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BUSINESS IN BRIEF 14/12   2009-12-14 - VietNamNet/VNA, TN, ND

Two Chinese banks licensed to open branches

The State Bank of Vietnam (SBV) has granted licences to two banks of China to open branches in Ho Chi Minh City and the capital city of Hanoi.

Accordingly, the China Construction Bank is permitted to open a branch in HCM City with a chartered capital of 20 million USD, while the Industrial and Commercial Bank of China is licensed to open its branch in Hanoi with a chartered capital of 50 million USD.

Both branches will have operation duration of 99 years and operate under the form of commercial banks, sources from the SBV said.

China has been Vietnam ’s largest trading partner since 2004. Last year Vietnam and China reached a target of 20 billion USD in bilateral trade, two years ahead of schedule.

China has to date invested in 655 projects in Vietnam , with a total registered capital of 2.23 billion USD.

Weak dong, Tet demand drag prices up

The prices of many goods have shot up since early December due to the dong’s recent depreciation and rising for goods demand ahead of Tet, but some producers and distributors are keeping prices down hoping to grab a larger market share.

Following the central bank’s decision to weaken the dong by around 5.44 percent at the end of November, prices of imports have risen -- Toyota cars, for instance, are VND16.1-84.6 million more expensive.

Cooking gas prices have jumped by VND22,000 for a 12-kilogram cylinder to VND267,000.

Foodstuff producer Vissan announced December 12 hikes of VND2,000-3,000 in the prices of 15 processed foods.

At Binh Dien market in District 8, prices of tiger shrimps have increased by VND10,000 a kilogram to VND130,000, squid by VND5,000 to VND70,000, sausages by VND7,000-15,000 to VND115,000, and tomatoes by VND1,000 to VND6,000.

Pork prices have risen by VND3,000 a kilogram at wholesale markets in Ho Chi Minh City.

Sugar has seen the highest price hikes, rising by 20 percent from last month and nearly half from last year to VND17,500-18,000 on the wholesale market.

Huynh Quoc Bao, an official at Binh Tay Market, said over 90 percent of goods, especially imports, saw prices shoot up last week.

Dairy companies, including Vinamilk, increased prices by 5-6 percent in early December, blaming it on the higher costs of imported raw materials and sugar.

Confectionery giants Bibica and Kinh Do have announced 5-10 percent hikes in the prices of some products.

But many producers and distributors have not increased prices after earlier promising not to hike them until the end of the year.

Le Van Loc, deputy general director of dairy maker Nutifood, said though imported raw materials and sugar cost 12 percent and 30 percent higher than in the third quarter, his firm would not hike prices as it had pledged earlier ths year.

It would maintain prices until early next year by cutting costs, he added.

Some supermarkets are also working with distributors to keep prices stable.

Saigon Co.op has not only promised to maintain rice prices until early next year but is also offering discounts of 50 percent on clothes, consumer goods, and appliances.

Big C supermarket is offering 2-50 percent discounts on over 800 items, 45 of them essential foods like pork, basa catfish, and chicken on which it is offering 10-20 percent discounts.

Many electronics shops too have kept their prices down despite the weaker dong, thanks to early preparations.

Dang Quy, deputy sale director of Thien Hoa Electronic Center, said Toshiba and Daewoo informed his company in November about a rise in prices, but soon changed their mind and have pledged to not hike prices this year.

Besides preparing early, Thien Hoa also negotiated with suppliers to ensure it can keep prices down during the shopping season, he added.

Le Xuan Dai, deputy head of the Ho Chi Minh City Market Management Department, said last week that his department would strengthen monitoring of sales points and prices of essential goods to crack down on price hikes.

Pepper exports exceed forecast by $78 mil

Pepper exports were better than forecast this year Do Ha Nam, chairman of the Vietnam Pepper Association, said.

Vietnam exported more than 128,000 tons in the first 11 months, an increase of 18,000 tons from last year, he said.

It was worth $328 million, $78 million higher than forecast.

This translates into a 52.4 percent increase in quantity and 11.9 percent rise in value.

The US was the biggest importer, buying 12,687 tons for $36.32 million in the first 10 months, he said.

This was 13.9 percent higher in volume terms but the value was 5.8 percent lower.

Exports to Germany shot up by 118 percent to 12,086 tons, worth $33 million.

Analysts said stocks fell sharply by the beginning of last month in leading pepper- producing countries to 45,000-46,000 tons.

In Vietnam, pepper farmers in some areas will begin their harvest by the beginning of February next year. Production is expected to be 5-7 percent lower after recent storms damaged crops.

The country’s pepper output in 2010 is expected to top 100,000 tons.

Global prices are forecast to move up as global demand has not shown any signs of decline while production in leading export nations like India and Indonesia is expected to fall because of unfavorable weather and pests.

Gold sees small rise from month-low

Domestic gold recovered slightly on December 14 by VND150,000 a tael over last weekend as the global price rebounded. The resurgence came as investors sought a hedge to protect their wealth from the decline in equities and the greenback.

Bullion was bought at VND26.8 million and sold at VND26.95 million at most gold shops.

The VND27 million mark began declining in Vietnam last Saturday after global prices headed for the biggest weekly loss since February.

Gold traders said investors would buy heavily if the prices continued to stay below VND27 million this week.

On the SBJ trading floor, more than 208,640 taels were traded at VND24.75-25.46 million by 1:30pm local time.

Matching prices were at VND24.86-25.1 million at the ACB gold exchange, with 17,520 taels changing hands by 10:30am. The floor commission was at VND2 million a tael.

Green returned to the global gold price board this morning as the US currency fell against a basket of six major ones.

In Asia, the yellow metal rose as much as US$6 an ounce to $1,122 this morning.

February-delivery gold gained 0.3 percent to $1,123.40 an ounce after dropping as much as 0.7 percent earlier on the New York Mercantile Exchange.

The metal soared 27 percent this year.

The Central Bank of the Russian Federation announced it would buy 30 metric tons of gold from Gokhran, Russia’s state precious-metals repository, this week.

The US Dollar Index slid 0.2 percent after climbing to the highest level in more than five weeks on December 11.

Gold tumbled 8.5 percent from a record high of $1,226.56 an ounce made on December 3 as the index advanced 2.6 percent in the same period.

The dollar exchange against the euro remained above $1.46.

Experts from Eximbank expected the metal would make a sharp correction to $1,090-1,078 before climbing to $1,250-1,270.

Crude oil declined for the ninth straight day, poised for the longest losing streak since July 2001 on speculation the global economy’s uneven recovery from recession may slow growth in demand for fuel and energy.

Crude oil futures for January delivery lost $1.28 a barrel, 1.8 percent, to $68.59.

Prices dropped 7.4 percent last week, the biggest loss since September.

Selling price of steel up by VND 300,000 a tonne

The steel at plants has seen an increase of around VND 300,000 a tonne in price.

Steel bars are sold at VND 12.3 million a tonne while rolled steel is sold at VND 12.1 million a tonne (excluding value added tax).

The reason is that the world price of steel billet has risen by US$5 – 10 a tonne to US$470 – 480 a tonne, along with the increases in freight and US$/VND exchange rate.

However, the amount of steel in stock is still big. Until the end of November, around 225,000 tonnes were still stockpiled. Every month, around 55,000 tonnes of steel is imported from Malaysia, Thailand and Indonesia, with 500,000 – 700,000 VND/tonne lower price than the domestic steel.

Other news

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Vietnam dong rates rise; banks curb new loans   2009-12-14

Dollar supply improved, but not ample   2009-12-14

VNBA rejects Vietnam Credit’s bank ratings   2009-12-14

Japan brewer pours $23mil into Viet Nam   2009-12-14

Former Bush official promotes US supply chain in Vietnam   2009-12-14

Buyers seek apartments under a billion   2009-12-14

MOF may solve tax fraud   2009-12-14

US firm takes over Vietnamese IT distributor   2009-12-13

Coffee output to drop on replanting   2009-12-13

Rosier outlook for most sectors in 2010: SSI study   2009-12-13

BUSINESS IN BRIEF 13/12   2009-12-13

Gold dives below VND27 million a tael   2009-12-13