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BUSINESS IN BRIEF 2/7
The agreement,
which was signed during the annual meeting of the World Customs Organisation
(WCO), is the 18th cooperative agreement that
Speaking at the
signing ceremony, GDC General Director Nguyen Ngoc Tuc underlined the
significance of the agreement in fostering customs cooperation between
The agreement is an
important milestone in the cooperation between the two countries and will
benefit both sides, he said.
Commissioner of HCE
Clement Cheung said that the agreement, the 21st of its kind his agency has
signed with foreign partners, is hoped to help bring efficiency and economic
benefit to both Hong Kong and
Hong Kong is now a
territory of transit for many of
HCE has a
reputation for operating effectively in fighting illegal drug transport and
enforcing intellectual property rights at border areas.
During the
gathering of the WOC, Tuc participated in working sessions and bilateral
meetings with the leaders of several customs agencies to enhance
understanding, promote cooperation and seek mutual assistance.
On June 27, the GDC
delegation attended the opening session of the WCO’s meeting in
Construction
sector declines 5.4 percent
Companies in the
construction sector in the first five months of this year continued to meet
many difficulties, especially in the materials and real-estate area, said the
Ministry of Construction.
The total business
and production value of the construction sector reached more than 12.6
trillion VND (600 million USD) in May and 57.814 trillion VND (2.75 billion
USD) for the first five months of this year, down 5.4 percent year-on-year.
The results meet
35.9 percent of full year targets, the ministry said.
The assembly
sector's revenue was 21.25 trillion VND (1 billion USD), down 14.6 percent
over the same period last year and 34.2 percent of the whole year target.
Many key projects are still behind schedule, especially those involving
electricity.
Meanwhile, the
value of production in the industrial and construction material was 23
trillion VND (1.1 billion USD), a slight increase of 3.9 percent
year-on-year. This was 39 percent of the whole-year target.
The construction
material industry continues to face a difficult time in domestic and foreign
markets, said the chairman of the Vietnam Construction Materials Association,
Tran Van Huynh.
He said that the
industry last year faced an over supply when sales plummeted because of the
inactive property market. He added that most companies did not operate at
full capacity.
"The capacity
of cement companies was 80 percent, the pottery sector was under 70 percent,
construction glass was under 50 percent and some of other sectors only 15
percent," Huynh said.
In addition, he
added, stockpiles of finished goods were at a high level - and coal and power
costs have increased.
All of these
obstacles have pushed many companies to bankruptcy and small companies have
to merge with big companies to avoid losses.
"Massive
uncontrolled investment is the main reason causing oversupply," said
Huynh, adding that many companies still use out-of-date machines that cannot
produce high-quality products with good designs and are harmful to the
environment.
To solve the
problem, the association has suggested re-planning the industry to balance
demand and supply, applying new technologies to improve quality and design of
products, using new materials that can save time and money, and using
industrial waste and strengthening management.
Construction
material production is considered a key industry in
Last year, the
industry's turnover reached about 190 trillion VND (9.05 billion USD), of
which 31 percent was contributed by the cement industry.-
Asset
management company established
The State Bank of
Wholly owned by the
State, the company with charter capital of VND 500 billion will be put under
the central bank’s management and supervision.
It is responsible
for purchasing bad debts of credit organizations in two ways: It can buy bad
loans at their book value by issuing special bonds, or at market value by
using other sources.
VAMC’s headquarter
is located at No. 22, Hang Voi Street, Hoan Kiem District, Ha Noi.
Earlier, PM Nguyen
Tan Dung signed Decree 53/2013/ND-CP on establishment of the asset management
company to address nearly US$5 billion non-performing loans and promote
credit growth in the banking system.
Non-performing
loans must meet five conditions: being bad debts as stipulated by SBV; being
guaranteed assets; having legal documents; being existing customers; and
having a balance that is higher than the level set by SBV’s regulations.
Lenders with
bad-debt ratios of 3% and above will be required to comply with the Decree or
being put under investigation.
The Government’s statistics
showed that as of February 8, bad-debt ratio at Vietnamese banks dropped to
6% of total outstanding loans. Credit grew 2.1% in the first four months of
the year, after hitting the 9% level in 2012./.
The Steering
Committee for Southwestern region, the Viet Nam Chamber of Commerce and
Industry (VCCI) and the People’s Committee of southern Hau Giang province on
June 26 hosted a trade and investment promotion seminar for the Mekong Delta
Region.
The event lured the
attendance of 250 speakers, scientists, experts, provincial leaders, and
investors from the Region and
According to Bui
Ngoc Son, Deputy Head of the Steering Committee for Southwestern Region, the
Mekong Delta Region has around 40,000 square meters in land area, a
population of around 20 million people, a 700-km coast, and a 360,000 square
meters exclusive economic zone. It shares a border line of about 340km with
The region gained
an average growth rate of 11.7% in the 2001-2010 period. Meanwhile, the
economic structure has shifted positively in which the agro-forestry and
fishery sector accounts for 38%; industry-construction 27% and service 35%.
The Mekong Delta
Region is a granary and a center of fruits and aquatic products, helping the
country’s agriculture sector maintain its development.
It has continuously
made a trade surplus in exports of its key agricultural commodities over the
last 27 years while the country suffered from a trade deficit in the field.
Last year, the
region contributed 90% of rice export and provided 70% of fruits volume and
60% of aquatic products for exports.
Doctor Vo Hung
Dung, Director of the VCCI in Can Tho assessed the Mekong Delta Region as a
promising region that will continue making positive contributions to the
national development.
The region had
three provinces out of the five winners in the Viet Nam Provincial
Competitiveness Index. Local authorities have spared no effort to improve
business environment, attract investment and facilitate long-term businesses.
VN Tourism
Culture Festival in RoK
The Viet Nam
Tourism Culture Festival 2013 will take place in the
The Festival will
be spotlighted by performances of folk and contemporary dances and songs.
In addition to
that, an exhibition themed
A conference to
promote and advertise the Vietnamese tourism industry in the
According to the
Korean General Department of Tourism,
Currently, 10 direct
weekly flights between
Ho Chi Minh City’s
economic growth remained positive during the first six months of this year,
with GDP estimated at VND340.7 trillion (US$16 billion), up 8.1% compared to
the same period last year.
As reported by the
HCMC People’s Committee at its conference yesterday to evaluate the city’s
socio-economic situation over the last six months and map out tasks for the
remaining months of 2013, the city has implemented a series of measures to
overcome the current economic difficulties, enhance business competitiveness,
and promote resolving inventory and trade issues.
Over the past
months, the city economy has achieved positive results with services rising
8.7% year on year, while industry and construction grew 7.1% and the
agricultural sector increased by 4.9%.
Total retail sales
of goods and services is estimated at VND289 trillion, up 21.3%, and the city
earned US$13.7 billion from exports, a year-on-year increase of 5.5%.
Budget revenues are
forecast to reach VND107.7 trillion, equal to 45.17% of the yearly target.
Total social investment capital is estimated at VND58 trillion and foreign
direct investment reached more than US$491 million, while remittances reached
US$1.95 billion.
The city welcomed
nearly two million visitors, up 10% from the previous year, and tourism
revenue reached VND41 trillion, up 24.4% year on year.
Speaking at the
conference, Chairman of the HCMC People’s Committee Le Hoang Quan said that
although the city’s economic growth remains positive and industrial
production has showed signs of recovering, relevant authorities, agencies and
local enterprises should focus on specific policies such as exempting or
extending the payment of business taxes so enterprises can reinvest capital
in development. Providing priority sectors access to loans should also be
continued, especially for agriculture, rural area development, support
industries, exports, small and medium-sized businesses, and high-tech
enterprises.
Chairman Quan
stressed that in the remaining months of 2013, the city authorities should
strengthen contacts and dialogues with enterprises in all economic sectors,
particularly small and medium-sized businesses, to help them overcome
obstacles and create a favourable environment for them to stabilise
production and contribute to the city’s economic growth.
11 export
commodities post over US$1 billion in revenue
The export revenues
earned from 11 commodities exceeded US$1 billion in the first half of 2013,
according to latest data.
The highest
grossing product was mobile phones with US$9.907 billion, followed by
garments and computers, which earned US$7.98 billion and US$4.712 billion,
respectively.
Other commodities
earning more than US$1 billion include footwear, crude oil, seafood,
machinery, transport vehicles, timber products, coffee and rice.
According to the
General Statistics Office, 15 countries in the world imported Vietnamese
goods worth US$1 billion or more in the six months ending in June.
The
Other major export
markets for Vietnamese goods are the
In the last six
months,
Interest
rates set to be weapon of choice
Industry insiders
are weighing up interest rate instruments to retain market stability.
Banks assumed less
disparity between dong and dollar deposits after the dong mobilising cap was
scaled down to 7.5 per cent, per year from March 26, 2013 has put pressure on
the dong-dollar exchange rate and prompted part of depositors to convert from
dong to dollar hoarding.
Thereby, to
increase exchange rate stability, the State Bank could consider further
reducing the interest rate imposed dollar deposits.
The current cap of
dollar deposits is 2 per cent, per year.
According to State
Bank Ho Chi Minh City branch deputy director Nguyen Hoang Minh, dollar
deposits at city-based banks contracted 8 per cent in April, but the pace was
slowing down in May and June.
In fact, banks’
outstanding loan balances in dollars fell sharply after the State Bank
enacted Circular 03/2012/TT-NHNN which contained stringent lending
requirements to limit clients of foreign currency loans in a bid to reduce
demand for foreign exchange and the pressure on the exchange rate.
Circular 03 on
foreign currency lending by domestic credit institutions and foreign bank
branches for resident borrowers was enacted on March 8, 2012 and came into
force from May 2, 2012.
This was evidenced
by the fact that by the end of May 2013 while credit in dong hiked 5.48 per
cent dollar credit slid 8.41 per cent.
Bank executives
then proposed the State Bank extend foreign currency supply to firms
especially importers having the demand, particularly in later months of the
year.
A Ho Chi Minh City
based electro-cryogenic trading firm director said the company often had to
borrow dollars outside of banks at high interest rates to feed the high
demand for importation during summer since it was illegible to source dollar
loans from banks.
The executive at Ut
Xi Seafood Processing, based in southern Soc Trang province, said the company
often took loans in dollars for lower interest rates at 4-5 per cent, per
year against at least 10-12 per cent, per year of dong-denominated loans.
Citibank
“Some of our local
customers have shifted into borrowing dollars in foreign markets,” said
Krause.
Krause proposed the
State Bank consider scaling down current dollar interest rates, arguing that
exchange rate volatility in the past two weeks was driven by shorter gap in
dong and dollar deposits. Thereby, people would shift into depositing in
dollars if the dong mobilising rate continued to fall.
In this regard,
State Bank Governor Nguyen Van Binh said the revision of current dollar
mobilising cap would take place, but at what time and level need further
consideration.
The labor demand in
HCMC rose by one-third in the second quarter compared to the previous one,
according to the HCMC Center of Forecasting Manpower Needs and Labor Market
Information (FALMI).
Tran Anh Tuan,
deputy director of FALMI, said enterprises in HCMC need an estimated 30,000
laborers this month alone, with the demand for manual laborers accounting for
40%, skilled workers and those of basic vocational level 15%, workers of
intermediate vocational level 20% and college graduates 25%.
The demand for
manual workers continues to rise in the sectors of textile-garment, leather
footwear, packaging, sales, services and hotel-restaurant. Specifically, the
demand for salespeople accounts for nearly 27% of the total, services nearly
11%, and marketing and PR 6.48%.
New graduates from
colleges and universities supplement a large number of laborers to the labor
market this month.
However, the
imbalance between supply and demand, especially the demand for college
graduates, will become more serious. Employers will still focus on recruiting
those with skills and qualifications.
According to FALMI,
over 50% of new graduates lack practical knowledge, soft skills and thus are
unable to find suitable jobs.
Besides, the labor
supply in some sectors such as accounting, human resources, construction,
finance-banking and management is always higher than the demand. Therefore,
there are quite many graduates doing jobs other than their majors or lower
than their abilities as they are unable to find suitable jobs.
Unifying
financial supervision agencies seems unlikely
Many experts
suggest that
Speaking at the
seminar on the current state and prospects of the financial supervision
system, Tran Kim Chung, deputy director of the Central Institute for Economic
Management (CIEM), said that it was time to build a unified financial supervision
model for
There are currently
five agencies in charge of financial supervision, namely the central bank’s
Banking Supervision and Inspection Agency, the State Securities Commission,
the Insurance Supervisory Authority under the Finance Ministry, the Deposit
Insurance of Vietnam, and the National Financial Supervisory Commission.
These agencies have
dispersed operations, inadequate supervision mechanisms and have not
coordinated with each other to detect defects on the market.
For instance, the
model of the Banking Supervision and Inspection Agency is overlapping and
inconsistent between central and local operations. Besides, its supervision
capability has not kept up with the market, according to Chung.
Meanwhile, the role
of the National Financial Supervisory Commission is weak with its function
limited to providing consultation, as the commission does not have the
authority to fine violations.
Therefore, Chung
said that these agencies needed to be unified.
Financial expert
Can Van Luc from Bank for Investment and Development of Vietnam (BIDV) echoed
Chung’s opinion, saying that a unified financial supervision model is
reasonable in the long term.
According to
Besides, around 15
financial groups have been or are being set up. “Who will be in charge of
monitoring such groups?” Luc said.
Luc said that
Despite agreeing on
the need for merging existing financial supervision agencies, Luc voiced his
concerns over conditions of establishing a unified agency as well as its
independence.
However, the
opinion of setting up such agency faced many objections at the seminar.
In a paper sent to
the seminar, director of the Banking Strategy Institute Nguyen Thi Kim Thanh
proposed to maintain inspection activities of agencies although she agreed
that the current supervision model was inadequate and its supervision
efficiency was low.
According to Thanh,
there needs to be mechanisms for coordinating and exchanging information
between key agencies such as the State Bank, the Ministry of Finance and the
National Financial Supervisory Commission.
Thanh’s proposal
was similar to the opinion of Nguyen Huu Nghia, chief inspector of the
Banking Supervision and Inspection Agency. Nghia said that prudence must be
taken since no one can assure the efficiency of the unified supervision
model.
Huyndai
Vinashin agrees to build tankers
Huyndai Vinashin
(HVS) announced on June 27 that it is building four oil tankers, each with a
capacity of 50,000 tonnes, for Italian company D’Amico International Shipping
S.A.
This is the first
time the factory is building oil tankers to stricter technical requirements.
The tankers must be
183 metres long, 32.2 metres wide, 19.4 metres high and capable of travelling
at 14.5 nautical miles per hour. The construction is scheduled to be complete
by mid-2014.
After the global
recession in 2012, HVS is now taking orders for tens of ships over the next
two years on order to help workers back into stable work.
HVS was started in
1999 as a repairer of ships. It shifted to ship-building in 2008.
To date, the
factory has handed over as many as 40 cargo ships, varying in size, to ship
owners around the world.
Vung Tau
halts four projects
Southern Ba
Ria-Vung Tau Province has halted ongoing investment in four tourism projects
due to serious delays in construction schedules.
They include the
Kawasami project, run by the Nam Hai Tourist and Investment Company, the
Phuoc Hai project from the Sai Gon Construction Investment Trading Co, Ngoc
Hai Resort belonging to the Dai Phat Tai Company and the Long Son project
from the Long Son Construction Trading Company.
The projects have
not been carried out and the land has been left fallow since the projects
received planning approval.
Vingroup announced
that the retail space in its Mega Mall in the
This is the group's
second Mega Mall, after the
To date,
The
Ha Noi gets
new exhibition centre
A new national
exhibition centre will be built on a 126-ha plot in Me Tri Commune in Ha
Noi's Tu Liem District, according to the Viet Nam Exhibition and Fair Centre
(VEFAC).
It has been
revealed that the project will cost US$2 billion.
The project
planning is well underway and VEFAC will begin to search for co-investors and
secondary investors from the beginning of the third quarter this year.
The current Giang
Vo Exhibition Centre will also receive an upgrade to make it a centre for
trade, service and culture, on the 6,838-ha site in Ba Dinh District's
BIDV to
lend $900m to coal group
The State-owned
Viet Nam National Coal and Mineral Industries Group (Vinacomin) will get
loans totally worth VND19.3 trillion (US$900 million) over a five-year
period.
The coal firm won
the agreement with the Bank for Investment and Development of Viet Nam (BIDV)
on Thursday.
In another
development, BIDV yesterday began to provide preferential loans at an
interest rate of 9 per cent.
The beneficiaries
of the short-term loans include small- and medium-sized enterprises and rural
and agriculture firms, exporters, and supporting industries.
BMW Euro
launches new showroom
BMW Euro Auto
yesterday launched its new BMW Long Bien centre in the capital city.
Costing an
estimated VND100 billion (US$4.7 million), the new BMW Long Bien showroom
offers fully fledged service, including an information centre, connectable it
with BMW mechanics in Munich.
"The opening
of the new showroom is definitely a milestone achievement of BMW Euro
Auto," said Horst Herdtle, CEO of BMW Euro Auto.
Blue chip
monopolies risk market instability
Big listed
companies ruled by a "key man" or family are an unknown quantity
and should be treated with caution, investment analysts say.
Director of
advisory firm TNK Capital Partners Tran Vinh Du said depending too much on
company founders who control up to 90 per cent of shares in the firm created
a "key man risk", where the major shareholder made all the play.
This meant such
companies could stand or fall on the decisions of a key men, in many cases
without recourse to other shareholders or the advice of a third party.
Among many examples
of "key man" ownership is Alphanam Investment Co (ALP), an
investment arm of Alphanam Group.
The company listed in
2007, but key positions, including chairman and general or deputy general
directors, are still held by chairman Nguyen Tuan Hai and his family.
Hai's family also
holds up to 90 per cent of the company's shares.
Another example is
Pomina Steel Corp (POM), with charter capital of over VND2.42 trillion
(US$115.2 million), in which 90 per cent of the shares are owned by Do Duy
Thai and his brothers.
And then there's
property giant Hoang Anh Gia Lai Corp (HAG), whose chairman, Doan Nguyen Duc,
holds 43 per cent of the shares.
Many chairmen argue
that these companies have been built on their blood and tears, so they should
retain such a high ratio of shareholding.
Andy Ho, managing
director and head of investment at VinaCapital, said holding a majority stake
is a good way for the founders to protect the company's value.
"As long as
they add value to the company and shareholders, such businesses are still
well worth investing in," Ho was quoted as saying in the publication
Nhip cau dau tu.
However, such a
large number of shares held in so few hands has caused some companies to rely
heavily on bank loans.
The growth in debt
at Pomina Steel Corp, for example, has increased over the years and its
short-term borrowing last year jumped by 30 per cent.
According to
analysts, some companies became listed to make them look more transparent, to
facilitate their borrowing from banks.
Let TNK Capital's
Du have the last say. He suggests that such listed companies should modernise
their governance models.
"They can
start by hiring high-level managers or, at least, they should have an
independent board member to diversify opinions, "Du said.
VIB granted
a VND420bn credit to Texhong
Vietnam
International Bank (VIB) and Texhong Yinlong Technology Limited, a
subsidiary of Texhong Textile Group – one of the top 10 largest textile
groups headquartered in Hong Kong, have signed a VND420 billion ($20 million)
credit agreement to finance the firm’s facility in northern Quang Ninh’s Hai
Yen Industrial Park.
In the existing
difficult economic context, this credit agreement demonstrates the bank’s
financial strength and also indicates VIB’s consistent business policy to
accompany foreign invested enterprises in particular and local businesses in
general.
“We are proud to be
the first local bank selected to provide capital and financial solutions to a
foreign invested enterprise with a large investment capital amount in
Texhong Yinlong
Technology’s facility is known as the largest foreign invested project in
industrial parks and economic zones in Quang Ninh.
“Since 2006,
Texhong Group has continuously developed investment projects and
Conference
introduces Lao investment environment
The Lao Consulate
General in
Vietnamese
businesses that plan to invest in
On the occasion,
the ITPC introduced participants two programmes it plans to carry out in
The programmes
prioritise businesses operating in the garments, cosmetics, household
products, food, electronics and construction materials sectors.
According to ITPC
Director Pho Nam Phuong, two-way trade between Vietnam and Laos is estimated
to reach 520 million USD in the first half of the year , 11.6 percent more
than last year’s figure.-
Regional
enterprises head for ASEAN economic community
Small and
medium-sized enterprises (SMEs) from
Participants heard
reports on small and medium-sized enterprises’ operational capacity, national
policies for SMEs and their contributions to the nations, especially creating
many jobs for unskilled people, contributing to reducing poverty and
increasing social welfare.
Reports also
highlighted shortcomings and challenges of each country’s businesses in the
development process, particularly in capital, technology, human resources,
business capacity and trade promotion.
Delegates affirmed
that integration in the ASEAN Community by 2015 reflects the determination
and efforts of the member countries in creating a highly competitive economic
region.
To develop and
integrate more deeply, small and medium-sized enterprises should make more
efforts to narrow the gap in human resources and technology, as well as strengthen
connectivity, cooperation, information and experience sharing, they said.
They also asked
each government to provide more financial and technical assistance and create
appropriate policies to help SMEs overcome their challenges.
Central
farmers rejoice storm-triggered rain
Tropical storm
‘Bebinca’ has caused much damage in the northern and central regions but also
brought ease to drought-stricken rice growers in the north-central province
of Nghe An and Ha Tinh.
Before the storm, rice
fields were parched because of scorching heat in Nghe An Province, where the
Irrigation Department had to dam up
Fortunately,
downpours from the storm have raised reservoir levels since June 22-24 to
provide irrigation water for large rice fields in Nam Dan, Hung Nguyen and
Nghi Loc District.
Nguyen Truong
Thanh, deputy head of the provincial Department of Irrigation, said that
storm-triggered rains saved vast areas of summer autumn rice from being
withered and several fields from being abandoned.
Tran Duy Chien,
deputy head of the Irrigation Department in the neighboring
This is an
important water source for residents’ daily activities and rice production.
Heavy rains also
raised water level on Ngan Pho, Ngan Sau and
Nguyen Van Hai,
head of the Agriculture Department in Huong Son District, said that about
1,500 hectares of summer autumn rice were saved from drought in the district.
Major tyre
plant inaugurated in Danang
The Danang Rubber
Joint Stock Company inaugurated a major new steel radial tyre plant in the
central city’s
The US$141 million,
equipped with state-of-the-art production lines and equipment, is
capable of producing 600,000 high-quality tyres a year. It will be the first
plant in
The factory is
expected to generate jobs for nearly 1,000 local people and contribute US$9.4
million to the State budget.
Addressing the
inauguration ceremony, Deputy Prime Minister Nguyen Xuan Phuc praised the
company’s efforts in making the plant operational, adding that the opening of
the plant shows that the company is making the most of the country’s
plentiful rubber resources.
On the occasion,
the Da Nang Rubber Joint Stock Company also signed a contract to provide
10,000 products per month for the Singapore-based Stamyord Tyres
International Pte. Ltd.
16,000 CBU
cars imported in six months
An estimated 16,000
completely built unit (CBU) automobiles worth a total of US$308 million were
imported into
The General
Statistics Office (GSO) reported that car imports saw an increase of 17.8
percent in volume and 7.5 percent invalue during the reviewed period.
The strong rebound
shows that the import value of CBU cars has been on the rise since earlier
this year.
After Rolls-Royce
announced their presence in
Imported CBU
automobiles rose by 3,000 units in the first four months of this year, while
their value increased sharply with steady growth from US$48 million in March
to US$50 million in April and US$66 million in May.
However, the import
value is predicted to drop to US$55 million in June.
Coffee
exports drop sharply
According to the
Vietnam Coffee and Cacao Association (Vicofa), the total coffee output in
2013 will drop by 30 percent to about 1.3 million tonnes.
In the first six
months of this year, 795,000 tonnes were shipped abroad, which is 24 percent
less than the previous six months.
In the reviewed
period,
Vicofa has asked
the Government to provide local exporters with incentive loans to buy 200,000
– 300,000 tonnes of coffee for reserves as global coffee prices are currently
experiencing a sharp decline.
In the Central
Highlands, Vietnam’s largest coffee growing area, coffee prices are hovering
around VND37,200 – 37,500 per kilogram, much lower than the trade price in
the same period last year, which wasVND46,000 per kilo.
Behind the
SBV rate adjustments
The State Bank of
Vietnam (SBV) has lowered loan interest rates and increased the exchange rate
in an effort to stabilise the currency market.
In a press release
on June 28, the central bank said the 1% exchange rate hike is part of its
plan to ensure the value of the Vietnam Dong, improve international payments
and increase foreign currency reserves.
It said that
despite the international financial fluctuations since 2012, the exchange
rate and foreign currency market in
It said the rate
adjustment will reflect the supply and demand of foreign currencies in the
market and create a firm and stable currency market.
Research Director
of Capital Dragon Dr Le Anh Tuan said the adjustment is in line with the
sharp depreciation of the currencies of emerging economies against the US
dollar.
Banking and finance
expert Can Van Luc said credit organisations’ increasing demand for US
dollars to purchase gold and the public psychology of converting Vietnam Dong
into US dollars to deposit in banks has pressurised the central bank to raise
the exchange rate.
The 1% adjustment
is appropriate and is part of the SBV’s roadmap for raising the rate by 2-3%
this year, Can said.
Banking expert
Nguyen Tri Hieu said the central bank’s move is a measure to loosen its
monetary policy. However, he forecasts that the depreciation of the Vietnam
Dong might be the SBV’s own orientation rather than the result of mounting
pressure from the market because imports have not put much pressure on the
economy so far this year.
Former SBV governor
Cao Sy Kiem agreed with the central bank’s decision, explaining that exports
are showing signs of recovery, which is fuelling the demand for foreign
currencies. In his opinion, the 1% adjustment will not significantly affect
the market.
For an
export-driven economy like
Similarly, the
bank’s decision to lower deposit interest rates does not affect the market
because many commercial banks have recently slashed their rates to below 7%.
Experts say the banks
currently have large amounts of money in stock, and lower interest rates will
not negatively impact their operations.
However, banking
expert Nguyen Tri Hieu said whether the interest rate is cut or not is no
longer a major business concern at the moment, citing that many businesses
still cannot access bank loans. Therefore, he says a lower interest rate will
not affect businesses very much.
Former SBV governor
Kiem welcomed the decision to lower the interest rate, but said
He also welcomed
the central bank’s decision to remove the ceiling deposit interest rate,
helping narrow the gap between deposit and lending rates.
Once these moves
prove to be effective, they will help save ailing businesses, said Kiem.
Pangasisus
breeders stricken by price plunge
Several pangasius
fish breeders have suffered heavy loss due to price fall in recent days in
the Mekong Delta.
A kilogram of
pangasius fish fetched only VND18,000-19,000 on June 29, leaving breeders
with a loss of VND3,000-3,500.
Despite of the
price fall, farmers still find it hard to sell their fish because processing
plants have reduced purchase.
Nguyen Van Mach, a
breeder in Lai Vung District, Dong Thap Province, said that he had sold 170
tons of fish at a loss of VND600 million (US$28,000). Adding to the woe, they
can not receive immediate payment but 1.5-2 months later.
Nguyen Van Dao,
director general of Go Dang Seafood Company in the province, said that the
pangasius price drop had been caused by abundant supply and low export price.
Not only breeders
but also businesses are falling in difficult situation, he added.
According to the
Vietnam Association of Seafood Exporters and Processors, pangasius export
turnover touched $174 million in May, up 16 percent over the same period last
year.
In the first five
months this year, the fish export was estimated to reach $709 million, a
reduction of 1.5 percent year on year.
Ministry
outlines housing support rules
Buyers of
low-income houses will soon be able to raise mortgages on their new
properties, even when they are not built, according to the Ministry of
Construction.
On June 25, the
ministry gave the details of the 30 trillion VND (1.42 billion USD) support
package set up for the purpose.
In Circular 11/2013
of the State Bank of Vietnam (SBV), issued in May, people who wished to
borrow money from the support package for low-income home purchases must meet
minimum capital requirements to be eligible for the loans.
This meant home
buyers must borrow money, but current regulations did not allow the use of
properties yet to be built as mortgage collateral, the ministry said.
So, allowing buildings
still in the planning stages to be used as mortgages would make it easier for
low-income earners to access bank loans.
Households or
individuals having sale and purchase agreements with developers of social
housing after January 7 would be eligible for the support package.
Those who sought
loans to buy houses of less than 70sq.m at below 15 million VND (715 USD) per
square metre must not own a house or must be living in accommodation at with
less than 8sq.m per person.
Beneficiaries of
the support package must be residing permanently in the province or city in
which they wanted to buy. Those with temporary residence status must
participate in social insurance for more than one year.
The support package
would be available to investors in social housing projects or projects
converted from commercial purposes regulated in Government Decree
71/2010/ND-CP and the Construction Ministry's Circular 02/2013/TT-BXD
respectively.
The support package
also covered investors of housing projects for students and workers in
industrial zones.
The distribution of
the support package must be completed within 36 months from June 1.
The ministry
recently proposed to apply the same preferential loan to commercial
apartments of below 90sq.m instead of only 70sq.m as currently regulated.
According to
statistics from the Housing and Real Estate Market Management Department, as
at the end of May there were 48 commercial housing projects registering to be
converted to social housing. In
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 1 tháng 7, 2013
Business
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