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BUSINESS IN BRIEF 27/11   2008-11-27 - VNA

Seminar helps boost Vietnam-Canada cooperation

The Vietnam-Canada Friendship Association (VCFA) and the Research Institute of America jointly held a seminar in Hanoi on Nov. 27 to identify areas of cooperation and propose measures to boost the relationship between the two countries.

The seminar, entitled “ Vietnam , Canada : Towards sustainable cooperation and development”, offered a chance for Canadian businesses to understand more about Vietnam ’s investment environment and seek local cooperation partners, said VCFA President Nguyen Duy Quy.

The event also provided Vietnamese with deeper understanding of the land and people of Canada , he added.

Participants at the seminar discussed potentials for cooperation and people-to-people diplomacy besides strengthening mutual understanding and economic-trade relations between the two countries.

Two-way trade between Vietnam and Canada has continuously increased in recent years, recording more than 1 billion USD in 2007. In the first eight months of this year, the figure reached over 800 million USD.

By the end of 2007, Canada had 62 FDI projects in Vietnam with a total investment capital of 489.5 million USD, ranking 21 st among 78 countries and territories investing in the country.

With its 4.2 billion USD project to build the Ho Tram Resort in southern Ba Ria-Vung Tau province which was licensed in April this year, Canada has become one of the 10 largest investors in the Southeast Asian country.

Vietnam is among 25 recipients of Canadian ODA, worth 30 million USD each year for the country. Canada ’s ODA capital is mainly invested in the improvement of officials’ capacity, administrative reform, information technology, environment, poverty reduction and assistance for ethnic minority people.

PVTrans gets loan to buy oil tankers

PetroVietnam Transportation Corporation (PVTrans) on Nov. 26 signed a 175-million USD term loan facility agreement with a group of foreign banks led by Citigroup.

Other lenders include Calyon Corporate and Investment Bank, Fortis Bank and Societe Generale.

The proceeds will be used to finance the purchase of three oil tankers with capacities ranging between 80,000 tonnes and 120,000 tonnes.

The 13-year loan is guaranteed by the Nippon Export Investment Insurance (NEXI) and the Vietnam National Oil and Gas Group (PetroVietnam).

Speaking at the signing ceremony, Chief Executive Officer of Citibank Vietnam Brett Krause said: “The successful closing of this long term loan facility amidst highly challenging credit market conditions, both locally and internationally underlines the strong fundamentals and outlook for PetroVietnam as well as PetroVietnam Transportation Corp.”

Krause added that Citibank was honoured to be selected by PVTrans to play a key role in this landmark transaction which demonstrated their continued commitment to clients in Vietnam.

“The global economy and financial crisis has impacted Vietnam , some global investors have left Vietnam , but the economy continues to grow and we see Vietnam growing in the future,” Krause said. Citibank has poured capital into Vietnam , three times more than regulation limits, and we have no intention of taking investment capital out of the market because we have a stable and robust base in Vietnam ,” he added.

PVTrans Corp is a subsidiary of PetroVietnam- which holds 60 percent of PVTrans’ charter capital. The main business operation of PVTrans is the transportation of crude oil, petrol and other chemical products. CEO of PVTrans Pham Viet Anh said, “PVTrans expects to reach pre-tax profits of more than 100 billion VND (6 million USD) this year, and increase profits one and a half times in 2009”.

PVTrans has the largest fleet of liquid tankers in Vietnam with a combined capacity of nearly 400,000 tonnes. PVTrans has been assigned as the main carrier of oil products for the Dung Quat Oil Refinery Factory which is expected to start operations from February 2009.

According to the company’s development plan to 2015, PVTrans plans to invest 3 billion USD in developing its fleet in order to meet the transport needs for oil refineries in Vietnam, develop its international oil transportation services and invest in other services such as floating storage, and other oil and gal services.

VN-Index plunges to three-year low

The VN-Index hit a three-year low on Nov. 26, while the Hanoi market hit its lowest level ever, despite the Government’s announcement late in the previous trading day that the nation’s inflation rate had slowed for a second consecutive month.

The Index on Nov. 26 tumbled 8.59 points to close at 311.74, a loss of 2.68 percent. Trading volume reached 11.74 million shares for a total turnover of 352.5 billion VND (21.4 million USD).

The day’s trading saw 129 losers and 27 gainers. Demand for shares has fallen sharply this week. Trading value averaged at 277 billion VND per day over the first three days of the week, while it was 483 billion VND per day during the first half of November, according to HCM Stock Exchange data.

Activity continued to be sluggish in most codes, except for Sacombank (STB), with orders for 2 million shares. Some major stocks hit remarkable lows on the day, with FPT, PetroVietnam Finance (PVF) and Pha Lai Thermal Power (PPC) all touching the floor of the regulated trading band.

Foreign investors were net buyers with 2.2 million shares bought and 1.7 million units sold. Net purchases value reached 57 billion VND (3.5 million USSD) for the day.

There was a possibility that the VN-Index would fall to the 300 point mark, said Kim Eng Securities analyst Ken Tai.

“It’s hard for the domestic stock market to rally in the short term,” said Tai, pointing out that local investors were closely following international developments.

Tai said the fate of Citigroup would have great impact on the world financial system, and added that he expected the US government would soon pass a rescue plan for the automotive industry, easing a burden the US economy.
Declining world steel and petroleum prices were likely to affect the shares of firms that rely on these materials for production, he added.

EuroCapital Securities said in a report that, with the banking and property markets still facing difficulties, the impositions of new income and capital gains taxes on securities at the begining of 2009 would be further discouraging to investors.

In Hanoi on Nov. 26, the HASTC-Index hit its lowest level ever, ending the day at 99.56 points, a massive 5.4 percent loss. About 7.65 million shares changed hands on a turnover of nearly 197 billion VND (12 million USD).

The northern market saw 121 losers and 25 winners. Most active shares were Asia Commercial Bank (ACB), with 1.4 million shares traded, and Kim Long Securities (KLS), with 1.2 million. Both fell sharply.

Tai expected the HASTC-Index to hold steady between 98 and 104 points, but predicted it could plunge to as low as 89.

Money transfers made easier

Western Union on Nov. 25 began officially providing money-transfer services at the Vietnam Post Corporation offices nationwide.

In the first period, Western Union services will be provided at over 600 of the 3,000 Vietnam Post Corporation (VNPost) offices across the country. In the next 18 months, this will be expanded to 1,700 VNpost locations.

Customers can receive money via Western Union in either Vietnamese dong or US dollars from 7:30am to 7pm everyday.

The cooperation between VNPost and Western Union will make sending and receiving money safer and faster.

Users only need to fill out a form and present some form of identification to use the service, a private account is not required.

Western Union has offered money transfer services in Vietnam for the last 14 years, cooperating with banks and enterprises to set up a network of 4,500 transaction centres across the country.

This is the first time they offered services at VNPost locations.

Western Union is the leading money transfer company in the world with more than 200,000 transaction sites located in 195 countries and territories.

Gov’t steeling themselves for Japanese plant report

Deputy Prime Minister Hoang Trung Hai has granted permission to the Japanese JFE group to conduct a pre-feasibility report on a steel plant planned for Dung Quat economic zone, in the central province of Quang Ngai .

The report has been commissioned to help clarify the project’s objectives, investment scale and its estimated timescale for implementation, as well as investigating its product category, the equipment and technology needed, total infrastructural facility investment, site clearance procedures and environmental protection measures.

Based on the report’s findings, as well as suggestions from the relevant ministries and branches, the Government will consider incorporating the project into its steel development plan, which runs until 2025.

The 5 million USD steel plant is predicted to produce between 6 and 10 billion tonnes of crude steel per year.

All exhaust gases produced during the production process will be reused for the generation of power.

Vietnam stands first among foreign investors in Laos

Vietnam has claimed the title of biggest foreign investor in Laos during the 2007-2008 fiscal year, with 21 projects totaling more than 120 million USD, according to reports from the Lao Ministry of Planning and Investment.

China came second, with 28 projects worth more than 94.6 million USD, followed by Thailand, with more than 47.7 million USD in 20 schemes and the Republic of Korea, 29.2 million USD invested in nine plans.

According to the ministry’s Trade Promotion Department, during that year Laos attracted 92 foreign-invested projects from 13 countries with total investment topping 300 million USD.

Vietnam has so far poured more than 1.8 billion USD into a total of 125 projects in the neighbouring country, according to the department statistics.

Cross-border trade fair opens in Yunnan

The eighth annual Vietnam-China border trade fair opened in the Hekou district in the Chinese province of Yunnan on Nov. 26, with 360 stalls featuring products from both countries.

This event is taking place at a time when both Vietnam and China are members of the World Trade Organisation, and Vietnam is preparing to open its retail markets in January 2009.

Vietnamese businesses from 12 provinces manned 100 stalls piled high with their products, such as wooden furniture, aquatic food products, and footwear, among others.

The event programme includes a series of trade promotion activities and a ceremony for the signing of contracts.

During the event, delegations from Yunnan province and its neighbouring Vietnamese province of Lao Cai will hold talks to review their trade ties in accordance with previously-signed agreements, as well as establishing strategies for future cooperation, particularly in the areas of trade, investment and tourism.

They also plan to examine ways to speed up the actualisation of the Kunming-Hanoi-Hai Phong economic corridor, and arrive at solutions to a number of other issues.

Local company grows rubber in Laos

The Sai Gon-Tay Nguyen Investment Joint Stock Company has been licensed to invest in rubber plantations in Laos .

Under the terms of the license, the company will establish the Sai Gon-Southern Laos Investment Joint Stock Company in Laos, planting rubber trees on 30,00 ha of land in Khetsomboune village, Phuvong district, Attapeu province.

The agreement covers the next 17 years, and also includes permission for the exploitation and processing of rubber latex.

During the first phase, which runs from now until 2013, the company will invest 15 million USD in planting 2,000 ha of rubber trees each year.

The Sai Gon-Tay Nguyen Investment Joint Stock Company is currently involved in several large-scale investment projects in Vietnam , including a 600 billion VND (35.2 million USD) animal breeding and introduction programme in natural forests to serve eco-tourism along the East Truong Son route.

This project is expected to become operational in 2011.

Citibank Vietnam committed to quality service

A strong revenue stream, good access to capital sources, a high level of liquidity and a competent workforce are some of the factors behind Citibank Vietnam being able to continue offering the highest-quality services in Vietnam , said general director of the bank Brett Krause.

He made this statement following a move by the US Department of Treasury, Federal Reserve (FED) and the Federal Deposit Insurance Corp. (FDIC) to commit $306 billion of U.S. government guarantees for troubled mortgages and toxic assets controlled by Citigroup Inc., of which Citibank Vietnam is a subsidiary.

Under the Troubled Asset Relief Programme (TARP), Citigroup will also receive a 20 billion USD cash injection from the US Treasury Department. In return for the cash and guarantees, the US government will receive a portion of Citigroup’s preferred shares, paying an 8 percent dividend.

This means that Citigroup will have increased access to FED’s Primary Dealer Credit Facility, Discount Window and Commercial Paper Funding Facility, as well as FDIC’s Temporary Liquidity Guarantee Programme, Krause said.

Citibank resumed its operations in Vietnam in 1993, opening branches in Hanoi and Ho Chi Minh City and became the first bank in Vietnam to launch Internet Banking in 2001.

Micro-entrepreneurs to be honoured in Hanoi

The Citi Vietnam Mirco-entrepreneur Award 2008’s presentation ceremony will take place in Hanoi next week, announced the Vietnamese Micro-finance Working Group and the Micro-finance and Development Centre.

The event, held for the second time in Vietnam, is funded by the Citi Foundation and organised by the State Bank of Vietnam and the Vietnamese Micro-finance Working Group.

This year, the Citi Foundation pledged over 1.3 million USD to organise the Citi Micro-entrepreneur Awards in 26 nations, including Vietnam .

The goal of the awards is to support micro-entrepreneurs and raise their awareness about micro-finance’s role in providing financial support for the poor, especially small loans to help people start their own businesses.

The award aims to honour excellent micro-entrepreneurs who have made efforts to boost their household income through their businesses and to promote local economic development.

Besides organising this year’s awards ceremony, we plan to bring out some new rating standards for businesses who registered to participate in the awards, which will assess the amount they have increased in revenue in the past three years and their ability to apply advanced technology,” said director of the Micro-finance and Development Centre, Nguyen Bich Vuong.

Additionally, 2008’s ceremony will award three micro-finance organisations that have provided new products for the local market.

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