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BUSINESS IN BRIEF 26/1   2010-01-26 - VietNamNet/VNA

US Website: VN economy likely to show significant expansion

Hanoi, Vietnam
The Vietnamese economy is expected to show a significant expansion though it was mildly affected by the diminished export demand, said a New York-based website.

An article posted on Seeking Alpha on Jan.25 wrote: “Vietnam practically evaded all the direct problems that came with the financial crisis, but the country was mildly affected by the diminished export demand. The Vietnamese economy and related exchange-traded fund (or ETF) may show a significant expansion as other countries start increasing imports.”

The website quoted PXP Vietnam Asset Management as saying that Vietnam’s economy could grow 7.5 percent this year and Bloomberg as saying that the Vietnamese economy expanded 5.3 percent in 2009 after a drop in demand for exports and foreign direct investment.

Harvard University Professor Joseph Nye was quoted by Seeking Alpha as pointing to Vietnam’s open economy, foreign direct investment and increasing exports as factors that aided the country’s rebound from the recent global financial downturn.

According to Bloomberg, the gradual recovery in export demand will provide the extra push in economic expansion in Vietnam.

Seeking Alpha is a premier website for actionable stock market opinion and analysis, and vibrant intelligent finance discussion.

Market volumes hit 7-month low

Market volume on the HCM Stock Exchange sank to a seven-month low on Jan. 25, with only 20.9 million shares changing hands, although the VN-Index gained 0.7 percent to close at 480.91 points.

The value of the trading session totalled a meagre 863.8 billion VND (46.7 million USD).

Investor responses to positive news seemed weak, said Nguyen Xuan Binh, a market analyst with Bao Viet Securities Co, pointing to optimistic corporate results being released but having no impact on market moves.

Even with January inflation rates in HCM City and Hanoi suggesting a reason for optimism, investors had not taken any action, Binh said.

And, noted analyst Nguyen Thanh Vuong, “they are really sensitive to any changes in or rumours about the economic situation, as well as global events”.

The US situation was another thing dragging down the market, Vuong added.

Binh felt the current market funk was similar to the period leading up to last year’s Tet holiday, adding: “Analysts and investors agree the market will be brighter after Tet, when liquidity issues and inflationary pressure settle.”

On the Hanoi Stock Exchange, the HNX-Index fell another 0.16 percent to close at 157.32 points. Market value was a weak 439.8 billion VND on a volume of 14.4 million shares.

Technical indicators indicated no signs of an impending dip in the market, Binh said, noting a current price-to-earnings ratio of 12.5x.

The domestic economy was in sustainable recovery which would allow the market to achieve a mid or long-term rally, he added, recommending value investors continue injecting money while margin traders should stay out.

Vietsovpetro to install two oil rigs in Bach Ho

Vietsovpetro, an oil and gas joint venture company between Vietnam and Russia , began construction and installation of two oil rigs BK-14 and BK-15 at Vietsovpetro Port , in the southern province of Ba Ria-Vung Tau on January 23.

The oil rigs have a combined investment capital of 550 million USD and are located in the southern and northeastern quadrants of Bach Ho, one of Vietnam ’s largest oil fields.

The Oil and Gas Construction, Installation and Repair Company – an affiliate of Vietsovpetro – was assigned to undertake the project.

Do Van Phuc, director of the firm, said his company would complete the project soon.

The new oil rigs were expected to be put into operation this year in order to increase output from the Bach Ho Oilfield, Vietsovpetro had managed to boost investment and operations in an effort to increase its total output this year, it said.

Last month, Vietsovpetro pumped its first oil from Well 2X, at Block 09-1 in the Nam Rong – Doi Moi Oilfield, and from another well in the Dong Rong Oilfield. The two wells have a total output estimated at 8,440 barrels per day.

Vietsovpetro director general Nguyen Huu Tuyen said operation of the new wells would provide a solid foundation for the joint venture to gradually increase its output from this year onwards. At the same time, it demonstrated Vietsovpetro’s potential and capacity in the oil sector, he said.

The firm targeted extraction of 6-6.2 million tonnes of crude oil and 595 million cubic metres of gas this year. With an estimated average price of 495 USD per tonne, its turnover would be more than 3 billion USD if the targets are reached.

Vinatex to build industrial parks for textiles, dyes

The Vietnam National Textile and Garment Group (Vinatex) plans to build two large industrial parks specialising in textile and dye.

The two IPs, each covering an area of 150ha, will be built in the Mekong delta province of Tra Vinh and the northern province of Thai Binh. They aim to attract domestic and foreign investors.

Vu Duc Giang, Vinatex general director, said the Ministry of Industry and Trade had approved construction plans of the two IPs and Vinatex was making the detailed plans to submit to the Government.

“Construction of the two IPs is expected to begin this year and both of them are expected to be fully occupied within the next five years,” he said.

By then, each IP was expected to have a textile output of 200 million square metres a year, he said.

He added the investment capital for building infrastructure facilities for IPs was about 20 USD per square metres. Standard facilities would include environmental measures such as wastewater, toxin and solid waste treatment.

Vietnam how needs about 2 million square metres of cloth a year for garment production but domestic supply can only provide about 700 million square metres, according to Vinatex.

The remaining cloth must be imported from China , Japan , India , and other countries and territories.

With the growth of garment and textile exports in recent years, the import of clothes, cotton, threads, fibres and other materials for garment and textile production has also increased, according to Vinatex.

In 2008, the country exported 9.1 billion USD of garment and textile products, but it imported 7 billion USD of the raw materials.

Giang said Vinatex had also set up five IPs specialising in garments nationwide and most of them were fully occupied.

Advertising industry to hold first exhibition

The country’s first ever International Advertising Equipment and Technology Exhibition, VietAd 2010, is scheduled to open on August 5 in HCM City . It is expected to attract nearly 250 domestic and foreign companies.

It’s a chance to promote trade between domestic and foreign advertising companies and for enterprises to introduce their advertising products and services to potential customers, said Dinh Quang Ngu, president of the Vietnam Advertising Association and head of the exhibition’s steering committee.

“The country’s advertising industry is still young in comparison with regional and international counterparts,” Ngu said, adding that a lot of technology needed to be imported.

The country has more than 5,000 companies operating in the industry, which earn a total of 1 billion USD a year.

Companies specializing in printing, electric signs, audio and lighting systems and advertising services will showcase their products and services at more than 400 booths.

A job festival and seminars on Vietnam and China ’s advertising industries and media, and advertising human-resource training will be held during the event.

The three-day event is co-organised by the Vietnam Advertising Association, Vietnam Printing Association, HCM City Advertising Association and Dong Nam Advertising and Commercial Promotion Joint Stock Company.

Habeco inaugurates brewery in Phu Tho

The Hanoi Beer, Alcohol and Beverage Corporation (Habeco) has inaugurated the first phrase of the Hanoi-Hong Ha Beer plant in the northern province of Phu Tho on January 23.

The project has a total investment capital of 186 billion VND (9.3 million USD) with a design capacity of 25 million litres a year.

The brewery is expected to reach 165 billion VND (9.2 million USD) in revenue in 2010.

Ecologically friendly factory opens in Binh Duong

Sai Gon Tan Tec Leather Co Ltd, a German-invested company recently put into operation its new ecologically friendly fanning plant in the southern province of Binh Duong.

With total investment capital of 12 million USD, the factory will produce 2 million sq.m of tanning leather a year.

The factory will emit 35 percent less CO2 than conventional production facilities.

In addition, the new factory will manufacture high quality leather that meets the new LITE standards.

Vietnam-Russia Bank opens office in Hai Phong

The Vietnam-Russia Bank (VRB) opened its 6th representative office in the northern port city of Hai Phong on January 26.

The new office aims to help the bank expand its network in the northern coastal region as well as in the northeastern major economic zone. In addition, it is tasked to serve enterprises including those doing business in Russia , and Eastern European countries among others.

VRB was set up in 2006 by the Bank for Investment and Development of Vietnam (BIDV), which holds 51 percent of its statutory capital, and the Russia Bank for Foreign Trade. Last year, VRB mobilised over 300 million USD and loaned more than 260 million USD.

Other news

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