BUSINESS IN BRIEF 11/7 Tien Giang hosts high-quality goods fair More than 200 businesses are taking part in a Vietnamese high-quality products fair that opens today in Tien Giang Province's My Tho City. The fair, which will run until July 14, features 350 booths showcasing various kinds of products, including garments and textiles, footwear, handicrafts, food and electrical goods. A forum that will link up small traders at traditional markets with domestic producers will also be organised on the opening day, with the participation of more than 150 small traders from My Tho and Binh Thoi . Banks buy US dollars at higher prices Several commercial banks yesterday continued increasing dollar prices for bids, ranging from VND21,220 to VND21,230 for buying and selling at the ceiling of VND21,246 per dollar. The Vietnam Commercial Bank (Vietcombank) set their buying price at VND21,230 per dollar, an increase of VND10. Vietnam Technological and Commercial Joint-stock Bank (Techcombank) also increased its buying price by VND10 for each US dollar, putting the exchange rate at VND21,180 per dollar. Meanwhile, most banks listed their selling price at the highest range of VND21,246 per dollar. PHR likely to miss annual profit target Phuoc Hoa Rubber Co (PHR) is unlikely to reach its profit target set for the whole year as first-half profit was estimated at VND170 billion (US$8 million), just 34 per cent. Rubber contributed 57 per cent of the total profit. In the first six months of the year, the company sold over 10,511 tonnes of latex products at an average price of VND60.53 million ($2,882) per tonne. As the price of rubber declined sharply in June, the company said it plans to manage the selling price in a more flexible manner. Ha Noi's top 10 brokerages chop and change The Ha Noi Stock Exchange has announced the market share of the 10 largest brokerages in the second quarter, revealing that HCM City Securities (HCM) remained in top position. However, its shares dropped from 10.54 per cent in Q1 to 8.83 per cent. Meanwhile, VNDirect Securities (VND) dropped down from the second place with 6.45 per cent of the market shares, to be replaced by Saigon Securities (SSI) with 6.88 per cent. BIDV Securities has fallen out of the top 10, with its spot taken by VPBank Securities with 3.21 per cent. Only SSI and Sai Gon – Ha Noi Securities (SHS) saw rises in market shares.- More IT solutions for small businesses Local small- and medium-sized enterprises (SMEs) now have seen more information technology (IT) solutions offered by providers in the context that IT solution demand from bigger companies is no longer vigorous like before. Data archive technology solutions provider EMC and its local distributor NT&T on Wednesday organized a seminar introducing archive solutions to thousands of SMEs in Hanoi and HCMC. EMC now has hundreds of customers in Vietnam, mainly big enterprises, said Mai Chi Trung, technical director of NT&T, which is the solution distributor of EMC. As the market for big firms is already saturated, EMC wants to shift to serving small- and medium-sized corporate customers, Trung said, adding the company has already prepared suitable solutions for these customers. With the huge number of SMEs, Vietnam is seen as a high-potential market to EMC and the firm will focus on the target customers in the near future to increase its revenue at home. Similarly, security firm Symantec has recently switched to providing IT solutions including anti-virus software and archive solutions to SMEs in the country. The enterprise has just introduced the version 2013 of a terminal protection solution to local SMEs besides offering many other security solutions for small businesses such as those against virus-carrying emails, spam emails or online scams. Le Thanh Nam, project director of Bkav, meanwhile, informed his firm now is providing lots of network security solutions targeting small companies including anti-virus solutions and others for computer and network safety. Apart from the three providers’ aforesaid solutions, several other IT solution providers also offer solutions for small enterprises under various brands like Kapersky, Cisco and Panda. PVN surpasses first half target PetroVietnam (PVN) has announced a post-tax revenue of 27.5 trillion VND (1.3 billion USD) in the first six months of the year, representing a 53.2 percent year-on-year increase. Le Minh Hong, PVN’s Deputy General Director, revealed the figures at a press conference held in Hanoi on July 8. He said that the group has met all of its targets for the first six months and improved from last year. Accordingly, the combined revenue of the company, including all of its subsidiaries, totalled 36-43 trillion VND, according for 56.3 percent of the year’s targets. In the first half of the year, the group contributed 82.8 trillion VND to the State budget – 11.9 trillion VND higher than the set target. Hong added that in terms of cooperate finance criteria, PVN posted total revenue of 181.3 trillion VND, showing16.5 percent above its targets. He claimed the group’s oil production was 13.64 million tones, an increase of 4.6 percent over the corresponding period last year. It also produced and supplied 9.05 billion kWh to the national power grid, representing a 17 percent increase over last year. It discovered four new gas mines and began the exploitation of three new mines. PVN produced 3.27 million tonnes of petrol in the six month period, posting 38.3 percent over the same period last year. Speaking at the conference, PVN’s Chairman Phung Dinh Thuc said plans for restructuring were underway having been approved by the Prime Minster at the beginning of the year. He said that 19 of the group’s companies this month would be updated about the restructure and provided with clear guidelines. In the second quarter, PVN planned to raise its oil and gas production to 12.37 million tonnes of oil equivalent (TOE), including 7.85 million tonnes of crude oil and 4.52 billion cubic metres of gas. It has targeted a turnover of 331 trillion VND in the last six months of the year, bringing the total of the whole year to 696 trillion VND. PVN expects to sign 2-5 new oil contracts and bring five mines into operation including two in the country and three other overseas. Diseases ravage shrimp farms in several provinces The Department of Animal Health under the Ministry of Agriculture and Rural Development on July 7 said that outbreak of diseases in six provinces and cities across the country have been mainly in shrimp farms with brackish water. The affected areas are the central provinces of Nghe An, Ha Tinh and Ninh Thuan; the Mekong Delta provinces of Tien Giang and Ca Mau; and Ho Chi Minh City. Of these, Ca Mau suffers the worst. About 1,843 hectares have been damaged due to white spot disease and 2,797 hectares have been damaged due to Acute Hepatopancreatic Necrosis Syndrome. The Animal Health Department has proposed to localities to speed up measures to cope with diseases and their spreading. Prime Minister Nguyen Tan Dung has instructed the Ministry of Agriculture and Rural Development to provide farmers with 95 tons of chlorine to disinfect shrimp farms. According to departments of agriculture and rural development in Bac Lieu, Soc Trang and Tra Vinh Provinces in the Mekong Delta, Acute Hepatopancreatic Necrosis Syndrome and white spot disease have ravaged more than 22,000 hectares of shrimp farms in the first six months of the year. Long-lasting hot weather and unseasonal rain have also proved conducive to spread of disease. Vietnam steps up investments in Laos Online Trade and Investment Portal and Consulate General of Lao will hold a workshop in Champasak Province in Laos to introduce a Trade, Tourism and Investment Program from July 22-26, to tap the rich potential market in Laos. According to ITPC, Laos is a potential market with rich mineral resources, besides having a common border with Vietnam along ten provinces stretching across 2,067 kilometers. In the past few years, Vietnam has been investing in Laos and has become the second largest investor in Lao after China. However, in the commercial sector, Vietnamese goods have not expanded as expected with limited representative agencies in Laos. To overcome this disadvantage, ITPC will constantly hold investment promotion programs so that Vietnamese goods can access the Laos market and increase exports. Mondelez International enters Vietnam market Mondelez International – the world’s second largest coffee company – has opened its first centre in Vietnam to help local coffee growers improve their cultivation methods. The “Coffee Made Happy” centre will provide free training for local farmers explaining how to boost crop yields and coffee bean quality. Mondelez International has committed at least US$200 million to helping one million coffee farmers and entrepreneurs by 2020. About 1,500 Vietnamese coffee growers will have a chance to attend free cultivation training designed to increase productivity and quality. Mondelez International's Global Coffee President Hubert Weber said the project aims to transform farmers into successful entrepreneurs by working with partners to develop their coffee farming and business skills. The company is among the Vietnamese market’s largest coffee purchasers. With the newly established centre, the firm is expecting to realise its ambitious sustainable supply target for its Western European distribution network by 2015. China is Vietnam’s largest rice consumer China imported 1.135 million tonnes of Vietnamese rice worth US$472.4 million in the first five months of 2013, making it the largest consumer of Vietnamese rice. The figures represent year-on-year increases of 27.8% in volume and 24.1% in value, according to the Vietnam Food Association (VFA). Rice exports to Singapore, Hong Kong and Angola also rose steadily by 38.7%, 24.4% and 151.6% respectively. China accounted for 36.4% of Vietnam’s total rice exports followed by the Philippines, Malaysia (6.6%), Singapore (5.2%) and the Ivory Coast (4%). As of July 4, Vietnam shipped nearly 4.2 million tonnes of rice abroad for nearly US$1.9 billion. Requirement relaxed for priority customs clearance Traders with an annual import-export turnover of US$200 million or above are qualified for a certificate that allows it to enjoy priority during the customs clearance process, says Circular 86/2013/TT-BTC of the Ministry of Finance. Previously, enterprises were required to have a minimum turnover of US$350 million per year to receive preferential treatment when going through customs clearance procedures. The requirement is also relaxed for those exporting agro-aqua products, textile-garment, and leather-footwear and importing raw materials for production. To get priority, they must have at least US$50 million in turnover, instead of US$70 million as stipulated by the old rules. The business preference policy has been in place since 2011. Eligible businesses are granted certificates that entitle them to priority customs clearance, such as a reduced customs clearance time and the right to go through the green gate. In addition to the condition on import-export turnover, businesses must also satisfy the conditions on legal compliance, financial accounting and payment. However, all of them have been eased. For legal compliance, the time for evaluating legal compliance of a business is now 24 months from the date of the General Department of Customs receiving its application for the preferential treatment, versus 36 months previously. During this two-year period, that business must not violate tax and customs laws. The business will not be penalized for mistaken declarations for more than three times, or imposed administrative sanctions for not observing the requirements of the customs authorities. Moreover, under the new rules, the process for verifying preferred business applications is simpler. Businesses only need to be approved by the General Department of Customs and local tax authorities, and no longer have to seek the nod from local departments of investment and planning, the authorities of industrial parks and economic zones, and local market monitoring agencies. Circular 86 will take effect from August 15, replacing Circular 63/2011/TT-BTC and Circular 105/2011/TT-BTC. Foreign firms keen to expand machine tool distribution Many foreign firms attending the exhibition on precision engineering, machine tools and metalworking MTA Vietnam 2013 say they will expand the distribution network of machine tools in Vietnam via opening showrooms and converting representative offices into companies. According to To Bich Linh from the representative office of Japan-based Mazak Co., Mazak plans to set up a 100% Mazak-invested company in Vietnam this year, seven years after opening representative offices in HCMC and Hanoi. Mazak will first open a showroom and technical center for machine tools in District 9 on July 31 to better provide spare parts for customers. Speaking to the Daily on the closing day of MTA Vietnam 2013 last Friday, representatives of some other firms said that the number of visitors at the exhibition declined by up to 40-50% compared to MTA Vietnam 2012, and the number of products sold during the exhibition also dropped strongly. According to most exhibitors, the fall in number of visitors might result from the current economic slump, but the market for machine tools in Vietnam is still full of potential. Edward Yuen, chief representative of Singapore-based TRUMPF, said that the firm collected only 120 addresses of visitors at MTA Vietnam 2013 while the figure at last year’s exhibition was 190. Besides, the firm has sold only two machines at MTA Vietnam 2013. According to Yuen, after opening a representative office in Vietnam nearly eight years ago, TRUMPF plans to establish a company here to expand the distribution network due to huge potential of the Vietnamese market. Similarly, Nguyen Hoang Binh Quan from the representative of Switzerland’s Bystronic in HCMC, said that Vietnam was currently in the process of building infrastructure such as airports, traffic and machinery, and thus Bystronic would surely set up a company to expand the machine tool distribution network in Vietnam. MTA Vietnam took place at Saigon Exhibition and Convention Center with the participation of around 340 local and foreign enterprises. Foreign exhibitors came from countries whose machine tool exports are high such as Japan, Germany, Italy, Taiwan and Switzerland. Vietnam’s demand of machines and equipment in the 2011-2020 period will be quite high with around US$250 billion, according to the National Research Institute of Mechanical Engineering. U.S. firm TIBCO Software enters Vietnam U.S. firm TIBCO Software (The Information Bus Company) will officially enter the Vietnamese market via a seminar in Hanoi tomorrow to get access to corporate customers. TIBCO is a provider of infrastructure software based on cloud computing or on-premise for information technology solution suppliers. According to Neeraj Shaabi, managing director and regional vice president of TIBCO in Asia, the firm sees many opportunities in Vietnam as most enterprises and organizations are building or expanding information technology infrastructure. At the seminar, TIBCO will demonstrate the latest technologies in the sector of data analysis and integration. New technological trends and data storage applications will be introduced as well. The difference in solutions supplied by TIBCO compared to other suppliers is the ability which can help the information technology system process and analyze metadata while the system is running. Business data is analyzed and reported in real time. TIBCO currently has over 4,000 customers worldwide. In Vietnam, Vietnam Bank for Industry and Trade (VietinBank) is the first bank to apply TIBCO’s business process management solution and architecture solutions. Tran Cong Quynh Lan, director of the information technology center of VietinBank, said solutions of TIBCO were helping VietinBank supply services and process information faster and more accurately. In addition, the solutions enable the bank to integrate many information technology systems to effectively process business processes and services. Brother has new printer plant apan’s Brother Ltd. has finished investing US$100 million in a new printer manufacturing facility in the northern province of Hai Duong, making Vietnam a country with Brother’s highest printer production capacity. According to Takafumi Kamenouchi, managing executive officer of Brother, the capacity of the fourth plant in Hai Duong is equivalent to the combined capacity of Brother’s three other plants in Vietnam. The facility specializes in producing printers, especially the new-generation monochrome laser printer for domestic sale and export. Vietnam is an important and strategic market for Brother, and the firm targets to double market share by 2015 from the current 13%. According to Brother, the launching of new printer products, including the monochrome laser printer HL-1111, and multi-functional printers DCP-1511 and MFC-1811, would help increase the firm’s market share in Vietnam quickly. The products can help consumers, and small and medium enterprises save operating costs in the long run. According to a survey by Brother Vietnam, a printer cartridge normally comes with a high price, so local consumers and small and medium enterprises often have their printer cartridges refilled to reduce costs. However, using non-genuine printer cartridges can affect the lifespan of printers and produce low quality ink. Nguyen Hoai Nam, managing director of Brother International Vietnam, said that with a price of VND300,000 for a genuine printer cartridge, Brother is pioneering to enable customers to use a genuine cartridge at a low price, one-third or one-fourth of the prices for other brands. Printer HL-1111 costs VND2.6 million, printer DCP-1511 VND3.5 million and MFC-1811 VND5.5 million. Black ink cartridge TN-1010 for 1,500 pages is quoted at VND300,000 and cartridge DR-1010 for 10,000 pages at VND600,000. All are inclusive of VAT. BIDV upgrades IT system Bank for Investment and Development of Vietnam (BIDV) and PricewaterhouseCoopers Vietnam Company (PwC Vietnam) last Friday kicked off a project on consulting services for information technology (IT) system assessment and transformation at the local bank. PwC Vietnam will assess the IT system of BIDV to see whether it suits the bank’s current and future business strategies and meets its requirements. The two sides will coordinate to draw up targets, strategies and roadmaps to upgrade the IT system at the bank. BIDV through the project wants to make a comprehensive renovation of its IT network to help it provide better services and improve risk management. Dinh Thi Quynh Van, general director of PwC Vietnam, said that assessment and transformation of IT network and core banking are a complicated project that will cause big impacts to the organization and operation model of the bank. VietinBank gets US$120 mil. from IFC to finance trade Vietnam Bank for Industry and Trade, or VietinBank, last Friday signed a trade finance agreement with International Finance Corporation (IFC) to take out US$120 million to lend on to Vietnamese traders to boost exports and imports. This US$120 million credit is part of IFC’s Global Trade Finance Program (GTFP), which has been benefiting more than 500 participating banks in 150 countries. The program is aimed at boosting trade in the emerging markets by linking local financial institutions with international banks, enabling these financial institutions to provide more competitive trade financing services. Participating in the program, VietinBank will be able to significantly enhance its capacity to cover payment risks when offering trade financing for local enterprises, especially small and medium ones. Nguyen Duc Thanh, deputy general director of VietinBank, said: “As Vietnam is a developing market, this US$120-million trade finance facility will help VietinBank effectively support local exporters and importers. “We expect IFC’s GTFP will create favorable conditions for Vietnam enterprises to access new markets, thereby improving the position of VietinBank in the international market.” VietinBank is one of the six Vietnamese banks participating in this program. Since its deployment in Vietnam in 2007, the program has issued more than 570 guarantees to participating banks with a total trade finance value of US$2.5 billion, making Vietnam one of IFC’s major trade finance markets. In 2013, the program commits a record value of US$800 million to participating banks. Nathalie Louat, IFC senior manager of financial markets in East Asia and the Pacific, said: “By assisting banks in building their capacity to deliver trade finance solutions, IFC has helped businesses maintain their export and import activities and contributed to their stable growth, especially in times of liquidity crisis.” IFC became a strategic partner of VietinBank in 2011 with an 8.03% stake in the local bank. Since then, VietinBank and IFC have cooperated on multiple fronts, such as expanding the small and medium enterprise loan portfolios, improving risk management and corporate governance, and boosting lending to energy-efficient projects. Law on gold custody service not yet available Local citizens intending to use gold custody service offered by banks will have to wait until the State Bank of Vietnam (SBV) issues a guidance circular as the draft version will only be put up for public comment in the next two weeks. Banks should have been allowed to provide asset custody service including gold in line with the Law on Credit Institutions but a license granted by the SBV is required in case banks handle the service with gold, a SBV official said. Nevertheless, in the period before the guidance circular’s release, local lenders didn’t have to ask for permission to keep gold for locals. The SBV now has decided to issue a circular to put all these services into order, which is also part of a road map to tighten management of the gold market to prevent banks from using gold of custody service for sales as this will damage liquidity of the whole system. At present, only those already placing gold at banks for custody will be allowed to continue using the service while others having demand will have to wait since lenders have had to halt the service until the related circular comes out. Converting gold deposits into custody service is still done normally among members in the banking system. Last Friday SBV continued to sell out the offered volume of 40,000 tales of gold, taking the sales volume via the three auctions earlier this month to a combined 120,000 taels, or around 4.5 tons. The gold volume is mainly bought by commercial banks for settlement of trading position and those people wanting to settle gold arrears, which has amounted to a total of 40 tons since the end of March. According to a deputy director of a small bank, his lender still has strong gold buying demand to repay for depositors as it has just arranged enough capital in Vietnam dong for gold purchase. The SBV says it will open one more auction to meet local demand and then will consider whether to continue to do the job. People’s credit funds pay high dividends Some 17 out of 19 people’s credit funds in HCMC earned profits and paid dividends higher than deposit rates last year, according to a report of the central bank’s HCMC branch. These funds offered dividends from 14-20% to their members. The report also said that the funds had a better effect than transport, clean veggies and agriculture co-operatives thanks to practical benefits for people. Meanwhile, people’s credit funds posted a low bad debt ratio, representing only 1.3% of last year’s total outstanding loans of VND883.7 billion, although the funds disbursed for 50% of credit applications that were disqualified for bank loans. However, capital source of people’s credit funds accounted for just 0.05% of total capital source as most funds are run on a smaller scale than other credit institutions. The funds mainly operate in outlying and rural areas to serve needy laborers and small traders. The funds have also met difficulties in capital mobilization due to limited facilities while many people are hesitant at depositing money at these funds. Most funds raise capital through relatives and personal relationships. Therefore, the funds see low competitiveness if they offer the same deposit rates as banks. The city has 19 people’s credit funds in 12 districts with over 43,500 members. Tentative seafood export ban stirs controversy The Vietnam Association of Seafood Exporters and Producers (VASEP) has criticized a tentative seafood export ban on those companies having four shipments warned of food safety within six months. Meanwhile, the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) said such a measure would protect the local seafood export industry. The Ministry of Agriculture and Rural Development is collecting comment on a draft circular which would replace Circular 55/2011/TT-BNNPTNT on seafood quality and safety testing. VASEP said seafood shipments often receive warnings or are rejected when violating certain regulations in an importing country. Most of these regulations are trade barriers, according to the association. Such shipments are not contaminated and not launched onto the market, the association states. Therefore, the association does not agree with the draft circular stipulating that a company with four shipments getting food safety warnings in six months would be banned from export. However, Nafiqad describes this as a way to protect the local seafood industry. With four shipments receiving warnings in just six months, the food safety control system of that company must be problematic, Nafiqad reasons. If the company did not stop exporting to those markets issuing the warnings, it would be most likely that its following shipments would attract more warnings. Then, this might be used as a pretext to ban seafood imports from Vietnam altogether. Bangladesh and India used to be prohibited from exporting to the European Union (EU) by the European Commission. Thailand has suspended exporting to the EU to avoid further warnings against its seafood and vegetables, said Nafiqad. In 2008, Russia suspended seafood import from Vietnam after detecting many tra fish shipments with a high glaze ice percentage. The agriculture ministry had to send a delegation to Russia to settle the case. Since then Vietnamese authorities and enterprises have been strictly controlling tra fish quality, output and price to avoid similar cases. Last year, after inspecting 12 cowhide fish processors, South Korea imposed a ban on 16 enterprises for their unsafe products. Rubber exports reach US$976 million in six months Vietnam exported 383,000 tonnes of rubber worth US$976 million in the first half of 2013, down 5.0 percent in volume and 19.2 percent in value against the same period last year, according to the Ministry of Industry and Trade (MoIT).   The MoIT said that the country exported 79,000 tonnes of rubber in June at an average price of US$2.595 per tonne, 15.2 percent lower than last year’s price. Although China is Vietnam’s rubber importer (accounting for 46 percent of the total volume), there has been a sharp drop in recent months (down 21.6 percent in volume and 30.7 percent in value respectively). Malaysia remains Vietnam’s second largest rubber importer with an increase of 10.6 percent in volume but a fall of 11.5 percent in value in the first five months of this year. It is forecast that the price of rubber is likely to fall further as exports from Thailand – the world’s leading rubber supplier- will pick up in the coming months. Tien Giang attracts most FDI in Mekong Delta Long An Province last year secured the top position in the Mekong Delta and ranked eleventh in the nation in foreign direct investment (FDI) commitments, neighboring Tien Giang overtook Long An in the first half of the year. In January-June Tien Giang’s FDI pledges amounted to US$103.19 million, which comes from fresh and operating projects, followed by Kien Giang with US$76.29 million and Long An US$73.99 million, says a report by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. The country had 554 new projects licensed with total registered capital of about US$5.81 billion in the first six months, up 3.7% year-on-year, FIA reports. Meanwhile, 217 operational projects added a combined US$4.66 billion in the period. In total, the country attracted a total of US$10.47 billion in FDI in the first half, increasing 15.9% year-on-year, and FDI disbursements totaled US$5.7 billion, a pickup of 5.6%. Foreign investors got involved in 18 business areas, with manufacturing industry attracting the highest FDI with 259 newly-registered projects worth around US$9.31 billion, 88.9% of total pledges, FIA noted. Real estate trading ranked second with total investment capital of US$419.67 million. Dealing with trade lawsuits Despite enjoying impressive export growth over the past five years, Vietnam has been hindered by trade barriers like anti-dumping and anti-subsidy measures imposed by a number of import customers. According to the Ministry of Industry and Trade’s (MoIT) Competition Authority, trade lawsuits arise from both export growth and economic slowdown. Vietnam’s ongoing international economic integration means a proactive approach to these disputes is the best option. The widespread financial and economic crisis has forced down the purchasing power of Vietnam’s key export markets. The fall has inspired some to adopt protective policies designed to shelter their domestic industries. Vietnam’s key export commodities are employing relatively basic technology with little added value, such as seafood, garments and textiles, footwear, and wood and timber furniture.The success of these commodities is fuelled by low labour costs and the country’s natural advantages. Price competition has increased the risk of anti-dumping lawsuits. A number of Vietnamese businesses have even engaged in contract price wars with each other, hurting exports more generally and creating more lawsuits. The Competition Authority says Vietnam’s World Trade Organisation (WTO) comittments mean it must accept its designation as a non-market economy until 2018. The designation disadvantages Vietnamese businesses, as foreign trade investigation agencies use third-hand cost and price statistics instead of using Vietnam’s  own figures to calculate dumping margins. These calculations often reveal anti-dumping ranges as much higher than the real prices of Vietnamese products, prompting domestic producers in importing countries to file legal challenges. The MoIT admits that despite the great efforts of exporters and business support units, Vietnamese business capacity for coping with anti-dumping lawsuits remains limited. Insufficient legal knowledge and anti-dumping regulation misunderstandings exacerbate the problem. Anti-dumping lawsuits over shrimp, catfish, and leather & footwear exports indicate a rising trend threatening huge losses for Vietnamese businesses already under considerable stress. The Competition Authority argues that apart from improving their competitiveness, domestic businesses should keep their basic anti-dumping knowledge as up to date as possible, standardise their  accounts, and preserve all data as evidence that could refute any dumping allegations. Particular attention should be given to market solutions, such as shifting competition by price to competition by quality and diversifying both products and markets. Vietnam Chamber of Commerce and Industry (VCCI) Vice Chairman Hoang Van Dung warns the number of business disputes will only rise as Vietnam’s international integration proceeds. Arbitration-based dispute settlement is a better option. Vietnam International Arbitration Centre (VIAC) Chairman Tran Huu Huynh says international arbitration permits disputing parties to specify the organisation serving as arbitrator, the place of arbitration, and the language in which arbitration is undertaken. Both national and international laws can be employed to settle disputes. The final verdicts issued by arbitrators are recognised and valid in nearly 150 nations. A concurring Competition Authority representative notes Japanese experiences demonstrate the importance of hiring qualified trade lawyers before initiating any legal action. SBV says will meet greenback demand Given the recent adjustment of the exchange rate, the State Bank of Vietnam (SBV) will inject U.S. dollars into the economy when needed, said SBV Deputy Governor Le Minh Hung. Banks have strengthened their dollar holdings as the dong interest rate has been further revised down as credit growth has remained low, he explained. When the exchange rate was poised to rise, exporters sought to sell the greenback to banks. Although the volume was not hefty, it has led to a sense of scarcity on the foreign exchange market, a source told the Daily. The central bank is monitoring the demand so as to intervene in a timely manner. In fact, there has been no increase in activity in the market. Incoming remittances fell in the early months, but not significantly, and moreover, the central bank has bought about US$5 billion, thus improving dollar supply. Still, Hung said he expected banks would reduce dollar holdings as local currency credit has started flowing into the economy again. In the year to date, the U.S. dollar price quoted by Vietcombank has risen 1.87% over late 2012. The same has been reported at most other banks. However, the average inter-bank exchange rate has picked up only 1% since the SBV slightly depreciated the dong on June 28. In a statement released early this year, SBV Governor Nguyen Van Binh said the dong fall against the dollar would not exceed 2% this year. MayBank-Kim Eng: No big exchange rate adjustment in H2 The exchange rate between the Vietnamese dong and the U.S. dollar will be affected by several factors in the second half of the year, but it will not move much, says a report issued last Thursday by MayBank-Kim Eng Securities Company. The gold market volatility is said to be the major factor for the weakening of the Vietnamese dong. The wide gap between local and global gold prices has piled pressure on the dong both ways: giving rise to gold smuggling and forcing the central bank to use some US$1 billion from the foreign reserves to import gold for domestic sale, especially to banks. Due to the increased gold import, the dong has been weakening although the foreign reserves remain sound, equivalent to three months of import cover, says the report. The fact that foreign investors lock in profits in the government bond market has left some impact on the exchange rate. Foreign investors hold some 10% of government bonds. They are enjoying higher yields because inflation in Vietnam has been falling since 2011 and banks have been boosting purchases of government bonds due to low credit growth. In the first five months, bank deposits increased 7%, while credit growth was only 3%. As of end-June, the State Treasury had raised a total of over VND124.3 trillion from government bond sales, meeting 73.1% of the year’s plan. MayBank-Kim Eng has warned that the exchange rate would be placed under pressure when foreign investors lock in bond profits in the bond market to buy foreign currency for repatriation to their home countries. Aware of this demand, banks have been actively purchasing foreign currency because they have abundant dong. Therefore, the central bank has warned banks against currency speculation. However, MayBank-Kim Eng has predicted foreign investors will not strongly take profit. If they did so, bond yields would go down. Meanwhile, trade deficit may not affect the exchange rate this year. The deficit is being financed by foreign capital inflows, especially FDI, and in recent years, there has been a balance between capital inflows and outflows. Usually, inflation impacts on the exchange rate, but Vietnam’s inflation forecast at 6-7% this year may not be a major cause of exchange rate volatility. With robust foreign exchange reserves, low inflation, and mild trade deficit, MayBank-Kim Eng believes there could hardly be any pressure on the exchange rate towards the year’s end. However, the company forecasts there may be a further devaluation, but not considerably, under the pressure of foreign investors’ profit taking on the bond market. The greenback in the informal market last Friday inched up to VND21,620 for selling and VND21,580 for buying. Meanwhile, banks quoted the U.S. dollar selling price at VND21,246, and raised the buying price to VND21,240, versus VND21,220 on the previous day. Ninh Thuan to house another wind power project he south-central coastal province of Ninh Thuan has approved in principle a project to produce wind power that will be undertaken by the Viet Nam Electricity Investment and Construction Joint Stock Company (EVNIC). The project using Russian technology will have a total designed capacity of 40.5 MW, according to EVNIC General Director Pham Hong Giang. In the first phase this year, the project will be carried out on 20 hectares in Cong Hai commune in Thuan Bac district, with three turbines having a designed capacity of 1 MW each based on Russian technology. It is expected to turn out about 14 million kWh of electricity annually. In the second phase from 2014 to 2015, it will be expanded to cover 160 hectares with 15 turbines with a designed capacity of 2.5 MW each using US technology. Ninh Thuan is considered a high-potential region for wind power development with total exploitation capacity of 2,000 MW by 2020. A number of areas with strong wind sources in Ninh Thuan are Ninh Phuoc, Thuan Nam, Thuan Bac and Ninh Hai districts. Some 14 wind farm projects have been given approval in principle by the local government to make surveys and prepare investment plans. The neighboring province of Binh Thuan is also a good region for wind power development with total capacity of up to around 5,000 MW. The provincial authorities have already allowed investors to deploy 12 wind power schemes, with two already in operation with total designed capacity of 30 MW. The wind power price paid by Viet Nam Electricity Group is set at 7.8 US cents per kWh. The country’s wind power potential to be exploited in the next few years is 6,500 MW.- Global price slump hits domestic rubber exports Vietnam’s rubber exports fell sharply during the first half of 2013, plunging 19.2 percent in value and 5 percent in volume against the same period last year, according to the Ministry of Industry and Trade. Up to the end of June, the country earned 976 million USD from exporting over 380.000 tonnes of rubber, as a price slump took its toll on earnings. In June alone, 79,000 tonnes of rubber were shipped abroad, bringing back 188 million USD. The average rubber export price was 2.595 USD per tonne, down 15.2 percent from the rate at the same time last year. The significant fall in export prices was attributed to low demand from international markets, while global output had also risen alongside volumes of stockpiled rubber in China and other major countries. During the January-June period, China remained Vietnam’s largest rubber importer, accounting for 46 percent of total volume. However, imports to the country from Vietnam dropped 30.7 percent in value and 21.6 percent in quantity. Rubber export prices are forecast to fall in the coming months as rubber output from Thailand - the world’s leading supplier - is expected to pick up. Vietnam ’s rubber output spiked to 1.01 million tonnes last year, representing a volume increase of 23.8 percent from 2011, according to the Vietnam Rubber Association (VRA). But despite this production boom, the annual earnings of 2.85 billion USD were down 12.6 percent on the previous year due to a drop in value. Last year, the Vietnamese natural rubber price fell 33 percent, due to reduced demand from China and the increasing preference for synthetic rubber over natural rubber. Regardless of the price slump recent efforts mean Vietnam has become the 3 rd largest exporter of natural rubber in the world, after Thailand and Indonesia. Gov’t bonds worth 1.5 trillion VND issued All 15-year Government bonds worth 1.5 trillion VND were posted up for transaction at the Hanoi Stock Exchange from July 8, said the Bao Viet Securities Joint Stock Company (BVSC). The bonds, guaranteed by the BVSC, have an issue interest rate of 8.98 percent and will become mature on June 30, 2028. This is the first guaranteed issuance in 2013 and the third since the Ministry of Finance’s circular on guiding the issuance of Government bonds in the domestic market came into effect in May 2012. This is also the first time the State Treasury has issued guaranteed 15-year bonds since 2006. Through various channels, the State Treasury has mobilised over 104 trillion VND of Government bonds so far this year, equivalent to 61.3 percent of the planned amount for 2013.- Deputy PM asks for complete petrol bill revisions Deputy Prime Minister Hoang Trung Hai has asked the Ministry of Industry and Trade and relevant ministries to submit to the Government in September a final draft of amended Decree No 84/2009/ND-CP on trading petrol. In 2009, the Government issued Decree No 84 to allow traders to peg the petrol retail price on the domestic market to market prices. According to the decree, traders can increase the retail price by 7 percent if wholesale prices surge by 7 percent. In case wholesale prices increase by 7-12 percent, traders can increase retail prices by 7 percent plus 60 percent of the surplus of 7-12 percent while the remaining 40 percent would be compensated by the petrol price stabilisation fund. If wholesale prices increase more than 12 percent, the State will develop solutions to retain retail price stability through the stabilisation fund and import tax reductions. According to some economists, Decree 84 aimed at trading petrol and oil under the market mechanism. However, there were many problems that should be amended. Under the amendments made by the industry and trade ministry, traders can increase the retail price by 5 percent if wholesale prices surge by 5 percent. In case wholesale prices increase by 5-8 percent, traders can increase retail prices by 5 percent plus 60 percent of the surplus of 5-8 percent while the remaining 40 percent would be compensated by the petrol price stabilisation fund. The ministry also suggests using the cost price of the previous month as the retail price for the following month. The cost price will be calculated based on the 30-day average price released by the Mean of Platts Singapore, or MOPS. MOPS refers to the mean price of oil traded through Singapore as per the data from Platts, a commodity information and trading company. The last suggestion is that at the very first working day of a new year, the ministry will set a ceiling for the fuel retail price that will be applicable for the whole year. Wholesalers will have the full right to adjust prices within the cap. If the cost prices are higher than the ceiling, wholesalers will be allowed to use money from the price stabilisation fund to recoup losses. The ministry allowed businesses to set prices for gasoline in 2009 on fluctuation between 7-12 percent and have increased petrol prices 10 times per year. This time, the ministry suggested the fluctuation to stand at 5-8 percent. The low fluctuation would make a lower increase/decrease of the retail price but the change had not brought real interest to customers, said economist Ngo Tri Long. The traders could still decide by themselves to change the retail price when the whole price increases or decreases by 5 percent so they could easily increase the retail price and rarely decline the price. The customers much accept the prices fixed by the traders, he said. The latest increase of petrol and oil prices were at between 300-370 VND per litre on June 28 to 24,110 VND for RON 92 petrol, 21,840 VND for diesel oil, 921,600 VND for kerosene and 19,070 VND for fuel oil. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR