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BUSINESS IN BRIEF 25/12   2010-12-25 - Viet Nam Net

Call to upgrade trade agencies


The country's trade promotion agencies should to train their staff intensively to ensure their activities are more effective, delegates told a meeting held in HCM City yesterday.


Do Thang Hai, head of the Viet Nam Trade Promotion Agency (Vietrade) – which held the meeting to take stock of this year's efforts and plan for next – said trade promotion agencies should have close links with Vietnamese trade attaches in foreign countries, especially for obtaining market information.


They should also co-operate with one another and improve the quality and effectiveness of trade information provided to businesses, he said.


Localities should focus on effectively implementing the National Trade Promotion Programme, he said. Besides, trade promotion should be linked with investment and tourism.


This year Vietrade organised more than 500 fairs in the country. It also organised 18 seminars and training courses in An Giang, Binh Phuoc and Ben Tre provinces and Can Tho and HCM City to apprise businesses about the Cambodian, African, Middle Eastern and European markets.


Vietnamese firms participated in 48 exhibitions abroad including the Brussels Seafood Exhibition in Belgium; Boston Seafood Exhibition and Magic Show in the US; Sial Exhibition in France; Dusseldorf International Shoe Exhibition; Food Industry International Exhibition in China; and Furniture Exhibition in Las Vegas.


The National Trade Promotion Programme helped more than 5,000 businesses sign 3,000 business deals and memorandums of understanding at fairs worth US$1.27 billion.


Vietrade's office in HCM City plans to organise more visits by business delegations in both directions next year.


Tran Minh Thang, head of Vieetrade's Export Development and Policy Department, spoke about the Prime Minister's Decision No 72 which will come into effect on January 1.


It had several new stipulations like the minimum number and size of booths at multi-sector exhibitions and the minimum number of participants, he explained.


Also at the meeting, the Ministry of Industry and Trade gave away certificates of merit to 15 trade promotion agencies in several provinces and cities for their outstanding performance.


Real estate prices too high for most


The prices of homes and apartments in Viet Nam are out of control and have skyrocketed beyond the reach of most buyers, says Viet Nam Construction Materials Association chairman Tran Van Huynh, who has warned that the current bubble could threaten the economy.


"As the cost of housing has increased, both low- and middle-income families are unable to buy their own home," said former deputy minister of construction Tong Van Nga. "Meanwhile, speculators have bought dozens of homes and apartments in order to resell them at higher prices, causing real estate prices to continue to increase."


In a time of tight credit and high interest rates, "too much money has been poured into the real estate market," agreed Huynh.


Outstanding mortgage loans from commercial banks totalled VND228 trillion (US$11.7 billion) as of October 31, an increase of 23.5 per cent compared to the same time last year, the State Bank of Viet Nam announced yesterday.


At the Viet Nam Business Forum held by the Viet Nam Chamber of Commerce and Industry and the World Bank at the beginning of the month, Luong Van Ly, a representative of the forum's land task force, suggested planning for each real estate development project should be more transparent in order to cut speculation.


Compensation paid for site clearance also needed to better approach market prices in order to enable families to afford new housing.


Nga proposed a more reasonable appraisal system and the construction of more low-and middle-income housing.


"Developers need to pay heeds to building homes at prices of VND600 million ($30,000) to VND1 billion ($50,000) for middle-and low-income households, as well as apartments for workers in industrial and processing zones," Nga said, also urging the construction of more rental housing.


Deputy Minister of Construction Nguyen Tran Nam suggested the establishment of a housing fund that requires all employees with or without their own homes to contribute 2 per cent of their monthly income to the fund, with contributions to be refunded when they retire.


"The fund would be used to finance loans for medium- and low-income families to purchase their own homes at low interest rates," Nam said.


Former deputy minister of natural resources and environment Dang Hung Vo also urged authorities to introduce a reasonable and equitable system of land-use fees which would encourage investors to put more capital into production rather than in real estate projects.


India makes it easier for Vietnamese exporters


India would do its utmost to create favourable conditions for Vietnamese businesses to export products to India, said the Indian Ambassador to Viet Nam Ranjit Rea.


During a seminar on opportunities for exports to the Indian market, held in Ha Noi on Thursday, the ambassador said India would provide Vietnamese exporters with free-of-charge pavilions at the first India-ASEAN Business Fair slated for March 2011.


Deputy Minister of Industry and Trade Nguyen Thanh Bien emphasised the importance of exchanging information on the two countries' trade policies and trade promotion activities in an attempt to foster bilateral trade.


Bien called on Indian investors to establish factories in Viet Nam to re-export products to India in a move to narrow the trade deficit between the two countries.


India has been one of Viet Nam's top 10 trade partners over recent years. Two-way trade reached US$2.3 billion in the first 11 months of the year; $863 million of which came from Vietnamese exports including steel, rubber, coal, computer components, machinery and chemicals.


Viet Nam's trade deficit with India decreased from $1.58 billion in 2008 to $657 million in the past 11 months.


New prices set for early rice exports


The Viet Nam Food Association has set new floor prices for export rice delivered in the first two months of next year.


In a statement posted on its website on Wednesday, the association said the export floor price of 5 per cent broken rice would come down by US$20 to $520 per tonne.


At the same time, the floor price for 25 per cent broken rice would rise $10 to $490 per tonne, the association said.


The new rates come into effect on Monday.


The association made the decision to decrease the floor price of 5 per cent broken rice in the face of weak exporter demand, with traders saying exporters had already bought what they needed for the Christmas and New Year period.


The latest price adjustments are the sixth in what has been a record year for rice exports in Viet Nam. By mid-December, the country had exported nearly 6.5 million tones, worth $2.78 billion.


Domestic firms had signed contracts to export roughly 7 million tonnes of rice in 2010, the association said.


The association also plans to export roughly 1.3 million tonnes of rice in the first quarter of 2011.


Late last month, the Food and Agriculture Organisation (FAO) forecast that global rice trade would drop by 2 per cent to 30.5 million tonnes next year because several major exporters, including Viet Nam, were expected to face supply constraints.


Electronics market hit by price rises, poor publicity


Sales of consumer electronics and household appliances in Ha Noi and HCM City have slowed despite heavy, and sometimes confusing, sales promotions by retailers.


Pham Quang Thinh, a shopper in HCM City, said he wanted to buy a 40-inch Samsung LCD TV advertised at an electronics centre for VND16 million (US$744), a discount of nearly VND4 million, but then he found the same offered on the website of a rival discount centre at VND14.99 million ($697).


A 32-inch LG LCD TV could also be found at competing retailers at prices up to VND400,000 apart.


Refrigerators imported from South Korea were being offered by one retailer at a discount of VND6.7 million ($311) each, but some consumers discovered that the sale price was equivalent to prices readily obtained at smaller retailers.


Disparity among retail prices was normal, said Nguyen Minh Thu, deputy director of Thien Hoa Electronics Centre, admitting that her centre's discount prices were sometimes equivalent to regular prices elsewhere. Some products in her centre were more expensive than those in other places, some much cheaper, she said.


Nguyen Hai Bang, head of marketing for Nguyen Kim Electronics, told Viet Nam News that customers who thought promotional campaigns from electronics centres were illusory should visit his centre and see for themselves.


Higher prices across-the-board for these prices may be the major factor scaring away shoppers. A recent market survey shows that prices of some LCD TVs have increased about 15 per cent since earlier this year.


A 32-inch LG LCD TV retailed at around VND7 million ($325) in February and now cost VND8 million ($372).


Nguyen Van Dao, deputy director of Samsung Vina Electronics Co, said that the prices of Samsung televisions rose by about 15 per cent this year – a figure lower than the increase in manufacturing costs.


A circuit board used in the assembly of the units, for instance, now cost his company 30 per cent more than it did last year. Volatility in the US dollar exchange rate had also increased the costs of imported electronics and parts, he said.


Bangladesh eyes cement imports from Viet Nam


Bangladesh has a huge requirement for cement and wants to import from Viet Nam, a visiting delegation from that country has said.


Mohammed Amirul Haque, director of Premier Cement Co, said since there was a construction boom in Bangladesh, the demand for cement and clinker was high, but domestic production met only 15 per cent of it. It imported 10-15 million tonnes of cement a year at a cost of US$500 million, and this was forecast to double in the next few years, he told Dau Tu (Vietnam Investment Review).


Fazle Azim, chairman of Hong Kong's Peakward Enterprises Co, which acted as a facilitator for the delegation, said the businesses represented on the trip accounted for 45-50 per cent of the country's total cement and clinker demand.


Vietnamese enterprises should take full advantage of this opportunity to increase their exports to this promising market, he said.


Azim said the visit was expected to open up co-operation opportunities in not only the cement sector but also other industries.


However, exporters to Bangladesh faced risks if they were not fully conversant with the payment methods.


Peakward Enterprises Co has been facilitating cement and clinker exports from Viet Nam. This year it enabled Hoang Phat Vissai Group to ship 1.2 million tonnes of clinker worth more than $40 million to Bangladesh.


It said next year it planned to continue acting as an export intermediary for Hoang Phat Vissai and some other businesses.


It had also promoted export of clinker by Hoang Phat Vissai to Japan and other Asian countries.


Cam Pha Cement Co is another client whom it helped export cement to the Middle East.


With the Vietnamese cement market expected to see bitter competition in the next few years when supply outstrips domestic demand, the Ministry of Construction wants businesses to strengthen exports.


But cement firms are not very familiar with exports, with only a few like Hoang Phat Vissai, Cam Pha Cement, Viet Nam Cement Industry Corporation and Ha Long Cement having exported in the past.


HCM City developers start looking North


Property developers in the south are turning to Ha Noi and northern provinces to find buyers.


HCM City-based Kien A Investment&Services Limited Co (Inveskia), which has launched the Imperia An Phu apartment complex in District 2 at a cost of more than US$120 million, is marketing it to customers and potential partners in the capital.


The project consists of 700 apartments priced at VND30 million to 41 million per square metre.


Kien A will ferry prospective buyers from the north to HCM City to see model units and the site.


It has tied up with Techcombank which will offer loans of up to 70 per cent of the value of an apartment.


Khang Gia Property Development and Investment Joint Stock Co unveiled on Wednesday three apartment complexes – Khang Gia Go Vap and Lucky Apartment in Tan Phu District, both in HCM City, and Nam Long residential area in Long An Province.


Analysts said northerners buy property in the south, especially units at resorts, as vacation homes or for investment.


Another reason is that property supply remains limited in the north whereas it is abundant in the south.


Developers would continue to woo northern investors in the future, they added.


Nguyen Dung Minh, sales director at Savills Viet Nam Real Estate Consulting Management Co, said expansion into the northern market was a positive sign for the Vietnamese property market. It was likely to spark off severe competition, he added.


Markets react with indifference to news of double-digit inflation


Stock indices barely registered a reaction yesterday to the announcement from the General Statistics Office that Viet Nam saw double-digit inflation of 11.75 per cent this year, with inflation in December alone of 1.98 per cent.


"It isn't a big news," said Nguyen Thi Thoa, an investor with VPBank Securities Co. "The double-digit inflation was forecast and the concerns over it reflected in previous corrections."


Thoa said that market sentiment was similar to the reaction to November inflation figures a month ago.


"But, on November 24, the VN-Index was at only 420 points and share prices fell further," she said. "Today, the Index remained above 470, which meant investors didn't have as many losses to cut or any negative motivation."


On the HCM City Stock Exchange yesterday, the VN-Index declined, but only by a modest 0.56 per cent to 472.76 points. The value of trades reached VND1.4 trillion (US$66.7 million) on a volume of 55.8 million shares.


ITC Investment and Real Estate Trading Co (ITC) was the most-active share, with 2.6 million traded, following the announcement by the Vietnam Azalea Fund that it would buy 2.9 million shares to increase its stake in ITC from 5.67 to 10 per cent.


Nguyen Thanh Tam, head of investment at a Ha Noi-based securities company, said the market had not seen any share dumping, yet the VN-Index had not broken a psychological barrier.


"This means local investors are neglecting stock investments," Tam said, noting as well the dropping trading volume over the past days.


Among leading shares, insurer Bao Viet Holdings (BVH) had the worst day, sinking by 4.44 per cent.


On the Ha Noi Stock Exchange, the HNX-Index closed essentially unchanged at 111.19 points. Volume remained modest with 30.9 million shares changing hands, worth a total of VND592.9 billion ($28.2 million).


Kim Long Securities Co (KLS) was the most-active stock, with 2.9 million traded, while Bao Viet Securities Co (BVS) had the most substantial decline of the day, losing 3.41 per cent of its value.


Foreign investors yesterday further slowed buys on the HCM City market, picking up only 1.1 million shares worth VND80.1 billion ($3.8 million). They turned net sellers in Ha Noi, selling off 89,500 shares worth a net of VND1.4 billion ($66,700).

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