PetroVietnam to buy oil fields abroad

The Vietnam Oil and Gas Group (PetroVietnam) is going to buy more oil fields abroad to counter the oil and gas shortages.

PetroVietnam is in the process of buying a Kazakhs company which owns some oil fields with reserves of tens of millions tonnes.

Since early this year, PetroVietnam has signed six new oil contracts with foreign partners, bringing the total to 13 exploring and exploiting projects overseas.

YTD, the group has extracted 33 million tonnes of oil, nearly meeting its yearly target. Its revenues reached VND 143.1 trillion (around US $8.94 billion), up 4% from the same period last year.

HCM City earns higher tourism revenue as favorite destination

Tourism in Vietnam is growing at a very fast pace and HCM city is the favorite destination.

Almost 2 million foreigners visited HCM City year to date, accounting for 60% of all foreign visitors in Vietnam.

Tourism revenue in Ho Chi Minh City has reached 1 billion USD with in the first 9 months of 2007. This represents an increase of 40% compares to the same period last year.

Many Investors flock to Hanoi Securities Trading Centre

Many investors have left HCM City to make transactions at the Hanoi Securities Trading Centre (HASTC) to seek larger profit.

With the allowed wider trading band (10% vs 5%), investors at HASTC can make twice as much profit compared to HCM City Stock Exchange (HOSE). This explains why investors are flocking to HASTC, though HOSE is still considered the main bourse of Vietnam, and sets higher requirements on listing companies, while HASTC is considered the place for less profitable companies.

It is noteworthy that most of the investors who have left HCM City trading floors to go to Hanoi are small investors.

According to a director of an investment fund in HCM City, investors do not care about the trading floors, the only thing they care about is where they can earn the biggest profit.

The prices of share items listed at HASTC are lower than that at HOSE. “Lower prices and wider trading band both will allow bigger profit,” said Mr Nam.

Great 5-year outlook for Vietnam

I think the outlook for Vietnam in the next 5 years is outstanding. It's amazing what the country has accomplished in the last 5 years. There are still many challenges ahead but I believe Vietnam is going to be a great emerging market.

Below are my top 5 reasons as to why Vietnam is a great place to invest and to do business in the next 5 years.

1. An Attractive FDI Destination. Some manufacturing companies are beginning to diversify away from China and India by looking into Vietnam. Others like Intel have already made Vietnam their main destination. In the last 10 months alone, Intel had committed as much money to Vietnam as it had to China in the last ten years.

Vietnam has done a great job of attracting foreign direct investment (FDI). Recently, the United Nations Conference on Trade and Development (UNCTAD) ranked Vietnam 6th among the 10 most attractive FDI destinations in the world for 2007-2009.

In the manufacturing space, The PricewaterhouseCoopers EM20 Index, which ranks top emerging markets and recently ranked Vietnam as the number one manufacturing destination beating out China.

2. A booming stock market and an attractive FII destination. The Vietnam stock market is in its early stage, commodities trading are limited, the debt market is not in place, and derivatives are not available, which means the potential for growth is HUGE. At the moment Vietnam listed shares can only be purchased on a handful of exchanges. I am expecting as shares begin to trade on more overseas exchanges, especially in the U.S., we'll see money from retail investors to pour in and move the market much higher. The Ho Chi Minh City Securities Center and the Hanoi Securities Trading Center have about 200 listed companies. The combined market capitalization of $26 billion represents 39 percent of gross domestic product.

Currently, there is an estimated 4-5 billion USD in foreign indirect investment sitting on the sideline waiting to invest in IPOs and listed shares. This number is expected to growth drastically in the next 5 years.

3. Access to Cheap Financing. Vietnam has recently became eligible to access the International Bank for Reconstruction and Development. The International Bank for Reconstruction and Development is a branch of the World Bank set up to assist middle-income and creditworthy developing countries by promoting development through loans, guarantees, and advisory services. Loans through the International Bank for Reconstruction and Development is one of the cheapest types of loans on international financial market that developing countries can access.

4. A Talented and Willing Work Force. With half its population under 25 years old, well-educated, and growing at an annual rate of 1.5%, Vietnam has a very attractive work force--young, talented, and willing. Currently, Vietnam also has one of the lowest unemployment rate in the world at 2%.

5. Privatization. Privatization of major state-owned firms is an important contribution factor to its success in the next 2-5 years and Vietnam is planning to accelerate the privatization of hundreds of state-run firms. The government is pushing for the full or partial privatization of state-run firms, including major banks, telecom firms, Vietnam Airlines, oil and gas industries, and infrastructure companies.


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Seafood exports hit 3 billion USD YTD

According to Ministry of Agriculture and Rural Development (MARD), seafood exports brought in 3 billion USD in the first 10 months of 2007 representing a year-on-year increase of 10.8 percent. Packaging, labeling and food safety regulations are key factors to continue and raise the seafood export turnover.

Local firms pay highly for foreign managers

Employees who earn monthly pay of VND60 to nearly VND200 million per month are very rare in Vietnam but these are the levels that some Vietnamese employers pay their foreign employees.

Tam Thanh Thien Trang, Deputy Director of the NetViet human resource development company, said that so far this year, especially in August and September, the need for foreign employees of Vietnamese companies suddenly soared.

Nhan Quoc Vinh, director of the headhunting division of L&A company, said: “Around 10% of the total positions that our clients (companies) want are for foreigners.” Each month, L&A seeks 60 personnel who are foreigners and overseas Vietnamese for their clients. Most of those positions are executive managers and financial managers.

Vietnamese companies, mainly real estate and project management units, often hunt executive managers, financial managers.

Ly Quy Trung, founding member and General Director of the Pho 24 group, said that in the next five years, Pho 24 would increase the number of pho restaurants from 60 to 100 in Vietnam and from 8 to hundreds abroad. That’s the reason Pho 24 has employed Alan Ainsworth, a British man who is experienced in restaurant management, as its manager for 3 months.

According to the Deputy Director of NetViet, the average salary for a foreigner manager is between $4,000 to $6,000 per month and up to $12,000 for some special positions, plus car and house hiring fees and school fees for their children.

However, the source of foreign labour in Vietnam is still scarce. The representative of an employment service company in HCM City said that this company could meet less than 20% of the demand for foreign employees of domestic companies.

Some labour recruiters say that many foreigners often work for Vietnamese firms for 3-6 months or 1 year only. The reasons are gaps of culture, environment, communications, and working style. In some cases, local companies offer high pay but after that they lower the pay. Another reason is that foreign managers are under high pressure as Vietnamese business owners place high hopes on them.

Overseas Vietnamese are more favoured than foreigners because they can speak both Vietnamese and English and are familiar with Vietnamese culture.

Apart from overseas Vietnamese and foreigners, Vietnamese who study abroad are also in great demand.

Four years ago, the PACE Education Group had three foreign employees who assumed key positions. It currently has one more female executive manager who is a foreigner. Apart from foreign managers, PACE plans to have 100% of its Vietnamese managers trained to international standards.

Gian Tu Trung, the founder of PACE, said that there were two recruitment trends: localising managers who meet international standards and internationalising Vietnamese staff by inviting foreigners, overseas Vietnamese and Vietnamese who study abroad.

However, according to Trung, both Vietnamese and foreign firms in Vietnam aim to internationalise Vietnamese staff.

source: http://english.vietnamnet.vn/biz/2007/10/750796/

"Tra" and "basa" exports likely to reach 1 billion USD

“Tra” and “basa” catfish exports are likely to bring in 1 billion USD this year, according to an official from the Viet Nam Association of Seafood Exporters and Processors (VASEP).

Local producers have recorded strong gains in markets such as the EU, the US , ASEAN and Ukraine in spite of their strict requirements on food safety and hygiene, according to VASEP Vice President Nguyen Huu Dung.

The Mekong Delta province of An Giang alone has so far this year registered year-on-year increases of 62 percent and 60 percent in the value and volume of exports, respectively.

The province expects to ship 120,000 tonnes of tra and basa catfish, worth 320 million USD, in 2007.

To date, local seafood producers have earned a foothold in 75 countries and territories around the world.

In order to raise “tra” and “basa” catfish export turnover, the fisheries sector has urged local authorities to beef up supervision over the misuse of chemicals in catfish farming and build trademarks for the product.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/218786/Default.aspx

Gold price rockets, gold exhausted

According to SJC in Hanoi, its gold shops in Hanoi were ‘overloaded’ yesterday afternoon, when people heard that the world’s gold price had hit the $769/oz level and the domestic level VND14.73mil/tael and rushed to buy gold.

Vu Minh Chau, the owner of Hanoi-based Bao Tin Minh Chau Gold Shop, said that his shop did not have enough gold to sell yesterday afternoon.

“The purchasing power has been rising dramatically, thus causing a serious imbalance between supply and demand,” said Mr Chau.

All gold shops have reported sharp increases in gold sales these days. SJC gold shop system in Hanoi said that every day it was selling 2-3,000 taels, or 2-3 times more than ordinary days.

While people are rushing to buy gold for fear of further increases of gold prices, professional investors are still keeping gold, not selling at this moment. Quang Dien, Director of SJC Hanoi, said that speculators were not selling gold at this moment because they hoped the domestic price would rise further to catch up with the world’s price (the domestic price is VND200,000/tael lower than the world’s level).

Bao Tin Minh Chau’s representative believes that a lot of individual investors are now thinking of borrowing money from banks to buy gold, anticipating that the gold price will rise continuously.

“They have to pay 1% per month in interest rate on bank loans, while they can pocket 5-10% for every wave of price fluctuation,” he said.

Mr Dien said that it is highly probable that the world’s price will hit the $770/oz level this week, thus raising the domestic price to VND14.8mil/tael. However, he has also warned that the gold price may unexpectedly see a downturn, and advised individual investors to sell gold now, which can ensure them fat profit already.

However, experts all lean towards the possibility of a gold price hike. Dinh Nho Bang, Chairman of the Vietnam Gold Business Association, said that the gold price may exceed the $770/oz threshold, reaching $780/oz.


Vu Minh Chau, the owner of Bao Tin Minh Chau: investors put difficulties on gold shops

What would you say about the gold market at this moment?

The highest gold price was on October 16, when bar gold was sold at VND14.73mil/tael. Purchasing power has increased by 150% over the previous week as people expect the gold price will increase further. It is quite a surprise that most clients only come to make transaction at 2-4 pm, thus making gold shops ‘overloaded’.

What can you compare about the purchasing power and the gold reserve of gold trading firms?

The gold reserve of gold trading firms proves to be too small compared to such high purchasing power. I can assure you that except big banks, no private company is capable enough to store gold at this hot moment.

The domestic price is still VND200,000/tael lower than the world’s price. Will the price gap influence the import plans?

As for jewellery gold, I can say that the supply will be enough to meet the demand without imports. Meanwhile, enterprises would incur losses if they imported bar gold at this moment.

source: http://english.vietnamnet.vn/biz/2007/10/750152/

Morgan Stanley to acquire 10 percent stake in PVFC

Leading global financial organisation Morgan Stanley was expected to acquire a 10 percent stake in PetroVietnam Finance Corporation (PVFC), an affiliate of Viet Nam Oil and Gas Group, the mother company reported on Oct. 16 at a signing ceremony in Ha Noi.

The Viet Nam Oil and Gas Group (PetroVietnam) inked two cooperation agreements with Morgan Stanley and Ha Noi Securities Trading Centre (HASTC).

Under the agreement between the overseas financial corporation and PetroVietnam, Morgan Stanley would assist PetroVietnam to raise capital from regional and global financial markets, as well as support the Vietnamese company with advanced management skills.

The agreement with HASTC would have the trading centre help PetroVietnam equitise its subsidiaries and capitalise money from the stock market more effectively.

In addition, HASTC would provide the group with necessary information in a bid to list shares of its affiliates in the global stock market, stated the agreement.

“PetroVietnam plans to exploit 19 to 20 million tonnes of crude oil and 10 to 12 billion cu.m of gas with anticipated revenue of up 20 billion USD by 2015. Of the total revenue, around 45 percent will likely come from oil, gas and financial services”, said PetroVietnam’s general director Tran Ngoc Canh.

PVFC, the group’s leading financial institution, will partly realise the 45 percent target, Canh said.

The agreement with Morgan Stanley marked a significant milestone for PetroVietnam to revitalise its expansion plans to the finance, insurance and securities fields, he added.

PVFC will auction its shares for the first time at the Ha Noi bourse on October 19.

“Some 13 companies have so far organised shared auctions at HASTC with a total value of chartered capital at 3.7 trillion VND (227 million USD),” said HASTC director Tran Van Dung.

However, “PVFC is the first financial institution to list its shares on Ha Noi stock market,” Dung said.

A representative from Morgan Stanley said becoming PVFC’s strategic partner marked a significant step in the seven-year relationship between his company and PetroVietnam.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/218523/Default.aspx

Hapro invests 120 billion VND in slaughter facility

The Ha Noi Trade Corporation (Hapro) has invested 120 billion VND (7.5 million USD) to build a cattle and poultry slaughter house in Ha Noi's Gia Lam outlying district.

The project, covering more than 2.5 ha in the Hapro Food Industry Park , will have an abattoir, a 10 tonne per day frozen food arm, a 10 tonne per day cannery and a 2,000-tonne refrigeration system.

The abattoir will be equipped with a system to slaughter 100 cattle a day and a system to slaughter 8,000 fowls a day.

Hapro has signed contracts with livestock breeding farms in Ha Tay, Bac Ninh, Bac Giang, Yen Bai and Phu Tho provinces to ensure the supply of quality materials for its facility.

The company also plans to build a network of between 35-50 safe food stores, with the first 10 stores expected to be operational by the end of this year.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/218533/Default.aspx

Stock market: cash flowing to Hanoi trading floor

The trading volume at the Hanoi Trading Securities Centre (HASTC) has seen sharp increases since mid September. It seems that the smart cash is flowing into the place which can bring the biggest profit. Investors are flocking to HASTC instead of the Ho Chi Minh City Stock Exchange (HOSE), which is considered the main bourse in Vietnam.

In the eyes of securities investors, HASTC is considered less profitable than HOSE. It is partially because they think that HASTC gathers companies which cannot meet the requirements for listing at HOSE.

Therefore, it is quite a nice surprise to see that the HASTC Index has soared from 261 points on September 17 to 379.58 points in early October, a 45% increase. Meanwhile, the increase was 18% only at HOSE during the same time.

Statistics show the signs of the investment capital transfer: HASTC’s trading volume has risen from the average level of 1mil units between April and September to 5mil units per trading session.

Analysts say that the figure is even higher than the ‘golden time’ of HASTC seen in February and March 2007, when the trading volume was 3mil units at maximum. More and more investors have shifted to make transactions at HASTC, which can be seen in the increased number of successful transactions.

In fact, investors once feared that SSI’s leaving for HOSE would cause falls in trading volume at HASTC. However, contrary to all predictions, the average trading volume in the first two trading sessions of the week was still 6.45mil units, an increase of 20% over the average level seen in the previous 10 trading sessions.

Why are investors flocking to HASTC? The Hanoi trading floor has shown its special attractiveness, especially as investors cannot gain fat profit at HOSE any more. Blue chips at HOSE are ‘exhausted’, and new stocks are not available due to irregular sales.

Analysts have also cited another important reason why investors have been able to earn the maximum profit of 10% per trading session: the wider trading band applied at HASTC compared to HOSE (10% vs 5%).

Nguyen Vu Quang Trung, Deputy Director of HASTC, said that there were five reasons behind the HASTC Index increase and the higher number of investors. He said that Vietnam’s stock market, both the HCM City and Hanoi floors, were now seeing upward trends. The national economy has been performing well, and listing companies all have reported satisfactory business results. Meanwhile, investors may be finding it necessary to restructure their investment portfolios.

Mr Trung also mentioned that HASTC had signed a memorandum of understanding with other stock exchanges, including New York Stock Exchange, calling this good news that has helped attract more investors.

Manh Hai, an investor at VIB Bank’s Securities Company, who has injected all his money in HASTC’s securities items for the last two years, said that he liked HASTC’s shares because of their transparency. “There have been no signs of fraud, with groups of investors working together to force prices up or down,” he said, adding that the listing companies all had good business results and strictly followed regulations on financial disclosure.

Mr Hai said that the HASTC Index would increase further in the time to come, possibly to hit the 400 point threshold.

Mr Trung from HASTC said that HASTC had received 20 applications for listing at HASTC from now to the end of this year.

Some analysts have warned that there are latent risks in the sharp increases of share prices at HASTC, and that it would be better if the HASTC index rose more slowly.

source: http://english.vietnamnet.vn/biz/2007/10/749915/

Agricultural product exports to fetch 10 billion USD

The export turnover of Viet Nam’s agricultural products is estimated to top 10 billion USD by the end of October, said Deputy Minister of Agriculture and Rural Development Diep Kinh Tan.

The figure is predicted to continue increasing by the year-end and early 2008, Tan said at a seminar entitled “Improving Small- and Medium-sized Enterprises’ Capacities in Preserving and Processing Agricultural Products among APEC Member Economies,” in Ha Noi on October 16.

The seminar offered small- and medium-sized businesses from Viet Nam and other APEC members the chance to share experiences in preserving and processing agricultural goods.

Oil and gas group inks deal with US investment bank

The Viet Nam Oil and Gas group (PVN) and the US investment bank Morgan Stanley signed a cooperation deal in Ha Noi on October 16.

The US bank is expected to hold a 10 percent stake in the PVN’s Finance Company (PVFC), which will make its initial public offering soon.

The bank will also help PVN draw capital from the regional and global financial markets and improve its financial and banking management skills.

The same day, the oil and gas group inked an agreement with the Ha Noi Securities Trading Centre (HaSTC).
As agreed, HaSTC will provide its partner with procedures and regulations relating to share auctions, share and corporation bond listings, as well as help PVN seek partners and list its shares on international bourses.

source: http://english.vietnamnet.vn/biz/2007/10/749924/

Oil and gas group inks deal with US investment bank

The Viet Nam Oil and Gas group (PVN) and the US investment bank Morgan Stanley signed a cooperation deal in Ha Noi on October 16.

The US bank is expected to hold a 10 percent stake in the PVN’s Finance Company (PVFC), which will make its initial public offering soon.

The bank will also help PVN draw capital from the regional and global financial markets and improve its financial and banking management skills.

The same day, the oil and gas group inked an agreement with the Ha Noi Securities Trading Centre (HaSTC).
As agreed, HaSTC will provide its partner with procedures and regulations relating to share auctions, share and corporation bond listings, as well as help PVN seek partners and list its shares on international bourses.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/218373/Default.aspx

US$4.8bil pumped into Vietnam’s securities market

28 foreign organizations and 537 foreign individuals have opened securities transaction account in Vietnam in the first eight months of 2007, said the Securities Investment Fund Management Company (VFM).

Under statistics from the VFM, the total amount of foreign capital that has been injected into Vietnam’s securities market was 4.8 billion USD at the end of August, 2007.

As forecasted, the country’s securities market will see a strong growth because a great number of securities companies such as Vietcombank, Incombank, BIDV, MobiFone, Sabeco, and Habeco have launched massive initial public offerings (IPO). The supply is expected to increase rapidly in the first quarter of 2008.

In particular, the Prime Minister’s approving of Vietcombank’s privatization will be a catalyst for the domestic market to thrive.

source: http://english.vietnamnet.vn/biz/2007/10/749634/

Gov’t demands stable VND/US$ exchange rate

In the first five months of the year, the State Bank of Vietnam (SBV) bought $7bil when the dollar supply was profuse. According to Nguyen Dong Tien, Deputy Governor of SBV, the purchasing aimed to balance supply and demand and to increase the national foreign currency reserve.

The opportunity to increase the foreign currency reserve, once again, has come, with the dollar supply proving to be in excess thanks to the high inflow of foreign direct and indirect investment, and high overseas remittance.

The Deputy Prime Minister’s instruction came after mass media reported that the central bank refused to buy foreign currencies from commercial banks, insisting that the dollar supply was not in excess. Analysts guess that the central bank is not buying dollars at this moment for fear of increasing the volume of VND in circulation, thus increasing inflation.

Deputy Prime Minister Hung has also asked SBV to take necessary measures to withdraw money from circulation, which may rise as the result of the move to buy foreign currencies. In the first five months of the year, the central bank spent a big sum of VND to buy foreign currencies, and then it had to issue bonds to withdraw VND from circulation. However, 13% of the spent volume of VND reportedly remains in circulation.

SBV has also been requested to make suitable intervention into the market so as to keep the VND/US$ exchange rate at a suitable level, and avoid an overly sharp devaluation or revaluation of the local currency.
Worries have been raised about whether or not the inflation rate would be pushed high if the central bank spent VND to buy foreign currencies.

Analysts say that this would not happen as VND would be injected gradually from now till the year’s end, and SBV would not spend a big volume of money at one moment. At the same time, the central bank would consider issuing bonds to withdraw money from circulation.

The foreign currency reserve is estimated to have over $20bil, and the figure may be higher towards the end of the year. The VND/US$ exchange rate shows signs of recovering after falling down in the last few days.

The VND/US$ exchange rate stayed at VND16,079/US$ late last week, and moved up slightly earlier this week to VND16,081/US$1. The greenback has decreased by 1% in value in the official market, and 0.8% in the black market.

Officials from SBV have attributed the revaluation of the VND to the strong recovery of the stock market since September 15. Since then, the VN Index has increased by 170 points, attracting a big volume of capital to the market, including money disbursed by foreign investment funds. A big volume of foreign currencies has been converted into VND for investors to make transactions.

Investors are now whispering in each others’ ears about the possibility that $3bil worth of foreign capital will be poured in from now to the end of the year. Other sources say that the volume may be $4.2bil.

The foreign direct investment (FDI) capital was also very big in the first nine months of the year, reaching $3.3bil. Meanwhile, overseas remittance keeps increasing, expected to reach $5bil this year.

Vietnamese consumers have been benefiting from the weak dollar, especially when purchasing imported products. However, the weak dollar will not support Vietnam’s exports in the world’s markets.

source: http://english.vietnamnet.vn/biz/2007/10/749696/

20 finance companies waiting licensing

Nine finance companies have been licensed in Vietnam so far, including the two, Prudential Finance under Prudential group, and SG Finance Company under Société Générale set up several days ago. The State Bank of Vietnam has received nearly 20 other applications for setting up finance companies.

“There would be more and more applications for establishing finance companies in the time to come,” said Tran Xuan Chau, Deputy Director of the Department for Banks and Non-bank Credit Institutions under the State Bank of Vietnam SBV).

How many finance companies are there in Vietnam?

SBV has licensed nine finance companies, seven of which belong to Vietnamese big groups and general corporations, and the other two are 100% foreign owned, specializing in consumer credit.

We have received some 10 applications for establishing finance joint stock companies and six applications for setting up 100% foreign owned companies

The six operational finance companies and the big number of companies awaiting licenses may remind you about the new wave of finance company establishment. What would you say about this?

We do not think that the number of registered companies is big. There would be more companies in Vietnam if the existing companies can make profit and the business climate is favourable for investors.

The fact that many investors apply for the establishment of finance companies at this moment show the confidence and high expectation of investors on Vietnam’s national economy in general, and in the banking sector in particular.
Why do you think so many investors apply for setting up finance companies at this moment?

There are several reasons. First, Vietnam’s economy keeps growing fast and stably. Second, the legal framework has been completed and perfected, paving the way for finance companies to operate in a safe and effective way. Third, the demand for finance services is increasingly high. Vietnamese enterprises have grown enough to need finance companies which can serve their demand for capital and other services. Fourth, the existing finance companies have been performing well, which reported the high profitability and low risk, if compared to other business fields.

Statistics showed that the percentage of people who can access finance services in Vietnam remains low (less than 10%).

Some experts said that foreign investors now try to establish finance companies, going this the roundabout way to access the Vietnam’s finance and monetary market when Vietnam tightens the establishment of banks. Do you agree with the viewpoint?

The fact that many investors want to bank on finance companies shows that the demand for capital of the national economy is very big.

I can say that the central bank always keeps cautious when considering licensing new finance companies, both domestic owned and foreign invested.

Foreign institutions, when applying for setting up finance companies in Vietnam, always have to commit to focus on the fields that remain open in Vietnam or the fields Vietnam’s banks have not paid much attention, such as providing consumer credit to individuals, funding house purchasing deals, or issuing cards.

I don’t think that foreign investors are taking the roundabout way to access Vietnam’s monetary market.

source: http://www.vneconomy.com.vn/eng/?param=article&catid=01&id=f41b61e3817b0f

VINATEX opens supermarkets in 16 cities and provinces

Vietnam National Textile and Apparel Group (VINATEX) has expanded its supermarket chain to 16 cities and provinces across the country.

Staring from a retail shop in Ho Chi Minh City six years ago, the chain, known as VINATEX MART, now includes 46 supermarkets in Hanoi, Hai Duong, Thanh Hoa, Nghe An, Da Nang, Gia Lai, Dak Nong, Binh Phuoc and other localities.

VINATEX MART has developed at an average growth rate of 60% per year. VINATEX plans to open 34 more supermarkets and trade centres by the end of 2007, raising the total number to 80.

source: http://www.nhandan.com.vn/english/business/151007/business_vi.htm

Can Tho attracts 10.3 million USD in FDI this year

The Mekong delta city of Can Tho has attracted 10.3 million USD worth of foreign direct
investment (FDI) so far this year.

As a result, The city has so far lured 44 FDI projects with combined capital of 136.9 million USD.

Besides, 99 foreign-invested branches, business offices, showrooms and entrepots are operating in the city.

During the nine-month period, FDI enterprises in the city garnered 146 million USD in revenues, a rise of 15 percent over the same period last year, of which export revenues have made up 27 million USD.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/218148/Default.aspx

World famous brands plan to enter Vietnam

The most luxurious fashion brand in the world, Gucci, has confirmed its presence in Vietnam. Gucci Chief Executive Officer Mark Lee said that Vietnam was an attractive market for high-quality consumer goods.

What is the role of Vietnam in Gucci’s business strategy in Asia and the Pacific?

Vietnam plays a very important in Gucci’s business expansion plan in Asia, the market with the strongest growth rate in Gucci’s global business strategy. In two years, 2005-2006, Gucci’s global revenue increased from 18.4% to 19%, higher in Asia, from 20 to 24%.

Vietnam is among the countries with the highest economic growth rates in the world. More than two years ago, Vietnam was in Gucci’s plan to expand its market in Asia. After seeking suitable partners, Gucci has experimentally opened its first shop on Dong Khoi road, HCM City.

What is the scale of this shop compared to the system of shops of Gucci in Asia?

Gucci shop in HCM City is designed, conducted, and provided with products meeting standards of Gucci in the whole world. This is a place that introduces the latest fashion trend, authentic products, and services up to Gucci global standards.

One of the standards that Gucci gives priority to when it chooses one place for investment is selecting partners with good strategic vision, effective administration policy, and a qualified team of staffs.

Gucci’s target is not selling products, but also providing customers high-class services related to fashion, linking them to top designers in Italy and through them making forecast and building fashion trends for Gucci lines of products.

So we took nearly one year for preparation, including seeking a good site for opening our shop, which is in a luxurious area, 100% of products are made in Italy, trained salesmen, etc.

Who are major customers of Gucci in Vietnam?

They are Vietnamese people. Vietnam is a market which has a young population, with increasing per capital income along with stable economic growth. In addition, the need for fashion products of Vietnamese customers is quickly catching up with the trend in the world market. This explains why not only Gucci but also many other big brands plan to enter Vietnam after Gucci.

It is said that compared to the current income of Vietnamese people, the price of Gucci products is too high. How will this influence Gucci’s business prospects in Vietnam?

I believe that it is not problematic. According to our survey, Vietnam is one of the markets with the most attractive growth index of luxurious consumer goods in Asia. This is basically attractive to big brands to invest in Vietnam through Vietnamese partners, by transferring their experience in brand management and development, etc.

source: http://english.vietnamnet.vn/biz/2007/10/749419/

Market watchers see smooth sailing ahead

The stock market will continue expanding for the foreseeable future, said Vu Bang, chairman of the State Securities Commission, during a Saturday conference on Vietnam's business environment.

"The equity market in the short term will lure more capital from foreign institutional and retail investors. In addition, shares have completed a reasonable price adjustment, and as a result the market should develop further," said Bang.

Over the last seven years, the market has become a reliable source of capital for companies wanting to expand their operations. With over 200 listed companies, market capitalisation has reached 28% of GDP.

"The bourse will grow further with the support of Government policies. The commission will also promote new information technology to provide investors with the latest equity data," said Bang.

Though investors are currently upbeat about the bourse, executives on Saturday noted several obstacles in the short term.

Huge price swings from month-to-month for instance put investors at unnecessary financial risk.

"Vietnam's stock market is young, so such adjustments are of course necessary," said Nguyen Duy Hung, general director of Saigon Securities Inc. "Each adjustment period can also be considered an opportunity for companies to step up and balance their capital needs with revenue streams."

The end result is companies become more self reliant.

Another factor that executives are concerned about is the Ministry of Finance's proposal to impose a 25% capital gains tax.

Investors would be less inclined to sink money into the exchange if such a tax was imposed, said Huy Nam, author of several books on equity trading. Investors may instead decide to put their money into more traditional assets like property and gold.

Bang, though, argued a capital gains tax would be necessary for the market's development. He said executives should instead consider how much of a tax could be levied without causing too much harm to investor interests.

source: http://english.vietnamnet.vn/biz/2007/10/749463/

Businesses seek united front to prosper in international market

More than 600 entrepreneurs gathered at the HCM City’s Reunification Palace to hear presentations made by local and foreign businesspeople on the topic "Viet Nam Entrepreneurs: One Team - One Vision".

"The role of the private sector is important. If businesses become strong, then so does the economy," Nguyen Thanh Minh, deputy editor-in-chief of Doanh Nhan Sai Gon (Sai Gon Entrepreneurs) newspaper, organiser of the seminar, said in his opening speech.

Minh said that despite the country’s membership in the World Trade Organisation (WTO), more than 110,000 companies in HCM City were not operating as a team.

Strengths, weaknesses

Senior economist Le Dang Doanh said the strengths of local businesses included patriotism, a determination to grow, an eagerness to learn and an ability to endure hardships.

"But most businesspeople lack fundamental knowledge about modern finance, banking, management and marketing. We should recognise that as a member of World Trade Organisation, quality and prestige are very important," he said.
Dr. Ly Qui Trung, owner of the popular restaurant chain Pho 24, said that doing business well relies on a tradition that has been developed over many years. "The business environment in Viet Nam has only been operating for the last two decades so it has not matured yet," he said.

The managing director of the market research company Taylor Nelson Sofres Viet Nam, Ralf Matthaes, who has spent 13 years working in Viet Nam, said local businesspeople had ambition and ability. "But they don’t know who they are five or 10 years later. The lack of vision is one of your weaknesses."

"Today, there are over 300,000 companies, three million households and 80,000 co-operative units doing business in Viet Nam.

"But 200 largest Vietnamese companies are still considered comparatively small- and medium-sized," he said.

Foreign competition

"Every company and group starts with a fixed vision. We are small now, but if we had a more well-thought vision, we would grow," Gian Tu Trung, director of PACE management school, said.

Trung said local companies would have to compete with foreign ones in the local market of more than 80 million but also in the world market of 6 billion.

"This means that our vision should move from the local to the global market. That will decide the destiny of each enterprise as well as Viet Nam," he said.

He said big businesses would be involved in the international product chain and small companies would take part in different parts of the chain.

"The global market will even affect those who sell miscellaneous goods because huge foreign retail corporations like Wal-mart and Seven-Eleven are going to enter the local market. So all of us have to change," Trung said.

Sharing the same vision would create a more united team with common values. "From that, a company or a country might take off," he added.

"The market is not the battlefield. The market is a place where the winner is the person who runs the fastest. Those with vision and a good team can reach their target more quickly."

Don Lam, general director of the investment management fund VinaCapital noted that local companies needed to improve their trademarks, prestige, quality, and ability to work as a team.

Regional, global expansion

Other speakers at the seminar spoke about their goals to reach an international and regional audience.

Le Hong Minh, director of VinaGame, said he wanted to tap the global market for online games, and go beyond his base of three million local online players.

Vu Thi Ngoc Trinh, president of the Minh Dung Limited company, said she expected to be among the top 10 enterprises that produce marine and veterinary medicine in South East Asia.

Economist Le Dang Doanh said he dreamed of a new image for Viet Nam - one of economic development and cultural and societal progress.

"It’s time to make the legendary Viet Nam that won the war to be the strong Viet Nam that succeeds economically," Doanh said.

Outstanding businesses

Ha Noi and HCM City held separate ceremonies to honour outstanding businesses and entrepreneurs on Saturday.

50 enterprises and 17 entrepreneurs in Ha Noi received "Thang Long Cup" and "Excellent Entrepreneur" awards in the capital. Also at the ceremony, the Viet Nam Fatherland Front began their month of action dedicated to helping the poor.

Addressing the event, Chairman of the Ha Noi People’s Committee, Nguyen The Thao, called on all State agencies, social organisations, businesses and individuals in the country and abroad to support the Fund for the Poor to help the disadvantaged acquire jobs and escape hunger and poverty. A total of 7 billion VND(US$437,500) was raised at the ceremony.

Meanwhile, HCM City presented 10 "Outstanding Business", and 89 entrepreneurs received the "Sai Gon Outstanding Entrepreneurs 2007" title.

The Sai Gon Entrepreneur newspaper earlier raised 1.5 billion VND (nearly $74,000) for its humanitarian fund through a walk held on October 7.

source: http://vietnamnews.vnagency.com.vn/showarticle.php?num=08BUS151007

Govt may permit FDI in commodity brokerages

Commodity brokerages may not be too far from being eligible to receive foreign direct investment (FDI). The government is mulling over a proposal to permit FDI in these brokerages. At present, foreign companies can enter the Indian commodities market only through their outfits or joint ventures in the equity markets.

The finance ministry is in favour of allowing foreign companies to invest directly in commodity brokerages.
In a letter to the ministry of consumer affairs, which regulates commodity brokerages through the Forward Markets Commission, the finance ministry has suggested that since the government is opening the doors to foreign investment in commodity exchanges, a policy should be formulated for commodity brokerages as well.

In the absence of a policy, foreign investment has crept into commodity broking firms indirectly. Most commodity broking firms are owned by stock broking companies in which 100% FDI is permitted. North Block’s view is that investment should be allowed from the front door, a source said. However, the ministry has not given its views on the quantum of FDI to be allowed.

When contacted, FMC chairman BC Khatua said though he has received no concrete proposal yet, the important issue is whether foreign companies should be allowed controlling stake. “In commodity exchanges, foreign companies cannot have controlling stake. FDI is limited to 49%, with FII and companies allowed 26% each. If the same logic is extended to brokerages, there should be no problem. But if they are allowed to own controlling stake or completely own brokerages , then it may not be so desirable,” he said.

The government has been reluctant to allow foreign commodity brokerages into the market directly because it fears that could change the market dynamics. If a large brokerage trades on its own account, it could well corner a commodity or affect price discovery in India’s stillilliquid market. Moreover, the impact would be felt by small producers and traders in the spot market as well since the futures and spot market are now fairly well-aligned.

“Unless foreign commodity brokerages are barred from trading on their own account, this danger would remain,’’ said an industry watcher.

While foreign investment up to 49% in commexes may be round the corner with the department of industrial policy and promotion preparing a Cabinet note on overall FDI review, FDI into broking firms may not happen simultaneously . This is because consultations on the issue are not over yet.

source: http://economictimes.indiatimes.com/Govt_may_permit_FDI_in_commodity_brokerages/articleshow/2452148.cms

PetroVietnam flexes some financial muscle

Investor interest in PetroVietnam Finance Corporation (PVFC) is climaxing with its initial public offering just a week away.

PVFC plans to auction 59.6 million shares on October 19. SeaBank Securities, PVFC’s financial advisor for the public offering, has set the initial bidding price at VND51,000 a share.

Besides being a subsidiary of Viet Nam’s leading oil producer, PetroVietnam, there are several reasons why investors want a piece of PVFC, including solid earnings.

The company has reported VND2 trillion (US$125 million) in revenue for the three quarters ending September 30, and a pre-tax profit of VND703 billion ($43.9 million).

"Looking at the company’s financial results, investors have high expectations for the IPO," says Hoang Mai Hoa, an analyst at Royal Securities.

Investors also feel comfortable in knowing PVFC is an arm of PetroVietnam, which in itself is expected to prosper as crude oil production increases, says Hoa.

Another important factor is the auction price is "surprisingly affordable for investors", especially for a blue chip, says James William, an executive with a HCM City fund management company.

Given demand and all the hype surrounding the IPO, William predicts PVFC shares could hit VND200,000 a piece when they officially list on the HCM City Stock Exchange.

PVFC has already announced Morgan Stanley as a posible strategic partner - a deal is expected to be complete before PVFC shares list on the exchange.

"Morgan Stanley is a leading financial firm in the global market. If it becomes a PVFC strategic partner, the Vietnamese financial corporation will be at an advantage in the local market," says William.

Deputy Prime Minister Nguyen Sinh Hung has ordered PVFC to limit total foreign ownership to 30 per cent, with any single overseas partner allowed to hold as much as 15 per cent.

Analysts, though, are warning investors not to be over zealous during the IPO.

"The market is not as hot as it used to be," says Dao Van Khanh, an Agribank Securities executive. "If share prices surge, they will not stay that way for long. If investors intend to trade in PVFC, then the initial public offering may not be a good time to buy."

Another concern, says Khanh, is more fundamental - the company is expanding aggressively into other industries, including property and media. By spreading its limited capital resources, PVFC might inadvertently put its core business at financial risk.

Nguyen Tien Dung, PVFC chairman, says money raised during the public offering will go toward the company’s core operations, which should improve earnings. He said there is little cause for concern regarding capital resources being spread too thin.

"The real value of the corporation is ensured," said Dung.

source: http://vietnamnews.vnagency.com.vn/showarticle.php?num=01STO121007

Foreign investors to hold a maximum of 30% stake in PVFC

Deputy Prime Minister Nguyen Sinh Hung has requested that foreign investors be allowed to hold a maximum of 30% stake and one foreign investor be allowed to hold a maximum of 15% stake in the to-be-equitised PetroVietnam Financial Company (PVFC), according to a new document issued by Governmental Office dated October 8.

These proportions are being applied to commercial banks, including listed ones.

PVFC is currently among the biggest financial institutions in Vietnam and is also the first State-owned financial company to be equitised. PVFC’s first initial public offering, scheduled for October 19, is attracting great attention from investors. The company will offer over 59.6 million shares at an initial price of VND 51,000 a share. After equitisation, the company will have a charter capital of VND 5 trillion.

source: http://www.nhandan.com.vn/english/business/111007/business_f.htm

Over 713 million USD to develop Su Tu Den field

Prime Minister Nguyen Tan Dung on October 8 approved a plan to explore and pump crude oil at Block 15-1 northeast of the Su Tu Den (Black Lion) Field in the Cuu Long Basin, according to the Ministry of Industry and Trade.

The project, which has a total investment of over 713 million USD, will install an oil rig and a pipe system to transport crude oil from the block.

The Viet Nam Oil and Gas Group (PetroVietnam) has been asked to choose contractors for the project, which is expected to pump the first oil flow in December 2009.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/217623/Default.aspx

More FDI capital poured in Da Nang

Central coastal Da Nang city licensed 20 foreign direct investment (FDI) projects totalling more than 677 million USD in the first nine months of the year, bringing the total valid FDI projects in the city to 112 with a combined capital of more than 1.5 billion USD.

Three of 20 newly-licensed projects, worth more than 653 million USD, are involved in real estate construction.

They are the 325 million USD Capital Square residential area project, the 250 million USD Da Phuoc residential area project and the 78.1 million USD Ngu Hanh Son resort project.

A series of projects which are being carried out in the city include the 86 million USD Silvershores resort, the 73 million USD VinaCapital golf course, the 60 million USD Vegas villa and hotel resort, the 57 million USD sea resort, the 30 million USD Daewon high-rise building, the 25 million USD Indochina Riverside Tower and the 25 million USD Olalani resort.

source: http://english.vietnamnet.vn/biz/2007/10/748909/

Singapore's Olam to invest $45 mln in Vietnam coffee facility

Agricultural commodities supplier Olam International said Tuesday it is investing US$45 million in a soluble coffee manufacturing facility in Vietnam, the Thomson Financial newswire has reported.

Olam, which is the world's largest supplier of Robusta green coffee, said the facility would produce and supply bulk spray-dried coffee powder, freeze-dried coffee granules and coffee extracts to the unbranded and private coffee label segment.

The company would build the facility in two phases. It aims to have production capacity of 3,700 tons annually annum by the first quarter of 2009, and then expand capacity to 6,500 tons by 2011.

The report quoted Vivek Verma, Olam's managing director for coffee, as saying that the expansion into soluble coffee manufacturing was “a one-step adjacency move” into a higher value-added activity in the coffee supply chain.

source: http://www.thanhniennews.com/business/?catid=2&newsid=32384

Viet Nam's economic growth looked at worldwide

Public opinion has recently flashed positive signals on Viet Nam’s economic growth, saying that the country is the spotlight for foreign investors.

The US economic newswire “Bloomberg” said Viet Nam's economic growth accelerated to its highest point in a decade, as companies made more garments for export and rising incomes and an increase in foreign visitors spurred service industries.

Jonathan Pincus, Hanoi-based country economist for the United Nations Development Programme said: “Vietnam is doing exceptionally well by any standard, and lower middle-income status by the end of this decade is entirely achievable.” However, the official stressed that Viet Nam is still a long way from creating truly international companies that are globally competitive, and this is a challenge for the country.

The German news agency (DPA) said high economic growth rate and low-cost labour are Viet Nam’s advantages, which are now attracting Chinese investors. Investment capital from China was only 66 million USD in 2005, but rocketed to 312 million USD the next year, DPA noted.

Investment capital from China will continue to pour into Viet Nam if the country’s high economic growth rate continues, the German agency said.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/217498/Default.aspx

VK Housing plans mega project in City

The joint venture Vietnam - Korea Housing Development Company (VK Housing) announced yesterday that it would build a project worth US$300mil in HCM City's District 7.

The eight-building project, called The Mark, will kick off next February on an acreage of 8.3ha. Over 35% of the land will be used for buildings.
The project's buildings of between 26 and 30 storeys all contain a basement.

When completed in late 2011, it will offer more than 2,000 apartments of 78 to 389 sq.m in size.

There will also be space for shopping malls to be located on the first to fifth floors. However, the first two blocks will be available 18 months from the first day of groundbreaking.

VK Housing general director Lee Jong Suk said The Mark would combine features of Vietnamese living and Korean housing styles, with contemporary furniture.

He expects to attract customers, including foreigners, to live in the complex, citing its convenient location next to a 5,000 sq.m park and near FV and Tam Duc Heart hospitals, as well as international schools, exhibition and shopping centres and golf courses.

Also yesterday, Nguyen Trung Tin, vice chairman of HCM City People's Committee, officially awarded the joint venture with an investment licence.

VK Housing has charter capital of $24mil with the local partner, the Housing Development and Trading Company representing 20%, and two Korean partners, P&D Korea and Lucky Vietnam, 80%.

The company also plans to build free a school of 27 classrooms worth VND11bil for District 7.

source: http://english.vietnamnet.vn/biz/2007/10/748673/

MOF considers lowering tax on finished steel

Fearing that steel will be in short supply, the Ministry of Finance (MOF) is considering further tax cuts on finished product to pave the way for more imports into Vietnam.
The ministry may lower the import tax from the current 8% to 2%, which is equal to the rate imposed on ingot (unfinished) steel.

The tax cut aims to help increase supplies, thus cooling the market down. Experts have anticipated the ‘steel price fever’ to occur in the last months of the year, when the country enters the construction season.

According to MOF’s Price Control Department, no steel mill has announced price increases so far this month after the adjustment at the end of September. However, the steel price is expected to increase by VND200-400/kg later in October due to the skyrocketing price of ingot steel.

On the domestic market, local mills sell bar steel at VND9,850-10,500/kg, and rolled steel at VND9,800-10,300/kg (deliveries at mills). Meanwhile, the retail price is VND12,000/kg on average.

The price of rolled steel has soared to VND14.5mil/tonne; however, purchasing 20-30 tonnes of rolled steel at once is currently impossible, because of serious shortages.

The price of China-sourced ingot steel keeps rising, now offered at $618/tonne, increasing by $13-18/tonne since the final week of September ($600-605/tonne), and $48-58/tonne since the first week of September. According to the Vietnam Steel Association (VSA), the ingot steel in stock was estimated at 290,000 tonnes, and local mills need to import 250-300,000 tonnes of ingot steel a month in order to meet local demand.

The Ministry of Industry and Trade has sent a dispatch to VSA, requesting it maintain enough production to avoid a shortage.

MOF and relevant ministries are determined to curb the rising cost of steel. Several days ago, MOF representative said that the ministry is considering setting up a price frame for steel products. If such a price frame is instituted, local steel mills would not be allowed to sell their products at prices higher than forced ceiling.

source: http://english.vietnamnet.vn/biz/2007/10/748688/

United Airlines to fly between HCM City-Los Angeles

US carrier United Airlines announced it would begin a daily passenger and cargo service between Ho Chi Minh City and Los Angeles via Hong Kong on October 29.

Speaking at a press meeting during his visit to HCM City on Oct. 8, United’s vice president Pacific, Mark Schwab, said: “We are delighted that in less than three years of operating in Viet Nam, we are significantly expanding our route network and offering travellers from Viet Nam a second gateway to California.”
The carrier will fly Boeing B747-400 aircraft on the new route.

The new service will also significantly increase cargo capacity into Los Angeles, the largest cargo gateway on the US west coast.

Joe Mannix, United’s country manager in Viet Nam, said: “Los Angeles is home to the largest ethnic Vietnamese population in the US, and the new service is expected to appeal to the fast-growing Vietnamese market while also complementing other United services from HCM City via Hong Kong to San Francisco and Chicago.”

The airline currently operates daily services from HCM City to San Francisco and Chicago and is the only American carrier serving Viet Nam.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/217174/Default.aspx

Commercial vehicles drive auto sales up 99 percent

Automakers in Viet Nam sold a total of 7,683 vehicles in September, up 99 percent over the same period last year, a growth fuelled by stronger sales of commercial vehicles.

The Viet Nam Automobile Manufacturers Association (VAMA), a trade association representing the country’s 18 leading carmakers, said sales of commercial vehicles, which include buses, vans and trucks, reached 3,889 units, up 136 percent year-on-year.

Passenger vehicle sales were up 96 percent, at 1.562 units sold, while the SUV and MPV market segment grew 57 percent, with 2,232 units.

According to VAMA chairman Udo Loersch, September’s strong sales brought total sales in the first nine months of the year to 49,240 units, up 83 percent over the same period last year, led by passenger vehicles, with nine-month sales up an annualised 145 percent.
New models should help sweeten the figures in the final quarter of the year. Toyota introduced its all-new Vios sedan with a 1.5-litre engine at 26,100 – 28,900 USD. Ford rolled out its Escape compact SUV with a 2.3 litre engine and a 35,500 USD sticker price.

Mercedes-Benz launched its new C200K sedan with prices ranging from 59,000-64,000 USD, while BMW will shortly begin offering its SUV, the BMW X5.

According to Huynh Du An, general director of Euro Auto Viet Nam, BMW’s authorised distributor in Viet Nam, his company already received nearly a hundred orders for new BMWs, all of which will be imported directly from Germany.

The nation imported 5,252 automobiles worth 280 million USD in the first eight months of the year, up 62.2 percent year-on-year, according to the Ministry of Industry and Trade. The import of car parts and components reached 481 million USD in the same period, up 69.4 percent.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/217275/Default.aspx

Da Nang property market booms

By the end of this year, the city is expected to have an additional 35,000 sq.m of office space. At the end of last year, there were 20,000 sq. m for lease with occupancy rates at 96 percent.

Duc Manh Company’s Vinh Trung Plaza and Indochina Capital’s Indochina Riverside Tower are set to provide 15,400 sq.m of international standard office space when they go on-line at the end of this year. Rental rates will average at 17 USD per sq.m at Vinh Trung.

“We expect much of the new supply will be absorbed,” he said, saying there will be more local and foreign firms present in the city, especially banks and other financial services companies. “This is the result of the city’s strong economic activity and unparallel infrastructure; it will encourage new development.”

Meanwhile, office rental rates are said to be acceptable, now averaging 10-15 USD per sq.m a month. “Rates might increase in the coming time, but only slightly due to abundant supply,” said Tran Quoc, head of Thien Kim Company’s real estate section.

The city’s retail market is also seeing good signs, as a Big C Shopping Centre is to open in November and the Indochina Riverside Mall is scheduled to open its doors at the end of December, said Leech. The total retail sales of goods and services is at 12 million USD a year, so not big, but the retail market’s annual growth rate of around 25 percent is quite good, he commented.

“The majority of local residents belong to low income groups... but more tourists are coming to the city and driving retail sales.”

The city’s hotel and residential markets are seeing the same situation, with a number of projects providing apartment and hotel spaces being designed, he said. Among the projects are the 200 million USD Vina Capital Square, the 80 million USD Daewon Cantavil and the 30 million USD True Friend Park.

The Da Nang property market is mostly in resort projects. According to the Da Nang Construction Planning Institution, the Son Tra-Dien Ngoc coastline is filled with construction projects for new resorts. Large projects include the 150 million USD Eden Resort covering 34 ha, the 86 million USD Silver Shores Crown Plaza Resort-20ha, and the 80 million USD Asia Pearl Resort-17ha.

CBRE forecasts that the city will have 500 villas, 3,200 hotel/resort rooms, 14 shopping malls, 800 condominiums, 275 serviced apartments and some 100,000sq. m of office space for lease by 2010.

source: http://english.vietnamnet.vn/biz/2007/10/748350/

Vietnam to keep stricter control over foreign stock investment

Under the draft regulation, individual investors would have to register with the Securities Depository Centre, while institutional investors with the SSC.

SSC would grant a certificate of investment registration to investors within seven days of receiving regular papers from investors.

The draft regulation has immediately raised two opposite opinions. Those, who protest the regulation, say that the requirement on investment registration would create ‘sub-licences’ that cause inconveniences for investors. It would take foreign investors too much time to get confirmation from diplomatic agencies, and be associated with many complicated procedures.

Meanwhile, others think that it is the right time to keep stricter control over foreign investment capital. To date, Vietnam still cannot reckon the total foreign capital flow that has come into Vietnam so far. Strict control over foreign investment capital will also help prevent dirty money from being washed in Vietnam.

Bui Thi Thanh Huong, Head of the Securities Business Management Division under SSC, said that the SSC would grant investment registration certificates if it found the papers lawful, while the inspection of papers would be carried out later. It would take three days on average to grant certificates, and after that investors would be given trading codes.

Mrs Huong acknowledged that it would be very difficult to examine the papers provided by foreign investors as it would require the SSC to check information in foreign countries. But SSC is considering taking full advantage of the relationships between SSC and the securities commissions which have signed cooperation agreements with SSC and use their databases.

Regarding the control over foreign capital, experts have pointed out that if SSC, the central bank and securities depository centre can cooperate well, they will succeed in controlling the capital and there would be no need to set up new procedures.

Under the current procedures, foreign investors have to apply for trading codes at the securities depository centre, and sign contracts on securities deposits with banks. In order to make transactions, foreign investors have to remit foreign currencies into their accounts and convert them into VND. Therefore, the central bank knows exactly how much foreign currencies have been injected in Vietnam. Meanwhile, the three agencies can share databases to keep control over foreign capital flow.

source: http://english.vietnamnet.vn/biz/2007/10/748497/

HCM City hi-tech park attracts investment worth US $1.4 billion

Ho Chi Minh City’s Hi-Tech Park has attracted US $1.4 billion worth of investment from 27 local and foreign investors after five years of operations.

According to Le Thi Thanh My, deputy head of the park’s management board, about 40 investors who had registered US $700 million of capital in total are awaiting for land grant, seven other projects capitalised at US $113 million are asking for infrastructure facilities, while 14 hi-tech investors are waiting for procedure completion.

The city is boosting site clearances in order to have 913 hectares of land for the construction of supporting facilities by 2010.

A trade and investment promotion programme for the city’s hi-tech park is being underway till the month-end.

A forum with the aim of giving investors in supporting industries more opportunities to get involved in the hi-tech operations in the park will be held. This also is a chance for local and foreign investors to seek partners and enhance co-operation.

source: http://www.nhandan.com.vn/english/business/081007/business_h.htm

World Bank to open office in Ho Chi Minh City

World Bank (WB) Country Director to Viet Nam Ajay Chhibber has said that the world’s largest development bank intends to open a representative office in Ho Chi Minh City.

Chhibber held talks with the local authorities on October 8 to discuss the acceleration of several WB-invested projects in the city and said he supported the city’s urban infrastructure development, adding that the WB is considering a financing package for the city’s metro project.

The bank has won applause from HCM City officials for its assistance to the city’s major projects on environmental protection, transportation and urban infrastructure.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/217083/Default.aspx

Heated stock market attracts foreign capital

VietNamNet Bridge – Commercial banks have said that the dollar price is decreasing because the foreign capital flow has unexpectedly returned to Vietnam’s stock market in recent days.The volume of dollars flowing into banks has increased sharply these days, said Mr Hai. Every day, his banks purchases $5mil, while the figure was $3mil in previous days. Eximbank also buys $5mil a day, and the figure may be nearly double sometimes, at $9mil.

Le Dac Son, Director General of VP Bank, said that a big volume of dollars had been injected in Vietnam, making the demand for selling dollars for VND soar dramatically. That is the main reason behind the dollar devaluation in the last few days.

Ly Xuan Hai, Director General of ACB, also said that the heated stock market had drawn foreign capital back.

The director of a securities company said that foreign investors had come back to the market right after seeing the signs of the market’s recovery.

The VN Index soared to the 1,106.6 point level on October 3 after many days of staying close to the 1,000 point level. The hot stock market has encouraged foreign investment funds to disburse, and in order to do that, they have to sell foreign currencies to get VND. That explains why foreign currencies are superfluous.

In September, foreign investors purchased no more than VND120bil worth of securities. On September 14 and 17, the most bustling days, the purchased volume was VND117-118bil. The situation was quite different on September 19, when foreign investors at HCM City Stock Exchange bought VND160bil, or 23% of the trading volume on the market. The purchased volume increased day by day, to VND200bil on September 20, VND300bil on September 27, and VND474bil on October 2, or 2-3 times higher than the sum of money investors injected in the market half a month ago.

Securities companies have reported sharp increases in the numbers of newly opened accounts, which have brought a big volume of foreign currencies.

Moreover, big deals made recently have also made the foreign currency volume available on the market bigger. HSBC spent $225mil to buy 10% of Bao Viet’s shares, while Deutsche Bank AG bought 10% of Habubank’s shares.

The devaluation of the greenback cannot be seen as good news for banks. The director of a joint stock bank said that banks were incurring losses, and they did not want dollars any more.

However, an official from the Hanoi branch of the State Bank of Vietnam said that it was too early to say that banks’ foreign currencies were in excess since there was no exact figure about the volume of dollars flowing into banks.

Finance experts forecast that the greenback value will remain at low levels until the year’s end. The State Bank of Vietnam is forecast not to buy foreign currencies in the near future, especially in the context of high inflation. The central bank has not shown any signs of interfering with the VND/US$ exchange rate.

However, an official of the Hanoi branch of the central bank said that if the dollar kept devaluating sharply against the VND, the central bank would buy more US$ or use other tools to stabilise the market.

source: http://english.vietnamnet.vn/biz/2007/10/748260/

VND20bil lost in Vietnam’s biggest van production project

Government inspectors have announced the preliminary loss of VND20bil ($1.25mi) in the biggest-ever project on making vans in Vietnam after two years of inspecting the investment activities at the assembly workshop in Thanh Hoa province.

The preliminary report released by the government inspectors showed that Vietnam Engine and Agricultural Machinery Corporation (VEAM), the investor of the project, lost VND20bil ($1.25mil) during the project’s implementation. The corporation initially estimated the total investment capital for the project at VND320bil ($20mil), but the sum was later raised to VND600bil ($37.5mil).
VEAM did not anticipate the volume of work needed to be done, which made additional expenditures arise. Meanwhile, VEAM purchased the production line from the South Korean partner, but did not get the technology transferred, which also pushed the cost up.

The government inspectors are finishing their inspection and will soon give final detailed conclusions about the controversial purchasing deal.

The story about the purchasing deal began in 2004, when VEAM, a state-owned corporation, asked for permission from the then Ministry of Industry (MOI) to buy a secondhand Samsung van production line after the automobile plant shut down.

At that time, VEAM conducted negotiations with the Daegu Urban Development Company (DUDC), which then owned the equipment and production line of Samsung automobile plant. The corporation planned to disassemble equipment in the plant and carry it to Vietnam to be installed at VEAM’s workshop in Thanh Hoa province in the central region.

A contract on purchasing Samsung’s automobile production line was signed on June 3, 2004, under which VEAM had to pay $12,315,164.

In the feasibility project which was submitted to MOI at the end of 2005, VEAM wrote that it would recover capital within 9-10 years. The assembling workshop in Thanh Hoa was expected to churn out 33,000 units from the 9-10th year of operation.

However, VEAM’s ambitious plan faced strong protest from relevant ministries and experts, some of whom accused VEAM of using state-sourced money to buy ‘scrap iron’.

Meanwhile, four companies reportedly joined the bid to buy Samsung’s production line, including Vietnam’s VEAM, which finally got the line for $12.3mil. Immediately after the bid, one of the four companies initiated legal proceedings, asking that the bid’s result be rejected, saying that there were dubious aspects in the deal.

However, the biggest ‘abnormal’ thing in the deal, about which the public raised a lot of questions, was the fact that VEAM signed consultancy contracts with two consultancy firms. The total value of the two contracts was $819,930, or 7% of the production line’s value. The question was why VEAM spent so much money for the consultancy services.

In early September 2004, 6-7 officers of the Bidding Committee for the Samsung automobile workshop sale, including Daegu state officials (where the Samsung workshop was located) and South Korean persons, representing VEAM, were arrested for “the dubiousness of the affair”. Directors of BKs and P&H, the two consultancy firms for VEAM, were among the arrested, for giving and receiving bribes.

Moreover, South Korean police also arrested six staffs of DUDC. A South Korean newspaper wrote that DUDC’s director met VEAM and gave a bribe to DUDC’s staffs. After VEAM won the bid, the director received $235,000 from VEAM.

Han from P&H also reportedly received $520,000 from VEAM for helping VEAM win the bid.

The case was so boisterous that on May 15, 2005, the government released a document, instructing MOI to inspect the problems related to the van production project.

source: http://english.vietnamnet.vn/biz/2007/10/747833/

EU, major market for Vietnam’s footwear and garments

Normalising diplomatic ties with Vietnam 17 years ago, the European Union has become an important trade partner for Vietnam and a large market for many Vietnamese goods, including leather, footwear, textiles and garments.

Leather and footwear exports currently represent 60 percent of Vietnam's export revenues to the EU. Even though Vietnamese leather shoes were levied an anti-dumping tax rate of 10 percent, Vietnam's footwear export turnover to the EU reached 1.96 billion USD in 2006, a 10 percent year-on-year increase.

After Vietnam and the EU signed minutes against fraud in footwear trade, its export value to the EU has annually increased by more than 10 percent.

Following footwear, textiles and garments are the country's 2nd largest export to the 27-country economic bloc. Last year, textile and garment exports fetched more than 1.24 billion USD, a 40.9 percent increase over last year.

The 1993 Vietnam-EU agreement on textiles and garments enabled the export of the products, previously banned to this market to increase by 38-40 percent annually.

The abolition of export quotas for these goods to the EU as from early 2005 has also helped Vietnam promote exports to the bloc.

According to Vo Tri Thanh, Head of the International Economic Integration Policy Research Department, under the Central Institute for Economic Management, as a member of WTO, Vietnam will have opportunities to boost exports to the EU - the world's second biggest importer.

However, the economic bloc with 27 member countries is known as a strict market, requiring Vietnamese businesses, in particular those operating in the garments and textiles sector to work hard to meet requirements and standards and to consider market demand as an indispensable part of their production and trade strategy, especially since the country joined the WTO in 2006.

Nguyen Bao - Deputy Director of the Trade Promotion Department under the Ministry of Industry and Commerce, attributed the slow growth in export turnover of the apparel and footwear sectors to businesses' dependence on materials. Most of them do outwork for joint ventures or wholly foreign-owned companies.

In order to improve the competitive edge of the garments, textiles and footwear industries, Bao said local businesses should restructure their outwork mechanism, invest in renovating equipment, technology and design as well as building trademarks.

Under a development strategy for garments, textiles and footwear by 2010, Vietnam continues to consider the EU as one of its key importers.

In order to attaining a total export turnover of 10-12 billion USD in 2010, the garment sector will concentrate on developing locally made fibre and producing 1 billion metres of fabric to serve garment exports through 2015, said Chairman of the Vietnam Garment and Apparel Association (Vinatex), Le Quoc An.

The sector will also improve the weaving and dying quality and build three garment and textile industrial zones equipped with modern facilities to attract foreign investment, An said.

A programme to modernize the garment sector will be pursued to develop a staff of fashion designers as well as promote the image of the Vietnamese fashion industry and trademarks for high-quality products, he added.

The footwear sector has also put forth a series of measures to improve the production quality in an effort to attain an export turnover of 6.5 billion USD in 2010.

source: http://english.vietnamnet.vn/biz/2007/10/747854/

A revolution in insurance market

Integration and Vietnamese government commitments to open its market have been creating great changes in the insurance market of Vietnam.

A series of state-owned insurance firms like the Vietnam Insurance Corporation (Bao Viet), Bao Minh, PetroVietnam Insurance (PVI) have performed initial public offerings (IPO) and sold their stocks to foreign strategic partners, which are international insurance groups.

This is considered a real revolution in the insurance sector to increase competitiveness and maintain market shares for domestic insurers.

On two consecutive days, September 12 and 13, the two largest insurers of Vietnam, Bao Viet and Bao Minh, announced the names of their foreign strategic partners. Bao Viet chose the Hong Kong and Shanghai Banking Corporation (HSBC) while Bao Minh selected the AXA of France. The Vietnam Reinsurance Corporation (Vinare) and PVI are negotiating to choose their foreign strategic partners.

According to Vietnam’s WTO commitments, the Vietnamese insurance market will open completely as of January 1, 2008. After that, foreign-invested companies will be allowed to supply compulsory insurance services in Vietnam.

Therefore, local insurers will face a great challenge from experienced and financially-powerful foreign insurers.

“Not only after January 1, 2008, but from now on Vietnamese insurers have to accept competition from joint venture and wholly foreign-owned insurance companies,” said Phung Dac Loc, Secretary General of the Vietnam Insurance Association.

In 1993, the Vietnamese government issued Decree 100 opening the way for the establishment of some Vietnamese, joint venture and foreign-invested insurance companies in the country.

The further opening of the market and integration into the world is confirmed in the Vietnam-US Bilateral Trade Agreement, signed on October 12, 2001. Under this agreement, as of October 12, 2006, Vietnam lifted all barriers against American insurers in Vietnam, equivalent to Vietnam’s WTO commitments in the insurance field.

Local insurers have had at least six years so far to prepare for full integration. Except for newly established ones, other Vietnamese insurers have gained successes in improving their competitiveness, such as Bao Viet, Bao Minh, PVI and Petrolimex Insurance Company (PJICO).

“Vietnam has fully integrated in the field of insurance. To exist and develop, local insurers must cooperate with foreign partners on the principles of mutual benefit and sharing. The development strategy of the insurance sector to 2010, with the decision of equitising Bao Viet, Bao Minh and Vinare is brave,” said Le Quang Binh, former Head of the Insurance Management Agency under the Ministry of Finance, who is now Chairman of the Board of Directors of Bao Viet.

Two years after the Vietnamese Prime Minister issued Decision 310 dated November 28, 2005 approving the equitisation of Bao Viet and the estabilishment of the Bao Viet Finance-Insurance Group, the equitisation of Bao Viet has been finalised along with its IPO and its selection of strategic partners.

Based on Bao Viet’s IPO, the Ministry of Finance has redefined this group’s chartered capital – VND5,730 billion (US$358.12 million) – in which the state holds 77.54%, local shareholders 3.68%, foreign shareholders 10% and others 8.78%.

The biggest success of Bao Viet’s IPO is that it chose the only strategic shareholder – HSBC – which committed to provide great technical assistance to Bao Viet.

Meanwhile, Bao Minh also has its foreign strategic partner, AXA, the leading non-insurance company in Europe.

Under the agreement signed with AXA, Bao Minh will have access to the technical expertise of AXA Group’s global and regional platforms. The agreement will help his company diversify insurance products, improve the quality of insurance services, promote business administrative reform and build Bao Minh brand.

source: http://www.vneconomy.com.vn/eng/?param=article&catid=04&id=809f1c2c1944f1

Fair on global integration kicks off in Ha Noi

More than 150 Vietnamese businesses are displaying their products at a fair entitled “Vietnamese Businesses – Global Integration and Sustainable Development”, which kicked off in Ha Noi on October 4.

The fair features more than 300 pavilions featuring some of Vietnamese most respected trademarks and products in construction, garments and textiles, footwear, automobiles, electronics, telecommunications, pharmaceuticals, foodstuffs, handicrafts and farm produce.

Domestics and foreign businesses operating in finance, banking, securities, real estate and tourism are also attending the fair, which will run through October 7.

On the sidelines of the exhibition will be a series of activities such as a conference on the securities market and equitisation, a musical festival, and fund raising events in support of development of young businesses.

source: http://www.vneconomy.com.vn/eng/?param=article&catid=01&id=c2db3ce2cb049d

RP last choice of investors–report

The world’s largest multinational corporations are looking to accelerate foreign direct investment everywhere in the region—except the Philippines—according to a UN report released Friday.

In its World Investment Prospects Survey 2007 to 2009, the United Nations Conference on Trade Development (UNCTAD) said the Philippines is at the bottom of the survey among Southeast Asian countries, ranking 28th out of 41 countries.

Neighboring countries like Vietnam placed sixth in the survey followed by Thailand, 12th; Malaysia, 14th; Indonesia, 15th; Singapore, 16th and Korea 21st.

In September, The Manila Times published a report of the World Bank and its investment arm, the International Finance Corp., which said the Philippines became less business friendly. In its report titled “Doing Business 2008,” the multilateral lender said the country’s ranking in terms of ease of doing business slid to number 133 from the 130th place last year, citing the slow pace of reforms in the area of business regulation. The report surveyed 178 economies. In the 2005 report, the Philippines landed on the 121st spot.

Survey methodology

The UNCTAD survey, which was done in March 2007, asked chief executive officers or investor relation’s office of a representative sample of 1,500 non­financial companies, chosen among the world’s 5,000 largest multinationals or transnational corporations in terms of foreign assets. The report did not name the companies surveyed, just the industries where they belong.

The industries that were surveyed include the food and beverages, textiles, clothing, electrical and electronic, motor vehicles, trade, transport and telecommunications and electricity gas and water.

Responses were collected by mail and by e-mail between April and June 2007.

Regional potential

“South, East and Southeast Asia, which offers major location advantages such as market growth and size, cost and quality of labor, is consolidating its position as the most preferred region of international investors,” UNCTAD report said.

China was the most attractive location for foreign direct investments (FDIs) destinations, ranking number one. It was followed by India, United States, Russian Federation and Brazil.

The UN body said the most important factors influencing location of companies includes the size of market, growth of local market, access to international or regional markets, stable investment environment and availability of skilled labor force.

“The major motives behind the growth of FDI remain market-seeking and, to a smaller but growing extent, resource-seeking [mainly skilled labor, but also raw materials and finance],” the UNCTAD report said. “Efficiency-seeking relocation to countries with low labor costs was also mentioned by respondents, but to a lesser extent than other factors. Companies are also very responsive to a stable investment environment and to government effectiveness.”

The UN report noted there could be consistent growth in foreign direct investment flows until end 2009, as a large proportion of companies expect to increase their investments abroad over this period: 68 percent of them plan to do so in 2007, 66 percent in 2008 and 64 percent in 2009.

On the other hand, only 13 percent envisage a reduction of their investments abroad in 2007, 11 percent in 2008 and 9 percent in 2009. The percentage of companies that anticipate stable levels of investment from one year to the next increases over time, from 19 percent in 2007 to 23 percent in 2008 and 27 percent in 2009.

Despite their optimistic views regarding opportunities for international expansion, company executives are sensitive to global risk factors that could potentially hinder the pursuit of their investment strategies. Such risks include geopolitical instability, protectionist policies or uncertainties about world economic growth, the UNC­TAD report added.

UNCTAD said the rise in investment flows would emanate not only from the largest multinationals in developed countries, but also, increasingly, from transnational companies in emerging economies.

“While companies from all regions are expected to increase their FDI, those from developing Asia show a particularly dynamic potential,” the report said.

UNCTAD said the survey aims at providing an understanding of the outlook for future trends in foreign direct investments by the largest multinationals for the period 2007 to end 2009, on the basis of the responses of a sample of companies regarding their investment strategies.

UNCTAD was established in 1964 to promote the development-friendly integration of developing countries into the world economy, according to its web­site. Its main functions are to serve as a forum for intergovernmental talks; undertake research, policy analysis and data collection; and provide technical assistance.

source: http://www.manilatimes.net/national/2007/oct/06/yehey/top_stories/20071006top1.html

EU crowned as largest importer of Vietnamese seafood

The European Union has beaten out the US and Japan to become Viet Nam 's largest seafood importer, accounting for 24.4 percent of Viet Nam 's total seafood exports.

In the past eight months, Viet Nam shipped 175,400 tonnes of seafood to the EU at a cost of 586 million USD, increases of 24.5 percent and 29.2 percent, respectively, over the same period last year.

On the rises in both volume and export value of seafood , Nguyen Viet Manh, Deputy Head of the Ministry of Agriculture and Rural Development's International Cooperation Department, said confidently "I predict that the EU will continue to remain as the biggest importer of Vietnamese seafood".

Vietnamese seafood has so far made its presence felt in 26 out of the 27 EU member countries.

The Association of Seafood Exporters and Processors said products from "tra" and 'basa" catfish are the most favoured by EU consumers, citing the 167 percent growth rate of catfish.

In the past eight months, the EU imported around 112,000 tonnes of 'tra' and 'basa' products valued at 312 million USD from Viet Nam .

Former Ambassador and Head of the European Commission Delegation to Viet Nam Markus Cornaro said "many Europeans prefer Vietnamese seafood" at his last press briefing during his working term in Viet Nam .

Apart from 'tra' and 'basa' products, Europeans also consume shrimp and molluscs imported from Viet Nam , said the EC official.

To increase the quality of products to meet the strict requirements of the EU market, Vietnamese seafood processors have invested heavily in renewing technologies, while closely monitoring the operation of raw material suppliers.

At present, only 0.1 percent of Vietnamese seafood is placed under warnings by the EU, 10 times less than the 1 percent in 2005.

Close to 245 Vietnamese businesses are currently qualified to export products to the EU and 25 others are waiting for licences from the market.

This year, the Ministry of Agriculture and Rural Development is set to rake in seafood export earnings of 3.6 billion USD, 300 million USD higher than last yea's turnover.

source: http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/216579/Default.aspx

Bank shares most attractive for investors: survey

Bank shares are the securities item investors most want to make investments in, a survey conducted by Thoi bao kinh te Vietnam newspaper has found.

6,300 readers participated in the online survey conducted by the newspaper, giving their answers from August 30 to September 30, 2007 about their levels of interest in 10 most salient business fields (each ID can vote one time).

The survey, which reflects the tendency in the market now, showed that bank shares top the list of securities items investors want to invest in. 37.71% of investors said that they are eyeing bank shares, a result that does not surprise anyone as this has been anticipated before.

The share of the companies in the real estate sector ranks the second in the list of most wanted securities items (17.28%), followed by the shares of power companies (8.73%). Meanwhile, only 8.34% of investors said that they are interested in the shares of finance companies and insurers.

The other six interested business fields are as follows (in order by level of interest) 1. health care, hospital and pharmaceuticals (7.61%) 2. telecommunication (6.74%), 3. food and foodstuff, drinks (5.93%), 4. freight forwarding (3.78%), 5. heavy industries (2.35%), and 6. light industries (1.53%)
There are now 20 bank share items available on the market, of which the two most well known ones are ACB, listed at the Hanoi Securities Trading Centre (HASTC), and STB at HCM City Stock Exchange. The two share items always lead the two trading centers in trading volume, and the ‘health’ of the two securities items plays a very important role in the performance of the stock market.

As the real estate market has warmed up again after a long time of freezing, it is understandable why the shares of real estate companies can draw such attention from investors.

It really is a nice surprise when the shares of power companies are more favored than the shares of finance and insurance companies. Pha Lai, Vinh Son – Song Hinh are the big names on the stock market. Prior to mid 2006, the shares of power companies were seen as bonds thanks to their stability and profitability. Since the stock market prospered, the shares have been attracting many investors, including foreign investors. Meanwhile, the shares of finance companies and insurers have entered the difficult period after a lot of price fever.

Many investors have been disappointed when they ‘put all their faith’ into finance companies’ shares. However, BVS (Bao Viet Securities), SSI (Saigon Securities Incorporated), PVI (PetroVietnam Insurance) and BMI remain very attractive in the eyes of investors.

There was not the big gap in the percentages of voters for other business fields’ shares. However, it may surprise experts that investors are not interested in the healthcare – pharmaceuticals – hospital shares, though these enterprises always offer highest dividends to their shareholders, and show great potentials for development.

The shares of telecommunication sector still await the joining of big corporations, including Mobifone, Vinaphone and Viettel, to become more attractive.

The shares of industrial companies showed disappointed results, and experts believe that the result reflects the disadvantages and shortcomings of industries if compared to other sectors in the national economy.

source: http://english.vietnamnet.vn/biz/2007/10/747569/

Viet Nam-France relations never more active, says PM

PARIS — Development of relations between Viet Nam and France had never been so active, Prime Minister Nguyen Tan Dung has told French President Nicolas Sarkozy.

The positive development of their ties in all fields and their determination to reinforce "traditional friendly relations, comprehensive, long-term and trustful co-operation" into the 21st century were very satisfying, he said.

France remained Viet Nam’s senior European partner and the Government wanted French investors to have a stronger presence in Viet Nam.

This was particularly true of transport infrastructure; energy; telecommunications, banking, finance and the processing of agricultural produce.

The Prime Minister thanked the President for France’s support of Viet Nam’s development.

France had pledged aid worth 1.4 billion euro from now till 2010 and the Prime Minister asked the President to support projects with a French flavour, especially the Long Bien bridge, the Ha Noi Medical University and the inner Ha Noi railway.

The Prime Minister also called for the two countries to thoroughly organise "Viet Nam’s Month in France" and "France’s Month in Viet Nam" and that more scholarships be provided Vietnamese students to study in France.

The Prime Minister said that he was pleased to have visited France at a time when both countries were promoting reform.

Viet Nam had also made active contributions to promoting and consolidating the Francophone movement; the protection of national identities and diversity in globalisation.

The Prime Minister thanked the president for France’s support of Viet Nam’s bid to become a non-permanent member of the United Nations Security Council for 2008-09.

He also extended an invitation from President Nguyen Minh Triet for President Sarkozy to visit Viet Nam.

The French president replied by saying that France and Viet Nam had long- standing historical and cultural relations.

Viet Nam was now developing its economy and was sure to be elected a non-permanent member of the Security Council for 2008-09.

The French president praised the results of the talks between Viet Nam’s Prime Minister and French Prime Minister Francois Fillon.

Agreements signed would take the bilateral relationship to a new height.

President Sarkozy said the two countries used this spirit to reinforced their relations, particularly in economy, to be worthy of their traditional ties.

The French president accepted the invitation to visit Viet Nam with pleasure.

Yesterday evening, Prime Minister Nguyen Tan Dung met with France’s National Assembly Speaker Jean Louis Debre and Senate Speaker Christian Poncelet.

Deals worth $6 billion

Businesses accompanying Dung on his visit to France have pulled in 10 contracts worth almost US$6 billion.

The deals include a pact between the Viet Nam Garment and Textile Corporation (Vinatex), the Tin Nghia Co and BNP Parisbas to issue Vinatex bonds worth $500 million.

Another $500 million contract was signed between Agribank and several French companies to aid Vietnamese farmers export coffee.

The Alstom Co signed a deal to supply equipment valued at 180 million euros ($250 million) for the Son La hydroelectric project, the biggest of its kind so far in Viet Nam.

The contract signings took place on the sidelines of a business forum held in France yesterday that drew over 500 representatives from French and Vietnamese businesses.

At the forum, Prime Minister Dung reiterated that French businesses would find Viet Nam a favourable destination for their investment as there is a large French-speaking community in the country.

Earlier, on October 1, a gala night was held by the Vietnamese Embassy and the Viet Nam Chamber of Commerce and Industry to mark the Prime Minister’s visit.

Addressing a 500-person audience, Dung highlighted the historic and cultural relationship between Viet Nam and France, one which has developed into comprehensive, trusted and long-term co-operation.

French Minister of Trade and Finance Christian Lagarde affirmed the French Government’s policy to gear bilateral relations to a strategic dimension in the new development stage.

In the first three days of Dung’s visit, three Vietnamese films that have won grand prizes in the national film festival were screened at to a full house at the La Pagode cinema.

source: http://vietnamnews.vnagency.com.vn/showarticle.php?num=04POL031007