31 Aug 2012 Intellasia Finance Vietnam - Hong Kong Business ...

finance & business news 

FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

GDP growth to accelerate in H2 2 

CPI to rise about 0.199pct on higher fuel prices 3 

Banking industry on an even keel 3 

Vietnam attends Apec finance ministers' meeting 3 

Banks re-ignite interest war 4 

Bad Debt in Real Estate 4 

Mounting bad debts hinder lending 6 

SBV continues net withdrawal of nearly 3.6 tr dong on OMO 6 

TEXT-S&P summary: Bank for Investment and Development 

of Vietnam 7 

Foreign currency credit falls in city 7 

Bank aims to save seafood company 8 

Loans for Livestock Husbandry, Pork, Poultry and Catfish Processing 8 

Deposit rate edges up 9 

HDBank raises 1-year term interest rate to 12pct/yr 9 

Gold demand remains strong 9 

More 20,000 SJC gold taels supplied to market 10 

Aug 31: Vietnam Central Bank Sets Dollar Unchanged At 

20,828 dong; Bank Rates Edge Up 10 

Vietnam, Russia strengthen finance cooperation 10 

Social insurance conundrum 10 

FDI firms enjoy a trade surplus of $7b in Jan-Aug 11 

Deputy PM pledges best conditions for Swiss businesses 12 

US Trade Representative due to visit Vietnam 12 

Inventory still high 13 

More than 6,100 companies formed in Aug 13 

Two items to join export turnover club of billion US dollars 14 

Exporters face tough China competition for US dollars 14 

Vietnam, Pakistan target $500m trade 15 

Canada supports Vietnam in skills training 15 

HCM City labour market still suffer from drawbacks 16 

Vietnam's Stocks Rise After Valuations Slump to Three-Month Low 16 

Foreign institutions believe Vietnamese stocks cheap and attractive 17 

Demand for trademark franchise, buying and selling 

expanding rapidly 18 

Ministries make businesses feel dizzy with unstable 

automobile policies 19 

Equipment manufacturers lose out 20 

Vietnamese companies lack strategy for exports to US 20 

Businesses Ask For Delay On Salary Increases 21 

Seminar helps firms improve management 22 

Dairies battle for market share 22 

Foreign fast food giants run a race in Vietnam 23 

Hanoi To Put 10pct Tax On Abandoned Villas 24 

BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 

Business Briefs August 31 25 

Blue chips lead modest market revival 26 

Aug 30: Vietnam Stocks Extend Gain On Improving Sentiment 26 

NANCE 

Intellasia 

No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi 

© All Rights Reserved 

31 August 2012 

Aug 30: Foreigners Continue to Net Buy on Both Bourses 27 

Aug 30: UPCoM-Index Bucks Trend to Close Down 27 

BMP to pay 30pct dividend 28 

DPR to contribute 12b dong in Harutour 28 

HPG: VCSC Recommends to BUY HPG on Valuation 28 

GIL's consolidated profit decreased by 46pct in H1/2012 29 

VICEM to buy 130,000 tonnes of coal from Vinacomin 29 

Over 70pct of Hanoi enterprises posts losses 30 

NKG earns over 3b dong profit in 6 months 30 

VNM posts 15.648tr dong of revenue in 7 months 30 

Motorcycle import jumps in Aug 30 

Vietnam's fertiliser import from China increases 31 

200,000 tonnes of sugar in stock 31 

Vietnam's Trung Nguyen Eyes Bigger Expansion 31 

5tr dong for seven water projects 32 

Different promotions sought to woo buyers 32 

DCS: Posts 1.1b dong Reviewed Consolidated Net Loss In 

H1/2012 33 

VNT: Explains 15.2b dong Reviewed Consolidated Net Profit 

in H1/2012, Up 45pct YoY 33 

SAM: Swings to 100b dong Consolidated Net Profit in Q2/2012 33 

Vietnam sees strong growth in tourist arrivals from Russia 33 

Vietnamese aviation - chances and competition 34 

Rising costs menace tra fish farming 34 

Shipping fees to increase despite low demands 35 

Enterprises in Danang lukewarm to banks' capital offer 35 

Belgian chocolatier names distributor 36 

Vietnam to be the world's third largest rice exporter 36 

Chinese grapes, potatoes come under strict scrutiny 37 

Coffee exports face tough challenges 37 

Cement plant's feet caught in stone 38 

Cashew paradox: farmers cut trees, firms increase imports 39 

HCM City Pilots Crocodile Breeding Programme For Leather 40 

Company licensed to planttrees in Laos 40 

Tra fish exports likely to rise in third quarter 40 

Vietnam's PV Oil Seeks Gasoline Cargoes for Sep Delivery 41 

Work starts on final bridge of Ho Chi Minh Road 41 

Thousands Of Containers Stuck At Mong Cai Border Gate 41 

Vinpearl granted parts of Nha Trang Bay for tourism investment 42 

Work on Nhat Le 2 Bridge starts 42 

Million dollar homes still up for sale 42 

Ministry Tightens Supervision on Property Market 43 

Mini-marts sprout up in HCM City 43 

Vietnam spends more on IT 44 

VNPT told to redo restructuring plan this year 45 

HCM City hosts Consumer Digital World Expo 2012 45 

Downturn shrinks ICT event 45 

Number of internet subscribers remains stagnant in 4 months 46 

FPT adjusts business plans for this year 46 

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FINANCE 

Vietnam finance & business 31 August 2012 

FINANCE 

GDP growth to 

accelerate in H2 

31/AUG/20122 INTELLASIA | DAU TU 

Inching up trend of the economy is continuing to be recognised. The figures from general 

Statistical Office (GSO) showed that the index of industrial production (IIP) in August 

2012 rose 4.1 percent from July and surged 4.4 percent over the same period last 

year. 

Totally, in Jan-Aug, IIP posted a rise of 4.7 percent on year, 0.1 percent lower than the 

rise of 4.8 percent in the first seven months of this year. 

According to specialists, these figures showed industrial production, which has big 

contribution to general economic growth, is on the rebound but it is still a relatively 

weak. 

The most difficult phase of the economy has been over, the gradual recovery of the 

economy has been mentioned by local and foreign economic experts in recent time. To 

offer more proof, perhaps, in the first seven months of this year, according to figures 

from the general Department of Taxation, nearly 1,000 businesses resuming operations 

mainly non-state enterprises can be considered a fairly typical example. 

With this recovery, although still remaining weak, it is forecast that Vietnam's GDP 

growth in the third quarter of this year would reach 5.53 percent. 

In a forecast released not long ago, both HSBC and ANZ have made the same prediction 

that Vietnam's GDP growth will be faster in the second half of this year when the 

moves of loosening monetary and fiscal policies are made. 

According to ANZ, the government's move to give a subsidy package of approximately 

29 trillion dong, while enhancing the capital disbursement for development investment, 

will help GDP growth in Q3 reach above 5 percent, and in Q4, even up to over 6 

percent. "As a result, GDP growth for the whole year will be around 5.5 percent," 

ANZ's experts predicted. 

If real GDP growth reaches 5.53 percent in Q3, the GDP growth in the first nine months 

of this year would be about 4.8 percent. This growth is quite low compared with the 

growth of 5.76 percent in the first nine months in 2011; 6.54 percent for the first nine 

months in 2010 and 6.52 percent in the first three quarters of 2008. However, it is still 

higher than the growth of 4.62 percent in Jan-Sep of 2009 - the year of economic recession 

and also the year of the economy changes quite similar to 2012. In 2009, GDP 

growth in Q1 and Q2 was 3.1 percent and 4.5 percent respectively. This year, in Q1 and 

Q2, GDP growth was 4 percent and 4.66 percent. Looking at the quarterly GDP growth 

rate, it is clear to see the "inching up" of the economy, which is falling into the stagnation 

situation since the beginning of this year so far. 

As forecasted by the Ministry of Planning and Investment, in Q4, GDP growth could 

reach 6 percent and it would be about 5.3 - 5.6 percent for the whole year. In a meeting 

with leaders of Hanoi People's Committee about two weeks ago, the minister of Planning 

and Investment, Bui Quang Vinh, also emphasized this. According to the minister, 

this year's GDP growth will not be able to achieve the goal (6 - 6.5 percent). 

Meanwhile, according to the prediction of a group of economic experts, economic 

growth from now till the end of this year depends largely on investment, including 

public investment, FDI capital and credit growth. While public investment and FDI 

capital are relatively stable and easy to predict, credit growth could not be determined 

reliably. 

The fact showed that despite certain changes, interest rates have fallen, both monetary 

and fiscal policies have been loosened, production and business activities of enterprise 

systems still face many difficulties. In such context, credit growth is still quite sluggish 

and it can only reach about six percent for the whole year. Meanwhile, social investments, 

despite being faster, even the government has approved to advances 30 trillion 

dong of the capital plan in 2012, still do not really have the positive changes and clarity. 

When the "nutrient" to feed the economy grows slowly, the economy does not expect 

a strong recovery. 

Intellasia 31 August 2012 2 / 46

FINANCE 


CPI to rise about 

0.199pct on higher fuel 

prices 

Banking industry on 

an even keel 

Vietnam attends Apec 

finance ministers' 

meeting 

31/AUG/2012 INTELLASIA | VOV 

Head of Price Management Department (Ministry of Finance-MoF) has said that the 

latest low adjustment of fuel prices will not affect CPI (consumer price index) significantly. 

Particularly, without strict control on the prices of other products, the gasoline price 

hike on August 28, according to specialists, although the rise was curbed, will likely 

have negative impacts on the macro economy and inflation control target. 

As confirmed by MoF, when allowing fuel wholesalers to increase the price at no higher 

than 700 dong/litre, or only about 50 percent against the actual difference between 

the basic price and the current selling price (by the time before 6:00 pm August 28), the 

state management agency had considered carefully the impacts of fuel price hike on 

CPI. 

Nguyen Tien Thoa, head of Price Management Department (under MoF), said that this 

adjustment of gasoline price up by 650 dong/litre was equal to the rise of only 1.713 

percent. The price hike on other oil was at low level. Therefore, the impact of gasoline 

price on CPI in this adjustment will be not higher. 

Thoa also confirmed if fixing other factors and other items to calculate the impact of 

fuel prices on CPI due to this adjustment, CPI would rise about 0.199 percent. 


The domestic monetary market has become rather stable after several CEOs of local 

banks and a financial tycoon were arrested due to alleged illegal activities. 

On August 20, Nguyen Duc kien, one of the founders of the Asia Commercial Joint 

Stock Bank (ACB), and also one of the richest tycoons in Vietnam's banking industry, 

was arrested for conducting alleged" illegal business". 

Three days after, the police also detained ACB chief executive Ly Xuan Hai on suspicion 

of "deliberately acting against state regulations on economic management". 

These events have sent shock waves through the country's financial market and many 

customers to the extent that they rushed to get their money out of ACB. 

Fearing that the public lack of confidence could spread beyond ACB, Vietnam's central 

bank pumped more than $1 billion to ensure the stability of the local banking sector. 

Speaking about these events with the media on August 25, the central banks' Governor 

Nguyen Van Binh said that a huge amount of money was withdrawn from the ACB on 

August 21, 22 and 23 but it dropped significantly on August 25. 

He said that activities of the ACB and the banking sector have returned to normal. 

The governor affirmed that the central bank has taken sufficient measures to ensure 

stable operations of the banking sector and the ACB. From August 21-27, total deposits 

at the bank reached VND33.44 trillion (US$1.59 billion), including more than VND5 

trillion (US$238 million) redeposited. 

Transactions at the bank have returned to normal, according to Nguyen Thanh Toai, 

the bank's deputy director. 

By the end of August, there had been wide fluctuations in the price of gold and exchange 

rate between the dong and the US dollar in the domestic market. 

Independent market watchdogs said the gold market became hot over the last week 

with the gold price jumping to VND44.7 million per tael on August 23 from VND42.6 

million in March, while the global price remained stable. 

The exchange rate between the dong and US dollar also climbed to over VND21,000 

per dollar on August 27, up by over VND100 compared with August 23. 

http://www.saigonmoney.com/2012/08/30/banking-industry-on-an-even-keel/ 


Deputy Finance minister Truong Chi Trung attended the 19th Apec Finance ministers' 

Meeting and related meetings in Moscow on August 28-30. 

Vietnam shared its macro-economic issues and concerns over regional issues and discussed 

the meeting's joint statement. 

On the sidelines of the event, Trung had a bilateral working session with his Russian 


FINANCE 


Banks re-ignite 

interest war 

Bad Debt in Real 

Estate 

counterpart Sergei Storchak, reviewing each country's macro-economic situation and 

international and regional issues of common concern. 

They signed a memorandum of understanding on enhancement of cooperation between 

the two finance ministries. 

The 19th Apec Finance ministers' Meeting was the most important event in the cooperation 

process of Apec finance ministers to prepare for the Apec Summit, scheduled 

for September 2 in Vladivostock city, Russia. 

The 20th meeting will convene in Bali, Indonesia, in September 2013. 

http://english.vovnews.vn/Home/Vietnam-attends-Apec-finance-ministers-meeting/ 

20128/141602.vov 

31/AUG/2012 INTELLASIA | VNS 

Commercial banks are vying with each other to lend at low interest rates as they 

scramble to achieve their credit growth targets for the year. 

According to State Bank of Vietnam statistics collated from 20 lenders' reports, several 

banks have offered to provide loans totally worth VND80 trillion (US$3.84 billion) and 

$1.1 billion in at 7-14 per cent interest. 

Maritime Bank's rates are among the lowest. 

In August it officially launched import finance product MFloat with a credit line of 

VND5 trillion at a fixed interest rate of 7-9 per cent. 

The fixed interest rate has to be paid every month while an additional interest rate has 

to be paid at the time of borrowing or closing a loan. 

Vietcombank said it has offered seven credit packages worth a combined VND31.5 trillion 

and $1 billion at 10-15 per cent for companies in all sectors. 

It has also lent at 10-13 per cent for agriculture and rural, export, and support industries. 

Agribank has earmarked VND37.68 trillion at a maximum of 13 per cent for short-term 

loans and 15 per cent for long - and medium-term loans for agricultural and rural companies. 

It has also designated VND10 trillion for export activities. 

Despite not having plentiful funds like the major banks, small banks too have unveiled 

credit products targeting customers'needs. 

ABBank, for instance, is offering VND1 trillion at 12 per cent or more. 

From September, SeABank will offer a preferential credit package worth VND600 billion 

for businesses in rice farming, processing, and export at 2 per cent below normal 

short-term rates. 

In December, it will offer six-month preferential loans worth VND1 trillion to businesses 

in the coffee and seafood sectors at 1 per cent below short-term rates. 

Ocean Bank has earmarked VND500 billion for three industries - electrical and electronic 

equipment, telephones; residential services, tourism; and health care. 

They will carry a mere 6.8 per cent interest. 

Independent economists appreciated the banks' efforts to cut lending interest rates, 

saying the move harmonised the benefits of both lenders and borrowers. 

The banking industry's credit growth rate of nearly 2 per cent in the last eight months 

has been far lower than in past years. Analysts point to this as one the reasons for the 

country's sluggish economic growth. 

http://vietnamnews.vnagency.com.vn/Economy/229502/banks-re-ignite-interestwar.html 

31/AUG/2012 INTELLASIA | VCCI 

Real estate market is considered a thermometer of national economy because the recession 

or recovery of national economy is mirrored in real estate market with a certain 

lag. 

According to a report released by the Ministry of Construction, the real estate market 

faced difficulty in the first six months of 2012; house prices dropped in all market segments; 

deals steeply plunged. Even, many projects had no deals at all. Therefore, it 


FINANCE 


holds no surprise that real estate loans (together with bad debt in securities industry) 

account for the largest proportions in total bad debts of credit institutions in Vietnam. 

Avoiding groundless optimism 

Investments in real estate development and cement production projects and other 

non-core businesses have caused giant State-owned enterprises (SOEs) and popular 

private firms to hold above half of bad debts in the banking system. Credit institutions 

stopped funding the real estate market. The burst of real estate bubble has panicked 

investors although none wants to mention it. 

Bad real estate debts include debts of investors to construction contractors; debts of investors 

to credit institutions; and land-related loans of investors (land rents, site clearance 

compensations, etc). 

Another source of debts comes from deposits and advances from homebuyers. However, 

investors do not have houses to hand to buyers. 

Bad property debts come from both subjective and objective reasons. Objectively, economic 

slowdown and other risks drag on property demand. And, subjective causes decide 

the severity of bad debts. In particular, risk management capabilities, especially 

monetary risk management of both lenders and borrowers play very important roles. 

In fact, many real estate companies (and not only they) know little about business risk 

management, even have very poor knowledge of market and investment project establishment, 

and disregard target market research. What they care is eventual ideal results: 

Multiple profits on investment. 

Another reason is groundless optimistic forecast by specialists and authorities, aiming 

to sooth the public. This lingers property investors to use timely solutions to deal with 

bad debts. 

Only enterprises that are alive can repay debts 

Credit institutions deal with bad property debts in two ways: (1) immediately cash recovery; 

and (2) future cash recovery. 

The first method has six ways to deal with security assets: Compulsory sale, package 

sale, general sale, inclusion of all debts, leasing and legal actions. 

The future cash recovery is expected to have two ways to handle debts: Convert debts 

into shares; and convert bad debts into securities. 

I think that our country can apply these methods now except securitisation because 

our stock market is too young. 

However, these methods are deployed at the last resort. As only living businesses can 

repay debts, lenders should sit down with indebted companies to discuss solutions. 

If they have good incomplete projects like building affordable houses or offices for 

lease, banks should fund them to complete those projects. 

If borrowers find buyers for their ongoing projects and change purposes of those 

projects like hospitals or schools, banks (and authorities) should facilitate them to finalise 

the deals if they do not cause any problems to master planning. 

Debt freezing, debt rescheduling and rate cut should also be taken into consideration 

if borrowers can thereby increase the capacity of repayment. 

They can sell projects to other investors or cancel suspended projects. 

Some bankers used to say that they would rather let capital be idle rather than lend real 

estate companies. In reality, not all the property market of Vietnam is frozen. Some 

projects are stilling making a profit in this tough time. So, why did they discontinue 

financing? Real estate businesses are important customers of banks and they are not 

deserved to be dropped. Banks should have had risk management plans for your businesses, 

not behaved like that. 

Apart from reducing prices, changing usage purposes to sellable segments and cutting 

expenses to deal with bad debts, real estate businesses also need to seek out other creative 

solutions like accepting instalment payments. These will ease pressures for customers, 

banks and themselves. 

Finally, real estate enterprises must undergo restructuring. 

A majority of real estate companies have small operating scale, with registered capital 

of less than VND10 billion (less than VND500,000), they are not strong enough to deal 


FINANCE 


Mounting bad debts 

hinder lending 

SBV continues net 

withdrawal of nearly 

3.6 tr dong on OMO 

with risks. Hence, they should amalgamate to form a stronger entity to withstand 

risks. 

Small businesses should not, and cannot, be allowed to develop and operate real estate 

but they should be allowed to buy and sell real estate. Transferring capital into Real 

Estate Investment Trust (REIT) is the best way. The government should allow HCM 

City and Hanoi to pilot this approach. Property associations there will stand out to mobilise 

capital. We can learn this method from Singapore or other countries. 

Normally, the government does not intervene into the market. But, current alarming 

bad debts of the banking system and enterprises are causing bad impacts on economic 

growth; the State Bank of Vietnam and other authorities start seeking appropriate instruments 

and measures to boost up business environment. This is much-expected and 

applauded move to ensure healthy development of involved industries and the economy. 

(By Dr Pham Sy Liem -Vice Chair, Vietnam Federation of Civil Engineering Associations 

) 

http://stoxplus.com/News/89599/1/186/bad-debt-in-real-estate.stox 

31/AUG/2012 INTELLASIA | THOI BAO KINH TE VIETNAM 

After five months of interest rate adjustment, credit growth saw a slight increase in 

May and picked up 1.02pct in July against the end of 2011. 

Assumingly, mounting bad debts among commercial banks have hindered further 

lending. Given the bad debt ratio of 3.2pct in late 2011 and the total outstanding loan 

of 2.63 million dong, the available credit would be 2.55 million billion dong. Yet, as the 

bad debt ratio jumped to 8.6pct by the end of March 2012 as released by the central 

bank, the remaining amount would fall to 2.41 million billion dong. 

"The central bank has made every effort to speed up credit growth. What is necessary 

for the time being is other supporting macro policies so as to trigger demand", said 

Nguyen Duc Huong, vice Chair of LienVietPostBank's Board of directors. 

He highly appraised the central bank's drastic efforts to strengthen the system's liquidity 

as well as to adjust interest rates for five times and to lower interest rates for existing 

loans to below 15pct. 

Recently at the National Assembly's question and answer session, SBV Governor 

Nguyen Van Binh urged for prudence in additional interest rate reduction citing the 

long-term goal of inflation mitigation and macroeconomic stabilisation. Unappealing 

dong interest rates are likely to weaken recently recovered position of the domestic 

currency. Depositors would then head for gold and foreign currencies, worsening the 

dollarisation. 

Therefore, for credit to expand further, bankers look forward to the interference of other 

macro policies particularly concerning public investment. 

China was cited as an example of concentrating on public investment and infrastructure 

construction in an attempt to make most of excessive cement, steel and bricks as 

a result of the crisis. As such, the property market could partly recover and labourers' 

income was improved, thus enhancing consumption. 

Therefore, the urgent task would be to boost public investment together with appropriate 

monetary policy. Nonetheless, credit demand may unnecessarily soar in one 

day or two due to extreme caution after the recent difficulties. Therefore, credit growth 

of 10pct would be an achievement which requires the proper combination of relevant 

policies, said Huong. 

31/AUG/2012 INTELLASIA | SBV 

On August 30, the State Bank of Vietnam (SBV) pumped 105 billion dong on open market 

operations (OMO) for 7-day term at the interest rate of 8 percent per annum (p.a.), 

according to the data from Bloomberg and the central bank. 

This is the lowest injection since August 21 when the banking tycoon, Nguyen Duc 

Kien, the founder of Asia Commercial Bank (ACB), was arrested. 

Since early this week so far, the central bank has pumped 32.829 trillion dong on OMO. 


FINANCE 


TEXT-S&P summary: 

Bank for Investment 

and Development of 

Vietnam 

Foreign currency 

credit falls in city 

Besides, on August 30, a loan worth 3.683 trillion dong on OMO pumped by the central 

bank on August 23 to support liquidity for commercial bank also fell due. 

Thus, the central bank continued a net withdrawal of 3.587 trillion dong on OMO after 

a net withdrawal of 12.196 trillion dong in two days earlier. 

Liquidity of banks has been stable again, therefore the interbank interest rate also 

dropped strongly. On August 30, the overnight interest rate was only 3.63 percent p.a., 

down 0.87 percent p.a. from a day earlier, one week at 4.19 percent p.a. and one month 

at 7.25 percent p.a., the lowest level in the past 10 days. 

31/AUG/2012 INTELLASIA | REUTERS 

(The following statement was released by the rating agency) 

Summary analysis - Bank for Investment and Development of Vietnam 30-Aug-2012 

CREDIT RATING: B+/Stable/B Country: Vietnam 

Primary SIC: Commercial Banks 

Credit Rating History: 

Local currency Foreign currency 

08-Dec-2011 B+/B B+/B 

23-Dec-2010 BB-/B BB-/B 

22-Jul-2010 BB/B BB/B 

Ratings Score Snapshot 

Issuer Credit Rating B+/Stable/B 

SACP b 

Anchor b 

Business Position Strong (+1) 

Capital and Earnings Very Weak (-1) 

Risk Position Adequate (0) 

Funding and Liquidity Average 

and Adequate (0) 

Support +1 

GRE Support 0 

Group Support 0 

Sovereign Support +1 

Additional Factors 0 

Outlook 

The stable outlook reflects our expectation that BIDV will maintain its financial profile 

amid challenging operating conditions in Vietnam and improve its risk management 

systems. 

We could downgrade BIDV if: (1) we lower the sovereign rating on Vietnam ; (2) the 

bank's asset quality declines substantially; or (3) its RAC ratio falls below 2 percent. 

We could upgrade BIDV if we raise the sovereign rating on Vietnam and the bank's 

stand-alone credit profile improves. Any large capital raising activity, including a strategic 

sale of a stake in BIDV, such that the bank's RAC ratio increases to above 3 percent, 

could improve its stand-alone credit profile to 'b+'. 

http://www.reuters.com/article/2012/08/30/idUSWLA253720120830 

31/AUG/2012 INTELLASIA | SAIGON TIMES DAILY 

Whilst dong credit in HCM City by end-July grew 2.11 percent from late 2011, foreign 

currency credit dwindled by 4.24 percent, according to the data of the central bank's 

branch in HCM City. 

As of end-May, dong outstanding loans in HCM City dipped 0.72 percent against the 

end of 2011, while loans in foreign currency inched up 1 percent. However, foreign 

currency credit began to fall in June, when dong deposit rate ceiling was lowered to 

below 9 percent per year. 

Nguyen Hoang Minh, deputy director of the central bank's HCM City branch, said it 

was normal that the demand for US dollar slowed down in the last two months, as the 

gap between dong and dollar lending rates was narrowed. 


FINANCE 


Bank aims to save 

seafood company 

Loans for Livestock 

Husbandry, Pork, 

Poultry and Catfish 

Processing 

At present, dong lending rates are fluctuating around 12 percent, versus dollar lending 

rates at some 6 percent per annum. Meanwhile, in late last year, dollar lending rates 

were only 7-8 percent, whereas dong lending rates hovered around 19 percent. 

Minh expected this would reduce the pressure on foreign exchange rate in the last 

months of the year. In the previous years, foreign currency credit always stayed high 

towards the year's end, forcing enterprises to buy dollars to pay mature debts, exerting 

pressure on foreign currency supply-demand in the local market. 

On the other hand, the unofficial dollar market is shrinking, with only a few unauthorised 

transactions detected. Most of the cases of violations discovered in the year to date 

are unauthorised foreign currency quotation. 

This suggests the demand for foreign currency is not high, thus the unofficial market 

remains dull, said Minh. 

A banker said foreign currency credit at his bank had picked up in the last three 

months, albeit little in comparison with dong credit growth. As foreign currency demand 

stays low, while supply is ample, there is little chance of foreign exchange rate 

volatility in the final months, he added. 

Therefore, he forecast foreign exchange rate would remain stable from now to end of 

the year, and would likely fluctuate less than 2 percent. 

http://english.thesaigontimes.vn/Home/business/infrastructure/25327/ 


The Sai Gon - Hanoi Bank (SHB) says it will move to restructure the debt-ridden Bianfishco 

firm in a bid to save the seafood processor. 

SHB recently acquired a 50 per cent in Bianfishco. 

"Bianfishco's debt was previously owed to Habubank, and we have to take charge of 

this after the merger," said SHB general director Nguyen Van Le. 

SHB chair Do Quang Hien said Bianfishco was in a good position to overcome its current 

challenges. 

"Bianfishco is among a few companies in the fisheries sector licensed for direct exports 

to the US market with an export tax rate of 0 per cent," Hien told the Vietnam Investment 

Review. 

During a period of stable operation, Bianfishco earned an average revenue of $100 million 

per year. Its troubles last year and current losses are estimated at VND600 billion 

($28.5 million). 

The restructuring will be conducted by both SHB and the Ministry of Finance's Debt 

and Asset Trading Corp. 

Sources from SHB said other banks had agreed to reschedule Bianfishco's debts. The 

Bank for Investment and Development of Vietnam and Vietnam Development Bank 

will negotiate to convert the debt into stakes as Bianfishco increases its charter capital. 

The seafood processor expects to increase capital to VND1.2 trillion ($57.1 million) 

from VND500 billion ($23.8 million) when business operations become stable. 

SHB has moved fast to restructure Bianfishco, as its merger with Habubank has only 

recently been completed. 

Doubts have been raised over whether the bank wanted to take-over Bianfishco. However, 

Le said the rumours were not true. 

http://vietnamnews.vnagency.com.vn/Economy/229530/bank-aims-to-save-seafoodcompany.html 


The State Bank of Vietnam (SBV) recently issued Document No. 5294/NHNN-TD on 

loans for livestock husbandry, pork, poultry and catfish processing. 

Accordingly, the SBV asked the chairs of Board of directors, the chairs of the Board of 

Members and general directors of the Vietnam Bank for Agriculture and Rural Development 

(Agribank), the Bank for Investment and Development of Vietnam (BIDV), Vietnam 

Bank for Industry and Trade (Vietinbank), the Bank for Foreign Trade of 

Vietnam (Vietcombank), and Mekong Housing Development Bank (MHB) to instruct 


FINANCE 


loans for households, farms, cooperatives and enterprises to develop husbandry, 

slaughter livestock, process pork and fowls, culture tra catfish, and process tra catfish 

for export. 

The banks were told to review and reassess existing loans as of August 15, 2012, reduce 

interest rates for eligible existing loans, and extend payment maturity up to 24 months 

for troubled customers. Banks must continue providing loans for customers with feasible 

production and business plans with an interest rate of no more than 11 percent 

per annum. 

The central bank pledged to provide assistance for the State-owned commercial lenders 

in case they face troubles in this business. 

http://stoxplus.com/News/89601/1/186/loans-for-livestock-husbandry-pork-poultryand-catfish-processing.stox 

Deposit rate edges up 31/AUG/2012 INTELLASIA | TUOI TRE 

Since the end of August 2012, the deposit interest rate at some small banks showed 

signs of edging up with an additional increase of by 0.5-1 percent per year from early 

August, according to the local newswire Tuoi Tre (Youth). 

A depositor in HCM City said that she was given an additional saving interest rate of 

0.5 percent to 12.5 percent per year for her saving at a HCM City's district 5-headquartered 

bank's branch. 

Of which, the difference of 3.5 percent will be paid directly in cash for customers when 

the saving falls due. 

Some other banks have launched long-term deposit programmes with the interest rate 

of 12 percent per year but depositors will be allowed to make premature cash withdrawals 

freely. When making premature withdrawals, customers just sign borrowing 

contract at the bank and the loan term will be equal to the remaining term on the saving 

book and the lending interest rate will be equal to the saving interest rate of the 

bank. 

HDBank raises 1-year 

term interest rate to 

12pct/yr 

Gold demand remains 

strong 

31/AUG/2012 INTELLASIA | DAU TU CHUNG KHOAN PAGE 26 

HCM City Development Commercial Joint Stock Bank (HDBank) has recently 

launched a saving product at the interest rate of 12 percent per year with a deposit 

worth from 500,000 dong onwards for terms of from 3-36 months. 

The interest will be paid flexibly monthly or quarterly depending on customers' options 

when making deposits. 

Particularly, for 12-month term, the bank has applied a saving interest rate of 12 percent 

per year. 


Although gold prices saw no strong fluctuations, demands for the precious metal kept 

rising in the country on Wednesday, again widening the gap between global and local 

gold prices. 

Saigon Jewellery Company (SJC) sold up to 6,000 gold taels on Wednesday. According 

to Nguyen Cong Tuong, deputy sales manager of SJC, daily selling volume of the company 

has been around 5,000 gold taels since August 20. 

SJC has recently processed 48,000 gold taels but the information failed to ease gold demands, 

Tuong said. 

SJC has seen large transactions of up to hundreds of gold taels ordered by banks and 

large enterprises. 

Explaining the strong demand for gold, a representative of the central bank said that 

many banks have increased gold buying to spur liquidity after people have shifted to 

gold. Although some enterprises have suggested the central bank to import more gold 

to stabilise the market, the agency currently has no plans for gold imports, saying that 

domestic supply is enough to serve local buyers. 

SJC on Wednesday quoted gold prices at VND44.37 million and VND44.57 million a 

tael for buying and selling respectively, rising by VND100,000 against the previous 


FINANCE 


More 20,000 SJC gold 

taels supplied to 

market 

Aug 31: Vietnam 

Central Bank Sets 

Dollar Unchanged At 

20,828 dong; Bank 

Rates Edge Up 

Vietnam, Russia 

strengthen finance 

cooperation 

Social insurance 

conundrum 

day. A tael equals 1.2 troy ounces. 

On the website www.kitco.com, the yellow metal on the world market was $1,662 an 

ounce at 6:00 p.m. on Wednesday, dropping by $4 compared to the closing price on the 

New York market on the previous night. 

http://english.thesaigontimes.vn/Home/business/financial-markets/25334/ 

31/AUG/2012 INTELLASIA | SGGP 

In the last five days, Saigon Jewellery Company Limited (SJC) has processed about 

20,000 gold taels to provide to the market, the local newswire Saigon Giai Phong, reported, 

citing Nguyen Hoang Minh, deputy director of the State Bank of Vietnam 

(SBV)'s HCM City branch, as saying. 

Earlier, SBV allowed SJC to process nearly 48,061 SJC deformed gold taels (about 1.8 

tonnes of gold) and other kinds of gold being converted into SJC gold to stabilise the 

gold price. 

Related to this problem, the news provider, Vietstock, quoted Minh as saying that the 

amount of over 48,000 gold taels will be processed within this week. 

31/AUG/2012 INTELLASIA | STOXPLUS 

The State Bank of Vietnam, the country's central bank, Monday set the exchange rate 

for the US dollar at VND20,828, unchanged for 8 months, and banks' rates marginally 

edge up. 

Banks are allowed to trade dollar at +/-1 percent from central bank quote and the ceiling 

price for dollar is currently at VND21,036. 

The rate offered by major commercial banks are at VND20,820-VND20,840 for bid and 

VND20,880 for ask. 

Dollar prices at the gold shops were also steady in the past days after heating a bit last 

week. 

Analysts say if dong denominated interest rate eases and production activities rise in 

the remaining of the year, dollar prices may edge up but will not surpass VND21,500. 

Local gold market has been supervised more closely, giving limited opportunities for 

speculators and volatility in this market will ease, helping stabilise forex market, traders 

said. 

http://stoxplus.com/News/89671/1/186/august-31-vietnam-central-bank-sets-dollarunchanged-at-vnd20-828-bank-rates-edge-up.stox 


Vietnam and Russia have agreed to cooperate in areas of mutual concern related to 

economic stabilisation and management, financing, state budget collection and spending, 

social welfare and human resource training. 

A memorandum of understanding (MoU) in this connection was signed by the Vietnamese 

and Russian Ministries of Finance in Moscow on August 29, on the sidelines 

of the Asia-Pacific Economic Cooperation (Apec). 

Accordingly, the two sides will exchange working delegations and co-ordinate in organising 

seminars, conferences and short-term training courses in Vietnam and Russia. 

The MoU will be valid in three years from January 1, 2013 to December 31, 2015 and 

can be renewed as agreed by the two sides. 

http://english.vovnews.vn/Home/Vietnam-Russia-strengthen-finance-cooperation/ 


31/AUG/2012 INTELLASIA | VIR 

Ensuring social insurance fund payment stability remains a pressing question. 

The International Labour Organisation (ILO) forecast Vietnam's retirement pension 

fund would start incurring deficits from 2020 and be running out by 2029. These figures 

came on the back of ILO's sweeping study about Vietnam's retirement pension 

fund under proposal from Vietnamese government. 


FINANCE 


FDI firms enjoy a 

trade surplus of $7b in 

Jan-Aug 

The study had pointed out a number of problems in Vietnam's current social security 

system. Accordingly, only 20 per cent of the workforce contributes to the social insurance 

fund whereas the rate of contributors/recipients is falling dramatically. 

This is shown from the fact that in 1996 there was one retirement pension recipient per 

217 contributors to the fund, it slid to around 10 contributors per one recipient in 2011. 

Meanwhile, the current average retirement age remains low (53.43 years generally for 

men and women), resulted in shorter time for payment against extended period of getting 

insurance benefits as the average life span of retirement pension recipients has extended 

to 73. 

In addition, pension hikes have significantly driven up fund costs. 

"After three six upward revisions from 2007 until present the pension hiked 134 per 

cent whereas social insurance fund rose an average less than 10 per cent per year," said 

ILO Vietnam's associate expert Carlos Galian. 

Hence, the fund's actual expenditure made up 94.65 per cent of total collected amount 

in 2011 against only 64.4 per cent in 2007. 

To boost incomes sources, under current regulations the fund's balance can be used to 

lend state commercial banks with usually low interest rates, to buy public bonds and 

government bonds. It could not be used for direct investment to ensure safety. This has 

resulted in low profit rates of 9-11 per cent only. 

From that practice, Ministry of Finance's Administrative Finance Department's deputy 

head Do Thi Thuy Hang suggested to hike idle capital efficiency through combining 

short-term and long-term loan provision or reforming lending rate setting methods. 

Hang proposed forming a specialised investment body to ensure the fund sustainable 

growth. 

ILO's Insurance and Finance Section expert Hiroshi Yamabana suggested gradually 

scaling up the retirement age. 

Accordingly, ILO suggested increase retirement age for men to 61 and to women to 56 

from 2016, one year more than current levels. Then every two years the retirement age 

for men and women will increase one more year until reaching 65 years. 

However, this move alone is not enough, according to the ILO. Yamabana also suggested 

introducing regulations to restrict early retirements such as slashing 5-6 per 

cent retirement pension to each year of early retirement. 

"As the Law on Social Insurance slated to be put on National Assembly agenda in later 

this year session and might be approved in early 2013, we expect a raft of measures to 

help balance fund collections and expenditure soon be in place," said Yamabana. 

http://www.vir.com.vn/news/business/social-insurance-conundrum.html 

31/AUG/2012 INTELLASIA | BAO DAU TU 

While the export turnover of FDI firms posted gigantic growth, local companies saw a 

fall of nearly 2 percent year-on-year in term of export turnover, according to the local 

newspaper Bao Dau Tu (Vietnam Investment Review). 

Vietnam's export import situation in the first months of 2012 saw strong changes. After 

eight months, the country's trade deficit was just about $62 million, much lower than 

the figure of $5.8 billion in the same period last year. 

Notably, in the country's export turnover in the first months of this year, FDI (foreign 

direct investment) companies made a significant contribution. According to the report 

from the Overseas Investment Department (Ministry of Planning and Investment- 

MoPI), FDI firms enjoyed a trade surplus of $7 billion in Jan-August (including crude 

oil). If excluding crude oil, FDI firms also posted a trade surplus of $1.53 billion in Jan- 

August 

It is expected that this positive change will last till the end of this year with some staple 

export items, which are the strength of FDI companies, such as electronic products, 

components and telephones. 

The import structure also had positive changes. As forecasted by MoPI, in Jan-Aug, 

while the import spending of essential products was estimated at $70 billion, rising 6.7 

percent on year, the import value of controlled items was estimated at $3.2 billion, 


FINANCE 


Deputy PM pledges 

best conditions for 

Swiss businesses 

US Trade 

Representative due to 

visit Vietnam 

down 25.6 percent on year. 

However, while FDI firms posted good export growth, local firms saw a downward 

trend in export turnover. In Jan-Aug, domestic companies contributed only $27.7 billion 

in the country's total export turnover, down 1.85 percent on year. 

Another noteworthy point when looking at the export structure in the first months of 

this year was that the products from processing and assembly made the main contribution 

such as telephone and components (making up 38 percent), electronic products 

and spare parts (contributing 20 percent) and garment and textile and footwear (11 

percent). 

According to the resolution of the National Assembly, this year's goal is to reach export 

turnover growth of 13 percent on year and trade deficit will be controlled at 11-12 percent 

of the country's total export turnover. However, as predicted by MoPI, the country 

could reach total export turnover of $111 billion this year, rising 14.5 percent on 

year. Meanwhile, the country's import spending would be about $113 billion, resulting 

in a trade gap of about $2 billion for the whole year, equalling to 1.8 percent of the export 

turnover, exceeding the target. 

As reported by General Statistical Office (GSO), in Jan-Aug, the country's export turnover 

reaped $73.35 billion, growing 17.8 percent year-on-year and the import value 

was over $73.4 billion, a year-on-year increase of 6.7 percent. 


Vietnam will create the best possible conditions for Swiss businesses to operate efficiently 

in the country, said deputy prime minister Nguyen Thien Nhan. 

At a meeting with 43 Swiss businesses in Zurich on August 29, deputy PM Nhan said 

Vietnam is always willing to perfect the country's business environment as suggested 

by foreign investors. 

The deputy PM said since former State President Nguyen Minh Triet's visit to Switzerland 

in 2010, two-way has increased steadily despite the impact of the world economic 

recession, the European debt crisis, and the appreciation of the Swiss franc. 

Nhan spoke highly of the role of the Swiss-Asian Chamber of Commerce (SACC), in 

arranging for businesses from both countries to meet, exchange information and seek 

partners, for the mutual benefit of economic, trade, and investment cooperation. 

Also at the meeting, deputy minister of Industry and Trade Nguyen Nam Hai briefed 

Swiss businesses on Vietnam's economic situation, and participation in the WTO, as 

well as new investment opportunities in the Southeast Asian nation. 

Deputy minister Nam said Swiss businesses have 89 projects in Vietnam with a total 

capitalisation of $2 billion, ranking fourth in Europe and 19th in the world in terms of 

investment in the country. Last year's two-way trade between Switzerland and Vietnam 

reached $3 billion. 

Deputy PM Nhan and Adolf Meier, Chair of the Vietnam Committee under the SACC 

expressed their belief that two-way trade turnover will grow considerably in the near 

future. 

Marco Martinelli, director of the TIM Investment and Management Consulting JSC in 

HCM City, affirmed Vietnam's huge potential for investment and trade development. 

Nhan is scheduled to meet with Chief of Federal Department of Economic Affairs Schneider 

Ammann, Chief of Federal Department of Home Affairs Alain Berset, and visit 

Swissmedic (a Swiss Agency for Therapeutic Products) and the Vietnamese Embassy 

on August 30. 

http://english.vovnews.vn/Home/Deputy-PM-pledges-best-conditions-for-Swissbusinesses/20128/141582.vov 


US Trade Representative Ron Kirk is scheduled to pay a two-day visit to Vietnam from 

September 2 to discuss bilateral economic cooperation. 

During the visit, the US official will meet with leaders from the Ministry of Industry 

and Trade, the Ministry of Planning and Investment, as well as a number of US and 


FINANCE 


Vietnamese entrepreneurs. 

He will touch upon issues of common concern towards the signing of the Trans-Pacific 

Partnership Agreement (TPP), and propose strategies of cooperation to promote common 

targets at the upcoming Asia Pacific Economic Cooperation Forum (Apec) along 

with initiatives for supporting efforts for Asean integration. 

Since the US and Vietnam established diplomatic ties 17 years ago, annual two-way 

trade turnover has increased from below $1 million to nearly $22 billion. 

The US is currently Vietnam's biggest export market and investor. 

http://english.vovnews.vn/Home/US-Trade-Representative-due-to-visit-Vietnam/ 


Inventory still high 31/AUG/2012 INTELLASIA | SAIGON TIMES DAILY 

The inventory index of the local processing-manufacturing industry this month was 

still higher than the year-ago figure, according to the general Statistic Office, indicating 

purchasing power of the economy is yet to be improved. 

The office on Wednesday said on its portal that the inventory index of the industry recorded 

as of August 1 jumped by 20.8 percent year-on-year. Those sectors posting high 

indexes are fertiliser and nitrogen compound sectors with 81.6 percent, plastic industry 

69.2 percent, communication components 61.9 percent and cement 50.6 percent. 

It is noted that while inventory remained high, manufacturing still expanded in the period. 

In the eight months of the year, the industrial production index marked up by 4.7 

percent year-on-year, with the mining sector rising by 4.9 percent, processing and 

manufacturing 3.9 percent, gas and power production and distribution 12.7 percent, 

and water supply and garbage and wastewater management and treatment 9.8 percent. 

A number of sectors with the higher production increases include ship building and 

floating structures with 150.7 percent, communication equipments 64.1 percent, vehicle 

components 43.8 percent, electronics spare parts 29.1 percent, medicine and drug 

materials 18.6 percent, dairy products and processing 16.3 percent, sugar production 

13.8 percent and crude oil 13.6 percent. 

Total investment capital which was financed by the State Budget this month reached 

an estimated VND19.57 trillion, with the central budget contributing VND4.61 trillion 

and provincial budgets VND14.96 trillion. As such, the State Budget from January to 

August injected a combined VND125 trillion into public investments, equivalent to 

60.2 percent of the year's plan and up 5.6 percent year-on-year. 

http://english.thesaigontimes.vn/Home/business/vietnam-economy/25329/ 

More than 6,100 

companies formed in 

Aug 

31/AUG/2012 INTELLASIA | BAO DAU TU 

Information from Business Registration Management Department (Ministry of Planning 

and Investment) said that in August 2012, Vietnam had 6,118 newly established 

companies with a total registered capital of 73.597 trillion dong, rising 3.32 percent in 

volume and 161.33 percent in value from July. 

If comparing with the same period last year, the number of newly formed companies 

saw a fall of 2.64 percent but increased 81.84 percent in pledged capital. 

Newly formed firms still mainly focused in two regions of Red River Delta and Southeast 

of Vietnam, with 34,216 companies, accounting for over 74.2 percent of the country's 

total volume of newly established companies in the past eight months. 

Earlier, in July, according to the report from general Department of Taxation sent to 

the Ministry of Finance, the number of newly established companies in July was 

46,818, of which, the number of non-state companies accounted for 42,349. 

Till the end of July, the number of companies suffering operation suspension was 

20,741 (by the end of June, the volume was 21,678 firms). Notably, in July, as many as 

937 companies resumed operations, mainly non-state firms. 


FINANCE 


Two items to join 

export turnover club 

of billion US dollars 

Exporters face tough 

China competition for 

US dollars 

31/AUG/2012 INTELLASIA | THOI BAO NGAN HANG PAGE 2 

Over the past eight months, two items reached an export turnover of approximately $1 

billion, promising to be new members in the group of export commodities with export 

turnover of over $1 billion in the next several months. 

In particular, since early this year till the middle of August 2012, manioc and its products 

fetched an export turnover of over $926 million, nearly equalling to the export 

turnover of the whole year 2011 ($960 million). 

In addition, exports of camera, cine-camera and components in Jan-August earned 

over $802 million, higher than the export turnover of the whole year 2011 ($702 million). 

Reportedly, according to the figures from the general Department of Customs, in 2011, 

as many as 19 export commodities of Vietnam reached a turnover of from $1 billion 

onwards (excluding crude oil and gasoline), of which, apparel products topped the list 

with an export turnover of $14.043 billion. 


Vietnam's exports are facing intense competition from Chinese goods in the US market, 

demanding that local exporters make a real breakthrough in product quality, prices 

and delivery time. 

Products exported to the US must satisfy these three requirements, stated Nguyen Duy 

Khien, head of the American Market Department under the Ministry of Industry and 

Trade. 

Speaking at the "US market - Opportunities for Vietnamese businesses" workshop held 

in Hanoi on Tuesday, Khien said the prices of Vietnamese exports are 2 percent higher 

than Chinese goods in the US market with one of the reasons for that - high transport 

costs. To reduce costs, furniture makers need to produce separable or folding products. 

"The US sets many strict standards. Some items from Vietnam are still well consumed 

in this market because our products carry US labels. 

"Most of the US consumers trust the labels on products rather than the country of origin. 

This indicates that the confidence of the US consumers in Vietnamese goods is still 

limited," said Khien at the workshop. 

According to experts, apart from traditional items like textile-garment and leatherfootwear, 

machinery and electronic parts are potential products that can penetrate the 

US market in the future. 

Therefore, local producers have to improve their products and seize any chance to 

bring their goods stateside. 

Speaking to the Daily on the sidelines of the workshop, Khien said the US is a huge 

market that imports some $2.3 trillion worth of products each year, twice as much as 

Germany and China. 

Meanwhile, Vietnam mainly exports textile-garment, leather-footwear, furniture, electronic 

products and seafood, which make up a very small portion of the import demand 

of the US market. 

At present, the majority of Vietnamese businesses are exporting to the US via a third 

party. "We need businesses that can play the role of a locomotive to directly fulfill the 

orders of the US," Khien stated. 

He informed that US companies only provide the product designs, so Vietnamese 

firms must find material supply themselves. 

"Vietnamese businesses face problems with this method, as they are accustomed to receiving 

materials from partners," said Khien. 

Production costs depend on material prices, which are volatile, causing great difficulties 

to producers. Therefore, Khien suggested local enterprises should join hands to 

supply materials to each other. 

In 2011, the two-way Vietnam-US trade turnover totalled over $21 billion, in which Vietnam 

exported $17 billion worth of products. 

http://english.thesaigontimes.vn/Home/business/trade/25325/ 


FINANCE 


Vietnam, Pakistan 

target $500m trade 

Canada supports 

Vietnam in skills 

training 

31/AUG/2012 INTELLASIA | VNA 

Vietnam and Pakistan are determined to achieve the 500 million USD target of bilateral 

trade by December 2013. 

This was delivered to the second session of the Vietnam-Pakistan Joint Trade Commission 

in Islamabad, Pakistan on August 28-29. 

The Vietnamese delegation to the session was led by deputy minister of Industry and 

Trade Le Duong Quang. 

The two sides also proposed the signing of a cooperative agreement between the Trade 

Development Authority of Pakistan and Vietnam 's Trade Promotion Agency to help 

realise the target. 

The two sides reviewed the implementation of agreements reached at the first session 

in Hanoi in October last year. 

They deliberated on measures to enhance and promote trade between the two countries 

such as lifting trade barriers, increasing the exchange of information and creating 

conditions for their businesses to engage in trade and investment promotion programmes. 

During the meeting, a Memorandum of Understanding was signed wherein Pakistan 

recognised Vietnam as a full market economy. 

Pakistan called on Vietnam to create more favourable conditions for Pakistani businesses, 

especially the granting of visas. 

On this occasion, Vietnam asked Pakistan to assist the country in preventing trade 

fraud. 

Later, deputy minister Quang met with the Senior Commerce minister and the Secretary 

of State for the Foreign Ministry of Pakistan, during which the Pakistani side expressed 

its hope to enhance the relationship with Vietnam. 

http://en.vietnamplus.vn/Home/Vietnam-Pakistan-target-500 million-USD-trade/ 

20128/28294.vnplus 


Canada on Wednesday signed a memorandum of understanding for a skills training 

project, supporting Vietnam in ensuring qualified labour supply. 

Canadian Ambassador Deborah Chatsis and deputy minister of Planning and Investment 

Cao Viet Sinh signed the MOU for the Vietnam Skills for Employment Project. 

Building on the success of the Vietnam-Canada Community College Project in Tra 

Vinh Province, the project will focus on strengthening the management and leadership 

of technical and vocational education training institutions. 

Through the project, two training centers of advanced management will be created to 

facilitate the strengthening of the management and leadership capacities of local training 

institutions. 

A Canadian executing agency will be selected through a competitive process, and will 

work with the lead partner, the Vietnam National University in HCM City, as well as 

the provincial governments of Hau Giang, Binh Thuan and Vinh Long. 

Other partners include community colleges in these provinces, the National Institute 

for Education Management and the Vietnam Association of Community Colleges. The 

Ministry of Education and Training and the Ministry of Labour, Invalids and Social Affairs 

will provide strategic guidance for the project. 

This project will strengthen Canada-Vietnam relations via technical and vocational 

training programmes, according to an announcement from the Canadian embassy. 

"Community colleges have played an important role in Canada in ensuring the availability 

of skilled labour and establishing institutional linkages between trainers and 

employers," Ambassador Chatsis said in the announcement. 

"This approach could be equally effective in Vietnam, where increasing the pool of 

skilled labour is essential to ensure sustained and equitable economic growth," the 

diplomat added. 

http://english.thesaigontimes.vn/Home/business/other/25328/ 


FINANCE 


HCM City labour 

market still suffer 

from drawbacks 

Vietnam's Stocks Rise 

After Valuations 

Slump to Three- 

Month Low 


Though considered a developed labour market, with highly-qualified human resources 

and modern employment structure, HCM City still suffer severe imbalance between 

labour supply and demand. 

This was the view of Erwin Schweisshelm, chief representative of Friedrich Ebert Stiftung 

(FES) Institute in Vietnam, at a workshop to report the results of a survey on the 

HCM City labour market held in Hanoi on Wednesday. 

The survey on HCM City, the city with high labour density and characteristics of a developed 

labour market, was conducted in August 2011 by FES Institute in coordination 

with the Institute of Labour Science and Social Affairs of Vietnam. 

According to Nguyen Huyen Le from the labour science institute, there are currently 

some 3.8 million labourers in HCM City, accounting for 59 percent of the city's population. 

Employed labourers are mainly those aged from 25 to 44. The number of male employees 

is higher than female in most age groups. 

Education levels and technical skills of the workforce in HCM City are quite higher 

than the national average. The city is not only training but also employing most of the 

highly-skilled trained labourers. 

The employment structure of HCM City clearly indicates the level of development in 

a modern way. Labourers in the service sector make up the largest portion, 69 percent, 

followed by industry, 30.3 percent. 

Wage labourers under formal employment contracts account for 66 percent of the 

city's workforce, while the national percentage is 35 percent, representing the development 

of the city's labour market. 

Moreover, according to the survey, the average monthly salary in HCM City is 

VND4.08 million per employee, far higher than the national average of VND2.9 million. 

Salary faithfully reflects labour skills. 

However, according to Uwe Blien, an expert from the German Federal Employment 

Agency, although HCM City is among the most developed labour markets, there still 

exist many shortcomings. Notably, the trained workforce of the city is facing unemployment 

due to supply-demand imbalance. 

Therefore, Blien suggested developing the information system in the labour market to 

connect labour supply and demand, boosting coordination between employers, trainers 

and managers to give accurate forecast about labour demand and the ability to 

meet the demand. 

http://english.thesaigontimes.vn/Home/business/other/25318/ 

31/AUG/2012 INTELLASIA | BLOOMBERG 

Vietnam's stocks climbed, with the benchmark index rising the most in Asia, as valuations 

fell to a three-month low and concern of more arrests in the banking industry 

eased. 

The VN Index (VNINDEX) gained 1.7 percent to 392.44 as of 11:19 a.m. in HCM City. 

Bank for Foreign Trade of Vietnam and PetroVietnam Gas Corp. advanced at least 2 

percent. A 21 percent slump through yesterday from this year's high on May 8 dragged 

the VN Index's valuation to 9.4 times estimated profit, the lowest level since May 25, 

data compiled by Bloomberg show. 

The gauge slumped 12 percent from August 20 to yesterday after Nguyen Duc Kien, a 

founder of Asia Commercial Bank, was detained for what the central bank called conducting 

"business illegally." The lender's former Chief Executive Officer Ly Xuan Hai 

was subsequently arrested for alleged economic mismanagement, according to a police 

statement, fuelling concerns of instability in the nation's financial system. 

"While the fundamentals of companies essentially haven't changed, their prices fell 20 

percent," Nguyen Hoai Nam, deputy head of research at Kim Eng Vietnam Securities 

Co., said by phone from Hanoi. "It's now a good opportunity to take advantage of such 

cheap valuations. Foreign investors have been buying, which helped stabilise sentiment." 


FINANCE 


Foreign institutions 

believe Vietnamese 

stocks cheap and 

attractive 

Overseas institutions bought more Vietnamese equities than they have sold each day 

since August 20 except for yesterday, when they divested $1.7 million, according to 

HCM City exchange data compiled by Bloomberg. Foreigners bought a net $16.4 million 

of stocks last week, the biggest weekly purchases since the period ended March 30. 

Sacombank Denial 

Tram Be, deputy chair of Saigon Thuong Tin Commercial Joint-Stock Bank (STB), or 

Sacombank, denied rumours that he had been summoned or detained by police, according 

to an e-mailed statement from the bank today. The stock fell 1 percent to 19,800 

dong extending its decline since August 20 to 13 percent. 

"The market will likely stabilise in next few days as rumours about more arrests of 

banking executives turned out to be unfounded," Pham Ngoc Bich, managing director 

of institutional sales at Saigon Securities wrote in a note to clients today. 

Asia Commercial Bank (ACB) gained 3.2 percent to 19,600 dong in Hanoi trading. The 

stock had slumped 27 percent since August 20 to yesterday. Moody's Investors Service 

lowered the lender's credit rating to B2 from B1 on August 24 and put the company on 

review for future downgrades following the "negative developments at the bank," it 

said. 

Bank Liquidity 

Fitch Ratings also placed Asia Commercial Bank on review for a possible downgrade, 

it said on August 24. The lender's long- and short-term issuer default ratings may be 

cut if there's sustained weakening in the bank's liquidity and reputation. 

State Bank of Vietnam Governor Nguyen Van Binh said August 21 the monetary authority 

stands ready to ensure banks have adequate cash after the detention of Asia 

Commercial's Kien. The central bank injected 13 trillion dong into the financial system 

through open-market operations on August 22, the most over a seven-day period this 

year. It added 3.5 trillion dong yesterday. 

Prime minister Nguyen Tan Dung's government is seeking to shore up a banking system 

saddled with the highest bad debt in Southeast Asia that credit-rating companies 

cite as a threat to the economy. 

Vietnam Joint-Stock Commercial Bank for Industry and Trade, the second-largest 

lender, climbed 3.2 percent to 19,600 dong. The stock slumped 12 percent from August 

20 to yesterday. 

http://www.bloomberg.com/news/2012-08-29/vietnam-s-stocks-rise-after-valuationsslump-to-three-month-low.html 

31/AUG/2012 INTELLASIA | VIETNAMNET 

The latest report by JPMorgan Chase showed the active outlook onto the Vietnam's 

economy and stock market. Meanwhile, Bloomberg newswire believes that Vietnamese 

stocks have become cheap enough to buy in. 

Dated August 24, "Vietnam Strategy Update," the latest report by JPMorgan about the 

Vietnamese stock market highlighted the impacts of the arrest of Nguyen Duc Kien, 

former deputy Chair of the Asia Commercial Bank, on the market, saying that the VN 

Index decrease, caused by the arrest, has made Vietnamese stocks become more attractive. 

In general, the analysis team of JPMorgan Chase does not think these are the big worries. 

The low VN Index has created a more attractive starting point for the foreign investors 

to join the market, though the index has increased by 12 percent since the 

beginning of the year. 

JPMorgan Chase has advised investors to buy the shares of the enterprises in the fields 

of consumer goods, pharmacy, infrastructure and some selected export companies. 

Meanwhile, investors have been advised to keep away from real estate and construction 

material companies' shares. 

The economic environment has been improved considerably. Especially, the inflation 

rate fell to 5.4 percent in July from the highest peak of 23 percent in August 2011. Vietnam 

witnessed the trade surplus of 100 million dollars in July instead of trade deficit. 

The total trade deficit of Vietnam in the first six months of the year was 58 million dol- 


FINANCE 


Demand for 

trademark franchise, 

buying and selling 

expanding rapidly 

lars, an encouraging result if noting that the figure was 5.8 billion dollars at the same 

period of the last year. 

Also according to JPMorgan Chase, the inflation decreases would have two positive 

impacts on the national economy. 

Firstly, this would lead to the monetary policies to be loosened, which would support 

the growth. Since the inflation rate decreases rapidly, the actual interests depositors 

can enjoy have been at the highest levels so far this year, despite the fact that the interest 

rate has decreased by 400-500 percentage points. 

Secondly, the inflation decreases would help improve the macroeconomic environment 

and the payment balance. If the inflation rate is kept at low level, people would 

keep dong. 

The foreign currency reserves have increased for the first time since 2008, while JPMorgan 

Chase believes the reserves would continue rising in the time to come. 

The finance newswire Bloomberg on August 28 also published a special report, saying 

that the investment opportunities have been open in the Vietnamese stock market. 

With the VN Index falling by 22 percent from the highest peak so far this year, Vietnam 

has fallen into the bear market situation, where the stocks have become cheaper than 

in other regional markets after the arrest of Kien, former Chair of ACB, and then the 

arrest of Ly Xuan Hai, former CEO of ACB. 

The P/E index of the Vietnamese stock market is now 9.4, the lowest level since May 25 

and 33 percent lower than the P/E of the 141 shares - the components for calculating 

MSCI South East Asia Index. 

Moody's Investors Service on August 24 lowered the credit rating given to ACB Bank 

to B2 from B1, while leaving open the possibility of further cutting the credit rating. 

Fitch Ratings has also announced the possibility of lowering the credit rating of the 

same bank, if its liquidity and prestige stay weak for a long time. 

Nevertheless, Marc Faber, Chair of Indochina Capital, an investment fund, who is also 

the publisher of Gloom, Boom & Doom Report, believes that the arrests bring long 

term investors the opportunities to buy Vietnamese stocks when the stocks are relatively 

cheap. 

http://english.vietnamnet.vn/fms/business/26280/foreign-institutions-believe-vietnamese-stocks-cheap-and-attractive.html 

31/AUG/2012 INTELLASIA | DOANH NHAN SAIGON 

Following the popular affairs such as Pho 24 acquired by Highlands Coffee, which 

then sold to Jollibee at more than $20 million, Masan's mobilisation of billions of US 

dollar from plenty of foreign financial companies are rumours relating to buying and 

selling domestic well-known trademark namely Tan Hiep Phat, Vinamit, Trung Nguyen 

and Kinh Do. 

This, as such, implies much public interest in the destiny of such reputable names as 

well as the allurement from the merger and acquisition (M&A) market in the context 

of mounting business difficulties before the acquisition risk from foreign big rivals. 

A few years ago saw local brand name deals such as Unilever acquiring P/S toothpaste 

at USD 5 million and Colgate purchasing Da Lan toothpaste at USD 3 million. Every 

year from then on has witnessed thousands of businesses being capitalised and experiencing 

ownership changes, capital restructuring, which has raised demand for trademark 

pricing. 

Over the past three years, Masan Group (MSN) has mobilised more than USD 1 billion 

largely from financial institutions, which is an admirable achievement for all domestic 

private companies. This group's partnership includes such established names as Bank- 

Invest, Vietnam Azalea Fund (Mekong Capital), TPG (Texas Pacific Group), House 

Foods, Mount Kellet, Richard Chandler Corporation and even loans funded by IFC 

and Goldman Sachs. As such, a domestic trademark stands a good chance of being 

sold at billions of dollars. 

In fact, demand for trademark franchise, buying and selling has been rapidly expanding, 

said Chair of Masso Consulting's Board of directors Nguyen Trung Thang. As- 


FINANCE 


Ministries make 

businesses feel dizzy 

with unstable 

automobile policies 

sumingly, business may grow beyond its management capacity, which had better be 

sold before the occurrence of crisis. Also, owners would have no other choice but to 

part with their businesses probably due to their own health problems, missing inheritors, 

financial pressures or the need of investment capital for other businesses. 

However, a number of deals over the recent time indicated that either local enterprises 

could no longer withstand additional difficulties or foreign investors would assume 

the present the convenient time for obtaining domestic established trademark at a bargain. 

In the meantime, what concerns most is the underdeveloped trademark pricing services 

and insufficient related legal corridor. 

The M&A market has recently developed for the past four years and the number of capable 

consulting firms is limited, said lawyer Truong Nhat Quang at YKVN's Law Department. 

There have been merely 4-5 firms that could handle complicated deals so 

far. 

"Given the economic recession, selling domestic trademark to foreign investors could 

be an option for local enterprises. It is high time to reposition the owners' roles to their 

own businesses in the market economy and separation between governance and ownership 

would be normal", said Thang. 


The Ministry of Industry and Trade's idea to loosen the requirements enterprises must 

have to be able to import cars has been facing the strong opposition from the enterprises-which 

have spent much investment money to satisfy the requirements. 

One year ago, the Ministry of Industry and Trade (MOIT) released the Circular 20 with 

strict regulations, aiming to tighten the management over car imports. 

The circular stipulates that car importers must show the procuration granted by the 

automobile manufacturers themselves. 

The legal document then dealt a strong blow on car dealers, who said that it was nearly 

impossible to obtain such requirements from the automobile manufacturers, and that 

car import companies would go bankrupt in masses because of the strict regulation. 

However, MOIT still turned a deaf ear on the complaints, insisting on the necessity to 

promulgate the legal document. 

One year later, MOIT has changed its mind after realising that the strict regulations really 

have weeded out a lot of car dealers from the market, thus making the market less 

competitive. It has also been informed that the tax sums collected from automobile imports 

have decreased dramatically, thus badly affecting the state budget income. 

Therefore, MOIT is now considering loosening the strict requirements, and once again, 

facing the strong opposition from the business sector. 

In the past, when it insisted on setting up the strict regulations, it faced the protest from 

small car dealers, who cannot satisfy the requirements. And now, when attempting to 

loosen the requirements, it is facing the opposition from the enterprises which have 

made heavy investment to expand the distribution networks. 

Dang Phan Thu Huong, deputy general director of Toyota Vietnam, said on Dau tu 

that in any cases, MOIT and relevant ministries need to follow consistently the purpose 

set up when issuing the Circular No. 20. 

The decision by MOIT has been advocated by Toyota Vietnam and other members of 

the Vietnam Automobile Manufacturers' Association (VAMA), which believe that it's 

necessary to stimulate healthy trade to protect the rights and legitimate benefits of consumers. 

Meanwhile, Tran Ba Duong, President and CEO of Thaco Group, has warned that if 

the watchdog agency removes the requirement on procurations to be granted by automobile 

manufacturers themselves, this would pave the way for car dealers to import 

distort the market and create unhealthy competition. 

Regarding the sharp falls of the tax collection, Duong said this should be blamed on 

the current economic difficulties rather than the car imports decreases. 

Duong also thinks that Hanoi and HCM City are imposing overly high automobile 


FINANCE 


Equipment 

manufacturers lose 

out 

Vietnamese 

companies lack 

strategy for exports to 

US 

ownership registration tax rate of 20 percent, saying that this has discouraged people 

to buy cars. 

Dau tu has also quoted Sales director of Honda Vietnam as saying that if the requirement 

on the procuration from manufacturers themselves is removed, this would badly 

affect official car distributors and the business of sales agents. 

The director said that the legal document adjustment would be applauded by automobile 

manufacturers if the new regulations benefit customers. However, in this case, 

customers would not be the beneficiaries from the amendment. 

Horst J. Herdtle, CEO of euro Auto, the authorised BMW importer and distributor in 

the Vietnamese market, said that authorised distributors have to spend big money to 

set up standardised distribution network, which would be a great waste if the regulations 

are removed. 

Dat Viet newspaper has quoted Michael Behrens, CEO of Mercedes Benz as saying that 

what automobile manufacturers need a stable legal framework which allows them to 

predict the investment costs and the market performance. 

http://english.vietnamnet.vn/fms/business/26281/ministries-make-businesses-feeldizzy-with-unstable-automobile-policies.html 


Though an increasing number of power plants are being planned in Vietnam, domestic 

firms are unable to get contracts to supply equipment to them mainly because they are 

unable to arrange for credit to build the plants. 

A national power industry plan for up to 2025 envisages the construction of 52 power 

plants with a total capacity of more than 54,700 MW. 

Chair of the Vietnam Association of Mechanical Industries, Nguyen Van Thu, told Vietnam 

News that 35 of them would be built by domestic investors. 

"Equipment will have to be bought for all the plants," he said. 

Although Vietnamese companies could not produce the main equipment for power 

plants like turbines because of a lack of resources and technology, they could supply 

28-30 per cent of other equipment, he said. 

"This is a promising opportunity. Unfortunately, the chance has been lost." 

Vietnamese investors, faced with a cash crunch, had turned to foreign suppliers and 

contractors for financial reasons, he explained. 

"Foreign contractors offer Vietnamese investors credit and other financial support." 

Phan Dang Phong, deputy director of the National Research Institute of Mechanical 

Engineering, concurred. 

He told Vietnam Economic Times that while the country was a big market for power 

equipment, only foreign firms were benefiting. 

He said 90 per cent of the contractors and suppliers were from China and they brought 

equipment that could be manufactured in the country and their own personnel. 

"The country is pouring money into building power plants but its companies and people 

do not benefit," he said. 

The Ministry of Industry and Trade should assess the capability of equipment manufacturers 

in the country to award them suitable projects, they said. 

Power-plant investors who flout the law with regard to equipment purchase should be 

punished, they added. 

Thu said power plants built with public money should be required to buy equipment 

from domestic companies, if available. 

http://vietnamnews.vnagency.com.vn/Industries/229511/equipment-manufacturerslose-out.html 

31/AUG/2012 INTELLASIA | DTINEWS 

Vietnamese exporters have gained a reputation for dumping products in the US market 

to compete with foreign rivals, but their lack of attention to quality could harm 

their long-term strategy, said an official from the Ministry of Industry and Trade. 

The head of the ministry's American Market Department, Nguyen Duy Khien, said, 


FINANCE 


Businesses Ask For 

Delay On Salary 

Increases 

"Vietnamese exporters tend to sell their products at low prices to attract buyers, but get 

themselves into trouble with US anti-dumping lawsuits." 

The statement was made on August 28, at a conference for trade promotion with the 

US, held in Hanoi. He added that domestic exporters should focus on quality and pay 

more attention to quality and more environmentally-friendly products if they wish to 

create sustainable trade with the United States. 

Khien said that from 50-60 percent of Vietnam's footwear products exported to the US 

are only half-finished because Vietnamese firms lack design expertise. Most Vietnamese 

companies receive design models and materials from their US partners, working 

as subcontractors for firms from Hong Kong, Taiwan or South Korea, instead of being 

direct contractors for American firms. 

The larger Vietnamese apparel firms have the capacity to act as a bridge for small local 

exporters to help them reduce overhead, he suggested. 

Opportunities pose challenges 

The US, home to the largest overseas Vietnamese community in the world, with 

around 1.5 million, is a significant market for Vietnamese goods. The US market is also 

widely considered to be less demanding than that of Japan or Europe. Vietnam's entry 

to the WTO, along with the removal of Permanent Normal Trade Relations (PNTR) 

and garment and textile export quotas have paved the way to increased exports to the 

US. 

However, Vietnamese exporters still face many challenges for entry of their goods to 

the US market. Currently China accounts for about 75 percent of the total footwear imported 

to the United States. For other apparel, China accounts for 33 percent, for electronics, 

32 percent, seafood, 18 percent and plastics, 25 percent. 

China is not Vietnam's only major competitor, however. Indonesia and Bangladesh are 

also competing for exports. Another obstacle is that there is only one direct shipping 

rout linking Vietnam with the US. The long distance adds to high shipping fees, along 

with other practical problems, such as potential pirating and the Bio-terrorism Act. 

Khien suggested that Vietnamese companies set up catalogues and websites in both 

Vietnamese and English to promote their products. This is something, he said that 

would help Vietnamese businesses increase the prestige of their brands and introduce 

them to potential foreign partners. 

http://www.dtinews.vn/en/news/018/24532/vietnamese-companies-lack-strategy-forexports-to-us-.html 

31/AUG/2012 INTELLASIA | DTINEWS.VN 

A number of enterprises have asked for a three to six-month delay on the planned adjustment 

to basic salaries, citing tough economic times as the reason. 

The Ministry of Labour, War Invalids and Social Affairs (Molisa) proposed two plans 

for a salary increase, to be applied from January 1, 2013. 

Under the first plan, the new basic salary will be divided by area, with highest salaries 

going to the most developed areas. Area 1 includes Hanoi, HCM City, Quang Ninh, 

Danang, Binh Duong, Dong Nai and Vung Tau, which will have salaries increased to 

VND2.7 million (USD130). 

Area 2 includes Hai Phong, Vinh Phuc, Thai Nguyen, Khanh Hoa, Binh Phuoc, Tay 

Ninh, Long An, An Giang, Can Tho and Ca Mau, and will have VND2.4 million as a 

basic salary. The area III and IV will respectively set VND2,130,000 and VND1,930,000 

as basic salaries. 

Under the second plan, VND2.5 million will be the basic salary for workers in area I, 

while salaries will be raised to VND2,250,000 in area II. Workers in areas III and IV will 

have VND1,950,000 and VND1.8 million for basic salary, respectively. 

However, the Department of Salary and Wage cited the General Statistical Office of Vietnam 

that nearly 26,000 enterprises had shut down in the first half of 2012, a 5.4 percent 

increase from the same period last year. In HCM City, 70 percent of enterprises 

have reported losses. 

Because of the bad financial state of these businesses in the last half of the year, many 


FINANCE 


Seminar helps firms 

improve management 

Dairies battle for 

market share 

have proposed the deadline for basic salary increase by three to six months. Ngo Chi 

Hung, head of Hanoi Management Board of Industrial and Processing Zones, said the 

government should raise the salaries for workers in the public and private sectors at 

the same time, by May 1, 2013. 

Representatives of Vietnam Chamber of Commerce and Industry (VCCI) in the southern 

region presented the opinion that an increase of only 10-15 percent or VND300- 

500,000 would be more reasonable in the current times. 

However, enterprises'' opinions did not gain traction. 

A representative of the Vietnam Trade Union said that their survey showed that current 

salaries can only cover about 60 percent of most workers basic needs. The Molisa'' 

survey showed a similar results, saying that the base salary in place now can only support 

57-63 percent of the workers'' basic needs. Meanwhile, the prices of gas, food and 

electricity continue to rise. 

Pham Minh Huan, deputy minister of Molisa, affirmed that the ministry has taken into 

account the troubles of businesses and that the government will provide necessary 

support. However, the adjustment in basic salaries is necessary due to inflation. 

Huan went on to say that the draft decree on salary adjustment will be released by October. 

The government will also form a national wage and salary council to act as an 

arbitrator between workers and enterprises. The council will also be responsible for 

salary adjustment each year. 

http://stoxplus.com/News/89596/1/188/businesses-ask-for-delay-on-salary-increases.stox 


A seminar to help businesses better manage and access capital was held yesterday in 

HCM City with the participation of more than 200 economists and firms. 

Deputy general secretary of the Vietnam Chamber of Commerce and Industry (VCCI) 

Vo Tan Thanh said that the government's measures to control inflation and stabilise 

the macro economy would help improve the business environment. Therefore, it was 

necessary to help firms access capital and use it more effectively. 

Representative from the VCCI's Vietnam Business Insight Survey Doan Thi Quyen 

said as firms have so far faced major capital shortages due to high unsold inventories, 

the government should speed up investment projects, encourage firms to use each others' 

products, develop the domestic market and enlarge export outlets to stimulate 

consumption. 

Economist Dinh The Hien recommended that firms should accept a certain level of 

losses and sell off their products at cheaper prices to retrieve capital. They should also 

offer larger promotions to be able to win big contracts. 

As for production, Hien suggested firms buy only enough raw materials for production 

instead of buying extra for speculation as they previously did. 

It was also necessary for firms to work together to rotate capital and reduce loans, he 

said. 

Economist Tran Du Lich said that the government should try to avoid inflation to help 

businesses. 

Lich forecast that the government next year would continuously take measures to stabilise 

the macro economy and would not lose financial policies. 

The country's economy next year would not change significantly with slow growth, 

Lich said, adding that investment and consumption would also remain low. 

http://vietnamnews.vnagency.com.vn/Economy/229539/seminar-helps-firms-improve-management.html 


Dairy producers are battling to maintain market share as new competitors enter the 

market. The domestic market is estimated to be worth about $3 billion, and is already 

crowded with domestic and foreign players such as Vinamilk, FrieslandCampina, Ba 

Vi, Moc Chau, Da Lat and Long Thanh. 


FINANCE 


Foreign fast food 

giants run a race in 

Vietnam 

But TH True Milk has made a big splash on the market, already seeing earnings of 

VND2 trillion ($US98 million) and accounting for 33 per cent of the fresh milk market. 

This was expected to rise to 50 per cent by 2017, with overall earnings to climb to 

VND23 trillion ($1.1 billion), said a representative of TH True Milk. 

FrieslandCampina Vietnam holds 30 per cent of the local market, putting it in second 

place overall after Vinamilk, according to FrieslandCampina Vietnam public relations 

manager Nguyen Ngoc Kinh Luan. 

"To achieve such a large market share and increase competitiveness, the company has 

improved quality from raw materials to production technology," Luan said. 

The company's dairy farms produced 60 million litres of fresh milk annually, accounting 

for around 25 per cent of the domestic demand for raw materials, he added. 

"Milk demand is going to keep rising sharply, especially in this Year of the Dragon, 

with many families thinking it's a lucky year to have babies," he said. 

Meanwhile, market-leader Vinamilk currently accounts for 80 per cent of the domestic 

condensed milk market, 90 per cent of the yogurt market, 50 per cent of the processed 

milk market, and 25 per cent of the fresh milk market. 

Vinamilk general director Mai Kieu Lien predicted Vinamilk would be able to increase 

its market share by 1-2 per cent per year and would increase its share of the fresh milk 

market from 25 per cent to 40 per cent. Under its development strategy through 2017, 

the company expected to become one of the 50 largest dairy producers in the world. 

Vinamilk has dairies in New Zealand in addition to its 10 in Vietnam operating at full 

capacity and projected that it would increase the number of cows at its farms from 

9,500 head in 2012 to 28,000 in 2016. It has built the Lam Son Dairy Plant in the central 

province of Thanh Hoa at a cost of VND276 billion to serve the markets in Thanh Hoa, 

Nam Dinh, Thai Binh and Ninh Binh provinces. The plant would begin production 

next year. 

"According to the Ministry of Agriculture and Rural Development, fresh milk production 

in Vietnam in the coming years will only meet 22-25 per cent of the local demand," 

Lien said. "So, the dairy industry in Vietnam has great potential for development in the 

future." 

http://vietnamnews.vnagency.com.vn/Economy/229545/dairies-battle-for-marketshare.html 


The Vietnamese fast food market has heated up after BBQ Vietnam announced the 

plan to open more shops, while McDonald's has been intensively looking for Vietnamese 

partners. 

Setting foot on the Vietnamese market in 2006, the South Korean BBQ Chicken brand 

has cemented its firm position there with the opening of a lot of new fast food shops 

in big cities. 

BBQ Vietnam, which now has 13 shops in Hanoi, plans to set up 8-10 more in the city 

by 2013, especially on bustling streets such as Hai Ba Trung, Ly Thuong Kiet and Hang 

Bong. It is also conducting market surveys to serve the plan to open shops in the satellite 

cities around Hanoi, like Hai Duong, Hai Phong, Quang Ninh and Ninh Binh. 

In 2015-2020, BBQ Vietnam would move towards to other big cities such as HCM City, 

Can Tho, Bien Hoa, Ba Ria-Vung Tau, Hue, Da Nang and Nha Trang. 

According to VietQ, a website of the national quality and standard directorate, there 

are three most popular restaurant models. Small restaurants have the small area of 30- 

90 square meters and have the investment rate of 54,000 dollars. Medium class ones 

(100-190 square meters) have the total investment capital of 83,000 dollars, while the 

big ones (more than 200 square meters) need 108,300 dollars. 

When answering the questions of VietQ, Sim Hwang Jin, director of BBQ revealed the 

ambitious plan to become the Number One in the Vietnamese fast food sector. 

A senior executive of McDonald's last week paid a working visit in Vietnam, which 

aimed to seek Vietnamese partners for franchising deals. 

In fact, McDonald's came to Vietnam several times in the past, but no official statement 


FINANCE 


Hanoi To Put 10pct Tax 

On Abandoned Villas 

was made after the trips. However, people hope that more detailed information would 

be released this time. 

Analysts believe that once McDonald's joins the Vietnamese market, it would lead to 

the big changes on the market. 

A representative of McDonald's said the fast food giant is seeking the partners in Vietnam 

through some service providers in Asia. He also said that McDonald's would be 

officially present in Vietnam in two years, while HCM City would be its first destination, 

where one or two shops would be set up. 

The shops with McDonald's brand would also appear in Hanoi, the biggest city in Vietnam. 

Meanwhile, in the long term development strategy of the fast food group, the 

number of McDonald's shops in Vietnam may reach 100. 

McDonald's network has covered 119 countries and territories all over the world. The 

giant's success has been brought by the strategy on exporting the business management 

model developed and tested in the US. 

The fast food giant has also spent money and time to conduct market surveys to find 

out the specific tastes of different customers. Therefore, in every country where Mc- 

Donald's sets foot in, it offers the specific dishes that fit the native consumption habits. 

In Malaysia, Singapore and Thailand, for example, McDonald's provides the drinks 

with durian favour. In India, pork is replaced with lamb. It plans to serve 2-3 new dishes 

that fit Vietnamese customers. 

As such, after Starbucks Coffee, The Johnny Rockets, another US brand would be 

present in Vietnam, which promises the big changes in the fast food market which is 

now being dominated by KFC, Lotteria and BBQ. 

There are three specific things in the Vietnamese fast food market. First, Vietnamese 

people choose fast food shops for the parties which last many hours. 

Second, fast food is understood as cheap food products. Meanwhile, in Vietnam, they 

are very expensive. 

Third, the market is being controlled by foreign chains. 

http://english.vietnamnet.vn/fms/business/26276/foreign-fast-food-giants-run-a-racein-vietnam.html 


Hanoi authorities proposed to impose new taxes on abandoned villa projects as a punishment 

to investors. 

According to the Hanoi Department of Construction, as of June the city had about 655 

villas and 574 linked houses, which were completed but unused. 

The villas that have been abandoned for less than three months will be subject to a 5 

percent tax on the contract value, while a 10 percent tax will be applied to those abandoned 

for over that term. The Ministry of Finance also proposed fining the investors 

VND10-20 million (USD478-957) per villa. 

However, experts said this could prove difficult since the government has not yet 

clearly defined what constitutes abandonment. 

In addition a progressive tax system has been suggested for those households that buy 

more than one property. Many have suggested that the properties are considered assets 

of the investors. 

Others claim, however, that these abandoned villas are proof that the investors are 

having difficulties and more taxes will simply add to their difficulties in tough economic 

times. 

The prime minister has ordered the local authorities to carry out an inspection on the 

matter, and requested that investors comply by putting the villas to use by the third 

quarter, suggesting that they may be forced to sell them to people with real demand. 

http://stoxplus.com/News/89598/1/184/hanoi-to-put-10-tax-on-abandoned-villas.stox 


BUSINESS 


BUSINESS 

BIZ NEWS 

Business Briefs 

August 31 

31/AUG/2012 INTELLASIA 

* SSI Member Fund will buy one million shares of Hung Vuong Corporation (HVG) 

within one month starting from September 5. 

* VIAC (No. I) Limited Partnership has bought over two million shares of Vinh Son- 

Song Hinh Hydropower Company (VSH) to spur its ownership from 8.5 percent to 9.5 

percent. 

* The State Treasury sold 1.1 trillion dong worth of two-year government bonds, nearly 

1.6 trillion dong worth of three-year bonds and 50 billion dong worth of five-year 

bonds via an auction yesterday. The winning coupons were 9.3 percent, 9.4 percent 

and 9.6 percent per annum respectively. 

* Hai Minh Corporation (HMH) has announced August 31 as the ex-dividend date for 

shareholders' to receive 2012 dividend in cash at 7 percent and bonus shares at 32 percent. 

* Vietnam Education Publishing House Company has registered to buy 129,000 shares 

of Dien Hong Printing Company (DHI) from tomorrow to September 28. 

* Na Loi Hydropower Company (NLC) has announced September 6 as the ex-dividend 

date to pay 2011 dividend in cash for shareholders at 18 percent. 

* Song Da 6 Company (SD6) has gained approval to trade 1.7 million more shares on 

the northern bourse. 

* Saigon Railway Passenger Transport Company will run 14 more trains from HCM 

City to Phan Thiet, Nha Trang and Quy Nhon and vice versa from today until Monday 

to meet the increasing transport demand for National Day, Vietnam News Agency reports. 

Passengers can buy tickets at vetau.com.vn, gasaigon.com.vn and ticketing 

agencies or call 08 38436 528. 

* Ha Tinh Garment Joint Stock Company has exported over 300,000 apparel products 

to the U.S, Taiwan, South Korea, Japan and some EU countries with a combined revenue 

of nearly 11 billion dong this year. The firm expects to obtain around 24 billion 

dong in export revenue from exporting over 600,000 products by the end of the year. 

* Vietnam Bank for Industry and Trade (VietinBank) has signed a deal with Novaland 

Group to offer preferential interest rates for customers buying apartments of the Sunrise 

City project in District 7 and the Tropic Garden project in District 2. Specifically, 

when taking out loans at VietinBank from September to December 31, customers will 

enjoy an annual rate of 8 percent in the first year and 10 percent in the following four 

years. 

* PetroVietnam Drilling and Well Services Corporation (PVD) explained a 26.8 percent 

on year increase in its audited consolidated net profit to VND663.1 billion in the first 

six months of 2012 as follows: Its drilling system PV DRILLING V (TAD) started operation 

from February 14, 2012 with high efficiency. Besides, other drilling well technical 

services such as karota gas measurement, equipment leasing grew well. 

* PetroVietnam Power Renewable Energy Limited Company has put into operation 

two of the three wind turbines at Phu Quy wind power plant which generates power 

for the island district of Phu Quy, Binh Thuan Province. Constructed in late 2010 with 

a total investment of over 335 billion dong, the plant will produce 25 million kWh per 

year. 

* Song Da Group and Viet-Lao Power JSC will develop two hydropower projects Sekong 

3 and Sekaman 4 in Laos' Attapeu and Sekong provinces. The 205- MW Sekong 

3 project worth $78.5 million will generate around 804 million kWh per year. Meanwhile, 

the $128 million Sekaman 4 project, having a capacity of 80 MW, will generate 

316 million kWh annually. 

* Vissan Company has opened its representative office in Cambodia's PhnomPenh 

City and signed a cooperation agreement with Cambodian distributor UngGech after 

two months of preparations. 

* Oil exploration and exploitation firm TNK Vietnam has set aside 2.1 billion dong to 


BUSINESS 


Blue chips lead 

modest market revival 

Aug 30: Vietnam 

Stocks Extend Gain 

On Improving 

Sentiment 

carry out four community projects in HCM City and Hanoi City this year. Specifically, 

TNK Vietnam will pay operation costs for poor patients, give scholarships for poor 

students with high scores in the recent university entrance exam, organise courses on 

traffic safety and provide costs for ten groups of students to conduct scientific research. 

* An Phat Plastic and Green Environment Company (AAA) has announced September 

5 as the record date to issue 9.9 million shares for shareholders at the 1:1 ratio. 

* Vietnam Fumigation Company (VFG) has decided to establish a branch in HCM City. 

* An Giang Fisheries Import & Export Company (AGF) has set up a subsidiary named 

M&T Seafood's Corp in the U.S with the total investment of over $740,000. 


Shares rose steadily yesterday on the HCM City Stock Exchange with the VN Index rising 

by 1.07 per cent to close at 397.25 points. The value of trades improved slightly over 

Wednesday, reaching nearly VND602 billion (US$28.7 million) on a volume of 39 million 

shares. 

"Blue chips continued to prop up the market," FPT Securities Co analysts wrote in a 

note. 

The VN30 Index, tracking the leading large-cap shares, closed up by 1.26 per cent to 

465.42 points. Shares of property developers Hoang Anh Gia Lai Co (HAG) and Vin- 

Group (VIC) hit their ceiling prices while such influential stocks as Vietinbank (CTG), 

Sacombank (STB) and steelmaker Hoa Phat Group (HPG) also rose by 1-3.8 per cent. 

Eximbank (EIB) was the most-active share yesterday with 2.25 million traded, ending 

a seven-session losing streak to gain 3.14 per cent yesterday. EIB closed at VND16,400 

per share. 

Investors had regained their confidence in the market, the FPT Securities analysts 

wrote, after recent scandals involving possible fraud in the banking industry had sent 

the market into a steep decline. However, they added "the buy-side continues to be 

timid because they fear a renewed slump or a lack of major supporting news". 

A rise on the Hanoi Stock Exchange yesterday decelerated towards the end of the session, 

with the HNX-Index closing up by just 0.06 per cent to 61.92 points. The value of 

trades was anaemic, at just VND279 billion ($13.3 million). 

Advancers edged decliners by just 97-90, with VNDirect Securities Co (VND) the 

most-active share on a volume of 3.23 million. 

In coming sessions, risks of negative information should decline and market movements 

would possibly be driven again by technical and fundamental factors, said Bao 

Viet Securities Co analyst Nguyen Xuan Binh. 

"The market may face the strong sell pressures, but the indices could continue to recover 

before challenging resistance levels at 400 points for the VN Index and 63.5 

points for the HNX-Index." 

Foreign investors concluded yesterday as net buyers on both exchanges, picking up 

combined shares worth over VND32 billion ($1.5 million). 

http://vietnamnews.vnagency.com.vn/Economy/229493/blue-chips-lead-modest-market-revival.html 


Vietnamese shares ended higher today and money flows focused on blue chips on the 

primary bourse. 

The benchmark VN Index rose 4.19 points or 1.07 percent to 397.25. Volume fell 6.1 

percent to 39.04 million shares worth of VND602.1 billion. Put through trading contributed 

3.76 million shares worth of VND58.77 billion. 

The market breadth continued to be positive on the primary bourse where 132 stocks 

advanced, 88 declined, 66 closed unchanged. 

The VN30 gained 5.78 points or 1.26 percent, to 465.42. Among its 30 members 18 

gained, 7 lost the ground and 5 unchanged. 

Market opened in the green with 2 million shares changed hands. Caution was seen in 


BUSINESS 


Aug 30: Foreigners 

Continue to Net Buy 

on Both Bourses 

Aug 30: UPCoM-Index 

Bucks Trend to Close 

Down 

declining volume, however, buying energy was steady and market stayed in the positive 

territory for most of the trading time, though easing a bit at around 10:30 and late 

trading. 

Blue chips continued to provide leadership in today trade, however, there was a clear 

rotation of their role each day. 

Today, HAG suddenly got great appetite from foreigners and share prices hit ceiling 

from early trade. In total these market players scooped 433,210 HAG shares out of total 

747,270 shares traded. 

Other property developer, Vincom JSC. (VIC) also hit the ceiling today. 

PetroVietnam Gas Joint Stock Corporation (GAS) continue to see firm buying interest 

and price hike with much support from foreign side. 

Bank shares were strong STB, EIB, MBB, STB, VCB were all gainers. 

Mineral shares KSA, KSS, KTB, BMC all limited up. 

However, rubber shares retreated CSM, DPR, DPR, TRC were all gainers. 

Other blue chips DPM, HPG, PVD, gained but other VNM, REE, VSH, GMD, BVH lost 

the ground. 

Active players saw the names of EIB, SAM, VNE, SSI, GAS. 

On the Hanoi Stock Exchange, the HNX gained 0.04 point or 0.06 percent to 61.92.Trading 

volume eased 2.4 percent to 32.35 million shares worth VND278.94 billion. 

The market breadth remained positive where 97 rallied, 90 declined, 81 closed unmoved, 

the rest untraded. 

HNX30 closed up 0.04 point or 0.04 percent to 117.66. 

VNDIRECT Securities Corporation (VND) continued to be the most active share on the 

bourse with 4.3 million shares traded, closing flat at VND10,200. 

Sai Gon Thuong Tin Real Estate JSC (SCR) ranked second with 4 million shares 

changed hands, closing up 5.5 percent to VND7,700. 

Kim Long Securities JSC (KLS) came third with 2.5 million shares changed hands, closing 

flat at VND9,000. 

http://stoxplus.com/News/89611/1/179/august-30-vietnam-stocks-extend-gain-on-improving-sentiment.stox 


Foreigners extended net-buying string of shares on Vietnam stock market on both 

bourses today, level of participation rose. 

These players net bought VND31.76 billion worth of shares on STC after buying 3.7 

million shares for VND102.36 billion and selling 2.45 million units for VND70.6 billion, 

accounting for 17 percent buying value and 11.73 percent selling value. 

Foreigners' top buying shares were GAS(VND19 billion), HAG(VND11.1 billion), 

PVD(VND10.5 billion), HSG(VND5 billion) and KDC (VND2.8 billion). 

Today, foreigners' top selling shares were BVH(-VND9.7 billion), EIB(-VND7.3 billion), 

STB(-VND3 billion), PGD (-VND2.63 billion) and DPM (-VND2.6 billion). 

On the Hanoi Stock Exchange, foreigners continued to net buy VND0.6 billion worth 

of shares after buying 0.3 million shares for VND4.22 billion and selling 0.24 million 

units for VND3.62 billion, accounting for 1.51 percent buying value and 1.3 percent 

selling value. 

They actively boughtPVS, DXP, LAS, SHB, KLS while they actively offloaded PGS, 

VND, SIC, APS, and MCF shares. 

http://stoxplus.com/News/89614/1/179/august-30-foreigners-continue-to-net-buy-onboth-bourses.stox 


The UPCoM-Index, the measure of 131 unlisted public companies, retreated from 7 

month high, liquidity rose. 

The index gave up 0.06 point, or 0.16 percent, to end at 38.12. The market volume rose 

to 254,249 shares valued at VND4.13 billion versus 112,390 shares valued at VND0.83 

billion traded on previous day. 


BUSINESS 


BMP to pay 30pct 

dividend 

DPR to contribute 12b 

dong in Harutour 

HPG: VCSC 

Recommends to BUY 

HPG on Valuation 

Market breadth turned negative with 13 gainers, 18 losers, 6 unmoved, and the rest untraded. 

TGP was the biggest gainer, climbing 10 percent to finish at VND2,200 on a trade of 

100 shares. 

HPT was the biggest loser, erasing 10 percent to close at VND9,000 on a trade of 1,000 

units. 

SPC was the most active on the gauge with a trade of 121,300 shares which unchanged 

at VND28,000. 

http://stoxplus.com/News/89612/1/179/aug-30-upcom-index-bucks-trend-to-closedown.stox 

31/AUG/2012 INTELLASIA | DAU TU CHUNG KHOAN 

Binh Minh Plastic JSC (coded BMP) held an extraordinary annual general meeting 

(EGM) last weekend to pass 2011's cash dividend plan at the rate of 30 percent (BMP 

advanced 20 percent) and 2012's cash dividend at the rate of at least 20 percent. 

The EGM also agreed to elect an additional member on the company's director board 

who will be introduced by the biggest shareholder namely State Capital Investment 

Corp (SCIC). In AGM in April, the cash dividend plan did not reach the approval from 

65 percent of shareholders. In this EGM, BMP's managers had proposed cash dividend 

as above (30 percent in 2011 and 20 percent in 2012). However, the state shareholder, 

SCIC, proposed a cash dividend payout for 2011 at up to 50 percent. 

BMP's pre tax profit in the first six months reached 229 billion dong. 


Dong Phu Rubber JSC (DPR) has decided to contribute 12 billion dong into Ham Rong 

Rubber Tourism JSC (Harutour) in Sapa, Lao Cai which having 66 billion dong of chartered 

capital. Ngo Truong Ky will be representative of DPR's investment in Harutour. 

Before this, DPR plans to divest 23 billion dong from Rubber Trading and Tourism JSC 

in order to contribute into Harutour. 

Phan Phi Dieu, DPR's spokesman said that by this time DPR could not complete its divestment 

since it has not found out transferring partner. However, the Vietnam Rubber 

Group has approved for DPR to invest into Harutour, whereby DPR is speeding 

up project's progress. DPR expects to fully contribute 12 billion dong from now till the 

end of 2012. 

31/AUG/2012 INTELLASIA | VCSC 

Viet Capital Securiites Company advices investors to buy Hoa Phat Group JSC. (HPG) 

on its valuation with upswing price target of 22 percent and its strong position in steel 

market, its core business. 

The following is highlights from VCSC's research: 

We upgrade HPG from ADD to BUY, raising our target price to VND25,300 (upside 22 

percent). We are aware that the coke division and the Mandarin Garden project are in 

a difficult period. But the steel division is proving HPG is the best investment choice 

in the steel industry. Despite a tough economic backdrop in 1H, the company still managed 

7 percent yoy volume increase and improved its market share (+40bp). We think 

the stock is cheap, trading at P/B of 0.8x, a 20 percent discount to our target P/B of 1x 

which mostly values the company at cost. 

Our target price is derived from a target P/B of 1.0x. The stock is trading at 20 percent 

discount to peer group P/B average of 1x book, despite registering the highest ROE 

(17.6 percent) and second highest ROA (8.0 percent) among the group in 2011. We note 

that a price-to-book valuation tends to undervalue a growing company with new assets 

such as HPG, as it mainly values the company at cost basis. However, we believe 

that in a bear cycle, the price-to-book valuation is most appropriate, as valuations on 

suppressed earnings will undervalue the company even more. Additionally, HPG's 

peer group are trading in a wide range of P/E from 3x to 225x which makes a P/E valuation 

unreliable. 


BUSINESS 


GIL's consolidated 

profit decreased by 

46pct in H1/2012 

VICEM to buy 130,000 

tonnes of coal from 

Vinacomin 

Steel market share improves despite difficulties. For the first 7 months, the company 

sold 352,753 tonnes (+7 percent yoy), increasing its market share marginally by 40bp to 

13.6 percent, and narrowing the difference between the company and the largest domestic 

steel producer from 2.4 percent to 1.9 percent. HPG's steel average selling prices 

have fallen less than the world average (-4 percent vs. -9 percent ytd). Given this, HPG 

has proven their strong market position and marketability of their steel. For 2H, with 

loosening monetary policy, the steel industry is forecasted to improve and we believe 

HPG, as an integrated steel producer, will benefit most. 

Coke division remains a burden on company's asset base. Shanghai market coke price 

has fallen by 12 percent ytd from low demand for construction steel. The fall in coke 

price has delayed operation of the second phase of the company's coke factory (350k 

tonnes/annum). Even from 2013, when the second phase of the BOF factory is in operation 

(500k tonnes/annum), and runs at full capacity, the coke factory only needs to run 

at 56 percent utilisation rate to meet the BOF feedstock demand. The remaining capacity 

will depend on world coke demand outlook. 

Mandarin Garden: cash drag. Queries about the sale status and cash collection schedule 

of the project were not disclosed by the company. According to the 1H financial 

statement, the company has collected an estimated VND842 billion, vs. the estimated 

cash outflow of VND2,400 billion. With the estimated total investment of VND4,500 

billion for the project, we expect the company to spend an average of VND1,050 billion/annum 

for the project until 2013. The uncertainty in the cash collection and the difficulty 

of real estate project worries us about the cash status of the project and the 

company as a group. 

1H12 results were in line with our forecast. HPG's achieved 46 percent of our revenue 

and 51 percent of net profit forecasts. Compared with 1H11, revenue dropped 7 percent 

and net profit dropped 46 percent. However, these numbers were expected (in 

line with company guidance) and have been priced in. We revise down our full year 

revenue forecast by 4 percent, adjusting for a slight drop in steel prices (-4 percent), but 

leave our net profit forecast unchanged at VND1,024 billion, translating to EPS of 

VND3,071 and forward P/E of 8.2x, or 4 percent higher than historical P/E of 7.9x. 

http://stoxplus.com/News/89595/1/179/hpg-vcsc-recommends-to-buy-hpg-on-valuation.stox 

31/AUG/2012 INTELLASIA | STC 

Binh Thanh Import-Export Production And Trade JSC (coded GIL) has announced its 

consolidated financial statements after revising for Q2/2012. 

In Q2/2012, GIL reached 237.8 billion dong of revenue, up 37.3 percent year-on-year. 

However, due to its increase in cost price, GIL's consolidated profit has decreased by 

8.5 percent. 

In addition, GIL's financial cost, administration cost strongly increased in Q2/2012. Its 

profit after tax was 490 million dong, down 97 percent year-on-year. 

Cumulatively in the first 6 months, GIL reached 428 billion dong of revenue, up 46.6 

percent compared with H1/2011. Of which, revenue from general sales was 373 billion 

dong (accounting for 87 percent total revenue), up 33 percent. Moreover, GIL received 

nearly 37 billion dong from selling dressmaking products which its revenue in H1/ 

2011 did not have. 

GIL's profit after tax reached 17.7 billion dong, down 46.4 percent. GIL explained that 

it was due to increase in interest expenses, transportation cost and fuel price and ineffective 

new workers. 

GIL has completed 48 percent of total revenue plan (900 billion dong) and 32.2 percent 

of profit plan (55 billion dong). 

31/AUG/2012 INTELLASIA | BAO QUANG NINH 

Vicem Materials Transport Cement JSC - COMATCE (of Vietnam Cement Industry 

Corportation - VICEM) has registered to buy 130, 000 tonnes of coal from Vietnam National 

Coal - Mineral Industries Holding Coporation Limited (Vinacomin). 


BUSINESS 


Over 70pct of Hanoi 

enterprises posts 

losses 

NKG earns over 3b 

dong profit in 6 

months 

VNM posts 15.648tr 

dong of revenue in 7 

months 

Motorcycle import 

jumps in Aug 

This is a part of the signed coal purchasing contract between Vinacomin and VICEM. 

Accordingly, COMATCE has registered to buy 130,000 tonnes of coal dust including 

many different kinds such as 3cHG (55,000 tonnes), 4aHG (45,000 tonnes), 4bHG 

(15,000 tonnes) and 5aHG (15,000 tonnes). 

This amount of coal will be handed over in September in 2012. 

31/AUG/2012 INTELLASIA | VNMEDIA 

Hanoi Department of Taxation has reported that in the first 8 months, over 210 enterprises 

in Hanoi dissolved and trillions of companies has been missing leading to a reduction 

of 500 billion dong in the State Budget. 

The number of enterprises of which revenue increased was very small, with 26,874 enterprises, 

down 23 percent year-on-year. Meanwhile, over 47,574 enterprises posted 

decreases in revenue, up 94 percent compared with the same period in 2011. 

By this time, when declaring corporate income tax, 50,713 enterprises in Hanoi posted 

losses, accounting for 71.7 percent of the proportion of enterprises which have submitted 

a tax declaration, up 32 percent year-on-year. 

These changes resulted from the difficult business situation of enterprises with high 

price input materials, inflation, high interest rate, delayed operations, large amount of 

inventories and decreasing buying power. 

According to Hanoi Department of Taxation, these difficulties from the declining economic 

situation have created impacts on State Budget revenue. The receiving progress 

in the first 8 months was instable and tended to decrease. 

It is estimated that domestic revenue from the start of 2012 till now only reached 79.486 

trillion dong, up 3.6 percent year-on-year, equal to 59.2 percent of the state laws estimate 

and 58.7 percent of estimate assigned by the Hanoi People's Committee. 

31/AUG/2012 INTELLASIA | STC 

Nam Kim Steel JSC (coded NKG) has announced its consolidated financial statements 

for Q2/2012 according to which NKG reached 790 billion dong of revenue, up 56.7 percent 

year-on-year. Its consolidated profit was 53 billion dong, up 8.9 percent. NKG 

gained 3.23 billion dong of consolidated profit in Q2/2012. 

Cumulatively in H1/2012, NKG's revenue was 1.681 trillion dong, up 29.3 percent compared 

with H1/2011. However, NKG's cost of good sold increased by a higher rate 

leading to a decrease of 22 percent in its consolidated profit to 102.6 billion dong. 

The NKG's pre tax profit reached 3.13 billion dong after 6 months, down 91.3 percent 

year-on-year. It has accomplished 24.3 percent of revenue's plan (4.9 trillion dong) and 

9 percent of pre tax profit's plan (50 billion dong). 

31/AUG/2012 INTELLASIA | VIETSTOCK 

Vietnam Dairy Products JSC (Vinamilk - coded VNM)'s revenue in the first 7 months 

of 2012 reached 15.648 trillion dong, up 30 percent year-on-year. 

According to 2012's plan, Vinamilk try to reach 26.5 trillion dong of revenue which will 

surpass the record of $1 billion in 2011. 

Vinamilk is the corporation purchasing the most natural milk materials in Vietnam, accounting 

for nearly 60 percent of total purchased fresh milk material. 

The average purchased milk material output grows by over 10 percent per year. In the 

last 7 months, VNM has bought 97,584 tonnes of natural milk, up 18.5 percent year-onyear. 

31/AUG/2012 INTELLASIA | VNECONOMY 

In June, Vietnam motorcycle import spending suddenly jumped up to 4,000 units with 

$7 million in value, up 100 percent in quantity and 130 percent in value compared with 

that in May. 

However, in July, these numbers got back to 1,790 units of motorcycles and $3 million. 

Notably, according to the estimate of General Statistical Office (GSO), the total amount 

of imported motorcycle in August will again rocket to 3,000 units, up 1,200 units com- 


BUSINESS 


Vietnam's fertiliser 

import from China 

increases 

200,000 tonnes of 

sugar in stock 

Vietnam's Trung 

Nguyen Eyes Bigger 

Expansion 

pared with July. Moreover, total import spending will be coming back to the level of 

$7 million as in June. 

In 8 months, total motorcycle import spending is estimated at 24,300 units, equivalent 

to $43 million, down 50.9 percent in quantity and 37.1 percent in value year-on-year. 

31/AUG/2012 INTELLASIA | PHAP LUAT TPHCM 

The latest statistics from general Department of Vietnam Customs showed that the 

amount of imported fertiliser in the first 7 months in 2012 was 1.9 million tonnes, equal 

to $864 million, down 10.93 percent in quantity and 2.67 percent in value year-on-year. 

In 14 import markets of Vietnam, Malaysia was the one with the highest decreasing 

amount while China continued to be the biggest fertiliser supplier in Vietnam with 

over one million tonnes worth $420.6 million, up 8.04 percent in quantity and 18.36 

percent in value, accounting for 48.2 percent of total import spending. 

31/AUG/2012 INTELLASIA | BAO HAU GIANG 

Vietnam Sugarcane and Sugar Association (VSSA) said that the total amount of sugar 

inventories was about 200,000 tonnes in Vietnam and about 17 million tonnes all over 

the world. This number will continue to increase when factories come into 2012 - 2013 

new pressing seasons. 

Currently, sugar sell price in factories is only about 15,000 dong - 15,700 dong per kilogram, 

but it is very difficult to sell due to smuggled sugar from Thailand and neighbouring 

countries. Nevertheless, sugar price in the near future is forecast to remain 

hard and reach over 16,000 dong/kilogram. 

Nguyen Thanh Long, VSSA's President said that: Sugar redundancy led to falling selling 

price and a low sugarcane buying price. If sugarcane is bought at the price of 1,000 

dong/kilogram, factories will be at risk of break even or at a loss. 

In addition, the currently prolonged sugar smuggling situation while the government 

still does not have effective solution, raw sugarcane price will not be improved, which 

is causing many difficulties for enterprises as well as sugarcane farmers. 

31/AUG/2012 INTELLASIA | DOW JONES 

Trung Nguyen Coffee Group Corp., Vietnam's biggest coffee processing firm, plans to 

invest up to $80 million in expanding its operations in the Central Highlands. 

The plan includes a new cultivation model in Eatul area and the construction of a plant 

with a daily processing capacity of 300 metric tonnes of instant coffee in Buon Ma 

Thuot city, in Dak Lak province, within the next three years, spokeswoman Pham Thi 

Diep Giang told Dow Jones Newswires Wednesday. 

Demand for processed coffee products locally and overseas is rising rapidly, Group 

Chair Dang Le Nguyen Vu told Dow Jones Newswires, adding that the US, South Korea, 

Germany and China are the group's top export markets. 

Industry data showed that local consumption of roasted and ground coffee products 

has risen 22 percent-25 percent so far in 2012, while exports of instant coffee products 

have increased more than 20 percent. 

Trung Nguyen is also working on a 10-year expansion plan to meet this rising demand, 

which includes steps to boost local production and developing a global network of distributors, 

Vu said. 

"We will upgrade existing facilities and invest $800 million in a new series of processing 

plants in Buon Ma Thuot city. Trung Nguyen aims to become the world's biggest 

processor of coffee products by 2022," he said. 

Trung Nguyen currently operates four plants with a total processing capacity of 

120,000 tonnes. 

The group will also launch campaigns to boost the average local consumption to 5 kilograms 

a year, from around 1 kilogram now. 

The group, which runs Vietnam's largest franchise network of coffee shops, plans to 

double the number of shops to 100 next year, Giang said. 

Intellasia 31 August 2012 31 / 46

BUSINESS 


5tr dong for seven 

water projects 

Different promotions 

sought to woo buyers 


Saigon Infrastructure Real Estate Investment Joint Stock Company (SII) will spend 

some VND5 trillion developing seven projects for water supply, water purification 

and electricity production in HCM City and some other localities. 

SII general director Truong Khac Hoanh told the Daily that the company would focus 

on implementing these environmental infrastructure projects in 2012-2013. 

Of the seven projects, the most notable is the first phase of the urban wastewater treatment 

project in HCM City with a daily capacity of 150,000 cubic meters, worth a total 

of over VND3 trillion. 

Meanwhile, a system for raw water supply and power generation will be developed in 

Van Phong Economic Zone in Khanh Hoa Province, with a capacity of 30,000 cubic meters 

per day. The total investment capital of the project is nearly VND100 billion. 

In Pleiku City, Gia Lai Province, SII will build an urban water supply system with a 

daily output of 30,000 cubic meters. The project costs VND200 billion. 

In addition, the company will carry out water supply system expansion projects in 

Khanh Hoa and Lam Dong, with a respective capacity of 40,000 and 30,000 cubic meters 

a day. 

On Thursday, SII will sign a contract to carry out the project in Pleiku. This will be the 

first project to get going, said Hoanh. 

Besides, SII will sign a comprehensive cooperation contract with HFIC Investment 

Joint Stock Company on Thursday. HFIC Investment will provide consultancy service 

and mobilise funds for the projects of SII. 

SII was established in May 2010, after a group of investors, including HCM City Infrastructure 

Investment Joint Stock Company (CII) took over Viet Thanh Investment 

Construction Joint Stock Company. 

In May 2011, SII decided to change its main business field to environmental infrastructure, 

including wastewater treatment, clean water supply and electricity production. 

SII chair is Le Quoc Binh, who is also serving as general director of CII. 


There will be 2,700 outlets joining the Sales Promotion Month programme in HCM 

City next month, with participants coming up with diversified promotions in a bid to 

attract consumers. 

Up to 750 enterprises owning a combined 2,700 outlets in the locality already put their 

names down for the programme under the arrangement of the city's departments of 

Industry and Trade and Culture, Sports and Tourism as recorded by the Import and 

Export and Trade Promotion Agency. 

Supermarkets and companies have plans to launch attractive promotions to win the 

hearts of customers. 

For instance, Co.opMart supermarket chain will offer discounts of up to 49 percent for 

over 2,000 products. In particular, supermarkets citywide during this weekend's National 

Day will launch the programme "One product with an unexpected preferential 

price for every day", with customers having bills worth at least VND500,000 each entitled 

to enjoy preferential prices. 

Also, Vinatexmart store chain plans to apply similar preferential sales, setting a discount 

of 10-50 percent for products and a lucky draw. 

Meanwhile, there will be four successive promotions slated for next month and October 

at Big C, with prices of products discounted substantially. 

Citimart also sets aside VND480 million to present gifts to customers and launch promotions 

to stimulate demands next month. Citimart buyers will have a chance to net 

a discounted product or a commodities basket worth from VND100,000 to VND1 million 

for bills of at least VND300,000 each. 

In the electronics and home appliances sector, electronics stores will also launch big 

discounts to woo customers. Thien Hoa Interior Furniture and Electronics centre is expected 

to offer a discount of up to 49 percent for thousands of products during next 

month. 


BUSINESS 


DCS: Posts 1.1b dong 

Reviewed 

Consolidated Net Loss 

In H1/2012 

VNT: Explains 15.2b 

dong Reviewed 

Consolidated Net 

Profit in H1/2012, Up 

45pct YoY 

SAM: Swings to 100b 

dong Consolidated 

Net Profit in Q2/2012 

Vietnam sees strong 

growth in tourist 

arrivals from Russia 

31/AUG/2012 INTELLASIA | HNX 

Dai Chau JSC. (DCS) reported VND1.07 billion reviewed consolidated net loss in the 

first haldf of 2012 from VND8 billion net profit a year back. The firm said in its financial 

statement sent to HNX's website on August 30. 

The firm's revenues were VND76.4 billion in H1/2012, down 71 percent on year from 

VND264 billion in H1/2011. 

The company had total VND476.4 billion assets by end of June 2012, versus VND524.4 

billion at the beginning of the year. 

The firm's EPS was - VND62/share in H1/2012, compared with VND329/share in H1/ 

2011. 

http://stoxplus.com/News/89687/1/193/dcs-posts-vnd1-1bln-reviewed-consolidatednet-loss-in-h1-2012.stox 


Vinatrans Hanoi (VNT) reported VND15.15 billion reviewed consolidated net profit in 

the first half of 2012, up 45 percent on year. The firm said in its financial statement sent 

to HNX's website. 

The firm's revenues reached VND253.4 billion in H1/2012, slightly up from VND252 

billion a year ago. 

Of note, the firm's products costs were VND233.6 billion in H1/2012, lower than 

VND239.5 billion a year back. 

The firm had total VND269.4 billion assets by June 30, 2012, versus VND254.3 billion 

at January 1, 2012. 

The firm's EPS was VND2,797/share in H1/2012, higher than VND1,924/share in H1/ 

2011. 

The firm explained its reviewed consolidated net profit up 45 percent on year in H1/ 

2012 due to increase in service revenues. 

http://stoxplus.com/News/89686/1/193/vnt-explains-vnd15-2bln-reviewed-consolidated-net-profit-in-h1-2012-up-45-yoy.stox 


Sacom Development and Investment Corporation (SAM) swung to a consolidated net 

profit of VND100.23 billion in the second quarter of 2012, against a net loss of VND89.5 

billion in Q2/2011. 

The firm generated revenue of VND419.84 billion in the second quarter, up 153.36 percent 

on year, the firm said in its consolidated financial statements posted on the 

Hochiminh Stock Exchange (STC)'s website. 

The firm reported net profit in the quarter after it recovered a provision for financial 

investments of VND7.13 billion and sold Dien Bien Phu Project with revenue of 

VND178.38 billion. 

In H1/2012, the company posted a net profit of VND137.8 billion on revenue of 

VND535.5 billion versus a loss of VND109.7 billion on revenue of VND296 billion in 

H1/2011, respectively. 

Its audited consolidated net profit fell by VND319.5 million to VND137.5 billion, compared 

to an unaudited corresponding figure of VND137.83 billion as its consolidated 

financial statement (unaudited) were prepared on unaudited financial statements of 

the holding company while its audited financial statements were made on audited financial 

statements of the holding firm. 

http://stoxplus.com/News/89683/1/193/sam-swings-to-vnd100bln-consolidated-netprofit-in-q2-2012.stox 


With a recent strong growth in international arrivals from Russia, Vietnam's tourism 

has picked this country as one of the three major source markets, together with South 

Korea and Japan, to focus promotion activities on. 

Nguyen Van Tuan, deputy head of the Vietnam National Administration of Tourism 


BUSINESS 


Vietnamese aviation - 

chances and 

competition 

Rising costs menace 

tra fish farming 

(VNAT), said the Russian market has continuously grown in two recent years, with arrivals 

growing up to 30 percent this month compared to a slight rise or a decline in arrivals 

from Europe and the US 

The high season for international tourists is still weeks away, but each week still has 

13 flights bringing Russian tourists to coastal cities of Danang and Nha Trang. 

"This market will receive a lot of promotion activities, and Russian partners will be invited 

to Vietnam," Tuan said. 

Together with VNAT, some provinces and enterprises are also in preparation for marketing 

activities in Russia. Some provinces such as Binh Thuan, Thua Thien-Hue and 

Danang City will attend the international tourism fair Leisure Moscow 2012 taking 

place in Russia on September 19-22. 

Meanwhile, Danang City, Thua Thien-Hue and Quang Nam provinces will join hands 

to promote and introduce tourism potentials of the three localities to Russian partners 

and media agencies. 

Currently, there is one charter flight from Russia to Danang each week, but the city 

wants to open the direct flight from Moscow to increase the number of tourists. 

Over 100,000 Russian tourists visited Vietnam last year, and the number of Russian 

tourists in this year's first eight months has also reached this level. Vietnam expects to 

welcome 300,000 Russian tourists in 2014. 

http://english.thesaigontimes.vn/Home/business/tourism/25319/ 


Various airlines in Vietnam are working hard to finance their fleet expansion as increasing 

passenger demand presents a positive outlook for the industry. 

However, with increasing competition, more astute management will be required to 

reap the benefits. 

Vietnam Airlines, the national flag carrier, revealed its fleet development plan by recently 

putting a new A321-200 aircraft into operation. 

The aircraft, leased from Vietnam Aircraft Leasing Company (VALC), is the first in a 

deal of 10 new A321-200 aircraft purchased by VALC from Airbus Airline. 

The carrier plan to buy 26 new Airbus aircraft during the 2011-2014 period, with seven 

expected to be delivered in 2012. 

The carrier conducts over 300 flights a day on 80 routes, to 20 domestic and 26 international 

destinations. Its fleet is expected to increase from 115 to 170 aircraft between 

2015 and 2020. 

Following the same trend, low-cost airline Jetstar Pacific on August 22 launched a new 

A320, the third of its kind in the fleet. 

Jetstar Pacific with a current capacity of 240 flights a week is expected to receive three 

more A320s before the end of this year. 

Its general director Le Hong Ha said that the operation of the new A320 fleet will help 

reduce the cost of operation and technical maintenance. 

The trend of fleet expansion can also be seen at Air Mekong - a private airline planning 

to rent two more A321 aircraft to serve the growing demand of domestic routes. In recent 

years, the Vietnam aviation market has seen robust growth. 

Over the past three years, Vietnam's carriers have served about 30 million passengers 

and transported 500,000 tonnes of cargo, a four-fold increase of both number of passengers 

and cargo compared with the figures recorded before 2005. 

http://english.vovnews.vn/Home/Vietnamese-aviation-chances-and-competition/ 



The local tra fish industry are under the menace of shrinking profits given rising input 

costs while export prices will barely increase, said Duong Ngoc Minh, vice chair of the 

Vietnam Association of Seafood Exporters and Producers (Vasep). 

According to Minh, due to the drought in America, supplies of animal feed materials 

from foreign suppliers such as Brazil, Argentina and the United States are strongly 


BUSINESS 


Shipping fees to 

increase despite low 

demands 

Enterprises in Danang 

lukewarm to banks' 

capital offer 

tumbling and this is pushing up the prices as a result. 

For example, the import price of soya bean meal now has shot up to $690 a tonne from 

the $450 in May, while local bran prices have also jumped from VND5,000 a kilo to 

VND6,400 and fish powder prices have marked up about 25 percent in the local market. 

Soya bean meal, rice bran and fish powder are the three main ingredients for animal 

feed production. 

"Higher animal feed prices plus other expenses will pull the production cost of tra fish 

up by at least 20 percent if farmers and companies begin farming at this time," Minh 

stressed. 

He urged both farmers and firms to take prudent consideration when investing in tra 

fish farming these days as the export rice cannot keep up with input costs increases. 

If one kilo of tra fish is priced at between some VND27,000 to VND28,000, the export 

price of tra fish fillets should be adjusted up to over $3 a kilo. But it is difficult to revise 

up prices due to slowing demands from the European market, not to mention the current 

abundant supplies of other seafood products. 

According to an animal feed distributor in the Mekong Delta province of Dong Thap, 

the price of animal feed for aquatic farming has risen thrice this month, with a combined 

increase of VND1,000 per kilo. In the meantime, the offering price of tra fish has 

only inched up since early last week as recorded by a sales officer of a trading company. 

"Foreign customers are reportedly cautious about the mild price revision and whitemeat 

tra fish shipments bound for the US market now fluctuate from $2.6 to $2.9 a kilo 

only," he added. 

http://english.thesaigontimes.vn/Home/business/trade/25323/ 


Although weak purchasing power in the European Union (EU) market has hurt export 

and import activities, many shipping companies have announced to raise fees in September 

following a rise early this month. 

According to a representative of freight forwarder HL Cargo, some shipping enterprises 

including CSCL, K-Line, Hapag-Lloyd and NYK have plans to raise charges on 

routes between Asia and the EU to compensate for rising material and fuel costs, regardless 

of falling goods volumes on the routes. 

Goods exports to the EU have declined steadily over the past months due to falling demands 

on the market. 

According to Vietnam Association of Seafood Exporters and Producers (VASEP), the 

debt crisis in Europe is the main cause for the slump in Vietnam's seafood exports to 

the EU since early this year. In the first quarter, seafood exports to the market dropped 

7.9 percent year-on-year while the second quarter reported a decline of 15.5 percent. 

The EU in the second quarter dropped from the first to the second position among key 

seafood importers of Vietnam's seafood. The buying power from the EU has yet to improve 

so far, VASEP said. 

Early this month, MSC and Hapag-Lloyd imposed peak season surcharge of $350 per 

twenty-foot-equivalent units (TEU). Hapag-Lloyd besides extending peak season surcharge 

also imposed general rate increase of $250 a TEU from August 15. 

http://english.thesaigontimes.vn/Home/business/other/25324/ 


Not a single enterprise attended a conference on interest rates and capital access held 

in Danang City on Tuesday despite the organiser had sent scores of invitation letters 

to them, a phenomenon explained by a local official as the business circle's disbelief in 

banks' promises. 

Phung Tan Viet, vice chair of Danang City, raised the question whether enterprises 

were no longer confident in lip services from banks as the interest rate remains preventively 

high despite repeated call for helps from them. 

The conference, titled "Interest rate policy and capital access for enterprises in the Cen- 


BUSINESS 


Belgian chocolatier 

names distributor 

Vietnam to be the 

world's third largest 

rice exporter 

tral Region and the Cenral Highlands," therefore heard monologues from banks and 

officials. 

Le Thi Thanh Toan, deputy director of the Ngu Hanh Son District branch of Bank for 

Industry and Trade (VietinBank), said there are credit packages at her bank with an annual 

interest rate of only 8.95 percent. But her assurance was swiftly rejected by vice 

chair Phung Tan Viet. 

"That soft rate is valid for only the first month, and will sky-rocket from the second 

month," Viet said. "Loans of one-month term are only used for situational remedies, 

and are of no meaning in assisting enterprises to maintain production," Viet raised his 

sharp tongue, adding preferential loans should have terms of between one and three 

years. 

The city's vice chair observed that the number of enterprises on the verge of bankruptcy 

is on the rise, thus capital support from banks is among the important resources to 

help them survive the tough times. 

Over the past several months, the government and the central bank have made drastic 

moves to pull down the interest rate, but only the deposit rate has been lowered while 

the lending rate remains high, he continued. 

Furthermore, many enterprises have become ailing after a long time grappling with 

economic difficulties, so they are no longer qualified to take out bank loans. As such, 

support from banks is deemed important. 

Vo Van Minh, director of the central bank's Danang Branch, said outstanding loans in 

Danang grew little between June 2011 and June 2012, at a mere 2.48 percent. The credit 

growth in this year's first half was even negative, Minh said. 

Vice chair Phung Tan Viet announced that central bank governor Nguyen Van Binh 

and Danang City's Party secretary Nguyen Ba Thanh would have a meeting early next 

month with the business community in Danang in order to find solutions for enterprises 

to better access capital. 

http://english.thesaigontimes.vn/Home/business/other/25331/ 


Callebaut, a famous Belgian-chocolate brand, has chosen United Vision as its sole distributor 

in the Vietnamese market. 

The 100-year-old company makes chocolate from ingredients imported from Belgium. 

It will target four - and five-star hotels, high-grade confectionery companies and other 

food-and-beverage outlets in Vietnam. 

http://vietnamnews.vnagency.com.vn/Economy/229535/belgian-chocolatier-namesdistributor.html 

2012 trade and agriculture fair in Phan Thiet 

31/Aug/2012 Intellasia | VOV 

A trade and agriculture fair opened in Phan Thiet city, southern Binh Thuan province 


It has more than 400 stalls put up by 170 domestic businesses from southcentral provinces. 

On display are different kinds of agricultural products and advanced machinery. 

In addition, a seminar on the potential of agricultural development in the southcentral 

region, a food festival and arts performances will be held during the fair which lasts 

until September 3. 

http://english.vovnews.vn/Home/2012-trade-and-agriculture-fair-in-Phan-Thiet/ 



Vietnam will be the world's third largest rice exporter in the next decade, after Thailand 

and India, Asian Development Bank (ADB) announced on August 30. 

Last year, total rice exports from Thailand, India, Pakistan and the US accounted for 

87 percent of the global value. 


BUSINESS 


Chinese grapes, 

potatoes come under 

strict scrutiny 

Coffee exports face 

tough challenges 

In 2011, Vietnam harvested 7.6 million hectares of paddy and produced 26.5 million 

tonnes of rice with the average yield of 3.49 tonne per hectare, showing a year-on-year 

increase of 0.94 percent. 

Asean is now the world's largest rice-exporting region with its export volume rising 

from 110 million tonnes in the 2010-2011 crops to 128 million tonnes in the 2021-2022 

crops. 

Vietnam and Thailand are two major suppliers of rice to Africa, ADB added. 

http://english.vovnews.vn/Home/Vietnam-to-be-the-worlds-third-largest-rice-exporter/20128/141609.vov 

31/AUG/2012 INTELLASIA | TUOI TRE 

As of the beginning of September, grapes and potatoes imported from China will be 

closely monitored and supervised for food hygiene and safety standards, the Vietnamese 

Ministry of Agriculture and Rural Development announced Thursday. 

The scrutiny came after two samples of grapes shipped from China to the northern 

province of Lao Cai, and one of potatoes to HCM City, were last month found exceeding 

the allowed amount of pesticides by three to five times. 

"Products that fail to pass strict scrutiny will be forced to re-export," said Hoang Trung, 

deputy head of the ministry's Plant Protection Agency. 

Meanwhile, Chinese grapes are still on sale in markets across HCM City at exorbitant 

prices thanks to their "grown-in-US" disguise. 

Tho, who runs a fruit booth at Pham Van Hai market in Tan Binh District, said he can 

sell as many as 60 kilogram of Chinese grapes during the days of high demand. 

Chinese grapes are available everywhere at VND130,000 a kilogram (US$6), which 

consumers say is too expensive. 

To answer consumers' questions on the high prices, traders simply say the fruits are 

from the US, and one fruit seller added that"we will never sell Chinese grapes, even 

when prices are dirt cheap." 

There has been some 100 tonnes of grapes shipped from China to the wholesale market 

of Thu Duc, according to its deputy director Nguyen Thanh Ha. 

Meanwhile, Chinese potatoes only take a modest place on shelves in markets citywide. 

"Potatoes only account for a small proportion of total fruits and vegetables imported 

from China," said Ha. 

Traders said they no longer sell Chinese potatoes as there is almost no demand. 

"As consumers prefer Da Lat potatoes, no traders sell the Chinese products," said 

Hoan, a small trader in Tan Dinh market. 

Da Lat potatoes are available at VND40,000 a kilogram, while the Chinese counterparts 

only fetch a quarter of the rate. 

http://tuoitrenews.vn/cmlink/tuoitrenews/business/chinese-grapes-potatoes-comeunder-strict-scrutiny-1.84817 


Members of the Vietnam Coffee-Cocoa Association (Vicofa) will have to pay $2 for 

every tonne of coffee they export as of October this year. 

At a recent meeting with the Ministry of Agriculture and Rural Development (MARD), 

Vicofa Chair Luong Van Tu said that the Association expects to receive at least $1 million 

from the 600,000 tonnes of coffee exported by its members every year. 

But the main question is how effectively the money will be used to support exporters 

when the coffee prices keep dropping sharply. 

Tu suggested that 50-70 percent of the funds should be used in growing coffee, 30 percent 

in stockpiling products and the rest in promoting trade. 

If there is no reinvestment in coffee production, Vietnam will lose its current status as 

the world's biggest producer and exporter of coffee and fall to fourth or fifth place, he 

warned. 

The plan would have taken effect sine January 1, 2012 but it was then cancelled due to 

strong opposition from Vicofa members. 


BUSINESS 


Cement plant's feet 

caught in stone 

They claimed that many businesses were in a fixed and going to declare bankruptcy. 

They argued that there should be unfair treatment as the fee payment bid not apply to 

foreign traders, who purchase nearly 50 percent of the country's total coffee volume 

while enjoying many advantages such as rich capital sources, lower loan interest rates 

and a much wider market. 

In the meantime, the MARD and the Ministry of Industry and Trade have adopted 

stricter export restrictions. 

To qualify as an official exporter, a domestic business has to show that it has been 

processing and exporting coffee for two consecutive years, and has shipped a minimum 

of 5,000 tonnes each year. 

Most small and medium sized enterprises in Vietnam considered these requirements 

unrealistic. 

The Buon Ma Thuot Coffee Association said 80 percent of their member businesses are 

independent and they cannot meet the condition for coffee shipments. 

In addition, the time required for processing and exporting coffee makes it difficult 

even for large businesses to operate well. 

As more than 150 businesses now only focus on exporting coffee instead of producing 

it, it is urgent to apply compulsory conditions for them to refrain from competing unhealthily 

and co-ordinate in stabilising the coffee industry. 

http://english.vovnews.vn/Home/Coffee-exports-face-tough-challenges/20128/ 

141615.vov 

31/AUG/2012 INTELLASIA | VIR 

Economic hardships have proven tough for the $167 million northern Thai Nguyen cement 

plant. 

With a VND77 billion ($3.6 million) loss after more than a year up and running Thai 

Nguyen Cement is at the crossroads, continuing its fading existence or going bust due 

to financial distress. 

Thai Nguyen Cement project, developed by Vinaincon, benefited from an array of 

state incentives like concessionary loans, sourcing foreign loans with state guarantee, 

borrowing from Ministry of Finance's (MoF) accumulation fund to pay foreign debts 

and using commercial loans in a total sum reaching 95 per cent of the project's total investment 

capital, tantamount to VND3.046 trillion ($145 million). 

However, since construction took seven years, and sponsoring banks failed to arrange 

capital as undertaken the project had to source part of its investment capital overseas 

with Vietnamese government acting as underwriter. 

Going into production at the time of economic slump when a raft of construction 

projects faced delay, progress extension or being cut to save costs Thai Nguyen Cement 

ran at less than 60 per cent designed capacity. By late 2011, the plant saw around 

300,000 tonnes unsold stock of cement and clinker valued at VND113 billion ($5.3 million). 

Thai Nguyen Cement currently does not have any capital sources to pay debts, according 

to the MoF. 

Thereby, in July 2011 as a guarantor the MoF had to pay over 4 million euros of Thai 

Nguyen Cement due debt at France-based BNP Paribas. 

To deal with the project's current financial woes, the MoF had proposed the Ministry 

of Industry and Trade (MoIT) and developer Vinaincon three scenarios - letting the cement 

plant go bust, shifting the plant to state cement conglomerate vicem or transferring 

state capital part of the plant at developer Vinaincon to the State Capital 

Investment Corporation (SCIC). 

However, these three scenarios are perceived as ineffective at this point of time. 

First, if the cement plant went bust, the state could loss a huge capital amount since it 

is rather difficult to sell the project at its real value in current context. 

Second, vicem did not want to acquire a project bogged down in debt like Thai Nguyen 

Cement as it is also burdened with debts, according to vicem's chair Luong Quang 

Khai. 


BUSINESS 


Cashew paradox: 

farmers cut trees, 

firms increase imports 

Third, in case the plant was transferred to SCIC, industry experts assumed the plant's 

performance could hardly be noticeably improved since SCIC did not have much experience 

in governing and managing cement business and construction industry. 

Besides, it takes time for the MoF and SCIC to mull the plant reshuffle plan. 

According to Vinaincon's chief accountant Hoang The Hien, Vinaincon is still waiting 

the government's instruction about how to deal with Thai Nguyen cement debts. The 

plant now runs at 50-60 per cent capacity which fails to cover high borrowing cost and 

machinery amortisation fees. 

To get additional income sources for paying debts, the plant must reach at least 80 per 

cent capacity, a target now out of reach in the face of low cement market consumption. 

Thai Nguyen cement's total designed capacity is 1.51 million tonnes per year. Its official 

cement brand is Quang Son. 

http://www.vir.com.vn/news/business/cement-plants-feet-caught-in-stone.html 


While local farmers have been jostling to chop down their cashew trees due to dirt 

cheap prices, cashew manufacturers have had to import half of the raw materials needed 

for production. 

The import rate is expected to rise further in the future, as the local areas for cashew 

plantations have increasingly decreased, despite the fact that Vietnam is the world's 

top cashew nut exporter. 

In the southern province of Binh Phuoc, farmers are still busy emptying their cashew 

plantations, as prices have nearly halved compared with the same period last year. 

"Prices have fallen from VND30,000 a kilogram last year to only VND17,000 a kilogram 

now," said Bui Minh Tien, from Loc Ninh District. 

Tien said he is switching to growing pepper, which will yield bigger profits, as he is 

no longer able to make ends meet with the VND45 million (US$21,500) annual income 

from the 3.5-hectare cashew plantation. 

Following the trend, other farmers in neighbouring localities have also replaced their 

cashew gardens with pepper or rubber crops. 

And this tree cutting wave is out of authorities' control, Nguyen Van Toi, director of 

the province's Department of Agriculture and Rural Development, admitted. 

"Cashew manufacturers do not buy the products directly from farmers, but via a multilayer 

chain of traders and small plants, and farmers are thus forced to sell at low prices," 

he explained. "So there is no surprise when farmers rush to empty their 

plantations." 

Increased imports 

In an opposite race from the farmers, manufacturers have had to increase imports of 

raw cashew for their production. 

Local manufacturers are expected to import an additional 400,000 tonnes of cashew 

this year, according to its governing body, the Vietnam Cashew Association (Vinacas). 

In the year to mid-August, some 215,000 tonnes of cashew have been shipped to the 

country, according to figures from the general Customs Department. 

However, the director of a cashew manufacturer in Dong Nai said the number is much 

bigger, as some companies are using a large amount of raw material imported in late 

2011. 

"Some major businesses have been exporting products made merely from imported 

materials this year," an industry expert, who wished not to be named, said. 

"Manufacturers prefer importing than buying from local farmers because imported 

prices from Cambodia and African countries are far lower than domestic rates," explained 

another company director, who also wished to remain anonymous. 

http://tuoitrenews.vn/cmlink/tuoitrenews/business/cashew-paradox-farmers-cuttrees-firms-increase-imports-1.84755 


BUSINESS 


HCM City Pilots 

Crocodile Breeding 

Programme For 

Leather 

Company licensed to 

planttrees in Laos 

Tra fish exports likely 

to rise in third quarter 


HCM City's Department of Agriculture and Rural Development has launched a pilot 

programme on raising crocodiles for skin export at a farm in Cu Chi District. 

Some 2,000 crocodiles of pure freshwater breeds will be raised at Ton Phat Crocodile 

Farm. 

Presently, popular breeds are a mixture of freshwater and saltwater crocodiles. 

Besides, for commercial crocodile farming, the animals must be raised separately from 

one another and provided with clean water periodically, said Le Minh Dung, deputy 

director of the department. 

The programme is aimed at improving the quality of crocodile skins so that they can 

meet required standards to be exported to Japan and European nations. 

HCM City is now home to some 170,000 crocodiles being raised in 39 hectares of specialised 

farms for commercial purposes. 

http://stoxplus.com/News/89593/1/188/hcmc-pilots-crocodile-breeding-programmefor-leather.stox 

31/AUG/2012 INTELLASIA | VNA 

A Vietnamese company has received permission from the Lao government to plant 

rubber trees in the Lao province of Savannakhet. 

Lao deputy minister of Planning and Investment Bounthavy Sisouphanthong singed 

an agreement to this effect with Thai Hoa Lao company's director Le Quang Dao in Vientiane 


Under the agreement, the Thai Hoa-Lao company, an affiliate of Thai Hoa Group, will 

lease an additional 1,000 hectares to carry out a 22 million-USD project on rubber plantation 

and construction of a processing plant in Noong district. 

Thai Hoa group has invested in Laos since 2000, mainly in rubber and coffee planting 

and processing rubber latex for export. 

http://en.vietnamplus.vn/Home/Company-licensed-to-planttrees-in-Laos/20128/ 

28283.vnplus 


Tra fish exports are expected to increase by the end of the third quarter thanks to high 

demand from the international market, according to the Vietnam Association of Seafood 

Exporters and Producers (VASEP). 

The increase is largely due to a higher volume of tra fish purchases by foreign importers 

to meet high demand during holidays at the end of the year. 

VASEP forecasts that tra fish exports in the third quarter will increase by 12 per cent 

against the second quarter, reaching an export value of $480 million. 

Tra fish contributes 26.3 per cent to the nation's total seafood export turnover. Total export 

turnover of tra fish this year would likely reach $1.8-2 billion, the association's 

general secretary Truong Dinh Hoe has said. 

Hoe said that the price of tra fish was increasing, proving that global demand remained 

high. He added that the export-turnover goal for the year was reachable if the 

industry maintained tra fish quality and kept the same number of partners. 

The US, the EU and Southeast Asia continue to be the biggest markets for Vietnamese 

tra fish. 

VASEP said that since the end of the second quarter, tra fish exports had increased by 

27-30 per cent in the US, and by 30-40 per cent in Southeast Asia. 

In the two first quarters of the year, tra fish exports did not gain a good result due to 

the global recession. In the first quarter, the export value year-on-year increased by 13 

per cent, and in the second quarter, it rose only 6 per cent, reaching $428 million. 

For the first six months of the year, the export value of tra fish was $854 million yearon-year, 

up by only 3 per cent. 

http://vietnamnews.vnagency.com.vn/Economy/229541/tra-fish-exports-likely-torise-in-third-quarter.html 


BUSINESS 


Vietnam's PV Oil 

Seeks Gasoline 

Cargoes for Sep 

Delivery 

Work starts on final 

bridge of Ho Chi 

Minh Road 

Thousands Of 

Containers Stuck At 

Mong Cai Border Gate 

31/AUG/2012 INTELLASIA | BLOOMBERG 

PV Oil Corp. is seeking to buy two gasoline cargoes for September delivery, according 

to tender information obtained by Bloomberg News. 

The company is a unit of state-owned Vietnam Oil & Gas Group, or PetroVietnam. Details 

are as follow: 

Product: 92-RON gasoline 

Quantity: Two cargoes of 9,000 cubic meters each 

(about 56,600 barrels each) 

Delivery: September 20 to September25 

Ports: Mien Dong, Vungtau and Nhabe, HCM City 

Offers due: August 31, 10:30 a.m. local time 

Validity: September 4, 12 p.m. local time 

http://www.bloomberg.com/news/2012-08-29/vietnam-s-pv-oil-seeks-gasoline-cargoes-for-september-delivery.html 


The Ministry of Transport on Wednesday broke ground for the Nam Can Bridge 

project in Nam Can District in the Mekong Delta province of Ca Mau as the final bridge 

of the Ho Chi Minh Road project. 

With a total length of 3,390 meters, the bridge consists of two approach roads stretching 

2,500 meters and costs nearly VND650 billion in investment capital funded by government 

bonds sales. It is set for completion after 18 months and will connect districts 

Nam Can with Ngoc Hien which is the only district in the delta region without a road 

leading to the centre area. 

The first phase of the Ho Chi Minh Road project has been completed and has been put 

into operation with a length of about 1,350 kilometers running from Hoa Lac in Hanoi 

to Tan Canh in the Central Highlands province of Kon Tum. The second phase which 

is still under construction starts in Pac Bo in the northern mountainous province of Cao 

Bang and ends at Dat Mui in Ca Mau Province. 

The Ho Chi Minh Road runs from North to South in parallel with the National Highway 

1 with a total length of 3,167 kilometers, running through 28 provinces and cities. 

The main route stretches 2,499 kilometers and the western route covers 684 kilometers. 

The first phase covering 1,350 kilometers between Hoa Lac and Tan Canh has been put 

into use and the second phase is under deployment, with the whole route set to be 

open with two lanes in 2015. 

When complete, the road alongside the National Highway 1 will be the backbone 

cross-country routes linking up seaports, airports and other major infrastructure facilities 

nationwide. 

http://english.thesaigontimes.vn/Home/business/infrastructure/25332/ 


Thousands of containers are stuck at Mong Cai Border Gate in the past six months, 

awaiting Chinese customs clearance permission. 

Guangxi Province authorities said the imports were mainly Vietnamese temporarilyimported 

goods for re-export were mostly frozen products that had been illegally 

transported. Meanwhile, other products such as wood, seafood and rubber have continued 

to get the nod from Chinese customs. 

Currently, more than 1,000 containers remained lined up at customs clearance stations 

and border gate depots, causing difficulties for around 100 firms because they have 

spent millions of VND on preservation costs and depots fees. 

Employment has halved at the border gate compared to the 7,000 people working 

there prior to March this year. 

According to the management board of Mong Cai Border Gate, by early August, total 

import-export value via Mong Cai border gate was estimated at USD2.78 million, 

down nearly 14 percent compared to the same period of last year. Export value saw a 

fall of 50.4 percent and imports 8 percent. Goods which are temporarily imported for 


BUSINESS 


Vinpearl granted parts 

of Nha Trang Bay for 

tourism investment 

Work on Nhat Le 2 

Bridge starts 

Million dollar homes 

still up for sale 

export also dropped 7.04 percent and this downtrend has continued. 

Chair of the Mong Cai City People's Committee, Duong Van Co, said "Goods transported 

via Mong Cai Border Gate to Guangxi Province now account for just 10 percent 

against March 2012." 

He also said that since March, Guangzi authorities had tightened control over smuggling 

in the area adjacent to Mong Cai, adding that, "According to information we've 

received from some Chinese companies, the Vietnamese temporarily-imported goods 

for re-export were illegally transported, therefore, they have been stockpiled at Mong 

Cai Border Gate." 

No one can know when the goods will receive Chinese customs clearance. The local 

People's Committee has asked authorities to arrange depots and power for the containers, 

Co said. 

The same situation is repeated at northern Lang Son Province''s Tan Thanh Border 

Gate. Meanwhile, at the province''s Chi Ma Border Gate, few goods for temporary import 

and re-export are able to cross the border. 

http://stoxplus.com/News/89597/1/188/thousands-of-containers-stuck-at-mong-caiborder-gate.stox 

31/AUG/2012 INTELLASIA | THANH NIEN 

Authorities in the central province of Khanh Hoa have granted Vinpearl Joint Stock 

Company an area of nearly 1,500 hectares (3,706 acres) in the protected Nha Trang Bay 

for tourism investment, Tuoi Tre reported. 

The involved area included more than 556 hectares of land and 926 hectares of bay, including 

the beaches and swamplands of Bai Ran, Bai Tre, Dam Bay, Vung Nga and 

Bich Dam on Hon Tre Island. 

The grant came in response to a proposal made by the real estate and tourism investment 

company. 

An official at the Nha Trang Bay management agency said that the land grant includes 

portions of Hon Tre's east coast - which was designated level-1 protected land. 

The designation requires authorities to keep the protected area intact, though they can 

approve construction in the areas in special cases. 

A deputy director at the Khanh Hoa Department of Culture, Sports and Tourism said 

there has been no approved zoning plan for the area granted to Vinpearl. 

In May, Khanh Hoa authorities appealed to the federal government to withdraw the 

protected land designation granted to Nha Trang Bay. 

The provincial People's Committee deputy chair Nguyen Chien Thang said the locality 

has "tied its own hands" since the bay was granted the title because any activities 

involving the area must comply with the Cultural Heritage Law and Environmental 

Protection Law. 

http://www.vietbiz24.com/Articles/1017/31329/real-estate/vinpearl-granted-parts-ofnha-trang-bay-for-tourism-investment.aspx 

31/AUG/2012 INTELLASIA | BAO DAU TU PAGE 1 

People's Committee of the central province of Quang Binh and Quang Binh Department 

of Transport in the morning August 31 started construction on Nhat Le 2 Bridge 

project, linking Dong Hoi city to Bao Ninh peninsula. 

The project with an estimated investment capital of 936.586 billion dong from government 

bond capital and other sources will be carried out from 2012 to 2015. 

Nhat Le 2 is a cable-stayed bridge with one pylon, total length of 515.2 meters consisting 

of four lanes and foot-walk. 

31/AUG/2012 INTELLASIA | VNMEDIA 

Large houses in inner-city districts of Hanoi are being offered for sale online at tens or 

even hundreds of billions of VND. 

According to major real estate trading websites, the districts of Hoan Kiem and Ba 

Dinh are home to some of the most expensive houses available. 


BUSINESS 


Ministry Tightens 

Supervision on 

Property Market 

Mini-marts sprout up 

in HCM City 

In Ba Dinh District, prices vary from a five-floor 70 square metre house on Linh Lang 

Street on sale for VND14.2 billion (USD676,190); to a 102-square metre home on Nguyen 

Truong To Street sold at VND56 billion (USD2.6 million) and a 200-square metre 

one at USD67 billion (USD3.1 million). 

In Hoan Kiem District, a 65-square metre house on Hang Cot Street is valued at VND33 

billion (USD1.5 million); rising to VND70 billion (USD3.3 million) for a 120-square metre 

house on Ly Thuong Kiet Street. 

Pham Xuan Can, Chair of Sohovietnam Real Estate Consulting Company, said current 

economic difficulties and tightened banking loans were posing a challenge for real estate 

investors, therefore, massive sales of such houses was inevitable; and despite the 

outrageous prices being quoted, the prices included discounts of 20-30 percent lower 

than at the height of the property boom. Despite the high prices, these luxury buildings 

are still attracting buyers who seem to have more money than sense. 

A representative from a real estate office on Ma May Street Hanoi said so far this year, 

the office had only sold 1-2 apartments because the sellers were asking for too high 

prices. Large houses were proving particularly hard to sell. 

http://www.dtinews.vn/en/news/018/24517/million-dollar-homes-still-up-forsale.html 


The Construction Ministry has decided to set up an interdisciplinary inspection panel 

to check real estate market management activities 

The Construction Ministry has decided to set up an interdisciplinary inspection panel 

to check real estate market management activities as specified in the prime minister's 

Directive No. 2196/2011 on reviewed contents of underway housing development 

projects and delayed housing projects. 

The panel will classify ongoing housing development projects, suspended housing 

projects and adjusted projects. 

Deputy minister Nguyen Tran Nam, head of the inspection panel, said: The real estate 

market has developed in both quality and quantity in the past time but it is prone to 

weaknesses, volatility and unpredictability. 

Vacated or suspended projects are quite many in Hanoi and HCM City. Notably, nearly 

500 real estate projects in Hanoi are subjected to review but the affair has not been 

agreed by the prime minister. Hence, in this inspection, the ministry will focus on disqualified 

and law-violating projects. 

http://stoxplus.com/News/89600/1/188/ministry-tightens-supervision-on-propertymarket.stox 


Opening mini supermarkets and convenience stores is becoming a new retail trend in 

HCM City. 

Many people do not want to go to supermarkets for minor purchases because of the 

time it takes for parking and queuing up. 

There is no inherent advantage in shopping in supermarkets either, with the prices of 

some products being higher there than outside and the quality of frozen food not being 

uniformly good. 

Thus, mini supermarkets and convenience stores are an idea whose time has possibly 

come, especially in suburban areas. 

Vu Van Trinh, general director of the Titanmart chain, concurred. His company found 

that demand for fresh foods and others was increasing rapidly in suburban areas like 

Hoc Mon, and Thu Duc Districts, so it decided to set up mini supermarkets there, he 

added. 

There has been early success. Trinh said his company had eight mini supermarkets 

which last year achieved a revenue growth of 20 per cent. 

"We are looking for places to open more mini supermarkets this year and at the start 

of 2013," he told Vietnam News. 


BUSINESS 


Vietnam spends more 

on IT 

The Vietnam Fashion Trading Company Ltd (Vinatexmart) has this year opened two 

new mini supermarkets, which boosted first-half turnover by 10-12 per cent. 

The company plans to open three more this year. 

The city Department of Industry and Trade reports that there are 251 convenience 

shores and mini supermarkets in the city, four times the 2005 number. 

Typically, these outlets are 200-1,000sq.m in size and offer a great deal of convenience 

to customers by stocking 5,000-10,000 items including fresh food, garments, cosmetics, 

and footwear. 

They are attractively displayed and frequently offer promotions. 

Nguyen Thi Ut of District 9 said she had no time to go to traditional markets because 

of her business, and often shopped in convenience stores. 

"They supply everything I need at reasonable prices," she said. 

Besides supplying fresh food, these shops also play an important part in stabilising 

prices with their promotional programmes. 

Many mini supermarkets like Foocomart, Titanmart, An Khang, and Satarmart also offer 

free delivery. 

Vu Kim Hanh, director of the Centre for Business Studies and Assistance, said the new 

trend created a reliable distribution system for consumers and helped companies sell 

their products. 

It also managed to take Vietnamese goods to suburban and rural areas, she added. 


Vietnam's spending on information technology (IT) is growing at an average rate of 17 

percent per year, almost hitting $3 billion in 2011 and forecast to reach $3.5 billion in 

2012 if the tempo is maintained. 

Speaking at a workshop on Vietnam information and communication technology held 

in HCM City on Wednesday, Nguyen Trong Duong, head of the IT department under 

the Ministry of Information and Communications, said Vietnam's IT spending had 

been rising sharply in the last five years, despite economic uncertainties. 

According to the White Book of IT released on the same day, Vietnam's IT spending is 

surging by some 17 percent every year, amounting to $2.9 billion in 2011, twice as 

much as the figure of $1.4 billion in 2006. 

Hardware and software make up a large proportion in the structure of IT spending in 

Vietnam, reaching 88 percent in 2006. However, the proportion of spending on hardware 

is gradually shrinking, standing at around 84 percent in 2011, equivalent to $2.4 

billion, while spending on software and IT services keeps picking up. 

Moreover, Vietnam's hardware export has been growing over the past years. In 2011, 

hardware and electronic products brought in $11.3 billion, up 101 percent against 2010, 

accounting for 82 percent of the total revenue of the IT industry. 

This impressive growth is attributed to the export revenues of Samsung, Canon, Panasonic, 

Foxcomm and Nokia, whose factories in Vietnam have been completed, allowing 

them to boost export of hardware and electronic products. 

Export turnover of computers, electronic products and components, and telecom devices 

totalled $10.89 billion in 2011, rising more than 92.2 percent year-on-year. For the 

first time, export turnover surpassed import turnover, resulting a trade surplus of $428 

million for the industry. 

Cell phones generate the highest export revenue, making up 60 percent of the total 

turnover. 

While hardware export records significant growth, telecommunications, which is seen 

as a gold mine for enterprises, witnesses its growth slowing down. The industry obtained 

unsatisfactory revenues last year because citizens and businesses cut spending 

on telecommunications. 

Specifically, the total revenue of the telecommunications sector was $7 billion in 2011, 

down 26 percent against 2010. Notably, revenue of mobile phone services dropped 

from $5.7 billion to $5.4 billion, but still accounted for 77.5 percent of the total revenue. 

http://english.thesaigontimes.vn/Home/business/ict/25322/ 


BUSINESS 


VNPT told to redo 

restructuring plan this 

year 

HCM City hosts 

Consumer Digital 

World Expo 2012 

Downturn shrinks 

ICT event 


The Ministry of Information and Communications has asked Vietnam Posts and Telecommunications 

Group (VNPT) to submit to relevant authorities its own restructuring 

plan for final approval within this year, after rejecting the group's previous plan. 

According to the ministry, reforming enterprises in the industry must clarify the difference 

between business activity and public welfare activity. 

For important telecom markets like fixed and mobile phone or broadband Internet, the 

restructuring needs to ensure the participation of at least three major enterprises in 

each sector. The purpose is to boost competition among industry players whilst restricting 

the overwhelming presence of State-owned firms from other sectors. 

Besides, restructuring schemes of industry insiders also need to sustain growth of markets 

in line with the overall economic restructuring and to balance benefits of the State 

and businesses and citizens. 

In order to ensure economic security in the telecom sector, the State will continue to 

hold majority stakes in a number of services suppliers whose infrastructure and public 

welfare services play an important role in the national telecom infrastructure's operation. 

Deputy minister of Information and Communications Le Nam Thang told the Daily 

that in fact VNPT had previously submitted its restructuring project to related ministries 

and agencies for comments. However, the scheme was said to be unsuitable as it 

had been drafted before the ministry set up orientations on restructuring plans of companies 

in the industry, Thang added. 

As such, only when VNPT builds up its restructuring scheme in accordance with the 

ministry's rules may the group gain approval from competent authorities for restructuring. 

http://english.thesaigontimes.vn/Home/business/ict/25330/ 


Vietnam Consumer Digital World Expo 2012, co-hosted by IDG Vietnam, HCM City 

Computer Association and the National Steering Committee on Information and Technology, 

opened at Tan Binh International Exhibition & Convention centre on August 

30. 

The four-day exhibition showcases more than 200 booths from ten countries and territories 

with various kinds of technology products such as mobile phones, electronics, 

telecommunications, digital devices, and the application of cloud computing. 

The event aims to introduce the most advanced products, services and technology solutions 

for consumers, and provide an opportunity for enterprises to seek new partners. 

Deputy Chair of the HCM City People's Committee Le Manh Ha said that the exhibition 

provides a window into the digital era with series of smarter, more powerful and 

more useful products, meeting the demand from customers. 

http://english.vovnews.vn/Home/HCM-City-hosts-Consumer-Digital-World-Expo- 

2012/20128/141600.vov 


The 17th Vietnam Consumer Digital World Expo (VCW 17) opened yesterday in HCM 

City, organised by International Data Group (IDG Vietnam) in conjunction with the 

HCM City Computer Association (HCA). 

The scale of this year's event is smaller by 30 per cent compared with last year due to 

the global financial crisis, and domestic economic challenges, as well as the increased 

development of e-commerce. 

The exhibition will display 13 types of products, including mobile and telecommunications 

equipment, digital ware, software, hardware, GPS, cloud-computing applications, 

smart-home applications and home-entertainment products. 

More than 200 exhibits from 10 countries and territories are part of the event which 

will close on September 2. More than 200,000 visitors are expected. 


BUSINESS 


Number of internet 

subscribers remains 

stagnant in 4 months 

FPT adjusts business 

plans for this year 

Sony introduces a series of products, including a 3D TV with full HD version, its latest 

laptop, the Ultrabook - T Series, and an Xperia smartphone, as well as a Handycam, 

Walkman, PlayStation and opera-quality home audio equipment. 

Taiwan Excellence showcases 18 brands in several product categories, with reasonable 

prices and good quality. 

Canon offers its latest cameras, including a Power Shot S-series, the new IXUS and other 

professional cameras and printers. 

HP brings laptops, an all-in-one desktop computer named HP Workstation Z1 and 

multi-purpose printers. 

Microsoft focuses more on hardware products, including a mouse with Blue Track 

technology and optical light sensor. 

The VCW 2012 this year focuses on youth, who account for the majority of trend-followers 

and technology users. 

It is expected to maintain its position as the best IT exhibition in Vietnam, bringing 

modern technology to the consumer and serving as a bridge between producers and 

end-users. 

http://vietnamnews.vnagency.com.vn/Economy/229543/downturn-shrinks-ictevent.html 

31/AUG/2012 INTELLASIA | VNECONOMY 

The number of internet subscribers across Vietnam in August, 2012 was estimated at 

4.4 million, up 15.6 percent year-on-year, according to General Statistical Office 

(GSO)'s report. 

GSO estimated that the monthly internet subscriber number was only 4.4 million from 

April till August, 2012, which means that the number of internet subscribers has not 

grown. 

The number of new mobile subscribers in 8 months was estimated to reach over 7.6 

million, up 13.6 percent year-on-year including 15,700 of fixed telephone subscribers, 

equal to 39 percent and 7.6 million of mobile phone subscribers, up 14 percent. 

In addition, the number of mobile subscribers by the end of August 2012 was about 

135.8 million, up 5.2 percent year-on-year; including 15.1 million of fixed telephone 

ones, down 2.6 percent and 120.7 million of mobile ones, up 6.2 percent. 

GSO also estimated that total post and telecommunications revenue in 8 months 

reached 105 trillion dong, up 6.8 percent compared with the same period in 2011. 


Board of directors of Financing and Promoting Technology Corporation (FPT) has decided 

to adjust 2012's business plans to match the real market conditions. 

Accordingly, adjusted revenue is estimated to reach 26.072 trillion dong, up 0.4 percent 

year-on-year (31.3 trillion dong of the initial revenue plan) and adjusted pre tax 

profit is expected to be 2.547 trillion dong, up 1.8 percent compared with 2011's plan 

(3 trillion dong of initial pre tax profit). Its adjusted earning per share (EPS) is estimated 

at 6,170 dong. 

FPT shared that technology information and telecommunications fields have been in a 

difficult situation due to huge investment demand. Many enterprises in these fields 

have been in difficult times and posted bad business results. 

Intellasia 31 August 2012 46 / 46 

End

31 Aug 2012 Intellasia Finance Vietnam - Hong Kong Business ...

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