ACB gets ready to sell debt
The Asia Commercial Bank (ACB) is considering the sale of VND1.5 trillion (US$71.5 million) worth of bad debts to the Viet Nam Assets Management Company (VAMC).
The bank is the first to voice the possibility of selling bad debt to VAMC, established on July 26.
General Director of ACB Do Minh Toan said the sum accounted for 50 per cent of the bank's total bad debt.
ACB reportedly owns up to VND3,090 billion (US$147 million) of bad debt, 20 per cent more than it did last year. It is the fastest increase in bad debt holdings in the bank's 20 years of operation.
Military Bank wins award for internet payments
The Military Bank (MB) has won the Excellent Electronic International Payment award (or STP certificate) from Wells Fargo, one of the three largest banks in the US.
This award is given to banks that make huge amounts of international payment transfers using the Wells Fargo Bank and have a straight through processing (STP) rate of more than 90 per cent.
The reward is in recognition of MB's new quicker service when processing transactions, that meets international standards, giving their customers a better deal.
In 2012, MB provided the best international payment services for customers recording a STP rate of more than 97 per cent.-
Da Nang reduces vehicle registration fees
The authorities in the central port city of Da Nang has begun to apply cheaper registration fees for vehicles that carry less than 10 passengers.
From today, people registering their vehicles now only have to pay 10 per cent of the vehicle's sale price, down from the previous fee of 15 per cent.
The city, which is the second municipality to cut its fees after Ha Noi, hopes to boost car sales and support car dealerships in financial difficulties.
Agents for Toyota Motors Viet Nam, Hyundai, Kia and Ford in central Da Nang City said that the number of orders they have received for new cars has increased substantially since last month when the reduction in the registration fee was announced.-
New cyber service to provide online gold trading
TienPhong Bank on Wednesday launched its new eGold service that enables customers to trade gold through internet and mobile banking channels.
It is the first bank to provide online gold trading in Viet Nam.
The chairman of TienPhong, Do Minh Phu, said the service would help to reduce costs for the bank and its customers and more importantly, limit the level of risk during gold transactions.
The service will accept transactions from the Sai Gon Jewelry Company (SJC) gold and several types of gold rings from the DOJI Gold and Gemstone Group.
Phu said that after transactions have been completed, customers can collect their gold from the bank's transaction points or can have them held by the bank. The trading prices will follow the listed prices.
The Deputy Governor of the State Bank of Viet Nam, Dao Minh Tu, said the service was very competitive in the domestic market, but emphasised the importance of cyber security measures for protecting the bank and its customers from hackers.
The service was developed with support from DOJI, one of the banks' major shareholders.
eGold can be transacted by mobile devices using iOs and Android operating systems.
Local manufacturing sector improves slightly in July
Viet Nam's manufacturing sector continued to decline in July, albeit at a slower pace, HSBC said in a report released yesterday.
Output and new orders fell at weaker rates and employment was unchanged, it said.
The seasonally adjusted Purchasing Managers' Index registered 48.5 in July, an improvement on June's 46.4, but, by remaining below the no-change mark of 50, it signaled a third successive monthly contraction of the manufacturing sector.
Output and new orders both continued to fall in July, but at slower rates, reflecting soft underlying market conditions, and weakened purchasing power.
The net decline in new orders was partly driven by a decline in new business from abroad as new export orders fell for a second successive month and at the fastest rate since the start of the year.
Excess production was used to build inventories, with stocks of finished goods rising at the sharpest pace since June last year. Inventories have now risen for two months in a row.
On the employment front, Vietnamese manufacturers left staffing levels unchanged during July following two months of contraction.
While some respondents added to payroll numbers to help bolster production, others responded to reduced new orders by cutting staff levels.
Prices were cut further in July, the fourth month in succession that a net fall has been observed.
Discounts were reported to reflect intensifying market competition and efforts to stimulate sales. There was some evidence that prices were reduced to help clear excess inventories.
In contrast, costs continued to rise. Inflation has now been registered for seven months in a row, with a limited supply of inputs reported to have pushed up prices. There was also evidence that a stronger US dollar raised import costs.
Trinh Nguyen, Asia Economist at HSBC, said: "The further deterioration of Viet Nam manufacturing activity reflects both weak domestic and external conditions.
"The SBV recently reduced the OMO rate by 50 basis points to ease liquidity conditions.
"But that is likely a stop-gap solution as fundamental reforms are required to resolve Viet Nam's credit challenges."
The HSBC Vietnam Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchase executives at around 400 manufacturing companies.
Power price rises on back of coal, gas hike
The price of electricity has been raised to an average 1,508.85 VND per kWh (exclusive of value added tax) starting August 1, an increase of 71.85 VND (5 percent).
The move was announced by the Ministry of Industry and Trade on July 31.
The new electricity price will range from 993 VND per kWh (0.046 USD) to 2,420 VND per kWh (0.1142 USD) for households.
The adjustment aims to partly compensate for the increased cost of power generation caused by increased coal and gas prices.
Poor and low-income households that use 0 to 50 kWh per month will be charged the same amount (993 VND) as before but households that use 100-400 kWh per month will be charged an additional 6,800 VND to 37,000 VND per month.
The last electricity price rise was on December 22 last year, with an increase of 5 percent (or 68 VND per kWh) to 1,437 VND per kWh.
The latest rise is expected to cause concern among the public and businesses, many of which are struggling to cope with the economic recession.
Foreign investor confidence improves
The confidence of foreign investors in Vietnam's economy continued to rise thanks to the improvement of macro-economic stability, the National Finance Supervision Committee (NFSC) has said.
The country's credit risk level, measured by the Credit Default Swap (CDS) coefficient, had been lowered from over 300 points in the same period last year to around 220 points on July 23.
The committee said in its economic report for the first seven months of the year released on August 1 that the monetary and financial market has been improved, contributing to the economic stability and reducing risks.
Interest rates fell from late last year and liquidity of the banking system was much better than in the previous period as Lease Rental Discounting (LRD) continued to decline.
It added that the exchange rates had been fluctuating in a short period after the State Bank of Vietnam adjusted the official exchange rate, mainly due to psychological factors.
In addition, there were some other factors causing slight effects on the exchange rate, including demand to balance and adjust forex positions of commercial banks and businesses.
Foreign investors adjusted investment portfolios as they withdrew approximately 450 million USD on the bond market and around 100 million USD on the stock market.
However, the committee said the exchange rate fluctuation would be temporary and supply and demand of foreign currency in the second half of the year would be stable. Foreign reserves were also forecast to continue to increase.
Seven month retail figures post 4.9 percent increase
According to the General Statistics Office, total retail sales and services were estimated at VND213.3 trillion in July, up 0.4 percent compared to the previous month and 12.8 percent year-on-year.
In the first seven months of this year, total retail sales and services reached VND1,480 trillion, up 12 percent year-on-year.
Of the seven-month total retail sales and services, trade reached VND1,140 trillion, up 11.4 percent, accounting for 77 percent; hotels and restaurants hit VND179 trillion, up 14.7 percent, accounting for 12 percent; services touched VND151 trillion, up 14.9 percent, accounting for 10 percent; and tourism was at VND14.3 trillion, up 2 percent, accounting for 1 percent.
Challenges face sugar sector before next crop
Many challenges lie ahead for the sugar sector, what with slower consumption, excess supply as compared to demand, and unchecked smuggling of sugar across borders.
Sugar manufacturers have so far processed 19 million tons of sugarcane to yield 1.53 million tons of sugar, an increase of 2.2 tons over the previous crop, according to the Ministry of Agriculture and Rural Development.
In 2011 and 2012, about 298,200 hectares of sugarcane was cultivated nationwide, 15,000 hectares more than the previous crop, with yield of 63.9 tons per hectare.
By July 2013, sugar inventory increased to nearly 426,000 tons, about 187,000 tons more than in the same period last year.
In August, September and October of 2012, sugarcane processed across the country was 190,000 million tons, whereas domestic sugar consumption is only 230,000 tons and imported sugar is 40,000 tons.
Sugar supply is now far in excess of demand by about 200,000 tons, before the next sugarcane crop. This puts huge pressure on sugar plants, said Doan Xuan Hoa, deputy director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.
As per an International Sugar Organization report, world sugar output was more than 187 million tons by May end, 7.5 million tons higher than in the last crop.
Sugar supply is thus far in excess of demand by about 10 million tons whereas it is forecast that sugar output in the 2013-2014 crop will be in excess of 1.5 million tons.
Despite low price of sugar in the market, plants cannot reduce price of sugarcane, resulting in some plants temporarily shutting down.
In addition, farmers have been forced to reap sugarcane early to avoid expected flooding in the Mekong Delta Province of Hau Giang.
The Vietnam Sugar Association has proposed to the Government to have flexible policies to boost sugar exports to China and for authorized bodies to strictly tackle sugar smuggling, so as to help boost the sugar sector.
EVN to increase power price from August
Vietnam Electricity on July 31 unexpectedly announced an increase of 5 percent in power price from August 1.
Accordingly, power price will now be VND1,508.85 per kWh, not including value added tax, up by 5 percent on the current power price of VND1,437 per kWh.
The state-run power company explained that the adjustment in power price is to cover part increase in power generation cost as the price of coal and gas has surged, especially, coal has risen 37-41 percent since April 20 this year.
This increase in power price will not have any effect on poor and low-income households who consume zero to 50 kWh, but households consuming 100-400 kWh per month will be charged an additional VND6,800-37,200 per month.
Singaporean businesses turn attention to Vietnam
Siu Lin Leow, Singapore’s Consul General to HCM City, has said Vietnam is now the most attractive destination for her country’s intrepid investors.
Siu made her remark at an August 1 meeting in HCM City honouring 40 years of Vietnam-Singapore diplomatic relations and the 48th anniversary of Singapore’s National Day.
Singaporean companies have invested their hopes as well as their resources in their Vietnam-based operations, she said.
Siu expressed pride in the current state of the two countries’ relations, with significant bilateral achievements recorded in economics, education, health care, culture, and national defence.
The strength of the political links between Vietnam and Singapore are a firm foundation for future expansions of economic interconnection, she stated.
Recent statistics reveal Singapore has invested in 1,100 projects in Vietnam, totalling almost US$25 billion in registered capital, making it the fourth largest foreign investor in the country.
HCM City People’s Committee Vice Chairman Le Manh Ha said the more than 500 Singaporean businesses calling the city home testify to health of the two countries’ economic cooperation.
Singapore became HCM City’s second largest trade partner in 2012, their US$6.09 billion in two-way trade turnover accounting for 60% of the total Vietnam-Singapore trade revenue.
Malaysian giant joins US$3.5 billion power plant
The Ministry of Industry and Trade (MoIT) and Malaysian Toyo-Ink Corporation on August 1 signed a Memorandum of Understanding (MoU) on the Hau River 2 thermal power plant to be built under the build-operate-transfer (BOT) model.
The US$3.5 billion plant, which comprises two turbine generators with a total capacity of 2,000 MW, will use imported coal to supply electricity.
The first generator of the plant is expected to start commercial production in the second quarter of 2021, and the entire plant in the second quarter of the following year.
Song Kok Cheong, CEO of Toyo-Ink, said the corporation has worked with Vietnam Electricity (EVN), other related agencies, localities and banks to run the project smoothly.
He also committed to following the progress and ensuring the project’s quality as set by the MoIT.
Deputy Minister of Industry and Trade Le Duong Quang affirmed that Vietnam’s total coal-fired power capacity needs to reach 36,000 MW, accounting for 47% of the whole power generation system’s capacity.
To meet the goal, the Vietnamese Government has issued policies and incentives to encourage investors, both in and out of the country, to join in building the core constructions in different cooperation forms, including the BOT model, he said.
SBV keeps close watch on lending
The State Bank of Vietnam this week instructed its branches across the country to closely monitor and inspect consumer loans from commercial banks.
The move is expected to ensure consumer-lending operations comply with applicable regulations and protect the rights of borrowers.
Accordingly, branches, transaction offices and the service introduction points of credit institutions must publish detailed interest rate information applicable to each product group and each loan product.
Additionally, the SBV branches, in collaboration with the banking supervisory agency, must strictly handle violations detected through inspecting and monitoring the activities of credit institutions in the respective areas.
The move was made after experts recently said that some banks have loosened their lending conditions for consumer loans to boost lending since deposits continue to rise amid slow credit growth. Some even offered consumer loans without mortgages or collateral.
The SBV reported that total deposits rose 9.48% in the first seven months of the year, while lending increased only 4.91%.
Additionally, the credit growth target of 12% set by the central bank for 2013 has also made many banks seek ways to loosen their lending conditions. Previously, banks applied strict requirements to their lending conditions for consumer loans in order to limit risks and avoid bad debts.
A foreign invested bank is offering borrowers loans as high as VND500 million (US$23,800), with interest rates at about 1.75% per month, on gradually decreased outstanding loans (equaling to 0.97% per month on fixed lending interest rate) without mortgages or collateral.
Another commercial bank is also trying to attract borrowers by giving shopping vouchers worth up to VND1 million (US$47.6) and an interest rate of 1.5% per month (18% per year), if they apply for 60-month consumer loans.
Experts said it is clear that lowering the credit standards may put banks into risk, which also significantly affects the credit quality of the entire banking system.
Bad debts are on the rise, if banks try to achieve credit growth at any cost, it will create bad consequences for the entire banking system, as well as the economy, expert warned.
Hau River 2 power plant to follow BOT model
The Ministry of Industry and Trade (MoIT) and Malaysian Toyo-Ink Corporation on August 1 signed a Memorandum of Understanding (MoU) on the Hau River 2 thermal power plant, which will be built towards the build-operate-transfer (BOT) model.
The plant, which will have a total capacity of 2,000 MW, comprises of two turbine generators and will run on imported coal to supply electricity, contributing to ensuring national energy security, particularly in the southern region.
According to Director General of the MoIT’s General Department of Energy Pham Manh Thang, the first generator of the plant is expected to start commercial production in the second quarter of 2021, and the entire plant in the second quarter of the following year.
The General Department pledged to provide guidance and work closely with the investor to ensure the progress of the project, Thang added.
Song Kok Cheong, CEO of Toyo-Ink, said with the support of the MoIT, the corporation has worked with Vietnam Electricity (EVN), other related agencies, localities and banks to run the project smoothly.
He also committed to following the progress and ensuring the project’s quality as set by the MoIT.
Addressing the signing ceremony, Deputy Minister of Industry and Trade Le Duong Quang affirmed that Vietnam’s total coal-fired power capacity needs to reach 36,000 MW, accounting for 47 percent of the whole power generation system’s capacity.
To meet the goal, the Vietnamese Government has issued policies and incentives to encourage investors, both in and out of the country, to join in building the core constructions under different cooperation forms, including the BOT model, he said.
New hospital fees to hit CPI
The national consumer price index (CPI) in August may rise by 0.6 per cent above the previous month when Ha Noi adjusts its hospital fees, the Domestic Market Management Group, under the Ministry of Industry and Trade (MoIT), forecast on Tuesday.
In August, the commodity market will be affected by factors such as weather, because the rainy season will affect the prices of food; an increase in the forex rate; higher fuel prices in the world market; and costs for the new school year.
The oil and gas price hike on July 17 from VND420-470 (US$0.019-0.022) per litre will contribute about 0.1-0.15 percent to the rise of the CPI in August over July.
The supply and demand in the market doesn't fluctuate much, so some products, such as foodstuff, fertiliser and sugar, remain on a stable trend.
However, as yesterday Ha Noi adjusted the fee of health care services, the CPI in August may rise about 0.6-0.7 per cent, twice as much as the estimated figure.
Earlier, the General Statistical Office (GSO) announced the country's CPI for July rose 0.27 per cent over June, marking it the strongest surge in the past five months.
If compared to last December, the CPI in July increased 2.68 per cent and is up 7.29 per cent from the same period last year.
Third hike in gas prices
Gas prices increased yesterday by VND667 ($0.03) per kilo or by VND8,000 ($0.38) per 12-kg canister.
After this latest increase, the current retail gas price stands at around VND386,000 ($18.4) per 12-kg canister.
The hike in domestic gas prices is due to higher prices on the global market, said Do Trung Thanh, the head of the business department at Sai Gon Petro.
He added that prices for deliveries in August in the global market have risen by $27,5 per tonne to hit $820 per tonne.
This is the third consecutive rise in gas prices since the beginning of June.—
Retail, wholesale job listings soar 85%
Recruitment website VietnamWorks, announces an incredible 85 per cent spike in job listings in the retail and wholesale sector in its latest report.
This is a key finding in VietnamWorks's second Online Employment Report for 2013, as the spike in job listings is in stark contrast to the country's most stagnant retail sales growth rate since 2004.
"While the general word-around-town has retail truly suffering, this has not been reflected in our data for the quarter where we saw job listings almost double in the period," said Jonah Levey, founder and chairman of VietnamWorks.
"Overall we saw a robust increase of 14 per cent in online employment demand in the second quarter of 2013 compared to the same quarter last year," he said.
"As Viet Nam's sluggish economic development has recently accelerated during the second quarter, our Q2 numbers follow the increasing trend from Q1 and hopefully solidifies the growth foundations for the rest of 2013," he added.
Other important findings in report show Da Nang as the best city in the nation to find a job in the next quarter, ahead of Binh Duong and Ha Noi.
Bac Ninh also repeated a huge increase in online labour demand (53 per cent) where several large investments saw a spike in demand, followed by Da Nang (34 per cent) and Binh Duong (31 per cent). These are increases in Q2, up from Q1.
"The government's new investment policies in Da Nang have generated a notably positive effect on confidence and foreign investors have quickly picked up the welcome move. Going forward, the job market and talent pools at Da Nang will benefit from the Government's commitment to invest heavily in its infrastructure," Levey said.
The policies will also help attract foreign industrial and ICT giants, he added.
The report said the best industries for job seekers are retail and wholesale (up 85 per cent), pharmaceutical and biotech (up 35 per cent), insurance (up 27 per cent), customer service (up 25 per cent) and consulting (up 24 per cent). Meanwhile, oil and gas, banking, civil construction, architecture and interior design, and human resources did not fare as well, reporting declines of 23 per cent, 10 per cent, 4 per cent, 2 per cent and 2 per cent respectively.
These industries also fared poorly in the first quarter.
In a similar finding to the Q1 study, customer service, accounting and finance, production and process saw the biggest increase in number of applications, whereas architecture, human resources and banking got the most notable decrease in Q2 labor supply.
As the banking sector is coping with economic difficulties by cutting staff, it has not only witnessed a strong decline in job postings but also the biggest decrease in job seekers, Levey said.
GAS says profit discrepancy was mistake
The PetroVietnam Gas Corporation (GAS) has said the VND800 billion (US$37.7 million) discrepancy in its financial reports from the first six months of this year was due to false estimation.
In a statement, the company said profit calculations were made on the 25th day of June, before the end of the second quarter.
"By that time, we could not collect all the cost and revenue figures for the entire company to generate a precise estimate for the period".
The early estimate was posted on GAS's website on July 18, showing the company had earned a net half yearly profit of VND6.2 trillion ($292.4 million).
A week later, a second report was sent to the HCM City Stock Exchange saying profits had actually exceeded VND7 trillion ($330.1 million).
Analysts say the company's explanation does not explain the significant discrepancy between the two figures.
The first report which indicated a second quarter profit of VND2 trillion ($94.3 million), declining 50 per cent from the first quarter, triggered a major sell off in GAS shares. In the week before the correction, company stocks dropped from VND65,500 ($3) to VND63,000.
GAS closed yesterday's session at VND63,500 ($2.9) per share, up 0.8 per cent from Tuesday.
Vinamilk to set up subsidiary to rear cattle and poultry
The Viet Nam Dairy Products Joint Stock Company (Vinamilk) announced on its website a decision by its Board of Directors to co-operate with Thong Nhat Thanh Hoa Co Ltd to establish Thong Nhat Thanh Hoa Cow Milk Co Ltd.
The subsidiary will be set up in the fourth quarter of this year, with a charter capital of VND600 billion (US$28.57 million), VND570 billion ($27.14 million) of which will be invested by Vinamilk. The new business will focus on rearing cattle and poultry.
Exports, imports targeting Germany surge in first half
Bilateral trade between Viet Nam and Germany reached US$3.695 billion in the first half of 2013, up 29.51 per cent on last 2012 figures.
According to the General Department of Viet Nam Customs, export earnings from Germany reached $2.352 billion (up 22.35 per cent from 2012), accounting for 18 per cent of Viet Nam's total export earnings from the European Union (EU).
Viet Nam's main exports to Germany included electronics, textiles, coffee and footwear. Whilst primary imports from Germany included electronic components, machinery, chemicals and automobiles.Total imports from Germany came in at $1.342 billion, up 44.32 per cent on 2012 figures.
Australia checks Viet Nam for power transformer dumping
Viet Nam is one of several Asian countries being investigated by Australia for alleged dumping of power transformers.
Other suspected countries and territories include mainland China, South Korea, Indonesia, Thailand and Taiwan.
Australia's anti-dumping commissioner said an investigation was held after two power transformers were allegedly offered for sale well below the normal price.
In Viet Nam, the Trade Defence Measures Office under the Ministry of Industry and Trade said it was the first case of alleged dumping between the two countries.
A representative from global trade atlas, GTIS, told Viet Nam News that the value of the two imported transformers was over US$14 million in 2012. The commissioner invited interested parties to lodge online submissions concerning the dumping no later than September 9. Submissions can be lodged at http://www.adcommission.gov.au.
HCM City opens more price stabilised outlets
The number of outlets selling goods at stabilised prices in Ho Chi Minh City, the country’s largest economic hub, had totalled 7,500 as by July 30, 483 more than the figure in April, 2013 when the city launched the price stabilisation programme.
This year’s price stabilisation programme focuses on four groups of goods, including essential foods and foodstuff, schooling materials, medicines and dairy products.
HCM City has set a target of opening 525 more outlets, including five supermarkets, 37 convenient shops, and 30 Co.op marts by the end of the programme on March 31, 2014.
At a conference to review the efficiency of the programme on July 30, Deputy Director of the municipal Department of Industry and Trade Le Ngoc Dao said the firms joining in the programmes are working to ensure the supply of quality goods for the market as assigned.
The department has designed a logo to label price stabilised goods and will publicise it in October to make it easier for customers when shopping, Dao said.-
SBV survey finds optimism among domestic banks
More than 55 percent of commercial banks expect their business performance results this year to outstrip last year, while 14.1 percent hold the opposite opinion.
According to the latest survey conducted by the State Bank of Vietnam’s Monetary Statistics and Forecasting Department, 71.4 percent of banks expected their profits to rise in the second half of this year, although at a predicted level of below 10 percent.
As much as 65 percent of banks predicted that their profits would increase this year compared to 78.4 percent of last Decembers poll, which indicates that banks are more cautious about predicting profit growth for this year after the unexpected results in the first half of the year.
The business performance results of most of banks in the first half of this year left many disappointed. Only 30.4 percent of banks said that their performance results had improved in H1 against 40.2 percent in the December survey.
Nearly 50 percent of banks also reported that their pre-tax profit has fallen, mostly between 20-30 percent, over the same period last year.
However, banks are still optimistic about the future, saying that the business climate is improving at last. Most banks forecast that both deposit and lending interest rates will drop further over the next 3-6 months.
63.3 percent of banks expected a better business outlook in the second half and only 3.8 percent were pessimistic about the economic climate in the latter months of 2013.-
Chinese machinery, equipment showcased in HCM City
Machinery and equipment used in construction, packaging and food processing are on display at the 14th Chinamac Fair 2013 in Ho Chi Minh City from July 31-August 3.
Together with the 2nd international exhibition on metalworking and welding technology, the fair is co-hosted by the Vietnam advertising and fair exhibition company, the China Light Industrial Corporation for Foreign Economic & Technical Cooperation and the Viet Trieu Hong Kong international exhibition company.
As many as 150 exhibitors from 11 countries and territories worldwide have come to the events exhibiting their products and technologies. Machinery used in paper production, garment and renewable energy are also available.
The exhibitions are held annually to promote trade and industry in the region and the world, and between Vietnam and China in particular.
US$20 mil. cemetery opened in delta
Fairy Park-Mekong Co. Ltd opened a cemetery named Son Trang Tien Canh with total capital of US$20 million in the Mekong Delta province of Hau Giang on Sunday.
The project, located along National Highway 61 in Thanh Hoa Commune, Phung Hiep District, is aimed to meet the demand for grave preservation among residents in the delta where graveyards are often flooded in the rainy season, said Trinh Quoc Trung, general director of Fairy Park-Mekong.
This is the second cemetery project of Malaysia’s Fairy Park Group in Vietnam after the one built two years ago in Truong Hoa Commune in Hoa Thanh District in the southern province of Tay Ninh.
U.S. helps improve city’s water supply system
Saigon Water Corporation (Sawaco) on Tuesday struck a deal with U.S.-based Astro Systems Group to renovate information technology and communications for the city’s water supply system under a project costing US$650,000.
Under the agreement, Astro Systems will support Sawaco to improve the system of supervision and data collection on water distribution in districts. Besides, the U.S. firm will also help Sawaco prepare its business strategy.
The project will be deployed in six months. Of its total cost of US$650,000, some US$593,000 is provided by the U.S. Trade and Development Agency as non-refundable capital and the balance from Sawaco.
Sawaco is going to execute another environmental plan in which a sludge treatment plant for the city’s water plants will be constructed with total investment of US$50 million, Tran Dinh Phu, general director of the firm, told the Daily on Tuesday.
Sawaco has already borrowed US$18 million from the Belgian Government and has also asked the Asian Development Bank for the remaining capital to have the project getting off the ground early next year, Phu said.
Many investors eye expressway project
Dau Giay-Phan Thiet Expressway attracted the interest of many investors who attended promotion events held in three Asian countries last week, said the management board for public-private partnership (PPP) projects under the Ministry of Transport.
A presentation about this project was delivered to international investors in India’s Mumbai on July 22, South Korea’s Seoul on July 24 and Singapore on July 26. About 100 investors from infrastructure development firms and financial institutions in the region expressed their interest in the expressway project, said the transport ministry in a statement released on Monday.
Dau Giay-Phan Thiet is the first expressway in Vietnam to be built under the PPP format to ensure the financial feasibility of the project, making it attractive to private investors.
The project will set an example of PPP mechanism development in Vietnam, serving as a precedent for other traffic projects to be developed in the PPP form in the future, said Deputy Minister of Transport Nguyen Ngoc Dong.
Bitexco Group has been named the first investor of this expressway project and will contribute 60% of the total capital. The second investor will be chosen via bidding and will contribute the remaining 40%.
Dau Giay-Phan Thiet Expressway, stretching a total of 98.7 kilometers, will have six lanes and a vehicular speed of 120 kilometers per hour.
The US$750-million project will help shorten the time for travel from HCMC to the southern central region and tackle traffic congestion on National Highway 1A. Also, it will facilitate formation and development of industrial zones and tourist sites along the route.
Industrial inventories remain high despite strong export
The industrial inventory index as of July 1 had risen 8.8% year-on-year although foreign-invested enterprises (FIEs) had achieved impressive export growth.
The inventory percentage of the processing-manufacturing sector stood at a high level in the first half of the year, 75.4%, according to the General Statistics Office (GSO). The index is identified by the division of the month-end inventory by the average inventory of the month.
“The normal level should be 65%,” said Pham Dinh Thuy, director of GSO’s Industrial Statistics Department.
Some items had a high inventory index, such as chemicals, pharmaceuticals and food.
Industrial production conditions were barely improving while consumption in the first six months picked up 8.3% over the same period last year. Textile-garment makers enjoyed an increase of 10.6% in consumption and manufacturers of computers and electronic products recorded a rise of 9.7%.
Whereas the industrial inventory index remains high and consumption has risen insignificantly, FIEs have achieved considerable growth in exports of many items.
Exports of mobile phones and components in the first seven months of 2013 are estimated at US$11.6 billion, a huge increase of 87% year-on-year. Computer and component exports have brought in US$5.7 billion, up 40.4%.
Asked if strong export of a number of items made by FIEs would help reduce the industrial inventory index, Thuy said the effect would be minimal since FIEs represented only 30% of the total industrial production value of the country.
FIEs have a great impact on export growth but they do not affect the production value much because most of them are simply assemblers and processors. While their exports have risen strongly, imports have also gone up, leaving little effect on domestic production, and unable to stimulate consumption and reduce inventories, said the Trade Information Center of the Ministry of Industry and Trade.
Consumer demand far from recovery
The demand for fast-moving consumer goods (FMCG) has yet to recover, proven by its low growth in this year’s second quarter, says a report released by the market research firm Kantar Worldpanel.
The FMCG sector’s value in cities in the second quarter did not increase compared to the same period last year while that in rural areas rose around 11%, according to the report.
Dairy products and drinks still took the lead in the market segment while packed foodstuff almost did not grow in rural areas and even plunged 3% in cities.
Groceries still maintained strong growth while growth of other main shopping channels has been on the wane, noted the report.
Notably, mini supermarkets and convenience stores continued to grow strongly thanks to a thorough knowledge of the convenience demand among urban residents as well as a widespread expansion of new stores.
In terms of drinks, Kantar Worldpanel experts recorded staggering growth of wheat beverage products in cities and of mineral water in rural areas during the second quarter. In urban areas, the product marked a growth rate of 31% in sale volume over the year-ago period, which is ascribed to a rise of 19% in the average consumption volume of every household.
Overall, however, local consumer demand has still failed to improve as observed by Kantar Worldpanel. Low-income people in urban and rural areas are the most vulnerable ones who were even forced to cut down on FMCG spending in the second quarter.
With the current tough market conditions, an effective segmentation strategy designed for different income groups will help producers grasp business opportunities from the changes of local demand, said David Anjoubault, general director of Kantar Worldpanel.
As low- and middle-income earners will continue to shift to products with low prices, it is extremely important to adjust the strategy accordingly to maintain this segment’s growth. Meanwhile, consumers with higher incomes will continue to be the pioneers in new consumer trends, especially those targeting health, convenience and better high-class values, he remarked.
Gov’t says no to demand stimulus
The Government in a report delivered at a regular meeting on Tuesday stated the macro-economy had been kept basically stable and inflation had been well restrained in the first seven months of the year, but no demand stimulus would be given.
Still, Minister-Chairman of the Government Office Vu Duc Dam remarked economic growth had been below its potential.
“The Government is fully aware of the stagnant economy and an increasingly higher risk of lagging behind if we do not succeed with the restructuring scheme,” he said at the meeting on Tuesday.
As per the Government report, the July consumer price index (CPI) picks up 2.68% against end-2012, the lowest increase over the same period in 2004- 2011.
The target for 7% inflation set by the National Assembly (NA) is attainable, Dam said.
There have been suggestions for demand stimulus, but the Government must take prudence.
“The Government has discussed and analyzed the opinions of experts at home and abroad, and found that macroeconomic stabilization cannot be ignored,” he said.
He explained: “Normally, when demand stays low, there is a need for stimulus, but without prudence, demand stimulus may fuel inflation.”
According to the report, credit growth as of July 25 had reached 5.02%, versus 1.2% in the same period last year, somewhat easing the pressure exerted by the credit growth target of 12% for this year.
Interest rates have gone down in line with inflation. Credit growth, reduced lending rates and tax breaks have greatly helped businesses overcome their hardships.
Businesses in the preferred sectors are offered a lending rate of 7-9% per year. However, those active in other sectors are given a rate of 11-13% for short-term loans and 13-17% for the long-term loans.
Though many banks have eased lending conditions, credit flow into the economy remains stagnant.
Speaking at the meeting, Deputy Prime Minister Vu Van Ninh said he was anxious about little progress in bad debt settlement.
Slow bad debt resolution is the main reason why cash flow into production is poor since banks are not keen on giving loans to corporate clients even though they pledge assets.
Talking to the media at the launch of Vietnam Asset Management Company (VAMC) last Friday, Nguyen Huu Nghia, chief inspector of the central bank, said most debts were mortgaged by real estate, which could hardly sell now. Therefore, lenders are unable to collect debts and do not want to give out loans in the traditional mortgage form any more.
If businesses failed to use loans efficiently, banks would rather have low credit growth and focus on debt recovery. For example, Vietcombank recorded a negative credit growth rate of minus 1.1% in the first six months, but its bad debt by end-June had declined to 2.7% from 3.22% in the first quarter.
Government bond sales were also counted in credit growth. Although the average bond yield keeps falling, the State Treasury by June 25 had sold VND120.5 trillion worth of government bonds, meeting 61.8% of the year’s target.
HNX transaction processing capacity boosted
The Hanoi Stock Exchange (HNX) this Monday started operating the upgraded trading system with a transaction processing capacity increased by 20 times.
This trading system is capable of handling 20-30 million orders per session, or 15,000-20,000 orders per second, over 20 times greater than the capacity of the old system, according to HNX.
The implementation of this system marks a step forward in trading technology of HNX and the stock market, a step closer to the global norm, providing the stock market with better liquidity.
The upgraded trading system is formed by integrating the trading systems for the stock market, the market for unlisted companies (UPCoM) and other markets expected to open in the future into a single trading platform. It facilitates transaction management and operation and save resources when operating the existing markets and those to emerge in the future.
The new trading system enables diversification of products (stocks, fund certificates and exchange-traded funds, etc.) as well as diversification of trading orders. It also permits application of more advanced technology in the future.
Together with the trading system upgrade, HNX prolonged the closing time to 3 p.m., changed the structure of a trading session and introduced new types of orders, including market-to-limit (MTL), market-fill-or-kill (MOK), market-fill-and-kill (MAK) and at-the-closing (ATC) orders.
HNX also set out rules for order edit and cancel. In addition to price correction, investors are allowed to change the volume of orders, but they cannot cancel orders in the last five minutes of a periodic order matching session.
Moreover, there are changes in reference price determination (reference price now equals to the closing price of the previous day) and additional provisions for odd-lot transactions (odd-lot transactions are done through continuous order matching and negotiation).
Regarding treasury shares, there are additional regulations on a maximum adjustment of the daily volume of orders for trading of treasury shares from 5% to 10% of the total registered volume in the documents businesses send to the State Securities Commission.
Đăng ký: VietNam News