Answering Tricky Interview Questions

by BNET Editorial

The importance of the job interview in the selection process cannot be overstressed. It is the best opportunity for both you and the employer to assess how well a person with your background, skills, experience, and even personality will fit into the culture and operations of an organization. Your résumé (or personal referral by someone whose opinion the hiring manager trusts) has likely already established that you meet the basic skills and background requirements. Your job now is twofold. First, you must discover for yourself if this is the right position for you. Second, you must impress your potential employer that you are the best candidate for the job. While most interview questions are generally straightforward, unambiguous inquiries, some interviewers will pose surprising questions specifically intended to explore your thinking and expectations at a deeper level. Unexpected questions may be meant to deliberately unbalance you to see how you react in high stress or confusing circumstances. There is also the possibility that these questions are not intended to be tricky at all. They may merely be invented by the interviewer, or borrowed from lists of questions available, for example, on the Internet. The interviewer may have no clear idea of their value or how to assess your response in relation to the requirements of the job.

How you answer tricky questions could determine whether you will receive an offer from the organization. It is also important to remember that what those questions are, and how your answers are received, can tell you volumes about whether this is a company you want to work for.

Here are some questions you might want to consider as you prepare yourself for a job interview:

• What aspects of your career are you most confident about, and how can you make sure those are discussed in the interview?
• What aspects of your career thus far are you particularly concerned about discussing?
• Can you formulate answers to questions about those aspects in advance?
• How can you use the interview to learn about the potential employer?

What You Need to Know

How do I answer a question that does not seem to relate to the job for which I am applying?

Some questions, for example, questions in which you are given a scenario and asked to think your way through to a solution, are designed to help the interviewer understand your ability to make tough decisions. Your interviewer may also want to assess your leadership abilities, especially in high pressure situations.

It is reasonable to assume that you will never find yourself stranded in a lifeboat, charged with deciding which fellow survivor to throw overboard to conserve rations. But the way you reason out your decision may tell the interviewer a great deal about you, for example, how you would choose which product to take out of inventory to conserve valuable warehouse space. The best way to address this type of question is to think of it in terms of business strategy.

How can I answer questions about my “greatest weakness” without disqualifying myself for the job?

When an interviewer asks you to identify your greatest weakness, he or she is attempting to discover the extent of your self-knowledge. We all have weaknesses, and it is not reasonable to expect you to be perfect in every way. Keep your answer short and dignified. Identify only one area of weakness, but also describe the actions you are taking to strengthen that area. Trying to turn a negative into a positive by saying things like, “My biggest weakness is that I’m a determined worker and won’t give up until the job is done well and completely,” fools no one.

How do I answer a question that the interviewer does not seem to understand?

It does occasionally happen that a company hires unqualified interviewers to select candidates. If you find yourself in this situation, you should consider whether this company is one you would like to work for. However, you should still strive to do your best in the interview. After all, you can always turn down an offer. To begin with, help the interviewer out by exploring the reasons behind the question. Consider what you would want to know about a prospective employee if you were in the employer’s position. Even though you may not answer the question itself, you will still benefit from the conversation. You will position yourself in the mind of the interviewer as someone who is not rattled by ambiguity, but instead works calmly and cooperatively with team members to arrive at the best possible outcome.

What to Do

Understand the Purpose of the Interview

As mentioned above, you have two tasks in the interview. You must assess whether you are right for the company, but you must also determine whether the company is right for you. The best job interviews are respectful encounters that allow mutual discovery. It may feel as if the employer has all the power—after all, it is the employer who will decide whether to offer you the position. Ultimately, however, it is you who holds the power, because it will be you who decides whether to accept the job. The reality is that interviews are just as important for you in the selection process as they are for the interviewer.

Keep that power balance in mind, and it will help you stay calm when tricky questions are asked.

Remember That the Interviewer May Be As Uncomfortable with the Process As You Are

Imagine yourself in the interviewer’s position. He or she likely meets with several candidates in a day, probing each with challenging questions. The interviewer is faced with the responsibility of narrowing the field of candidates to a lucky few, or, perhaps, a single prospective employee. This responsibility carries a fair amount of pressure. Interviewers may become tired of the same old questions and the same pat, rehearsed answers. Finally, remember that the interviewer was once in your position, applying for his or her job in the company and worrying about the same surprise questions that you are.

Prepare yourself in advance by identifying the topics that might be the most difficult for you. Spend some time thinking carefully about how you might answer them, writing out possible answers until you settle on your best strategy. Here are eight areas of questioning that could pose a challenge for you:

• your experience and management skills
• your opinion about industry or professional trends
• the reasons why you are leaving your current job
• financial or intangible value of your past achievements
• your work habits
• your salary expectations
• your expectations for the future
• your personality and relationship skills or problems.

Imagine which of these areas might be discussed and formulate in advance your general thoughts and the responses you want to express. Do not rehearse or memorize answers to anticipated questions word for word, as this may make your responses sound artificial.

Never Lie

Many interviewers do this work for a living, and they are more experienced at hearing the answers that candidates think they want to hear than you are at delivering them. Be candid and clear, and use lengthy answers only when you see that demonstrating your strategic thought process in detail will add valuable information. It should go without saying that outright lying will not serve you well.

When in Doubt, Try to Understand the Business Reason Behind the Question. Ask Questions of Your Own

“What do you mean?” or “Could you rephrase that question?” are perfectly acceptable queries in any civilized conversation. Job interviews are no different.

Be Prepared to Answer Questions about Salary

During the interview process you want to keep the focus on your worth, not your cost. If the subject comes up early in the process, politely decline to go into details about past salary and future expectations. Many companies have a policy of offering salaries only at a certain percentage above a candidate’s previous salary. If your previous salary, for whatever reason, was below market average or below your worth, you should not have to accept a lower salary in the future.

Before the interview, be sure to do your homework regarding the salary for this position so that when the time comes to discuss compensation you are prepared. You should decide ahead of time on a salary range that is acceptable to you. Make sure the top of the range is well above the figure you would accept, and the bottom of the range slightly above your predetermined “walkaway” figure.

Study Question Lists

Many lists of questions are available online. Interviewers use them, and you should as well. Although you may not be asked those specific questions during the interview, you will do well to prepare yourself by thinking about a wide range of topics relating to the position you are seeking.

What to Avoid

You act unprofessionally

One of the worst things you can do for your chances in an interview is to act in an unprofessional manner. Remember the old adage about first impressions: this is your only chance to make a stellar first impression. Professional behavior includes, firstly, arriving on time or even a few minutes early. Dress in a manner appropriate to the position you are seeking. Maintain a respectful, positive mien. Interviews are without doubt stressful experiences, but keep your emotions in check. An interview is no place for anger, defensiveness, or excessive enthusiasm.

You speak about your former employer or coworkers in unflattering terms

If you are asked why you are seeking new employment, do not concentrate on any gripes you may have about your existing or former employer, but instead talk about your positive ambitions. Focus on what has gone well in your career, not on what has failed. Do not get drawn into a discussion of whatever faults you may feel your former employer or coworkers possessed. If there were disagreements that led to your leaving your previous position, avoid discussing them if possible. If the topic is unavoidable, be as impartial in your discussion as possible. Harsh criticisms will only make you look petty.

You give away your power

Your purpose at the interview is to assess the desirability of the job, as well as to impress upon your prospective employer your own fitness for the job. Remember that you have power in this situation as much as the employer does: the power to say no to a job offer. Do not give away your power by coming to the interview unprepared or acting in an unprofessional manner.

You “hide behind” scripted answers

The interviewer will have heard these hundreds of times. Original responses, even if they are slightly clumsy, will be more valuable to both you and the interviewer. They are more indicative of whether there is indeed a match between you and your potential new employer.

Where to Learn More

Books:

Fry, Ronald W. 101 Great Answers to the Toughest Interview Questions. 5th ed. Franklin Lakes, NJ: Career Press, 2006.

Yate, Martin John. Great Answers to Tough Interview Questions. 6th ed. Dover, NH: Kogan Page, 2005.

Web Site:

Monster Career Center: www.content.monster.com

http://www.bnet.com/2410-13056_23-55129.html?promo=713&tag=nl.e713

Managing remote call center agents: 14 best practices

By Donna Fluss, President, DMG Consulting LLC

07 May 2007 | SearchCRM.com

As companies have come to embrace the concept of at-home (remote) call center agents, managers find themselves struggling with how to oversee this new workforce.

Enterprises constantly struggle to find the right agents to deliver an outstanding customer experience. Some have turned to offshore outsourcers that claim to have an abundance of high-quality agents available for reasonable prices, while others prefer to keep their call center activities domestic, provided they can find agents with the right skills for the job. The remote (at-home) agent business model has proved to be a creative and cost-effective approach to staffing contact centers with skilled, high-quality and loyal employees. It's also a cost-effective method for addressing contingency planning and disaster recovery.

Managers in call centers throughout the U.S. are weighing the benefits and challenges of employing remote agents. As technology is no longer viewed as an impediment, the most significant concern is how to manage remote agents without personal contact from the call center supervisor, particularly for single-site operating environments that have never had agents based in multiple or satellite locations.

Some of the best practices for remote agent oversight have long been used to manage agents in secondary locations. The most important practice is to invest time in hiring qualified agents – individuals who are highly motivated, satisfy all competency and skill requirements, have the right working environment and technology already in place, and are technically savvy and able to troubleshoot at home. My consultancy, DMG Consulting, recommends that contact centers employing remote call center agents use the following best practices for hiring and managing their staff:

1. Use a competency-based assessment tool as part of the hiring process to evaluate potential remote agent candidates. This tool should make sure that candidates have the necessary contact center skills and are highly motivated self-starters.

2. As part of the interview process, ask agents whether they meet all of the criteria on a remote agent readiness checklist.

3. Establish a three-month trial period to determine whether a new hire or a premise-based agent who "transfers" to a remote location can properly perform the job. Whether hiring employees or contract staff, you should make it clear in the agreement that the enterprise has the right to terminate the relationship without cause during this probationary period. (Involve your human resources and legal departments in addressing this issue.)

4. Create an online training program that addresses your products, systems and general corporate information. This program can be delivered via an e-learning mechanism or on paper, but it must test the agent's knowledge. Supervisors must be available to review and assist remote agents with training challenges.

5. Give remote call center agents the same training opportunities as premise-based staff. If you generally put new hires in a protected pod for the first two weeks after they come out of training, do the same for the remote agents. Be sure to make a supervisor available, particularly immediately following the initial training.

6. Establish and document job responsibilities, requirements, procedures and policies. This document needs to address all standard operating policies plus specific remote agent requirements.

7. Establish a formal communication process between supervisors and remote agents. The process should include a daily conversation with the supervisor or manager. It's critical that management adhere to this schedule. Remote agents must also be made aware of the process for escalating inquiries to supervisors. (It's recommended that premise-based and remote agents follow the same escalation procedures.)

8. Use chat for handling the majority of agent inquiries. Supervisors need to be available to respond immediately to chat inquiries from agents.

9. Ensure that remote agents have access to all product and service information, whether it's online or paper-based. If paper-based, the documents should be shipped to remote agents as part of their set-up process.

10. Establish a defined number and frequency of quality monitoring (QM) sessions for remote agent evaluations. Provide regular, scheduled feedback on agent performance, covering both strengths and coaching on performance opportunities. It's important to involve remote agents in all quality-monitoring and training-related activities.

11. Reward remote agents for performance excellence, just as you would premise-based staff.

12. Ensure that remote agents have access to performance management reports and quality assurance (QA) evaluations for self-managing performance.

13. Include remote agents in all team meetings and up-training activities. It's recommended that remote agents be part of an agent team that includes both remote and premise-based staff. If your staff is 100% remote, run team meetings at least once a week to keep staff connected and interacting with one another.

14. If your center is using both premise-based and remote agents, pair agents to ensure and reward cooperation. Be creative in identifying ways to promote a sense of "connectedness" or "team spirit" for agents who work at home. If you are having a holiday party at the site, be sure to communicate this to remote agents so that they have time to prepare and join in, if they choose. Do not leave them out just because they are not on-site.

About the author
Donna Fluss is the founder and principal of DMG Consulting LLC, a firm specializing in customer-focused business strategy, operations and technology services for Global 2000 and emerging companies. Ms. Fluss is a recognized thought leader and innovator in CRM, contact center and real-time analytics. For over 23 years, she has helped end users build world-class differentiated contact centers and vendors develop high-value solutions for the market. She is the author of the book, "The Real-Time Contact Center" and many leading industry reports, including the 2006 and 2007 Speech Analytics Market Report and the annual Quality Management/Liability Recording Product and Market Report.

10 steps to a practical social media business strategy

By Allen Bonde

27 Jan 2010 | SearchCRM.com

How can you make social media and Web 2.0 work for your business? As we discussed last time, social media sites and models are really just “channels” from a marketing and CRM perspective -- requiring targeted approaches, expectations and even owners. But while experimenting with public social media and marketing campaigns is an essential first step for most businesses, simply having a presence on Facebook or Twitter does not mean you have a true social media business strategy.

So where should we start after we get our “Facebook fix” and turn to leveraging social models more broadly and completely in our business? An examination of early adopters shows that blogs, social networking and customer forums offer the “biggest bang for the buck” among Web 2.0 tools in terms of measurable benefits.

Customer-facing processes in sales and marketing (arguably the stepping-off point for “social CRM”), along with employee knowledge-sharing, training and development, are natural places to focus social efforts initially.

For more on social media business strategies

Get advice on whether marketing or customer service should own your social CRM initiative

See a demo of SAP's new Twitter integration

But a social business strategy is a lot more than just picking the right tools and processes to improve. A strategy should begin with an assessment of business goals, current use of channels and customer needs and should then outline user adoption, ownership and governance models, ultimately resulting in a phased, flexible roadmap, with use cases and metrics to provide one “language” for all stakeholders.

As a consultant, I know that following this advice is easier said than done! So the remainder of this article shares some more specific recommendations, in the form of “10 steps,” for creating a practical social business strategy based on projects I’ve worked on in the past. I hope this list is helpful, and I welcome your feedback, thoughts and additional ideas for making social media and the promise of social CRM work for your business.

1. Create a mission statement -- What are your top-level objectives for applying social media and Web 2.0? And how will you achieve them? Ideally, this can be boiled down to one statement, articulating both the vision and where you aim to focus in terms of specific strategies. Don’t skip – or skimp on – this one; it’s important.

2. Assign owners – Who will take the mission, build the team, secure the budget, identify the tools needed? And who will own each channel, like LinkedIn, Twitter, your blog, etc., as you scale up the program? In about half of the organizations we have looked at, marketing owns social media, but this is mostly because early social business tended to focus on marketing or online commerce first.

3. Outline employee policies -- Do you have a corporate social media handbook, with policies, style guides and guidance for employees looking to participate (on behalf of the company) in public forums and social sites? And as you roll out new social business tools, beyond creating awareness – see below – how will you encourage new behaviors and even innovative uses for these social tools?

4. Identify existing communities -- Where are discussions taking place now? For consumer products, they may take place on Amazon or Facebook, while business topics may originate on LinkedIn or internal forums. But it’s also likely that most discussions will span multiple social (and traditional) channels and involve both user-generated and enterprise content. Your social business strategy will need to address all of these!

5. Create a marketing plan -- How will you promote and roll out your new (or existing) social capabilities? Will word-of-mouth marketing be sufficient? Also, a training plan, incentives and recognition programs for frequent posters to communities and moderators will be needed.

6. Develop individual channel strategies -- Depending on which channels best fit the goals of your social business strategy, it’s important to look at the “role” and “tone” of each, think about cross-links (e.g., Facebook promotion back to your corporate blog) and leverage monitoring and benchmarking tools for tracking discussions, sentiment and your current “influence.” For example, Twitter Grader is a good way to see how you stack up in the world of Twitter.

7. Develop community strategies and programs – How will you support existing communities via new social business tools and encourage the widest number of users to share, publish and comment on information, whether it exists inside or outside the enterprise? In addition, what is needed to measure reputation and enable a trust model that scales across all communities?

8. Develop your platform strategy -- As companies look to integrate social channels with core business processes, a growing number are turning to social business software (SBS) platforms like those from Jive, OutStart or RightNow via its HiveLive acquisition. In evaluating these options, it is important to outline enterprise requirements (built-in expertise location, mobile access, etc.) and dependencies to help you scale from individual communities to enterprise collaboration and social networking.

9. Create a social business dashboard -- What metrics will you use to show the ROI for your programs? In the customer service arena, reduced costs from avoided calls or email and higher customer satisfaction are two proven measures to start with. For enterprise use of Web 2.0 in other areas, improved information sharing and lower communication costs are additional benefits that could be measured and tracked.

10. Publish an action plan -- What tactics are needed to fulfill your social business vision over the next 12 to 18 months? Typically, these plans start with management activities (steps 1, 2, 3 and 9), marketing-oriented tasks (steps 4, 5 and 6), content and community development (steps 4 and 7) and technology rollout (steps 7 and 8). Ideally, for each tactic, you want to articulate specific skills needed, timeframes and dependencies, and field trials to test assumptions and readiness for proceeding with subsequent phases.

About Allen Bonde

Allen Bonde was recently CMO of eVergance and is a well-known analyst, entrepreneur and management consultant. He has 20 years of experience at McKinsey, Extraprise, the Yankee Group, and GTE (now Verizon). He has written for CIO.com and SearchCRM.com, and he has appeared on CNBC and Fox News. Bonde is the founder and managing director of Evoke CRM Partners (www.EvokeCRM.com), a consultancy focused on multi-channel customer strategies and the convergence of social media, self-service and CRM. He encourages readers to connect with him on LinkedIn and follow him on Twitter: www.twitter.com/abonde.

Vietnam - News and Regulations

WTO AND VIETNAM - PM Dung meets UN, WTO leaders in Geneva

GENEVA — In meetings with UN officials in Geneva yesterday, Prime Minister Nguyen Tan Dung affirmed Viet Nam’s great appreciation for the co-operation and support it received from the United Nations, International Labour Organisation and International Organisation for Migration.

ILO director-general Juan Somavia, International Organisation for Migration director general William Lacy Swing, and UN under-secretary general Sergei Ordzhonikidze all took note of Viet Nam’s socio-economic achievements in recent years, especially its successful recovery from the global economic crisis, and affirmed that they were ready to co-operate with and support Viet Nam in the future.

They also expressed admiration for Viet Nam’s contribution to the "One United Nations" reform initiative.

Dung told Somavia that the nation always put a focus on creating jobs, especially via its National Target Programme through 2010 which helped ensure jobs for nearly 50 million workers and increase the level of training programmes by 40 per cent. Viet Nam also continued to revise its laws and policies to promote jobs, training skills and social security.

Dung urged the ILO to continue co-operating with Viet Nam on the framework of national-level co-operation on Sustainable Job Promotion for 2006-10.

Somavia said that the ILO would keep providing technical and financial support to projects on the labour market, revising and amending the laws on labour and labour relations, sustainable job creation for the disabled, and UN programmes on gender equality.

Somavia also said he hoped that Viet Nam would take a seat on ILO’s executive board for the 2011-14 term and, in the presidency of ASEAN this year, boost co-operation between ASEAN and the ILO.

In his meeting with Swing, Dung affirmed that the Vietnamese Government consistently supported legal migration while combating human trafficking. He vowed continued co-operation with other countries and international organisations on this issue. Dung also said Viet Nam expected further financial and technical assistance from Swing’s organisation.

Swing said he was ready to help Viet Nam in developing policies for sustainable migration management; fighting human trafficking; broadening labour markets; and meeting the requirements of the international labour market, as well as protecting the legitimate rights and interests of Vietnamese guest workers who lost their jobs as a result of the global economic crisis.

He also affirmed his organisation’s co-ordination with and help to Viet Nam in dealing with illegal immigration into the country.

In his meeting with Ordzhonikidze, Dung stressed that Viet Nam attached great importance to the central role of the UN in solving international issues, especially in coping with the current global challenges.

"Viet Nam has been and will be taking an ative part in UN activities in a proactive, constructive, responsible and co-operative spirit," he said.

Dung thanked the UN and its secretariat for helping Viet Nam successfully accomplish its 2008-09 term as a non-permanent member of the Security Council.

Ordzhonikidze affirmed he would continue pushing UN organisations for effective support in terms of financial resources, knowledge and experience for Viet Nam in the latest stage of its renewal process and international economic integration, as well as in realising the Millennium Development Goals and the "One United Nations" initiative in Viet Nam.

The World Trade Organisation (WTO) is willing to lend Viet Nam a helping hand in designing a roadmap for each specific phase of its integration into the world economy, the WTO chief has said.

The statement was made when WTO Director General Pascal Lamy met Prime Minister Nguyen Tan Dung in Geneva, Switzerland, on January 25.

The WTO chief urged Viet Nam to continue to perfect its legal system to meet WTO standards.

Three years since its WTO admission, Viet Nam had seen a raft of economic achievements, especially GDP growth, and those in trade, FDI attraction and tourism, Lamy said.

He also highlighted Viet Nam for posting a positive GDP growth rate in 2009 when the financial crisis and the impact of the global economic recession lingered.

Regarding the Doha talks, the WTO official emphasised that once the round of negotiations succeeded, it would work to both stimulate the world economy and speed up global financial reform.

Accordingly, he said he hoped Viet Nam and other ASEAN members would act as the medium to push the Doha negotiations to end as scheduled.

For his part, Prime Minister Dung said as the ASEAN Chair in 2010, Viet Nam and other members of the grouping hoped that the Doha talks would conclude in 2010 with equitable results, which take the needs of developing and underdeveloped countries into consideration.

The early end of the Doha round would open up opportunities for trade facilitation, helping improve market entry capacity and cut subsidies, Dung told the WTO official.

The leader said Viet Nam’s serious adhesion to its WTO commitments over the past three years had provided proof of its wide and deep integration into the international trade system and positive contributions to the world’s largest trade organisation.

Dung said he expected the WTO to continue backing the idea of offering dispensation the WTO’s new members from undertaking obligations to implementing new commitments of the Doha talks. — VNS

INFRASTRUCTURE/TRANSPORTATION -

Vietnam PM approves $16.23b expressway project The Vietnamese prime minister has approved a 300 trillion dong ($16.23 billion) project to build an expressway linking Hanoi and the Mekong Delta city of Can Tho. The 1,811-km route will include 16 sections and have between four and eight lanes, the government said on its website last weekend. Construction on the expressway will be divided into two phases with the first worth 272.6 trillion dong scheduled to build 1,469 km between 2011 and 2020. The second phase worth 68.72 trillion dong will build 342 km, including the expansion of Dau Giay-Long Thanh and Ben Luc-Trung Luong, after 2020. Currently, three sections of Cau Gie-Ninh Binh worth 9.65 trillion dong, Ben Luc-Trung Luong worth 14.97 trillion dong and Dau Giay-Long Thanh worth 16.34 trillion dong are under construction. The project investment will come from state budget under the government's guaranteed loans and investors' capital, the website said. The total land area for the projects is forecast to reach 1.2 million hectares. The expressway is expected to connect key economic zones, raise transport capacity on the North-South route and ease traffic jams on National Highway No. 1, particularly in big cities.

Vietnam's international bond issue - Vietnam smoothly comes back international bond market, HK press

"Asia Times" of Hong Kong on January 27 reported that after three years of absence, Vietnam marked its comeback to the international bond market by successfully issuing 10-year US dollar loans. Vietnam's international bond issue is assessed to be smoother compared with that of Indonesia and Philippines in this month early.

Accordingly, on January 26 early morning (Hong Kong Time), Vietnam offered $1 billion of 10-year bonds (subject to the country's second tranche bond offering from October 2005). Initially, the yield rate was defined at 6.95-7 percent pa. Finally, the bonds were traded at the nominal coupon rate of 6.75 percent and the issue yield rate of 6.95 percent pa.

As announced, the bond offering attracted the high bidding volume of the underwriter group including Barclays Capital, Citi and Deutsche Bank. The list of investors registering to join Vietnam's international bond offering reached 200 accounts with total bidding value of $2.4 billion, higher 2.4 times than the offering volume.

Vietnamese government made big efforts to reinforce its credit rating prestige before offering bonds in the current inflation context. As a result, Vietnamese bonds attracted the attention of high quality capital flow, 56 percent of transaction belonged to US investors, 16 percent to European investors and 28 percent to Asian investors.

This week early, 10-year bonds of Indonesia were traded at $101/bond but then the price decreased 1-1.5 points while Philippines' bonds fell one point. Meanwhile, thanks to the one-day delay in transaction schedule, Vietnamese bonds surged one point on January 26.

On the closing time of Asian market January 26, Indonesia's 10-year bond changed hands at $100.25 and Philippines' at $100.625/bond. Vietnamese bonds ended the first trading day at $99.5/bond, higher than the issue price of $98.576/bond.VNA

INSURANCE - Dai-ichi Life Vietnam reports steady growth

Dai-ichi life Vietnam has announced positive business results for 2009 and a breakthrough strategy for this year.

The insurer obtained 744 billion dong from insurance premiums last year with new policies increasing by 39 percent. This is also the second straight year the Japanese-invested company has posted profits from the local market after three years of operation.

The company expanded its market share from 4.8 percent in the first year to around 7 percent in 2009. Dai-ichi life Vietnam plans to obtain 8 percent of the market share this year and increase the figure to 10 percent two years later.

To reach the targets, it plans to improve human resources in its agent system and launch more products to meet various demands this year. "We hope that our agents will be pioneers in Vietnam in using net books with new software to provide consultancy for customers;' Dai-ichi life Vietnam general director Takashi Fujii told the Daily.

The company is the first insurer in Vietnam to apply insurance request forms with five questions instead of 31. It has also had Japanese experts design documents following the style of Japanese comic books to help customers learn about complicated financial concepts.

In Vietnam, Dai-ichi Life ranks third with 50 offices, 400 staff and 13,000 agents. The firm.11&0 plans to expand this year.

Dai-ichi Mutual Life Insurance Co. acquired Vietnam's Bao Minh-CMG joint venture in 2007 to establish Dai-ichi Life Vietnam and increased its chartered capital to $25 million. The enterprise was approved by the finance ministry to raise its capital to $72 million in 2008 and became the second largest foreign insurer in Vietnam in terms of invested capital.

"This proves the commitment of Dai-ichi life's long-term business in Vietnam;' Fujii said.

Established in 1902, Dai-ichi Mutual life Insurance Co is the oldest mutual insurer in Japan and the second largest life insurer there with over 8.5 million customers.VNA



TELECOM - VNPT conducts a 74.5b dong project

Vietnam Post and Telecommunication Group or VNPT and finance ministry yesterday signed a principle contract to carry out the bidding package of upgrading and expanding the data transmission for telecom infrastructure of the finance sector.

The bid is worth of nearly 74.5 billion dong. Accordingly, VNPT will supply services relating to the finance ministry's demand for hiring transmission channel, expanding and installing data transmission channels for the telecom infrastructure of finance sector from now till the end of 2011.

Earlier, in August 2009, VNPT and finance ministry had inked a cooperation deal on applying digital signature for electronic state administration services.vns



CHEMICALS - PET prepares for distributing polypropylene products

Petrolimex Services Joint Stock Corp (coded PET) announced that the company would officially start distributing the plastic particles produced by Dung Quat Polypropylene Plastic Plant in February 2010.

At present, the corporation is completing the final preparation works of connecting the power network and other technical facilities between Dung Quat Oil Refinery and the polypropylene plastic plant in order to serve for trial running period and operation process.

The polypropylene plastic plant was the first petrochemical projects in Dung Quat Oil Refinery Complex. The plant was built on a site of 16 hectares near Dung Quat Oil Refinery with total investment capital of $232 million, or nearly 4 trillion dong. The plant has designed capacity of 150,000 tonnes of product per year. After two years of construction, the contractors have already finished 96 percent of the total construction works.

It is expected that PET's annual revenue will be increased to over 3 trillion dong from its sole distribution activities of plastic products for Dung Quat Oil Refinery.DTCHK

Why Good Spreadsheets Make Bad Strategies

4:07 PM Monday January 11, 2010
by Roger Martin

We live in a world obsessed with science, preoccupied with predictability and control, and enraptured with quantitative analysis. Economic forecasters crank out precision predictions of economic growth with their massive econometric models. CEOs give to-the-penny guidance to capital markets on next quarter's predicted earnings. We live by adages like: "Show me the numbers" and truisms such as "If you can't measure it, it doesn't count."

What has this obsession gotten us? The economists have gotten it consistently wrong. As late as the first half of 2008, no prominent macroeconomist or important economic forecasting organization predicted that the economy would not grow in 2008 (or 2009), let alone that it would crater as disastrously as it did. But, undaunted, the same economists who totally missed the recession turned back to the same quantitative, scientific models to predict how the economy would recover, only to be mainly wrong again. CEOs keep on giving quarterly guidance based on their sophisticated financial planning systems and keep on being wrong — and then get slammed not for bad performance but for their failure to predict performance exactly as they promised mere months earlier.

In this oh-so-modern life, we have deep-seated desire to quantify the world around us so that we can understand it and control it. But the world isn't behaving. Instead, it is showing its modern, scientific inhabitants that quantity doesn't tell us as much as we would wish. While the macroeconomists would dearly love to add up all the loans to provide a total for "credit outstanding" and then plug this quantity into their economic models to be able to predict next year's Gross Domestic Product, they found out in 2008 that all of those loans weren't the same — some, especially the sub-prime mortgages, weren't worth the proverbial paper on which they were written.

And CEOs and their CFOs would love to be able to extrapolate last month's sales quantity and predict next quarter's sales, but sometimes they find out that those sales weren't as solid a base for growth as they might have thought — especially if some of the customer relationships underpinning them weren't as strong as they might have imagined.

The fundamental shortcoming is that all of these scientific methods depended entirely on quantities to produce the answers they were meant to generate. They were all blissfully ignorant of qualities. My colleague Hilary Austen, who is writing a fantastic book on the importance of artistry, describes the difference between qualities and quantities in the latest draft:

Qualities cannot be objectively measured, as a quantity like temperature can be measured with a thermometer. We can count the number of people in a room, but that tells us little about the mood — upbeat, flat, intense, contentious — of the group's interaction.

Why are qualities so important? We need to understand the role of qualities in dealing with the complex, ambiguous and uncertain world in which we live because understanding, measuring, modeling and manipulating the quantities just won't cut it. Adding up the quantity of credit outstanding won't tell us nearly enough about what role it will play in our economy. Adding up sales won't tell us what kind of a company we really have. We need to have a much deeper understanding of their qualities — the ambiguous, hard-to-measure aspects of all of these features.

To obtain that understanding, we need to supplement the quantitative techniques brought to us through the march of science with the artistic understanding of and facility with qualities that our obsession with science has brushed aside. We must stop obsessing about measurement so much that we exclude essential but un-measurable qualities from our understanding of any given situation. We must also consider the possibility that if we can't measure something, it might be the very most important aspect of the problem on which we're working.

Roger Martin is the Dean of the Rotman School of Management at the University of Toronto in Canada and the author of The Design of Business: Why Design Thinking is the Next Competitive Advantage (Harvard Business Press, 2009).

http://blogs.hbr.org/cs/2010/01/why_good_spreadsheets_make_bad.html

Vietnam - News and Regulations

GOLDMANN SACHS ON VIETNAM - FDI attraction encouraged in high tech

US finance group Goldman Sachs has ranked Vietnam among 11 countries that could achieve high growth rate in 2010 and be a good investment destination for international investors.

Along with optimistic forecasts of other international organisations, the assessment of Goldman Sachs has helped investors feel more secured while investing in Vietnam.

Foreign investors now are ready to pump long-term production and business expansion plans in Vietnam to head off the post-crisis opportunities. Many projects, which were previously tardy in implementation because of global finance crisis, are also expected to start within this year. Nguyen Hoai Nam, general director of Berjaya Vietnam Group said that its finance centre in Ky Hoa tourism site, HCM City's Dist 10 will be kicked off in Q1. The project is estimated to cost $930 million. In Ba Ria Vung Tau province, work on Saigon Atlantis hotel tourism project worth $4.1 billion will begin in Q1 also after the provincial governance handed over 80 among 295 hectares to the project investor.

The retail sector in Vietnam's market has attracted special attention of foreign investors. Tham Tuck Choy, general director of Parkson Vietnam stated that the Parkson system in Vietnam last year reached the best business results (with a gross revenue of 30 percent/year) among the markets Parkson has invested in, higher than 10-15 percent/year in Malaysia and China.

"With such a satisfactory result, we are more confident in expanding investments in new projects. The fourth Parkson shopping centre was inaugurated in HCM City in late December 2009 and the sixth one will be opened in next five years. This year, Parkson will have one more shopping centre in Hanoi and another in Da Nang towards. The network expansion will not stop at this figure", Tham Tuck Choy added.

Foreign Investment Department targets to attract total $22-25 billion of FDI capital in 2010, a year-on-year growth of 10 percent and actualise $10-11 billion, also up 10 percent. FDI attraction will concentrate on support industries, infrastructure development and human resources.

Local firms are also ready to cooperate business with foreign investors. In 2009, Saigon investment group (SGI) started work on infrastructure of Saigon-Chan Mai non-tariff and industrial area with total cost of 1.279 trillion dong in Thua Thien Hue province. Also SGI plans to kick off ground on 100,000 sqm production facility (costing 400 billion dong) in Can Tho City. The facility is expected to complete within 2010 and welcome foreign investors with suitable land rentals when the world economy has overcome the difficult period, Dang Thanh Tam-chair of SGI.

In recent months, Jetro organisation in HCM City received a large number of investors for seeking business opportunities in Vietnam. Last year Japan ranked ninth among top ten countries with the highest investment capital in Vietnam with 77 newly licensed projects worth $138 million. Japan's investment capital here surged by $234 million.

Dang Thanh Tam was very optimistic as predicting that 2010 FDI attraction of Vietnam will be over $40 billion. In his opinion, Vietnam should boost FDI attraction in high technology, which requires a suitable investment preference mechanism.CAFEF

POWER/PRICE - EVN suggests raising electricity rate over 11pct

The Electricity of Vietnam Group has suggested increasing the retail electricity price by 11.65 percent to 1,059.75 dong a kWh.

According to the prime minister's decision on trading electricity in 2009 and 2010 - 2012 in accordance with the market mechanism dated 12 February 2009, the electricity selling price from 1 January 2010 will be based on the market.

At the end of December 2009, Vietnam Coal and Mineral Industry Corp ?Vinacomin? submitted an official letter to the prime minister proposing increasing coal selling prices for electricity production as of 1 January 2010. EVN said that if the input fuel coal price increases, the electricity price will naturally surge accordingly.

Pham Manh Thang, director of the trade and industry ministry's electricity regulation department, said that building the annual electricity price plan is responsibility of EVN, while the trade and industry ministry will give ideas. The plan will be appraised by the finance ministry before being submitted to the prime minister for approval.

Based on the processes and the price hike plan proposed by Vinacomin, EVN submitted an official letter to the trade and industry ministry on January 15. EVN suggesting four price scenarios applicable in 2010 with the lowest increase of 6.2 percent. By that time, the average electricity selling price will be 1,052.44 dong a kWh.

However, EVN suggested raising the retail sale electricity price by 11.65 percent against the approved average price of 2009, reaching 1,059.75 dong a kWh (in accordance with the coal price increase of 15 percent). According to EVN, if this scenario is realised, total production and business expenses of electricity in 2010 will be 84.915 trillion dong and the average cost 1,029 dong a kWh. With this price, EVN will gain profits of 6 percent to 12 percent.

Right after EVN issued the above document, related agencies also submitted their reports to the trade and industry ministry. Accordingly, most of them agreed with the price plan mooted by EVN. However, some opinions stated that the proposed electricity rates (the coal price rises by 15 percent, the electricity price 11.65 percent) should be cut to 4.98 percent, equivalent to 1,019 dong a kWh.

Additionally, the appraisal department also suggested eliminating the scenario 4 of EVN because the coal price hike of this scenario is low (10 percent), failing to meet the routine on raising the coal price in accordance with the market price.

As for the plan inspection agency of the finance ministry, Nguyen Tien Thoa, director of price management department, said that his department needs four scenarios. Their main difference is because of coal price.VNEXPRESS

INSURANCE COOPERATION - Maritime Bank cooperates with Prudential

Maritime Commercial Joint Stock Bank (Maritime Bank) and Prudential Vietnam Life Insurance Co have signed a banking insurance cooperation agreement.

Accordingly, in 2010, the customers under Maritime Bank's credit programme for consumption purposes will get loan insurance offered by Prudential Vietnam until the payment maturity date. The insurer's credit life insurance products will be applied for all the mortgage and credit loans supplied by the bank.

At the same time, the two parties will continue to carry out the cooperation model, in which Maritime Bank's financial consultants will introduce the insurance products offered by Prudential Vietnam that meet the customers' financial demands.

In addition, Prudential and Maritime Bank will keep searching other cooperation opportunities that bring in mutual benefits in the future.TBKT

TELECOMMUNICATION - Vietnam telcoms propose floor rates for mobile services

Vietnam's big telecommunications companies have asked the Ministry of Information and Communications to establish minimum mobile phone service fees in fear of unhealthy competition this year.

In the proposal, the state-owned Vietnam Posts and Telecommunications together with the military-run Viettel, have recommended that the ministry apply floor charges of some 800 dong per minute.

The companies also said the ministry should not allow sales promotions offering customers more than 50 percent off the credit they purchase.

Viettel deputy general director Nguyen Manh Hung said it was very likely that a fees "war" would break out among mobile phone service suppliers this year, implying unhealthy competition.

This could sink new companies and prevent major ones from expanding their business to disadvantaged areas and overseas, according to Hung.

Most foreign investors, meanwhile, said the "war" would take place sooner or later without the government's interference.

Minister Le Doan Hop said the ministry would consider the proposal.

TNN

RESOURCES - Hard to find out large oil and gas mines, PetroVietnam says
Around 40 percent of Vietnam’s electricity is produced from fuel fired plants of PetroVietnam so the potential to increase the gas output in next years will help Vietnam partially surmount the power shortage as well as ease the pressure of seeking coal supply sources for power production. But opportunity to find out big petroleum mines in Vietnam’s territory seems to be running out. In 2010, PetroVietnam plans to start drilling six new oil wells but the drilling will not likely increase this year’s petroleum output. According to the group’s 2010 mining plan, total output of crude oil will be only 15 million tonnes and gas with eight billion cubic metres, lower than 2009’s. The development of gas drilling sector depends on infrastructure like gas pipeline and consumption market. Currently, each year PetroVietnam only can supply few hundreds of cubic metres, almost condensate gas drilled from the crude oil mining process at some new oilfields. Along with three gas pipelines Bach Ho, Nam Con Son and Ca Mau, PetroVietnam is building the fourth pipeline from the Thai frontier to Can Tho province’s O Mon and also the second Nam Con Son pipeline to drill gas in West Ocean and Nam Con Son basin (including Hai Thach well with an estimated reserve equalling to the combined reserve of Lan Tay and Lan Do).SET Phung Dich Thuc, general director of PetroVietnam said, after two new pipelines are finished, the onshore gas supply will be raised by 30-40 percent to 10-11 billion cubic metres a year. More important, all new pipelines will help promote contractors to enhance investments and exploration at new potential oilfields. It is hard to find out some large petroleum wells, he admitted. All of the six new oilfields set for drilling in 2010 are small so total extra petroleum reserve is only 34 million tonnes (excluding the reserve of oil wells overseas). This year PetroVietnam only targets to hike the reserve to 35-40 million tonnes of convertible oil. Meanwhile, Vietnam’s need of crude oil and gas in the future is on rapid increase. Only Long Son oil refinery in Ba Ria Vung Tau province (that will be signed JV contracts in 2010) and Nghi Son refinery in Thanh Hoa (ground will start in 2010) need up to 20 million tonnes of crude oil a year. In addition, PetroVietnam plans to raise the capacity of Dung Quat Oil Refinery from 6.5 million tonnes to 10 million tonnes, thus the group will have to expand operation scope outside Vietnam to increase petroleum output. “We may import gas by pipeline and compressed gas by ships”, Thuc revealed. PetroVietnam is considering connecting Vietnam’s gas pipelines to some South-eastern Asia countries to buy gas for meeting domestic demand. As estimated, from 2012, Vietnam needs to import four billion cubic metres of gas. The plan of importing compressed gas was carried out through building the big reserve depots in provinces. From 2010, PetroVietnam will have first petroleum products in foreign countries when the oil wells namely Nhenhexky, SK 305 in Russia and Malaysia, Junin (Venezuela) are put into drilling. The crude oil output (drilled in foreign countries) in 2010 could be about 500,000 tonnes. Up to now, PetroVietnam has invested in 21 overseas projects with total cost of $600 million. According to Dinh La Thang-chair of PetroVietnam director board, the group’s overseas investment will surge sharply when its JV with Russia’s Gazprom started petroleum exploration and drilling projects. In 2010 alone, PetroVietnam will invest 110.500 trillion dong, up over 44 trillion dong year-on-year. Apart from signed projects, PetroVietnam will continue seeking other investment opportunities in Africa, America, South-eastern Asia, Russia, SNG countries also. Last year the group established partnership deals with national petroleum companies of Bolivia, Nicaragua, Mozambique, Angola, Sudan, Kazakhstan, and Argentina.

POWER - Hoang Anh Gia Lai Group invests in hydropower in Laos

Under the memorandum of understanding (MoU) signed in Vientiane on January 19 between Vietnam’s Hoang Anh Gia Lai Joint Stock Co (HAGL)’s general director, Nguyen Van Su and Laos’ deputy minister of planning and investment, Thongmy Phomvisay, HAGL will build a $120 million hydro-electric power plant in Laos.

The Nam Cong 2 hydro-electric power plant with a designed capacity of 70MW will be put into operation after three years of construction.

Earlier in August 2009, the two signatories signed a MoU for Nam Cong 3 hydro-electric power plant.

Once operational, the two projects will help boost socio-economic development in southern Laos’ region.

The HAGL has gained prestige in Laos with the Sea Games 25 village in Vientiane and a project on planting 10,000 hectares of rubber trees in Attapeu province.CAFEF

Vietnam - News and Regulations

FINANCE - PROFIT HORIZON - Banks report robust fiscal year

In comparison with first three quarters of 2009, the increasing impetus of banks' profit in Q4 tumbled sharply because the gap between lending and deposit rates was nearly flat. But, the full year's profit performance of banks was very impressive, surpassing far 2009 targets.

Especially between Q2 and Q3, the banking profit mainly came from the earnings of credit activities thanks to the government's lending rate subsidisation programme. Also at that time, banking profits nearly fulfilled the full year's plan.

For example, Sacombank's 2009 pre-tax profit was announced at 1.901 trillion dong (excluding the combined profit from member companies) after deducting money for the risk prevention fund. In December alone, the bank reported earning 243 billion dong in profit. In the profit structure, the bank's earnings from credit activities accounted for 25.5 percent and the remainder was from other service and profits.

Ly Xuan Hai, general director of HCM City based Asia Commercial JS Bank (ACB) said in a statement that that lending leapt 81 percent in 2009, more than double the credit growth in the banking sector as a whole of 38 percent. It had forecast 2.7 trillion dong in profit. ACB's total assets reached 171.95 trillion dong, a surge of 63.2 percent from 2008, it said. ACB shares were trading down 600 dong at 37,000 dong at 0311 GMT on Friday. Notably, its combined profit reached 2.818 trillion dong, of which 20 percent from credit operations, 26 percent from service provision, 4 percent from interbank capital business, 24 percent from bond business and 25 percent from other profits. Capital Adequacy Ratio (CAR) of ACB was posted at approximately 40 percent.

Similarly, at Maritime Bank, the turnover from credit activities in 2009 made up 25 percent of its total profit. Till December 31, the profit from business was closed at 1.084 trillion dong, growing by 132 percent year-on-year and exceeding nearly 500 billion dong against the last year's plan.

Talking with Dau Tu Chung Khoan, Tran Anh Tuan-general director of Maritime Bank said, high profit from lending operations was thanks to the surge in revenue of non-credit services (derivative service, bond, debt securities and other services).

On the interbank market, Maritime Bank is considered to be the potential and prestigious partner. Total assets of Maritime Bank till late 2009 hit 60 trillion dong. According to annual report, the 7-day payment capacity of Maritime Bank is always at over 1.75 percent. This is also the firm development basis of Maritime Bank.

As for Bank for Investment and Development of Vietnam (Bidv), total assets reached 300 trillion dong on December 31 while its deposits totalled at 194 trillion dong, total pre-tax profit was estimated at 3.450 trillion dong and the bad debt ratio at 3 percent (lower than 2008's 4 percent).

According to Nguyen Duc Vinh-general director of Techcombank, 2009 pre-tax profit obtained 2.138 trillion dong, bringing the united profit to 2.250 trillion dong after deducting 550 billion dong to the risk standby fund.

Meanwhile, Vietinbank posted total profit of 3.018 trillion dong, total deposits of 221.700 trillion dong, total outstanding loans and investment of 218 trillion dong. Lending and investment operations occupied 91 percent of the bank's total assets. Till late 2009, total outstanding loans for the economy Vietinbank provided reached 162.3 trillion dong. DongA (Eastern Asia) Commercial JS Bank estimated total pre-tax profit at 782 billion dong, average deposit balance at 33.392 trillion dong in 2009.

Although have not revealed 2009 business results, Eximbank said it would early finished the year's profit target of 1.5 trillion dong.

Ending 2009, HCM City Housing Development Commercial JS Bank (HDBank) publicised 2009 business performance with 19.140 trillion dong in total assets, 17.119 trillion dong in deposits, 8.231 trillion dong in total outstanding loans, bad debt ratio of 1.1 percent, and pre-tax profit of 255 billion dong. The figures of ABBank were 26.576 trillion dong, 15 trillion dong, 12.883 trillion dong, and 415.57 billion dong profit. Additionally, ABBAnk's charter capital in 2009 was raised to 3.482 trillion dong.

With the optimistic signals from the economy, ABBAnk strikes to maintain the growth at 30-40 percent in 2010 and earn 550 billion dong in pre-tax profit, total assets of 35 trillion dong and a charter capital of 3.8 trillion dong.

Up to the end of last December, Sacombank posted the bad debt ratio at 0.69 percent. Its total capital surplus and funds attained 2.095 trillion while ACB's ratio was 0.42 percent. Sacombank's 2010 profit is targeted at 2.6 trillion dong.

Thanks to the low bad debt ratio, banks' money deduction for risk standby fund in 2010 is expected to be less than 2009 along with higher profits.DTCHK

SOVERIGN BOND MARKET - Vietnam to sell $1b of 10-yr debt next week

Vietnam will start marketing $1 billion of dollar-denominated 10-year bonds next week amid the busiest start of a year for sovereign emerging-market debt in at least a decade.

The government hired Barclays Capital, Citigroup Inc. and Deutsche Bank AG to manage the sale, said a person familiar with the matter, who declined to be identified before a public announcement. deputy Finance minister Tran Xuan Ha will meet investors in Hong Kong on January 18, London on January 19, Boston on January 20 and New York the following day, the person said.

The sale of Vietnam's second dollar bond will test investor confidence in the nation, shaken by accelerating inflation and a decline in the dong to a record-low. Indonesia this week sold $2 billion of 10-year bonds at a higher yield than last week's sale by the similar-rated Philippines, after scaling back the offering and cancelling plans to sell 30-year debt.

"There are still pockets of money looking to invest but the market is coming off a bit and getting more selective," said Felix Dornaus, an emerging-market bond investor in Vienna at Erste Sparinvest KAG, which owns Vietnam sovereign bonds among 27 billion euros ($39 billion) of assets. "There's some scarcity value to Vietnam bonds and it could do well in that sense."

Demand for developing nations' dollar debt is ebbing after governments sold $10 billion of bonds overseas this year, twice as much as the $4.5 billion in the year-earlier period, according to Bloomberg data. Turkey, Mexico and Poland also sold foreign-currency bonds this year.

Widening Spreads

The spread between yields on emerging-market debt and US Treasuries has widened nine basis points to 2.79 percentage points in the past week, after declining 4.16 percentage points in 2009, according to the JPMorgan Emerging Market Bond Index Plus. A basis point is 0.01 percentage point.

"As the global credit markets are starting to normalise there is demand at this point in time," said Joseph Lau, a Hong Kong-based economist at Credit Suisse Group AG. "It still represents at least an opportunity for them to raise capital offshore."

Vietnam is rated Ba3 by Moody's Investors Service, three levels below investment grade. The government in October 2005 raised $750 million by selling 10-year bonds, then lent the proceeds to Vietnam Shipbuilding Industry Corp., known as Vinashin.

The 6.875 percent securities maturing January 2016 traded at 3.5 percentage points more than similar-maturity Treasuries yesterday, compared with 2.8 percentage points three months ago, according to data compiled by Bloomberg. The bonds were issued in 2005 at 2.56 percentage points more than US government debt.

Financing Needs

Vietnam's government, as part of a two-decade-old reform process known as 'doi moi,' or renovation, needs funds to build roads and power plants as the population expands. deputy prime minister Nguyen Sinh Hung said in November that it will use the money raised from the dollar bond issue for energy projects.

Proceeds may also help ease a shortage of dollars in the country. The dong declined 5.4 percent against the dollar last year. It traded at 18,474 as of 3 p.m. in Hanoi.

"They have virtually unlimited needs for financing," said Jonathan Pincus, an economist with the Vietnam Programme at the Harvard Kennedy School in HCM City. "They have to finance their budget deficit and they have plenty of infrastructure needs. Power is a major issue, there are roads and railroads to build."

Vietnam has about $16 billion in foreign-exchange reserves, central bank deputy Governor Nguyen Van Binh said in Hanoi on December 3. The World Bank estimates the nation's reserves totalled $23 billion at the end of 2008.

Supply

Vietnam said on January 13 that it plans to almost double the amount of its local-currency bond sales this year to meet spending requirements as about half of its existing debt matures.

The Ministry of Finance intends to sell 100 trillion dong ($5.4 billion) of debt, up from 56 trillion dong originally planned. About 70 trillion dong of government debt will mature this year.

An increase in supply may drive up dong-denominated bond yields, which are rising on concern that inflation will quicken, according to a report from Bank for Investment & Development of Vietnam, the country's second-biggest lender. The Vietnamese government sold less than a third of the 100 trillion dong of bonds it planned in 2009 because investors demand higher yields.

"They're not willing to pay the premium that people demand for dong bonds so they have to go overseas and sell dollar bonds," Pincus said. "If they can get a reasonable price, it's the right thing to do."DTCHK

Bond market promises robust growth this year

With more attentions of big investment organisations, the bond market promises stronger development in 2010.

Currently, in the world, some countries use only nine government bond codes, while others have nearly 20 government bond codes. Meanwhile, Vietnam has over 500 government bond codes with different terms.

According to a representative from the finance ministry, the ministry is considering setting standards terms, volumes for each issue time and accordingly the ministry will repurchase retailed government bond codes in the market.

Some experts said that with the recovery of Vietnam and the world's economies, demand for different kinds of government bonds and corporate bonds in Vietnam have continued recovering quickly. Namely, in recent months foreign investors have paid much attention to different kinds of Vietnam's corporate bonds.

In addition to government bonds, corporate bonds are also a kind of potential commodities that attract much attention of big financial organisations. With strong increased demand for capital by businesses, the upcoming time promises more commodities for the corporate bond market.

Many experts said that the land for the corporate bond market in Vietnam remains widely open because it has been nearly untapped.

Hoang Huy Ha, chair of Vietnam Bond Association, said that Vietnam's bond market's scopes is only 17 percent of total GDP while this figure in China is 53 percent, in Thailand 58 percent, in Singapore 74 percent and in Malaysia 82 percent.

Currently, in the structure, corporate bonds account for only 10 percent of total bonds, Vietnam Development Bank's bonds 33 percent and the remaining volume is government bonds and provincial bonds.

In fact, the number of businesses paying attention to raising capital via bond issue is increasing very fast. In 2008, only two or three businesses issued bonds but in 2009, this figure was 15 with total value of 20 trillion dong.

With such a trend, experts said that in 2010 and following years, the number of businesses issuing bonds will continue increase quickly. Additionally, in 2010, there would be some favourable factors for businesses' raising capital via bonds when the credit channel from banks becomes tougher.DT

INSURANCE - Life insurance firms plan to launch competitive plans in 2010

During the year 2009, although the economy in general and banking and finance market in particular witnessed ups and downs, as for life insurance firms, 2009 still was considered a good year.

These life insurers are starting 2010 with many competitive plans to occupy market share. Along an aim of bringing life insurance products closer to inhabitants, the more important point as for life insurance is trade-mark and prestige to customers.

With a satisfactory business result in 2009 of 39 percent growth against 2008, Dai-ichi Life Vietnam said that the year 2009 was the second consecutive year it posted high profit with total insurance premium of 744 billion dong. Hence, Dai-ichi Life Vietnam affirmed that this year will be the company's speed-up year.

"2010 is regarded as an important year as for Dai-ichi Life Vietnam because the company has finalised preparing infrastructure as well as human factor and strategic finance to launch to the market" said Takashi Fujii, Dai-ichi Life Vietnam's general director.

Takashi Fujii added in 2010, his firm plans to open at least 10 business offices and upgrade quality for insurance agent system towards more professionally. The company will also study to launch more new products to market.

Dai-ichi Life Vietnam targets to reach 8 percent market share of life insurance in 2010 and it is expected to be 10 percent by 2012.

At present, there are about 5 percent of Vietnamese people buying life insurance products while there are over 120 million Japanese people buying life insurance products (averaging one Japanese person owns two life insurance products). Thus, Vietnam's life insurance market potential is very big and Vietnam's life insurers need to strive to build a healthy and professional market, according to leader of a life insurer.

Also with satisfactory business results in 2009 of over 200 percent last year's plan, in the marketing plan in 2010, Korea Life will spend some three billion dong on social activities and supporting community.

AIA Vietnam also ended 2009 with good performance such as 75 percent growth of first year insurance premium and 25 percent growth of total premium against 2008. AIA Vietnam said that is prepared to increase chartered capital from 970 billion dong to 1.026 trillion dong and develop stronger in Hanoi market via opening more branches and offices.

"AIA Vietnam will also open more offices and branches in provinces and cities to provide its life insurance products to inhabitants more easily. In addition, AIA Vietnam is mapping out plan to upgrade customer care centres. As planned, till the end of 2010, the company will complete upgrading and putting into operation 10 modern customer care centres including centres in provinces and cities such as Nha Trang and Da Nang" according to representative from AIA Vietnam.

Representative from ACE Life stressed that building a standard operation system along with a strong corporate culture will be core issues of ACE Life in 2010 in order to perfect its image to customers.

In fact, although each life insurer builds its own strategies to develop its image in the market, the common point of life insurance companies is offering the best products to customers. Therefore, in 2010, life insurers will make focuses on perfecting customer service system with the best products. Additionally, this year, life insurers will launch more new products with more value added services.VNS

Foreign Direct Investment - Provincial Competitiveness Index

Da Nang still most competitive in 2009

Da Nang City continued to be the most preferred business destination for entrepreneurs, according to the 2009 Provincial Competitiveness Index (PCI) to be officially released today in Hanoi.

The central coast city is given a score of 75.96 points, slightly ahead of the southern province of Binh Duong with 74.01 points, while Lao Cai, Dong Thap and Vinh Long also emerged as three of the best performers, according to the PCI 2009, which measure governance in the country's 63 cities and provinces.

Rankings of other major cities remain stable, with HCM City taking the 16th position with 63.22 points, Hanoi on the 33rd place with 58.18 points, while Dong Nai ranked the 18th with 63.16 points and Ba Ria¬-Vung Tau on the 8th place with 65.96 points. Cao Bang, Dale Nong, and Bac Kan-at the bottom of the rankings-still require the most improvement in provincial governance.

The PCI 2009 is the result of a major, ongoing collaborative effort between the Vietnam Chamber of Commerce and Industry (VCCI) and the US Agency for International Development (USAID)-funded Vietnam Competitiveness Initiative (VNCI). The Saigon Times Group serves as the official media organisation for the annual survey since its first launch in 2005.

The organisers have conducted polls among 9,890 Vietnamese enterprises. Respondents are random1y selected from a list of registered private firms that is supplied by the National Tax Authority, stratified by business age, sector, and legal form. The process ensures a highly representative sample.

The PCI research team notes that many localities have exerted tremendous efforts to improve their rankings. They included Ca Mau, Dien Bien, Long An and Thua Thien-Hue.

In particular, Dien Bien slashed informal charges substantially, enhanced the proactively of its leadership and boosted the quality of labour and training. Meanwhile, Ca Mau moved up the ranking table thanks to its lower market entry costs and informal charges. Long An and Thua Thien-Hue fared better in 2009 as both managed to improve transparency, making it easier for locals to gain access to their official documents.

In 2009, the weight assigned to each sub-index was recalculated to reflect the operations of the economy and changes in Vietnam's institutions. Sub-indices that left the greatest influence on growth, investment and returns in the private sector were given the highest weight (20 percent) - namely, transparency as well as labour and training.

2009 was also the fifth consecutive year in which transparency was given the greatest weight although the methods used to calculate PCI were already adjusted to better reflect reality.

Land access and legal institutions, which were given the lowest weight (5 percent), were actually important. However, since the scores of Vietnamese localities in both aspects were mostly dismal and similar, the impacts of both factors on the development of the private sector were not significant. To improve their scores on both sub-indices, local authorities would need not only initiatives of their own but also broader policy reforms on a national level.

Positive trends

According to the latest PCI ranking, the median score continued to rise, showing that local economic governance was remarkably better in 2009. Five of the nine sub-indices posted significant improvement.

Regarding market entry costs, the research showed that the time taken to register business fell from 12.25 days to 10 days. The time cost of regulatory compliance also improved after years of stagnation. The total time taken for business leaders to carry out administrative procedure also dropped from 22 percent to 15 percent while the average tax inspection time decreased from eight hours to five hours. In other words, administrative reforms brought about considerable improvements.

The scores on land access, labour and training, and legal institutions also rose drastically.

Remaining challenges

Transparency, which had the highest weight, already made great strides for several years, but a reverse trend arose last year.

Access to provincial documents and plans was diminished in general. The proportion of enterprises which deemed it necessary to foster rapport with authorities to gain access to provincial documents related to their business returned to the level of2006 (about 61.26 percent). Similarly, the percentage of enterprises which found the implementation of central laws on provincial levels predictable or which had to negotiate with tax officers resembled that in 2007.

Notably, enterprises found it easier to access legal documents such as decrees and documents guiding the implementation of central laws than to obtain provincial documents such as budgets, zoning and land use plans, as well as incentives.

The research team cited a report by experts to observe that the government started to use official letters instead of legal documents. The government issued 9,470 official letters relating to legal issues in 2005-2008, three times as much as it did in 1987-2004. Before 2004, a locality had 19 official letters and 81 legal documents on average. The figures have changed to 55 and 45 respectively. Consequently, legal documents have proliferated, making ties with the authorities especially important.

Business plans

Business plans fleshed out by enterprises for the following two years are an important part of PCI surveys. PCI 2009 is announced when business sentiments are on the wane despite more upbeat macroeconomic forecasts.

According to the surveys, only 65 percent of the private enterprises plan to expand production and business in the next two years, lower than the figures for 2008 and 2007 (78 percent and 77 percent). Small enterprises were more adversely affected by the global economic turmoil, so only 47 percent of them wanted to scale up their operations.

Enterprises hoping for bigger operations mostly choose Hanoi, HCM City and Da Nang as the best locations to increase investment thanks to their attractive markets. However, if this factor was not taken into account, Binh Duong and Vinh Phuc would become the preferable choices by virtue of their high quality of economic governance.sgtd

FOREIGN INVESTMENT - Vietnam an attractive destination for foreign investors

Germany's EMFIS news provider last weekend assessed that Vietnamese economy in 2009 had grown strongly but its inflation remained at dangerous level.

Vietnamese stock market increased sharply when entering the first trading sessions of 2010. Particularly, the VN Index on January 14 surged to 534 pts and has soared by nearly 8 percent so the year early, marking the highest growth in Asia.

The positive development of Vietnamese stock market led to a number of notable things, in which Letindex of Vietnam in recent months was very low. In the forth quarter of 2009, Letindex was below 1.9 percent, the lowest level in Asia.

The recovery of the Vietnamese stock market in the last days had many reasons. First off, Vietnamese government released some interventions to loosen share transactions. In addition, the disordered gold trading will be suspended till late March 2010. Also, initial statistics on the 2009 economic growth of Vietnam (that had been announced already) were at high prospect. In details, total Gross Domestic Product (GDP) of Vietnam last year still grew by 5.32 percent against 2008's 6.18 percent despite the financial crisis. GDP surged again in the last half of 2009 especially that of Q4 2009 rose by 6.9 percent. The economic recovery was been shown clearly by the money supply.

In 2009, the money supply for lending of banks increased by 38 percent year-on-year, mainly in construction field which helped supporting the domestic economy.

EMFIS said that Vietnam, along with China and India still is one of few nations overcoming the financial crisis without any "tattoo".

According to EMFIS, in medium term, Vietnam will continue being one of countries attracting the global attention with the wave of privatisation, modernisation and urbanisation are continued and the prospectus of many social classes keeps growing.

International investors forecasted that in next years, there will be billions of US dollar being pumped into Vietnam's economy.VNS

WORLDBANK ON VIETNAM’S TRADE LOGISTIC - Vietnam stands at 53rd grade in trade logistic index, WB report

World Bank last Friday announced the ranking list of Logistics Performance Indicators - LPI of 155 economies, which was led by Germany, Singapore standing at second position and China at 27th.

The report was based on the overall survey on the international commodity transportation sector. In which, Vietnam ranks 53rd position in terms of WB's trade logistic index report. Vietnam with China, India, Uganda, Thailand, Philippines and South Africa are the developing countries showing special signals on the logistic industry.

Chair of WB, Robert Zoellick said that the economic competition unintentionally made the countries more flexible in improving the trade logistic operations, upgrading the business efficiency, reducing costs and boosting the economic growth.

More suitable connection between producers and international market will result in the bigger development and investment opportunities, that are also the major concerns in the development strategy of developing countries, Robert Zoellick added.

According to Otaviano Canuto-vice chair of WB, the developing countries should invest better in logistic sector to escape from the crisis.DTCHK

CONSTRUCTION - Construction investment for 2010 estimated at 42tr dong

Ministry of Construction estimated total investment for its member companies in 2010 at nearly 42 trillion dong, up 22 percent year-on-year.

In 2009, the entities under Construction Ministry carried out 437 among 563 projects with total value of 30.950 trillion dong, reaching only 92 percent of the year plan.

In the urban technical infrastructure, social infrastructure and housing field, there were 313 projects with the actualised capital of 13.870 trillion dong, accounting for approximately 44.8 percent of the total figure of 2009.

Many enterprises were active in accessing and borrowing soft loans at 4 percent pa from the government's demand stimulus package for developing production and investing in new projects.

According to the Ministry of Construction, the real estate is the investment field with high profitability compared with other sectors but it contains a lot of risks if being short on experience and financial strength. Together with property giants namely HUD, Song Da Corp, Viwaseen and Viglacera started joining the new playing ground. Many entities began research and construction on housing projects for students, and low income earners.

Business - PetroVietnam surpasses 2009 business plan targets

Vietnam National Oil and Gas Group (PetroVietnam – PVN) announced surpassing the 2009 targeted business plan, in which the total drilling output of crude oil exceeded 2.8 percent, gas exploration of 0.1 percent and production output of nitrogenous fertiliser of 2 percent.

The group reported achieving significant financial results of total revenue of 265.02 trillion dong, equal to 125 percent of year plan, contributing to state budget of 91.05 trillion dong, or 148 percent of year plan, export turnover of $7.82 billion, or 134 percent of the year plan.

The year 2009 was the first time in the past four years that PetroVietnam has fulfilled the year plan of oil exploitation with total production output of 16.3 million tonnes, or 440,000 tonnes higher than the year plan. The group's total oil-based exploitation volume was estimated at 24.31 million tonnes, equal to 102 percent of the year plan, up 8 percent against the previous year. The crude oil export was posted at 16.29 million tonnes, or 105 percent of the year plan, up 11.5 percent year-on-year.

PetroVietnam targeted to increase the national reserve of 35-40 million tonnes of oil. The group planned to reach total oil production volume equal to 92 percent compared with that of 2009, gas production of 99.9 percent, nitrogenous fertiliser of 99 percent, power production volume of 117.7 percent, output of petroleum products of 350 percent and crude oil supplies for Dung Quat Oil Refinery of 229.7 percent.cafef

TELECOM - Viettel attains 10tr dong profit in 2009

Military Telecommunications Corp (Viettel) has recently released business results in 2009 with 60 trillion dong of revenue, increasing 80 percent against 2008's figure, 10 trillion dong of profit and over seven trillion dong of tax payment, according to Nguyen Manh Hung, Viettel's deputy general director.

As planned, the company will invest in 10-15 countries by 2015 and the company's revenue from foreign markets will be higher than that from domestic market.

Hung said that during past five years, Viettel's revenue increased 52 times.

Viettel has also invested some $250 million in Laos and Cambodia and is the telecom firm with biggest infrastructure in these markets.

During 2009, Viettel's revenue from foreign markets gained over $70 million and it is expected to be $300 million in 2010.

In February 2009, Hung said that his firm would invest about $60 million in the Republic of Haiti. Viettel is also promoting to invest in Burma, Bangladesh, North Korea, Angola and Cuba.

In 2010, Viettel set a target of 60 percent growth. Also from 2010, Viettel will officially carry out new strategy: studying, designing and providing telecommunications equipments. The telecom provider expected to gain $100 million of revenue in 2010 from this field.CAFEF

VinaPhone signs $70m contract with Motorola for expanding GSM network

Motorola Group announced on January 14 that its member company of Motorola mobile information network has recently signed a contract valued $70 million with VinaPhone.

Accordingly, in the next two years, Motorola will support VinaPhone to set up additional 3,000 BTS stations, expanding 2G coverage area in provinces in northern and southern regions, especially in large, crowded cities of Hanoi and HCM City.

The signed contract between two parties resulted from achievements during the period when Motorola supported VinaPhone in launching 2G and 3G mobile network services.

The GMS network with large coverage area will help VinaPhone in upgrading capacity to meet the increasing demands of telecommunication services in urban areas and high quality services with wide coverage areas in rural and urban services.TBKT