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BUSINESS IN BRIEF 21/8   2008-08-21 - VNA

VN-Index tumbles on big sales

Huge sales pushed the VN-Index down on Aug. 20 with the index closing at 508.47 after sliding 2.06 points, or 0.6 percent, although market liquidity and trading value remained high.

Trading volume reached 32.38 million shares and fund certificates for a turnover of 1.2 trillion VND (72.7 million USD). The HCM Stock Exchange (HOSE) saw 49 winners and 100 losers at the end of the day.

Huge sales were seen on the day, with investors likely cashing in their profits after 10 straight days of increases leading up to August 19, and the daily trading band loosened for the domestic stock market on August 18.

Experts expected the move late last week, saying the expanded trading band, now 5 percent for HOSE and 7 percent for the Ha Noi bourse, would enable investors to reach expected profits.

Foreign investor transactions slowed on August 20, with more than 3 million shares bought and about 2 million units sold. The figures were 5.88 million and 2.67 million on Tuesday.

At the Hanoi Securities Trading Centre, the HASTC-Index slipped 2.73 points or 1.71 percent to end at 156.78. Trading volume fell by 18 percent to 13.95 million shares with a total value of 601.8 billion VND (36.47 million USD).

Asia Commercial Bank (ACB) continued to lead the market in terms of trading volume with around 2 million shares changing hands, followed by Kim Long Securities (KLS) with 1.35 million units.

Tien Phong Plastic (NTP), Petroleum Technical Services Corp (PVS) and Song Da No 10 Joint Stock Co (SDT) were also active with about 750,000 shares traded of each.

Vietnam Auto Show 2008 features hybrid cars

Vietnam Auto Show 2008, the biggest of its kind so far, opened in Hanoi on August 21 with hybrid cars on show for the first time.

It is also remarkable that the local supporting industry is well represented at the event, an encouraging sign of the industry’s growth.

World-renowned makers such as Honda, Toyota , Ford, GM Daewoo and Mercedes-Benz have brought to the event their environmental friendly and energy-saving models such as FTHS ( Toyota ) and B Concept (Ford).

Opening the five-day show, Deputy Minister of Industry and Trade Do Huu Hao said the Government and relevant ministries and sectors will continue to work out solutions and long-term strategies to facilitate the automobile industry’s development.

The show, entitled “A true dream”, jointly organised by the Vietnam Automobile Manufactures’ Association (VAMA) and the Asia Trade Fair and Business Promotion Joint Stock Company, is expected to receive around 120,000 visitors.

VAMA, a non-profit organisation, has 17 members, including 11 joint venture and foreign-invested firms. Making its debut in 2000, the association has made considerable contributions to Vietnam ’s automobile industry and created more than 65,000 jobs for local workers.

Medi-Pharm Expo 2008 opens in HCM City

Local companies join foreign businesses from 20 countries and territories to showcase their medical and pharmaceutical products at an exhibition that opened in Ho Chi Minh City on August 21.

The organisers of the Saigon Medi-Pharm Expo 2008 - the Vietnam Medical Products Import and Export Joint Stock Company and the Vietnam National Trade Fair and Advertising Company (Vinexad) – will hold symposiums on medical and pharmaceutical products and health care services during the four-day event.

Executives from exhibiting companies will be taken on fact-finding tours to a number of hospitals and drug companies in the city.

Engineering sector urged to increase int’l cooperation

A party politburo member has asked the engineering industry to increase technological transferring and international cooperation in personnel training and scientific research to boost its development.

Truong Tan Sang, who is also standing member of the Communist Party of Vietnam Central Committee’s Secretariat, made the request while working with the Vietnam Association of Mechanical Engineering (VAMI) in Hanoi on August 20.

He said manufacturing engineering should be the priority in the sector’s development strategy in order to rise above the “sub-contractor” status.

Shipbuilding, automobile and construction engineering businesses play an important role and take a big responsibility for the country’s industrial sector, Sang said.

The party politburo member also said in order to develop the industry, the government should perfect its policies on engineering and further its assistance to the sector, which is the core of the national industrialisation.

A report made by VAMI President, Nguyen Van Thu, showed that the industry has posted an annual growth of nearly 22 percent since 2001.

Export of engineering products earned more than 2 billion USD last year and the figure is estimated at 900 million USD in the first six months of this year.

However, local engineering businesses still mainly involve in subcontracting and command only 40 percent of the local market.

HAGL hires assets experts before listing

Hoang Anh Gia Lai Joint Stock Co (HAGL) has signed contracts with KPMG, CB Rechard Ellis and Ernst&Young in order to evaluate assets before its planned share listing in October.

Under the contracts, KPMG will assess HAGL’s assets in several fields, including rubber, hydro-electricity, mining and the company’s hotel business, while CB Rechard Ellis will assess HAGL’s 30 real estate projects across the nation and Ernst&Young will audit the accounts for the company

Chairman of HAGL, Doan Nguyen Duc, said that the company still had to carry out a comprehensive evaluation of assets after having changed from a private enterprise to a joint-stock company in June of 2006.

That has left HAGL with only an estimate of its total asset value, said Duc, who added that company assets are probably much higher than the old estimates. Now the new auditing contract will provide for a full evaluation.

A professional audit by international standard auditors will help HAGL’s managing board to control and improve managing and accounting systems and internal control.

Detailed, precise and reliable information is also needed to build investor confidence and gain strategic shareholders.

According to the plan, the asset valuation will be completed by the end of September, before the listing of shares on the Ho Chi Minh Stock Exchange in October.

Hoang Anh Gia Lai posted pre-tax profit of approximately 915.7 billion VND (55.5 million USD) during the first six months of this year, accounting for 36.6 percent of annual target, equivalent to 2.5 trillion VND (151.5 million USD).

The company targets an annual growth rate of between 30 and 50 percent from now until 2012, said Duc.

HAGL set an annual dividend payout ratio of 49 percent on July 20 for last year’s shares, meaning that investors will receive an additional 49 shares for every 100 shares they hold.

With more than 7,000 employees, the company is one of the nation’s largest private firms, operating in a range of fields including processing and exporting wood furniture, rubber and granite production as will as owning a football team bearing the company’s name.

Hoa Phat Group sees good growth

Hoa Phat Group made an after-tax profit of 986 billion VND (59.7 million USD) in the first seven months of this year, which is 34 percent more than its an annual target. The group also posted a gross revenue of 5.75 trillion VND (348.24 million USD) in the period, generating 75 percent of its annual target.

The group is completing work on the Hoa Phat complex, which is expected to start producing cast iron by the second quarter of 2009. The company hopes the complex will contribute 6.5 trillion VND to its total revenue

Rice exports reach nearly 2.86 million tonnes

Vietnam exported close to 2.86 million tonnes of rice by mid-August, earning 1.67 billion USD, according to the Vietnam Food Association (VFA).

Bumper crops in both the North and South promise a total yield of 37 million tonnes of paddy for the year, one million tonnes higher than 2007, which means the government may raise the yearly export target to 4.5 million tonnes.

Domestic businesses have signed contracts to export 3.5 million tonnes of rice in the first nine months of the year.

The VFA has instructed its member businesses to buy around 660,000 tonnes of rice in the Mekong River Delta and speed up the delivery of contracted rice.

According to the Ministry of Agriculture and Rural Development, rice is Vietnam’s fifth largest foreign currency earner, accounting for 20 percent of the total export turnover of the agro-forestry-seafood group.

Catfish firms get out of anti-dumping tax

The US Department of Commerce (DOC) has decided to exempt three Vietnamese tra catfish export and processing companies from anti-dumping tariffs.

The US department said there had been errors in calculating import duties on the three companies, according to the Vietnam Association of Seafood Exporters and Processors (VASEP).

The three companies are East Sea Seafoods Joint Venture Co Ltd (ESS), QVD Dong Thap Food Limited Company (QVD Food Co) and Anvifish Co Ltd.

The DOC asked Anvifish Co Ltd to pay a 31.68 percent tariff at the beginning of this year. However, after the company proved that DOC had made errors in calculating the tax, the DOC decided to exempt the company from tariffs.

In its official document, the DOC admitted its mistakes in calculating import duties after Anvifish Co Ltd petitioned Vietnam ’s Ministry of Industry and Trade.

DOC has also asked QVD Food Co to pay a 14.59 percent tariff, but the company was exempted from paying anti-dumping taxes after DOC said it did not have conclusive proof of anti-dumping activities.

4 bln USD petrochemical complex to be built soon

Construction of the southern petrochemical complex at the Long Son Oil and Gas Industrial Zone in southern Ba Ria-Vung Tau province will start on September 25.

According to the Vietnam National Oil and Gas Group (PVN), the Prime Minister has given the greenlight to the project’s ground-breaking and other work.

The project, estimated to cost almost 4 billion USD, will be capable of turning out 3 million tonnes of products a year. It will be the largest of its kind in the country.

It is a joint venture of PVN, Vietnam National Chemical Corporation, Vina SCG Chemicals, and the Thai Plastic and Chemicals.

The complex is expected to operational in late 2012 to supply petrochemical products including HDPE, LDPE, PE, PP and PVC to the Vietnamese market, meeting about 65 percent of the country’s demands for PE and PP in 2017 and ensuring the input materials for the petrochemical industry.

PVN also said that the project will create about 10,000 jobs.

Japan talks public-private partnership experiences

A seminar took place in Hanoi on August 20 to provide Vietnam with Japanese experiences in boosting public-private partnership (PPP) in infrastructure development.

The event, co-hosted by the Ministry of Planning and Investment and the Japan International Cooperation Agency (JICA), heard various reports on Japan’s experiences in financing PPP projects and applying this model to the development of the power industry.

Addressing the seminar, Deputy Minister of Planning and Investment Nguyen Bich Dat said Vietnam’s policy is to mobilise all resources from the non-state sector to contribute to developing infrastructure and other areas.

“We are well aware that poor infrastructure is not only a hindrance to national development but also a factor lowering the investment environment’s attraction and competitiveness,” Dat said.

The deputy minister also spoke highly of Japan’s reports and described them as useful experiences and important suggestions for Vietnam during its process of designing policies on applying the PPP model in the country.

Hue eyes air connection with to Japan

The authorities of central Thua Thien-Hue province and Japan’s Shizuoka city have met in Hue city to discuss a plan to open flights connecting the two cities.

They hope to conduct the first flight from Hue city’s Phu Bai International Airport to Shizuoka city on the occasion of the inauguration of Shizuoka’s Fujisan ( Fuji Mountain ) International Airport in early March 2009.

Regular flights connecting two cities are expected to attract more Japanese tourists to Hue city and vice versa, as well as facilitate the travel of overseas Vietnamese students and the two countries’ businessmen.

The cooperation in opening the new air route is part of the two cities’ cooperation programme signed in April 2005, which has been also extended to various fields, particularly urban and environmental management, and cultural exchange.

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