Thread: Latest news on the Dong!

SBC cracks the whip on expansion
21:36' 07/10/2006 (GMT+7)
Soạn: HA 917639 gửi đến 996 để nhận ảnh này
Mr Michael Smith.

VietNamNet Bridge -
The Hong Kong and Shanghai Banking Corporation Ltd (HSBC) held its annual offsite meeting of the board of directors in Ho Chi Minh City last week, the first time the meeting has been in Vietnam since the bank established operations here 136 years ago. Michael Smith, president and CEO of HSBC Asia Pacific, spoke to VIR’s Duong Nguyen about the bank’s business strategies in the Vietnamese market.

Why has HSBC chosen Vietnam for this meeting?

As a tradition, our board of directors meets once each year in a key market outside our Hong Kong head office. These visits give the directors the opportunity to experience for themselves some of our key businesses and markets in the region, and allows them to meet with government, regulators, customers and staff. This year’s choice of Vietnam shows how important Vietnam is to HSBC.

The meeting here also demonstrates our commitment to Vietnam and our belief in the country’s continuing economic growth. HSBC has been in Vietnam for a long time and it is important for us to know what and how we continue play our part in this market.

What impressed your board members about what is happening in Vietnam?

I believe the board were struck by the go-ahead and “can-do” attitude of the country and the young, vibrant and exciting environment for business. In general, the reaction from all our board members was extremely positive. They now have a better understanding of the bank’s strategies in this market and expressed their support for the bank to move forward. I am very pleased with their response.

The country, I think, will develop very fast in the next few years and the banking and financial services sector must develop accordingly. So it is logical that we are positive about these developments.

Were any new decisions made for the Vietnamese market through the board meeting?

The key decision that came out at the meeting is the agreement to double our stake in Techcombank to 20 per cent if we can reach an agreement on price and obtain the central bank’s approval. Personally, I am quite positive about this deal, as we feel that the business culture that exists between us is a comfortable partnership.
Our board also agreed that the potential of this country is great, so we should be increasing our presence and profile here. We are keen on opening more branches in Vietnam so that we may introduce a wider range of banking services and products here.

Generally, as an international financial institution, we at HSBC pledge to invest in this country where we believe the demand for financial services will continue to increase. We will do what we are allowed to do and we are very compliant with local regulations. But of course, we would like to be able to do more if the rules allowed.

Does HSBC have any plans to invest in other local commercial banks besides Techcombank?

We don’t have any plan to invest in other commercial banks in Vietnam right now, as we have already become the strategic partner of Techcombank, as you know. This is a partnership that we would like to develop further in the future. We are now focusing on providing Techcombank with more advanced technical support.

HSBC has an organic business strategy with an appropriate long-term view. Having more than one strategic partner in this industry at the moment, I think, might lead to conflicts of interest. I do not want to see that problem occur.

HSBC has just signed a memorandum of understanding (MoU) with the Ministry of Finance (MoF) to provide cooperation and consultation on a number of key areas. Can you elaborate on the partnership?

We are honoured to be chosen by the MoF as one of their key partners in facilitating the development of Vietnam’s bond markets. Under the MoU, HSBC will provide assistance and consultation in developing Vietnam’s domestic government and corporate bond markets, and offering guidance for the ministry’s risk management and fund management strategies.

We will also help the Vietnam government develop local credit rating agencies and provide onshore and offshore training to MoF executives in risk management, managing government and corporate bonds, and asset management.

US may grant Vietnam PNTR status Nov. 13
14:10' 06/10/2006 (GMT+7)
Soạn: HA 916679 gửi đến 996 để nhận ảnh này
Senator Chuck Hagel talking during a round-table meeting with Vietnamese correspondents yesterday in HCM City.

VietnamBridge – The US Congress will come into session on November 13 to vote on Permanent Normal Trade Relations (PNTR) status for Vietnam in advance of President Bush’s APEC trip to Hanoi.



That was the statement made by Senator Chuck Hagel from Nebraska at a round-table meeting with several Vietnamese correspondents in HCM City yesterday.



“It was the issue regarding textiles in our bilateral negotiations with Vietnam brought up by two senators from North & South Carolina, Senators Dole and Graham. I understand the issue has been resolved and there should not be any reason not to have a vote after we return on Nov 13. I believe that once the vote is held that PNTR will pass with a very strong vote”, he said.



The Senator visited the HCM City stock exchange on Thursday and found it very interesting that the stock market in Vietnam was doing well and growing.



“What they’re doing is important. It will help build a very significant capital foundation for growth here in Vietnam”, Mr Hagel said.



However, he raised concerns about the banking industry and transparency issues in Vietnam. He said anything that stands in the way of investment will need to be addressed, guaranteeing intellectual property rights.



“Vietnam is looking at those issues now and there are issues that need to be worked through, but that’s not unusual”, he added.



Senator Chuck Hagel, who is on a two-day visit to Vietnam, chaired the US Senate subcommittee with oversight responsibilities for the stock market for the US and he expressed that he wanted to help to develop the stock exchange in Vietnam.



He will work today with Vietnam’s Defense, Finance and Foreign Ministers in Hanoi before leaving for China, the Philippines, South Korea and Mongolia.



Senator Chuck Hagel served during the Vietnam War in the US Army’s 9th Infantry Division in 1968. He came back to Vietnam in 1999 to cut the ribbon to officially open the new American Consulate in HCM City.



Mr Hagel is considered a potential Republican presidential candidate in 2008. The Senator said yesterday he would not decide whether or not to run until after the November 2006 midterm elections.

Was wondering if someone would be kind enough to throw some light on the following. Is the value of the dong at its lowest since it was introduced? If so, what was the reason for its devalue? I cannot seem to find a site where I can chart the history of the dong. At the moment, roughly $65 would get a million dongs. However, the only way they can sourced seems to be via ebay at triple their face value. Do you guys think there is an upward potential for this currency? If yes, what would you base your assumptions, facts, etc on? As someone remarked a few days ago, the value needs to go up three times to value to recoup the initial investment.

Agreed this may not be in the same league as the dinar in terms of potential but it's probably still a good bet. What do you folks reckon?

Vietnam enlarges WTO accession possibility: top negotiator
11:28' 12/10/2006 (GMT+7)
Soạn: HA 921955 gửi đến 996 để nhận ảnh này
Mr Luong Van Tu.

VietNamNet Bridge - Deputy trade minister and head of Vietnam's WTO negotiation team, Luong Van Tu, expressed his optimism about WTO accession after the 14th session of multilateral negotiations in Geneva on Oct. 9.


The deputy minister said the 14th session between Vietnamese negotiators, the WTO task force and related members reviewed Vietnam's pledges on commodities and services sectors and reports of the task force. They also set out plans for the coming discussions to hopefully close the deal by the end of the month.

In the unofficial talks from Oct. 10-12, the task force is settling discussions on special consumption taxes, trading rights, import and export quotas for some controversial commodities, and special economic zones.


The deputy minister said that in the unofficial talks his team hoped to wrap up the discussions, in which the parties have reached consensus on some key issues. He said his team continued to clear remaining issues in Oct. 12 final talks.

The deputy minister said he hoped the 14th session would mostly finalise the multilateral discussions and ascertain the final report on bilateral commitments on commodities and services sectors.

In the official session on Oct. 9, the head of the task force proposed to finalise discussions with Vietnam in October, with another session on either the 25th or 26th to approve bilateral and multilateral commitments.


The proposed session will also approve a protocol to submit to the WTO's general council to approve Vietnam as its 150th member.

It will take the task force at least 10 days to call for the WTO's general council meeting.



(Source: VNA)

Vietnam WTO Accession Within Reach
By Matt Steinglass
Hanoi
12 October 2006

Steinglass report - Download 288k audio clip
Listen to Steinglass report audio clip

A Vietnamese delegation in Geneva is negotiating with a group of other countries to hammer out a final agreement on Vietnam's accession to the World Trade Organization. A deal could be reached in a day or two, allowing Vietnam greater access to the world's markets.

A definitive agreement allowing Vietnam to join the World Trade Organization could be reached by Friday.

Eirik Glenne is Norway's ambassador to the WTO and he is chairman of the multilateral negotiations on Vietnam's accession that began on Monday in Geneva.

"Hopefully, it depends of course on how these consultations are going, but hopefully we will have an agreement by the end of the week," he said. "Which we will then have to formalize later on."

The multilateral negotiations are the final substantial hurdle in Vietnam's effort to join the WTO. Vietnam has already concluded bilateral agreements with each of the member countries that requested them, including major trading partners such as the United States, the European Union and China.

But a number of countries, some of which have bilateral agreements with Vietnam, have raised new concerns in the multilateral round. Glenne says those countries are negotiating informally to resolve the remaining issues.

"We have now a group of countries, it's not all the working party because not all of the working party's members are equally interested in the remaining issues, but there are some countries, less than 10, that are participating in these informal consultations now," he said.

Glenne declined to specify which countries are involved or what the issues are. But the official Vietnam News Agency announced Wednesday that the remaining disputes include Vietnam's special consumption tax, which applies to luxury goods such as cars and cigarettes; its favoring of companies in special economic zones; and its granting of trading monopolies on certain goods to state-owned companies. Other countries are also pushing Vietnam to adopt sanitary measures to ensure the safety of food exports.

Other Vietnamese media reports have cited intellectual property rights as a major area of concern at the multilateral talks. Many developed countries that produce software, movies and books are concerned about illegal copying of their copyrighted works.

Joining the WTO has been a prime foreign policy objective for Vietnam for years. Membership is necessary for Vietnam's export-driven economy to compete with rivals who are already members, such as China.

The country's leaders had hoped to join before Hanoi hosts the Asia-Pacific Economic Cooperation summit this November. But once the working group reaches an agreement, Vietnam's candidacy must still be approved by the WTO's general council of 149 nations. The possibility that this could take place before the APEC summit appears increasingly remote.

nvestment promotion activities boosted in Vietnam

VNECONOMY updated: 11/10/2006

Vietnam welcomes and creates favorable conditions for foreign businesses to invest and operate effectively in the country, said Deputy Minister of Planning and Investment Cao Viet Sinh at an investment promotion conference in Hanoi on October 10.

He said that since the Foreign Investment Law took effect in 1987, Vietnam has attracted more than 6,500 investment projects from 74 countries and territories with total registered capital of more than US$55 billion.

“The rapid growth of foreign invested enterprises in Vietnam has resulted from the long-term attractiveness of the country’s investment environment and its typical advantages,” said Mr Sinh.

According to Mr Sinh, these advantages include political stability, dynamic economy, favourable geographical location, abundant natural resources, rapid development of a market with more than 82 million people and a young and industrious labour force.

The conference provided a chance for domestic and foreign businesses to share experiences and seek opportunities. It also helped foreign investors understand more about Vietnam’s legal system and investment policies.

Foreign investors expressed their keen interest in a wide range of issues ranging from real estate to production, trade and services.

“Vietnam is anticipating a wave of investment in the real estate market and many other areas,” said Tran Trong Hieu, Investment Director of the International Investment and Urban Development Joint Stock Company (IDJ), which co-organised the conference with the Ministry of Planning and Investment.

Mr Hieu explained that the real estate market in Vietnam has been slow going in recent times due to a lack of financial sources for housing projects, but the demand for housing and offices remains high. That is the reason behind investors’ decision to explore this potential market in Vietnam, said Mr Hieu.

Three memorandums of understanding were signed at the conference in Hanoi which attracted more than 200 foreign investors from the US, Japan, the Republic of Korea, Singapore and Malaysia.

A similar conference will be held in Ho Chi Minh City on October 12. More than 300 domestic and foreign investors have registered to attend.

Ready for a new wave of investment

VNECONOMY updated: 12/10/2006

Foreign investors consider Vietnam a destination for long-term investment.

In the next five years, Vietnam needs around US$140 billion in total investment capital to achieve its development target, in which around one-third comes from overseas.

Apart from ODA, Vietnam needs around US$25 billion in foreign direct investment (FDI). With an annual realized capital of US$5 million, portfolio investment must be far higher.

Foreign direct and indirect investment poured into the country is now on the rise. However, it is considered to be lower than its potential and not meet investment demands for a rapid and sustainable economic growth.

Fortunately, a new wave of investment has been clearer for Vietnam. In order to seize upcoming opportunities, the Ministry of Planning and Investment is preparing a draft Directive on incentives to accelerate the new wave of investment into the country.

These days, foreign investment is flowing into emerging economies, which have stable political environment, high growth rates, and favorable conditions for investment. Transnational groups are withdrawing part of their investments from China to pour into its neighboring countries under the model called “China plus one”.

Large investors such as Japan, US, EU… show growing interests in Vietnam and consider economic cooperation with the country. Meanwhile, traditional partners, including South Korea, Taiwan, and Singapore, continue to pour their investment into the country.

Vietnam’s bilateral negotiations on WTO accession were completed while multilateral negotiations have been basically completed, drawing attention of foreign investors. They consider Vietnam a destination for long-term investment.

With great efforts, Vietnam managed to gradually improve the institutions of socialism market economy and legislation system to meet its demand for integration and create transparent and fair legal environment for investment.

Particularly, the issuance of Law on Enterprise, Law on Investment and other laws marked a significant progress in building institutions and improving business environment of the country.

Nevertheless, to attract investment from potential markets and world’s leading conglomerates, much needs to be done. First, it’s important to effectively develop and implement legal texts, in which documents guiding the implementations of Law on Enterprise and Law on Investment need to be issued as soon as possible.

Tax policies and regulations on enterprises’ operations such as advertising and promotion costs, personal income taxes, import tax imposed on electronic components… that are putting a brake on investment attraction must be reconsidered. It is necessary to provide incentives for projects of building essential facilities for people working in industrial zones.

Besides, the issuance and implementation of illegal incentives must be stopped.
Along with the implementation of policies and legal documents, ministries and sectors are required to complete plans relating to investment in order to create a more favorable and transparent environment for investment.

Other important solution to attract more foreign investments is an administrative reform. Among others, decentralization of state management over investment is an important content.

Authorities of provincial people’s committees in licensing, supervising and monitoring foreign-invested projects have been increased. “One door” policy in investment must be accelerated. Registration procedures are expected to be simplified. Hot-lines in state administrative offices are supposed to be set up to solve troubles of investors.

Infrastructures need to be improved to facilitate operations of enterprises.
Regarding social aspects, it’s important to prevent illegal strikes. Living conditions of labors, including accommodation, must receive proper attentions. Also, human resources development and training are important.

It is expected that investment incentives will generate big changes in attracting foreign investment, making it effective contribution to a sustainable economic growth.

Source: Thời báo Kinh tế Việt Nam

chouchou, just wanted to thankyou for all your hard work in digging up these great articles . . . your like the equivalent of SGS but with dongs

The World Trade Organisation (WTO)'s door has opened wide for Viet Nam with the fresh conclusion of the 14th session of multilateral negotiations in Geneva, Switzerland.

The concerned parties will deal with remaining issues before the last negotiation session meets on either October 25 or 26 to approve bilateral and multilateral agreements, said Deputy Minister of Trade Luong Van Tu, head of the Vietnamese negotiation team. The WTO will consider the admittance of Viet Nam at its General Council's meeting early next month.

By finishing the 14th session of multilateral negotiations and having reached agreements with all 28 WTO members who require bilateral negotiations, Viet Nam has now entered the last stage of its long-lasting WTO negotiation process.

Viet Nam officially applied for WTO membership in 1995. Since then, the country has made great efforts to satisfy requirements of the WTO task force, especially WTO members who require bilateral negotiations.

According to Deputy Minister Tu, almost all partners acknowledged the Vietnamese National Assembly's recent efforts to revise laws in accordance with the country's administrative reform and economic renewal, as well as international practices.

In addition to revising existing legal documents, Viet Nam has promulgated more than 20 new laws and ordinances in order to comply with the WTO's regulations. These laws, including the Commercial Law, the Law on Intellectual Property Right, the Investment Law, the Enterprise Law and the Law on Competition, have been applauded by international partners.

Viet Nam was one of the first nations which has not only brought in new laws but also revised existing ones in order to make them conform with regulations of the WTO before joining the organisation.

Trade Minister Truong Dinh Tuyen noted that although Viet Nam was a developing country and its economy was in a transitional process, its commitments were higher than those of other WTO members with the same level of development.

Viet Nam has even pledged to abolish export subsidies for its agricultural products right after the country becomes a WTO member, Tuyen stressed.

In both bilateral and multilateral negotiations, Viet Nam did its best to reach agreements on tariff reductions and market opening, especially on areas and goods considered to be sensitive to its economy.

While facing various difficulties in negotiations, the country has received great support in different fields from the international community, said the Vietnamese negotiation team.

It can be said that Viet Nam has overcome the hardest obstacles on the path of joining the WTO. However, local management agencies and businesses need to seek proper ways in order to effectively integrate into the global "playground", take full advantage of opportunities and minimise possible risks.

Source: Vietnam Agency

Pham Manh Dung, Director of the Legislative Department under the Ministry of Planning and Investment (MPI), spent time to talk about the list of conditional investment sectors specified in the two long-awaited guiding decrees of the Investment Law.

Could you talk more about conditional investment sectors, which draws special attention of foreign investors?

The Government’s Decree No.108/2006ND-CP dated September 22, 2006 lists 14 conditional investment sectors for foreign investors, which include banking, insurance, telecom, providing services relating to finance, transportation, advertising, real estate trade…

Conditional investment sectors are divided into two fields. The first are provided with detailed conditions. For instance, foreign ownership ratio in a sea transport project is restricted to 40% at maximum. For 100% foreign invested projects in insurance business, however, foreign ownership is restricted by quotas. In short, the Government reserves the right to control and protect local investors in these sectors.

The second are provided no detailed conditions for investment, which means that the State will decide whether to open certain fields to foreign ownership basing upon national/provincial plans and strategies for socio-economic development. For foreign invested projects in exploitation and exploration of petroleum and minerals, for example, we have no detailed conditions but basic commitments.

This will create a loophole for investment license issuing bodies to cause troubles for enterprises, won’t it?

We could not reserve the right to protect local investors in certain fields if we had commitments. Thus, except for those that had been mandatory tabled in WTO negotiations, Vietnam provides no detailed conditions for foreign investment into certain fields. This means that it’s possible to make amendments to legal texts.

For the fact that investors might consider this a loophole in administrative procedures, we will have other solutions to fight for corruptions and to reform administrative procedures, rather than leaving a lucrative business and losing our opportunities. We do not reserve interests of state-owned enterprises but of the whole nation.

In such fields as banking and petroleum, we restrict foreign ownership ratio while technology and management play an important role. Could this affect the process of equitization?

In fact, a fair competition exists in several fields. Nevertheless, we must hold control over the banking sector, which includes investment, to ensure financial security. Also, the petroleum sector must be under our control to ensure energy security. The pros and cons need to be carefully weighed.

How do regulations on conditional investment sectors implemented on interdisciplinary enterprises?

It depends. When a field holds majority in market shares of an enterprise, it is considered the major field. In addition, according to the Law on Competition, foreign investors are not allowed to acquire a company that holds 50% of shares in the whole market.

This means that authorities will decide on restriction of foreign ownership ratio basing on the major field that an enterprise is doing business in?

Exactly.

When will the list of banned or restricted investment sectors be announced?

The list is now in the process of translation, and will be officially announced within the next one month. It’s important to have a consensus among ministries and industries.

Source: Thời báo Kinh tế Việt Nam