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Finance

Securities mortgaging in vogue again

17/Apr/2009 Intellasia | 15/Apr/2009 Dau Tu Chung Khoan page 21

Value added services of securities companies for investors are seemingly recovering together with the stock market.

In addition to workshops, presentations for information assistance, many securities companies are actively cooperating with credit organisations in a bid to provide financial assistance, increase trading capacity for investors. Currently, in the stock market, it is not difficult for investors to obtain such services as advancing revenue from securities sales, mortgages, share repo and others.

Although being a new player, on April 14, Truong Sinh Securities Co (TSS) signed a cooperation deal with Lien Viet Bank to provide capital assistance to investors. Pham Ngoc Thang, TSS's general director, said the mortgage value amounts up to 50% of the share market price and interest rates are relatively competitive.

Having developed mortgage services for long-term, Petroleum Securities Co (PVS) by this time is also promoting this value added services. Currently, PVS has cooperated with various credit organisations in offering securities loans. Lists of shares, value and interest rates of securities mortgage at PVS vary depending different partners. What is notable is that there is no maximum limit for securities mortgage at PVS. The interest rate for securities mortgage at PVS is 10.5% a year. In addition, PVS is also introducing repo services for such bank shares of Military Bank, Vietnam Export and Import Bank only. At Gia Quyen Securities Co (EPS), investors can use securities mortgaging services and advance payment for securities sales because EPS cooperates with partner banks to provide those services. With the securities mortgaging services, investors can use listed and unlisted shares in the accepted list of shares for mortgage to borrow loans.

In the past Bao Viet Securities Co (BVSC) had partnered with many banks including Bank for Investment and Development of Vietnam (Bidv) in order to supply capital to clients through securities mortgage in transaction accounts. Currently, BVSC accepts securities mortgage for 23 codes listed on the both floors, mostly blue-chip codes such as FPT, VIC, REE and so on. And if shares have a market price of 30,000 dong a share or more, the mortgage value will be 50%. As for the market price of from 20,000 to 25,000 dong a share, the mortgage value will be 8,000 dong a share, for the market price of 16,000 to less than 20,000 dong a share, the mortgage value is 7,000 dong a share, for the market price of from 25,000 to 30,000 dong a share, the mortgage value is 10,000 dong a share. The maximum limit that BVSC and partner banks can offer is five billion dong for the lending duration of three months.

VNDirect Securities Co also makes a partnership with Bidv to offer securities mortgage services with an interest rate of 0.03% a day. In fact, VNDirect works as a broker to arrange meetings between clients and banks only. All procedures are processed directly by between investors and banks while the securities company only manages securities and supervises debt payment obligations.

Pressure on lifting mortgages, when the market started strongly declining by early 2008, perhaps still haunting many securities companies and banks. However, there are many reasons for securities companies to rev up this kind of service, namely increased demand of investors, lowly decreased share prices, abundant capital source of banks.

Nguyen Manh Cuong, vice director in charge of securities trading and service division of Bidv-Ha Thanh branch, said that the bank now sets aside a limit of securities-backed loans worth 100 billion dong for BVSC, SSI each.

Cuong added that Bidv has put forward various measures to manage risks for such kind of loans. In addition to categorising different kinds of mortgaged shares, banks also set specific alert rates and solutions. If share prices reduce by 30% against the price at the time of mortgage, investors will have to pay in secured assets in cash or securities. If three days has passed from the deadline, investors still fail to pay in secured assets, the bank and securities companies will sell shares to settle loans.

The market is on an upward tendency with the positive sentiment of local investors. As for banks, after promoting interest rate subsidised loans under the government's demand stimulating policy, banks' credit growth expands, hence, the room for securities-backed loans is also widened. This makes many investors engage into offering securities-backed lending activities.

Currently, most of banks lend investors 20 to 50% of share market prices for short-term. According to banks, VN Index will be likely to fall below 300 points. However, with a relatively tough regulation on settlement rate [if the share price reduces by 30% of the share market price, securities-back loans will be settled], securities-backed lending activities are considered to be relatively safe.

Commercial banks continue pushing deposit rates

17/Apr/2009 Intellasia | Lao Dong

Commercial banks now join the competition of negotiated lending rates, and continue pushing up the deposit rates while the US dollar interest rate is falling.

Saigon Commercial JS Bank on April 15 announced a new interest rate benchmark higher much than the previous rates whereby the rate of one week deposit is 5% pa, two weeks at 6% pa, three weeks at 7% pa, 2-3 months at 7.85% pa, 4-5 months at 7.9%, 6-8 months at 8.1% and 9-12 months at 8.2% a year.

At Vietnam Tin Nghia Bank, the dong saving rate for a term of one week was raised from 4.2% to 4.5% pa, two weeks from 5.4% to 5.5%, two months from 7.6% to 7.7%, six months from 7.8% to 7.9% and 12 months from 8.2% to 8.3%. Meanwhile, one-month deposit at Nam Viet Commercial JS Bank carries a new rate of 7.7% instead of the previous 7.5% pa, two-month deposit rate was up from 7.6% to 7.8% and three months from 7.7% to 7.9% pa.

Large sized banks with more advantages are also preparing for interest rate hikes. From April 16, Eximbank decided to increase the 12-month deposit rate to keep customers and avoid affects to other services.

However, the capital mobilisation recently has signalled to slow down, according to bankers, because of the economic difficulties and the capital flow shifted to the stock market.

State Bank of Vietnam's figures showed that in the first three months of 2009, the dong mobilisation of HCM City banks only grew by 3.84% while the dong lending jumped 4.8%.

Among commercial banks (mainly joint stock banks), the fierce competition in consumer lending was started up. Thus, although deposit rates surged, negotiated lending rates still tended to decline.

This year many banks targeted to reach the consumer lending accounting for 20-30% of total outstanding loans. Some boosted marketing by door-to-door offering.

Few lenders lowered the negotiated lending rate down to nearly SBV's basic rate ceiling. The blooming consumer lending activities could lead to unpredictable risks.

Meanwhile, the US dollar interest rate since April early has kept decreasing. ACB reduced the one-month US dollar deposit rate down to 1.6% pa, two months at 1.8%, three months at 2% pa, six months at 2.3%, nine months at 2.6% and 12 months at 2.9% pa, down 1-3% depending on each term.

The heavier pressure of the surplus of US dollar deposits made the deposit rate of some small banks slump. In Vietnam Tin Nghia Bank, the deposits with a term of one-month carries the rate of 1.2% (down 0.8% from the start of April), six months at 2% pa (0.5%) and nine months at 2.2% (0.6%).

Different from the dong, the US dollar mobilisation continued growing strongly whereas the lending is going down. HCM City banks' US dollar raising soared by 11.5% in Jan-March but their credit growth was negative.

Many enterprises that have US dollar earnings are keeping a huge volume of foreign currencies and then send to banks for interests. They [US dollar keepers] are waiting for an expected increase in the dong/US dollar forex rate, which affects strongly to banks' foreign currency business.

Informal bank shares prices surge riding on back of formal market

17/Apr/2009 Intellasia | Dau Tu Chung Khoan page 28

Prices of bank shares on the informal stock market as well as two listed share codes of ACB and STB have recently surged sharply ahead of the upward trend of the stock market.

But should investors buy bank shares when the real bad debt ratio of Vietnamese banks is under question according to many financiers while local banks are targeting to reach a high credit growth this year.

Duong Cam Da, vice investment director of Vietnam Equity Holding under Saigon Asset Management Corp (SAM) said that there were three reasons pushing bank share prices up to high levels recently. Firstly, leading lenders such as Asia Commercial JS Bank (ACB), Sacombank (coded STB), Techcombank and Eximbank posted a fairly high profit in Jan-March. Secondly, the US stock market also witnessed a rally after US financial institutions namely Goldman Sachs and Wells Fargo announced a huge Q1 profit. Thirdly, prices of bank share plunged to a level lower that of other shares. Because of above reasons, investors now are rush to pump capital into the "king shares".

In his opinion, the Vietnamese finance sector is at high potential because locals are habitual users of cash in the economy and the number of bank account users and credit card users still remains comparatively low. SAM [Saigon Asset Management Corp] invested in STB with suitable price ranges and will continue following up Vietnamese stock market in general and the banking sector in particular to release strategic steps.

In order to pursue this year's business targets, a lot of banks planned to reach a credit growth of 90%, which contains the hidden bad debts in the current context.

However, it is still too early to say whether Vietnam's banking sector will remain unscathed from the affects of the global financial tsunami said Nguyen Viet Cuong, vice managing director of VinaCapital.

But market watchers say in any event, the surge in the informal price of bank share trades recently was due to a ride on the back of the formal market and recent the rally of the Vietnamese stock market is not yet sustainable.

Vietnam admits dam resettlement programmes inadequate

17/Apr/2009 Intellasia | DPA

Vietnam's efforts to resettle villagers displaced by the massive Son La hydroelectric project have been slow and inadequate, government officials said Thursday. Most of the villagers displaced by the dam in the mountainous northern province of Son La belong to ethnic minorities. National Assembly member Ksor Phuoc, an ethnic Jarai who heads the assembly's Committee on Nationalities and its Group for Resettlement and Supervision of the Son La Hydroelectric Plant, said those resettled felt insecure in their new homes.

In some resettlement areas, Phuoc said, displaced villagers have already arrived, but roads, power lines, and schools have yet to be built.

"In those places, children have to travel to schools far from their new homes," Phuoc said.

Phuoc's comments echoed a report delivered Tuesday to Vietnam's National Assembly Standing Committee on the resettlement of people displaced by the dam.

The report said the process is behind schedule and likely to cause resentment among those resettled.

Authorities have so far moved 62% of the 91,000 people who will be displaced by the dam's holding reservoir. Vietnamese deputy prime minister Hoang Trung Hai said Wednesday that resettlement had been held up by delays in awarding compensation to displaced households.

The government granted each displaced household between 50 million and 70 million dong (US$2,800 to US$4,000) to build a new house. But Phuoc said the actual cost of the new houses was between 200 million and 300 million dong (US$11,500 to US$17,000).

Phuoc said hundreds of households were still unsure how to earn a livelihood, two-years after being resettled in their new locations.

Nguyen Thai Hung, deputy Head of the Management Board for Displacement and Resettlement in the Muong Lay district of Son La province, said that besides infrastructure, the resettlement areas lacked good farmland.

"The fertile land is already allocated to local people before the displaced arrive," Hung said. "Authorities can only allocate land in mountainous areas which are very difficult to farm."

Hung said most of the resettled were used to growing lowland wet rice, and had to learn new methods for growing upland dry rice. He said they had received little help from agricultural experts in learning how to work the land they had been granted.

The Son La Dam is the largest ever built in Vietnam, with a capacity of 2,400 megawatts and an estimated cost of US$2.5 billion. It is scheduled for completion in 2015.

The dam has been controversial since it was first proposed, partly because of the resettlement issue and partly due to environmental concerns. The province of Son La is prone to earthquakes, and if the dam fails, it could flood the city of Hanoi.

KPMG says Vietnam still prospective for FDI

17/Apr/2009 Intellasia | Vietnamnet

The international consulting group KPMG has highlighted Vietnam as a prospective destination for foreign direct investment (FDI) from developed countries in a large swathe of business areas despite the slump worldwide.

In a just-released statement, the auditing, taxation and advisory group of services firms says that "whilst the propensity and capacity of foreign investors to do deals in emerging markets is generally down..., we still see attractive opportunities in Vietnam. Sectors that are attracting attention are fast moving consumer goods, media and entertainment, telecoms, financial services, infrastructure and real estate."

The statement from KPMG Vietnam says the country "still possesses many investment opportunities for the medium to long-term investors" in the above-mentioned sectors for those investors who are prepared to spend the time to study the market.

KPMG observed that developed-to-emerging market deals has fallen sharply in recent times, especially in the second half of last year, but the FDI disbursement in Vietnam will remain positive.

Citing the latest Emerging Markets International Acquisition Tracker (EMIAT) from KPMG's Advisory practice, the statement shows that second half of 2008 saw a 37% decline in developed-to-emerging deals. For the six months mentioned, only 230 such deals were recorded by EMIAT, the lowest figure since the beginning of 2003.

EMIAT monitors deals in 11 developed economies and 11 emerging, high growth economies, the latter group including Vietnam, Brazil, China, Central and Eastern Europe, Hong Kong, India, Russia, and South Korea among others.

Truc Ba Ha, M&A Advisory Services at KPMG in Vietnam, says that FDI commitments are expected to decline to an estimated US$20 billion this year in comparison to US$64 billion pledged for 2008. However, "FDI disbursements in 2009 are expected to be similar to 2008 level at approximately US$11 billion, an indicator that the appetite for Vietnam still remains strong."

Ian Gomes, Chair of KPMG's High Growth Markets practice for KPMG in the UK, commented: "We are seeing a marked decline in terms of deals into the emerging, high growth markets. However, this is more indicative of the purchasers struggling for credit than it is of the emerging markets losing their appeal... The trend of increasing capital flows from west to east is not cancelled, it is merely postponed."

Truc Ba Ha notes that "Vietnam will continue to be an attractive emerging market in both mid and long-terms for local and foreign investors since many of the fundamental characteristics still remain such as favourable demographics, large private sector, WTO commitments, business legislative reforms, large untapped rural market."

In the year's first quarter, FDI commitments in Vietnam exceeded US$6 billion, while FDI disbursements amounted to some US$1.5 billion, according to figures from the Ministry of Planning and Investment.

Vietnam govt bond sales fail due to high yield bids

17/Apr/2009 Intellasia | Reuters

Vietnam's State Treasury failed to sell any government bonds this week because bidders sought higher yields than the Treasury was prepared to accept, the Hanoi stock market said.
Five bidders at the auction on Thursday sought to buy 600 billion dong (US$34 million) worth of two-year bonds at yields of between 8.2-9.5% but the treasury's ceiling was 7.6%, the exchange said in a statement.

Two bidders also sought 350 billion dong worth of five-year bonds at between 8.8-9.2%, well above the State Treasury's ceiling of 7.9%. The exchange did not name any bidders.

The State Treasury had hoped to raise 1 trillion dong in the bond sale to big infrastructure projects, such as roads, bridges and ports.

At the previous auction of government dong-denominated bonds on March 12, the Treasury also failed to sell any two-year and three-year debt.

The government has pledged 17 trillion dong (US$956 million) in economic stimulus, including loan subsidies. State media have reported that more such policies were in the works, but it was unclear how they would be funded.

Government bonds were an option if policymakers relaxed their stance on yields, the Vietnam News quoted former central bank governor and National Monetary Policy Consulting Council member Cao Sy Kiem on Wednesday as saying.

"If we want a more successful bond issue, the yield should be raised," Kiem said.

18 domestic banks win Citi Awards for payment capabilities

17/Apr/2009 Intellasia | Vietnamnet

Four State-owned commercial banks and fourteen joint stock banks in Vietnam have been announced as winners of the annual Citi Straight Through Processing (STP) Awards Program, in recognition of their their leadership in global payment capabilities, Citi Vietnam announced in a press release today.

The annual program recognises those banks in Vietnam that have state-of-the-art international payment services. The awards are based on the straight through processing (STP) rate, a rate assigned for accuracy in electronic transfers, which is at least 90%.

This year's winners include the Joint Stock Commercial Bank for Foreign Trade of Vietnam, Bank for Investment and Development of Vietnam, Vietnam Bank for Agriculture and Rural Development, Vietnam Bank for Industry and Trade, Asia Commercial Bank, Saigon Thuong Tin Commercial Joint Stock Bank, DongA Commercial Joint Stock Bank, Military Commercial Joint Stock Bank, Vietnam Technological and Commercial Joint Stock Bank, Orient Commercial Joint Stock Bank, Housing Development Commercial Joint Stock Bank, Southern Commercial Joint Stock Bank, Indovina Bank, An Binh Commercial Joint Stock Bank, Hanoi Building Commercial Joint Stock Bank, Vietnam Maritime Commercial Stock Bank, Vietnam International Commercial Joint Stock Bank, Southeast Asia Commercial Joint Stock Bank

"This is the seventh year in a row that Citi has recognised our local banking partners. The increased numbers of winners over the years is a clear testimony of the improved payment processing capabilities of both state-owned and joint stock banks in Vietnam," Brett Krause, Citi Country Officer for Vietnam, said in the release.

"This award program continues to make an important contribution to the banking industry in Vietnam by encouraging banks to constantly improve service quality and apply international quality standards. The program also gives Citi an opportunity to share best practices with some of our local banking partners," said Krause.

Citi has made a long-term commitment to Vietnam and has played a key role in assisting in the development of Vietnam's financial markets. Citi was the first US financial institution to receive a branch license and the first US bank to open a full branch in Hanoi in 1994.

PXP fund unit surge

17/Apr/2009 Intellasia | Thoi Bao Kinh Te Vietnam page 11

PXP Vietnam Asset Management reported on Wednesday that Net Asset Value of its fund unit reached US$2,611 till March 31, 2009, surging 8.385% compared to February 27, 2009.

Last month Vietnam Fund invested about 88.8% of total investment fund in listed firms and another 10.8% in Vietnam's unlisted companies.

Previously, Vietnam Lotus investment fund under PXP also announced the NAV was US$1,608 per fund unit last month, decreasing over 15.8% month on month.

SHB launches PhoneBanking

17/Apr/2009 Intellasia | Dau Tu Chung Khoan page 29

Saigon Hanoi Commercial Joint Stock Bank (SHB) has launched the PhoneBanking service all over the network whereby from April 16, customers can enjoy prominent services like frequent update on banking products, personal account information, low using cost and customer support service 24/7 and others.

On April 20, 50 million SHB coded shares at 10,000 dong par will be put into transactions via the northern trading floor.

VietABank dips into gold

17/Apr/2009 Intellasia | Dau Tu Chung Khoan page 29

From April 22, Viet A Commercial Joint Stock Bank (VietABank) will launch the gold investment business programme according to the world's price at its gold trading centre.

With this, customers' total trading volume can be higher 14 times than their ownership capital. As gold investors demand to borrow capital, the dong loan rate (provided by VietABank) will be 8% pa, gold loan rate at 4% pa. But, the interest rates will be adjusted in each period.

Apparel export to Japan on the rise

17/Apr/2009 Intellasia | VNA

Vietnam's apparel export value to Japan has surged recently against diminished exportation to the U.S. and the European Union.

Vietnam's apparel industry reached US$138 million in export turnover within the first two months of this year, a 27% year-on-year increase, according to the Vietnam Trade Office in Japan. The northeast Asian country reduced tariffs on many apparel products from Vietnam after the Vietnam-Japan Economic Partnership Agreement was signed last year.

Moreover, the Japanese yen has appreciated against the US dollar and Japan has announced to seek another Asian garment supplier besides China due to rising prices.

Towel, T-shirt, shirt and underwear exports to Japan increased by 128%, 102%, 35% and 26% respectively within the first two months of the year.

 

Business

 

VN Index ends six consecutive increasing sessions as slumping 9.74 pts

17/Apr/2009 Intellasia | Atp | CafeF | HASTC | STC

The VN Index today April 17 ended the six consecutive increasing sessions as slumping 9.74 pts or 2.83% from yesterday to close at 334.14 pts with total matching order trade of nearly 67.2 million shares for about 1.617 trillion dong, surging 51% in volume and 41% in value compared to the previous session.

However, the stock market still recorded a successful trading session with a total rise of 9.09 pts in VN Index.

There were 106 share codes decreasing, 59 rising and 16 standing still.

Among top ten largest cap share codes only PVD soared 2,000 to 70,000 dong per share and remaining shares down, particularly FPT fell 2,500 to 55,500, HAG -3,000 to 60,500, PPC -1,400 to 28,000 and VNM -4,000 to 83,500 dong per share, followed by VIC, REE, ITA, SJS and VSH.

SAM still maintained the matching order price higher the comparative price while SSI saw a floor decrease. After the session closed, SAM surged 100 dong slightly to 24,000 dong/share with a trade of over 6.8 million shares, SSI slid 2,300 to 44,200 dong/share with 4.62 million shares being transferred.

Notably, BCI of Binh Chanh Construction Investment JSC was up 1,400 to 29,700 dong per share.

In terms of matching order trade, STB led the market with 12.03 million shares, SAM with 6.8 million, SSI with 4.62 million, VF4 with 3.54 million, VF1 with 2.69 million, BCI with 2.16 million and VIP with 1.76 million.

Like STC, the Hanoi floor today witnessed a decline when its index was down 6.89 pts to close at 122.56 pts with a market trade of 32,447,800 shares worth more than 848.793 billion dong.

Business, banking and stock market report Apr 17

17/Apr/2009 Intellasia

• Vietnam Air Petrol Co Ltd or Vinapco, an affiliate of the national flag carrier Vietnam Airlines, has been fined three billion dong for allegedly violating the Competition Law by stopping air fuel supply to Jetstar Pacific Airlines on April 1, 2008 without warning, causing the airliner to cancel 30 flights, according to a judgment of the National Competition Council, Lao Dong reports.
  
• Korean-owned Posco Vietnam Co Ltd is planning to turn out the first 40,000 tonnes of cold-rolled steel from its 1.4 million tonnes/year plant, for the first phase worth US$366 million in August. The largest steel project in Vietnam with total investment capital of US$1.12 billion, will commission its hot-rolled steel plant by 2011.
• LongAnFood Processing Export Joint Stock Co (Lafooco) has proposed trading rice for cashew from African countries to the Vietnam Cashew Association and is awaiting approval from the ministries of agriculture-rural development and industry-trade this month. Once approved, the project will help processors to cut import costs for cashews and open new markets for Long An rice exporters.
• Clever Online Advertising Corp, or Clever Ads, the authorised advertising company of Google Inc. licensed with Google Advertising Professional in Vietnam, has introduced a new internet-based advertising service via key words called Google AdsWords. This way of advertising is said to be more effective and less expensive as enterprises using the service can track detailed behaviour of internet users and potential customers, improve advertising and marketing strategies and make the best use of other add-on tools available from the worldwide search engine Google.
• In 2008, Thien Viet Securities Co (TVS) reached 99.4 billion dong in revenue from securities business and investment, a year-on-year growth of 45 billion dong. However, because the cost for securities business operation surged from 16.5 billion dong in 2007 to 67 billion dong last year, the pre-tax profit was down 4.6 billion dong to only 20.7 billion dong.
• PXP Vietnam Asset Management reported on Wednesday that Net Asset Value of its fund unit reached US$2,611 till March 31, 2009, surging 8.385% compared to February 27, 2009.
• Singapore's Sembcorp Industrial Park Group, who joined a venture with Vietnam's Becamex to set up Vietnam-Singapore Industrial Park (VSIP), will start construction on VSIP Hai Phong urban industrial zone in this September, the group's chair Low Sin Leng confirmed on the occasion of Singaporean prime minister Lee Kuan Yew's Vietnam visit on April 14.
• Saigon Services Joint Stock Co-Savico (coded SVC) on April 15 reported that its total assets reached 1.363 trillion dong in the end of 2008, a year-on-year growth of 27%. In 2009, the company targets to attain 2.250 trillion dong in total revenue, 70.5 billion dong in pre-tax profit and a dividend of 10%.
• Pha Lai Thermo Power Joint Stock Co (coded PPC) reported that last month, its revenue from electricity production and business reached 404.784 billion dong while the pre-tax profit totalled at 106.867 billion dong because of the increased electricity-selling price of Electricity of Vietnam (EVN).
• Saigon Hanoi Commercial Joint Stock Bank (SHB) recently released the Q1 business results with a total pre-tax profit of 80.8 billion dong, total asset of 13.651 trillion dong, decreasing 730 billion dong from the year early.
• Saigon Hanoi Commercial Joint Stock Bank (SHB) has launched the PhoneBanking service all over the network whereby from April 16, customers can enjoy prominent services like frequent update on banking products, personal account information, low using cost and customer support service 24/7 and others.
• From April 22, Viet A Commercial Joint Stock Bank (VietABank) will launch the gold investment business programme according to the world's price at its gold trading centre.

Australian steel maker launches specialised products

17/Apr/2009 Intellasia | The Saigon Times Daily Online

BlueScope Steel Vietnam on Wednesday launched new Clean COLORBOND steel products for manufacturing facilities as well as curved roofs and walls of structures in a move to further tap the local market.

Le Anh Tuan, vice president of the Australian-invested company, said the pre-painted steel products were made with zinc-aluminum coating and anti-fungus performance.

"BlueScope Steel turns out the products in various colors to meet diverse needs of companies for developing industrial facilities including retail and wholesale stores in Vietnam," Tuan told the Daily before the launch ceremony in HCMC.

He underscored the importance of having new products to provide project developers with more options for construction materials in a time of falling demand due to the impact of the global economic turbulence on the world's steel industry.

"Vietnam's steel industry is not an exception," Tuan said. He quoted sources including the Vietnam Steel Association as saying that steel makers in this market had seen their turnover fall by at least 30% over the past six months.

Earlier this year, the association estimated domestic steel production in the first quarter plunged by 24% year-on-year to 761,000 tons while steel consumption slumped by up to 71% compared to the year earlier period to around 700,000 tons.

"BlueScope Steel Vietnam faces the same difficulties," Tuan said, pointing out the decline in foreign direct investment (FDI) in the country in recent months as one of the reasons.

The Ministry of Planning and Investment's figures showed Vietnam drew over US$6 billion in FDI including injected capital in operational projects in the January-March period, down nearly 40% year-on-year.

However, Tuan said BlueScope Steel was optimistic about Vietnam's steel market as this was a developing market and many investors would return and come to build factories in this market.

"New opportunities come when investors return to Vietnam again as they will need steel, especially the quality products," Tuan said.

Currently, BlueScope Steel Vietnam turns out pre-painted and zinc-aluminum alloy-coated steel sheets in addition to other steel materials. The company has operated a US$105-million metallic coated and painted rolled steel mill in Phu My 1 Industrial Zone in the southern province of Ba Ria-Vung Tau since November 2005.

The facility includes a 125,000 ton per annum metallic coating line and 50,000 ton per annum paint line.

Alpine Biomed to set up plant in Vietnam

17/Apr/2009 Intellasia | VNA

Alpine Biomed, a developer of specialty diagnostic devices, is planning to double its manufacturing capacity and expanded its worldwide network by opening a new facility in Vietnam.

Located in Ho Chi Minh City, the new factory will produce and distribute medical devices that are used in diagnosing gastroesophageal reflux disease, reported the Pharmaceutical Business Review.

Alpine Biomed's new facility is one of the first US-headquartered companies in Ho Chi Minh City to receive medical device quality management system certification from the International Organization for Standardisation.

The manufacturing center will export diagnostic devices to customers throughout the world and employ approximately 100 people.

John Arnott, President and CEO of Alpine Biomed, said: "Our new facility in Vietnam is another key component of our strategic plan to become one of the world's leading specialty diagnostic device companies."

"It is a state-of-the-art facility featuring the most advanced technologies that connect our manufacturing centers around the world to provide our customers with the highest-quality devices that diagnose a range of gastrointestinal and neurological disorders," he said.

Sembcorp commits to industrial park expansion

17/Apr/2009 Intellasia | Thoi Bao Kinh Te Vietnam page 3

Singapore's Sembcorp Industrial Park Group, who joined a venture with Vietnam's Becamex to set up Vietnam-Singapore Industrial Park (VSIP), will start construction on VSIP Hai Phong urban industrial zone in this September, the group's chair Low Sin Leng confirmed on the occasion of Singaporean prime minister Lee Kuan Yew's Vietnam visit on April 14.

VSIP Hai Phong project is designed to cover 1,600 hectares with total cost of US$100 million for the first phase. In 2009, the investor [Sembcrop] will pour US$30 million to carry out the project.

To date, Sembcorp has invested in VSIP 1 (500 hectares) and VSIP 2 (2,045 hectares) in Binh Duong province, VSIP Bac Ninh 700 hectares and VSIP Hai Phong that will be broken within this year.
Total committed investment capital for building infrastructure of above four VSIP projects is estimated at US41.5 billion. Of which US$660 million has been disbursed.

Vietnam Airlines says to talk soon to buy 10 A321s

17/Apr/2009 Intellasia | Reuters

National flag carrier Vietnam Airlines plans to talk with European plane maker Airbus over the purchase of 10 A321-200 aircraft by early May, a Vietnamese company excecutive said on Thursday.

"Our chief executive will go to France late this month or early next month to talk with Airbus over the purchase," said the Vietnam Airlines official, who is familiar with the purchase plan but declined to be identified by name because he was not authoorised to discuss the matter.

Earlier this month prime minister Nguyen Tan Dung approved a plan for the Hanoi-based unlisted airline to buy the 10 planes for delivery between 2011 and 2014, the government has said.

Based on 2008 average list prices, the planes would be worth around US$900 million.

Vietnam has forecast air passenger traffic to more than double to 32.4 million people by 2020 from 16 million in 2008.

Vietnam Airlines, the country's largest airline now with a fleet of 50 aircraft, has targeted its passenger handling this year to rise 7.3% to 9.46 million.

The airline and Vietnamese aircraft leasing firm, in which Vietnam Airlines was one of five founders, signed contracts to buy 47 planes in late 2007, including 12 Boeing 787s, five ATR 72s and 30 Airbus planes.

Last December, Vietnam Airlines signed a US$112 million contract to buy another six turboprop ATR 72-500 planes from ATR, a joint venture between EADS and Finmeccanica.

Vietnam Airlines said it carried 8.82 million passengers last year, 10.6% higher than in 2007 and almost 54% of Vietnam's total.

Savico reveals '09 business plan

17/Apr/2009 Intellasia | Nguoi Lao Dong

Saigon Services Joint Stock Co-Savico (coded SVC) on April 15 reported that its total assets reached 1.363 trillion dong in the end of 2008, a year-on-year growth of 27%.

Of which 38.66% was poured into commercial services, 41.84% for real estate services and 19.5% for financial investments. At that time, chartered capital of SVC was posted at 203.6 billion dong and the ownership capital was 479 billion dong.

In 2009, the company targets to attain 2.250 trillion dong in total revenue, 70.5 billion dong in pre-tax profit and a dividend of 10%.

SVC was recently licensed to move trading floor from HASTC to STC.

Air carriers in hock over fuel

17/Apr/2009 Intellasia | VnExpress

The jet fuel supplier Vinapco has announced the overdue debts owed by Indochina Airlines and Jetstar Pacific Airlines. The announcement was recorded in the official letter sent to ministries of traffic and transportation, industry and trade and Competitive Management Competition yesterday.

Till April 16, total debts of both air firms were up to 75.3 billion dong, in which Jetstar Pacific owed 57.2 billion dong and Indochina Airlines 18.1 billion dong. The old debt of 3.1 billion dong was paid already by Indochina Airlines.

In 2007, Vinapco said it suffered a loss of 27 billion dong as supplying fuel to Vietnam Airlines and 2.9 billion dong to Jetstar Pacific.

PVI signs US$110m of contracts

17/Apr/2009 Intellasia | Dau Tu Chung Khoan page 5

PetroVietnam Insurance Joint Stock Corp (coded PVI), Bao Viet insurer co-signed a contract of providing aviation insurance programmes to Service Flight Corp of Vietnam (SFC) in 2009 and 2010, including insurance for aircraft body and responsibility insurance for passengers, luggage, goods, personal property, and flight crew.

In Q1 of 2009, PVI earned 1,000 trillion dong in total premium, leading Vietnam's life insurance market. Yesterday the insurer also passed the 2009 business plan with total premium of over three trillion dong, profit of 218 billion dong and a dividend of 10%.

PVI contributed capital into some big projects like Viet Laos hydropower plant, Sao Mai Ben Dinh JSC and Song Da Finance JSC.

Song Da consulting firm plans to hike capital

17/Apr/2009 Intellasia | Dau Tu Chung Khoan page 6

Song Da Consulting Joint Stock Co (SDC) has approved the plan of issuing more shares to hike the chartered capital from 15 billion dong to 21.5 billion dong, which will be broken into two phases.

For the first phase, the firm will share the dividend of 20% through offering 300,000 shares to raise capital by three billion dong. And then SDC will issue the share buying warrant of 4.8:1 to hike capital by another 3.75 billion dong.

Total remaining shares of the issue will be allocated to other investors.

Last year the consulting firm posted 131.35 billion dong in revenue from sales and service provision, a y-o-y rise of 10.96%, 8.77 billion dong in after-tax profit, up 19.97% against 2007. The figures are expected to 123.54 billion dong and 9.52 billion dong in 2009.

Vietnam fast-tracks highway deals

17/Apr/2009 Intellasia | Yonhap

With new overseas construction orders tumbling, Korea's major builders are scrambling to win orders for highway construction from Vietnam in an effort to bolster their sagging sales, market watchers said yesterday.

New overseas construction orders plunged 42% on-year to a combined US$8.2 billion in the first quarter on decreased demand from Asian countries stung by the global economic recession, according to the International Contractors Association of Korea.

New orders from Asian countries, including Vietnam, nose-dived 65% from a year earlier to US$1.92 billion in the January-March period, it said.

"Due to the global economic crisis, Korean builders are striving to clinch orders for highway and other public works projects from Vietnam," said an ICAK official, who declined to be identified. According to the ICAK, demand for highway construction in Vietnam is expected to increase sharply on the back of the country's policy to expand its nationwide highways. The Vietnamese government has mapped out a plan to construct highways spanning 5,753 kilometres (3, 574 miles) nationwide. Between 2006 and 2020, the country will pave a total of 2,235 kilometres of highway. Four highways spanning 231 kilometres are already under construction.

State-run Korea Expressway Corp is leading efforts to receive orders for highway construction in Vietnam. The company opened a branch in Hanoi, the capital of Vietnam, in March 2006. "We are stepping up efforts to win orders for highway design and construction supervision in Vietnam," said an official for Korea Expressway.

In February 2008, Korea Expressway Corp signed a deal to design a 105.5-kilometer highway linking Hanoi with Hai Phong, a port city 100 kilometres from Hanoi with Vietnam Infrastructure Development and Finance Investment.

Following the deal, GS Engineering and Construction Co., Korea's second-largest builder, won a US$175 million order last December to build a 9.3-kilometer section of the Hanoi-Hai Phong expressway from Vidfi. The builder plans to complete construction by October 2011.

Posco Engineering and Construction Co signed last month a US$153 million deal with state-run Vietnam Express Corp to build a 27-kilometer section of the 244-kilometer highway linking Lao Cai and Noi Bai. Posco Engineering and Construction is in talks with VEC to obtain orders to construct a 22.1-kilometer section of the highway, according to ICAK.

Pha Lai thermo power plant reaches 300b dong in Q1 profit

17/Apr/2009 Intellasia | CafeF

Pha Lai Thermo Power Joint Stock Co (coded PPC) reported that last month, its revenue from electricity production and business reached 404.784 billion dong while the pre-tax profit totalled at 106.867 billion dong because of the increased electricity-selling price of Electricity of Vietnam (EVN).

Thus, in Jan-March, the company gained 283.766 billion dong in after-tax profit (excluding the profit from forex rate difference).

Based on the first phase debt payment schedule of 2009, PPC paid the periodic debt amounting to 928.37 million yen on March 20. The foreign debt of PPC till March 21, 2009 was 35.278 billion yen left.

The dong/yen forex rate on the market now is decreasing. On April 13, the forex rate was announced at 168.73 dong per yen by State Bank of Vietnam, down 16.23 dong against December 31, 2008.

High-end apartment prices to continue freefall

17/Apr/2009 Intellasia | Saigon Economic Times Online

At a meeting on Hanoi's real estate market outlook in Q1 and prospect for the whole 2009 held yesterday, Richard Leech, director of CBRE Vietnam spoke that the offering price of high and medium class apartment projects declined 4-8%, even 20-30% whereas that of simple-mannered houses surged 5-10%.

In the latest report, CBRE also assessed that Hanoi's office rents continued decreasing and the ratio of vacancies remained high.

Particularly, in the first quarter of 2009, the rent of offices Grade A was down 8% from the last year end to US$49 per square metre with the vacancy ratio of 2.6% while that of offices Grade B also tumbled to US$33 a square metre, down 5% year-on-year with the current vacancy ratio of 19%.

Within this year, Hanoi will have extra space supply of 100,000 square metres of offices Grade B and 13,000 square metres of offices Grade A.

Vietnam's timber market attains position as world's fourth largest hardwood chip exporter, reports wood resource quarterly

17/Apr/2009 Intellasia | Eworldwire

Vietnam is now one of the most important suppliers of plantation Eucalyptus and Acacia wood chips to the pulp industry in both Japan and China. The country has expanded shipments gradually over the past six-years and is now the world's fourth largest hardwood chip exporter, reports the Wood Resource Quarterly.

Vietnam has become a major exporter of wood chips in a short period of time. In 2002, the country exported only 150,000 metric tonnes of wood chips and was a marginal supplier at the time. In 2008, the country became the fourth largest exporter of hardwood chips in the world, with an estimated volume of two million tonnes being shipped, mainly to Japan and China.

The interest from farm households in planting trees has turned around quite dramatically the past decade. In the 1990s and early 2000, production of rice, livestock and tea generated more profits than timber, with the consequence that farmers converted forestland to farmland. This changed when the wood chip exports took off in 2002-2003. Many farmers are now planting trees as the profitability is considered very good compared to many other crops.

The number of woodchip mills has exploded in Vietnam from only 15 plants in 2003 to currently 50 wood chip mills along the 3500 kilometres long coastline. The chip mills typically have a annual capacity between 50,000 and 150,000 tonnes, but many of them are currently running at a reduced rate due to a lack of logs. Total chip production is estimated to be close to two million tonnes, while capacity is somewhere between three and four million tonnes. Wood chip exports, of which a majority is Acacia, has steadily gone up the past five years. The two major destinations have been Japan and China, with Taiwan and South Korea accounting only for about 10% of total shipments.

The average cost of hardwood chips from Vietnam to Japan was US$169/metric tonne (CIF) in the the fourth quarter of 2008, according to the Wood Resource Quarterly. These were among the lowest-cost chips imported to Japan last year, with only chips from Malaysia and Thailand being cheaper.

Without a doubt, the forest industry is growing in importance in Vietnam, and the country is expanding its domestic timber resources to be less dependent on imported wood raw-material in the future. Wood chip exports will probably increase in the short-term, but with the pulp industry in expansion mode over the next few years, wood chips shipments to Japan and China may decline long-term.

Global timber market reporting is included in the 50-page publication Wood Resource Quarterly. The report, established in 1988 and with readers in over 20 countries, tracks sawlog and pulpwood prices in most regions around the world and also includes regular updates of the latest developments in international timber, pulp, lumber and biomass markets.

Contact Information

Wood Resources International LLC

Hakan Ekstrom

info@wri-ltd.com

http://www.woodprices.com

Vietnam Telecommunications Report Q1 2009

17/Apr/2009 Intellasia | PressWIRE

www.companiesandmarkets.com adds new report: Vietnam Telecommunications Report Q1 2009 BMI estimates that, by the end of September 2008, the number of mobile customers in Vietnam had risen to over 57mn. Our estimates are based on the latest data to be published by Vietnam's Ministry of Information and Communications (MIC), which suggested that there were around 51.6mn subscribers at the end of June 2008. According to MIC figures, Viettel, which is owned by the Vietnamese military, continued to lead the Vietnamese mobile market with a market share of around 37.8%, a 2.5%age point rise over the quarter. Figures for major rivals, next largest mobile operators, MobiFone and VinaPhone were not released, although it is estimated that they remained in the high 20s. We did not make any alterations to our forecast for mobile subscriber growth in Vietnam, which continued to show strong growth.

Alterations were made in our fixed-line forecast, with the MIC reporting a total of over 13mn fixed-lines at the end of September 2008, (reflecting a growth rate of 17.1% since the end of 2007), we now believe that by the end of 2008, the market will have achieved similar growth levels to 2007 of 23%. Strong takeup of fixed-line has been due to the reduction in tariffs introduced since June 2007, which has attracted a growing number of users. The MIC in an effort to continue with gaining new subscribers to the fixed-line market announced that it would reduce monthly subscription charges from dong 27,000 (US$1.66) to dong 20,000, but inter-province calling rates would rise from dong 120 to dong 200 per minute, in an effort to bring rates above cost price.

These rates, due to be introduced from 2009 until 2010, are not expected to have an impact in the immediate term, but by the end of the decade, could be negatively impacted by increased mobile substitution and the proliferation of VoIP services results in weaker demand for fixed-line services. The slowdown will partly reflect fixed-line saturation in urban areas of Vietnam, while rural parts of the country will be more inclined to take up mobile telephony. At the end of our five-year forecast, we expect a total of 20.5mn fixed-lines, and a penetration rate of close to 22%.

Meanwhile, according to Vietnam's internet Network Information Centre (VNNIC), the number of broadband subscribers rose by 49% in the first 10 months of 2008, reaching 1.928mn. This new growth occurred on the back of the impressive 150% growth recorded in 2007. By the end of 2008, we forecast a market of around 2mn broadband subscribers, which is equivalent to a penetration rate of 2.3%. Growth in the latter half of our five-year forecast should be robust as operators increase the level of investment in broadband technologies and make tariffs affordable to a larger proportion of the population. Furthermore, although currently in trial phase, WiMAX should also boost take-up of broadband, particularly in areas where ADSL access may prove problematic.

Google enters keyword advertising in Vietnam

17/Apr/2009 Intellasia | Thoi Bao Kinh Te Vietnam

Through signing a partnership agreement with CleverAds Vietnam, Google started to enter and develop the keyword advertising market of Vietnam.

According to local firm CleverAds, Google AdWords is the online advertising mode with many disadvantages while companies are trying to cut down business cost.

Each click on Google AdWords will be charged at 1,000-1,500 dong flexibly. Customers will not have to pay fees if not click advertising content.

Nguyen Khanh Trinh, director of CleverAds said that Google AdWords is the highly potential online advising sector. The growth rate of the advertising field of Vietnam is forecasted at over 30% a month.