Home » Business » Vietnam Business in brief 30/8

Shares recover Vietnam Business in brief 30-8from two-day fall

Stocks recovered yesterday on both exchanges after two consecutive falling sessions but trading remained sluggish.

On the HCM City Stock Exchange, the VN-Index regained 1.89 per cent to close at 393.06 points on a total turnover of VND582.4 billion (US$27.7 million).

Advancers outnumbered decliners by 206-36, led by blue chips.

Phu My Fertiliser (DPM), steelmaker Hoa Phat Group (HPG), Tan Tao Investment Industry (ITA) and logistic Gemadept (GMD) all rose to the ceiling while insurer Bao Viet Holdings (BVH), dairy giant Vinamilk (VNM) and Vietcombank (VCB) also increased from 1-3.5 per cent.

However, Sacombank (STB) and Eximbank (EIB) continued to decline, with the latter being the most active code on trades of almost 3 million shares, shedding 1.24 per cent to VND15,900 ($0.75) a share.

The VN30 tracking the top 30 shares on the southern bourse was up 1.22 per cent overall to reach 459.64 points.

Meanwhile, the HNX-Index on the Ha Noi Stock Exchange grew by a more substantial 3.6 per cent to finish at 61.88 points, with gainers overwhelming losers by 214-38.

The HNX30 also increase 4.71 per cent to stand at 117.62 points.

More than 33 million shares, worth nearly VND298.5 billion ($14.2 million), changed hands yesterday, with VNDirect Securities (VND) being the most active code on trades of 4.8 million shares. VND closed up 6.25 per cent to end atVND10,200 a share.

Investors seemed to calm down after chairman of Masan Group (MSN), who was rumoured to be detained following the arrests of the two former executives of Asia Commercial Bank (ACB), appeared in Viet Nam.

“They seemed to realise that they had over-reacted to inaccurate information and they yesterday rushed to pick up shares they shrugged off in the past days,” analysts of FPT Securities Co wrote in a note.

“The market was also buoyed as bottom buying started late Tuesday when traders saw valuations were attractive to buy although local gasoline traders raised retail prices for the fourth time,” they said.

Food safety watchdog neglects vegetarian food

Many vegetarian restaurants have mushroomed and a variety of vegetarian foods are being sold in markets to satisfy the increasing demand of people, yet there is no way to detect how safe is the vegetarian food being served in restaurants or sold in markets.

Vegetarian foods are prepared from dried bean curd, mushrooms and braised gluten, and sometimes made to taste like meat, which amateur vegetarians prefer as it stays for a longer duration.

However, the real concern is whether these vegetarian food items are safe or not and which agency controls the food safety and hygiene for such food items, because most of these foods come from China and Taiwan (China).

Stores in wholesale markets like Binh Tay, An Dong and Phu Lam display vegetarian foods with unclear markings and without legal certificates of safety and names of manufacturers.

A shop assistant said mushrooms, dried tofu sticks, braised gluten are from China while spices, seasonings and additives are from Taiwan (China),  as the country can only grow Chinese black mushroom (or Shiitake Mushroom) while others such as King Oyster Mushroom (Shimeji Mushroom), Enoki Mushroom (Golden Mushroomare), Pleurotus Mushroom are brought into the country.

Similarly, sauces, soy sauce, soya cheese are sold in markets without legal certificates of safety and names of company, date of manufacturing and expiry date.

Tran Thi Thua, director of a company that produces the vegetarian food Amla, said consumers should buy food items with clear markings and indications of date of manufacturing and expiry, and advised people to be cautious of foods mixed with contaminated colorants and preservatives.

Hence, it is essential for the food safety watchdog to monitor and inspect vegetarian food items being sold in markets, to protect consumers.

ICA tells Vietnam to play by rules

The International Cotton Association has urged Vietnam’s government and contract parties to obey international cotton trading rules.

The UK-based association’s (ICA) president Antonio Vidal Esteve, managing director Kai Hughes and Richard Pollard, chairman of the ICA Rules Committee, last week met with leaders of key ministries and cotton industry players in Vietnam to discuss solutions to the large numbers of arbitration cases that have arisen recently, due to Vietnamese cotton importers’ failure to abide by the ICA’s globally recognised bylaws and rules.

The ICA mission also held talks with leaders of the Delegation of the European Union to Vietnam and the British embassy to explore means to raise awareness and encourage compliance with the ICA bylaws and rule Vietnam.

Pollard, chairman of the ICA Rules Committee, told VIR that about 44 arbitrations had been initiated over the past 18 months against Vietnamese cotton importers and the number of arbitrations might continue to rise in the coming months.

“Between August 2010 and March 2011, there was a violent spike in global cotton prices rising to a high of $2.20 per pound from an average price of 70 cents before falling sharply again to the usual rates. This placed Vietnamese cotton spinners, who had contracted to buy cotton at high prices, into grave difficulties in the falling market. Instead of talking with the suppliers to find a solution many Vietnamese firms simply broke their contracts with foreign cotton exporters,” Pollard said.

Pollard declined to name the Vietnamese spinning mills concerned citing confidentiality between the parties, but stressed that: “Those Vietnamese spinning mills which defaulted on contracts and refused to comply with ICA arbitration awards will be listed on the ICA list of defaulters together with associated companies. ICA members are not permitted to trade with companies on the default list putting Vietnamese cotton spinners at a significant disadvantage in the market.”

The Vietnam Cotton and Spinning Association reported that Vietnam annually imported around 400,000 tonnes of assorted cotton, accounting for 5 per cent of the world’s total cotton output. Locally-sourced cotton could currently meet only 1 per cent of local production demand. The country was also a big garment and textile exporter which last year earned nearly $16 billion from exporting garment and textile products and has enjoyed 20 per cent annual growth for the past five years.

Vietnam’s textile and garment industry employed more than 2.5 million people and made up some 15 per cent of the country’s export revenue. Textile and garment revenues for 2012’s first half stood at $7.5 billion.

“We are increasingly concerned about the high proportion of Vietnamese partners who are defaulting on their contracts. The recent fluctuations in cotton price was a global problem but in other countries buyers negotiated with sellers to reach a compromise solution. Thus we have to come to Vietnam to discuss the solutions and understand the country’s rules in settling international trade disputes and enforcing the awards of foreign arbitral institutions,” Pollard said.

One of the ICA’s primary functions is its arbitration service. If cotton is traded under ICA bylaws and rules, parties have the right to apply for ICA arbitration in the event of a contract dispute. The service is impartial and internationally recognised.

Minh Phu digests some bitter business results

The country’s largest shrimp company’s first quarterly loss since its listing in 2007 has spooked many investors.

In the first six months of the year, Minh Phu Seafood Corporation (MPC) achieved an accumulated profit after-tax of VND60.97 billion ($2.9 million), down 28.6 per cent compared to the same period of 2011. However, its second quarter’s result disappointed investors as the company recorded an after-tax loss of VND2.29 billion ($109,000).

The firm is in a pickle as its financial costs have increased sharply and its outstanding loans mount to VND4,000 billion ($190.5 million). The company is incurring borrowing interests on investments in Minh Phu-Hau Giang Factory, Loc An Company and Hoa Dien Company, which have not generated profits.

Due to exchange rate fluctuations, Minh Phu borrowed in local currency instead of US dollar, and faced crippling 16 per cent interest rates.

Bond yields and long-term borrowing rates were even higher at 18-19 per cent while Minh Phu had to pay yields for the VND700 billion bonds which was recognised as part of the half yearly financial costs.

In total, its bond yields and loan interest rates in 2012’s first six months amounted to VND225.7 billion ($10.8 million), an increase of 210 per cent over the same period of last year.

Meanwhile, the much-anticipated Minh Phu-Hau Giang Factory, with designed capacity three times greater than the existing Minh Phu-Ca Mau Factory, is not operating at full capacity because of a shortage in skilled workers.

Le Van Quang, chairman of Minh Phu’s board of directors, said: “We recruited 6,000 workers for the factory but only 4,000 are able to work at the moment. This is due to the insufficient supply of accommodation for workers as its land acquisition was not successful as planned.”

Furthermore, erratic weather and unstable material areas have caused difficulties for Minh Phu in obtaining raw materials for production. Even though, the weather conditions have improved since May, shrimp death rate is still high at 30-40 per cent.

On the other hand, Minh Phu was severely affected by shocks from the importing countries.

The European market’s purchasing power dropped sharply by more than 50 per cent due to the sovereign debt crisis. Therefore, shrimp-exporting countries have switched to American market, which created excess supply and pulled the selling prices down by up to 50 per cent.

Products sold at $15.5/kg are now priced at only $10.2/kg. Minh Phu’s stock of products have been sold at loss or with reduced profit margins. In addition, its Chinese partners often delay the payments or pay insufficiently..

Consortium pockets $335m deal to action O Mon 1

A consortium of Japan’s Sojitz and South Korea’s Daelim Industrial has won a $335 million contract to get unit 2 of O Mon thermal power plant 1 moving.

The contract was recently signed between Can Tho Thermal Power Company, a subsidiary of state-run Electricity of Vietnam and the consortium to build the plant in Mekong Delta’s Can Tho city.

The contractor will be in charge of supply, construction, and test run of the power block, including detailed engineering in addition to the boilers and main plant equipment.

It is scheduled to construct one unit of 330 megawatt gas and oil-fired power plant for power generation during a 36-month construction period.

O Mon 1 is part of O Mon thermal power complex worth $2 billion with the total design capacity of 3,600MW, including four gas-fired plants in Can Tho that would save around 600,000 tonnes of carbon dioxide emissions a year compared to coal-based alternatives.

The 660MW O Mon 1 thermal power plant, with capital design of two generators, is operated by Can Tho Thermal Power Company and its first unit went on stream and linked to the national grid on a trial basis in 2008 while 720MW O Mon 2, 700MW O Mon 3 and 720MW O Mon 4 thermal power plants are expected to start construction during 2012-2015.

The consortium succeeded in winning the constract to build the power plant after bagging the $1.2 billion Thai Binh coal-fired thermal power plant construction project, the largest in Vietnam, in May 2012.

“With such achievements, we expect to seize opportunities to ensure competitiveness and win projects in Vietnam and Southeast Asian markets, where demand for power plant construction has recently been on the rise,” Daelim said.

Panasonic champions CSR

Panasonic Vietnam last week held the 2013 Panasonic Master Scholarship Award Ceremony to outstanding Vietnamese graduates, a part of its corporate social responsibility programme.

More than 40 students from 16 universities nationwide applied for 2013-2016 Panasonic Master Scholarships this year, according to the company. After four selection rounds, the three best graduates were chosen. These graduates had passed strict screening process by the jury which were composed of representatives from the Japanese embassy to Vietnam, Vietnam’s Ministry of Education and Training, the Panasonic Scholarship Japan Office and Panasonic Vietnam.

Panasonic Scholarship covers full living costs and tuition fees for a three-year masters course, but also organises many cultural exchange activities for the scholars during their studying time in Japan. It is planned for those three scholars to officially start their study course in March 2013 at top universities in Japan, after spending four months learning Japanese in Vietnam.

The Panasonic Scholarship Programme in Vietnam has been implemented since 2003. Some 22 outstanding Vietnamese graduates have received the scholarships. Among 13 graduated masters, two have completed a PhD course in Japan, four are working on doctorates in Japan.

Asia’s biggest MDF factory commissioned

Asia’s largest medium-density fibre-board (MDF) factory, in the Minh Hung III industrial zone, Chon Thanh district, in the southern province of Binh Phuoc, went into operation on August 28.

The factory was built at a cost of US$125 million on a 38-hectare site and the MDF VRG Dongwha, a joint venture between the Dongwha Group from the Republic of Korea and the Vietnam Rubber Industry Group, is the main investor.

It is equipped with the same advanced machinery and technologies used in European countries.

With an output of more than 300,000 cu.m a year, the factory will bring in more than VND1 trillion in revenue this year.

The company has also built a chemicals plant to directly supply the factory with additional raw materials to improve its competitiveness in terms of quality and prices.

Once fully operational, the factory will help meet domestic and overseas demands for MDF, while generating jobs and raising the incomes of the local community.

Vietnamese American community a major market

Opportunities for Vietnamese businesses in the US and ways of penetrating the market were discussed at a conference held by the Trade Promotions Department in Ho Chi Minh City on August 28.

At the conference, Nguyen Duy Khien, Director of the American Markets Department, pointed out that Vietnamese products such as garments, textiles, footwear and toys are much lower in price.

This is a big advantage in the US, where businesses tend to focus on high-tech products and often outsource their manufacturing arms to other countries.

However, Le Xuan Duong, Director of the Export Support Centre at the Trade Promotions Department, believes there is plenty of opportunity for Vietnamese products in the US, due to a high demand from the substantial Vietnamese community living in the country.

Currently, there are about 1.3 million Vietnamese living in the US, the fourth largest overseas community in the country, while the choice of Vietnamese products on American shelves, especially foodstuffs, is still limited.

Trade analysts also pointed out that exporters should improve their designs and packaging to reduce transport costs and use online services to approach the market in a more efficient and cost effective manner.

Dien Bien supports agro, forestry technical centre in Laos

Officials from the northern province of Dien Bien and the Laos province of Phongsaly held an opening ceremony of the Hat Tham agro-forestry technical centre on August 28.

The 7.25-hectare facility was jointly built by the Dien Bien and Phongsaly provincial Departments of Agriculture and Rural Development, for over VND26 billion, about VND3.5 billion of which was funded by Dien Bien province.

The Dien Bien agriculture and rural development sector has so far provided human resources and construction materials worth over VND1.46 billion, nearly 50,000 breeding fish and aquaculture equipment for the centre.

On the occasion, the Dien Bien authorities granted equipment and seedlings worth over VND1.6 billion to the centre.

In the past, the sector assisted Phongsaly province in aquaculture techniques, human resources, organisation and management, as well as building a veterinary hospital and providing capital for animal husbandry worth over VND600 million.

Exports to Japan up 45 percent

Vietnam’s exports to Japan in the first half of this year reached around US$7 billion, a year-on-year increase of 45 percent.

The figure was announced at a seminar in Tokyo on August 28, organized by the Trade Office of the Vietnamese embassy in Japan, the Vietnam Chamber of Commerce and Industry, and the Japan-ASEAN Centre.

Trade Counselor to Japan Nguyen Trung Dung said in the nearly 40 years after they established diplomatic ties, Japan has become an important partner of Vietnam in many fields, including politics, economics, trade, investment and tourism.

In 2009, both countries raised their relationship to a strategic partnership for peace and prosperity in Asia. Japan is Vietnam’s third largest trade partner and second largest export market, said Dung.

Two-way trade in 2011 hit more than US$21 billion, including nearly US$11 billion from Vietnamese exports, a rise of 39 percent compared to the previous year.

Dung added that Vietnam and Japan have also signed many agreements, creating a legal framework for promoting bilateral cooperation in economics, trade, investment, and tourism.

The seminar provided an opportunity for localities and businesses from both countries to meet, exchange information and seek cooperative opportunities.

Masaaki Okano, a representative from the Asia New Power Company, emphasized that Vietnam and Japan share many cultural similarities and there is great potential for cooperation. However, there are not many Vietnamese products in the Japanese market so businesses from both sides should strengthen cooperation and boost trade promotion.

He said that Japanese businesses should clarify their specific requirements, while Vietnamese businesses should research the Japanese market, especially quality and design standards, as well as legal regulations.

Trade Fair 2012 opens in Can Tho

A trade fair opened in the Mekong Delta city of Can Tho on August 28, attracting a large number of local enterprises as well as those from Japan, Taiwan, Laos, Malaysia, China and Indonesia.

A wide range of products are on display, including information technology, aviation services, handicrafts, food and beverages, and telecommunications devices and electronic goods,.

Vo Thanh Tong, Vice Chairman of the Can Tho municipal People’s Committee, said that the fair is part of the city’s efforts to strengthen trade among enterprises, promote domestic companies, particularly those in the Mekong Delta, and attract more foreign partners and distributors.

The Mekong Delta is considered a potential market with 17 million consumers.

Activities marking the 50th anniversary of Vietnam-Laos diplomatic ties are also scheduled as part of the seven-day fair.

Sufficient supply of petrol for domestic use: ministry

The Ministry of Industry and Trade (MOIT) has quashed rumours that Vietnam is running short of petrol for domestic use and said any hoard of this product will be strictly dealt with by relevant agencies.

Vo Van Quyen, head of the Domestic Market Department under the MOIT, said that wholesale petrol companies have an adequate supply of petrol and oil for consumption and that his department will work with relevant agencies to examine filling stations that are said to have refused to serve their customers.

Over the past few days, many filling stations have halted operations or not operated at full capacity, reasoning that there is a power cut or a lack of petrol supply from wholesale trading companies. However, wholesale companies have confirmed that they have enough petrol and oil for supply.

Sources said petrol agents do not want to purchase more petrol and oil due to high transport and low commission costs, putting mounting pressure on wholesale companies to raise retail prices.

The MOIT asked wholesale petrol and gas trading companies to provide a sufficient supply of the product for their distribution networks, including agents and retail filling stations.

It requested the provincial Departments of Industry and Trade, their market management agencies and other relevant agencies to keep a close watch on market fluctuations and hand down heavy fines on any filling stations that hoard petrol illegally to manipulate the market.

The market watchdogs have revoked the business license of a number of filling stations in several localities for hoarding petrol and waiting for a price hike.

HCM City committed to effective use of ODA

Ho Chi Minh City has spared no effort to use official development assistance (ODA) from the Japanese Government in an effective way over the years.

Chairman of the Ho Chi Minh City People’s Committee Le Hoang Quan said this at the August 27 working session with Hiroto Arakawa, Vice-President of the Japan International Cooperation Agency (JICA).

Quan expressed his sincere thanks for Japan’s ODA,to Vietnam, particularly HCM city in a number infrastructure projects such as building an international terminal at Tan Son Nhat  airport, East-West Avenue  and the Binh Hung waste water treatment plant.

He said all these are of great significance to the City’s socio-economic development,

Notably, both sides on August 28 broke ground on a joint project to build Metro Line No 1 in HCM City, which is 19.7 kilometers long.

During the working session, the two sides reviewed the progress of ODA projects, funded by JICA, and discussed measures to speed up site clearance along the HCM city-Long Thanh-Dau Tay express way as well as plans to perfect the urban railway system.

Vietnam invests in two hydro-electric power plant in Laos

Vietnam will help Laos to build two hydro-electric power plants in the southern provinces of Attapeu and Sekong, near the common borderline between the two countries.

This is part of an agreement signed in Vientiane on August 27 by representatives from the Lao Government and leaders of Vietnam’s Song Da (Da River) Group and Vietnam-Lao power joint stock company.

Accordingly, the two plants, namely Sekong3 and Sekaman 4, will be built at the estimated cost of US$278.5 million and US$128 million, respectively.

The Sekong 3 plant with a design capacity of about 205 MW is expected to produce 804 million kWh a year by 2015.

The Sekaman 4 plant with a smaller design capacity will supply 316 million kWh a year by 2016.

The two projects aim to ensure energy security and boost trade ties of both countries.

Vietnam boosts trade promotion in Thailand

Vietnam-Thailand trade turnover reached US$9.5 billion in 2011, announced the Vietnamese embassy at an international forum on human resources in Bangkok on August 27.

The event was attended by hundreds of Vietnamese and Thai businesses and representatives of ministries, agencies and organizations from both countries.

Participants focused their discussions on human resource development in the Southeast Asian region and trade ties between Vietnam and Thailand.

They said Thai investors are keen on the Vietnamese market, with a total amount of capital estimated at US$6.7 billion. Vietnam currently has 56 companies operating in Thailand.

They also stressed the need for the two countries to prepare human resources, complete the legal framework and increase management skills to grasp new opportunities and deal with challenges arising from regional economic integration when an ASEAN Community is established by 2015.

Chakchai, General Director of Amata group – the largest Thai investor in Vietnam, spoke highly of Vietnam’s investment policies and skilled workers, saying that foreign businesses are enjoying simplified administrative procedures in the country.

On the occasion, 75 Vietnamese and Thai organizations and individuals were awarded for their best trademarks and contributions to cultural community development in Southeast Asia.

Petrol distributor plans to diversify operations

State-owned petroleum distribution giant Petrolimex will develop liquefied natural gas and petrochemical industries alongside its current focus on fuel import and distribution, pursuant to a business plan through 2015 approved by the Prime Minister last week.

The plan includes strategic measures to transform Petrolimex into a large-scale economic group using high technology and playing an important role in stabilising the domestic petroleum market and ensuring national energy security.

Under the plan, Petrolimex has also targeted annual earnings by 2015 of over VND358 trillion (US$17 billion) and pre-tax profits of nearly VND4.5 trillion ($214.3 million).

To achieve its goals under the plan, Petrolimex would review its distribution system to increase efficiency of trade transactions and improve product quality. It also intended to expand its network of direct dealers to remote, border and island regions.

The group would also focus on developing warehouses and ports in all major regions of the country to receive imported petroleum products.

To finance its planned growth, it would seek capital from equitisation and bank financing.

The group needed VND5 trillion ($238.1 million) for construction of its Nam Van Phong refinery complex alone, plus another VND4.2 trillion ($200 million) to develop distribution infrastructure.

Under instructions from the Prime Minister requiring it to withdraw investment from non-core and inefficient lines of business, the group would complete a restructuring plan in the third quarter of this year.

US offers hidden potential for exporters

Vietnamese items such as garments and textiles, footwear, wooden furniture and toys have the advantage of cheap labour cost for export to the US, those attending a conference on “the US market- Opportunities for Viet Nam’s enterprises” heard yesterday.

The conference, held in Ha Noi, aimed to introduce opportunities for Vietnamese businesses to penetrate the market. It also focused attention on how enterprises could bypass obstacles in exporting to the market.

Speaking at the event, Nguyen Duy Khien, director of the Ministry of Industry and Trade’s American Market Department, said US businesses often focus on high-tech products.

They therefore tended to outsource their manufacturing in other countries or import labour-intensive items.

Khien said most US companies had taken advantage of their strengths, such as marketing and developing products, while outsourcing production.

Le Xuan Duong, director of the Trade Promotions Depart-ment’s Export Support Centre, said there was a great opportunity for Vietnamese products in the US market due to high demand from the Vietnamese community.

“This could be a bridge to bring Vietnamese goods into the market,” Duong said.

A recent survey of the US community showed that there were 1.7 million Vietnamese living in the US, accounting for 10 per cent of the total Asian people living in the US.

This makes it the fourth largest overseas community in the country after China, India and the Philippines.

He added that Vietnamese food options in the US were limited and Vietnamese immigrants often had to buy products from China, Thailand and South Korea.

Experts said businesses exporting low value products to faraway markets with high transportation and transaction costs would not be able to stay competitive.

They recommended that companies improve their designs and packaging to reduce transportation costs and use online services to approach the market in a more efficient and cost-effective manner.

Marketing congress to be held in Viet Nam

The Viet Nam Advertising Association (VAA) has launched a website www.adasia 2013.vn and announced the official logo of the 28th Asian Advertising Congress (AdAsia) to be held in Ha Noi next year.

The event, scheduled for November 5-8 in Ha Noi, is expected to attract 1,500 delegates from the Asian Federation of Advertising Associations (AFAA) member countries and territories as well as advertising and communications companies and foreign businesses.

The event would be an opportunity for Vietnamese companies to learn more about communications and advertising activities in Asia while promoting Viet Nam’s image in the region, said Tran Hung, general secretary of VAA.

AdAsia has been held biennially since 1958 by AFAA to promote a modern and professional advertising industry in Asia. AdAsia 2011 took place in New Delhi, India.

A Long Corporation buys majority interest in bakery

A Long Joint Stock Corporation signed a contract yesterday to buy 55 per cent of Bao Ngoc Bakery.

Le Duc Thuan, chairman and general director of A Long Corporation, said his corporation would not change the Bao Ngoc trademark and would set up a strategic plan to turn Bao Ngoc Bakery into a country-wide food producer and nutrition foodstuff distributor. It also aimed to penetrate into regional countries.

A Long Corporation said the company would focus on bringing the Bao Ngoc Trademark back to the market. Bao Ngoc products would be strictly produced and supervised under quality production management by Japanese experts and technology.

Preferential interest rates offered to home businesses

OceanBank has started offering short-term loans with preferential interest rates to household businesses.

Borrowers will be offered working capital at preferential interest rate of 14 per cent per year in the first three months and thereafter at the bank’s normal lowest interest rate. This year, the bank is required to target a credit growth rate of 27 per cent.

More bird’s nest products to be exported

Khanh Hoa Bird’s Nest Company has put into operation a canned bird’s nest drink manufacturer in Cam Thinh Dong commune of Cam Ranh City in the central coastal province of Khanh Hoa.

The plant cost VND160 billion (US$7.6 million) with a production capacity of 15,000 products per hour and 50 million products per year.

It exported the first batch of more than 200,000 canned bird’s nest drinks to Australia. In addition, the company would continue to export its products to Hong Kong, South Korea and Japan.

Coffee traders to incur personal income tax

The Ministry of Finance has launched an official dispatch to confirm that income from coffee transactions at coffee trading floors will be subject to personal income tax.

Under the dispatch, commodity exchange companies are responsible for temporarily deducting 0.1 per cent of every transaction via the coffee trading floor and making tax declarations monthly or quarterly.

Airline provides more seats for National Day

Vietnam Airlines announced it would increase domestic flights to meet the rising demand during the National Day.

Accordingly, from August 30 to September 4 the carrier will increase its flights on 11 domestic routes. Flights between Ha Noi-Da Nang, Ha Noi-Nha Trang and HCM City-Nha Trang will increase to serve the high demand of tourists.

Vietnam Airlines will provide a total of 84,000 seats or an increase of 12 per cent over normal daily fights.

Seafood exporters ask ministry to ease obstacles

The Viet Nam Association of Seafood Exporters and Producers (VASEP) has proposed the Ministry of Agriculture and Rural Development remove handling difficulties for fisheries exporters.

Under the proposal, VASEP has petitioned MARD to change some regulations on controlling seafood export products, ease financial difficulties by improving access to loans.

Deutsche Bank ups stake in dairy giant Vinamilk

Deutsche Bank has acquired 3.55 million shares in Vinamilk (VNM), increasing its stake in the dairy processor to 5.42 per cent, Vinamilk announced yesterday. The transaction was completed on August 15 with a final transfer of nearly 3.7 million shares worth an estimated VND415 billion (US$19.7 million). Prior to the purchase, the German bank held a 4.78 per cent stake in Vinamilk. VNM closed up by 1 per cent yesterday to VND103,000 per share.

More brokers suspend margin trading in MSN

HCM City Securities Co announced on Monday that it would suspend margin trading on shares of food processor Masan Group (MSN). Previously, FPT Securities Co also suspended margin trading in MSN, along with some banking stocks, while HCM City Securities Co halted margin trades in shares of property developer Hoang Quan (HQC), Na Ri Hamico Mineral Co (KSS), Tay Bac Mineral Co (KTB) and construction firm Song Da 9.06 (S96). The moves followed a recent scandal involving fraud allegations against two major banking tycoons that has rocked the stock market. MSN finished yesterday unchanged, while other blue chips retreated or plunged to floor prices.

REE increases stake in coal miner

Refrigeration & Electrical Engineering (REE) has acquired 30,000 more shares of Vinacomin-Nui Beo Coal Co (NBC), lifting its stake in the mining enterprise to 5.14 per cent and making REE a major shareholder in NBC under the law, effective August 21.

REE posted a profit of VND7.2 billion (US$342,800) in the first six months of this year, 1.78 per cent higher than in its previous report. Meanwhile, NBC estimated earnings of VND944 billion ($44.9 million) during the first seven months of the year and projected earnings of VND203 billion ($9.6 million) this month. Both shares rose during yesterday’s session.

Curbing inflation remains top priority

The Government should continue pursuing its goal of containing inflation as consumer prices rebounded in August with a month-on-month rise of 0.63% after falling during the previous two months.

The reverse in the consumer price index (CPI) came as no surprise as the prices of essential commodities, including petrol, gas and electricity, have increased recently.

In July, transport and housing costs fell by 2.71% and 0.93% respectively but rallied to rise 1.07% and 2.03% the following month, driven by oil and gas price increases.

The cost of drugs and medical services continued to go up by 5.44% in August after major hospitals implemented the new medical fee scheme. Last month, they increased 3.36%.

In addition, food and restaurant services, which make up a substantial proportion of the overall CPI, dropped slightly by 0.18% month on month, much lower than the 0.47% decline in July.

Many economists said that the drop in consumer prices in the past two month was only temporary since they were affected by items facing volatile prices such as food and energy.

Boosted by spikes in the prices of essential commodities, the CPI in August bounced back with the largest month-on-month rise in the last six months.

Analysts have forecast that the domestic prices of many commodities will continue to rise until the end of 2012 due to the upward trend of prices on the world market.

Growing consumer demand in the final months of the year will also cause the prices of many commodities and services to increase.

Bearing that in mind, the Government should continue its drastic measures as outlined in Resolution 11 to stabilise the economy, curb inflation and maintain steady growth.

Although consumer prices have gained just 2.86% and the year’s target for 7-8% inflation is likely to be met, inflation may spiral out of control in the coming years if appropriate measures are not implemented carefully.

In the past, credit growth has remained modest so monetary policies were not a threat to inflation.

However, the recent move by the State Bank of Vietnam to remove the cap on credit growth for several commercial banks has raised concerns about a large amount of money being injected into the economy.

The disbursement of funds from the State budget will also be accelerated in the final months of 2012.

Therefore, relevant authorities need to co-ordinate monetary and fiscal policies flexibly to ensure an increased money supply will not spur inflation in 2013 and the following years.

Exports in agro-aqua-forestry products touch US$18.1 billion

Ministry of Agriculture and Rural Development on Monday said that export turnover of agro-aqua-forestry products this year have reached US$18.1 billion, an increase of 9.7 percent year-on-year.

In August alone, export turnover of these products is expected to touch $2.35 billion.

In the first eight months of this year, exports of agro products increased by 6.3 percent compared to the same period last year, to reach $10 billion.

Similarly, export of aqua products rose by 6.4 percent to touch $4 billion and forestry products rose 19.8 percent to touch $3.15 billion.

According to the ministry, the export value of most agro-aqua-forestry products has been on an increasing momentum, except rice and rubber where exports have faced a lot of difficulties.

Vietnam has exported 5.5 million tons of rice in the first eight months, yielding a total value of US$2.48 billion. This is up 0.5 percent in quantity but down 8.5 percent in value year-on-year.

China has become the largest export market for Vietnam with an increase of 5.2 times in volume and 4.4 times in value compared to the same period last year.

Rice export has reduced in both volume and value in other markets like the Philippines, Indonesia and Singapore.

Co-op Mart kicks off promotional program

Saigon Commercial Cooperative Union or Saigon Co-op officially opened its promotional program themed ‘Pride of Vietnamese Goods’ at its Hoa Binh supermarket in District 11 of Ho Chi Minh City on August 27.

Vietnam’s leading supermarket chain launched the program in response to the popular ‘Sale Promotion Month’ and the campaign ‘Be Vietnamese Buy Vietnamese’.

Co-op Mart supermarket chain will offer a discount of 49 percent on 2,000 products at 59 branches and 46 of its food outlets. More than 600 suppliers will take part in the program this September, investing more than VND100 billion.

The supermarket has spent VND20 billion on gift vouchers worth VND30,000 per voucher and is offering special prices on many items.

In addition, Co.op Mart supermarkets will organize 200 mobile markets in remote areas, industrial zones and hostels for residents, workers and students to buy good quality goods at reasonable prices.

In related news, around 750 enterprises will participate in an annual ‘Sale Promotion Month’ to start on August 30 and run through September at hundreds of supermarkets, convenience food stores,  electronic and home appliance centers and department stores in Ho Chi Minh City.

The annual ‘Sale Promotion Month’ aims to promote consumer spending and maintain the socio-economic growth rate.

The program will also be an opportunity for enterprises to introduce their products to consumers at reasonable prices and offer attractive discounts, lotteries and free services.

The program will begin with a fair featuring more than 430 display booths for 250 businesses in fields such as garments and textiles, leather, cosmetics, food, electronic goods, plastic and agriculture-forestry-aquaculture products.

The fair will be held at Phu Tho Indoor Stadium in District 11 from August 30-September 3.

EVN buys wind power in Bac Lieu

Cong Ly Construction-Trading-Tourism Co. on Monday signed a contract of selling power of its wind power project in Bac Lieu Province to Vietnam Electricity Group (EVN) at 7.8 U.S. cents per kWh.

To Hoai Dan, director of the firm, told the Daily on Monday that the power price was set based on Decision 37/2011/QD-TTg on price support for power projects issued in June last year by the Prime Minister.

Currently, Cong Ly has finished construction of 110-kV power lines, 22/110-kV substations and other facilities worth a combined VND130 billion, enabling ten wind power turbines of 16 MW of the project’s first phase to generate power in late November. Meanwhile, the second phase is being implemented.

Having a total investment cost of some VND5.2 trillion, the 100-MV wind power project in Bac Lieu Province consisting of over 60 wind power turbines will generate around 320 million kWh for the national power grid every year.

Trade deficit stays low this month

After two months of enjoying big trade surplus, Vietnam has incurred a trade deficit this month with US$150 million which is rather low compared to US$279 million in February and US$527 million in May, reports Chinhphu.vn.

In the eight-month period, January, April, June and July brought a trade surplus, with high numbers of US$361 million and US$559 million recorded in June and July. Meanwhile, trade deficit were seen in other months of the period.

The trade deficit in the year’s first eight months was much lower than that of the same period last year, at a mere US$62 million compared to US$6.54 billion. The deficit this year to date made up less than 0.1% of the total export revenue compared to 10.5% in the year-ago period.

The good trade balance is attributed to strong export growth.

Specifically, the average monthly export revenue in the January-August period reached US$9.17 billion, or a year-on-year rise of 17.8%, which is quite high amid difficulties in prices and markets.

If the monthly export in the eight-month period is maintained in the rest of the year, Vietnam may obtain around US$110 billion in export revenue this year.

There were 16 commodity groups fetching export revenues of over US$1 billion each in the period. Among such groups, garment, phones and accessories, and crude oil were ones having highest revenues with US$9.72 billion, US$7.355 billion and US$5.542 billion respectively.

Some commodity groups with export revenues almost reaching US$1 billion are cassava, cashew, bags, steel products and cameras and accessories.

Vietnam enjoyed export revenues of over US$1 billion in 17 markets such as the U.S. with over US$11.1 billion, Japan nearly US$7.6 billion, China over US$7.2 billion, South Korea over US$2.9 billion and Malaysia nearly US$2.4 billion.

In terms of import, the January-August import growth of 6.7% was much lower than the export growth of 17.8% and also lower than that of the same period last year. If such import growth is kept unchanged in the next few months, this year’s import spending may amount to nearly US$114 billion.

With such estimated import and export figures, this year’s trade deficit may reach some US$4 billion, which is the lowest since 2003.

The trade deficit decline will pave the way for Vietnam to stabilize the macroeconomy, improve balance of payments, stabilize foreign exchange rates and increase foreign exchange reserves.

SGT/VOV/VIR/VNA/VNN/Dtinews/SGGP/ND

No comments yet... Be the first to leave a reply!