Thread: Latest news on the Dong!

Computer market enters low season16:51' 17/05/2007 (GMT+7) VietNamNet Bridge – Computer producers and distributors are launching big promotional programmes in May and June in an effort to boost sales in the low season.

Big computer distributors in Hanoi like Dang Khoa IT Plaza, Tran Anh and Phuc Anh all said that sales were down by 20-25% recently.

The prices of several main accessories have been decreasing sharply. Intel CPUs have decreased by 15-40% in price compared to the days just after Tet. USBs, commonly-used products, have also decreased in price, though the decreases have not been big thanks to relatively high purchasing power.

Despite the lower sales, distributors are not worried since this is the low season, and the market will remain quiet for at least one or two months before heating up again in July.

It seems to be the most suitable time of the year now to buy computers as distributors are trying to launch big promotional programmes in order to boost sales. Customers who buy more than VND50,000 worth of goods will receive gifts, valuable computer accessories. If buying products worth up to VND10mil, customers will enjoy gifts worth up to VND2mil.

Those who buy a whole computer set at a Tran Anh distributor will be given a printer, a Canon IP-1300, and associated software. Mai Hoang Company has announced a sale-off month, from early May to early June, offering the discount of 3% on all kinds of products.

Not only distributors, producers are also offering their own promotional programmes. A representative of Dang Khoa IT Plaza said that buyers would receive “double” gifts from both producers and distributors.

In summer, customers are rushing to buy fridges and air conditioners to hide themselves from the summer heat; therefore, computers and IT equipment are not high on the to-buy list. Enterprises and offices are not buying computers at this moment because it is not the right time for disbursement in the fiscal year. Meanwhile, students, the main customers, are preparing for their summer holiday.

Analysts said that the market would bounce back in July and August. They said that the market would be very bustling at that time, especially as many State owned enterprises would begin using copyrighted software as required by the State

Phuoc Ha

Foreign exchange stable16:38' 17/05/2007 (GMT+7)

VietNamNet Bridge – The local market has witnessed a stable dollar/dong trading rate at around VND16,050 to the dollar on the inter-bank market though the greenback value announced by the State Bank of Vietnam fell in some consecutive days to stay low at VND16,114 by early this week in comparison with the high level of VND16,132 by early last week.
It was reported that some commercial banks have recently sold lots of dollars to some local fuel importers and some big foreign-owned companies.
Some experts forecast that the dong would not depreciate much in this quarter and perhaps towards the year-end thanks to ample sources of capital that are to be possibly channeled into the country for IPOs of giant local names.
Meanwhile, the exchange rates between the local currency and other major currencies such as the euro, the yen continued to fluctuate broadly due to the big movement of the greenback on the global market.
The euro jumped up by around VND100 early this week compared to last Friday's level while the New Zealand dollar also skyrocketed to VND11,850 from VND11,680 last week.
The market is still paying close attention to the Fed's actions after its base interest rates were decided to keep still at 5.25% at the latest meeting last week.
Dong interest rates drop on excess liquidity
Last week, dong overnight rates felt again to 3.5-4% per annum from 4-4.5% per annum on excess liquidity of commercial banks. Rates of short tenors from 1 week to 1 month also dropped by 50-75bps.
Meanwhile, six month dong loans stayed the same at 7.5-8% per annum.
Overall commercial banks continued to see huge surplus of liquidity, officially estimated at between VND40-50tril. Last week the central bank withdrew VND20.5tril from the system via it open market operations and VND700bil via its weekly auction of Treasury notes.
Next week will continue to see huge dong liquidity surplus and slow rate of lending growth. Thus rates will stay at low levels till the end of this month.
In the underwriting of 5-year government bonds last week, there was only VND200bil awarded out of VND700bil offering.
The awarded coupon was at 7.15% per annum. In the secondary market, the offer yield moved to 7.15% from 7.25-7.30% in the previous week.
Given flush liquidity of local commercial banks coupled with increasing demand on bonds from both local and foreign investors, we expect the yield will remain at current levels.
(Source: SGT)

Minimum wage to increase annually15:41' 17/05/2007 (GMT+7) VietNamNet Bridge – The Ministry of Labour, War Invalids and Social Affairs will submit to the government the wage reform scheme for the 2008-2012 period. The press talked to Minister Nguyen Thi Hang about the minimum wage policy.

How much will the minimum wage increase under the itinerary set in the scheme?

We are about to submit to the government this scheme on the minimum wage. While compiling the scheme, we considered increasing the minimum wage this year. But finally we decided to submit to the government a plan in which the minimum wage will be increased as of 2008 to begin a period when the minimum wage will be raised continuously to reach a common minimum wage for all in 2012.

So the minimum wage will not increase this year?

That’s right! The minimum wage will not be adjusted this year. It will be still kept at VND450,000 (US$28) per month.

According to surveys, the increase of the minimum wage in recent years hasn’t helped improve the lives of labourers much. In addition, if it is increased a little and continuously, it will be troublesome for enterprises.

That’s why we chose the solution of increasing the minimum wage by 20% in January 2008. At that time, the minimum wage will be VND540,000 ($33.75) per month.

When will all forms of enterprises have the same minimum wage?

At first, we wavered between two solutions: increasing the minimum wage by 15% and 20% each year. Finally, we choose the 20% solution to submit to the government. Previously we submitted to the government two solutions and the government picked one.

The time for all forms of enterprises to have the same minimum wage will depend on the rate of increase of the minimum wage in the foreign-invested sector. If this rate is high, the time will be 2012. If the rate is low, it will be 2010.

How will the increase of the minimum wage in the coming year be implemented?

According to the plan that we are about to submit to the government it will be performed each January. Enterprises will be informed early to prepare.

According to our plan, the minimum wage will rise to VND540,000/month in January 2008, VND648,000 ($40) /month in January 2009 and VND777,600 ($48.5) in January 2010.

How much will the minimum wage increase in the foreign-invested sector?

According to our calculation, the minimum wage in the foreign-invested sector will increase at 6-8% a year. At this speed, all forms of enterprises may have the same minimum wage by 2010.

(Source: Dau Tu)

Time is ripe for next Gov’t bond14:54' 17/05/2007 (GMT+7)

VietNamNet Bridge – The Vietnamese Government plans to issue US$1bil worth of bonds abroad in 2007. Both domestic and external situations are favourable for the issue, and the Vietnamese economy has grown substantially so that it has become cheap to borrow overseas, said Reuben Tucker, director of debt markets at Barclays Capital, who visited Hanoi last week.
* What's Barclays view of the Vietnamese Government's plan to raise $1bil through bonds this year?
This is very good timing for the Government; and let me outline a few of the reasons for that.
The most important message the Government is able to make in 2007 is about momentum and stability. Momentum, with respect to international credit ratings agencies, has successively upgraded Vietnam's ratings and that is an enormous vote of confidence on the Government's economic reform programme in particular its very stable and conservative fiscal policy, the developing programme of privatisation and most importantly the very central oriented growth strategy the Government has for Vietnam.
Barclays Capital's view is that [Moody's outlook] will very quickly translate into an actual upgrade to match the upgrade by Standard&Poor's. So when the Government re-approaches the international market, investors will be very aware that there has been considerable momentum upon Vietnam's economic story...
The other message in terms of momentum and stability is the performance of the existing US dollar 2016 bond that has seen a significant upping in spread sat a risk premium.
That deal was launched at 256 basis points over US treasury bills and it is currently trading within 110 basis points.
What does this tell us? This tells us there has been a significant change in the international investor pricing of Vietnamese economic risk. Investors are very keen to take more exposure on Vietnam because they have more and more confidence in the progress that is being delivered into the economic reform programme.
The other key points to emphasise in terms of the Governments intensity to return to the international market in 2007 is that there has been an enormous expansion in the potential investor base.
One of the factors behind that is the heightened international investor awareness of the economic success story in Vietnam.
This heightened awareness has accelerated since the hosting of the APEC leaders conference, the normalisation of trade relations with the United States, and most importantly the entry into the WTO in January.
There is a far broader range of investors who today are interested in gaining exposure to this thriving economy than there was in 2005, and the 2005 deal was enormously successful. There were over $4.5bil in told orders and over 250 individual investors in that transaction.
We believe that in the current market the deal in 2007 will be even larger in terms of investor line.
There is also a market balance here as well, and that is US dollar rates remain low and these credit spreads remain very tight and there is a fantastic opportunity to access low cost US dollar financing.
So the key benefits in terms of the Government's economy is this ability to sell its message based on the momentum that has been generated since 2005, the stability that has been provided, and the very favourable outlook that has been generated not only with the rating agencies but also with national investors.
That has been shown through secondary performance, not to mention the key timing factors in terms of very low cost financing opportunities that currently exist.
But I think above all this, above the bond issue itself, not only is this an opportunity to market a bond but also to showcase the development of Vietnam over the last two years.
* As you know, a few companies from Vietnam are also planning to mobilise capital through an international bond issue. Do you think these corporate bonds will compete with the Government's sovereign bonds?
The domestic markets in Vietnam are obviously experiencing enormous growth and they will continue to be a key source of ongoing capital for local borrows.
Our primary interest is in providing the diversification into a much large pool of international investors, and ultimately the US dollar bond financing is the most appropriate means of access to that investor base.
In terms of what you had mentioned by way of a number of borrowers - sovereign, corporate and potentially banks all looking to access a number of markets in the not too distant future - this gets back to a key issue: basically to date there is not a great degree of diversity or a great deal of means by which international investors can gain exposure in the international market to Vietnam's economy. There is one trade sovereign bond, the dollar 2016 issue.
What investors would like to see over time is, first, the development of a yield curve for sovereign issuances. Multiple issues and the second issue by the Government will start to create that yield curve.
But before that, there will be an opportunity for other issuers to start to access the international market and provide international investors with a diverse range of potential exposures to the Vietnamese economy - sovereign, large corporate and banks.
* What technical assistance would you provide to sovereign bond issuers?
When you enter the long term debt market, you must ensure you have the structure and the investor base that make sense. We are looking to leverage our expertise in the international bond market to assist local borrowers in accessing a range of different markets, providing strategic advice, and structured advice to local borrowers.
In 2006, we are rated the number one arranger of international bond issues. In Asia we have set sovereign bond benchmark issues for Thailand, Korea, Indonesia.
We have executed a range of sovereign, quasi-sovereign issues and are leading innovators in banks' capital solutions in markets such as Malaysia, Thailand, the Philippines and India.
(Source: Viet Nam News)

I am certainly no economics expert, but it is amazing to me how Vietnam is so properous now, with building investments, their booming stock exchange, foreign investment and the list of positive economic developments continues......so why have they not revalued their currency? I find it hard to believe that they are waiting on Iraq and the dinar.

Online gaming to get a boost from HP14:34' 17/05/2007 (GMT+7)

VietNamNet Bridge – Hewlett-Packard (HP) Vietnam Ltd. yesterday signed a memorandum of understanding to help VinaGame Software Service Joint Stock Co. with online gaming development and other technical problems.
Under the MoU, HP Vietnam will help VinaGame upgrade its infrastructure for online games services and optimise its operating systems.
HP Vietnam will deploy the HP database centre's server system, equipment and software to assist VinaGame.
Speaking at the signing ceremony in HCM City, Tran Thanh Hai, VinaGame's technology director, said that with nearly 1,000 servers now operating, VinaGame badly needed a central server system to control the database.
"VinaGame will equip more servers and by expanding co-operation with HP Vietnam as a strategic partner, we can expand our business in the future," Hai said.
Phung Hoai Duong, HP Vietnam's sales director, said the firm's partnership with VinaGame was based on the emerging online game market in the Asia-Pacific region, which is forecast to grow at 19.7% in the 2005-09 period with a turnover estimated at US$5bil in 2008.
"Vietnam is a potential market for online game services, given its young population, rising internet access rate and stable economic growth," he added.
Hewlett-Packard, one of the top US computer technology companies, opened its affiliate HP Vietnam in 1995.
VinaGame began its online gaming system in 2004, including the games Vo Lam Truyen Ky (Swordsman Online), Ragnarok Online, Nine Dragons, and most recently, Boom Online.
(Source: Viet Nam News)

Maritime sector to channel funds into large ports12:57' 17/05/2007 (GMT+7)

VietNamNet Bridge – The Vietnam Maritime Administration will from now on manage to channel new investments into large-scale seaports and port complexes to improve efficiency and prevent rampant development, an official said.
Deputy head of the administration Tran Thanh Minh said a revised master plan is being prepared specifying that only projects to build ports able to handle vessels of more than 50,000DWT, especially in concentrated port complexes, are allowed.
Detailed zoning plans and investment policies are being drafted in line with this orientation, he said.
Investment in Vietnam's port system in the past decades has been thinly spread, resulting in low efficiency, overburdening, and a lack of ports capable of handling big vessels.
According to the Transport Ministry's statistics, Vietnam has nearly 270 ports of all sizes in 24 provinces and cities, and the nine largest ports can receive ships of less than 40,000DWT each.
These ports are managed by different agencies, but most of them have been developed with the State budget.
These ports have combined designed handling capacity of 100mil tons per year, but most of these ports have been operating at full capacity. In the past two years, the annual throughput at Vietnam's seaports has exceeded 140mil tons.
Transport experts forecast that some 200mil tons of goods will go through Vietnam's seaports annually by 2010, and the figure will rise to 340mil tons per year in the subsequent 10 years.
That means the country will have to secure big funds for port development so as to double its system's handling capacity by 2010 and quadruple the capacity by 2020.
Recently, many provincial governments and local port operators have applied to expand existing ports and build new ones, but in many cases, such development plans are deemed not to be in line with the master plan.
The maritime administration therefore will ask developers to invest in large-scale port projects as well as pay attention to improving relevant services.
Minh of the administration gave a long list of seaport projects that will be prioritized for development in the coming years. These include Cai Lan, Dinh Vu and Lach Huyen ports in the north, Nghi Son, Vung Ang, Chan May, Danang, Dung Quat, Quy Nhon and Van Phong ports in the central region, and Ben Dinh-Sao Mai, Thi Vai-Cai Mep, Hiep Phuoc, Cat Lai and Can Tho ports in the south.
To carry out the development plan in the next four years, Vietnam needs about US$4bil. Transport experts said that one quarter of the total required fund should come from official development assistance, while another quarter will come from the State coffer, and the remainder will come from the private sector.
(Source: SGT)

BUSINESS IN BRIEF 17/509:39' 17/05/2007 (GMT+7) RoK businesses walk away impressed with Binh Duong</SPAN>

A business delegation from the Republic of Korea (RoK) went away impressed by southern Binh Duong province’s rapid economic development after visiting the province on a fact-finding mission on May 16, a RoK trade official said.

Chairman of the RoK’s Presidential Commission on Small and Medium Enterprises Yum Hong Chul said that he would draw up a roadmap to enable enterprises invest in Binh Duong.

A sister city agreement already in place between Daejeon Metropolitan City, the scientific and technological hub of the RoK, and Binh Duong province would help to facilitate RoK companies to establish business relationships in the province, the RoK official said.

The RoK entrepreneurs were said to be impressed with the modern facilities of the Vietnam-Singapore industrial zone (IZ) during their working session with leaders of the Binh Duong Industrial Investment and Development Corporation (Becamex IDC).

Becamex IDC General Director Nguyen Van Hung told his guests that the province would permit RoK businesses to lease more than 300 ha of land for industrial production and trade projects.

The RoK currently ranks second among 37 countries and territories investing in Binh Duong province with 240 projects, worth more than 700 million USD.</SPAN>

Nagakawa Vietnam to build home appliance plant</SPAN>

The Nagakawa Vietnam joint stock company will invest 200 billion VND (12.5 million USD) into a home electronics production plant and R&D centre in Vinh Phuc province, by the year-end, said general director Nguyen Duc Kha.

The 10-ha plant which is being built for export purposes and to meet rising domestic consumer demand, is expected to have an annual output capacity of over 250,000 units.

The company also stated plans to increase its chartered capital to 200 billion VND this year and to 1 trillion VND by 2010 in order to build Hanoi's Nagakawa Plaza.

Nagakawa Vietnam had been a joint venture before it became a joint stock company.</SPAN>

Effort to promote Vietnam-EU trade</SPAN>

A seminar on measures to boost Vietnam-EU trade ties after Vietnam joins the WTO accession was held in Da Nang city on May 16.

Representatives from the EU, the Vietnam Chamber of Commerce and Industry (VCCI), the Italian chamber of commerce and over 100 businesses from the central and Central Highlands regions attended the seminar.

The focus of the seminar was assistance to businesses in the central and Central Highlands regions to raise their capacity in their trade with the EU after Vietnam entered the WTO.

The EU is Vietnam’s leading trade partner. The two sides have granted each other the Most Favoured Nation Status and Vietnam is now a beneficiary country from the EU’s Generalised System of Preferences (GSP). Vietnam-EU trade has grown strongly after the EU abolished quota for Vietnam’s textiles and garments on Jan. 1, 2005. Bilateral trade increased to 9.9 billion USD in 2006 from 3.6 billion USD in 1999, and stood at 1.4 billion USD in the first two months of this year. Vietnam exports wooden products, sea food, textiles and garments and footwear to the EU market.

Antonio Berenguer, commercial counsellor of the EU Delegation of the EC in Vietnam, urged Vietnamese businesses to improve the quality of their products and get better knowledge of the EU’s law and regulations in order to boost trade with this market.</SPAN>

Largest steel mill to be built in southern Vietnam

Work will begin on Vietnam’s largest cold-rolled steel mill in the southern province of Ba Ria-Vung Tau in August.

The Vietnam Steel Association said the 1.12 billion USD mill invested by Posco of the Republic of Korea, will also be the largest in Southeast Asia.

The mill, scheduled for completion in 2009, will have an annual capacity of 2 million tonnes in the first phase, which will increase to 3 million tonnes in the second phase. It is expected to generate 10,000 jobs.

The mill is the fifth flat rolled steel project and the third foreign-invested steel investment in Vietnam.

Vietnamese handicrafts on show at London fair</SPAN>

Vietnamese handicraft products are being showcased at the prestigious 48th International Spring Fair, which opened in London on May 15.

This years fair features more than 100 booths that display a wide range of traditional handicrafts that range from ceramics, wood products, embroidery, bags, foods and beverages from around the world.

According to Vietnam's UK embassy Minister-Counsellor, Nguyen Thi Nha, the exposition plays a critical role in bringing Vietnamese culture closer to the rest of the world. The embroidered tablecloths produced by Vietnamese craftsmen have particularly impressed fair-goers, she said.

The annual fair, which began in London in 1958, used to be known as "The Fair of Diplomats" as it drew the attendance of international embassy staff that were based in the English capital.

According to the organising board, the fair has attracted thousands of visitors so far with all money collected from the sale of tickets to be disbursed to charitable organisations.</SPAN>

Vietnam's bourses dip</SPAN>

Ho Chi Minh City's bourse, the VN-Index slid for another day as it closed at 1040.99 points by the end of the May 16 trading session, down 13.7 points.

By closing, just over 5.1 million shares were traded, worth 718.413 billion VND.

Meanwhile, the HaSTC at the Hanoi Securities Trading Centre dipped slightly by 2.52 points to finish at 334.58 points. Only 12 shares rallied for gains, 16 showed no change and 58 fell.</SPAN>

HCM City: Industrial zones bring great changes</SPAN>

Development of export-processing zones (EPZs) and industrial zones in Ho Chi Minh City have boosted development considerably in the area since they were established in 1992.

The 3 EPZs and 12 IZs, occupying more than half of the city’s planned acreage of 6,000 ha, have so far attracted 1,062 projects capitalised at over 3.53 billion USD. The figures represented 21 percent and 12 percent in the number of projects and the volume of investment capital, respectively, recorded by all EPZs and IZs nationwide.

Foreign investors have poured 2.23 billion USD in 450 projects in these zones, or 12.76 percent of the total FDI capital in the city.

Up to now, the city’s EPZs and IZs have earned 11.48 billion USD from exports or 13.68 percent of the whole city’s turnover. Their trade surplus has reached 2.017 billion USD, bringing a large sum of foreign currencies to the city and helping increase its GDP.

The EPZs and IZs also generated 220,000 jobs, including nearly 162,000 in FDI projects.

The local authorities have designed more plans to attract large-scale projects in hi-tech industries, with priorities given to electronics, telecoms, information technology, chemical, machinery engineering and food processing.</SPAN>

Chamber kicks off fourth golden V design competition</SPAN>

The fourth Golden V handicraft design contest was officially launched on May 15 with the aim of improving the competitiveness of Vietnamese products.

Open to companies, independent designers, students and craftsmen, the contest theme this year is “making life better for people”.

The contest is also an opportunity for Vietnamese designers, artisans and manufacturers to promote international cooperation, says Pham Thi Thu Hang, director of the Vietnam Chamber of Commerce and Industry’s small and medium-sized enterprise section.

People have until September 15 to submit designs, with final selections made in November Entries must not have competed in any previous competitions, and must not be in full production.

Six prizes will be awarded, with the top design taking home 10 million VND (USD 625). There will also be 10 consolation prizes worth VND 2 million each.

The winning works will be put on display at Artworks & Designs Portal - marketplace of export and import,offers company directory,catalog and trade leads to importer,exporter,manufacturer,wholesaler,supplier - and presented during various trade promoting activities conducted by the chamber.

The competition is also being sponsored by the Trade, Industry and Agriculture Ministries.</SPAN>

Seminar on Vietnam-EU trade relations held in HCM City</SPAN>

As many as 120 import-export businesses in Ho Chi Minh City on May 15 attended a seminar on Vietnam-EU trade relations in response to Vietnam’s WTO admission.

At the seminar, co-organised by the Vietnam Chamber of Commerce and Industry (VCCI)’s branch in HCM City and the European Delegation in Vietnam, local enterprises were told about business opportunities in Vietnam.

Representatives from the Spanish Trade Promotion Centre in Vietnam shared their experiences in developing a distribution system as well as marketing experiences.</SPAN>

Vietnam welcomes Australian investors</SPAN>

Vietnam attaches great importance to creating propitious conditions for Australian businesses to invest in Vietnam, affirmed Vice President Truong My Hoa.

The Vice President applauded the cooperation between Victoria State and ministries, agencies and localities of Vietnam while receiving in Hanoi on May 15 a delegation from Victoria State, Australia, headed by governor David de Kretser, who is on a week-long visit to Vietnam, starting on May 14.

She spoke highly of the Australian government’s Official Development Assistance (ODA) for Vietnam, saying that the Australian-funded projects have yielded positive results, contributing to the socio-economic development of the country.

Vice President Hoa spoke highly of prospects for cooperation between the two countries, particularly in economy, trade, investment, education and training, and tourism.

She said the two countries needed to foster their cooperation to tap their potentials for their common interest and for peace, stability and cooperation in the region.

For his part, the governor highly valued the friendship and cooperation between Australia and Vietnam, which he said has seen considerable development in various fields.

He expressed his wish to enhance the cooperation between Australia’s Victoria State and ministries, agencies and localities of Vietnam.</SPAN>

(Source: VNA)

HSBC: Vietnam on right track09:30' 17/05/2007 (GMT+7)

VietNamNet Bridge - Vietnam is following the right track where its financial infrastructure development is concerned, said HSBC's new Vietnam General Director Thomas Tobin.

Speaking at a press conference in Hanoi, on May 16, Tobin singled out Vietnam’s open-door policy and abidance of its WTO’s commitments in giving permission for the establishment of wholly owned foreign invested subsidiary bank, as a catalyst for the country's continued development.

“This move will create the same playing field for both domestic and foreign banks,” he said, stressing “we would like to consider any opportunity to open our subsidiary bank in Vietnam as soon as there is a circular handed out by the State Bank of Vietnam.”

Tobin went on to say that the presence of foreign banks would in fact provide domestic banks the opportunity to enhance their competitiveness. “I think that foreign banks should not be considered as a threat to local banks. Foreign banks, like HSBC, are willing to share experiences and international expertise with their domestic partners in advanced technology, product development, risk management and business administration. Through strategic partnership with foreign banks, Vietnam’s banks will be able to develop faster,” he said.

According to Tobin, the new decree that permits foreign partners to increase their shareholdings at Vietnam’s banks from 10 percent to 15 percent and up to 20 percent with the Prime Minister’s approval proves the Vietnamese Government’s determination to implement market reforms.

With two branches in Hanoi and HCM City, HSBC is now the biggest operating foreign bank in Vietnam in the areas of investment capital, transaction networks staff and clients</SPAN>.

(Source: VNA)

Will someone put it simple for me as to what all the news means in reference to the Dongs value? There was talk about RV & WTO but somewhere I have lost that connection.