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Vietnam sets sights on for 8.5% growth

The Vietnamese government
The Vietnamese government’s focus next year would be on achieving GDP growth of 8.5 percent and stepping up administrative reform and the fight against corruption, Prime Minister Nguyen Tan Dung said.

At a two-day cabinet meeting which wrapped up Wednesday he also hailed the country’s achievements and listed out the problems hampering its development in 2006.

He noted that GDP growth had been nearly 8.2 percent and almost all targets had been achieved despite facing natural disasters, epidemics, and inflation.

He highlighted Vietnam's successes in the foreign arena, citing the successful organization of the APEC Economic Leaders' Meeting, its unanimous nomination as the Asian candidate for a non-permanent seat on the United Nations Security Council for 2008-9, and its accession to the World Trade Organization.

However, economic development had fallen short of potential.

He criticized the sluggish public spending and implementation of projects, shortage of skilled human resources, pollution, and unresolved social issues.

The meeting also discussed other issues, including social and economic development and exports in 2006, issue of government bonds, and the action plan to implement the Anti-Corruption Law.

They debated and endorsed the establishment of anti-corruption committees in provinces and major cities headed by chairpersons of the local administrations.

Source: VNA

Handset prices get cheaper and cheaper
17:25' 27/12/2006 (GMT+7)

VietNamNet Bridge – This year has witnessed the so-called “price revolution”: the price of a handset drops by VND100-500,000/unit just one month after the model is marketed.

Several hundred choices for customers
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Cellular phones under the world’s most famous brand names all are present in Vietnam. Nokia, Samsung, Motorola and Siemens have introduced several series of phones in Vietnam’s market. Nokia, for example, has launched 96 models of cellular phones onto the market and is planning to market another seven models in early 2007. BenQ-Siemens have also introduced 30 models, while Sony-Ericsson has 35 models in Vietnam. Motorola, which has had 30 series of products, is going to market six others in one or two months.

Vietnamese customers now have many choices when they decide to buy cellular phones. A saleswoman at the Mobile Plaza on Ba Trieu street in Hanoi said that any cellular phone model could be out of date just one or two months after it was launched onto the market. Mobile Plaza itself introduces two or three new models every month.

Nguyen Thi Bich Phuong, Marketing Director of Nokia Vietnam, said that Nokia introduces new products every one or two months which gives more choices to customers, and so do other handset producers.

According to Nguyen Thi Hoa, the owner of two mobile phone shops in Hang Bong and Dien Bien Phu streets in Hanoi, cellular phones have become cheaper and cheaper, and this brings more opportunities to customers. Two or three years ago, with VND2-3mil, one could only buy a phone with regular functions, while with the sum of money now, he can buy a phone with many specific functions like recording or taking pictures.

Meanwhile, in the market appear mobile phones that are selling dirt-cheap, and the prices of which are just a half of the retail prices announced by producers, and they are illegally imported into Vietnam.

Price decreases indispensable

Ms Hoa said that in November and December, cellular phone prices decreased dramatically by VND100-500,000/unit. She said that the price decrease is inevitable since new models are born every day, making other models obsolete.

“The life of a cellular phone model is very short nowadays,” she said.

Meanwhile, Nguyen Thi Trang Nhung, Marketing Director of Motorola Vietnam, said that there were two factors leading to the sharp price decrease. First, after launching new products to the market, the producers have to have suitable price policies to attract more customers. Second, sales agents, who can get commissions from sales, always try to offer discounts or give gifts in order to raise their sales.

Meanwhile, in the market appear mobile phones that are selling at prices just equivalent to a half of the retail prices announced by producers.

(Source: Lao dong)

Vietnam has 22mil mobile subscribers
17:12' 27/12/2006 (GMT+7)

VietNamNet Bridge – In 2006 alone, 10mil new mobile subscribers connected to the network, raising the total number of mobile subscribers to 22mil so far, which reflects a very high telecommunications growth rate.
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Currently, the three networks using GSM technology, VinaPhone, MobiFone and Viettel, are holding 95% of the market share with 19.7mil mobile subscribers. Meanwhile, the two service providers using CDMA technology, S-Fone and EVN Telecom, have 2.2mil subscribers.

Though being a newcomer, Viettel has become the fastest network developer: It has 7.3mil subscribers, including 5mil new subscribers in 2006. MobiFone ranks second with 7.1mil subscribers (2mil in 2006), and VinaPhone, third, with 5.3mil subscribers. Meanwhile, MobiFone and VinaPhone are the senior service providers in the market.

Telecom service providers hope to raise the total number of mobile subscribers to 44mil in 2007 (20mil subscribers will sign on in the next year). If Hanoi Telecom joins the market on January 15, 2007 as planned, the telecom market will see the competition between the two technologies, GSM (VinaPhone, MobiFone, Viettel) and CDMA (S-Fone, EVN Telecom and Hanoi Telecom).

Minister of Post and Telematics Do Trung Ta said that the market had been witnessing impressive growth over the last few years thanks to the higher living standards of people and the suitable marketing programmes of the service providers. However, he said that service providers should pay attention not only to developing the networks, but also to improving service quality. He said that from 2007 the ministry would keep strict control over telecom service fees, the quality of services and the promotion campaigns of the network developers. The ministry will impose a fine on any service provider that offers a service at below production cost.

In addition, telecom companies will have to declare quarterly or monthly the figures related to their coverage areas, networks and number of subscribers. The providers of the services about which customers complain will be fined.

Mr Ta has urged local telecom service providers to improve themselves to get adapted to economic integration. In five years, Vietnam will have to open the telecom market, which will pave the way for foreign providers to penetrate Vietnam’s market.

(Source: VNE)

VinaCapital licensed for $150 mln tourism-golf complex

Tran Van Minh (L), chairman of DaNang People’s Committee, hands over the license to the representative of the UK-listed fund manager VinaCapital on Thursday
The UK-listed fund manager VinaCapital has obtained a license to develop a US$150 million golf course and tourism area in central Vietnam.

The central Danang city People’s Committee Thursday handed over the investment license to the investor.

Under the proposal, VinaCapital will pump $150 million into building a 50ha tourism area and a 210ha international-standard 36-hole golf course.

Villas for sale will take up 10ha of the tourism area and 20 of the golf course in Hoa Hai Ward.

Construction is expected to start next April and will take between two to three years.

Under the memorandum of understanding (MoU) inked in June between the local government and VinaCapital, the investor obtains a 50-year lease on the 260ha area along Ngu Hanh Son street, linking Danang and the ancient two of Hoi An, for a total of $29 million.

VinaCapital also must pay a $3-million deposit right after the signing and $12 million more as soon as it gets a license and signs the land-lease agreement.

The company can pay the rest of the money over the next 20 years in installments of $700,000.

Danang is responsible for site clearance and compensation and will have to hand over the land to the investor no more than nine months after it receives land rent.

The city government has pledged to give VinaCapital all of Da Nang’s preferential policies.

Once completed, the tourism area and the golf course will give a boost to tourism in the city and the central provinces from Thua Thien-Hue to Quang Nam.

Another VinaCapital-invested project to develop a $200 million commercial-residential complex obtained the go-ahead from the local government in June.

The group will build a complex of trading centers, apartments, office blocks, and villas on nine hectares in the central city’s Son Tra District.

It will be the largest-ever investment in the city.

With registered capital of $500 million, VinaCapital, the manager of the Vietnam Opportunity Fund, is expected to invest in offices, trading centers, residential areas, industrial parks and entertainment areas in the country’s key areas, such as HCMC, Hanoi, Nha Trang City, Hoi An and Danang.

VinaCapital also operates two other funds – the $205 million real estate fund VinaLand, and the newly set up $50 million DFJ VinaCapital L.P. which invests in information-communication technology (ICT) firms.

Reported by Huu Tra – Compiled by Ha Dong

PetroVietnam pumps 24.3 million tons of oil equivalent

The Vietnam Oil and Gas Corporation, PetroVietnam, has announced it exploited 24.3 million tons of oil equivalent in 2006, earning nearly VND148 trillion ($9.22 million).

These include 17.3 million tons of crude oil and condensate and 7 billion cubic meters of gas.

Since April 2006, PetroVietnam has exploited crude oil overseas with a productivity of 0.03 million tons from Sendor oil field, PM-304 lot in Malaysia.

Currently, the corporation is running seven oil exploration and exploitation projects abroad.

Source: Lao Dong – Translated by Thu Thuy

Market rallies, listed firms to hit 100 today


The Vietnamese stock exchange Wednesday bounced back steadily as there were 48 gainers and 29 losers, with four firms listing yesterday and six more expected today.

The VN-Index yesterday gained slightly to 6.81 points to close at 754.63.

Market trading was valued at VND666 billion (US$41.4 million), a rise of VND62 billion ($3.8 million) over the previous session and turnover was 7.15 million securities.

The top five winners include FPT (Financing and Promoting Technology Corp); SJS (Hanoi-based Song Da Urban and Industrial Zone Investment and Development Company); PVD (Petroleum Services and Drilling Joint Stock Co); HRC (Hoa Binh Rubber Joint Stock Co) ; and AGF (Agifish) gaining by between VND5,000 and VND21,000.

Foreign investors injected VND268 billion ($16.6 million), making up 40 percent of the total trading value, in stockpiling 1.15 million shares mainly FPT and PVD.

More listings

Four additional companies climbed aboard the Ho Chi Minh City Securities Trading Center yesterday, sending the total number of listed firms to 94.

The new comers include Hoa Binh Construction and Real Estate (HBC), Khanh Hoa Power (KHP), Lu Gia Mechanical and Engineering (LGC) and Viettronic Tan Binh (VTB).

HBC debuted 5.6 million shares and more than 24,000 units were traded yesterday priced at VND103,000.

The company’s focus businesses include housing and infrastructure construction, and building materials production among others.

Its net-profit this year expected at VND8.5 billion ($500,000) from VND3.1 billion last year.

KHP were taken off the Hanoi over-the-counter market on December 13 for listing more than 13 million shares on the HCMC bourse yesterday.

Its price was set at VND24,5000 with more than 17,000 securities traded yesterday.

This year the power company estimates it will net VND22 billion and targeted VND25 billion next year.

LGC, with a modest chartered capital of VND10 billion, is among leading players in producing and installing public lighting and traffic light systems in Vietnam.

Investors handed 1,000 shares at VND40,500.

VTB debuted on the bourse with 7,000 stocks and at the price of VND47,000, and some 2,000 share were traded.

Today the HCMC market – Asian’s hottest performer, will welcome six new comers, bringing the total to 100 listed firms.

The fresh listings include Saigon Fishing Net (SFN), My Chau Packaging (MCP), the Safoco food company (SAF), Petrolimex Transport (PJT), Binh Dinh Mining (BMC); and the investment and trading DIC company.

Busy OTC market

Yesterday the Hanoi bourse took on 10 newly listed companies with more than 109.3 million shares, increasing the exchange’s overall value up to VND10.8 trillion ($677 million).

The newest additions are Petrolimex Petrochemical (PLC), HCMC Book and School Equipment (STC), Song Da Investment and Development (SIC), Phu Thinh-Nha Be Garment (NPS), Song Da 5 (SF5), Song Da 7 (SD7), H.A.I Agricultural Pharmaceutical (HAI), Nui Beo Coal (NBC), Minh Phu Seafood (MPC) and Hanoi Milk (HNM).

Among these, HAI and NPS are the first companies in their sectors to list shares, with chartered capital of VND114 billion ($7 million) and VND10.6 billion ($660,000), respectively.

Seventy-seven companies and one commercial bank are now listed on the exchange.

Source: Thoi bao Kinh te Vietnam, VnExpress – Compiled by Ha Dong

S. Korean builders rushing to tap Vietnamese market


South Korean construction companies are scrambling to make inroads into Vietnam in an effort to preempt a building boom in the fast-growing economy, the Yonhap news agency reported.

The Vietnamese economy has been growing at an annual rate of over 7 percent since 2002, the second-highest in Asia after China, which has led to a boom in its construction market including the building of two large towns in and around the Vietnamese capital of Hanoi.

Such a boom has come as a strong magnet for South Korean builders' Vietnam push as they are looking for fresh profit sources amid weak construction business back home, the report said.

It quoted Ahn Kwang-seop, an official at the Construction Association of Korea (CAK), as saying, "[South Korean] builders are trying to secure a share of the Vietnamese construction market ahead of their foreign rivals."

"In addition, a series of strong government measures against property speculation have prompted domestic builders to look overseas to find new growth engines."

South Korean builders started entering the Vietnamese housing market in the early 1990s but Seoul's 1997-98 financial crisis put a crimp in their efforts.

However, South Korean President Roh Moo Hyun's visit to Vietnam in October 2004 has spurred their moves to advance into the Southeast Asian country.

In January this year, a consortium of five South Korean builders won a contract from the Vietnamese government to participate in the development of a new town in Hanoi.

The builders are Daewoo Engineering & Construction Co., Kolon Engineering & Construction Co., Keangnam Enterprises Ltd., Daewon Co., and Dongil Construction Ltd.

Under the Hanoi new town project that began in 1996, the builders will construct apartments and commercial-residential buildings, whose cost is estimated at US$1 billion.

On Dec. 18, POSCO Engineering & Construction Co. and Vietnam's state-run builder VINACONEX clinched a deal with the Hanoi government to build a new town in An Khanh near Hanoi.

Ground will be broken for the town in May next year, with completion scheduled for 2020.

POSCO Engineering & Construction, the building arm of South Korea's top steelmaker POSCO, will construct a 75-story building and 7,600 apartments in the envisioned town's residential area at a cost of $1.4 billion.

"We will map out a master plan to build the new town ahead of the start of the construction in May. It will be a self-reliant town, not a dormitory town. The construction of a highway to connect the new town with Hanoi is underway, and is now 20 percent completed," said an official at the construction company on condition of anonymity.

Other South Korean construction companies are also stepping up efforts to tap the Vietnamese housing market.

Lee & Co Group got permission on Dec. 12 from the Ho Chi Minh City authorities to construct apartments in the city.

Daewon Co. Ltd., a South Korean construction company, has been building apartments in Ho Chi Minh since 2004 in a joint venture with Vietnamese builders.

With South Korean builders, especially small and midsize ones, hurrying to enter the Vietnamese market, some experts warn small and midsize companies against potential risks, urging them to make thorough preparations.

South Korea's state-run trade promotion agency, the Korea Trade-Investment Promotion Agency, cites difficulty in obtaining land for housing and the complicated approval process. In Vietnam, private ownership of land is banned.

Source: Yonhap

More and more rich tourists taking cruises to Vietnam
10:54' 30/12/2006 (GMT+7)

VietNamNet Bridge – Some 3,000 rich tourists have arrived in Vietnam on a colossal ship, Princess Sapphire. But ports in Vietnam have repeatedly been welcoming five-star boats.

At 11:30 am on December 27, three hours after the colossal Princess Sapphire, carrying 3,000 passengers, docked at Phu My port in Ba Ria – Vung Tau, the Ben Thanh Market in HCM City and New World Hotel were crowded with shoppers. The main streets in district 1 in HCM City were also full of tourists, who had come out to do sightseeing and shopping.

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Shopping on Le Loi street

Tourists seem to like going to souvenir, fashion and jewellery shops. Laura, a traveller from the
US, said that she found the goods sold here, in HCM City, the cheapest and most diversified among the places she has visited. The traveller showed three t-shirts she had bought for her son, which were priced at $30.

According to Le Dinh Tuan, Director of the HCM City branch of Tan Hong Travel Company, Princess Sapphire has the tonnage of 115,000 tonnes, and carries 3,000 passengers and a crew of 1,500. With such big tonnage, the ship cannot dock at Saigon port, and has to enter Phu My port.

One day stay of the colossal ship costs VND700-800mil, which includes expenses for logistics services, navigation and water supply. In addition, the 3,000 passengers can bring a huge sum of turnover to Vietnam when they do shopping, eating and drinking, and enjoy entertainment services.

Mr Tuan said that cruise tourists always take long journeys, and most of them are elderly people, who have high incomes and require high-class services. Mr Tuan said that these tourists spend $100 a day on average.

Princess Sapphire is just one of the five-star ships that have docked at Vietnam’s ports, including Ba Ria – Vung Tau, Saigon and Ha Long. HCM City, for example, received Spirit of Adventure (500 tourists), Costa Marina (110), Nautica (700) on December 24, 25, 26 and 28.

Vo Anh Tai, Director of Saigontourist, one of the two travel firms which receive the most cruise tourists, said that Vietnam has become one of the favourite destinations in the world. Saigontourist expects to receive 30,000 travellers in 2007.

Meanwhile, Tan Hong Travel Company expects to receive 40,000 cruise tourists. Mr Tai said that besides the familiar names, several other ships from the US, Italy and the UK are also coming to Vietnam.

Most recently, through Saigontourist, Italian Costa Allegra has decided to choose Ha Long as the given destination in its regular journeys, which last five days each.

According to Cassancha Mani, head of the tour operation division of Princess Sapphire, in order to attract more tourists and persuade them to stay longer in Vietnam, Vietnam should form up the ports serving tourism in big cities near the sea like HCM City, Nha Trang, Da Nang and Ha Long. There should be the areas for receiving tourists, for entertainment, shopping and other logistics services. In addition, Vietnam’s international air routes should be better and diversified, because this is one of the factors that make ship companies decide whether to choose Vietnam as a fixed destination in its journeys.

(Source: Tuoi tre)

Vietnam sees 2006 GDP growth at 8.17 pct


Vietnam estimated on Friday that its gross domestic product (GDP) grew 8.17 percent in 2006, led by expansion in the construction and industrial sectors.

The combined construction and industrial sector grew 10.37 percent this year and made up 41.52 percent of GDP at current prices, up from 40.97 percent last year, the General Statistics Office said.

The service sector's share of GDP was 38.08 percent, almost unchanged from last year when it was recorded at 38.01 percent.

This year's growth is lower than last year's expansion of 8.4 percent. The government has said it is targeting growth of 8.5 percent for next year.

Officials from the Ministry of Planning and Investment said growth this year was fuelled by strong industrial output, which grew 17 percent compared with 2005, and a record high level of foreign direct investment (FDI), expected to total $10.2 billion.

They said FDI of around $10 billion was likely next year, with a string of big infrastructure projects in the pipeline, including more than $5 billion in the power and oil-refining sectors.

Vietnam is Southeast Asia's third-largest crude producer after Indonesia and Malaysia, but it still relies on oil product imports due to a lack of major refineries.

Following are breakdowns of the value (in billions of Vietnamese dong) and growth (in percent) of various sectors for this year.

Source: Reuters

BIDV $65.3 mln bond issue successful debut for future IPO


The Bank for Investment and Development of Vietnam (BIDV) said Friday it has successfully mobilized VND1.04 trillion (US$65.3 million) as equity capital from its second long-term bond issue.

The figure was higher than the initial target of VND1 trillion ($62 million) including VND695 billion ($43 million) in 15-year bonds and VND350 billion ($21.8 million) in 20-year bonds.

The bank said it readjusted the bond issue plan due to oversubscribed investors.

The 10-year bond carries annual interest of 9.8 percent in the first five years and the 15-year version carries 10.2 percent in the first 10 years.

The bank reserves the right to buy back the 10-year bonds in 2011 and the 15-year bonds in 2016. If the bank does not take them back, the interest of the former bonds will be fixed at 10.325 percent, and that of the latter at 10.825 percent.

The bank has instituted its stock brokerage BIDV Securities Co. (BSC) as an agent to buy and sell its bonds.

The bank said the successful issue comes off the mounting volume of bonds officially registered by investors, which posted 136.5 percent higher than the bond issued.

All long-term bonds, after their issuance, are set to list at the Ho Chi Minh City Securities Trading Center and deposited at the Securities Depository Center.

BIDV had experienced its successful first issue of VND2.2 trillion ($138 million) in 10-year and 15-year bonds.

The state-run commercial bank’s bonds – the longest terms (10 and 15 years) offered on the bond market – are in line with international standards and provide a benchmark for other banks to follow suit.

Since the bond sale, the bank’s capital adequacy ratio has risen to 9 percent from 6.86 percent recorded April 26.

The bond issue comes as a part of a plan that BIDV has hatched in consultation with the Hong Kong Shanghai Banking Corporation (HSBC) to sell VND3.25 trillion ($204 million) worth of bonds this year.

HSBC representative attributed the attraction of BIDV bonds to the bank’s professional operations.

Prior to the bond sale, the bank hired a global financial and banking group to assess its credit rate, creating reliance for investors.

Big plans

Tran Bac Ha, general director of BIDV, unveiled that the bank submitted its plans for an initial public offering in 2007 to the government for consideration.

If the government gives the green light to the proposal, the bank would go ahead with the plans in Q4 next year as scheduled.

The bank also has an ambitious plan to list BIDV bonds on international securities exchanges such as Hong Kong and Singapore by 2012.

Reported by Hoang Ly – Compiled by Ha Dong