Replies to post #900 on Vietnam Currency Discussion Board

[Zoinkers]

Vietnam money: dong rates rise on strong loan demand


Overnight lending rates in the Vietnamese dong firmed in the past week due to stronger demand for loans, especially from the corporate sector, bankers said Monday.
Three of Vietnam's four main banks offered overnight loans in dong at 7 percent on Monday, compared with a range of 3.7-5.0 percent last week. Dong overnight loans were being fixed at 6.51 percent, market data showed.

As of mid-September, outstanding loans in Hanoi totaled VND150 trillion, up 26 percent compared with the beginning of the year, the central bank's Hanoi branch said last week.

Lending in dollars, which accounted for 33 percent of the total loans, grew 23.3 percent, while deposits in both dong and dollars grew only 17.5 percent in in the period, indicating higher demand for imports, the bank said.

"Demand for dong loans usually soars in the fourth quarter as companies need funds to meet contract payments," a banker at a private bank in Hanoi said.

Deputy Prime Minister Nguyen Sinh Hung said last week Vietnam needed 554 trillion dong next year, or nearly 20 percent more than this year, to invest in major infrastructure projects, such as sea ports, roads and industrial parks.

The government aims to raise VND201 trillion ($12.4 billion) in 2008 from the private sectors and borrow VND40 trillion from state-run banks for its projects.

On the dollar front, several banks including Sacombank, VIB Bank, Eximbank and ABBank have raised interest rates on dollar deposits to raise more funds to meet higher expected demand from importers.

Most banks now offer 5.5 percent to 5.7 percent annual yield to 12-month dollar deposits, from 5.2 to 5.5 percent previously.

The Asian Development Bank said it had revised down Vietnam's current account balance in 2007, saying it would face a deficit equivalent to 5 percent of gross domestic product, from a small surplus of 0.2 percent previously forecast for this year.

Slowing exports – due to less sales of crude oil and seafood – coupled with rising imports have widened the trade gap, leading to the current account deficit, ADB said on Monday.

But it said overseas remittances – a key input of Vietnam's foreign exchange reserves – and tourist arrivals remained strong.

Using the State Bank of Vietnam and sources to calculate remittances, ADB said actual remittances for the first half of 2007 surged 53.4 percent from a year earlier to $2.9 billion. Remittances stood at $1.89 billion in the first half of 2006.

ADB said its own forecast of remittances for the whole of 2007 is $5 billion.

Source: Reuters

http://www.thanhniennews.com/business/?catid=2&newsid=32057

[RICK C]

Giant GE to make big investment in Vietnam
16:29' 19/09/2007 (GMT+7)
VietNamNet Bridge – Colin Low, GE National Executive for Singapore, the Philippines and Vietnam, has not admitted anything, except the news about the working visit by GE’s Chairman and Chief Executive Jeffrey R. Immelt on September 28, during which he will meet government representatives and announce an important investment deal in infrastructure.




Colin Low, GE National Executive for Singapore, the Philippines and Vietnam
Vietnam’s media guess that the important investment deal Mr Low has mentioned is a project of many millions of dollars, following the heavy investment of other giants in the world, including Intel and Foxconn.



GE is a well-known US-based technology, telecommunication and financial service group, which has been present in Vietnam since 1993, even before the US lifted the embargo against Vietnam in 1994. In 2003, GE established GE Vietnam Company Ltd, 100% foreign owned, specialising in providing post sales services in health care, electric equipment and power. At the end of 2006, GE opened a representative office of GE Consumer Finance in Hanoi.



Mr Low said that four GE subsidiaries were present in Vietnam: GE Infrastructure (power, aviation, water), GE Industry (electricity, high-grade materials), GE Healthcare and GE Consumer Finance.



GE’s main clients in Vietnam include Vietnam Airlines (air carrier), the Electricity of Vietnam, Vietnam Railway Corporation, PetroVietnam (oil and gas), public and private owned hospitals.



When asked why GE decided to invest in Vietnam, Mr Colin Low said that the main reason was that Vietnam’s Investment Law had become open and protected the benefit of investors.



In fact, South Korean, Japanese and Taiwanese investors all eye Vietnam as an investment address because they want another non-China destination to set up their projects, because investors do not put all eggs into one basket in order to disperse risks. In general, foreign investors see Vietnam as a potential market for outward investment.





With the achievements of the four GEs in Vietnam, the group has every reason to be optimistic about its future performance in the country. GE’s total turnover was $62mil in 2006, and the average growth rate is at 20% per annum, or 3-fold higher than the GDP growth rate. Vietnam is now described as a market with great potential, which is now taking off.



Mr Low also highly praised the quality of the Vietnamese labour force. In Hai Phong city, which has developed industries, labourers there have been well trained to fit industrial production projects.



GE is considering the demand for chartering aircrafts from the national air carrier Vietnam Airlines in order to negotiate a contract on aircraft chartering, Mr Colin Low told the press on September 18.



He said that Vietnam Airlines needed to charter long-distance aircrafts for the direct flights from Vietnam to the US to be launched soon, and needs Boeings. Meanwhile, GE has 1,400 aircraft for lease.



GE once leased three aircrafts to Vietnam Airlines, and 16 of Vietnam Airlines’ operational aircrafts (Boeing 777 and Airbus 320) use GE engines.



(Source: Tuoi tre)