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BUSINESS IN BRIEF 19/11   2008-11-19 - VNA

Int’l security conference opens in Hanoi

The 15 th Asian Professional Security Association (APSA) international conference and the first International Security Show (VietSecurity) opened in Hanoi on November 18.

The events are drawing the participation of APSA members and companies from 10 countries and territories.
More than 20 papers delivered at the conference discussed the security and safety situation in Vietnam , the region and the world. Delegates from the Republic of Korea , Malaysia and Thailand said that Vietnam ’s security and safety environment was highly appreciated by foreign investors.

However, they said that the deep international integration is posing many challenges for the country, particularly international crimes, thus requiring strategic solutions at national level.

VietSecurity will conclude on November 20.

Ministry plans import restriction to curb deficit

The Minsitry of Industry and Trade (MIT) is planning restriction on the import of products already produced domestically and non-essential consumer goods to reduce trade deficits next year.

Restricted imports include tobacco, under-12 seat CKD cars and motorbike parts and components. The auto industry will see the sharpest drop in imports with import value to scale down to 7.2 billion USD in 2009.

The MIT said other measures include the full use of imports stockpiled in warehouses.

Asia remains the largest import market for fuel and materials for its advantages such as close geographical location and good prices, making up between 75 and 85 percent of the total value. Meanwhile the Ministry said it encouraged importing advanced technology from developed markets such as the United States and Europe .

Import value is expected to increase 15 percent to 96.6 billion USD next year while exports are likely to rise 18 percent to 76.7 billion USD, making 19.9 billion USD in trade deficits, up five percent from 2008, the MIT reported.

Index drops on global unease

Share prices continued to fall on Nov. 18 on the Ho Chi Minh Stock Exchange, with mixed investor sentiment.

The VN-Index lost 4.36 points, or 1.26 percent, to close at 340.69, while trading volume increased slightly to nearly 12 million shares on a turnover of 362.5 billion VND (21.6 million USD).

Trading activity continued to be minimal. Only Sacombank (STB) showed significant activity, with 2.2 million shares traded, while runner-up as most active share, Saigon Securities Inc (SSI), saw only 923,000 shares change hands.

”We are seeing caution from buyers, both domestic and foreign”, commented a Dai Viet Securities report. “It’s a necessary attitude at this time, as the world economy is witnessing highly complex developments.”
The report noted that the crisis had spread to retail and to manufacturing industries, with such major names as GM and Ford now struggling to survive.

A Vietnam International Securities Co report also showed worries about the short-term outlook for the economy, citing news that Standard&Poor’s was considering lowering Vietnam ’s credit rating. The report cited Deutsche Bank and Citigroup data predicting that Vietnam ’s economic growth would slow to 5.2 percent next year, while the US , Japanese and EU economies are all entering 2009 in recession.

Bloomberg chairman Peter Grauer told Dau tu Chung khoan (Securities Investment) last week that declines in economic growth would certainly affect companies’ profits, and would slash share values. He said the downturn might last until the end of 2010.

Shares prices in Hanoi on Nov. 18 bucked the trend, as the HASTC-Index rose by 0.93 percent to end the day at 111.38. About 7.5 million shares changed hands for a total value of 233.6 billion VND (14 million USD).

French consultant opens info day of Vietnam business

PriceWatersHouseCoopers (PWC), a France-based finance and market consultant, has opened the “Vietnam Day” in Paris bringing together French businesses in various industries who share the same interest of investing in Vietnam.

The seminar on November 18 was co-organised by PWC and the Vietnamese Embassy in France, attracting well-known groups that have operations worldwide, including Electricity of France (EDF), the French National Railway Company (SNCF), ESI Groupe, Movement of the French Enterprises (Medef International) and members of Vietnam’s diplomatic mission in France.

PWC specialists, who belong to a Vietnam trade promotion group – Group Business Vietnam – presented the legal framework regarding investment and doing business in the country.

PWC executives brought to the ocassion an overview of the economic situation and business opportunities as well as challenges in Vietnam. They underpinned that there are high potentials for foreign enterprises in the Southast Asian country, particularly those engaged in the six areas that Vietnam is calling for more investment, including infrastructure, industry and logistics, pharmaceuticals and healthcare, environment, real estate, information technology and communications.

The seminar has created a forum for French enterprises to openly raise questions of concern in regards to auditing and accounting tools, recruitment of financial, banking and stock market staff.

PWC has operated in Vietnam for many years. The company provides financial consultancy and market strategies to prospect and current investors in Vietnam.

Japanese logistics firm opens hub in Vietnam

 Japanese-invested logistics firm Yusen Vietnam put its international entrepot into operation on No.17, in a bid to meet increasing demands for logistics services in Vietnam .

The 2.3 million USD entrepot is located in Hanoi ’s neighbouring province of Hai Duong , which provides easier access to the Hai Phong seaport and Noi Bai airport,

“The operation of the international entrepot will not only meet increasing demands for logistics services in Vietnam, but also function as a logistics hub in the region, linking with China, Thailand, Cambodia and Laos,” said Yusen Vietnam’s general director Tetsuro Tsuzuki.

Tsuzuki said although Vietnam and the global economy were experiencing financial challenges, demand for logistics services is still booming following the ongoing foreign investment hike in the country.

“One of the most important factors that makes Vietnam attractive in the eyes of foreign investors is cheap operation costs, even compared to China ,” he added.

Trillions of VND needed for industrial mineral sector

The Ministry of Industry and Trade (MOIT) has approved a master plan with a total value of over 2,500 billion VND to improve the industrial mineral sector in order to better meet the demands of export and domestic production.

The plan will create zones for the exploration, exploitation, processing and use of industrial minerals, including serpentin, barit, grafit, fluorit, bentonit, diatomit and talc by 2015 with a vision to 2025.

According to the MOIT, capital for the plan will be mobilised from a number of sources. The state budget will invest in technology infrastructure adjacent to the exploitation zones, large-scale refinements and scientific studies, while ore exploiting and processing projects in economically-disadvantaged areas will be given access to state credit.

To mobilise sufficient capital for the plan, the ministry plans to enforce the decentralisation of resources management, encourage all economic sectors and foreign investors in the ore exploitation and processing industries.

Centrally-governed cities doing a roaring trade

Trade and industry representatives from the five centrally-governed cities of Hai Phong, Da Nang , Hanoi , Ho Chi Minh City and Can Tho met in Can Tho on Nov. 18 to seek deeper cooperation based on each city’s strengths.

Participants at the meeting asked the Ministry of Industry and Trade to give investment priority to infrastructure development, thus providing opportunities for the five cities to spearhead the country’s process of industrialisation and modernisation.

Statistics, released at the meeting showed that these cities have been responsible for exports totalling 34.86 billion USD so far this year, accounting for 53.62 percent of the country’s total export value.

The cities’ import values are estimated at 43.7 billion USD, representing over 52 percent of the country’s total, while their retail sales and service revenues stand at 438.3 trillion VND (27.3 billion USD) or 45.19 percent of the nation’s total.

Despite facing numerous difficulties, the five centrally-governed cities still obtained high industrial growth rates, with a total estimated industrial production value of 316.3 trillion VND for 2008.

Hai Phong recorded the highest growth rate of 18.5 percent, followed by Can Tho, with 17.07 percent, Hanoi , 14.8 percent, Da Nang , 14.3 percent, and Ho Chi Minh City , 13.5 percent.

Wireless communications centre to open in HCM City

A wireless communications development centre is to be built in Ho Chi Minh City under a 54 million EUR contract recently signed by the British company Harvey Nash and the French telecoms firm Alcatel Lucent.

According to Harvey Nash, the centre, which will be connected with Alcatel’s software research and development centre in Germany centre in Germany , will provide wireless telecom solutions that meet international standards. It is expected to create more than 200 jobs.

Harvey Nash’s Global Managing Director Paul Smith said the company’s decision to establish such a centre was based on the intellectual competence of the young generation of Vietnamese in the IT and telecoms sectors.

He also said he believed that the project would help promote Vietnam as a centre for advanced software research and development.

Harvey Nash has been operating in Vietnam since 2000 and has built up a list of blue-chip clients, including Honda, Vielife, Reliance Globalcom, The Discovery Channel and most recently, Prudential.

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