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BUSINESS IN BRIEF 5-1Fine weather brings bumper fishing haul

Bui Hat’s fishing boat with 13 men on board returned to shore in central Quang Ngai Province on Monday with its hold full of fish after nearly a month offshore.

Tuoi Tre (Youth) newspaper quoted Hat of Binh Son District’s Binh Chau Commune as saying: “By Tuesday morning I finished selling all the fish in my boat and earned more than VND400 million (US$19,000).

“After deducting all costs for the trip, I earned a profit of more than VND300 million.”

In fact he made a profit on every fishing trip, and it added up to more than VND3 billion ($146,000), the highest profits in more than 10 years.

Pham Van Tuan of Tu Nghia District had a similar story, saying his two fishing boats also made a combined profit of VND3 billion last year.

“I hope this year the catch will be as good as last year or better. It will help improve the lives of fishermen.”

Most of the 7,000 fishing boats in Quang Ngai reported bumper catches last year.

One fisherman attributed this to the favourable weather. In all they caught 126,000 tonnes of fish, 12 per cent higher than in 2011, according to the local Department of Agriculture and Rural Development.

In Ly Son Island alone, fishermen caught more than 29,000 tonnes worth VND241.2 billion ($11.4 million), a 10 per cent rise in volume.

Tran Ngoc Nguyen, chairman of the Ly Son District People’s Committee, attributed this to local fishermen investing in new boats and upgrading existing ones to fish offshore.

“Most Ly Son fishermen now fish offshore in traditional fishing grounds, so the volume continues to increase,” he said.

“The Government’s support with regard to security and fuel for the fishermen has also encouraged and helped them fish offshore for long periods.”

Many fishermen are building new fishing boats this year.

Pham Hanh of Tu Nghia District is building a new boat with a 400 horse-power engine which cost him around VND3.5 billion.

“I earned big profits from offshore fishing last year, so I am now building one more fishing boat,” he said.

Phan Huy Hoang, deputy director of the province’s Department of Agriculture and Rural Development, said many fishermen had also acquired new boats last year. The actual number was 150.

“The province will continue to encourage and support fishermen to help them feel secure while fishing offshore,” Hoang said.

Ngo Thi Kim Ngoc, chairwoman of the Quang Ngai Province Labour Federation, said her federation last Sunday gave VND980 million ($46,000) to four fishing families whose members had met with accidents while fishing in the Hoang Sa (Paracel) archipelago.

The money is for building new boats, buy equipment, and repay bank loans.

Ha Noi’s budget revenues pass $7bn

The capital’s budget revenues have reached over VND146 trillion (US$7 billion), 99.9 per cent of this year’s estimate, announced the Ha Noi Treasury on the first day of the year.

In particular, VND137 trillion ($6.5 billion) came from domestic taxes and VND9 trillion ($0.4 billion) from imports-exports.

The Treasury spent nearly VND62 trillion ($3 billion) from the local budget, or 80 per cent of the yearly forecast.

Total budget revenues in Ha Noi are estimated to reach more than VND161 trillion ($7.7 billion) this year.

Cooking gas prices decline in HCM City

The retail price of a 12 kg gas canister in HCM City dropped by VND7,000 (US$0.33) on the first day of the new year following a decision by Saigon Petro Gas, one of the largest gas distributors in Viet Nam.

Retail prices offered in neighbouring provinces fell accordingly and were reduced to VND422,000 ($20) per canister.

The slump came after the world gas price decreased by $25 to $955 a tonne over November last year.

There were nine increases and seven reductions in gas prices in 2012.

Central region hosts Indian businesses

Over 100 businesses from India and central provinces of Viet Nam will join a business seminar in Da Nang today, Indian Ambassador to Viet Nam Ranjit Rae said yesterday.

It is the first ever time that a seminar will be organised with participation from Indian businesses in the city.

The event is providing an opportunity for businesses from the two countries to exchange investment and marketing information.

Last year the two-way trade between Da Nang and India was just US$200 million.

Indian enterprises have invested $4 trillion in Viet Nam, but Da Nang has yet to attract an investment project.

Direct flights to Kazakhstan begin

Air Astana, Kazakhstan’s national flag carrier, yesterday officially launched a direct route linking Almaty, the country’s largest city, and HCM City, with two flights set to make the journey every week, on Wednesdays and Fridays.

A 160-seat Boeing 757 will leave Tan Son Nhat International Airport in HCM City at 13:00 and arrive at Almaty International Airport at 19:50 Vietnamese time.

There are also two flights from Almaty to HCM City via Bangkok (Thailand) on Wednesdays and Fridays.

Vietway Aviation Services is Air Astana’s official agent in Viet Nam, in charge of ticket sales and promotion.-

Firm issues trading mechanism for delisted shares

Vung Tau Petrolium Trading and Service (VMG) has worked with the State Securities Commission to issue a new trading mechanism after its delisting by the Ha Noi Stock Exchange.

Parties who wish to buy shares can inform the company about details of the proposed transactions. The transactions will then be put to the commission for approval.

The company was forced to delist from July 27 as no transactions had taken place for a year.

Securities commission slams price manipulation practices

Six cases of share price manipulation were investigated last year by the State Securities Commission.

Most recently, the commission fined two investors VND300 million (US$14,285) each for manipulating the price of Sao Mai Construction Corp (ASM) shares.

In addition, cases involving Sacombank Securities (SBS) and Trang An Securities (TAS) were referred to the police.

Infrastructure company expects to close 2013 in the green

Vinh Phuc Infrastructure Development (IDV) forecasts earnings of VND30 billion (US$1.4 million) and a net profit of VND10 billion ($476,100) this year.

Total asset value was expected to reach VND305 billion ($14.5 million).

The company also announced its business results in the first nine months of last year, including revenue of VND21.35 billion ($1 million) and profit of VND8.55 billion ($407,100).

Central city lays out new land use fees

The basic commercial land use fee for property in downtown Da Nang has been set at VND16.8 million ($800) per square metre, the city’s People’s Committee has announced.

Under the new rates to apply in 2013, prime sites on Nguyen Van Linh Street which link downtown with the city’s international airport and Son Tra Peninsula will become the central city’s most expensive real estate.

Commercial land fronting Nguyen Van Linh, Hung Vuong and Le Duan streets would be levied a total of VND40.32 million (US$1,920) per square metre. This would be calculated on the base rate of VND16.8 million multiplied by a differential of 1.5 for main street frontage and multiplied by another 1.6 for property with frontages on three streets.

The basic rate for other non-agricultural commercial land in the city was set at VND11.7 million ($560) per square metre, while a square metre of residential property in an outlying area but with good infrastructure (e.g., a paved road) will be levied between VND62,000 ($2.90) and VND700,000 ($33).

In the first five months of last year, the city earned nearly VND500 billion ($24 million) from land use fees, representing 13.5 per cent of the city’s total revenue of VND3,700 trillion ($176 million).

However, with the real estate market stagnant, this major municipal revenue source has been diminished.

Investors buy $72.12 million bonds from Da Nang

The Ocean Bank and PetroVietnam Finance Corporation have bought a total of 1500 bonds worth VND1.5 trillion (US$72.12 million), issued by the city if Da Nang.

The five-year-term bond, with a fixed interest rate of 11 per cent per year, is to raise funds for the construction of shopping and trade centres, supermarkets, wholesale markets and entertainment places.

It was the first of Da Nang’s planned VND5 trillion ($240.4 million) bond issue for socio-economic development this year.

Markets ripen for dragonfruit

Dragon fruit has taken the lead in Vietnamese fruit exports, recording the highest growth and value last year, according to the Ministry of Agriculture and Rural Development.

Exports were worth about US$150 million, an increase of more than 40 per cent over 2011 and comprised about 45 per cent of the country’s total fruit exports.

Vietnamese-grown dragon fruit is now sold in more than 30 countries and territories.

Exports to China more than doubled in volume (107 per cent) and value (176.5 per cent). The Korean rates were 136 per cent and 114 per cent, respectively.

Besides traditional markets in China, Thailand, Indonesia and Holland, Vietnamese dragon fruit has now penetrated Chile, Brunei and Greenland.

The average export price was at $539.5 per tonne, 6 per cent higher than last year. The highest prices were $4,500 per tonne to Russia, and $3,600-3,630 per tonne to Japan, $2,760 to the US, $2,160 to Canada and $2,100 to Britain.

China was the biggest dragon fruit importer from Viet Nam, however, price were lowest at only about $396 per tonne.

In August, dragon fruit became the first Vietnamese fruit allowed to be shipped directly to the US without prior radiation tests. The tests are now held after arrival.

The US Patent and Trademark Office has also recognised “Binh Thuan dragon fruit” as the name for fruit from Binh Thuan Province. It is the country’s largest dragon-fruit producer with total planting of more than 16,000ha and an output of 600,000 tonnes per year.

According to the ministry, dragon fruit will continue to prosper this year. However, to expand markets, more fruit must meet international standards, such as GlobalGAP, VietGap and EuroGap.

According to Tran Ngoc Hiep, director of Hong Hau Dragon Fruit Farm Company Ltd in Binh Thuan Province, exporters should complete production processes according to international standards and then transfer these advanced techniques to growers.

Tran Huu Danh, director of Long Viet Company in Tien Giang Province said exporters must be careful to maintain quality and prestige.

The GAP Agriculture Joint Stock Company recently begun to export dried dragon fruit to the US, creating an opportunity for value adding.

Supermarket sales rise over holiday weekend

Traditional markets and supermarkets in HCM City reported a slight growth in sales during the four-day New Year holiday period, despite difficult economic conditions.

Although no specific figures were reported, most supermarkets such as Co-opmart, Maximark, Metro and BigC confirmed that sales volume, especially for food items such as beef, chicken, fish and fresh vegetables, had risen during the holiday.

Nguyen Thi Phuong Thao, director of Maximark Cong Hoa, said customer traffic increased because of the supermarket’s discounts of 5-50 per cent on 3,000 items.

Processed food such as fried chicken and bread as well as fruit were in high demand, followed by fashion products and cosmetics, according to a BigC representative.

Although sales rose during the period, most supermarkets agreed that the total figure was less than that of last year.

All supermarkets this year had prepared well and launched many promotions for New Year holiday.

Despite this, the market has not reached last year’s growth rate of 30-50 per cent during the same period.

However, in some traditional markets such as An Lac Market in Binh Tan District, sales had doubled during non-holiday days.

Along with the slight increase in sales, the price of seafood and other commodities had risen by 20-30 per cent.

A trader at Binh Dien Market in District 8 said that pork sales had been increasing but then fell two days before the New Year holiday.

She attributed the drop in sales to the number of workers returning to their hometowns in the provinces to enjoy the holiday.

However, sales began to rise again in the first few days of the new year, with prices also increasing by VND3,000-5,000 per kilo.

Because of such increases, prices in restaurants, especially in tourism areas near HCM City, such as the beach town of Vung Tau, also went up, with service charges rising by about 5 per cent.

Many customers complained about the price increases, saying that service had not been good due to the crowded conditions caused by vacationers.

BIDV shares transferable

Bank for Investment and Development of Vietnam (BIDV) is working with relevant agencies to help shareholders transfer BIDV shares after the bank delayed its plan to list on the Hochiminh Stock Exchange (HOSE).

BIDV has delayed trading of 2.3 billion shares under the code BID which it announced it would do no later than January 10, or within 90 days after the bank won listing approval from HOSE.

Many investors have borrowed money to buy BID shares at the IPO (initial public offering). However, during several months of preparing listing procedures, liquidity of these shares has been stagnant.

Shareholders now can contact BIDV Securities Company to transfer their BID shares.

According to BIDV’s statement, its board of directors signed a decision on December 25 delaying the listing plan given approval of the Government and the central bank. The bank is preparing necessary procedures to help shareholders transfer BID shares.

BIDV said that listing stock was not a wise choice as the stock market has kept falling with low liquidity. Therefore, benefits of shareholders and share prices would be hurt.

“As an enterprise with a stake of over 95% belonging to the State, BIDV has reported to the Government and the State and asked for instructions on the timing of listing,” BIDV said in the statement.

The central bank released a document on December 20 giving approval in principle to this delay but told BIDV to focus on charter capital increase, bad debt handling and credit quality improvement to attract strategic investors.

BIDV has yet to find foreign strategic partners.

Westernbank to merge with PVFC

Westernbank has got the Prime Minister’s approval to merge with PetroVietnam Finance JSC (PVFC), a source from Westernbank said.

Both sides now are performing necessary procedures to finalize the merger and will publicize the information in the next quarter, said an executive who asked not to be named.

All information relating to converting shares and the road map for the merger are yet to be announced by the two sides.

Westernbank has chartered capital of VND3 trillion and the bank is in the list of lenders to be restructured in line with the central bank’s plan. Westernbank is trying to make preparations for restructuring assets and strengthening governance and management capabilities to facilitate the merger.

Westernbank already controlled bad debt ratio within the allowable limitation while its capital mobilization activities have fared well. As of late this year, the lender has mobilized VND11 trillion from local residents and entities, growing 17% compared to end-June.

Meanwhile, PVFC has a chartered capital of VND6 trillion and its assets are valued at nearly VND92 trillion. Merging with another bank is the firm’s strategy with an aim to change its current model as a financial company into a commercial bank.

PVFC last Tuesday got nod from its shareholders to adjust the 2012 business plan, with  the after-tax profit target revised down to a mere VND50 billion from the initial VND519 billion. Its after-tax profit in this year’s January-September totaled VND197 billion.

Property sale plans diversified on poor demand

The local property market this year has seen sale plans diversified to attract homebuyers who don’t need to rush in times of steep price falls.

The high-end condo project Hoang Anh Riverview developed by Hoang Anh Gia Lai Group in HCMC’s District 2 is known for its double discounts.

In 2009, the project owner announced a 40% price cut, bringing down the condo price from VND49 million to VND28 million per square meter. This year, secondary investor An Binh Land has further slashed the price to VND18.2 million a square meter.

A few other projects are also offering 10-20% discounts.

Some land plot sellers commit to give buyers enough materials to build a simple house apart from construction permits, land use right certificates and free designs. Such a sale plan is mainly applied to land plots in Long An and Binh Duong, targeting low-income earners.

Owners of several land plot projects now have to accept installment payments to relieve buyers of financial pressure.

Dat Xanh Real Estate Service & Construction Corporation adopts this flexible payment method to boost sales of land plots in the Gold Hill project in Dong Nai’s Trang Bom District. Buyers pay VND5 million each month over a period of about 2.5 years.

Instead of discounts, some project owners promise valuable gifts to their customers. For example, Bao Gia Group has announced it will give VND1 billion worth of interior furnishing items to those buying the apartments of The Flemington project in HCMC’s District 11.

Meanwhile, Novaland pledges to transfer US$1,000, or some VND20 million, per month to bank accounts of the customers buying two-bedroom flats of the Sunrise City in  District 7.

Apart from cars and furnishing items, gold is another kind of gift that property project owners offer homebuyers. Each customer of the Imperia An Phu project in District 2 will be given four taels of SCJ gold.

After making a down payment equivalent to 50% of the home value, homebuyers can take out loans to pay the remaining amount with a five-year term and a fixed interest rate of 1% per month. A number of property firms use this sale plan when their customers cannot access bank loans.

If mass buying is executed to get discount prices, mass selling is adopted to look for potential customers. The Settlement Week organized by Eden Real gathered a lot of projects of various segments, including apartment, low-rise house, villa, hotel, office building and workshop, to introduce to customers.

The owner of The Eastern project in HCMC’s District 9 allows its customers to pay an amount equal to only 10% of the home value. The rest will be paid after apartments are handed over, which is slated for late 2013.

On the website of the luxury condo project The Vista in HCMC’s District 2, the owner says: “We cover loan interest, you just move in The Vista!”

Many property project owners have joined hands with banks to offer homebuyers preferential loans with even a zero interest rate. In fact, they accept lower profit by paying loan interest for their customers.

Some project owners have decided not to offer discounts. In fact, in their initial plans, they included discounts of some 10%, which would be lowered gradually, or late buyers enjoy discounts one or two percentage points lower than the ones before them.

This “early birds discount” is beneficial to first comers, but it can only be applied in the projects with prime locations and good products.

Le Thanh Commercial Construction Co., for example, has put up condos of Le Thanh Twin Towers in HCMC’s Binh Tan District for lease in 49 years after tenants have paid the project owner VND350 million.

Several other project owners are also looking for chances in the condo-for-rent segment rather than leaving the finished apartments unoccupied.

For sustainable development of dairy farming

Dairy farming in Vietnam meets only 25% of the market demand but many farmers are shifting to other businesses. In dairy farming areas, land for animal husbandry is shrinking given the fast pace of urbanization, making profit earned from grass growing to serve milk cow farming less attractive than other businesses.

In fact, dairy farming in Vietnam is primarily developed by households in outlying and semi-urban areas that have enough conditions of infrastructure, capital, technique, input and output. Around 95% of dairy farming households run a small scale business with less than 10 cows. Under calculations, to hold on to this industry in the long term, each household needs to develop its herd with 40 cows and 40 calves to reach an output of 500 to 600 kilos of milk every day and an average income of VND15-20 million a month. However, this cannot be done in large dairy farming areas due to urbanization. From this reality, FrieslandCampina Vietnam has suggested a solution, building sustainable dairy farming areas – developing cow farming under the household model in suitable areas and supporting industries given the Government’s long-term planning and relevant policies and legal framework.

First of all, a sustainable dairy farming model must have a sizeable land area and favorable weather conditions to breed cows as well as grow grass and corn for cows. Secondly, this area must be ready or invested with infrastructure such as traffic, water and electricity supply, food processing and supplying units, breeding animals and animal health stations. Especially, this area must have a milk purchasing and processing system to secure milk consumption. In addition, farmers should receive professional training on farming techniques, quality management, and plantation management to raise capacity and quality, and to cut expenses to obtain higher profits.
A training course for farmers held by FCV

To build sustainable milk cow farming areas, there must be a general plan with specific details and steps, policies, authorities’ planning and voluntary cooperation between local authorities, enterprises and farming houses to create common and long-term benefits for all sides.

Farming households can take part in the project by investing manpower, capital and land. Given consultancy and support of FrieslandCampina, they will receive training on professional dairy farming to build up standard plantation systems, raise capacity and milk quality, and save costs. Their product will be sold to the purchasing system of FrieslandCampina. Therefore, farmers can get stable profits and FrieslandCampina’s milk factories can receive high-quality material sources. Besides, farmers can supply fertilizer for other households and farms.

Not only will cow breeders benefit from this project, other economic stakeholders will be activated as well. Cow plantations will buy grass and corn from local feed providers, encouraging cultivating households to boost investment to improve output and quality. Both cow farmers and cultivating households will use services such as seed, technical service, animal health, plant protection, harvest, processing, agricultural equipment, capital and training, creating conditions for service providers and local manpower to develop together.

“FrieslandCampina and some professional organizations of the Netherlands such as construction consulting and project management firm Fresh Studio, Wagenigen University and its study center, feed provider De Heus are taking part in this project along with related agencies in Vietnam. We will also provide knowledge and skill training for farmers in areas of this project, build milk purchasing and quality check systems, organize training courses for animal health workers, provide technical services in these localities, and cooperate with the local government in cow herd supervision, management and development,” says Luu Van Tan, who takes charge of FrieslandCampina’s milk industry development program.

HSBC: Vietnam’s economy likely to be better in 2013

The year 2013 will likely be better for Vietnam’s economy than 2012 amid slowly improving domestic and external demand and the initial results from the country’s recent reform efforts.

According to the report “Vietnam at a glance” released on January 3 by Hong Kong and Shanghai Banking Corporation (HSBC), Vietnam’s economy slowed to 5.0 percent in 2012 from 5.9 percent in the previous year.

The Vietnamese government’s actions in 2011 and 2012 to prioritise sustained-over-rapid-growth were considered positive for the country’s long-term outlook, the report says.

According to the report, there were some bright starts of the economy in 2012, such as exports, which expanded almost 20 percent despite weak external demand and trade surplus.

However, it notes that the country needs further reforms to resolve bad debt overhang and improve the business environment and supportive infrastructure.

It also needs to improve the business environment, most notably reducing red tape and creating clearer laws on how to resolve insolvency, to attract foreign investment to support its development, the report says.

FDI creates momentum for Quang Ninh

The northeast province of Quang Ninh aims to attract US$500 million for seven FDI projects this year.

They include two on-going projects, namely the US$150 million expansion of Hai Ha seaport, and a US$35.5 million rare earth processing plant.

The province is calling for foreign investment in hi-tech and environmentally friendly technology and hopes to attract Japanese investors to industrial parks, including Viet Hung and Dong Mai.

To develop itself into a service industry province by 2020 and a modern service industry by 2030, Quang Ninh will need US$38.286 million (about 127 percent of its GDP), of which 50 percent will come from FDI inflows in the 2013-2020 period.

Ca Mau’s exports target over US$1 billion

The southernmost province of Ca Mau expects to bring their export turnover to US$1.050 billion in 2013, up 10.5 percent on last year.

To fulfill the goal, the provincial People’s Committee has paid special attention to promote trade, develop and expand markets for aquatic products, and encourage businesses to invest in new technologies in order to improve the quality of seafood products and hone their competitive edge.

The province’s key export items includes shrimp, fish and cuttlefish which are sold to markets such as the US, Japan, the EU, Australia, Canada, Russia, China, the Republic of Korea and several others on the African continent.

Ca Mau currently has 33 frozen seafood processing factories and four fish powder processing factories, with a capacity of around 180,000 tonnes per year.

To fulfill the target, the province has directed relevant agencies to boost administrative reforms, implement incentive policies for businesses through the provision of loans, lowering of interest rates and the exemption of certain fees and taxes.

It also focused on developing aquaculture in an effective and sustainable manner by establishing centralised shrimp farming areas, applying modern technologies, promptly addressing infectious diseases on shrimp, and expanding the aquaculture model under the VietGAP procedure to provide clean materials to export seafood processing factories. .

The province will invest in upgrading infrastructure and irrigation and facilitate offshore fishing to reach the 107,000 tonnes of produce required to reach the target.

Vietnam-India trade turnover hits US$4 billion

Vietnam-India trade turnover has risen to US$4 billion from US$178 million ten years earlier.

The figure was released at a business meeting held in the central city of Danang on January 3 by the Indian Embassy in co-ordination with the Vietnam Chamber of Commerce and Industry (VCCI), the Indian Chamber of Commerce (ICC) and the Indian Business Chamber in Vietnam (INCHAM).

Present at the meeting were Indian Tourism Minister Chiranjeevi Konidala, Indian Ambassador to Vietnam Ranjit Rae, ICC Chairman Rajiv Mundha, Chairman of the Danang city People’s Committee Phung Tan Viet, representatives from the Ministry of Industry and Trade (MoIT), and businesses from both countries.

The event is part of activities in the framework of the Vietnam-India Business Forum to mark the 40th anniversary of bilateral diplomatic ties and the 5th anniversary of the establishment of bilateral strategic partnership.

Ambassador Ranjit Rae highlighted the fruitful cooperation between India and Vietnam in recent years, saying India has invested more than US$1 billion in the fields of mineral exploration and exploitation, information technology (IT) and health care services.

2012 marked a breakthrough in bilateral cooperation, especially in the fields of politics, national defence, economics, trade, cultural exchange, and human resource development, he said.

India is currently one of top ten foreign investors in Vietnam, with a total trade turnover in the first ten months of 2012 reaching US$3.2 billion.

While in Vietnam, an Indian business delegation is scheduled to work with the Ministry of Agriculture and Rural Development (MARD) and the Vietnam Tea Association in Hanoi and make a fact-finding tour to the northern provinces of Thai Nguyen and Phu Tho.

Chan May-Lang Co EZ attracts 32 investment projects

Since its establishment six years ago, the Chan May- Lang Co Economic Zone (EZ) in the central province of Thua Thien- Hue has attracted 32 investment projects, capitalized at VND35,474 billion.

They include 10 foreign direct investment projects valued at VND21,000 billion.

Of the total, 12 projects have been put in operation.

Besides offering investments incentives, Thua Thien-Hue has invested more than VND1,733 billion in building transport, electricity and water supply, communication and other social infrastructure to give the Chan May- Lang Co EZ a facelift.

With a total area of 27,108 ha, the economic zone houses the Chan May deep-water port (668,5ha) and the Chan May urban centre (3,441ha).

It has completed construction of a USD$ 875 million Laguna tourism area invested by the Singapore Banyan Tree group and a 10,000 cubic metre fuel depot under the Petrol Vietnam Oil (PV Oil).

Thua Thien- Hue province plans to finish site clearance on 2,000 ha in the next three years to handle over to investors.

At present, it has constructed three resettlement areas with a total area of 90ha for 2,000 displaced households in Loc Vinh, Loc Tien and Lap An districts.

National reserves to reach 1.5 pct of GDP by 2020

Prime Minister Nguyen Tan Dung has approved a development strategy aimed at raising the level of national reserves to 1.5 percent of GDP by 2020.

Under the strategy, Vietnam’s national reserves are expected at 0.8-1 percent of GDP by 2015. Key commodities are related to socio-economic security, natural disaster adaptation and rescue work, national security and defence, and epidemic prevention and control.

By 2015, Vietnam will have about 500,000 tonnes of rice, 500,000 cubic metre of petrol, and 700,000 tonnes of crude oil in store. The level of national reserves will be adjusted depending on the real situations in the following years.

The strategy emphasizes the need to apply modern preservation technology to ensure the quality and quantity of reserved goods and protect the environment.

HCM City aims for 10 percent GDP growth

Ho Chi Minh City is set to achieve a GDP growth rate of 9.5-10 percent in 2013 while stabilizing macroeconomy, controlling inflation, boosting production and generating more jobs.

The target was announced by the municipal People’s Committee at a meeting on January 2 to review socio-economic development and budget spending in 2012 and work out orientations for 2013.

HCM City’s GDP grew by 9.2 percent in 2012, nearly double the country’s average rate despite a number of shortcomings in dealing with real estate projects, inventories, and bad debts.

Participants in the January 2 meeting raised their concern about issues related to export business, employment, housing and social security for local people.

The focus of discussion was on facilitating production, promoting consumption, reducing inventory levels, as well as tightening the financial and monetary market to achieve US$4,000 worth of GDP per capita and reduce the rate of unemployment to less than 4.8 percent in 2013.

Downtown office market heats back up

A tendency for offices in HCM City to move back to the downtown area was discernible in 2012, according to leading commercial real estate services provider Cushman & Wakefield.

The real estate services firm records “existing total stock” at over 1.25 million square metres, but notes that there seems to be a “limited supply” of Grade A offices with floor space of over 1,000 square metres.

It estimates supply of new office space for the year at 220,000 square metres and for this to increase to 230,000 square metres in 2013.

Significant projects under construction (Grade A) include Times Square (9,930sq.m), originally scheduled for completion in the fourth quarter of last year; the 34,400sq.m Lim Tower that is set for completion in first quarter of 2013; and the 9,125sq.m President Palace, which was also to be completed in the fourth quarter of last year.

In the Hanoi market, the office migration tendency was to the west of the city, with demand volumes in general on the decline. The report said a marginal uplift in demand could be seen in 2013 compared to 2012. The capital city’s existing “total stock” was estimated at one million square metres.

Last year’s total new supply in the capital city was estimated at 150,000 square metres, but predicted to double this year, so “Hanoi will remain a tenants market”.

Significant projects under construction include the 21,000sq.m Cornerstone (estimated completion in 2013); 43,835sq.m Lotte Centre Hanoi (estimated completion in 2014); and the 45,261sq.m EVN Twin Tower (estimated completion in 2013).

Cushman & Wakefield is the world’s largest privately-held commercial real estate services firm. Founded in 1917, it has 243 offices in 60 countries and more than 14,000 employees.

Manufacturing index declines in December

Vietnam’s Manufacturing Purchasing Managers’ Index (PMI) dropped to 49.3 in December, according to the latest report by the Hong Kong and Shanghai Banking Corporation (HSBC).

The December PMI, down from 50.5 in November, posted below the neutral 50.0 mark for the eighth time in the past nine months. The latest deterioration in operating conditions mainly reflected reduced new order inflows, disinvestment of inventory holdings and stagnating production volumes.

The average PMI reading in Q4 2012 is 49.5, up from 46.9 in Q3 and the highest outcome since the third quarter of 2011.

After rising moderately in November, the level of manufacturing output was broadly unchanged during December. Companies indicated that where volumes had been sustained, this had been largely through the depletion of backlogs of work. Market conditions remained subdued overall, reflected in reductions in both domestic and new export orders. The level of new export business contracted for the eighth month running and to a greater extent than signalled in November.

The muted performance of the sector has not yet filtered through to the labour market, as highlighted by job creation being recorded at manufacturers for the third successive month in December. Although the rate of increase in payroll numbers was again only mild, it was nonetheless still one of the fastest signalled since the survey began in April 2011. Higher employment – alongside efforts to sustain production volumes – was also a prime factor underlying the substantial drop in backlogs of work.

Weak demand and rising cost-caution impacted on purchasing and stock holding decisions during December. Input buying volumes were unchanged compared to November levels, as lower demand discouraged companies from raw material purchasing. Meanwhile, a preference for reduced inventory holdings led to lower levels of pre- and post-production stocks.

Average input prices declined for the first time in five months in December, although the rate of reduction was only slight. Lower purchasing costs were mainly attributed to weak demand for raw materials, especially in the domestic market.

December saw average output prices decline for the eighth consecutive month, with the rate of decrease broadly in line with the average for this period. Lower factory gate prices were attributed to weak demand and strong competition.

Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC says the economy is stabilizing, as indicated by the output level. However, the economic recovery process is still in its fragile state as external demand remains weak and consumer confidence is subdued. Price discounting measures are being helped by a reduction of input prices. A third expansion of employment shows the resilience of the economy.

Still, while things will likely improve marginally next year, significant changes to consumption behaviour are not expected unless meaningful reforms take place, she adds.

Stock market receives a boost

A plan to support the crippling stock market was submitted to the Finance Ministry on January 2.

In its plan, the State Securities Commission (SSC) has proposed major solutions, including those for increasing market commodities, supporting businesses that want to list shares on the bourse, and attracting foreign investment, besides technical solutions.

To assist listing businesses, the SSC has proposed solutions to taxation and the issuance of shares below the actual denominations.

Meanwhile, technical solutions will help improve the liquidity of the stock market by raising the trading margin for both Hanoi and HCM City stock exchanges.

The Vietnam Economic Times quoted an SSC expert, saying there will be a “breakthrough” in share ownership by foreign investors to increase market attractiveness.

Dung Quat Oil Refinery to increase its output by nearly 1 mil tonnes

The Dung Quat Oil Refinery plans to produce 6.5 million tonnes of petroleum products in 2013, up nearly 1 million tonnes over last year.

The refinery is expected to earn VND120,000 billion in revenue and contribute VND16,800 billion to the State budget.

Last year, in spite of difficulties, the refinery produced 6 million petroleum products of different kinds, contributing more than VND15,000 billion to the State budget.

Dinh Van Ngoc, general director of Binh Son Refining and Petrochemical Company Limited, overseeing the Dung Quat Oil Refinery, said the company is an important contributor to the State budget.

So far, it has contributed VND45,000 billion to the state budget, surpassing its investment capital of VND43,000 billion.

Can Tho targets 1.2 mln arrivals in 2013

Can Tho City plans to welcome more than 1.25 million arrivals, including 210,000 foreigners, in 2013, a year on year increase of 5.9 percent.

The municipal Department of Culture, Sports and Tourism also plans to raise total revenue from tourism services to VND970 billion, rising 10.2 percent against last year.

In 2013, the local tourism industry will continue to boost promotion programmes with cities and tourism centres from across the country.

The city will maintain cooperation programmes with An Giang, Kien Giang, Bac Lieu and Ca Mau provinces, and prepare for signing cooperation programmes with the other provinces in the Mekong River Delta.

In 2012, Can Tho City received 1.18 million arrivals, including 191,000 foreigners, surpassing the annual target by 7 percent and showing a year-on-year increase of 21.6 percent.

At the same time, the Mekong Delta locality earned VND880 billion from the tourism industry, beating 2012’s target by 10 percent and rising 22.2 percent against 2011.

Key spots attracting most domestic and international tourists include Cai Rang floating market, My Khanh tourism area, Can Tho old market, Binh Thuy old house and Ninh Kieu wharf.

Da Nang welcomes first int’l flight in 2013

The central city of Da Nang welcomed the first international flight from Singapore to its international airport on January 1.

The Silk Air’s flight had 126 international visitors on board. On New Year’s Day, Da Nang also welcomed another group of 80 visitors from India’s naval ship.

In 2012, air travelers to Da Nang reached around 157,000, up over 236 percent compared to the previous year.

With the opening of nine air routes, Da Nang aims to increase the number of international tourists to the city in 2013 by 20 percent over last year.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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