Thread: Latest news on the Dong!

But the question still is:

Will and when the Dong rise in Value?

Keep the posts coming!

Domino's Pizza opens store in Vietnam
http://www.detnews.com/article/20101...90402/1001/biz

Domino's Pizza opened today its first store in Vietnam, a franchise restaurant in Ho Chi Minh City.
"Opening our first store in the largest city in Vietnam gives us an excellent entryway into this growing economy," said Michael Lawton, chief financial officer and interim executive vice president of Domino's Pizza International.

Vietnam’s Bonds Drop for 2nd Week on Low Liquidity; Dong Steady
http://www.bloomberg.com/news/2010-1...ng-steady.html

[QUOTEVietnam’s five-year bonds fell for a second week on speculation demand for government debt has waned due to low liquidity at banks. The dong held steady this week.

“When liquidity is not good like now, lenders are reluctant to buy bonds,” said Nguyen Tuan Phong, a Hanoi-based bond-trading manager at Bao Viet Fund Management Co., a unit of Vietnam’s biggest insurer. “They are concerned that it may be hard to sell bonds if they need to get cash.”

Vietnam’s State Treasury sold none of the 3 trillion dong ($154 million) of bonds offered yesterday, according to a statement on the Hanoi Stock Exchange’s website.][/QUOTE]

More Bulgarian enterprises invest in Vietnam
http://english.vovnews.vn/Home/More-...011/121544.vov

State Vice President Nguyen Thi Doan has called on Bulgarian enterprises, including Nove Holding Group, to promote business and investment in Vietnam.

Please keep the news coming

Does anyone think the Dong is a worthwhile investment to buy and hold?

The Dong will follow the yuan..sounds like a song ??

What should Vietnam do to prosper next to the giant like China
http://english.vietnamnet.vn/en/spec...ike-china.html

VietNamNet Bridge – Vietnamese leading economists believe that it would be unfeasible to try to escape from the influences from China – and the best thing to do now is to find the way to prosper based on the prosperity of China.

Japanese Nihonkeizai newspaper, when reporting that Vietnam joins the negotiations for the Trans-Pacific Partnership Agreement (TPP) in order to seek multilateral agreements, commented that no other countryin Southesat Asia has been absorbed into Chinese economy so deeply. In Vietnam, analysts have expressed their worries about the reliance of Vietnam’s economy on the neighbouring China. The question raised by National Assembly’s Deputy Duong Trung Quoc remains open: “What should Vietnam do in order to benefit from the cooperation with China and reduce the reliance on China?”

Leading experts and scientists, including National Assembly’s Deputy Duong Trung Quoc, Dr. Le Dang Doanh, a well known economist, Pham Chi Lan, also a well known economist, Dr. Vu Minh Khuong from Singapore National University, Dang Le Nguyen Vu, Chair of Trung Nguyen Group, and Nguyen Mai Phuong from the US law firm Mayer Brown, have discussed the issue with VietNamNet’s Vietnam Economic Forum.

Reproach yourself first before you reproach others

All Vietnamese people now can feel the heavy reliance of Vietnam’s economy on the neighbouring China. However, it remains unclear how big the reliance is and how serious the latent risks are.

Dr. Le Dang Doanh believes it is necessary to recognize the current reliance, to review our commitments and what we will receive in return.

“It is necessary to review them and make them public,” Doanh stressed. “We always say that we have to take initiative in the global integration, but in fact, we are regularly on the defensive”.

Dang Le Nguyen Vu from Trung Nguyen Group said that to date, Vietnam still has no strategy. However, Vu believes that the current conditions have never been so favourable for Vietnam’s development

“The whole world is supporting Vietnam’s development,” Vu said.

“However, the problem now is whether Vietnam can understand itself and understand others well in order to set up appropriate economic strategies,” he added.

Until the 1990s, Vietnam still had exported to China more than it had imported from the country. However, things have changed over the last decade. While China’s exports have increased sharply, reaching $16 billion, Vietnam’s exports remain modest at nearly five billion dollars.

Vietnam is an agricultural economy, but it is now still importing farm produce from China, including thousands tons of onions and garlic. China-made products have been flooding the domestic market, including the products made in China but labeled as Vietnamese products.

Vietnamese exporters, who do not care about quality, but attracted by the low import prices, have been importing products from China on a massive scale.

“The ignorance and the calculation of Vietnamese enterprises, who would sacrifice everything for profit, have brought benefits to foreigners,” said Duong Trung Quoc, a National Assembly’s Deputy. “Therefore, reproach yourself first before you reproach others”.

Economist Pham Chi Lan said that Vietnam proves to be unselective when openings its doors to foreign investment. “The land in coastal areas has been allocated to foreign investors, 80 percent of whom are investors with Chinese origins,” Lan said.

Local newspapers once quoted Ta Van Huong, Director of the Energy Department under the Ministry of Industry and Trade as saying that the Chinese have been chosen as the EPC contractors in 80 percent of coal-run thermopower plant projects.

Nguyen Mai Phuong from Mayer Brown law firm said that with the current bidding laws, the contractors from the US, UK and Japan don’t have the opportunities to win, because their equipments are good and so offer higher prices.

Vietnam should develop based on China’s prosperity

Dr. Nguyen Quang A believes that it would be “utopian” thinking to try to escape from the influences from China, and a wiser approach is necessary.

According to Dri Vu Minh Khuong, Vietnam should think of trying to develop together with China, and not to escape from its influences. “Vietnam-China prosper together” will be a better motto. “We cannot avoid China.there is a saying “to jump out of the frying pan into the fire”.

Khuong believes that Vietnam should set up an agency for cooperation for development with China

It is undeniable that China, the neighbour of Vietnam, has been risingrapidly, and Vietnam should take full advantage of Chinese strong development to create an impetus for its own development

Tunisia, Vietnam pledge to boost trade
AfricanManager
http://www.africanmanager.com/site_e...p?art_id=15959

Tunisia and Vietnam, on Monday, agreed to boost trade to reach a bilateral trade value of US$150-250 million by 2015, the Vietnam news agency said.

The agreement was reached in the Vietnam-Tunisia Inter-government Committee's 2nd meeting.

In the meeting, the two sides decided to join hands in the oil and gas sector as a priority of their bilateral economic co-operation program.

The Vietnamese Government asked the Tunisian Government to recognize Vietnam as a full market economy.

Both sides also pledged to provide optimum conditions for State-owned Vietnam Oil and Gaz Group and its partners from the north African nation to explore, exploit and refine oil and gas resources.
Investors from the two countries were encouraged to invest in petroleum and the energy industry. The Vietnamese side presented the Tunisian delegation with the draft of an agreement on investment encouragement and protection, with agreement for an early signing.
The meeting also discussed programmes on cooperation in finance, agriculture, aviation transport, labor, education, culture, tourism, construction and trade promotion.
Secretary of State in charge of American and Asian Affairs and head of the Tunisian delegation Saida Chioui said as the first Mediterranean country to sign an association agreement with the European Union, Tunisia could help Vietnamese products penetrate European and African markets.

Tunisian representatives encouraged Vietnam to send business delegations to do trade promotion activities in the country soon, Saida said.

This year, the trade value between Tunisia and Vietnam was expected to achieve $18 million, including $11 million in exports from Vietnam and $7 million in imports to the country.

Vietnam Battles Dark Side of Boom
http://online.wsj.com/article/SB1000...677728744.html

HO CHI MINH CITY, Vietnam—At a time when many emerging markets are trying to stem a destabilizing rise in their local currencies against the dollar, up-and-coming Vietnam is grappling with a rather different problem: Residents can't get enough of the U.S. greenback, as their own currency, the dong, threatens to spiral lower.
Moody's Investors Service signaled the extent of the problems Wednesday, downgrading its rating on Vietnamese government debt to B1 from Ba3 in part because of the downward pressure on Vietnam's currency and worsening inflation. It also maintained a negative outlook on the country's ratings, citing the mounting debt problems at state-run Vietnam Shipbuilding Industry Group as another reason for the downgrade.

Call it the dark side of Vietnam's economic boom. In recent years, Vietnam has established itself as a major production hub for the global economy, luring big names such as Canon Inc. and Intel Corp. to its shores and racking up some of the fastest growth rates in Asia after China.

But the Communist-run government's determination to hit persistently high growth targets, coupled with state-directed lending growth of more than 30% annually in recent years, have flooded Vietnam's economy with money and created a raft of problems for the local currency. The excess capital has triggered a sharper uptick in inflation than has been seen in other emerging markets, stripping confidence in the dong as residents doubt their government can manage rising costs in the months ahead.

Meanwhile, unlike many Asian countries, Vietnam runs a substantial trade deficit, which adds further downward pressure on the dong. Officials here expect a deficit of $12 billion this year, little changed from 2009.

The dong has already lost about one-fifth of its value against the U.S. dollar since mid-2008, and black-market rates for dollars are currently 10% or more above the official exchange rate. That is fueling speculation that the government will be forced to devalue the dong again in the next few months to bring official values closer in line with street rates.

Vietnam's currency woes serve as a reminder that not all emerging markets are the same at a time when investors are pouring money into frontier economies worldwide.

Most of Vietnam's neighbors, including Thailand, Malaysia and South Korea, are seeing their currencies shoot up in value as investors bet on stronger growth in Asian markets while the U.S. and Europe slog through slow recoveries from the latest global recession, sending the dollar and the euro lower.

Stronger currencies are a problem for many Asian countries because they make those countries' export sectors less competitive on global markets.

But that isn't an issue for Vietnam. Instead, residents are now hoarding dollars and other stores of value because they consider just about anything to be better than the dong.
The gold and jewelry stores along Ho Chi Minh City's Le Loi Street are doing a roaring trade most mornings, selling everything from U.S. dollars to South Korean won to residents desperate to unload their dong. The biggest trades often are made by vendors who also hawk goods like shirts, shoes and dried mangoes at the cavernous Ben Thanh market nearby. On a recent Tuesday, Nguyen Thi Phuong placed several bricks of Vietnamese dong on the glass table at Thuy Van's kiosk and asked how much to convert it into gold. The answer: 36.7 million dong per tael, or $1,447 per ounce, about 2.3% higher than international prices that day.

"It's worth it for the peace of mind," Ms. Phuong says.

This loss of faith in the dong also presents a challenge for Vietnam's Communist leaders who, until now, have relied on rapid economic growth to keep the country's 85 million people satisfied. As the dong weakens, it is driving up the cost of imported goods and ratcheting up fears of higher inflation rates to come. The consumer-price index hit 11.1% in November, virtually assuring that the full-year inflation rate will hit double figures. Economic growth overall is expected to reach 6.7%.

Economists say the country has also used up much of its foreign reserves supporting the dong. Vietnam keeps the precise level of its foreign reserves secret, but the International Monetary Fund recently estimated it had enough to provide for 1.8 months of imports— a dangerously slim amount and well short of the three months that multilateral agencies consider adequate.

One problem is that Vietnamese have long been used to dealing in foreign currencies, and sometimes buy land and other expensive goods with gold instead of bank notes. People here consume 10 times more gold on a per capita basis than people in China, according to data collected by the World Gold Council, and about twice as much as Indians.

Government economists also estimate that as much as $5 billion in U.S. bank notes are held outside the banking system in Vietnam, stuffed into mattresses or hidden under creaky floorboards—enough to cover Vietnam's projected balance-of-payments deficit this year.

Hanoi's economic planners in recent weeks have flagged their intent to do more to combat their currency problem instead of focusing relentlessly on bolstering headline gross-domestic-product growth figures, as they have in past years.

Last month, the central bank pushed up its benchmark lending rate to 9% from 8% to help support the dong and contain prices, while the government has slapped a 10% tax on gold exports to help sustain the supply of the metal and avert any potential panic.

Officials at Vietnam Shipbuilding Industry Group, or Vinashin, also are scrambling to reschedule some of its $4.4 billion in debt after the company almost collapsed during the summer. Several top executives have been arrested for allegedly masking the extent of the firm's problems, and new government-appointed managers have told creditors that the shipbuilder might not be able to make a $60 million initial repayment on a $600 million syndicated loan arranged by Credit Suisse in 2007—a failure that could badly tarnish the country's international reputation.

Vinashin officials didn't respond to requests for comment. A Credit Suisse spokesman said the investment bank had no comment.

"An unwillingness to support a seemingly strategic company…raises questions on the health of the public enterprise sector at large, and the adequacy of official holdings of foreign-exchange reserves," Moody's said in a statement Wednesday.

Prime Minister Nguyen Tan Dung has ordered government ministries to set prices on goods such as coal and petrol to keep price rises in check. Among his tools, so far unused, are new rules enabling the government to impose price controls on goods and services produced by foreign and private companies in addition to those of state-owned enterprises.

"All the authorities should take strong measures to control gold prices and stabilize the foreign-exchange rates and interest rates, and punish speculation in gold and foreign currencies," Mr. Dung said earlier this month.

It is unclear whether the current policies are enough to stop the rot. In a research note to clients this month, Capital Economics asked whether Vietnam is heading for a crisis in 2011.

The answer, said economist Kevin Grice, is "yes" unless Vietnam moves more aggressively to let interest rates rise further and does more to tackle state-enterprise spending that, while encouraging growth, also contributes to a large budget deficit.

The International Monetary Fund last week warned that Hanoi needs to tighten monetary policy and also do more to cut public debt. "Further reforms are needed to safeguard a financial system that is robust, efficient and market-based," the IMF's Asian-Pacific chief, Masato Miyazaki, said in a statement.

The Communist Party Congress in January might determine how far Mr. Dung and other leaders are willing to go—and even whether they survive to push through policy changes. The congress, held every five years, will determine whether Mr. Dung will be appointed to a second term as premier and will likely set the scope of any reform plan.

If Hanoi's policy makers act decisively by tightening monetary policy, analysts said, they could restore confidence in Vietnam and its financial markets and gradually revive the flagging dong.

Stock market analysts said equity prices here have retreated to a level at which they now look attractive, with only those in Pakistan rated cheaper on a price-to-earnings basis. On Wednesday, the VN Index closed 0.8% higher at 493.47 points amid heavy trading volumes driven, brokers said, by speculation that the government's change in focus might help stabilize prices.

Some analysts, though, said it will be difficult for Vietnam to shake off its old ways. Already, the government is projecting an inflation rate of at least 7% a year for the next five years, far higher than its neighbors, in a sign that it intends to pursue its target-driven, growth-at-all-costs policies.

"This isn't a sustainable way to run an economy," says Nguyen Quang A, an economist who ran Vietnam's only independent economic think tank until its founders opted to close it amid tightening government censorship.