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BUSINESS IN BRIEF 24/12   2010-12-24 - Viet Nam Net

One kilo of gold to make one Sim card 


Mobile network operator Vietnamobile has introduced a gold Sim card weighing one kilogram plus that is recognized in the Vietnam Record book as the biggest gold Sim in the country.


The Sim, made from 27.7 taels of 9999 gold and worth VND1 billion or about US$50,000, is the special prize for the luckiest person in Vietnamobile’s New Year promotion program called “Speak your way to gold.”


Vietnamobile users will have a chance to win up to thousand of bonuses every day and the privilege to be the owner of the Vietnam Record gold Sim. It will be awarded at the end of the campaign by a lucky draw in search for the luckiest person.


It is 20 centimeters long and 11.8 cm wide. The network's prefixes -- 092 and 0188 -- are curved on the Sim.


The program runs from Dec. 20, 2010 to Feb. 28, 2011 and is applicable nationwide to all Vietnamobile pre-paid subscribers.

Vietnamobile will also present many other prizes and bonuses to those pre-paid subscribers who join the program.


Remarking the gold Sim, Mr. Cao The Anh, representative of the Vietnam Guinness Center in Hanoi, said: “The idea of the biggest gold Sim in Vietnam is truly creative. What’s more surprised is that this record will be offered to the luckiest customer in the Tet promotion program.


“I believe there won’t be any more happiness and astonishment to win this prize on the very beginning of the year,” he added.


Speaking at the introduction of the gold Sim in Hanoi Dec. 20, Vietnamobile CEO Elizabete Fong said, “Vietnamobile is about to welcome our 2nd Tet in Vietnam… Talk of gold is our special Tet promotion program and also our sincere gratitude to our customers.”


HAGL to sell $200 mln bonds in Singapore


Vietnamese property giant Hoang Anh Gia Lai Joint Stock Company will raise US$ 200 million from the sale of five-year bonds on the Singapore Stock Exchange in January.


The coupon will be based on the group’s credit rating to be done by Standard and Poor’s and Moody’s.


Vo Truong Son, HAGL deputy CEO, said the company will have the right to buy back the bonds after three years.


HAGL looks at the bond issue as an optimal solution since bank loans have become too expensive, Doan Nguyen Duc, HAGL chairman, said.


The money raised from the issue will be used to fund planting of rubber trees on 40,000 ha in Laos and Cambodia and building hydropower plants in Vietnam.


HAGL has in the past sold VND1.1 trillion ($56.4 million) worth convertible bonds to Singapore sovereign fund Temasek Holdings and 16.22 million shares at $70 million to Deutsche Bank Trust Co Americas which will be listed on the London Stock Exchange at the end of this month or in early January, Duc said.


The group, which is listed in Ho Chi Minh City, has a registered capital of VND2.93 trillion ($150 million) and interests in real estate, mining, rubber, and hydropower generation.


Gold changes little   


The price of gold in Vietnam slid by VND50,000 a tael (1.2 ounces) over the previous day on December 23 as global prices remained fluctuating around US$1,390 an ounce.

Gold was bought at VND35.75 million and sold at VND35.85 million at most gold shops as of 10 am local time.


Sacombank Jewelery Company bought gold at VND35.79 million and sold at VND35.87 million as of 9:55 local time.


Meanwhile, at the same time Hanoi-based Phu Quy Jewelry purchased SJC-brand gold at VND35.77 million and sold at VND35.87 million.


Domestically, gold fetched VND670,000 a tael higher than global prices.


According to gold traders, the demand for cash usually increases by yearend as customers need to make payment and final settlement. Thus, trading on bullion market always turned muted by this time. Besides, a stable US dollar exchange rate on free market, and an unchanged global gold price also helped to maintain the rate steady.


Dollars were bought at VND21,040 and sold at VND21,080 on free market this morning, unchanged as of the previous day.


Internationally, gold changed little as US equities climbed to a two-year high, eroding the appeal of the precious metal as an alternative asset.


Gold for immediate delivery slipped as much as $0.5 an ounce to close at $1,386 an ounce on the Comex in New York.


In Asia, gold rebounded this morning. Spot gold gained $1.5 an ounce to trade at $1,387.5 an ounce as of 10 am Vietnamese time.


Information about the US’s GDP, which rose 2.6 percent in third quarter, almost had not affected bullion market. The revised 2.6 percent increase in gross domestic product compares with a 2.5 percent estimate issued last month and was less than the median forecast of a 2.8 percent, a Commerce Department report showed.


The euro exchange rate against the greenback fell to $1.3 a euro yesterday. The shared-currency lost 0.08 percent while the US Dollar Index was stable at 80.73.


Crude oil futures for February delivery emerged $0.66 a barrel, or 0.7 percent, to close at $90.48 a barrel on the New York Mercantile Exchange.


This morning, crude oil climbed to nearly $91 a barrel due to positive data on the US economy and a severe winter in the nothern hemisphere.


ASM Group to build fish oil refining factory 


Sao Mai An Giang Group (ASM) on December 22 announced that it would invest US$15 million to build a fish oil-refining factory in the Mekong Delta province of Dong Thap.


The group also signed a contract with Belgium’s Desmet Balesstra Group to provide equipment for the fish oil-refining factory, which will have the capacity of producing 100-200 tons of fish oil per day.


The factory is expected to start operations at the end of 2011.


Covering an area of over 23,000 square metres, the factory is expected to supply fish oil products, which will be extracted from tra and basa fish fat that come from the Mekong Delta region.


Italian Company receives ship made in Vietnam 


Bach Dang Shipbuilding Industry Corporation handed over a 4,500-cubic-metre ethylene carrier vessel named "King Arthur" to Italian ship owner Mediterranea Di Navigazione on Dec. 21.


This is the first in a series of four vessels the Vietnamese firm has built for the Italian company.


The carrier is the first of its kind made in Vietnam. It is 104 meters long, 16.4 meters wide and 8.4 meters deep. It has a draft of 7.2 meters.


The Bach Dang corporation is focusing on completing a range of products for delivery this year, including a 6,500-ton cargo ship, a 1,700 TEU (20-foot equivalent unit) container ship. It is also building other ships for domestic and foreign buyers.


Taiwan life insurer to enter Vietnam


Taiwan-based Fubon Life Thursday got the green light from the Ministry of Finance to set up Fubon Life Insurance Vietnam early next year.


The company, which will be headquartered in Hanoi and have a branch in Ho Chi Minh City, will begin operations in the first quarter.


“The approval marks an important milestone for Fubon Financial Holding in tapping the Vietnamese market as well as advancing the group’s position across Asia,” Dau Tu (Vietnam Investment Review) newspaper quoted Kenneth Shih, vice chairman of Fubon Life, as saying.


Fubon Financial Holding, the holding company that owns Fubon Life, already has a non-life subsidiary in Vietnam while Taipei Fubon Bank, also part of the group, has a branch here.


Fubon Financial is Taiwan’s second largest financial company.


Vietnam Airlines carries 12 millionth passenger


Vietnam Airlines flew its 12 millionth customer of the year Thursday, a Japanese flew into Hanoi from Ho Chi Minh City.


Yugo Satomi was warmly welcomed at Noi Bai Airport by representatives of Vietnam Airlines and given a gift of two free business-class tickets on any of the carrier’s international routes.


The 12,000,001st and 11,999,999th passengers each one free ticket by economy class.


Vietnam Airlines estimates revenues this year will surpass VND36.2 trillion (US$1.86 billion), a whopping 47.3 percent increase from last year.


It forecast load factor to increase by 33.7 percent to 12.3 million passengers, 4.7 million of them foreign visitors.


Oil import taxes cut again as prices rise


The government has cut import tariffs on oil products for the fourth time this year following a petition by importers amid rising global prices.


The Ministry of Finance issued a circular Wednesday halving the tax on leaded and unleaded gasoline and jet fuel to 6 percent.


It takes immediate effect.


It also cuts the tariff on diesel from 5 percent to 2 percent, and on other oil products from 7 percent to 5 percent.


Late last month petroleum products importers asked for the tariff cuts, saying it will otherwise be difficult for them to comply with government orders to keep prices stable.


Oil prices were mixed in quiet Christmas eve trade in Asia, coming off two-year highs buoyed by upbeat US consumer confidence figures, analysts have said.


Global crude oil prices for delivery in February, shed 13 cents to US$91.38 per barrel after hitting $91.63 in intraday trade on Thursday, its highest level since October 2008.


Central Highlands gets first bonded warehouse


Tay Nguyen Coffee Exp-Im Investment JS Co has opened a VND307 billion (US$1.57 million) bonded warehouse in the Dak Lak Province, the first of its kind in the Central Highlands where 80 percent of Vietnam’s coffee output is produced.


The Vinacafe warehouse, built on a 17-hectare site in Hoa Phu Industrial Park, has a storage capacity of more than 300,000 tons of goods.


The facility targets the agriculture and food industries in the Central Highlands region.


Ministry hikes rates on State-subsidized loans


Interest rates on State-subsidized loans extended through the Vietnam Development Bank or the Bank for Social Policy for export or investment purposes will be increased from 9.6 percent to 11.4 percent per year for Vietnamese dong-denominated loans and from 6 percent to 6.6 percent for loans made in US dollars, under a new regulation by the Ministry of Finance.


Duong Duc Minh of the ministry's Department of Banking and Financial Institutions said the increase was due to the State Bank of Vietnam's recent hike in the prime rate from 8 percent to 9 percent.


"The increase in the prime rate widened the gap between State-subsidized loans for investment and export projects and commercial bank rates," Minh said.


Lending interest rates on Vietnamese dong-denominated medium- and long-term loans have averaged 14.5-16.5 percent and even a number of sectors enjoying priority rates, such as agricultural and export enterprises, are having to borrow at 13-15 percent per year.


The ministry has also seen yields for Government bonds rise to 10.7 percent, causing the sale of bonds to drop off last month to only VND400 billion (US$20.5 million), Minh said.


He also said that the increase in State-subsidized interest rates also reflected the overall trend of lending interest rates on the market, while the high rates on US dollar-denominated loans would reduce pressure on the dollar supply.


If market rates continue to rise next year, the ministry will make further adjustments to the subsidized rates as required under Vietnam's commitments to the World Trade Organization, he added.


The State has allocated about VND4.5 trillion ($230 million) from the State budget to fund interest subsidies for next year, an increase of VND800 billion ($41 million) over this year's rate, according to the ministry’s figures.


Foreign banks allowed to raise capital


The State Bank of Vietnam Wednesday granted licenses to the branches of three foreign banks, allowing them to increase their charter capital.


The HCMC branch of Huanan Commercial Bank Ltd plans to raise its capital from US$15 million to $65 million and Chinatrust's HCMC branch will lift capital from $15 million to $50 million.


And the HCMC and Hanoi branches of Mizuho Corporate Bank Ltd want to steeply lift their capital from $15 million each to $133.5 million.


By October 31, Vietnam had had a total of 71 foreign credit institutions and 48 representative offices. They now manage more than VND420 trillion ($20 billion) in assets, or 11.25 percent of the entire finance sector.


Auto registration fees to surge


The registration fee for passenger vehicles with fewer than nine seats will be increased in Hanoi and HCM City early next year from 15 percent to 20 percent of the vehicle's purchase price, under an expected decision from the Ministry of Finance.


Outside of Hanoi and HCM City, registration fees would be set between 10 and 20 percent, depending on the local economic situation.


The increase was necessary to discourage the rapid growth of personal vehicles, blamed for snarling traffic in the nation's major cities, as well as significantly raise revenue stream for the State budget.


Automobile registration fees were an important source of State revenues, the ministry said, generating VND7 trillion (US$359 million) annually, or about 2.5 percent of the nation's total budget.


Nguyen Ngoc An, a salesman at an auto showroom on Hanoi's Au Co street, predicted the fee surge would further inflate the price of a new car, already high due to heavy import and excise taxes.


Auto sales have surged significantly in the country in recent years amid robust economic growth. According to data published by the Vietnam Automobile Manufacturers Association, 17 automakers in the country sold a combined number of 99,978 vehicles in the first eleven months of this year.


The nation imported 46,940 complete-built vehicles worth $856.4 million during the period, according to the General Department of Customs.


The Ministry of Finance earlier this month shaved tariffs on imported vehicles, effective January 1. Under the new tariff regime, vehicles with fewer than nine seats and an engine capacity of 1.8-2.5 liters would see import taxes lowered by 1 percent to 82 percent. Meanwhile rates for vehicles with larger engine sizes would fall by 6 percent to 77 percent.


Milk prices to rise by up to 10%


Milk distributors have received notice from some dairy manufacturers that prices will rise 3-10 percent on January 1.


Hancofood will hike the price of its Dollac Pro baby formula from VND179,000 (US$9) for a 900 gram carton to VND184,370, and its Dollac full cream milk from VND121,800 to VND184,370.


Friesland Campina Vietnam’s 12-liter sterilized milk carton will cost VND258,000, while a box of 48 small fresh milk cartons will cost VND240,000.


Dutch Lady’s sweetened condensed milk will go up to VND21,000 per carton, and Dutch Lady drinking yogurt to VND3,500 – 5,500, depending on the flavor.


Some other milk producers have already hiked the prices of liquid and sweetened condensed milk.


The industry has blamed the price hikes on rising input costs and exchange rate fluctuations but distributors believe it is merely to boost this year’s revenues since announcing a hike will induce many of them to stock up at old prices.


Works started on wind-power plant in Ninh Thuan


Construction of the Trung Nam wind-power plant started Tuesday in the Thuan Bac District, central Ninh Thuan Province.


The 900-hectare plant, with a total investment of US$500 million, is expected to go into operation in 2012 and will have a capacity of 200MW.


According to a government survey, Vietnam's land mass covers some 17,400 square miles suitable for developing wind power projects. The two provinces of Ninh Thuan and Binh Thuan, in particular, show the greatest promise. Together they are projected to be capable of generating 800 megawatts.


Development of renewable energy, including wind and solar power, has been considered critical to Vietmam's continued growth as hydro- and thermo-power production face increased challenges.


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