Setting up new banks: green light on

Setting up new banks: green light on
16:41' 13/06/2007 (GMT+7)
VietNamNet Bridge – The regulation on setting up joint stock banks has been promulgated by the State Bank of Vietnam, paving the way for the establishment of more banks after a decade with no new banks.



With the aim of creating healthy competition in the market, while only allowing the most capable banks to be established, the central bank has set up strict requirements for candidate banks.

In order to get operation licences, banks must follow the strict requirements on chartered capital stipulated by the Prime Minister in different periods. From now until the end of 2008, the required chartered capital is VND1tril ($62.5mil) at minimum. After December 31, 2008, investors must have at least VND3tril to be eligible to set up banks.

Investors must make capital contributions to banks with their own money; they are strictly prohibited from making capital contributions with borrowed money.

Foreign investors are not allowed to make capital contributions to newly set up banks. They are only allowed to buy stocks of local banks which have been operating for two years at least. The foreign ownership in a local bank must not be higher than 30%.

A bank to be set up after the regulation comes into effect will have at least 100 shareholders, including three founding institutional shareholders who have the minimum assets of VND2tril and chartered capital of VND500bil.

In case the founding shareholder is a commercial bank, it must have the minimum total assets of VND10tril, chartered capital of VND1tril, and a bad debt ratio of below 2%. Shareholders are not allowed to transfer shares within three years of the day of licencing. Founding shareholders can only transfer shares among themselves within five years of the day of licencing.

Every institutional shareholder is allowed to hold 20% of the bank’s chartered capital at maximum. Individual shareholders are allowed to hold 10% of the bank’s chartered capital at maximum. Shareholders must get the Prime Minister’s approval to hold more than the above proportion of shares.

The regulation on setting up banks was promulgated on June 7 and will be valid 15 days after the regulation is published in the official gazette. Kieu Huu Dung, Director of the Banks and Non-banks Credit Institutions Department under the State Bank of Vietnam, said that right after the regulation came into effect the central bank would release a notice about receiving the applications for setting up new banks.

Twenty five applications for setting up joint stock banks have been sent to the central bank. All of them have the tentative capital sums of VND1tril and higher, and one of the banks has the impressive capital of VND3tril. However, Mr Dung said that the central bank would not consider any applications until the regulation came into effect.

State Bank Governor Le Duc Thuy stated at a meeting with the press in March that the central bank would not be soft in licencing new banks. Prior to that, experts warned that many investors would set up banks not for doing business themselves, but for reselling their operation licences.

IZs in Mekong River Delta left idle

IZs in Mekong River Delta left idle
16:39' 13/06/2007 (GMT+7)
VietNamNet Bridge – There are 120 existing industrial zones (IZs) in the Mekong River Delta area, but only four of them are fully occupied.


The Tra Noc IZ, one of the few effective IZs in the Mekong River Delta
The biggest problem of the IZs in the area is that they do not fit in with the master development plans of the area, while every IZ develops in its own way. This has resulted in waste in land funds and investment. Moreover, pollution in the IZs has become alarming.

The land in the Mekong River Delta has been mainly used for cultivation. Foreign experts have also said that the delta is the ideal area for agricultural development. However, the wonderful land area suitable for growing paddies and fruits has now been turned into industrial zones.

The programmers in the Red River Delta seem to think in a simple way. They believe that changing the land for agricultural cultivation into land for industrial production will help speed up the local economic restructuring process, and create jobs for labourers.

Local authorities have been put under pressure to obtain high GDP growth rates; therefore, they have tried to set up as many IZs as possible, though they did not make good preparations for the IZs. A series of IZs have been born, leaving farmers bare-handed as they do not have land any more to cultivate.

The IZ programmers never made thorough studies before designing the IZs. It seems they never sat together to discuss the strategy on the Mekong River Delta development in general so every locality has been setting up their own policies, which, as a result, has spoiled the common development plan.

In fact, IZs in the Mekong River Delta have low land use ratio. Most of them see the occupancy of 36-40%, and in some IZs, the ratio is 5% only.

Trade with Japan could reach $18bil

Trade with Japan could reach $18bil
16:54' 13/06/2007 (GMT+7)
VietNamNet Bridge – Bilateral trade value between Vietnam and Japan is expected to reach about US$18bil by 2010 if the Vietnam-Japan Economic Partnership Agreement (EPA) is approved, according to Vietnamese trade counselor in Japan, Nguyen Trung Dung.



Dung said the list of Vietnamese items eligible for Japan's taxation preferences would be lengthened.

"There will be many more Vietnamese products eligible for the Japanese market. They include agricultural products, art arid handicrafts and seafood," Dung said.

He also said that the signing of the EPA would not only result in the opening up of the two countries' markets, but also create opportunities for Vietnamese and Japanese businesses to expand their relationships in many fields such as investment, tourism, human resources development and cultural exchange.

"Thanks to the agreement, Vietnam will gain access to Japan's financial and technical assistance in science, technology, e-commerce, finance and banking."

He said the third round of negotiations to draft the EPA has just finished in Tokyo.

"At this round of talks, the two sides had detailed discussions relating to many areas such as investment, industry, agriculture and labour and have agreed many issues," he said.

"Both the Vietnamese and Japanese sides want to end negotiations and sign the bilateral partnership this year."

Dung said the Vietnamese and Japanese relationship was developing very well in many sectors, particularly trade, tourism and investment.

This was evident from the bilateral trade value of VND10bil ($625,000) in 2006.

The US$18bil bilateral trade value target was feasible, he said. "I have worked as a trade counselor in this country for many years. However this is the first time I saw so many Japanese businesses pay attention to the Vietnamese market like it is at present."

Recently, the Vietnamese Ministry of Trade joined with the trade office of the Vietnamese Embassy in Japan to organise two trade promotion workshops in Tokyo and Fukuoka, he said.

"The two events attracted the participation of hundreds of Japanese enterprises. Many major Japanese distributors said they were ready to import Vietnamese high-quality goods and sell them to local supermarkets and trade centres," Dung said.

In addition to traditional export items including seafood, wood furniture and textiles, many other Vietnamese products such as chemical engineering goods, processed agro-products, footwear, and plastics will also have great potential in the Japanese market after the EPA is signed.

Dung said domestic enterprises need to make thorough preparations to ensure that products are of good quality and design.

There are still many hurdles for Vietnamese goods to be exported to Japan, he said.

"To protect domestic production, Japan is applying many strict technical regulations to exporters from Vietnam and many other countries, particularly relating to food hygiene and safety."

In future, these technical barriers might be simplified after the agreement was signed, he added.

SBV reconsidering 3% decision

SBV reconsidering 3% decision
16:33' 13/06/2007 (GMT+7)
VietNamNet Bridge – The State Bank of Vietnam (SBV) may enact another document to replace the newly promulgated decision which puts a lid on bank loans for securities trading deals.

SBV tightens control over loans for securities trading deals



Under the newly promulgated decision, the outstanding loans of commercial banks given to stock investors must not be higher than 3% of the banks’ total outstanding loans.

Soon after it was released, the decision faced strong opposition from banks and stock investors.

A financial expert said that while Vietnam was trying to manage the market with economic measures, an administrative order like the newly released decision should not be applied.

The expert said that he could not understand why the 3% safety line had been set up, and not a 5% or another one. He said that 10 joint stock banks had reported that their outstanding loans for securities investments had exceeded the allowed level but their businesses were still performing well even while the market was down.

Banks and investors also complained that the regulation was not clear, which makes it difficult for banks to follow it. The regulation did not clarify the deadline when banks must reach the said 3% safety line and how they would be punished if they did not obey the instruction.

Arguments have been raised over the regulation even among officials of SBV. An official from the central bank said that it was necessary to keep banks on the right track; however, it was also necessary to consider thoroughly such a sensitive decision.

The official said that the enactment of a document with more reasonable and detailed provisions was being considered. He said that the document to be enacted would reflect the spirit of limiting funding securities investment, but would consist of flexible provisions in order to avoid shocks to banks and investors.

Stock brokerages told to let banks manage investor accounts

Stock brokerages told to let banks manage investor accounts
15:56' 13/06/2007 (GMT+7)
VietNamNet Bridge – Early November is the deadline for securities companies to authorize commercial banks to manage finance of stock investors, the Ministry of Finance has ruled.



Currently, stock brokering houses rather than banks take money from investors, so the ministry has issued a new rule forcing these brokerages to transfer this job to the banks.

The rule bans securities firms from receiving money directly from investors, so investors must deposit money at banks designated by securities firms. Most securities firms now take money from investors and only transfer the money to banks at the end of day.

Bui Thi Thanh Huong, head of the securities trading department of the State Securities Commission of Vietnam (SSC), told local media that a securities firm's operations included brokering, consulting, and underwriting.

Cash management must be in the hands of credit institutions, she said. The rule aims to secure safety for investors when securities firms face trading problems as well as ensure interest rates and reimbursement.

An executive from Bao Viet Securities JSC said the firm was receiving money directly from investors and send to banks at the end of day but he did not elaborate on how to manage the switch.

Meanwhile, Rubber Securities JSC director Do Khac Thang said that his brokerage was considering setting up a link with a bank.

Some companies like Dai Viet JSC and Viet Dragon JSC are changing methods to manage cash of investors.

Nguyen Mien Tuan, CEO of Viet Dragon JSC (VDSC), said his company was linking with Eximbank to manage investor's cash, so investors were required to come to Eximbank to deposit money which was then transferred to the account of VDSC.

When investors wanted to withdraw money from their securities trading accounts, banks would let them take money out if they got a notice from VDSC, Tuan added. He said this method sounded workable in line with the new rule.

Similar to VDSC, Dai Viet JSC has authorized the Military Bank to receive money from its customers. CEO of the company Bui Van Tuynh said the new method helped the firm save on human resources and money.

Stock brokering arms of commercial banks like ACBS or Sacombank Securities Company have found things easier as they are using the information technology infrastructure developed by their parent organizations.

BMW to come back to Vietnam in July

BMW to come back to Vietnam in July
16:46' 13/06/2007 (GMT+7)
VietNamNet Bridge – It is expected that in early July 2007, five BMW 2007 models will appear on the domestic market.



BMW’s cars will be distributed in Vietnam by authorised distributors. The five models will include the luxury sedan 7 series and the multi-purpose vehicles (MPV) X5.

It remains unclear who will be the authorised official distributors of BMW cars in Vietnam. It is said that the distributors still have to complete several other procedures before presenting themselves before the public in July, when they will introduce the imported models manufactured by Germany’s BMW.

In Vietnam, BMW has been one of the two most favourite brand names. However, the German automobile manufacturer was not successful with its plan to assemble cars in Vietnam to sell domestically in the VMC joint venture. VMW decided to withdraw from the joint venture. However, finding Vietnam a market with potential, the automobile manufacturer has decided to come back to Vietnam, but in another way: selling foreign-made cars through a new distributor.

Two days ago, Japanese automobile manufacturer Daihatsu also announced it would withdraw from its joint venture in Vietnam. People think that the Japanese company may seek another Vietnamese partner and set up a new legal entity.

To date, X5 and 7 series models have been imported to Vietnam, but just in small quantities. Analysts said that the domestic car market would see big changes once foreign made BMW cars were imported.

Though being a small car market, the purchasing power in Vietnam is very encouraging. Especially, Vietnamese connoisseurs are now tending to use luxury models. Cadillac, Porsche, Audi, Bentley, Lamborghini and Maybach cars all have appeared in Vietnam.

Imported cars prove to sell very well in Vietnam. That explains why several automobile manufacturers in Vietnam have decided to import cars to sell domestically together with the models they assemble themselves.

Truong Hai Automobile Company, for example, has reported that it sold 3,500 imported units in May 2007 alone. The manufacturer plans to assemble the Kia Morning to sell on the domestic market as the imported Kia Mornings have sold very well in Vietnam.

In related news, AutoTech 2007, one of the four biggest automobile and motorbike exhibitions in Vietnam, will take place in Hanoi from June 22-25.

Dollar price hits highest peak in six months

Dollar price hits highest peak in six months
13:58' 05/06/2007 (GMT+7)
VietNamNet Bridge – The Vietnam Bank for Foreign Trade (Vietcombank) on June 4 announced the exchange rate at VND16,096/US$1, the highest peak in the last six months. Experts said that the rate would see further adjustment as the demand is increasing.



Earlier last week, the rates announced by Vietcombank were VND16,065/US$1 (purchasing) and VND16,075/US$1 (selling). One day later, the figures rose to VND16,055 and VND16,080 respectively. On June 4, the greenback was sold at VND16,096/IUS$1, the highest peak over the last six months.

Experts said that the greenback has been revaluating, though very slowly. On the black market, one dollar is now exchanged for VND16,020.

The situation proves to be quite different from what was seen late last year. After reaching the VND16,100/US$1 level on November 17, the greenback devaluated gradually, bottoming at VND16,000/US$1 on February 9, 2007. However, the greenback price has bounced back again on March 2, when the exchange rate reached VND16,001/US$1 and the greenback value has been continuously increasing since then. In the last week alone, a dollar increased by VND20 in value.

Hoang Danh Chinh, the owner of the Kim Dung Gold Shop on Le Loi street in district 1, HCM City, said that though the dollar price increases, the demand for dollar does not increase accordingly. He said that every day, his shop exchanges several thousand dollars for clients. Eximbank has also reported the same situation: some $400-500 are exchanged every day.

Meanwhile, Nguyen Phuoc Thanh, Director of Vietcombank HCM City Branch has attributed the dollar price increase to the sharp increase in the demand. As the gold price in the domestic market keeps rising, gold importers try to collect more dollars to import gold. He said that the demand for dollars reaches $10mil some day.

“The supply of dollars has become more tight when the State Bank of Vietnam decides to buy dollars in for the national reserve fund, which has made the demand for dollars increase dramatically,” said Mr Thanh.

Vu Duc Hai from Eximbank said that the continued increase of the dollar value is the periodic recovery of the currency. Importers need more dollars at this moment, while foreign funds tend to sell shares to get dollars back. These factors all have led to the scarcity of the greenbacks.

Experts said that it is very likely to see the greenback value increase further as Vietnam needs to encourage exports, especially when it has joined WTO.

Mr Thanh from Vietcombank has forecast that the dollar supply and demand will balance in the coming time. The investors, who find it unprofitable to keep dollars, will sell dollars. The greenback will revaluate, but there would not be big changes and dramatic increases as the exchange rate is being put under the control of the central bank

State management authorities not ready for Euro 2 yet

State management authorities not ready for Euro 2 yet
13:53' 05/06/2007 (GMT+7)
VietNamNet Bridge – From July 1, 2007, all the vehicles circulating on roads must meet the Euro 2 standard on exhaust fumes. However, involved parties seem not to be not ready for this yet.



The Decision No 249 by the Government on the application of exhaust gas standards was enacted two years ago. Under the decision, from July 1, 2007, all the vehicles circulating on roads must meet the Euro 2 standard. As for the vehicles which have been certified as meeting the requirements on technical safety and environment, but have not been assembled, the deadline for the Euro 2 standard implementation will be extended to July 1, 2008.

The circulating vehicles in four big cities, including Hanoi, Hai Phong, Da Nang and Can Tho will have to meet the Euro 2 standard as of July 1, 2007, while the deadline will be one year later, July 1, 2008, for the vehicles in other localities.

It is quite surprising that while vehicle manufacturers said they are ready for the Euro 2 standards, state management authorities and petrol importers said they still have many things to do.

The Vietnam Registration Administration (VRA) has not promulgated the documents guiding the implementation of the Euro 2 standard yet. Do Huu Duc, Deputy Head of VRA said that as there remain arguments on some issues, the document will only be enacted in mid June at the earliest.

Mr Duc said that the exhaust fumes of domestically manufactured vehicles will be examined by VRA. As for the imports, the state management authority will check the certificate on exhaust fumes of foreign manufacturers. Only the vehicles sourced from the countries which apply the higher standards on exhaust fumes will be accepted.

In order to implement the Euro 2 standard, the Government has assigned the Ministry of Transport to build a vehicle exhaust gas testing centre. The centre has the total investment capital of VND280bil which will be located in Thanh Tri district in the suburb of Hanoi. However, the project just exists on paper, and the exhaust fume tests will surely be unable to be carried out here as of July 2007.

Meanwhile, VRA has not given concrete answers on where to test vehicle exhaust fumes. An official from VRA said that the equipments VRA now has cannot give exact results if testing Euro 2 and Euro 3.

While state management authorities have to deal with a lot of problems, petrol importers complain that they cannot find the suitable supplies of petrol to import. Under the Decision 50 enacted in 2006, the petrol to be imported as of July 1, 2007 must meet TCVN 6776-2005 standard.

Petrolimex said that the corporation has contacted 53 petrol suppliers, and only 12 of which have agreed to provide petrol that can meet the new requirements. However, even these 12 suppliers cannot meet all the requirements set by TCVN 677-2005. Meanwhile, the few suppliers that can meet TCVN 2005 just can provide petrol in a small quantity.

Petrolimex has proposed to extend the deadline for TCVN 2005 implementation to July 1, 2007, while it should have implemented the TCVN 2005 six months before to pave the way for the implementation of Euro 2 standards.

However, as reported by the Ministry of Trade, petrol importers remain technically incapable to meet the new standard. Enterprises will have to import two kinds of diesel, 0.25% S and 0.05% S, while the current depots cannot contain these two kinds at the same time.

According to Cao Xuan Vinh, Head of the Environment Division under VRA, the petrol and diesel products available on the market cannot meet the Euro 2 standards. The sulphur content in petrol being used in Vietnam is 3-5 times higher than the allowed level.

Information secrets sometimes unnecessary

Information secrets sometimes unnecessary
08:56' 05/06/2007 (GMT+7)

Vinamit and Indochina Capital sign cooperation agreement in HCM City on May 25, 2007.
VietNamNet Bridge – Before the negotiation with a foreign investment fund, the representative of a Vietnamese company had planned the level of information that the foreign partner knew about their business. But on the negotiation round, he was very surprised when they knew very clearly about his firm.



The foreign partner not only knew information about the company’s profit in the past three years, its market share but even the market share in each region, the disadvantages of the firm’s products, the relations between members of the board of directors. The representative of the Vietnamese company was so surprised that the foreign investment fund knew thoroughly about his firm.



The director of another Vietnamese company’s heart missed a beat as his future partner knew about his company’s agents in every detail and they even knew how much goods were in the stock of each agent.



“It is surprised that they have abundant and accurate information. It is really difficult to keep secrets when they come in front of the door,” the director said.



Le Hai Lieu, General Director of the Duc Thanh Wood Company, which has just received investment capital of US$2 million from Denmark’s BankInvest group, said that the two sides met and sign their cooperation agreement within only three months. However, BankInvest came to Vietnam over one year ago to learn about private companies. BankInvest had researched and collected enough information about Duc Thanh so they needed only three months for everything.



Vietnamese directors worry that as foreign investment funds know about their firms clearly, they can ‘force down’ the price and cause sudden tenseness which can make cooperation fail.



However, a director said that he wasn’t worried but proud of this because through that the value of his company is proved. “They unintentionally show us that though we are limited in assets and capital but we have a potential that they have to survey and want to cooperate with us,” he said.



Moreover, instead of keeping ‘secrets’, local companies should change their attitude and provide more information for their partners, which make foreign investment funds respect them more and help improve the position of Vietnamese firms in negotiation, an expert said.

BUSINESS IN BRIEF 5/6

EVN, Intel forge software partnership



The Vietnam Electricity Group (EVN) has teamed up with Intel to promote the use of information technology within the country’s power sector.

A memorandum of understanding defining the agreement was signed in Hanoi, on June 4, where Thomas M Kilroy, Vice President cum General Director of the Group of Digital Businesspeople under the Intel Group, commented that the MoU signalled a kick-start for long term cooperation between the two.

Director of the EVN Information Technology Centre Pham Duong Minh spoke about the benefits that EVN will gain from this strategic cooperation pact, specifically the use of state-of-the-art solutions and technologies developed by Intel.

Under the agreement, Intel will become an advisor to EVN, aiding the latter in outlining plans and strategic roadmaps for the application of software solutions inside the sector. It will also run an IT day each quarter for EVN to be appraised with the latest in IT solutions from around the world.



Coffee exports to top $1 billion



Vietnam is expected to export 900,000 tonnes of coffee in the 2006-07 crop this year, earning an export value of more than 1.2 billion USD, according to the Vietnam Coffee and Cocoa Association (Vicofa).

The figure represents an increase of 374 million USD or about 30 percent in export value compared with the last crop in 2005-2006.

Van Thanh Huy, Vicofa chairman, attributed the export growth to the producers’ interest in meeting world demand.

Coffee experts credited the export spurt on the industry’s efforts to improve the quality of coffee, especially Robusta, and by raising competitiveness on the global market.

In the first quarter of this year, Dac Lac province, the country’s biggest coffee producer, exported 115,000 tonnes of coffee, posting an export value of 168 million USD, an increase of 95.6 percent from the same period last year.



Vietfish expo names best in seafood



Thirty seafood products will be named high quality Vietnamese items at the ninth-annual Vietnam Fisheries International Exhibition (Vietfish), which is to open in HCM City next week.

Organisers, including the Ministry of Fisheries and the Vietnam Association of Seafood Exporters and Producers (VASEP), said domestic and foreign seafood firms would attend the fair.

Some 66 exhibitors from 25 countries will be showcasing a wide variety of products at 250 booths, including seafood products, equipment, chemicals, additives, packaging and refrigerated units.

The three-day event will include seminars on trade barriers in seafood export, seafood export quality, and new refrigeration technologies.

The exhibit will open on June 12 at the HCM City International Exhibition and Convention Centre.

Organisers will also hold a fund-raising show in support of poor children and women in disaster-stricken areas.



Trade facilitation, key to APEC development



Trade among the Asian Pacific Economic Cooperation (APEC) economies is significant and growing, therefore, trade facilitation is one of the fundamental pillars of APEC’s work for its development, said a Hong Kong senior official, at the APEC Trade Facilitation Symposium 2007.

Addressing the opening ceremony in Hong Kong, China, on June 4, Hong Kong’s Secretary for Commerce, Industry and Technology, Joseph W P Wong said that trade facilitation means reducing costs to business operating in and between markets.

Trade among APEC economies is consistently growing, he said, adding that intra-APEC merchandise trade has more than doubled since 1994, from 1.4 trillion USD to over 3 trillion USD today.

During the two days symposium, participants will discuss three themes, namely “Helping SMEs in doing business”, “Ease of doing business”, and “Movement of Goods”.

The purpose of the symposium is to provide a forum for dialogue between the public and private sectors, with a view to better matching trade facilitation measures with the needs of business.

Representatives from Vietnam’s Trade Ministry also attend the symposium and will make speech on the second day of the event.



Agifish to issue nearly 3.4 million shares



Vietnamese seafood exporter Agifish is poised to issue nearly 3.4 million ordinary shares worth 60.7 billion VND (3.8 million USD) in order to upgrade two of its processing plants.

Agifish will use the Sai Gon Securities Company to issue these shares to investors under a guarantee issuance, according to the Vietnam Association of Seafood Exporters and Processors (VASEP).

At present, Agifish is among the country’s leading exporters of ‘tra’ and ‘basa’ catfish and has a chartered capital of 78.8 billion VND (4.9 million USD).



PetroVietnam insurer to auction shares



PetroVietnam Insurance Corp (PVI) will sell 10 million shares on the Hanoi Securities Trading Centre on June 26 at an initial price of 50,000 VND (3.1 USD) a piece.

This is the second auction in a plan to sell 35.1 million shares this year to increase the company’s charter capital from 500 billion VND (31.3 million USD) to 851.4 billion VND (53.2 million USD).

Under the plan, PVI intends to auction 24.8 million shares to existing shareholders at a 2:1 ratio, and 270,100 shares to staff at a preferential price of 10,000 VND.

Vietnamnet

APEC used Ford Mondeos sold out

VietNamNet Bridge – The last auction of APEC used cars ended successful on June 2, when all the Ford Mondeos 2.5 version were sold out. The selling prices were VND10-70mil higher than the starting price levels.

This proved to be the most successful auction of APEC used cars as the selling prices were much higher than the starting prices. Most of the clients who successfully bought the cars were individuals.Before the sixth and the last auction occurred, the auctioning board decided to lower the starting prices for the offered E280 cars by VND54mil/unit to VND1.76bil ($110,000). Meanwhile, the starting price of Ford Mondeo remained unchanged at VND572mil/one-unit lot ($35,750).Eight out of the 12 APEC cars offered at the auction were sold out, including six Ford Mondeos and three Mercedes Benz 280. Representatives from the auctioning board said that the four cars left would be confiscated which will serve the diplomatic tasks, or sell separately to clients later if they can find buyers.At first, the sale of APEC used cars was believed to go smoothly as the auctioning board thought that many people wanted to buy the cars, which witnessed a very important historical event, the APEC summit 2006, and at reasonable prices. However, in fact, it was very hard for the auctioning board to sell the cars.Finally, the auctioning board has fulfilled its tasks, selling the APEC used cars, after five months. 278 out of the 282 cars have been sold. According to Head of the Public Asset Management Department under the Ministry of Finance, no automobile manufacturer or sales agent would be able to sell so many units in such a short time of five months. He said that the sale proved to be encouraging as the sum of money the auctions could bring to the state budget proved to be relatively high

Vietnam estimates May trade deficit at $700 mln

Vietnam estimated Friday its trade deficit in the first five months of the year more than doubled to $3.25 billion from a year earlier, due largely to a surge in imports for the construction of state projects.
in May alone the deficit was estimated at $700 million, up more than 27 percent from last month's shortfall, the General Statistics Office said.

In the first five months of 2006 the deficit stood at $1.54 billion. In May 2006 the office estimated that month's deficit at $400 million.

The trade report showed imports of machinery, mainly for big government projects including Vietnam's first $2.5 billion refinery and new power plants, rose 45 percent in the January-May period from a year earlier.

The imports of steel and steel ingots in the first five months were also expected to jump 64.7 percent from a year earlier to $1.7 billion on the back of robust demand from the construction sector.

The Trade Ministry has projected the trade deficit this year would reach $4.66 billion, with exports rising 22 percent from last year to $47.54 billion and imports hitting $52.2 billion.

Source: Reuters

Oil billionaires interested in Vietnam’s real estate

VietNamNet Bridge – The interests in Vietnam’s real estate of billionaires from oil exporting countries like Saudi Arabia, Qatar and Bahrain is a new phenomenon but the Republic of Korea will still be the top investor in Vietnam’s real estate market.



The Kingdom Hotel Investment group of prince Alwaleed bin Talal bin Abdulaziz Alsaud fired the first shot to open the capital flow from oil producing countries in the Middle East to the Vietnamese real estate market when it decided to buy the Vegas tourism project of the Magnum Investments Company in the central city of Da Nang.



The group plans to invest US$65 million to build a 150-room hotel and 15 villas on 15.4ha of land, which are scheduled to be put into use in 2011, named Raffles Resort.



The logistic sector is also attractive to investors from the Middle East. After merging with Britain’s P & O Ports group, the Dubai Ports World group has officially entered Vietnam through a port project in HCM City with a total investment of $230 million.



In addition, the Sama Dubai group is negotiating the construction of the Cua Dai bridge in the central province of Quang Nam and has expressed the wish to participate in the Binh Quoi – Thanh Da urban area project in HCM City.



“Around 20 investors from Dubai, Qatar and Bahrain are seeking opportunities of investment in Vietnam. They not only target to the logistic industry like container ports but also seek investment opportunities at new residential areas in Hanoi, HCM City and even in the central region,” said Marc Townsend, General Director of CB Richard Ellis, a real estate service company.



According to CB Richard Elllis, investors from the Middle East are big groups which have implemented huge real estate projects in their countries and are expanding investment to Asian countries.



For example, the Kingdom Hotel Investments is purchasing a series of hotels, resorts, and luxurious apartment buildings in Thailand, the Philippines and China.



“Oil kings are targeting China and Singapore but they mainly focus on the Vietnamese market because this is a new and potential market,” said Mr Marc Townsend.



This is also confirmed by prince Alwaleed bin Talal bin Abdulaziz Alsaud in a press release issued after his group bought the tourism project in Da Nang: “Vietnam is one of the fastest developing economies in Asia and ranks the sixth for tourism development according to forecast of the World Travel and Tourism Council. With the fast growth of tourism, entertainment and business, we will build a high-class hotel here”.



According to Marc Townsend, oil billionaires are very serious in choosing Vietnam as a destination and they are surveying and negotiating with localities and the Vietnamese government. However, as projects are in negotiation process, their details can’t be revealed. In addition, oil billionaires can’t easily obtain projects.



“This is similar to Malaysian investors. Groups like Gamuda Land, Berjaya and Sertia have signed memorandums of understanding on investment in big real estate projects in Hanoi and HCM City but so far none of them have been implemented because negotiation and investment formalities are still being performed,” Mr Marc Townsend said.



While investors from the Middle East, Singapore, Japan and Malaysia are seeking opportunities, Korean investors are emerging as the leading investor in the real estate market of Vietnam and they will still be at this position in the future when new projects are signed.



Big names in this field are Posco E & C with the $212 million Bac An residential area project, Kumho with $230 million Asiana Plaza Saigon project, the West West Lake Co, Ltd with $314 million West West Lake residential area project and Booyoung with $171 million apartment project in the northern province of Ha Tay.

OTC market: investors make selective deals

VietNamNet Bridge – Instead of buying any shares available on the market, investors on the OTC market are now keeping cautious about making deals, leading many share items to drop dramatically in price.



Analysts said that there were 1,230 share items available on the market, but only 40-50 share items were seeing regular transactions these days. Shares of enterprises in the fields of petroleum, banking, securities, insurance, real estate and rubber production prove to be the most wanted stocks.

Nguyen Ngoc Truong Chinh, Head of the OTC share brokerage division under ACB Securities Company, said that only 50 OTC share items had been witnessing successful transactions.

Huynh Hong Hanh, who has been acting as a securities broker for the last four years at the Nguyen Cong Tru market, gives investors a list of 100 OTC share items to choose from, saying that other items are not being traded any more.

Trinh Hoang Nam from the Saigon Securities Incorporated (SSI) said that many speculators had been crying as the shares they bought had become unsalable.

Phu My Fertiliser, Military Bank, Eximbank, EAB, Phuong Nam Bank, Dai Viet and Au Lac Securities, Dong Phu Rubber, and Saigon Thuong Tin real estate are all among the most wanted names in shares.

Many share items, which were once sold at very high levels, have seen their prices drop dramatically. Vinalogis shares are selling at VND25,000/share, Vinaconex 12 at VND25,000, Vietcom at VND18,000, Northwest Hydropower Plant at VND26,000, and Saigontel, VND12,000.

Dr Tran Hoang Ngan, Head of the Banking and Securities Faculty under the HCM City Economics University, said that this was a good sign for the stock market, as it showed that investors had more experience and knowledge when making investment decisions, and did not just make investments by ‘feeling’. Dr Ngan said that the companies issuing OTC shares must really be doing good business to make their shares salable.

Tran Cong Nam, a senior investor on SSI trading floor, said that the OTC market, though it had not been controlled strictly by management authorities, had its own rules of the game: bad quality commodities will be rejected.

Vietnamnet
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Bao Viet shares at what cost?

VietNamNet Bridge – A survey shows that the price of Bao Viet shares to be offered at the share auction slated for May 31 will not be very high. Though enjoying advantages in trademark, network, safety ratio, land use rights, Bao Viet still carries disadvantages of a State owned enterprise.

How much is Bao Viet worth?



Investors said that the starting price of VND30,500/share Bao Viet has set proves to be a suitable level, if considering Bao Viet’s business performance and comparing the prices of shares of other insurers. Bao Viet’s total assets, as appraised by Credit Suisse, are nearly $1,900bil ($1.2bil).

Analysts said that the starting price of VND30,500 was set because of several reasons. Bao Viet’s business performance has not been very good, so the share price should not be set at an overly high level. Moreover, the insurer should learn lessons from the auctions of Cadivi, PVGas, and Thac Mo shares. At those auctions, investors initially offered very high price levels, but they then gave up on the auctions.

According to the prospectus, the post tax profit of the insurer is VND524,007bil ($32,750mil), meaning that the EPS (earnings per share) will be VND770.59.

Supposing that the average price of Bao Viet shares after the auction is VND50,000/share, the P/E index would be 64.89, if the share price is VND70,000/share, the P/E would be 90.84, and if the price is VND100,000, the P/E would be 129.77. The starting price of VND30,500/share proves to be reasonable, analysts say.

Maintaining Disadvantages

Though enjoying advantages in trademark, network, safety ratio, land use rights, Bao Viet still bears disadvantages of a State owned enterprise.

The disadvantages lie in the competitiveness in the fields of operation mechanism, ownership capital, human resources, products. While the business performance and financial indexes prove to be normal, the tentative dividends, however, prove to be not so attractive.

An investor said that this proves to be a bad business performance for such a big insurer like Bao Viet, which gained only VND318bil ($19.87mil) in post tax profit. The growth rate Bao Viet has witnessed in the last time proves to be lower than that obtained by other insurers, like BMI, VASS, PVI, PJICO and VNR.

Investors are forecast to not try to buy Bao Viet shares at any cost, because they will have many other choices when other big groups make IPO. They will only buy Bao Viet shares at ‘acceptable’ prices which can ensure profit. If they buy Bao Viet shares at abnormally high prices, they will have to ignore many other opportunities to be brought about by Vietcombank and BIDV’s IPOs.

It is expected that several investors will offer the auctioning prices of VND33-35,000/share. Investors who think that Bao Viet will obtain the growth rate of 4-5 times higher than in 2006, i.e. the post tax profit of VND1,200-1,600bil, will offer VND40-60,000. The most optimistic, who still consider Bao Viet the No 1 insurer in Vietnam, will pay VND80-100,000

Vietnamnet
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Foreign owned accounts at securities companies on the rise

VietNamNet Bridge – More and more foreign investors have decided to make money on Vietnam’s stock market. Statistics show that the number of foreign owned accounts opened at securities companies is increasing.



According to the HCM City Securities Trading Centre (HSTC), nearly 5,000 foreign owned individual accounts have been opened at HSTC member securities companies. The owners of the accounts mostly are Japanese, Korean, Taiwanese and Singaporean. The largest number of foreign investors on Vietnam’s stock market proves to come from Japan.

Nguyen Hong Nam, Deputy Director General of the Saigon Securities Incorporated (SSI), said that some 2,000 foreigners’ accounts had been opened at SSI, 70% of which are Japanese owned.

BVSC, DVSC and Rong Viet all have reported an increased number of new foreign individual accounts, which account for 30% of the new accounts. Experts said that the new wave of foreign investment had been refreshing the stock market.

Vietnam’s stock market has become attractive in the eyes of foreign investors. Vietnam’s national economy is performing well, while the stock market is developing, which promises more profitable investment deals than developed markets.

In fact, the profit made by foreign securities investors in Vietnam has been increasing considerably. In his recent visit to Vietnam, John Stuttard, the Lord Mayor of the City of London, said that the gigantic development of the stock market had caught the special attention of British financial investors.

Nguyen Chi Trung, Director of the Brokerage Division under the Rong Viet Securities Company, said that if foreign investors kept trading as currently, the stock market would rally. Now, foreign investment funds are increasing their demand for securities, and they are especially targeting the IPOs of many big banks and corporations scheduled for the coming time.

VinaCapital said that it had estimated the sum of money to be disbursed, and has given a forecast about the auctioning price of Bao Viet shares. Mekong Capital has presented its third fund before the public, the $100mil Vietnam Azalea, which will focus on equitised companies in Vietnam. Mekong hopes to close the fund soon and begin the investment period, expected for the end of May.

Experts said that the demand of foreign investors was increasing. However, they will have to restructure their investment portfolios and look for new commodities, as there is no more room for foreign ownership in big companies like REE, SAM, STB and VNM.
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Making Your Home Business Work!

Running your own home based internet business is a piece of cake. RightYou've probably heard how easy it is to rake in tens of thousands of dollars practically over night, and how you can have all kinds of "free time" and extra cash for traveling and shopping at your favorite store...Just throw up a web site, add a few affiliate links, post to some forums and presto - you're in the money!But the reality is this. If you want to succeed in your own home based internet business, whether it's affiliate marketing or selling your own products, you will have to work at making it successful. You have to make it your job to succeed. You must treat it as your job, not as your hobby.It's great to think that with just a few easy strokes you'll be running on auto-pilot, bringing in loads of cash and then on to the next venture. But without some simple planning and consistent effort you're setting yourself up for failure.Here are a few tips to help you get started.STAY ORGANIZEDSet up folders in your email client. You should set up a folder for each contact and keep important correspondence while deleting what you don't need. If you belong to membership sites that require passwords, keep the "welcome" letters where you can find them.Set up folders on your desktop. If you download a lot of software, ebooks or PDF books from specific individuals simply name a folder on your desktop after the author or site owner. Then when you download something you can place it in their folder.Make your own HTML home page. For quick and easy access to all your important sites make up an HTML page with hyperlinks to your most frequently used sites along with a brief explanation of each site. Keep it on your desktop for easy access.STAY FOCUSEDSet aside a specific time for work. It could be from 7pm-9pm every day or whatever time's good for you. During this time do not get distracted from doing only what needs to be accomplished for your business. Try to use the same time slot every day so you get into a routine and get used to the working mindset. Save the surfing for another time.Set aside a work space. Make sure that all your friends and family know that when you're in your work area you're off limits! No one's to bother you.Finish one task before starting another. As the old saying goes, "Put one foot in front of the other." Don't start working on something new until the first task is completely finished.BE CONSISTENTWork the ideas that "work."When you find something that works well for you work it hard and get as much out of it as possible. If you're submitting articles to a certain site and they're paying dividends, keep feeding the cycle.Learn from failure.Don't get discouraged. Each failure's just a learning process. Use any failure to your advantage by taking the lesson and applying it to your next venture.Test, test, and more test.Always test headlines and ad copy. A small change can reap huge rewards.With these few simple steps you will stay organized, stay focused, be consistent in your efforts and build a solid foundation on which you can build your internet empire!After all, you are the one who will ultimately determine the success or failure of your business!

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Securities companies cannot get enough space on trading floor

13:44' 10/05/2007 (GMT+7)
VietNamNet Bridge – Securities companies complain that the new requirement on the surface area of 150 sq m for trading floors has put big difficulties for them.



Leaders of the National Securities Incorporated (NSI) sighed for relief when hearing that the trading floor must be 150 sq m large at least. The NSI’s trading to be opened in some days on Nam Ky Khoi Nghia street is 152 sq m, or just 2 sq m larger than the required area.





Nguyen Chi Thanh, Chairman of NSI, said that the company luckily got the 152 sq m surface area as NSI and the Ministry of Finance’s Debt and Asset Trading Company have joint trading activities. Mr Thanh said that NSI has to pay VND30mil ($1,875) a month as the leasing fee for the area. This will be reserved for transactions and brokerage service, while other services will be provided in the company’s Ton Duc Thang branch, also in district 1.



Nguyen Mien Tuan, Director General of the Rong Viet Securities Company, who has opened the new trading floor, 920 sq m large in district 3, said that he has to relocate the company’s headquarter to the new place in district 3, which is farther from the centre than the previous headquarter.



Mr Tuan said that the previously trading floor at 40-42 Phan Boi Chau, district 1 was very small, 50 sq m, just to fit 40 investors.



Directors of securities companies said that they were lucky to lease the large trading floors as they set up the floors soon, when the market was fledgling. Meanwhile, the later born companies will find it hard to meet the requirement on surface area of trading floors.



Securities companies try to set up trading floors in the places near the HCM City Securities Trading Centre, which is called “HCM City’s Wall street”. The leasing fee of the premise on Nam Ky Khoi Nghia, Nguyen Cong Tru and nearby areas stays at $25/sq m. On average, a company has to pay $10,000 a month at least for leasing a 400 sq m premise, which is used for trading floor and office space.



There are 50 securities companies in HCM City, and each of them has many trading floors. Many of them said that they want to lease offices in high-grade buildings like Sunwah or Saigon Centre, but they cannot. HCM City and Hanoi are witnessing the serious shortage of offices for lease, which makes the leasing fees escalate. In fact, many trading floors are less than 100 sq m large.



Companies complain that they were not given enough time to look for new large trading floors as the legal document on the operation of securities companies came into effect just five days after it was enacted.


However, Tran Dac Sinh, Director of HSTC, said that the new requirement would be applied to the newly set up companies only. As for the operational trading floors, SSC will give more time for the companies to find new trading floors.



Securities companies not only have to meet the requirements on the scale of trading floor, but also need to upgrade services and improve technologies in order to serve investors better.


Money Maker Online
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HCM City IZs and EPZs: a hectare worth $3 million

16:19' 03/05/2007 (GMT+7)

VietNamNet Bridge - On average, every hectare of industrial land in HCM City attracts $3.19mil worth of investment, generates the industrial value of several million dollars a year, and creates 20 jobs.

IZ.jpg
The figures were released during a review of the 15-year development of HCM City's IZs and EPZs (Hepza).

Vu Van Hoa, Head of Hepza management board, said that farm land and fallow swamps had turned into crowded production areas, which create high industrial value. On average, every hectare of industrial land in IZs and EPZs can attract $3.19mil worth of investment, while it could only create a value of $2,850 a year when it was agricultural land.

HCM City now has 15 IZs and EPZs, which have the total developed area of 3,688 ha, and are now leasing to 2,046 enterprises.

The operational IZs and EPZs have attracted 450 foreign invested projects, capitalised at $3.55bil, accounting for 63% of the total foreign direct investment (FDI) in HCM City. Industries alone have attracted 80% of the total FDI.

The ratio of FDI of the investment capital in IZs and EPZs has been increasing year after year. It was 3.81% in 1991-1995, and the figure rose to 27.4% in 2001-2006.

In the last 15 years, enterprises in IZs and EPZs have exported $11.48bil worth of products, 13.68% of HCM City's total export turnover. In 1995, the export turnover of the IZs and EPZs was 1.2% of the city's export turnover only, but the figure rose to 17% in 2006. The export markets for Hepza's enterprises have been stable, and include Japan, which consumes 42.11% of Hepza's exports, the EU with 16.27%, and Taiwan with 5.95%.

According to Mr Hoa, the most important thing for Hepza is that foreign investors have been gradually transferring technologies and management skills to Vietnamese labourers.

The Tan Thuan EPZ has reserved 39 ha for high technology projects, which need few labourers. Hepza and the HCM City Economic Institute are working on a project to establish a joint stock company specialising in the infrastructure development of the Hiep Phuoc port new urban area, which will raise capital from the residents in the areas which the projects will cover. This would be a completely new mode of investment, under which local residents would make capital contributions to the company and projects with their land plots.

NguoiLaodong

HCM City has opportunities for US small-, medium-sized investors

14:21' 05/05/2007 (GMT+7)

VietNamNet Bridge – In a meeting with HCM City businesses on May 3, 29 small- and medium-sized enterprises from Washington state said that they saw many opportunities in the city.



Sharon Wallren, Assistant to General Director of Wallren Company, with the curiosity of a businessperson, asked a female student named Xuan Long who was guiding US businessmen to the meeting room, about the address of the producer of a silk-made decorative item that the student had pinned on her shirt.



“This item is very sophisticated so American customers would be very fond of it,” Ms Sharon explained.



Taking part in the business delegation of Washington state, some overseas Vietnamese businessmen also expressed their wish to invest in health care, education and law in Vietnam.



American businessmen are interested in HCM City’s investment attraction and preference policies, specific projects that the city is calling for investment for, the business environment and security.



Washington’s Secretary of State Sam Reed said that this was the first time that small- and medium-sized companies from Washington had come to Vietnam to seek investment opportunities.



According to Mr Reed, big groups of the US have come to Vietnam already. Small- and medium-sized enterprises need the support of the government.



He said that the reason for bringing 29 companies from Washington on the trip to Vietnam was to survey the Vietnamese market. After the meeting with Vietnamese partners, he said he believed that there would be successful contracts in the future.



“Most of the projects that HCM City introduced at the meeting are attractive,” he commented.

VietNamnet

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