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INVESTMENT – German Talanx subsidiary to buy 25 pct of Vietnam insurer

Reuters

A subsidiary of Germany's third-biggest insurer, Talanx, has agreed to buy a 25 percent stake in the enlarged share capital of Vietnam's PVI Holdings for 1.92 trillion dong ($92 million), PVI said on Wednesday.

The transaction with HDI-Gerling Industrie Versicherung AG is expected to take place before the end of the year, pending local regulatory approval, and another Talanx firm, Hannover Re (HNRGn.DE), will provide support, PVI said in a statement.

The agreed purchase price was 36,000 dong per share, it said.

PVI stock rose 5.13 percent on Wednesday to 16,400 dong in trading that ended before the announcement of the agreement.

PVI Holdings, a Hanoi-listed subsidiary of state oil and gas group PetroVietnam, is the leading non-life and industrial sector insurer in Vietnam, with a 24 percent market share and gross written premiums in 2010 of $183 million, the statement said.





EU invests about $31b FDI in Vietnam

Vietbiz24

So far, European Union (EU) has been always amongst leading FDI (foreign direct investment) partners in Vietnam with a total pledged capital of some $31 billion, according to Multilateral Trade Department.

EU investors have been present at almost all important economic sectors of Vietnam, but most concentrated in industries and construction (accounting for 50.1 percent in the total number of FDI projects and 50.6 percent in the total pledged investment).

In which, heavy industry sector has lured 180 FDI projects capitalised at nearly $4.2 billion, and followed by oil and gas exploitation with 19 projects worth $2.5 billion. EU’s investments in the service sector accounted for about 40 percent in the total number of projects and 42 percent of total investment capital.

Vietnam – EU bilateral trade relations are progressing positively. Within 11 years from 2000 to 2011, the trade turnover between Vietnam and EU has increased 4.3 times from $4.1 billion in 2000 to $17.75 billion in 2010. Of which, Vietnam’s exports to EU posted a four-fold increase from $2.8 billion to $11 billion and Vietnam’s imports from the EU increased 4.89 times from $1.3 billion to $6.3 billion.

In recent four years, except for time of global financial crisis in 2009, the average annual growth reached 25 percent. Particularly in the first two months in 2011, the total export import turnover between Vietnam and EU reached $3.08 billion, up 28 percent over the same period last year.





Foreign investors eyeing domestic real estate projects

TBKTSG

A lot of real estate project assignment deals where buyers are foreigners have been reported so far this year, while the number is expected to increase towards the end of the year since the assignments, which are now under negotiations would be finalized by that time.

Difficulties of some could be opportunities for others

Many real estate developers are reportedly facing big difficulties because they cannot access bank loans and find it hard to find the buyers for their products. However, the difficulties of the developers are really the big opportunities for financially capable investors. Foreign investors, through the foreign brokerage companies which have representative offices in Vietnam are exploring the opportunities of doing business in Vietnam.

Marc Townsend, Managing Director of CB Richard Ellis Vietnam, a real estate service provider, said that a lot of foreign investors are seeking investment opportunities in Asia, including Vietnam.

According to him, South Korean investors are coming back to Vietnam after they withdrew from the market in 2008. Some Russian and Chinese investors have also asked consultancy firms to give advices on the opportunities on making investment in office buildings and apartments in Vietnam.

A senior executive of Sacomreal, a real estate developer, said that in the first six months of the year, some foreign investment funds came to learn about the cooperation opportunities with Sacomreal in Sacomreal’s projects.

Mapletree Investments, a subsidiary of Singaporean Temasek Holdings, came to learn about the projects on office buildings and apartments, while South Korean Sung Chang has expressed its interests in retail projects, and Israeli EngelInvest also came to seek information about Vietnamese market.

The managing director said that the high population density and the high profitability of the real estate projects in Vietnam are the main factors that attract foreign investors, despite the current gloomy real estate market.

In fact, domestic real estate developers are also seeking foreign investors to cooperate because they cannot rely on their financial resources to develop projects. The currently applied tightened monetary policies have kept many real estate developers away from the official credit channel. As a result, domestic investors have to look for the financial sources from foreign investors.

Su Ngoc Khuong, Analysis Director of Savills Vietnam, also a real estate service provider, said he has received a lot of domestic investors, who ask for the help to connect foreign investors. Khuong said that the number of cases, where domestic investors use the company’s consultancy services has increased by 20 percent.

He went on to say that Asian investors, including Japanese, South Korean and Singaporean, who believe that they have enough knowledge about Vietnamese market and Vietnamese business habits, have determined to make investments in the market. They have been not only interested in apartment and office projects, but also in villa projects.

According to Khuong, it takes an affair about one or two years to be completed. It took Jones Lang LaSalle Vietnam, for example, one year to arrange the assignment of Center Point office project on Nguyen Van Troi road in HCM City between Refico, the initial investor, and Japan Asia Vietnam – a Japanese real estate investment fund.

Savills is reportedly acting as the broker for the assignment deal of the trade-office-apartment complex worth 120 million dollars in HCM City, having revealed that the affair may be wrapped up by the end of the year.

Existing investors speeding up

While new foreign investors still keep cautious when approaching the Vietnamese market, the experienced investors have been trying to expand their investment portfolios.

Singaporean CapitaLand, for example, has purchased 70 percent of the stakes of the residential quarter project in Binh Trung Dong ward in district 2 of HCM City from Khang Dien Saigon. The project is expected to cover an area of 2.9 hectares, which will contain 974 apartments. Of the total investment capital of 70 million dollars, CapitaLand is holding 70 percent of the capital contribution, while Khang Dien is holding the other 30 percent.

Just two weeks later, the group made another deal when it purchased 65 percent of stakes of Quoc Cuong Saigon at 121 billion dong. Quoc Cuong Saigon possesses a 9000 square meter land plot in Binh Chanh district in HCM City, which has got the license to develop a project on 800 apartments.





China's FDI into Vietnam crosses $3 b mark

Vietbiz24

From early this year to July 2011, Chinese investors have invested in 805 FDI (foreign direct investment) projects in Vietnam, according to the General Department of Vietnam Customs (GDVC).

In recent years, the friendship and comprehensive cooperation between Vietnam and China have been constantly evolving. In 2010, the bilateral trade turnover between the two countries reached $27.328 billion, up 29.8% over 2009′s figure. In particular, Vietnam’s import value was $20.019 billion and export turnover reached $7.309 billion.

The figure from GDVC also showed in July, Vietnam’s trade deficit from China was nearly $1 billion. Totally in Jan-Jul, the country’s import value from China was $13.03 billion while Vietnam’s export turnover to China reached only $5.56 billion, leading a trade gap of $7.46 billion in Jan-Jul, or 140% of the country’s trade deficit in the period.

From beginning of this year till July, 2011, Chinese investors have invested in 805 FDI projects with a total pledged investment capital of $3.184 billion.

In 2010, ASEAN – China Free Trade Area (ACFTA) officially applied a strong commitment on tax reduction from both China and the ASEAN countries. Accordingly, the ranges of goods will have import tariffs of 0-5%, including the agricultural and industrial products.

However, in fact, during the 2007-2010 cooperation period, Vietnam has been always providing raw materials and agricultural products, while China exports industrial products to Vietnam with bigger volume.

Vietnam Chamber of Commerce and Industry (VCCI) said it hopes that enterprises of the two partners should seek and take advantage of cooperation opportunities on trade, investment, production joint ventures.





FDI firms' trade deficit increases 12 times m-o-m

DVT

The import value of FDI (foreign direct investment) enterprises in July was over $3.991 billion, rising 3.9 percent from the previous month and accounting for 48.5 percent of the country's total import value in month.

Meanwhile, the export turnover of FDI firms reached nearly $3.887 billion, up 1.4 percent on month and accounting for 41.7 percent of the country's total export turnover in month.

Thus, in July, FDI firms posted a trade deficit of $104 million, equalling to 13 times from nearly $8 million in previous month.

Totally in Jan-Jul, FDI businesses imported $25.7 billion, up 25.8 percent year-on-year, bringing the trade gap of FDI firms in Jan-July to $1.77 billion, accounting for 32.71 percent of the country's total trade deficit.





HCM City grants investment license for 175 FDI projects

Dan Viet

In the first seven months of this year, HCM City has granted investment license for 175 FDI (foreign direct investment) projects with a total pledged capital of over $1.73 billion, up over 57 percent from the same period last year, according to HCM City Department of Planning and Investment.

If including the raised capital of 61 existing FDI projects in the city, in Jan-Jul, the city has attracted over $2 billion FDI capita, rising nearly 70 percent year-on-year, of which, processing and manufacturing industries made up nearly 62 percent of the total capital for 25 projects.





US-Vietnam trade still in strong growth momentum

The Saigon Times Daily

A foreign customer scrutinises apparel products of Garment Company No. 10 at a recent exhibition in HCM City. Apparel still tops the list of Vietnamese products exported to the US market in the first half of this year - Photo: Kinh Luan

Despite difficulties in the US, two-way trade between this country and Vietnam continue to register a double-digit increase as showed by updates of the US Census Bureau on its website.

Figures at www.census.gov/foreign-trade/balance indicated the US trade in goods with Vietnam surpassed $10.15 billion in the first half of this year, a year-on-year rise of over 21 percent.

The US imported merchandise worth more than $8 billion and earned export revenue of over $2.14 billion from Vietnam in the January-June period, as compared to some $6.6 billion and $1.7 billion in the first half of 2010.

Noticeably, Vietnam's export revenue from the US market rose month-on-month in the second quarter of this year, from nearly $1.36 billion in April to more than $1.43 billion in May and $1.52 billion in June. On the opposite direction, Vietnam saw the US imports down to more than $351 million in May from $385 million in April before inching up to $358 million in June.

Apparel still topped the list of Vietnamese products shipped to the country's biggest export market in the first half of this year as this brought about revenue of over $3 billion, recording strong growth of around 18.5 percent over the same period last year.

Footwear was Vietnam's second biggest earner from the selective market in the six months ended in June as its export value stateside rose 27 percent year-on-year to nearly $968 million, followed by furniture with 4.5 percent and $837 million respectively.

Electronic items and seafood were also among Vietnam's major export products bound for the US in the year to June, with the latter's earnings up 49 percent to more than $332 million.

Fabric and fiber appeared as the top US merchandise exported to Vietnam in the January-June period, with a whopping year-on-year increase of 155 percent to over $262 million. The other major export earners included steel, machinery, equipment and accessories.

Last year, bilateral trade between the US and Vietnam neared $19 billion, a significant rise of about 20 percent over the year earlier. Vietnamese exports accounted for more than $14.8 billion of the total number.





ECONOMY – World Bank assists anti-corruption competition

Vietnamplus

The final round of competition of Vietnam Anti-Corruption Initiative, VACI 2011 was launched on August 16 by the government Inspectorate and the World Bank (WB) in Hanoi.

Addressing the opening ceremony of the final round, deputy Chief Inspector Tran Duc Luong said success in the battle against corruption would require great efforts from State agencies and positive support and involvement of the entire society.

VACI 2011 aimed to raise public awareness of anti-corruption law and bring into play the role and responsibility of the people, agencies, organisations, units and public employees in combating corruption, he said.

The programme was expected to enhance cooperative relations between Vietnam and the international community in anti-corruption activities and aimed to reflect Vietnam's responsibility as a member of the United Nations Convention against Corruption, he added.

World Bank Country director in Vietnam Victoria Kwakwa affirmed that VACI 2011 was the results of cooperation between Vietnam and the WB in combating corruption.

The involvement of organisations and individuals in VACI 2011 proved that the fight against corruption in Vietnam had received attention and the participation of the social community, she said.

She said she hoped VACI 2011 would give fresh impetus to the Vietnamese government in combating corruption more effectively.

The programme, themed "Strengthening public integrity and law implementation for effective anti-corruption" was officially launched on December 9, 2010. It included an innovation competition and knowledge exchange in order to formulate and assist innovative ideas on the issue.

VACI 2011 was jointly sponsored by the Australian Agency for International Development (AusAID), the UK Department for International Development, and the embassies of Belgium, Finland and Sweden.

Vietnam's trade surplus touches $ 5.41b mark in Jan-July period

Vietbiz24

The country's trade deficit in the first seven months touched $5.41 billion, decreasing sharply against $6.44 billion in the same period of 2010, the local newswire reported.

In July alone, Vietnam earned a $9.32 billion record from exports, up 10.2 percent month-on-month while the import spending fell 4.6 percent to $8.22 billion, representing the trade surplus of $1.1 billion - the first surplus in 28 months.

According to GSO, the exports of gemstone, precious stone and products in July brought in $1.11 billion, up 38 percent against June. Therefore, the exports of this group of commodities reached $2.318 billion by late June 2011, a year-on-year rise of 51.6 percent.

Garment and textile exports also gained over $1.35 billion last month, increasing 2.8 percent.

Meanwhile, the imports of machines, equipments and other components, though falling 2.7 percent between June and July, still were at high, $1.2 billion.

So, till the end of July, total exports turnover of Vietnam attained more than $52.51 billion, surging 36.2 percent over the year earlier and equaling to 66.1 percent of the full year's plan; import spending was around $57.92 billion, +25.8 percent and 61.9 percent, respectively.

7-month trade deficit of Vietnam, thus, was posted at $5.41 billion.

The general Statistic Office (GSO) said in its website [www.gso.gov.vn], generally, seven months' total export turnovers reached $51.5 billion, up 33.5 percent from last year' same period. Seven months' import turnovers reached $58.1 billion, up 26.2 percent from last year' same period, including $32.7 billion of the domestic economic sector, up 23.8 percent; and $25.4 billion of the FDI sector, up 29.5 percent.

Trade deficit in 7 months of this year was 6.64 billion USD, equaling 12.9 percent of total export turnovers. If gold was excluded, it was at an estimation of $8.4 billion, equaling 16.9 percent of total export turnovers.





FINANCE - Real interest rates surpassing 'ceiling level'

Vietbiz24

The ceiling interest rate of savings in dong, which is ruled at 14 percent a year, is only applied on small deposits of less than 100 million dong by banks and the real deposit rate has surpassed the ruled level.

Real saving rates which banks are paying to depositors now are ranging between 16 and 17 percent pa and especially 18 percent pa is applied on the deposits of more than 1 billion dong. A customer in Cau Giay Dist (Hanoi) enjoyed 22.5 million dong per month on her deposit of 1.5 billion dong, equaling to the real interest rate of 18 percent a year.

However, recently the State Bank of Vietnam Governor Nguyen Van Binh said that the interest rate may be 17-19 percent in September. Other signals from the interbank market also are promising good news for the coming time.

In the interbank market, the overnight loan rate decreased to 11 percent per year last week while other terms also went down to 14 percent pa instead of 15-18 percent pa in July. Therefore, people expected that the dong lending rate would continue declining in the forthcoming time.

Similarly, the real deposit rate of US dollar is standing at 3-4 percent a year against the ceiling level of 2 percent pa. As a result, the lending rate has risen from 5-6 percent to 7.5 percent a year.

Primary data of the SBV in Jan-June showed that the credit growth of the dong was 2.72 percent whereas that of US dollar jumped 22.21 percent.

Last week, the Central Bank reported that the US dollar trading interest rate on the interbank market soared in most terms. Overnight trade of US dollar reached $1.401 billion, accounting for 53 percent of total trading value, showing that the demand for the greenback kept rising strongly.

ENERGY - Investing in renewable energy to save power

VOV

Many families and businesses have started using energy-saving products to cope with the soaring prices of electricity, petrol, and gas. However, there remain certain snags in developing renewable energy in Vietnams.

Innovations

Many innovations have been introduced in response to the energy-saving campaign launched by the Ho Chi Minh City Power Corporation.

The family of Nguyen Thi Ngai in Tan Binh district is one of 800,000 families in Ho Chi Minh City who can now save nearly VND100,000 a month after replacing the old incandescent lamps with compact light bulbs. Le Thi Xuan in District 3 says her family has decided to use a solar-powered water heater and turn off all light bulbs in the house at peak time in the evening when need be.

Nguyen Anh Vu, Head of the Public Relations Department of the HCM City Power Corporation, says his company recently launched a communication campaign to raise public and business awareness of the need to save energy and has received a positive response from many families and businesses in the city.

In the first six month of 2011, the city saved as much as 198.59 million kWh of electricity (85.41 percent of the annual target). Of the total, 40.9 million kWh was saved in public lighting (21.6 percent) 101.7 million kWh in daily lighting (51.2 percent) and 34.2 million kWh in production (17.2 percent).

Hoang Minh Ba, Director of the JSC Technical Services Telecom – TST member Group Posts, says not a few businesses are still using backward technologies which consume much power.

In addition, power waste in households remains a big problem as they have no energy-saving equipment.

Challenges

In order to ensure the sustainable development of businesses and improve their competitive edge, it is imperative for them to use renewable energy such as wind, solar, and bio energy.

However, the cost of investment in renewable energy projects is very high beyond the reach of domestic businesses.

Tran Anh Hao from the HCM City Department of Industry and Trade cites another reason for low foreign investment in such projects is the low price of electricity in Vietnam.

The HCM City Department of Industry and Trade is sponsoring an energy-saving exhibition (Enertec Expo 2011) in the hope that visitors will be able to gain access to energy-saving technologies and products and contribute to implementing the national strategy on energy efficiency and reduction of environmental pollution.



Third turbine of Son La hydropower plant to be operation on August 25

Vietnambusiness.asia

The Electricity of Vietnam (EVN) announced yesterday that the third turbine of Son La hydropower plant with designed capacity of 400 MW had been put into idle operation successfully.

As planned, the hydropower plant will officially put the third turbine into operation on August 25, joining the national grid in five days earlier, supplying additional 10 million KWh per day.

Each day, the three turbines of Son La hydropower plant supply about 30 million KWh to the national grid now.

The first two turbines of the hydropower plant has supplied about 3 billion KWh to the national grid so far.





RESOURCES - PetroVietnam to ramp up production

Vietnamplus

PetroVietnam is to be one of the nation's leading groups, both inside and outside the country, with sharpened competitive edges and growth of up to 20 percent a year, according to a five-year plan approved by the prime minister.

The group aims to increase oil and gas reserves and petroleum exploration output by 35-40 million tonnes and 23-34 million tonnes of oil equivalent per year respectively.

By 2015, PetroVietnam would be able to produce about 16-17 million tonnes of refined oil, meeting 50-60 percent of domestic petrol demand and 60-70 percent of nitrogenous fertiliser demand.

By 2015, around 50-60 percent of materials demand for petrochemical and petrochemical products would be satisfied.

At the same time, the group would put three bio-fuel plants into operation while developing bio-fuel production and distribution systems nationwide.

Petroleum services would be encouraged to grow at an average rate of 20 percent per year, the plan says.

PetroVietnam was eligible to use foreign currencies for its investment projects or those carried out by its subsidiaries via service contracts, according to a new circular issued by the Ministry of Finance.

The circular said the group was allowed to use foreign currencies to contribute capital to joint ventures.

PetroVietnam could use foreign currencies to pay principal, interest and fees on its borrowings for those investment projects and other maturity debts.

The group was expected to collect foreign currencies from petroleum contract revenues inside and outside the country.

The new circular would not apply for PetroVietnam subsidiaries.





Petrolimex to Start Operations at Vietnam Oil Terminal in 2012

Bloomberg

Vietnam National Petroleum Corp., the state-owned company known as Petrolimex, plans to begin commercial operations at its 505,000 cubic-metre Van Phong bonded oil terminal next year.

The facility will be commissioned in April, Henry Yau Win Onn, project manager at unit Petrolimex Singapore Ltd, said by telephone today.

The 29-tank Van Phong terminal in southern Khanh Hoa province will be capable of storing 230,000 cubic meters of gasoil and 125,000 cubic meters of gasoline, Petrolimex Singapore said in an e-mailed statement today.

The facility, which will have four jetties and be able to accommodate vessels with displacement of as much as 150,000 metric tonnes, will also have a capacity to store 150,000 cubic meters of fuel oil, the company said in the statement.

Petrolimex is Vietnam's biggest gasoline and diesel supplier.





Gov’t approves $1bln imported gas docks

VIR

The Prime Minister has approved a project on building a system of gas import docks at Ham Tan district in the central province of Binh Thuan , according to Do Khang Ninh, general director of PetroVietnam Gas (PV Gas).

Accordingly, the docks will include a port where ships go to have gas put on or taken off them and buildings used for storing gas. The docks project has a total investment of more than $1 billion.

As scheduled, once completed and put into operation, the docks will be capable of receiving about 2-3 million tonnes of imported gas per year.

The project planning will be accomplished by PV Gas later this year. The construction was expected to be started by 2012.





INFRASTRUCUTRE - Hanoi to build nine industrial zones

VNS

Hanoi will build nine industrial zones between now and 2015 and plans to build an additional 15 of the zones in the next 15 years.

At the moment, the city has only eight industrial zones that account for 10 per cent of the city's industrial production value, 45 per cent of its export revenues and 20 per cent of its GDP. These zones also employ about 110,000 workers.

According to the Management Board of Hanoi Industrial and Export Processing Zones, up to June 2011, Hanoi's industrial zones had attracted 537 projects, including 253 foreign direct investment projects with a total investment of $3.63 billion.



Slow construction industry weighs on materials sales

VNS

The building materials market has had a tough time lately due to a downturn in the building industry and increased production.

The Viet Nam Building Material Association said production at factories making cement and ceramic tiles had increased against the same period last year while consumption had reduced.

Nguyen Thi Thuy, owner of Tien Thuy building material shop in Hoang Quoc Viet Street, said sales always fell in the wet season but this year they were down from the beginning of the year and hadn’t recovered.

Pham Thanh Trung, owner of Son Tung shop in Tay Ho Street, Ha Noi, said the shop had a year-on-year reduction of 70 per cent in revenue to VND300 million (US$14,527) in June.

Nguyen Tien Nghi, deputy chairman of the Viet Nam Steel Association, said consumption of steel had fallen to 298,000 tonnes in June and recovered to 359,000 tonnes in July, still much lower than the average consumption of 400,000 tonnes a month.

Sales were not expected to improve before the end of this year due to reduced public investment and expenditure on construction in a period of high inflation, Nghi said.

Consumption of cement in July had also reduced by 360,000 tonnes against June to 3.59 million tonnes, said Le Van Diep, head of the administrative office at the Viet Nam Cement Association.

To promote sales of building materials, producers and retailers had offered large discounts.

Viglacera Ha Long, a building ceramics producer, usually discounted at the end of the year but this year 10-15 per cent was applied since mid-year, Thuy said.

Meanwhile, large steel and cement producers had sought to export their products.

This was a temporary solution because the export value was not high, Diep said.

Exports of clinker and cement reached 2.5 million tonnes in the first half and 133,000 tonnes of steel in the first seven months.





LEGAL NEWS – Vietnam requests customs declaration when carrying over $5,000, 15m dong

Stoxplus

The State Bank of Vietnam has issued Circular No 15/2011/TT-NHNN requesting all individuals to declare at the customs if they carry over $5,000 or foreign currencies equivalent to $5,000 or if they carry over 15 million dong.

The Circular was issued on August 12, 2011 but it did not state when it will come into effect.

Earlier in 2006, Vietnam set the maximum free carry of $7,000 under the Decree 160/2006/ND-CP.

Those who bring under $5,000 or foreign currencies equivalent and wish to deposit into a current account at a foreign bank have to declare too.

The move is seen as Vietnam's effort to stabilise its forex market.



New regulations on cross-border carrying of cash

Vietnamplus

The State Bank of Vietnam has issued a circular, stipulating the bringing of foreign currency in cash and dong in cash by individuals when leaving or entering the country.

Under the Circular No. 15/2011/TT-NHNN, individuals who carry over 5,000 USD or other foreign currencies that have equal value and more than 15 million VND must make customs declarations at border gates.

For individuals who carry into Vietnam foreign currency equal to or less than 5,000 USD, or other foreign currencies have equal value and wish to send this amount of foreign currency to account of payments in foreign currency of individuals opened at credit institutions or branches of foreign banks licensed to conduct foreign exchange transactions must also declared to the border gate customs.

The entry-exit declaration certified by the border customs of the foreign currency in cash brought into is the basis for licensed credit institutions to send foreign currency in cash to the account of payments.

The entry-exit declaration verified by the border gate customs is only valid for individuals to send foreign currency in cash to the account of payments within a maximum of 60 days from the date on the declaration of entry-exit.