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BUSINESS IN BRIEF 4/11
An
Giang highlights agricultural bounty
The
Mekong Delta
The
province’s agricultural restructuring will be centred on cultivation,
livestock, fisheries and forestry products.
Cultivation
is a key area that helps ensure national food security and increase export
turnover, so the restructuring of the sector will be carried out on strategic
products such as rice, vegetables and fruit.
An
Giang will prioritise investment in developing large-scale rice production
under the model of large paddy fields with an aim to enhancing the quality
and value of rice harvests.
In
addition, the province will focus on sustainable and safe vegetable and crop
production using safe agricultural practices set out by the VietGAP and
GlobalGAP organisations. Special zones for growing vegetables will be set up,
applying advanced technology to raise productivity and quality.
An
Giang will also set up key fruit tree growing zones for mango, banana and
dragon fruit following good agricultural practices in combination with
eco-tourism.
Livestock
restructuring will see An Giang shift from small to larger breeding models,
applying modern technology based on local farmer financial capacity, and
invest in environmentally friendly waste treatment systems.
Regarding
fisheries, the province will prioritise rearing tra fish and blue-leg shrimp,
while diversifying seafood products. It will invest in an irrigation system
and infrastructure serving aquaculture.
Through
the restructuring of the forestry sector, An Giang hopes to develop a
sustainable industry which promotes environmental protection, biodiversity,
is capable of coping with climate change and contributes to improving
people’s livelihoods.
In
order to improve the forestry sector’s economic efficiency in line with
maintaining environmental protection standards, the province aims to develop
forests to preserve biological diversity, while also encouraging eco-tourism
and developing forest garden models.
Further
added value is planned to be added to the sector by boosting wood processing.
By applying advanced science and technology in timber processing higher value
products can be produced.
In a
bid to restructure the local agricultural sector, An Giang is making efforts
to re-organise production, while simultaneously incentivising businesses to
co-invest in the sector with farmers. Studies into which policies will best
stimulate this investment are ongoing for future proposals to central-level agencies.
The
province’s restructuring plan will additionally focus on training and
developing human resources, raising the capabilities for farmers and local
agricultural managers, specifically cultivating knowledge about economic
management and the market economy.
An
Giang is an agricultural province and home to total cultivatable land of
246,821 hectares, with rice-growing land accounting for more than 82 per
cent. The province boasts the largest area of cultivatable land in the Mekong
Delta.
Over
the years, the province’s agricultural sector has obtained enormous
achievements in growing rice, vegetables and aquaculture. The province’s rice
output increased to four million tonnes in 2012 from 3.1 million tonnes in
2005, vegetable and fruit output increased to 892,000 tonnes from 569,000
tonnes and seafood output increased to 300,000 tonnes from 181,000 tonnes in
the same period.
ACE
Life wins new landmark licence
ACE
Life, part of the ACE Group, has got the nod from
The
full licence for the establishment of ACE Life Fund Management Company (ACE
Life FMC) in Vietnam was awarded to ACE Life Insurance Co., Ltd. (ACE Life
Vietnam) at a welcome reception hosted yesterday by Vietnam’s Ministry of
Foreign Affairs in conjunction with the US-ASEAN Business Council’s (USABC)
first Board of Directors meeting in Hanoi.
The
licence, issued after three months since the in-principle approval given by
Vietnam President Truong Tan Sang during his official visit to the US in July
2013, eamarks significant development for the ACE Group and ACE Life Vietnam,
as well as reflects the fast developing economic ties between Vietnam and the
US, as dubbed by Vietnamese government officials and USABC executives
participating at the event.
“We
are excited to establish our first fund management company in
“This
is a milestone for ACE Life as the fund management company will help enhance
our local business operations and demonstrate our commitment to investing in
Headquartered
in
“Besides
the strong support from ACE Life Vietnam in terms of capital, management
experience and manpower, ACE Life FMC will also receive valuable support from
the ACE Group with its global expertise in insurance, reinsurance and asset
management,” said Lam Hai Tuan, ACE Life Vietnam chairman and country
president.
“We
believe ACE Life FMC will provide domestic and foreign long-term investors
with various attractive offerings through the establishment and management of
different types of funds, including pension funds. This will contribute to
supporting one of the Vietnamese government’s major proposals, and help
improve and enrich the capital market in
Operating
in
ACE
Group is one of the world’s largest multiline property and casualty insurers
with operations in more than 50 countries. ACE Limited, the parent company of
the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a
component of the S&P 500 index.
At a
time when many Vietnamese state-owned enterprises (SOEs) are struggling to
find capital to resolve the bad debt issue, the finance ministry said some 30
billion yen, or $300 million, is waiting to be disbursed to buy their
liabilities.
Dang
Quyet Tien, deputy head of the Corporate Finance Agency under the ministry,
said SOE restructuring is among the top priorities for the seven assistance
packages the Japanese government has recently pledged to support
“The
finance ministry is currently working with the Japanese International
Cooperation Agency (JICA) over an agreement in which Japanese businesses will
help local SOEs restructure by buying their debts,” he said.
Specifically,
JICA will help boost the financial muscle of the Vietnamese agencies in
charge of trading bad debts, namely the Debt and Asset Trading Corporation
(DATC) and the Vietnam Asset Management Corp (VAMC).
Japanese
investors, both public and private, will buy bad debts from Vietnamese SOEs,
thus enhancing their restructuring process.
“It is
estimated that some 30 billion yen will be pumped into this plan,” Tien said.
Tien
added that Japanese investors are interested in the electronics and
shipbuilding industries, as well as the beverage and confectionary sectors.
The
VAMC is also buying bad debts from local state-run enterprises by issuing
special bonds, and Tien said the difference between VAMC and JICA programs is
that the foreign investors, instead of the local government, will cover most
of the debts being traded.
“Moreover,
while VAMC and DATC only buy debts of businesses with assets, JICA will
classify them into groups with different solutions,” he said.
Debtors
with feasible development plans will be restructured, while those with too
much debt will be forced to declare bankruptcy.
“
Dai
Quang Minh named developer of major urban area roads
The Ho
Chi Minh City People’s Committee has named Dai Quang Minh Real Estate as the
project developer for the four main roads of the Thu Thiem New Urban Area.
They will be built under the build-transfer (BT) and “land in exchange for
payment” models.
The
Vietnamese developer will receive their payments in the form of properties in
zones throughout the project for building residential and hi-rise buildings,
the yacht wharf, and other projects.
In
building the roads, Dai Quang Minh is supported by the Vietnam Infrastructure
Development and Finance Investment Company (VIDIFI).
In
May, the southern hub also named Dai Quang Minh as the developer of a
pedestrian bridge connecting District 1 with the Thu Thiem peninsula in
District 2 under a BT format. The bridge runs from
The
company is also developing some low-storey residential areas on the
peninsula, which is home to 20 projects including resettlement apartment
buildings, a tower, and exhibition and convention centre. Thu Thiem is
designed to house
Policymakers
and businesses from
As one
of the most important external economic events in
Middle
East – North Africa , with a population of over 520 million, is a market of
great potential for
Despite
their geographical distance,
Two-way
trade between
Investors
from the Middle East are pouring capital in several major projects in
Meanwhile,
the Vietnam National Oil and Gas Group is conducting an oil and gas
exploration and exploitation project in
The
forum on economic cooperation between
Participating
businesspeople are also expected to extend their contact bases and reach
cooperation deals.
B-WTO
supports
The
Beyond WTO Programme (B-WTO) has helped
As
With
its goal of strengthening the Government’s capacity, the B-WTO Programme, a
post-WTO technical assistance programme, has provided
It has
also helped Vietnamese ministries, agencies and localities implement the
Government’s action programmes on some major guidelines and policies for the
rapid and sustainable development of the Vietnamese economy as a WTO member,
he added.
According
to Trinh Minh Anh, head of the B-WTO Programme Steering Committee Office,
between September 2009 and September 2013, 48 projects were carried out as
part of the B-WTO Programme – Phase II.
Of
which, 23 supported the completion of the market economy institutions, six
helped solve socio-economic challenges of integration to rural areas, 11
improved integration management and coordination capacity, and the remaining
eight assisted localities in realising their action plans.
The
majority of the programme’s short-term objectives have been achieved,
actively contributing to implementing the priorities of the Government’s
Action Plan, he said.
One of
the major projects is to improve the capacity of the Competitiveness
Management Department (CMD) in order to enhance market economy institutions
in
With
the support of the B-WTO Programme, the CMD has investigated and handled
trade defence lawsuits under Vietnamese law, including the cases against
imported float glass in 2009 and refined vegetable oil in 2013.
It has
also investigated and imposed anti-dumping measures against cold-rolled
stainless steel imported from
CMD
Director Bach Van Mung said that thanks to the programme, the department has
built a competitive environment database and assessed the competitiveness of
30 economic sectors.
Since
the programme was launched, 17 countries have recognised
Another
outstanding result of the project was the establishment of an early warning
system on anti-dumping lawsuits and the training of staff capable of dealing
with trade defence cases lodged by foreign countries, he added.
However,
Deputy Director of the Central Economic Management Institute Vo Tri Thanh
said that despite remarkable reform and development achievements over the
past 27 years, many reforms have lost the momentum and the Vietnamese economy
has revealed a number of shortcomings in structure, resistance, and social
and environmental issues.
Therefore,
Vietnam needs a new reform push in three major directions, which are economic
restructuring with a focus on State-owned enterprises, finance-banking and
public investment; deep and comprehensive integration centring on economic
integration and prioritising ties with the ASEAN, East Asia, Asia-the Pacific
and strategic partners; and combining economic reforms with institutional and
political reforms, he stressed.-
Seminar
focuses on new generation FTAs
Opportunities
as well as challenges for
Held
by the Party Central Committee’s Commission for External Relations, the
Ministry of Foreign Affairs and the United Nations Development Programme, the
seminar is part of a project on the enhancement of the capacity to serve deep
and broad international integration.
Participants
heard reports of experts and exchanged views on the results and experience
They
analysed opportunities and challenges posed by new generation FTAs to the
country’s production, investment, trade and social culture, as well as its
national sovereignty.
Delegates
also discussed what
Vietnamese
goods come to southern border area
A
diverse array of Vietnamese goods are up for grabs at a fair in the border
commune of Vinh Xuong, the southern province of An Giang, that has attracted
over 11,000 local and Cambodian shoppers.
Featuring
high were 40 booths operated by 25 firms, showcasing local specialities, farm
produce, craft products, garments and household appliances.
Besides
local exhibitors were 18 from
Previously,
two fairs took place in provincial rural areas in order to make quality and
affordable items available to residents.
Another
fair will be up and running soon in the lead-up to the traditional New Year
festival which is the most important in a year that will come at the end of
January next year.
2.48
mln preferential shares for Mekong Delta farmers
The An
Giang Plant Protection Joint Stock Company (AGPPS) recently issued 2.48
million preferential shares to be sold to farmers in the Mekong Delta at half
price in a bid to raise their position in agricultural production.
This
is the first time Vietnamese farmers have had the opportunity to become the
shareholders of the country’s leading company specialising in the
agricultural sector.
More
than 6,000 farmers will be able to buy each AGPPS share at the preferential
price of 30,000 VND (1.4 USD) and are expected to enjoy an annual dividend of
30 percent.
Approved
by the AGPPS Annual General Meeting of Shareholders in April, it is one of
the company’s moves to support farmers, in addition to the provision of
technical support and input materials plus ensuring the purchase of farm
produce.
To
help farmers sell their products, the company has built five rice processing
plants and will complete the construction of 12 factories of the same kind,
each with an annual capacity of 200,000 tonnes, in Mekong Delta provinces by
2018.
Setting
a sustainable pangasius supply chain
A
project on the sustainable pangasius supply chain in
With
total value of nearly 2.4 million EUR (3.1 million USD), a project aimed at
establishing a sustainable pangasius supply chain in Vietnam (SUPA), presided
over by the Vietnam Cleaner Production Centre (VNCPC), with the participation
of the Vietnam Association of Seafood Exporters and Producers (VASEP), the
World Wildlife Fund (WWF) Vietnam and the WWF Austria, has begun.
The
project is expected to boost the development of the Vietnamese pangasius
sector in the direction of cleaner production and contribute to the
establishment of a sustainable pangasius supply chain for the sector.
Pangasius
is a major export product of
The
SUPA project has been developed in such a context. Under this project, a
supply chain involving all stages of pangasius production will be set up.
Involved in the chain will be those who produce feed for pangasius, young
fish and chemicals, those who breed pangasius and small and medium
enterprises (SMEs) which combine pangasius breeding and processing, pangasius
processing companies, purchasers, international distributors and Vietnamese
traders, big retailers and shops. The project will link all sides concerned
into a chain consisting of farmers, businesses, importers, retailers and
processing plants to create quality and competitive finished products.
According
to Ngo Tien Chuong, WWF Vietnam’s Aquaculture Coordinator, the project
proposes comprehensive solutions to deal with problems facing the pangasius
sector. Specifically, the project will focus on improving production
capability and promoting responsible production in order to improve the
quality of products, minimize environmental impacts and reduce production
costs through the effective utilization of natural resources and the
application of cleaner production methods (RE-CP) as well as efforts to
innovate products and develop the market. Chain links will be tightened to
optimize the interests of all sides involved while standards set by the
Aquaculture Stewardship Council (ASC) will be applied to meet market
requirements.
The
project will help SMEs and household-sized producers exchange information and
provide them with technical assistance so that they can apply ASC standards
to promote sustainable production and enhance the competitiveness of the
Vietnamese pangasius sector in the global market.
The
project will provide farmers with training on fish breeding techniques and
quality management to that they can create the best products. Pangasius
processing companies will be assisted to apply the most advanced technologies
so that they can efficiently use energy and material resources and launch
products which meet the highest requirements of import markets.
The
implementation of the project began in April 2013 and will finish in March
2017. Its goal is turning
Total
expenditure on the SUPA project is nearly 2.4 million EUR or 64 billion VND,
of which 1.9 million EUR (80 percent) is funded by the EU through the EU
Switch-Asia Program and the remainder, 20 percent, is contributed by
organisations which take part in implementing the project.
Vietnam
to introduce business opportunities in Singapore
A
Vietnam Forum to be held by the Institute of Southeast Asian Studies (ISEAS)
in
Talking
with Vietnam News Agency’s Singapore-based reporter ahead of the forum, Dr.
Aekapol Chongvilaivan, fellow of ISEAS’s Regional Economic Studies Programme,
said the Vietnam Forum is especially marked the 40th anniversary of the
Vietnam-Singapore diplomatic relations.
Since
its inception in 1973, the friendship between the two countries has grown
hand in hand in terms of trade and investment.
“Over
the past 40 years we have seen an increase in bilateral relations not only in
political relations but also in economic and social collaborations,” he said.
“So many reforms had been implemented in
“We
have seen development in
Aekapol,
one of presenters at the forum, the event will also provide some insight into
the policy making process as well as business opportunities that emerge in
the country.
About
the impact of the Vietnam - Singapore Strategic Partnership agreement, he
said that under the initiative, Singapore and Vietnam governments will sit
down together to set out future plans for mutual agreements as well as mutual
plans to strengthen economic and political relationships.
“It’s
very important to the business sector that will build confidence as well as
optimism about investment and business opportunities in
On
So
with the access to the WTO,
“To
that extend, I think it is perhaps something that is very important to ASEAN
because it will strengthen the ASEAN enthusiasm,” he noted.
He
described
“By
being the membership of the TPP,
He
expected that Vietnam will push forward in many ambitious areas like intellectual
property rights, investment protection, service sector, saying that it will
be beneficial for Singapore and Vietnam and also good for ASEAN as a whole.-
The
ambitious plan was revealed by Deputy Chairman of the municipal People’s
Committee and head of the Steering Committee for Collective Economy
Development Le Manh Ha at a conference in
Ha
added that the number of new working groups, cooperatives and cooperative
unions will hit 1,500, 175 and 10 respectively between 2016 and 2020. They
are expected to contribute 1.2 percent of the city’s GDP and create jobs for
50,000 workers.
To
realise their goals, local departments and agencies were requested to review
the quantity and quality of cooperatives in each sector, and make it easier
for them to access production facilities, credit capital, managerial staff
and skilled workers.
The
State management apparatus on the collective economy will be perfected while
the working efficiency of the city cooperative unions will be improved.
An
outstanding example is the Saigon Union of Trade Cooperatives, which runs a
network of Coopmart supermarkets in 30 cities and provinces nationwide.-
Russia’s
WTO membership to impact Vietnam
Influential
Vietnamese businesspeople based in
Trade
Counsellor at the Vietnamese Embassy in
He
also briefed the guests of the ongoing free trade agreement negotiations
between
He
said
Issues
like taxation, quotas, trade protection and market trends also came up during
the discussions.
Compared
to other WTO commitments, the
The
document is expected to be signed in late 2014 or early 2015.
New
companies outnumber old in HCM City
More
than 20,000 new companies opened in
The
city's Tax Department reports that in the reviewed period, the number of
companies that stopped operations was less than that of the newly registered
and re-opened ones.
More
than 20,700 new companies were established as of September, pushing the total
number of companies in the city to more than 137,700.
During
this period, more than 5,200 firms resumed operations, which is a positive
sign for the city's economy, the department said.
It
noted that the companies that resumed operations were mostly in trade,
services, garment, and timber industries.
As of
September, just 18,000 companies had closed shutters, significantly lower
that similar figures last year.
The
department attributed this result to the city being able to help enterprises
overcome various challenges, particularly through preferential credit and tax
policies.
These
policies have helped companies re-plan their strategy and resume production,
the report said.
New
strategy needed for ODA management, use
ODA
commitment to
At the
same time, the donors said as
To
ensure the effective use of ODA sources, Minister of Planning and Investment
Bui Quang Vinh suggested implementing solution packages of policy
improvement, simplifying procedures and facilitating the implementation of
invested projects.
The
country should also revise and supplement related legal documents such as the
Law of Construction, Law of Investment, Law of Bidding and regulations on ODA
and preferential loans in the Law of Public Investment, the minister added.
Sharing
the view on reduction in ODA flow and increase in less-preferential loans, WB
Country Director Victoria Kwakwa proposed the Government focus on its green growth
and climate change strategies, saying that they “position it well to benefit
from planned new climate and green financing platforms at the international
level once they come into place”.
Representatives
from the Japan International Cooperation Agency (JICA) said that development
cooperation will be more effective and sustainable thanks to the Government
promptly refreshing the decree on ODA management and use and other
preferential loans from donors in April this year and changing the donors’
meeting into the Vietnam Development Partnership Forum this year.
Meanwhile,
Pratibha Mehta, UN Resident Coordinator in
Among
the nearly 80 billion USD in ODA commitment to
In
1993,
“Today,
In
addition, support for socio-economic development policies from foreign donors
has created trust and encouraged foreign private businesses to invest in
An
Giang: Farmers earn high profit from
Farmers
in the Mekong delta
The
varieties, namely Kinu,
The
company also assists farmers throughout the farming process through guiding
them in rice tending techniques, preventing diseases and insects and
supplying fertilizers. It buys all rice output from contracted farmers to
export to
During
the last five years, the project attracted over 4,000 farmers in four
districts of Chau Thanh, Chau Phu, Thoai Son, Tri Ton and Long Xuyen city who
plant Japanese rice on a total 8,000 ha, harvesting 32,000 tonnes of rice for
export.
The
company said it has plans to further expand the cultivation area next year.
Airport
to be built in Binh Thuan
Minister
of Transport Dinh La Thang has signed a decision approving the planned Phan
Thiet airport in central Binh Thuan province.
The
543-ha airport will be built in Thien Nghiep
The
passenger terminal building will be around 5,000 square metres with maximum
capacity of 300 passengers.
Quang
Ninh develops transport infrastructure
The
As
part of “two corridors, one belt” economic cooperation between Vietnam and
China, and Pan-Tonkin Gulf economic cooperation, the locality plans to pour
money into building and upgrading facilities such as airports, seaports,
railways and highways.
Chairman
of the provincial People’s Committee Nguyen Van Doc said his province is
mobilising all capital sources besides the local budget to promote investment
in the field under the modes of BT (Build-Transfer), BOT
(Build-Operation-Transfer) and PPP (Public-Private Partnership).
The
province and the Ministry of Transport have implemented many transport
projects by these means, including the road connecting Ha Long city with
Local
authorities are appealing for foreign investors in the construction of
They
have also created a healthy environment for transport service providers to
compete, and encouraged local people to use public transport, helping reduce
traffic jams and accidents.
Home
to over 500 scenic, cultural and historical sites, including the World
Natural Heritage Ha Long Bay, the province is in a great position to develop
its tourism services, especially the entertainment industry.
The
province welcomed over seven million tourists last year, including more than
2.4 million foreign arrivals thanks to transport development.-
Coastal
province announces “Ba Ria Salt” brand
The
southern coastal
The
province’s salt received its brand certificate from the Department of
Intellectual Property, Standardisation and Metrology under the Ministry of
Science and Technology.
The
certification will enhance trade promotion, the effectiveness of quality
management, and the product’s economic value.
Salt
production in Ba Ria–Vung Tau is said to date back 160 years thanks to the
intensity of its sunlight, wind and higher sea water salinity than other
localities.
The
Governor of the State Bank of Vietnam (SBV) has allowed many commercial banks
to raise credit growth to 20 percent by 2013. Lower credit rate has failed to
give a strong boost to lending although the year’s end is inching in - the
time when the demand for finances is usually the highest in the year. Report
by the
Interest
rates have been on a downward trend through 2013. So far this year, interest
rates have been slashed by 3-5 percent from the end of 2012 when commercial
lending rates were pegged at 13-17 percent per annum. Presently, rates hover
at 12-13 percent per annum. Besides, some borrowers with good profile can
access loans bearing an interest rate of 11 percent per annum. Lending rates
for five priority borrowers have slid from 12 percent per annum to 9 percent.
Interest
rates on old loans have also been revised down by some banks to some 13
percent per annum. Commercial lenders have also actively supported corporate
clients to restructure their debts in order to help them restore operations
and improve bad debt ratios.
Lending
rate reduction also resulted in a rapid deposit rate decrease. Ceiling rate
on VND deposits is capped at only 7 percent per annum, applicable to only
deposits with a maturity of less than six months. Currently, common deposit
rates are 4.6-7 percent per annum for 3-month term, 5-7 percent for 6-month
term, and 5.5-8.5 percent for 12-month term.
Rapid
rate reduction and easing borrowing conditions failed to boost credit growth
for the time being, because of economic slowdown. Therefore, there is a
silence but fierce competition among banks to draw new customers. Many banks
have launched various promotional programmes and soft loans for personal
borrowers towards the end of the year.
From
now until December 31, 2013, Southeast Asia Commercial Joint Stock Bank
(SeABank) continues to implement its home loan programme called “Your home,
our priority” with zero interest rate in the first month and a fixed interest
rate of as low as 10 percent per annum in the next 11 months. The lender
allows borrowing up to 70 percent of house value in 15 years, plus a
potential grace period of 12 for principal repayment. Their houses are the
collateral for the loans.
Vietnam
Technological and Commercial Joint Stock Bank (Techcombank) also reported to
spare a huge credit for personal clients to buy real estate, vehicles and
consumer products at an appealing interest rate of 9.99 percent per annum in
the first nine months in the event of 5-year or longer borrowing term, in six
months in the event of 3-5-year term, and in three months in the event of
three-year or shorter term.
For
corporate clients, Techcombank offers a soft loan programme, featuring an
interest rate of 8.2 percent per annum on VND loans and 3.8 percent on USD
loans through December 31, 2013. The rates are very competitive and
applicable during the borrowing period.
Saigon
Thuong Tin Commercial Joint Stock Bank (Sacombank) also announced lending of
2 trillion VND to corporate borrowers, bearing an preferential interest rate
of 9 percent per annum, to meet the rising demand for finances before the
Lunar New Year 2014.
Other
banks also have their own promotion programmes to stimulate credit demand
towards the end of the year. This has credit easing, with lower interest rates
and easier access to capital.
Companies
are still hungry for capital although borrowing costs have dropped
dramatically. Poor business performance has inhibited them from accessing new
loans. New business plans are postponed by unfavourable business operations.
Meanwhile, really capital-hungry companies cannot access loans because banks
do not want to fund highly risky plans. These companies have often incurred
bad debts at banks, which are subject to being restructured.
It is
two months ahead of the Lunar New Year - the busiest business period in the
year for most enterprises. This leads to growing borrowing demand during this
time. However, the situation seems to be different this year. Credit growth
is half of the full-year target of 12 percent. At a recent conference, Le
Quang Trung, Deputy General Director of Vietnam International Bank (VIB),
predicted the credit growth would be just 9 percent in 2013.
Interest
rates are attractive, but this is not as much a primary concern of
enterprises as it was one year ago. Many companies have shrunk production on
contracting demand to reduce costs to live through this difficult time.
Hence, although banks are offering appealingly low interest rates, they are
not eager to borrow.
Normally,
personal consumer demand also soars ahead of the Lunar New Year. But this
year stagnant production, rising unemployment and declining income have
contracted consumer demand. The housing market remains gloomy. Fears of
unemployment and decreasing incomes in the future have forced many people to
delay vehicle purchase, home repair and expensive furniture purchasing. So,
consumer credit is hard to find customers.
Although
deposit rates drop, the public is still keen on placing their money at banks.
If credit is not boosted, excess capital at banks may occur. Then, banks will
be in a greater difficulty because their incomes are still largely relying on
credit. This is a driving force for banks to intensify cash flows into the
economy in the coming time.
Rice
husk- fired power plants to be built
It
comes from
Che
Group Managing Director K.K. Chang said each plant can produce 10MW by using
rice husks as main materials.
The
first will be constructed in Hau Giang province later this year and the
remaining ones will be built in six other provinces within five years.
All
machinery and equipment will be supplied by CHE Group which cooperates with
the
CHE
Group and Torftech have established a joint venture named Torche Energy Sdn
Bhn as the building contractor to do the work.
More
petty enterprises set up in city
The
number of newly-established enterprises in HCMC continued to rise further in
the past on emonth, but most of them are small-scale ones in terms of charter
capital compared to last year.
Between
September 16 and October 15, the city’s Department of Planning and Investment
issued 2,292 business certificates to new business startups, an increase of
333 enterprises compared to the previous month-long period and up 237
enterprises year-on-year.
In
this year to October 15, as many as 21,087 new enterprises were set up, a
rise of 7.5% on year, while their combined registered capital totaled only
VND95.37 trillion, or a fall of nearly 43% on year. The average capital of
each new enterprise is equal to only half of that in 2012, according to the
HCMC Statistic Bureau.
Pham
Viet Anh, board chairman of the consulting firm Left Brain Connector,
observed that the prolonged economic slowdown has hit the business circle
hard.
“The
majority of newly-established enterprises are small in terms of capital as
they have been affected by protracted economic woes,” he said.
Furthermore,
though lending has been loosened, most enterprises find it hard to access
banks for loans, he added.
“In my
process of providing consultancy to enterprises, I’ve found that most of them
are still downbeat about the economy,” Anh said.
Of
over 21,000 new enterprises established this year to date, there are 959
private firms, 2,283 joint-stock entities, and over 17,800 liability-limited
companies.
During
the January-September period, as many as 17,232 enterprises suspended
operations or shut down business, a slight fall of 2.6% compared to the same
period of last year, according to the HCMC Statistic Bureau.
Foreign
reserve eases pressure on forex rate, says ANZ
There
would be less pressure on the central bank to devalue the local currency
owing to the country’s ample foreign reserve, ANZ says in a recent report on
The
bank gave an unofficial estimate on
“This
affirms our view that there is less pressure for the central bank to devalue
(
Joint-stock
banks on Monday quoted buying-selling prices of the U.S. dollar at VND21,080
- VND21,120, while prices at State-owned banks were VND5 lower. Meanwhile,
the dollar price on the unofficial market was equal to banks, at VND21,120 as
of Monday evening.
Other
sources of dollar supply in
Trade
surplus was also a factor supporting the stability of the forex rate. ANZ’s
report said that the 12-month trade balance remained in a narrow surplus of
US$521million, despite posting a deficit in October. This is in stark
contrast to the average trade deficit of US$15.1billion in 2010, prior to the
record devaluation of 9.2% in February 2011, it said.
Besides,
positive remittances to
Meanwhile,
the dollar demand has fallen as the central bank had cut short the list of
enterprises eligible to borrow U.S. dollars from banks, giving nod to only
exporters that have income in dollars and importers of essential goods.
“If
strictly following the regulation, demand on dollars would decrease by 30%
which would help to ease pressure on the forex rate,” he added.
ANZ
expected the country’s 2013 inflation to fall in the lower half of its 6-8%
forecast range. The 12-month average inflation currently stands at 6.8%
year-on-year and the bank forecast the inflation to remain manageable.
In
addition, ANZ also reiterated its view that the central bank would keep its
benchmark refinancing rate on hold at 7% until the first half of next year.
This
rate is among factors impacting banks’ lending rates to customers and also
the signal on monetary policy of the central bank.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 3 tháng 11, 2013
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