Finance

 

Vietnam experts calm despite clashing growth estimates

19/Mar/2009 Intellasia | DPA
International analysts in recent days have presented wildly varying estimates for Vietnam's 2009 GDP growth, but local economists said Wednesday they were not worried. "The global situation is volatile, and international experts cannot forecast the current situation," said Tran Dinh Thien, director of the Vietnam Institute of Economics. "So how can they do that for Vietnam?"
At a business roundtable that concluded Wednesday, the only thing economic forecasters could agree on was that the government's growth target for 2009 was too optimistic.
Justin Wood, director of The Economist Intelligence Unit's Southeast Asia Corporate Network, forecast growth for 2009 at just 0.3%, down from 6.2% last year.
Lim Chuan Poh, CEO of Singapore Telecommunications International, said growth would likely come in at 3%. JP Morgan Chase Chief Economist David Fernandez agreed with an International Monetary Fund forecast that put growth at 5%.
All the estimates were lower than the official government target of 6.5%.
"Lack of information about Vietnam's economy is the main reason for the different estimates," said Tran Duc Nguyen, former head of the prime minister's Research Commission, an economic advisory council that was abolished in 2006. "If they had sufficient data, the figures would not be varying by a factor of twenty times."
Nguyen said The Economist Intelligence Unit's low estimate was due to excessive reliance on Vietnam's export economy, not domestic demand, which he claimed constituted a large portion of Vietnam's GDP.
According to official statistics, however, exports account for 70% of Vietnam's GDP.
The economists also said they felt GDP growth was overrated as a measure of economic well-being.
"The government should not devote all its efforts to achieving high economic growth, but should pay attention to the quality of our growth," Thien said.
"Emphasising the rate of economic growth is very biased," Nguyen said. "It does not help to raise the quality of people's lives."
Since the 1990s, Vietnam's government has championed the success of its "doi moi" policies of economic reform in delivering greater wealth to its people. The country cut its poverty rate by more than half between 1991-2005, and per capita income topped 1,000 dollars per year in 2008.
Economists warn that falling export revenues due to the global economic slowdown are leading to large-scale layoffs and threatening the government's ability to raise enough revenue to meet its budget needs.
Some observers worry that economic setbacks may lead to rising social and political tension.

Financier upbeat on dollar G-bond issue

19/Mar/2009 Intellasia | Thoi Bao Kinh Te Vietnam
With the small scope issuance of US dollar G-bonds, it seems that the government is treading cautiously in testing the market's reaction.
On March 20, Hanoi Securities Trading Centre (HASTC) will officially auction the first session for US$100 million government bonds, starting the plan of issuing US$300 million G-bonds in the domestic market.
Concerning the plan, Thoi Bao Kinh Te Vietnam had a talk with Mac Quang Huy, independent financier about some relating issues in the following interview. Excerpts:
Is the government's decision to issue G-bonds in US dollars at this time suitable or not?
I think that the plan of issuing US dollar G-bonds in the domestic market at this time is very good because the move can help reduce the issue fee and capital mobilisation cost compared with the overseas issue. At the end of February 2009, Indonesia issued US$3 billion in international bonds (including US$2 billion of 10-year bonds at the yield rate of 11.75% per year and US$1 billion of five-year bonds at 10.5% pa). Meanwhile, Vietnam's first sovereign bond issue in 2005 are now traded at about 9.7% pa in the international market. Vietnam and Indonesia have the same lending limit so if issuing international bonds, Vietnam will have to pay a yield rate of about 10% a year. In which, the US dollar G-bonds with a term of less than 5 years issued in the domestic market carry the yield rate of about 3% pa.
I forecast, the yield rate of the government's US dollar bonds at 4% pa will be successful whereby the government could save 6% pa. Also, if issuing international bonds, the government will have to pay the issue fees for investment banks, rating companies, and cost of broadcast. On the other hand, the US$300 million of G-bonds is divided into three terms 1, 2 and 3 years with a small share offering volume so the government did not announce a too low yield rate ceiling whereby the capital mobilisation plan will be likely successful and not cause strong impacts on the foreign currency market.
Some people said that the issuance of US dollar G-bonds in the domestic market aimed to create a new financial tool and a new attractiveness for foreign investors. What do you think about this?
There will be few long-term foreign investors joining the issue because they can purchase G-bonds of Indonesia and Philippines with more attractive coupon rate. As for them, buying bonds of Vietnam or of Indonesia will have to suffer sovereign risks, leading to a rise in credit spread and a high demand yield rate.
When taking Vietnamese G-bonds, foreign investors usually purchase additional credit default swaps (CDS) of foreign providers in order to minimise risks. Now, the CDS spread for Vietnam's international bonds remains high at 7% pa.
Some domestic investors will not buy CDS because they accept a much lower coupon rate of G-bonds. Therefore, participants of the government's March 20 bond issuance are mainly local commercial banks and foreign banks in Vietnam. These banks now own a huge volume of low-cost US dollar capital raised from the domestic market. However, short-term foreign investors can pump capital into these G-bonds as a flexible cash management tool. Foreign investment in US dollar G-bonds can help the investors limit the depreciation of the dong against US dollar. Thus, Vietnam needs to increase transparency of government bonds in US dollar through the secondary market.
The government plans to offer these bonds under the public tender method. What is your comment?
In my opinion the government should not offer these bonds under the public tender to retail investors. Instead the bonds should be offered separately to some Vietnamese commercial banks that have surplus US dollars, for example Vietcombank, Bidv or ACB.
Vietnam now has billions of US dollars in bank deposits or banks have transferred excess hard currency funds offshore with foreign banks but earning very low interest. Also, banks are mobilising US dollar at 3.2% per annum for terms of 1-5 years. So, if the government should sell US dollar bonds to Vietcombank at the yield rate of 4% per annum, which will likely be successful because Vietcombank can enjoy the difference of 0.8% per annum (between US deposit rate of 3.2% pa and the G-bond coupon rate of 4% pa) to buy the government's less risky bonds.
In future, if wanting to reach the successful US dollar bond issues on the domestic market, the government needs to ascertain the combined US dollar holding of the banking system and private holdings to make informed decisions. A US$1 billion bond issuance could cause a very strong affect on the market. By that time, commercial banks could hike US dollar deposit rates, which will urge people to deposit US dollars instead of the dong and influence the dong/US dollar forex rate. Some say dollarisation [of the economy] could surge again as a result.
What do you think about the goal of the G-bond issue?
Regarding the capital usage, I do not have a clear awareness on the government's capital usage purpose excepting the compensation for state budgetary overspending, raising capital for key projects. I think that the government is testing the market's reaction to launch following issuances.
As I know, the government now plans to issue US$1 billion international bonds in 2009. Vinashin also schedules to offer US$400 million bonds overseas. I will not be surprised if Vinashin is allowed to borrow the capital supply from the government. Absolutely, the more importance is that the capital using purposes must be clear and effective because the state budget is naturally people's tax.

No worries in US dollar bond issuance: specialist

19/Mar/2009 Intellasia | Vietnamnet
Le Duc Thuy, former Governor of the State Bank of Vietnam, now Chair of the National Finance Supervision Committee, believes that there are no worries about the dollarisation in the issuance of bonds in US$.
In the talk with Thoi bao kinh te Vietnam's newspaper, Thuy said that the bond issuance will not worsen the dollarisation as some experts fear, while it will help put dollars drifting on the market under control and ensure that the dollars can be used for the right purposes.
He said:
In principle, the National Finance Supervision Committee advocates the issuance of government bonds in both local currency and dollar. Therefore, we cannot see any worries in the upcoming issuance.
The government bond issuance proves to be a must, when we need to mobilise capital from the public for investment, while the state budget may face the deficit.
The main thing we need to care for is that the bond interest rates should be reasonable to successfully raise funds from the public. At the very sensitive moment, accepting a little high interest rate to successfully mobilise capital would be better than insisting on low interest rates and unsuccessfully mobilising capital. The failure of the capital mobilisation will badly affect the demand stimulus policies.
The interest rates are relatively high on the international market. Vietnam will not be able to afford such high interest rates. However, if we are mobilising capital at the domestic interest rates, the buyers of the bonds will be Vietnamese people only.
Some experts have warned that the bond issuance in dollar at this moment will make the dollarisation more serious. Do you agree with this?
I don't think so. The dollarisation occurs when people use dollars in payment, especially when the dollars lie among the public. Meanwhile, issuing bonds in dollars means that we try to collect dollars and put them in the banking system. This should be seen as a measure to fight the dollarisation.
Jica has just said that the dollarisation in Vietnam has decreased as the deposits in dollars have been increasing. This means that the dollars drifting on the market have been put into the bank system.
If the government does not need to use all the dollars it mobilises, it can sell the dollars to get dong to serve its spending. The dollars will be sold to those who really need to the dollars. Therefore, there is no need to worry about the dollarisation.
But why do you think the government plans to issue bonds in dollars, not dong, at this moment?
We once issued bonds in both dong and dollars. We lately issued bonds in dong, but the issuance failed because of the offered low interest rates.
The most important thing that makes us think of issuing bonds in dollars is that banks have profuse capital in dollars, but the loaning in dollars have been going slowly as businesses dare not borrow in dollars for fear of the exchange rate fluctuations.
In the US, the bond always has the interest rate at less than 1%. Meanwhile, experts believe that the interest rate of the bonds to be issued will be relatively high. Do you think that the high interest rates will badly affect the credit ranking of the government?
To date, even as the Chair of the National Finance Supervision Committee, I still don't know how high the interest rates should be. Commercial banks are paying between 2.5-3% per annum for US$deposits.
I think we should not compare the bond issuance in Vietnam with the US. Only the country with the credit ranking at AAA can borrow money with the interest rate close to Libor.

Vietnam inflation could dip below 10% in '09

19/Mar/2009 Intellasia | Tuoi Tre
The Central Institute of Economic Management (CIEM) on March 17 organised an international conference titled "Financial crisis and the role of investment" to seek and share experiences in countering with the global economic storm.
According to the assessment of some international organisations, Vietnam's GDP growth will range between 4.3% and 5.5% in 2009 and the inflation will be around 6-9%, less than 10%.
Sharing experiences with Vietnam, Dr Zhang Yunling-director of China's Social Science Academy's International Research Institute said that to fight the strong affects of the global economic earthquake, China reduced export tariff, built up reform programmes for 10 key industrial sectors, launched the four trillion yuan stimulus package (of which 37% was given for infrastructure development, 9% for rural area development, 10% for housing development and 9% for industrial restructure).
As stated by Fuku Kimura-chief economist of the Economic Research Institute for Asean and East Asia (ERIA), Vietnam's macro-economic policies in short-term should focus on maintaining transparency, stabilising finance and reinforcing the social security network.

Gold market in downturn

19/Mar/2009 Intellasia | 18/Mar/2009 VnExpress
Along with the downtrend of the world gold price, the domestic selling gold price on March 18 dropped by 50,000 dong per tael against previous day.
At Saigon Jewellery Joint Stock Co, the SJC gold price was listed at 19.35 million dong/tael (buying) and 19.43 million dong/tael (selling), a day on day fall by 50,000 dong/tael and it was 19.37-19.43 million dong/tael (buying-selling price) at Phu Nhuan Jewellery and Gemstone Joint Stock Co (coded PNJ).
Meanwhile at Bao Tin Minh Chau Joint Stock Co, the selling price declined by 100,000 dong/tael against previous day to 19.42 million dong/tael and the buying price quoted at 19.32 million dong/tael.
On ACB gold trading floor, the trading price ranged around 19.212 million dong/tael with a total trading volume of 33.6 taels worth 644.95 billion dong.
In the free foreign currency market, the forex rate was traded at 17,680 dong/US dollar (buying price) and 17,710 dong/US dollar (selling price), increasing by 10 dong/US dollar from yesterday.

Vietnam says banks can't skirt FX band with derivatives

19/Mar/2009 Intellasia | Reuters
Vietnam's central bank said on Wednesday commercial banks could not use derivatives to trade dollar/dong on the spot interbank market in order to skirt the currency's official trading band.
The State Bank of Vietnam several months ago banned the use of third currencies to circumvent the band, which stands at +/-3% around a midpoint set each day by the central bank. It said on Wednesday it planned to step up monitoring.
Bankers say that in practice some traders have been using currency options and other methods to trade dollar/dong outside the band, at a rate that many see as more market-oriented.
Last week commercial banks' forex rate was listed common at 17,481-17,486 dong per US dollar.

Hanoi's total deposits estimated at 460.251tr dong in Jan-Mar

19/Mar/2009 Intellasia | CafeF
Total deposits of Hanoi based banks and credit institutions are estimated at 460.251 trillion dong in the first three months of this year, up 25% year-on-year but down 0.36% from the end of 2008.
Meanwhile, the banks lent total 276.156 trillion dong in the period, jumping 27.4% against the previous year and 4.04% from the last year end.

SHB receives dong deposits at 8.58%/yr

19/Mar/2009 Intellasia | Thoi Bao Kinh Te Vietnam
Saigon Hanoi Commercial Joint Stock Bank or SHB yesterday announced to adjust the progressive dong deposit rates all over the network whereby the bank's highest deposit rate was 8.58% per annum, marking one of attractive interest rates on the market now.
SHB raised deposit rates for all terms by 0.3-0.5% per annum. The 6-36-month deposits carry an interest rate of 8-8.5% pa. With a deposit of over three billion dong and a term of 36 months, depositors can enjoy the highest level of 8.58% pa.
According to the bank's general director Nguyen Van Le, the interest rate adjustment aims to raise capital for meeting the rising demand of corporate customers under the government's stimulus package.
In this month, pursuant to SBV's Decision 508/QD-NHNN, SHB Asset Management Co Ltd was established.

PVFC to allocate 20tr dong for subsidised loans

19/Mar/2009 Intellasia | Thoi Bao Kinh Te Vietnam page 10
Southern bourse-listed PetroVietnam Finance Joint Stock Corp (PVFC-coded PVF) yesterday March 18 officially carried out the credit subsidisation package to Vietnamese enterprises under the prime minister's Decision No 333/QD-TTg dated March 10, 2009 allowing financial companies to launch the interest rate subsidisation programme according to the Decision No 131/QD-TTg.
Tong Quoc Truong, PVFC's general director said that his firm will spend some 20 trillion dong on this programme.
The interest rate subsidisation will be 4% a year based on the total outstanding loans and the lending duration of from February 1 to December 31, 2009. The maximum subsidised lending duration will be eight months.

VietinBank to negotiate on loan rate

19/Mar/2009 Intellasia | 18/Mar/2009 Cong Thuong
The Bank for Industry and Trade of Vietnam (VietinBank) on March 18 said it would offer loans at negotiated rates for home buyers, land use rights used to build a home, cars, or studying costs and medical treatmenta and other consumer loans.
The negotiation lending rate can exceed 150% of the central bank's basic rate but not lower than the VietinBank's regulated floor interest rate in each period.
As for credit contracts signed before March 16 and not yet being disbursed, customers can negotiate to resign these credit contracts according to the negotiation lending rate.
VietinBank's negotiation lending rate programme relies on the State Bank of Vietnam (SBV)'s governor's Circular No 01/2009/TT-NHNN dated January 23, 2009 guiding negotiation lending rate of credit institutions for consumer loans.

HDBank signs credit guarantee deal with VDB

19/Mar/2009 Intellasia | 18/Mar/2009 Vietstock
Under a credit guarantee agreement signed recently between HCM City Housing Development Joint Stock Bank (HDBank) and Vietnam Development Bank (VDB), the two sides will jointly provide credit and credit guarantee to enterprise, especially SMEs, for investment projects and business and production development.
Accordingly, HDBank and VDB will introduce to each other customers who want to borrow capital. In addition, HDBank will provide VDB information on enterprise appraisal and ranking along with regulations on lending conditions to enterprises.
In return, VDB will also provide HDBank guidance on guarantee regulations and other relevant regulations in VDB's system.

Mekong Delta housing developer allowed to deduct for risk standby fund

19/Mar/2009 Intellasia | 18/Mar/2009 State Bank of Vietnam
The State Bank of Vietnam (SBV)'s governor on Match 18 issued an Official Dispatch No 1818/NHN-CNH allowing Mekong Delta Housing Development Commercial Joint Stock Bank (MHB) to deduct for its risk standby fund according to the Clause 7 in the Decision No 493/2005/QD-NHNN.
Under the document, MHB was required to continue to study, check and appraise to periodically complete the bank's internal credit ranking system and suitable risk standby policy in accordance with the laws. The lender has to study and build database system on customers' credits to appraise the credit risk as well as insolvency of borrowers.

VietBank inaugurates Phu Nhuan transaction site

19/Mar/2009 Intellasia | 18/Mar/2009 Lao Dong
Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) yesterday March 18 officially inaugurated Phu Nhuan transaction office at No 95C Phan Dang Luu, ward 7 in Phu Nhuan Dist.
VietBank has opened its transaction sites in four provinces so far and plans to inaugurate five branches in Hai Phong, Da Nang and HCM City in the first half of this year.
As planned, the bank's network will include 40 transaction sites nationwide by the end of this year.

Korea life insurer sets up in Vietnam

19/Mar/2009 Intellasia | 18/Mar/2009 Lao Dong
Korean life insurer Hanwha Group on March 16 officially joined Vietnam's life insurance market.
Representative from Korea Life said that it was licensed in 2008. This year, Korea Life plans to open two branches in Hanoi and HCM City.
At the same time, the insurer will introduce four main products to attract about 4,000 customers by the end of the year.

Supply increases, VN Index drops 2.32% to 267.04 pts

19/Mar/2009 Intellasia | AtpVietnam | HaSTC
In the face of the strong increase of the supply, the Vietnam's stock market today March 19 tumbled after four consecutive increases. The index of Ho Chi Minh Stock Exchange (STC) lost 6.35 points or 2.32% to 267.04 pts with the total matching order trade of over 32.2 million shares worth 639 billion dong, rising 17% in volume and 26% in value day on day.
70% of listed shares decreased. Particularly, among 175 share codes and four fund certificates being listed on the southern bourse, the stock market saw 127 shares decreased with 67 falling to the floor price, 27 others increased with four reaching the ceiling price and 25 remaining shares stood still.
Out of top ten market largest capitalised shares, only PPC of Pha Lai thermo power firm reached the ceiling price with 1,000 dong to 21,500 dong per share along with VNS, MPC, DHG, REE, GMD, DQC and DCL. Others decreased such as DPM -1,500 to 29,500 dong per share, FPT -2,300 to 45,500, HPG -1,400 to 27,800, VIC -1,900 to 36,800 and VPL -2,100 dong to 40,500 dong per share.
STB still led the market in trading volume with 4.28 million shares and then SSI with 3.09 million, REE 2.54 million, SAM 2.05 million, ITA 980,000 and DPM with 920,000 shares changing hands.
Similarly, Hanoi Securities Trading Centre (HaSTC) today March 19 also tumbled as the HaSTC Index slipped 1.84 points or 1.87% to end at 96.3 pts with the total market trade of 21,767,881 shares valued at nearly 434 billion dong.
Some big gainers were KBC +2,100, S99 +2,000, VSP +1,700, SDC +1,400 and PAN and PSC +1,200 dong per share.
Some big losers included DTC -1,800 and GHA and VMC -1,100 dong per share.
ACB was still the bestseller with 3,838,900 shares and followed by KLS with 3,648,400, BCC with 2,422,800, BVS 1,542,200, VSP 928,100, BTS 858,000, TS HPC 834,700, VCG 554,600 and PAN with 420,100 shares being transacted.

Business briefs March 19

19/Mar/2009 Intellasia
* Southern bourse-listed Vietnam Dairy Product Joint Stock Co (Vinamilk-coded VNM) has recently announced this year's business and production plan which will be submitted to the company's coming shareholders' meeting on March 31. As planned, Vinamilk targets to bring 9.22 trillion dong in revenue, 1.438 trillion dong in after tax profit, a year-on-year rise of 10% and 15% respectively and 30% dividend payment.
* Listed firm Refrigeration Electrical Mechanical Joint Stock Co (coded REE) announced that it started construction on the plant of producing electricity from rubbish bury field in Dong Thanh Commune, Hooc Mon Dist and Phuoc Hiep commune of Cu Chi Dist, HCM City.     The project investors are Korea's KMDK Ltd and REE.
* The Vietnam Machinery Installation Corp (Lilama) on March 18 inaugurated a shipyard using the world's most modern technology in the northern city of Hai Phong. Lilama's shipyard project, which is part of the government's shipbuilding industry development scheme to 2010, has a total investment capital of 260 billion dong including 45 billion dong from the state budget, 60 billion dong in preferential loans of Vietnam Development Bank (VDB)'s Hai Phong Branch and the remaining parts mobilised by Lilama.
* Tan Dinh Travel Joint Stock Co, better known as Fiditour, yesterday launched a promotion for domestic package tours from HCM City to the central and northern regions with discounts of 32%-40%, equivalent to 1.6-3 million dong. Accident insurance has been raise from 10 million dong to 20 million dong.
* Ngoc Ngan Co Ltd has cemented a deal with Tien Giang Province's Coo Be District to export 150 hectares of Global GAP standard longans. The company is shipping four containers of the fruit daily to the UK, France and Canada.
* Espace Business Hue Joint Stock Co has been granted an investment certificate to establish a Big C supermarket, the largest of its kind in the northern and central regions, at a cost of nearly 300 billion dong on 20,300 square metres in Hue City
* Phu Nhuan Jewellery Joint Stock Co has announced its 2008 revenue from selling and exporting gold ingots topped one trillion dong and US$16.2 million, 98% and 84% year-on-year increases respectively. The company has already sealed deals ensuring its 2009 revenue and net profit targets of 4.5 trillion dong and 150 billion dong respectively, up 23% over last year.
* Construction of the 200 bed Minh Duc general Hospital, to be the first private-owned hospital in the Mekong Delta's Ben Tre Province, is underway on 5,200 square metres in Ben Tre Town. The six-story facility will be worth over 119 billion dong.
* Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) yesterday March 18 officially inaugurated Phu Nhuan transaction office at No 95C Phan Dang Luu, ward 7 in Phu Nhuan Dist. VietBank has opened its transaction sites in four provinces so far and plans to inaugurate five branches in Hai Phong, Da Nang and HCM City in the first half of this year.
* Saigon Hanoi Commercial Joint Stock Bank or SHB yesterday announced to adjust the progressive dong deposit rates all over the network whereby the bank's highest deposit rate was 8.58% per annum, marking one of attractive interest rates on the market now.
* The Bank for Industry and Trade of Vietnam (VietinBank) on March 18 said it would offer loans at negotiated rates for home buyers, land use rights used to build a home, cars, or studying costs and medical treatmenta and other consumer loans. The negotiation lending rate can exceed 150% of the central bank's basic rate but not lower than the VietinBank's regulated floor interest rate in each period.
* Under a credit guarantee agreement signed recently between HCM City Housing Development Joint Stock Bank (HDBank) and Vietnam Development Bank (VDB), the two sides will jointly provide credit and credit guarantee to enterprise, especially SMEs, for investment projects and business and production development.
Sources: Thoi Bao Kinh Te Vietnam, Lao Dong, Nguoi Lao Dong, Dau Tu, Dau Tu Chung Khoan, Tuoi Tre, Thanh Nien, Tin Tuc, Nhan Dan, Vietstock, SSC, VCBS, HaSTC.

Vinamilk plans 30% dividend in 2009

19/Mar/2009 Intellasia | 18/Mar/2009 Thoi Bao Kinh Te Vietnam
Southern bourse-listed Vietnam Dairy Product Joint Stock Co (Vinamilk-coded VNM) has recently announced this year's business and production plan which will be submitted to the company's coming shareholders' meeting on March 31.
As planned, Vinamilk targets to bring 9.22 trillion dong in revenue, 1.438 trillion dong in after tax profit, a year-on-year rise of 10% and 15% respectively and 30% dividend payment.
In addition, Vinamilk will invest 1.208 trillion dong in its fixed assets. Of which, 203 billion dong will be invested in Maga factory project and 295 billion dong in soft drink factory project.
In 2008, the company's total revenue was 8.381 trillion dong and 1.371 trillion dong in pre tax profit with EPS of 7,132 dong.

Citigroup Global sells 5,330 DHG coded shares

19/Mar/2009 Intellasia | AtpVietnam
Hau Giang Pharmaceutical Joint Stock Co (coded DHG) announced that its shareholder Citiroup Global Market Ltd and Citigroup Global Market Financial Products Ltd sold out 5,300 DHG shares on March 3, reducing the holding of Citigroup Global in DHG from 1,003,076 shares (or 5.02%) to 997,746 shares or 4.99%.
During the last quarter of 2008, DHG reached 437.952 billion dong in net revenue from sales and service provision, up 2.5% or 10.414 billion dong from the same period of 2007, and 32.136 billion dong in after-tax profit, bringing the figures of the whole 2008 to about 1.546 trillion dong revenue and 135.867 billion dong profit.
The firm's EPS was posted at 6,796 in 2008.
After the session March 18, DHG increased by 5,000 dong to 105,000 dong per share with a recorded trade of 58,790 shares.

Sao Ta Food JSC registers to buy nearly 500,000 fund shares

19/Mar/2009 Intellasia | CafeF
Sao Ta Food Joint Stock Co (coded FMC) has recently registered to buy 497,530 its shares as fund shares to stabilise the price of FMC-coded shares according to the negotiation and matching order methods.
The purchase duration is from March 25 to June 25.
The capital to buy these shares is from the company's capital surplus to December 31, 2008.

Local shoemakers can't find foothold

19/Mar/2009 Intellasia | Vietnamnet
The export slowdown has had local shoemakers turn their attention to the domestic market, which has been dominated by foreign products, particularly those from China and Thailand.
The general Statistical Office has noted a dramatic decrease in orders from Vietnam's key export markets in the US, Europe and Japan. Footwear exports generated US$658 million in the past two months, a decrease of 7.3% from the same period last year.
Vietnamese footwear producers have not been able to carve out a strong presence in the domestic market because foreign offerings are better designed and less costly.
Huynh Quang Thai, a footwear trader, says he delivers goods directly to small booths at the markets in District 5 for an average of 85,000 dong (US$5) for brand name pairs made in Vietnam and those are sold to customers at around 140,000 dong (US$8.2). However, buyers pay just 65,000 dong (US$3.8) for products with diverse designs from China.
Vu Van Minh, general director of Vietnam Shoes Company, says footwear consumption in the domestic market has reduced by 30-40% compared with the same period last year.
Many domestic manufacturers, wholesale and retail businesses, as a result, are in deep trouble and facing the threat of closure.
Financial troubles have caused consumers to tighten their budgets and Chinese shoes companies facing export difficulties in major markets are now switching their focus to the Vietnamese market, hence domestic footwear makers are suffering, Minh says.
Independent market observers also say local enterprises have lost significant market share to foreign competitors because they lack distribution networks, and have not yet built up their brand names in the local market.
Footwear made in Thailand also have a major presence in the Vietnamese market, offering, like the Chinese, a wide variety of designs at lower costs.
A footwear wholesaler in An Dong market says Thai footwear costs only half as much as similar locally-made products.
According to the Vietnam Leather and Footwear Association (Lefaso), domestic tanneries are capable to meet just 20% of national demand. Vietnam, therefore, has to import 80% of its tanned leather from foreign countries.

Vietnam blocks US manufacturer's products on cancer scare

19/Mar/2009 Intellasia | DPA
Large supermarkets in Vietnam have stopped selling Johnson & Johnson products on news that the company's baby shampoo sold in the US contained chemicals that could cause cancer, the supermarkets said Wednesday. A US consumer group, the Campaign for Safe Cosmetics, reported this week that it had found formaldehyde and 1,4-dioxane in several varieties of Johnson's baby shampoo. The chemicals are considered probable carcinogens, and are banned from cosmetics in some countries, but not in the US.
"We received the order to stop selling most Johnson & Johnson's products, except for makeup powder, in our supermarket chain on Tuesday," said Nguyen Tuyet Thu, a sales manager at Coopmart, one of Vietnam's largest domestic chains.
Nguyen Thi Hong Gam, head of the products division at top Vietnamese supermarket Fivimart, said distributors had informed her Tuesday they were no longer supplying Johnson's products.
The Vietnamese newspaper Lao Dong reported Wednesday that the international retailer Big C would stop selling Johnson's products at its Vietnamese stores until they were certified as safe.
On Monday, Truong Quoc Cuong, head of Vietnam's Drug Administration Agency, said his agency would test Johnson & Johnson products and announce its results as soon as possible.
Vietnam is one of several East Asian countries, including Hong Kong and Taiwan, where stores have dropped Johnson & Johnson products since news of the contaminants broke.
Formaldehyde is used widely in construction materials in Vietnam, and tests have periodically detected it in locally made rice noodles.
The Vietnamese press and public have become increasingly concerned about chemical contaminants in recent years. In the past 18 months, the government has ordered recalls of contaminated soy sauce, substandard milk powder, and melamine-contaminated Chinese milk.

Vietnam Airlines to buy 14 ATR72-500 aircraft Jun '09-May '10

19/Mar/2009 Intellasia | Dow Jones
Vietnam Airlines will purchase 14 new ATR72-500 airplanes from June this year to May next year to replace its existing ATR72-200 planes, the Ministry of Transport said Wednesday.
The ministry didn't say how many ATR72-200 planes the country's flag carrier currently has, but said it operates a total of 50 planes on 29 domestic routes and 36 international routes.
The airline plans to expand its fleet to 104 by 2015 and to 150 by 2020. The expansion will include the purchase of 39 new Boeing B787s, Airbus A350-900s and A321 planes, the ministry added.
It said Vietnam Airlines is preparing to become the second biggest airline in Southeast Asia by 2015, after Singapore Airlines.
Earlier this month, the Vietnam Aviation Department said Vietnam Airlines will invest 4.49 trillion dong (US$264 million) to develop its business this year.
The company will use 3.74 trillion dong to buy new airplanes, the department said. The rest will be invested in training and in other businesses.

Vietnam trade fair to be held in Russia

19/Mar/2009 Intellasia | VOVNews
Local enterprises are preparing for a fair featuring Vietnamese exports, the first of its kind, in Russia from September 15-18.
The European Market Department, under the Ministry of Industry and Trade, reported that 50 domestic companies from 10 sectors such as agriculture, aquatic products and light industry, are expected to take part in the fair to promote trade to the European market.
La Van Chau, from the Department, commented that Russia is a high-potential market for Vietnamese commodities, particularly seafood, farm produce, apparel and footwear, as demand for these products is on the rise in the European market.
Vietnam and Russia have seen a surge in bilateral trade in recent years, marked by a record of US$1.5 billion in two-way revenues in 2008. Of that amount, Vietnam exported US$672 million, an increase of 67% year-on-year, and plans to increase that figure to US$1 billion in 2009.

Vietnam dumps lamps, says India

19/Mar/2009 Intellasia | Vietnamnet
Vietnamese exporters of compact fluorescent lamps will suffer higher import tariffs in India after the country's anti-dumping agency ruled that they dumped products.
The Vietnam Competition Authority (VCA) said Monday India's director general of Anti-dumping and Allied Duties had finalised a lawsuit against Vietnamese exporters of compact fluorescent lamps.
Exporters from China and Sri Lanka were also named in the lawsuit, but only Chinese exporters would face punitive measures along with their Vietnamese counterparts, VCA said.
Chinese exporters will face antidumping tariffs ranging from US$0.364 to US$1.908 per unit and Vietnamese exporters between US$0.452 and US$1.582, according to the Indian authority.
The ruling charged Vietnamese and Chinese exporters of injuring Indian manufacturers and threatening the country's industry.
Compact fluorescent lamp imports from China increased sharply from 36.32 to 87.86% of India's total lamp import in the 2003-2007 period while Vietnam accounted for 4.46% in 2007.
Exporters from Sri Lanka were ruled out of the lawsuit as their products accounted for less than 3% of India's total imports and have yet to injure its industry, the authority said.
India imported 121 million lamps in 2006-2007, according to the director general.

Lilama inaugurates modern shipyard in North

19/Mar/2009 Intellasia | 18/Mar/2009 Hanoi Moi
The Vietnam Machinery Installation Corp (Lilama) on March 18 inaugurated a shipyard using the world's most modern technology in the northern city of Hai Phong.
Lilama's shipyard project, which is part of the government's shipbuilding industry development scheme to 2010, has a total investment capital of 260 billion dong including 45 billion dong from the state budget, 60 billion dong in preferential loans of Vietnam Development Bank (VDB)'s Hai Phong Branch and the remaining parts mobilised by Lilama.
The project under the consultancy of Japan-based Kanematsu Group, was designed by Port & Waterway Engineering Consultant Joint Stock Co (TEDI PORT)-the Ministry of Transportation.
At the inaugurating ceremony, Lilama also delivered the MS "Mittelpate" ship worth US$5.6 million and signed another contract to build a Hohe Bank with Germany-based Briese ship-owner.

Global equipment supplier receives investment capital from Japanese bank

19/Mar/2009 Intellasia | Saigon Economic Times Online
Global Equipment Service Joint Stock Co (GES) announced to receive the stake investment capital from Development Bank of Japan (DBJ).
Two sides have not yet revealed the investment figure. However, Tran Don-chair cum general director of GES said that the extra capital will be invested in developing infrastructure and upgrading customer care services, signing M&A deals and new production technique.
GES will also expand network globally to develop businesses in other markets, launching training applications and modern technologies.
According to Shin Kikuchi, head of DBJ's Business and Technology Finance Group, the bank focuses on GES for investments in overseas projects on manufacturing solar energy equipments, Flat Panel Display and transistor equipments.
Formed in 2006, GES has launched technical services in 11 nations. IDG Venture Vietnam is the pioneer fund in providing capital to GES, followed by IT Farm Nozomi Investment Fund of Japan.

Steel price keeps falling

19/Mar/2009 Intellasia | Thoi Bao Kinh Te Vietnam page 1
The Vietnam Steel Association yesterday reported that the steel price continued decreasing by another 200,000 dong per tonne as for the steel bars and rolled steel, marking the third reduction from the beginning of 2009.
In the southern market, Vietnam Steel Corp sells 10.25-10.58 million dong per tonne, while the price of Vinakansai stands at 9.6-9.8 million dong per tone (VAT exclusive).
The retail price of steel ranges between 11.2 and 11.3 million dong/tonne.

Vietnam to build LPG depot at Dung Quat

19/Mar/2009 Intellasia | Oil&Gas Journal
Vietnam's PetroVietnam Gas Corp., keen to reduce the nation's expenditures on imports, has begun construction of a liquefied petroleum gas depot and a tank truck station at the recently launched Dung Quat refinery.
The project, valued at 226.6 billion dongs (US$13.32 million), includes two 1,000-tonne LPG rundown tanks, a system to deliver LPG from the rundown tanks to tank trucks, a firefighting system, and an industrial pipeline system.
When operational in first-quarter 2010, the project will ease distribution and delivery from the refinery to the central coastal and Central Highlands regions, enhancing Vietnam's domestic LPG market stabilisation.
Together with existing facilities of PV Gas North and PV Gas South, the new project-along with a cold LPG warehouse to be built in Ba Ria-Vung Tau province later this year-will form a complete infrastructure system for LPG distribution.
Last December, PV Gas and PV Gas South jointly inaugurated another LPG depot in the Tra Noc II industrial zone, at Can Tho city on the Mekong Delta. The 1,140-tonne capacity Can Tho LPG depot, valued at 115 billion dongs (US$7.18 million) will supply some 50,000 tonnes/year of LPG.
The uptick in activity by Vietnam's state firms underlines the competitive nature of the county's LPG industry, starting last December when Castrol BP Petco shareholders stopped BP Gas operations after a review of LPG business in central and southern Vietnam.
Nguyen Minh Huyen, communications manager of BP Vietnam, said that lower-than-expected profit and the pressure from illegal bottling activities and counterfeit bottles on the local market led to the business closure.
Huyen said illegal filling is widespread in Vietnam, which, combined with a competitive market environment, led to reduced profits for BP Gas, which initiated operations there in 1998 to supply LPG products for household, commercial and industrial consumers.
Earlier in December, though, Elf Gas Saigon, a joint venture of Total Oil Asia-Pacific and Saigon Construction Corp., reported its acquisition of the local rival Saigon Gas Holdings Corp., including an import terminal in Go Dau.
Total said the acquisition "secured its position" as one of Vietnam's leading LPG suppliers, boosting its share of the local gas market to about 15%.
"In Asia-Pacific, Vietnam is one of our key countries for development, and this opportunity for growth fits well with our strategy in the region," said Thierry Pflimlin, senior vice-president of Total Oil Asia-Pacific.
Total operates throughout Vietnam, with affiliates Total Gas Hai Phong in the North, Elf Gas Da Nang in the central region, and Elf Gas Saigon, Total Gas Can Tho, and now Saigon Gas in the South. All affiliates have import terminals.
Vietnam's LPG consumption averages 950,000 tonnes/year, with 30% or 285,000 tonnes/year of the total produced domestically at the country's only LPG plant in Ba Ria-Vung Tau province.
Vietnam imports the remainder, about 665,000 tonnes/year, much of it coming from neighbouring China. In January this year, China exported 58,817 tonnes of LPG, with 50.1% or 30,000 tonnes of the total going to Vietnam.
Two-years ago, PetroVietnam forecast that Vietnamese LPG demand would rise by more than 50% to 1.2-1.3 million tonnes/year by the end of 2010. It said additional demand will then double to 2.4 million tonnes/year by 2020, with domestic supply covering about 1.8 million tonnes of the total.

Coal sales set at 40m tonnes in 2009

19/Mar/2009 Intellasia | VOV
Vietnam Coal and Minerals Group (Vinacomin) said it has finalised negotiations and signed coal sale contracts for 2009. Accordingly, the group's coal sales this year is estimated at 40 million tonnes including 19.5 million tonnes for domestic market and 20.5 million tonnes for export.
Vinacomin said it would concentrate on increasing mining production in opencast coal ores, changing and upgrading coal mining technologies, strengthening capacity of Khe Cham 3, Nam Mau, Ha Lam, Mong Duong ore.

Song Ong hydro adds to national electricity supply

19/Mar/2009 Intellasia | Nhan Dan
The generator groups No 1 and 2 of Song Ong Hydropower plant on March 17 came into the national grid after three-years of construction. The last generator group will be operational on March 18, 2009.
The plant was invested and built with total first phase cost of over 156 billion dong by Lilama's Song Ong Hydropower Joint Stock Co Total capacity of the three turbines is 8.1 MW.
With the designed electricity output of 41 million kWh a year, the plant will surmount partially the electricity shortage in the central region.

REE starts work on US$25m CDM power plant

19/Mar/2009 Intellasia | CafeF
Listed firm Refrigeration Electrical Mechanical Joint Stock Co (coded REE) announced that it started construction on the plant of producing electricity from rubbish bury field in Dong Thanh Commune, Hooc Mon Dist and Phuoc Hiep commune of Cu Chi Dist, HCM City.
The project investors are Korea's KMDK Ltd and REE.
Total cost for the project is US$25 million, of which 30% is ownership capital and 70% is loans.
The designed generation capacity of the power plant is 6-8 MW. Construction time is about 1-2 years,

ADB to offer US$410m loan to Vietnam for expressway project

19/Mar/2009 Intellasia | Dow Jones
The Asian Development Bank said Wednesday that it will lend Vietnam US$410 million to build an expressway in the country's southern region.
The ADB said it will sign an agreement on the loan with the State Bank of Vietnam Friday.
The 51-kilometer expressway, which will link HCM City, Vietnam's economic hub, with Dong Nai province, will require a total investment of US$932 million.
The Japan International Cooperation Agency and the Vietnam Expressway Corp will provide the rest of the money needed for the project.
Construction of the expressway is scheduled to begin in the second quarter.

Construction on City Gate Towers starts in Q2

19/Mar/2009 Intellasia | CafeF
Nam Bay Bay Investment Joint Stock Co (coded NBB) will start work on City Gate Towers project worth 1.708 trillion dong by the second quarter of 2009.
The project is situated in Ward 16, Dist 8, HCM City, comprising three buildings of 19 storeys, 24, and 28 storeys and two basements, trade centre, service area, one 12-storey office building, designed by SMEC International Co.
Total construction area for City Gate Towers is 172,667 square metres. Out of the investment capital, NBB contributes 70% and the remainder is invested by CII.

Total rubber production output estimated at 680,000 tonnes in '09
18/Mar/2009 Intellasia | Saigon Tiep Thi | CafeF
Among over 70 countries and territories buying Vietnam's rubber, China is the biggest importer. Particularly, China spent US$952.7 million on importing Vietnam made rubber, accounting for 56% of Vietnam's export market share, followed by Malaysia, Korea and Taiwan with an average market share of 3-5%.
10 markets that posted the highest growth in importing rubber from Vietnam in 2008 included Germany and Italy. Between 2007-2008, Germany's natural rubber import growth was 7.65%, in which the import spending on Vietnamese rubber surged 14.7%. The figures of Italy were 13.49% and 38% correspondingly.
However, some markets such as Korea, US, Japan and Turkey reduced the demand for importing natural rubber from Vietnam while their total import last year increased sharply against 2007.
Czech spending on importing Vietnam's rubber in 2008 was US$8.3 million, a year-on-year jump of nearly 50% compared with 2007's US$3.6 million. Meanwhile, Vietnam only earned US$30.5 million from rubber export to US, down nearly 20% from the previous year.
Vietnam's rubber production output accounts for 5.4% of the world's total output, ranking the fifth position after Thailand, Indonesia, Malaysia and India.
According to the development plan of Ministry of Agriculture and Rural Development, the country's rubber plantation area in 2009 will reach 640,000 hectares and the total output is estimated at 680,000 tonnes.

Russian market to open up for Vietnam's catfish again

19/Mar/2009 Intellasia | Vietnamnet
Russia will likely open up its market for Vietnamese catfish products again after months of interruption due to food safety concerns, as a group of local seafood processors left for Russia on Monday to ink an agreement to this effect.
Vietnamese exporters will meet with Russian importers and are due to cut deals to ship tra catfish products to the market under the witness of the Russian Federal Service for Veterinary and Physio-sanitary Surveillance (VPSS), said an official of Vietnam's agriculture ministry.
Deputy minister of agriculture Luong Le Phuong told reporters on Monday that "the job of reopening the Russian market for Vietnamese catfish products is 90% complete."
Russian food safety authorities ordered a halt of catfish import from Vietnam on December 20 last year and dispatched a team of experts to Vietnam to look into production and processing conditions between February 21 and 28 this year.
The inspection was aimed to see whether Vietnamese processors had improved production and processing conditions as warned by the Russian side. Earlier last year, Russian inspectors had also visited Vietnam to look into such conditions in 24 local enterprises that were sending seafood shipments to Russia, plus 15 other local enterprises that wanted to penetrate the market.
Late last year, Vietnam's agriculture ministry also issued new rules to tighten control over food safety and hygiene in seafood bound for Russia.
Deputy minister Phuong said Russia and Vietnam had agreed to cut down on the number of Vietnamese processors allowed to export catfish to Russia, and emerging market for Vietnamese seafood. The agreement was arrived at between Russia's VPSS and Vietnam's testing and quality assurance agency Nafiqaved.
Despite the temporary ban in Russia, Vietnam last year still shipped nearly 120,000 tonnes of tra catfish products to this market with total value of US$188 million, an upsurge of 161% in volume and 123% in value over 2007. This compared with US$1.45 billion worth of Vietnam's tra catfish export of 640,000 tonnes last year.

FPT Software targets US$10-15m profit in 2009

19/Mar/2009 Intellasia | 18/Mar/2009 CafeF
The annual shareholders' meeting of FPT Software Joint Stock Co (FSOFT) held on March 14 passed this year's business and chartered capital increase plans.
Last year, FSOFT made revenue of 714.6 billion dong (US$42 million), a year-on-year growth of 49% and 213.2 billion dong in after tax profit, rising 32% y-o-y with EPS of 8,968 dong.
To the end of 2008, FSOFT's chartered capital was 238 billion dong.
The company's main market is Japan with a revenue of US$25.4 million in 2008, accounting for 60% of the firm's total revenue and increasing 55% against 2007.
Based on the current business situation, The company set three business scenarios for 2009 as follows:
* A: Revenue of US$50 million and profit of US$15 million
* B: Revenue of US$47 million and profit of US$13.2 million
* C: Revenue of US$42 million and profit of US$10 million
FSOFT also plans to issue nearly 13 million ordinary shares at 10,000 dong par to hike its chartered capital from 238 billion dong to 367.57 billion dong. Particularly, 11,888,450 shares will be allocated to the existing shareholders at the ratio of 2:1 (one new share for two old shares), 570,980 shares will be offered to the company's staff with the price of 10,000 dong per share and 499,600 remaining shares will be sold to the employees with a good performance in 2008.
After the share issuance, FPT's holding rate into FSOFT will be reduced from 68.89% to 66.91%.
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