2008)
Planning and Investment Minister Vo Hong Phuc is leading a business delegation to Washington, New York and Houston. He discussed the visit with Dau Tu (Vietnam Investment Review) newspaper.
What are the difference between this and previous investment-promotion visits to the United States?
We will provide information designed to encourage the US Government to recognise Viet Nam’s market economy as well as promote investment. Specifically, we will prove that our policies are geared to a market economy. All our market mechanisms have matched international standards since we joined the World Trade Organisation in 2007.
The delegation will act within the framework of our campaign to have the WTO recognise that Viet Nam has a market economy. The campaign will persuade WTO members to treat Viet Nam as an equal in the world economy.
Who will you talk with and what will you say?
The delegation will go to New York, Washington DC, and Houston. There, we will work mostly with Government representatives, especially members of the Foreign Affairs Department.
We will also meet with non-government organisations and the US-ASEAN Business Council. We have prepared documents to provide sufficient information for them to have a clearer understanding of Viet Nam’s situation. It’s all part of out effort to persuade the US Government to recognise Viet Nam’s market economy.
But attracting investment is the visit’s most important purpose.
What is your assessment of the position and role of American investors in Viet Nam and what do you see as the likely trend?
The US is sixth among the countries and territories investing in Viet Nam and is an important partner.
Its investment is increasing and is focused on many sectors. American investors now have many major investment projects in Viet Nam. These include real estate, heavy industry, energy, oil and gas and hi-technology.
What do US investors think of Viet Nam’s investment environment?
They highly appreciate it. This is especially true following the visit of a US business delegation to Viet Nam led by the US Commerce Secretary late last year. Its assessment had a positive impact on American investors who wanted to pour money into Viet Nam.
But investors called our attention to the complex administrative procedures as well as the lack of trained personnel and infrastructure. The Government is now working to overcome these shortcomings so as to create the most favourable conditions for both domestic and international investors.
I now hope that ministries, economic sectors and localities make the changes necessary to attract more US investors.
What will you do to attract more US investment?
We will focus on introducing Viet Nam’s investment potential and environment so as to consolidate the confidence of American investors in doing business in Viet Nam.
We hope that after the visit will persuade US investors from new areas to enter Vi et Nam. We have focused on the east, but during this visit we will promote investment from the south where the potential for co-operation between Viet Nam and the US is great.
Which sector will be given priority ?
We will draw their attention to hi-technology, tourism, finance, banking and supporting industries in addition to the sectors that have already drawn their investment such as energy, petroleum and real estate.
I hope the visit contributes to attracting more US investment into Viet Nam and persuades the US Government that Viet Nam has a market economy. — VNS
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