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INTERNATIONAL MONETARY FUND ON VIETNAM - Vietnam Must Avoid a Premature Easing of Policy, IMF Says
Bloomberg
Vietnam
may undermine efforts to stabilise the country's economy and currency
if it prematurely eases monetary policy, the International
Monetary Fund said, as the nation fights the fastest inflation in Asia.
"The
risk is that all the hard work they've done this year in trying to
re-establish their stabilisation credentials and to try to convince
the population that they have the discipline needed to push through with
the macro stabilisation programme gets undone," Benedict Bingham, the
IMF's senior resident representative in Vietnam, said in an interview
yesterday.
At
stake is Vietnam's struggle to regain investor confidence hurt by
inflation that's exceeded 20 percent, a widening trade deficit and the
near-bankruptcy of the nation's largest shipbuilder, which signaled
risks in the banking industry. Its currency is Asia's weakest performer
against the dollar this year after India's rupee.
Vietnam
in February passed the so-called Resolution 11, which aimed to fight
consumer-price growth and support the currency with tighter
monetary and fiscal policies, and Bingham said that economic
stabilisation programme isn't complete yet.
"There
mustn't be a gap between the headline policy message that they're
committed to maintaining this strategy until the job is done, and
the actual implementation of monetary policy," Bingham said in HCM City.
"People will pick these signs up, and raise questions about the
strategy."
Dong Pressure
The
dong weakened 0.2 percent to 20,850 per dollar as of 12:05 p.m. local
time, according to data compiled by Bloomberg. It was devalued
for the fourth time in 15 months on February 11. The VN Index of stocks
closed down 0.2 percent.
The
State Bank of Vietnam weakened the dong's reference exchange rate today
to 20,638 per dollar from 20,628 per dollar, according to its
website. It last adjusted the rate on August 24.
The
currency is allowed to trade 1 percent on either side of the daily
reference rate set by the central bank. On the so- called black market,
it can move outside the band.
"We
are seeing the dong trading outside of its band, by around 1 percent,"
said Bingham. "It's not under acute pressure, but it's drifted
out."
The
central bank earlier this year raised its discount, refinancing and
repurchase rates in a bid to stem credit growth, check inflation
and steady the economy.
In
July, the State Bank of Vietnam bank cut its repurchase rate to 14
percent from 15 percent, and the following month it began pushing
commercial
lenders to lower their interest rates.
Policy Easing
The
central bank will leave interest rates unchanged for now and consider
cutting them if price gains slow, the government said in August.
The
moves to ease monetary conditions echo efforts in recent months by
emerging markets from the Philippines to Brazil to leave rates unchanged
or cut borrowing costs, as Europe's debt crisis and the risk of a US
contraction dim the outlook for the world economy.
Overnight
interbank rates, which the central bank can influence through the
supply of liquidity, are about 12 percent to 13 percent, Bingham
said.
"The central bank's open market operations have left the banking system with an overnight rate below policy rates," he said.
About
49,000 Vietnamese businesses ceased operations or dissolved in January
through September, a 22 percent increase on a year earlier,
hurt by borrowing costs exceeding 20 percent, Nong Thon Ngay Nay
newspaper reported.
Consumer Prices
Vietnamese
consumer prices rose 22.42 percent in September from a year earlier,
slowing from a 23.02 percent pace in the previous month while
remaining the fastest inflation rate in a basket of 17 Asian economies
tracked by Bloomberg.
Vietnam's
government has also spent the last year wrestling with the
near-bankruptcy of state-owned Vietnam Shipbuilding Industry Group,
known as Vinashin.
The
company's default on foreign-currency borrowings at the end of 2010 has
raised doubts about asset quality at the country's banks, Moody's
Investors Service said last month. Moody's, Standard & Poor's and
Fitch Ratings all cut Vietnam's sovereign debt rating deeper into
so-called junk status in 2010.
Vietnam's
gross domestic product may rise 5.8 percent in 2011, the slowest pace
since 2009, Asian Development Bank data show. The economy,
a production hub for companies from Intel Corp. to Honda Motor Co.,
expanded 6.8 percent in 2010.
INVESTMENT – Foreign investors must have at least 30pct equity in FDI projects to prevent bad debts:
FIA proposal
Vietbiz24
The
Foreign Investment Agency or FIA (Ministry of Planning and Investment)
is proposing to the government to re-apply the provisions of the
equity at 30 percent for foreign investors when participating foreign
direct investment (FDI) projects in Vietnam in efforts to prevent large
bad debts of FDI firms, Do Nhat Hoang, director of FIA said on Tuesday.
On
the issue that many FDI firms fled, leaving the bad loans amounting to
$80 million for Vietnamese banks, the Thoi Bao Kinh Te Saigon (Saigon
Economic Times) newspaper quoted Do Nhat Hoang as saying that the high
bad debt level of FDI firms was due to Vietnam's regulation on 30
percent equity of FDI firms into Vietnam removed from 2005, so foreign
investors could contact with local banks for borrowing
loans when they entered Vietnam.
However,
many banks were not careful in evaluating the loan applications,
leading to lending with large amounts of capital into inefficient
projects, Hoang said.
Hoang
said FIA is proposing to the government to re-apply the provisions of
the equity of a foreign investor at no less than 30 percent in
a FDI project as previously defined in 2005.
According
to Thoi Bao Kinh Te Saigon, Dr Nguyen Dinh Cung, vice director of the
Central Institute for Economic Management also said that
the State Bank of Vietnam (SBV) should take strict controls over the
loans of FDI enterprises.
Dr
Cung also suggested that, if a project has been licensed, but exceeding
12 months, it has yet to be deployed or is deployed behind schedule
without a legitimate reason, state authorities should revoke the
investment license.
Donors urge quality public investment
VOV
Donors called on Vietnam to restructure public investment to foster quality growth at a workshop in Hanoi on October 4.
While
examining the Ministry of Planning and Investment (MPI)'s five-year
socio-economic development draft, most donors supported the country's
projected annual growth rate of 6.5 percent in the next five years
instead of 7 percent. They said the reasonable rate would enable Vietnam
to improve social protection policies, increase basic services for the
poor and the most vulnerable groups, and create
more jobs.
Eamonn
Murphy, the UN Resident Coordinator in Vietnam, said the country should
pay attention to equity issues as economic growth alone cannot
ensure human development.
Rie
Vejs Kjeldgaard, ILO representative in Vietnam, applauded issue of
labour being pushed to the forefront aimed at reducing the unemployment
rate amongst workers in urban areas to below 4 percent, creating jobs
for over 8 million in five years. However, she said more detailed
planning needs to be considered.
MPI
deputy minister Cao Viet Sinh said the mindset related to public
investment needs to be redirected toward decreasing investment and
mobilising
non-budgetary funds from other economic constituents to develop the
economy.
According
to MPI minister Bui Quang Vinh, public investment has decreased from
roughly 42 percent during 2006-2010 to 33 percent in 2011.
At the same time, he said there has been too much reliance on the
national budget, which increased risks to the economy over a long-term
period.
The
draft also focuses on curbing inflation, stabilising the macro-economy,
maintaining reasonable growth associated with economic restructuring,
and facilitating sustainable development by 2013.
The
draft will receive further comments from international donors before
being finalised and submitted to the National Assembly by the end
of October.
ECONOMY – Hanoi's GDP expected to rise 11-12pct in 2012
Vietbiz24
In
the first nine months of this year, Hanoi's GDP (Gross Domestic
Product) grew 9.4 percent and it is expected to rise 12 percent this
year.
The
aforementioned information was given at the seminar on implementation
of socio-economic development tasks in 2011 and plan for 2012 for
Hanoi held on October 4.
Also at the seminar, the capital city targeted to reach GDP growth in 2012 at 11-12 percent.
Of
which, service growth would be 10.7-11.6 percent, industry-construction
at 12.5-13.7 percent and agriculture at 2.7-3.7 percent. The city's
export turnover growth would be about 15 percent in 2012.
Hanoi
would also continue construction of infrastructure framework and carry
out the master plan for the city till 2020 and vision till 2030.
Under which, the city will continue to develop the social housing
projects and speed up the pace of key urban traffic projects such as Ha
Dong-Cat Linh railway, Nhon-Hanoi Railway Station, ring road No 1 O Cho
Dua-Hoang Cau and roads of Van Cao-Ho Tay, Cat
Linh-La Thanh-Yen Lang.
Vietnam's 2011 Trade Gap To Narrow To $10b
Reuters
Vietnam's
trade deficit this year will narrow to around $10 billion with exports
expected to continue along a strong growth path to reach
$95 billion by year's end, a staterun newspaper reported on Wednesday.
Imports
could rise 23.8 percent to $105 billion, leaving an annual trade gap of
10.5 percent of exports, below a government target of 16
percent for 2011, the Capital Security newspaper cited an Industry and
trade ministry projection as saying.
The
ministry's projection is well below a forecast last month by the
Planning and Investment Ministry of $12 billion and also below the
government's
$14.5 billion target for the deficit.
The
newspaper said the annual trade deficit forecast came after
JanuarySeptember exports rose 35.4 percent from year earlier to $70.03
billion,
based on government data.
Higher
prices of agricultural products, raw materials and minerals have
contributed to growing export revenue, the newspaper quoted director
Nguyen Tien Vi of the trade ministry's Planning Department as saying.
For JanuarySeptember trade data click.
Last year, Vietnam's annual trade deficit eased to $12.6 billion, from $12.87 billion in 2009, customs statistics show.
TRADE -
Anti-dumping duties on Vietnam’s shoes lifted, but worries exist
Doanh Nhan Saigon
Vietnamese
shoes makers now have the opportunities to come back to the EU market,
since the anti-dumping duties have been left. However,
they still cannot breathe a sigh with relief because big difficulties
are still ahead.
In
the past, the EU market consumed up to 70 percent of total shoe exports
of Vietnam, while the proportion has decreased to 45 percent.
This means that the EU is always a big market for Vietnamese shoe
makers.
However,
the shoe makers are reconsidering their export strategy, thinking about
if they should continue relying on the EU as the biggest
market.
Diep
Thanh Kiet, Deputy Chair of the Vietnam Leather and Shoes Association
(Lefaso), believes that it would be better for Vietnamese enterprises
to diversify the export markets instead of focusing on the EU market,
even though the EU has listed the anti-dumping duties on Vietnam made
leather capped shoes.
Vietnam
is not the only maker enjoying benefits from the EU’s decision, because
the EU has decided to lift the anti-dumping duties on Chinese
products as well. This means that in the near future, Vietnamese
products will have to compete fiercely with Chinese ones in the EU
market.
Also,
though the anti-dumping duties have been removed, Vietnam is still put
under the EU’s monitoring for one year. During that time, if
the exports of the products which once imposed the anti-dumping duties
saw sharp increases, or the average products’ prices decrease, the duty
imposition would be resumed.
If so, the EU will have full powers to impose higher duties for longer time while it does not have to conduct any investigation.
Vu
Ba Phu, Deputy Head of the Competition Administration Department (CAD),
an arm of the Ministry of Industry and Trade, has advised enterprises
not to gather all strength on only one market, the EU, and that they
should consider penetrating other potential markets such as Japan, South
Korea or North America.
China,
the shoe maker who has the same conditions as Vietnam, has also pushed
up its supervision over the exports, to be sure that the exports
to the market will not increase too sharply. Therefore, experts have
warned that in the time to come, enterprises may try to export products
to the EU through third countries, including Vietnam.
Tran
Van Tac, Director of Tuan Viet Shoes Company, said that shoe makers
will have to compete with a lot of rivals in the near future, not
only the ones from China. Therefore, Tuan said that enterprises need the
support from Lefaso when they have to gather strength and spend most of
their time on the production to create the products with more
reasonable prices.
Kiet
believes that Vietnamese shoe makers should quickly shift from making
low cost products to making medium class products and high grade
products. In fact, the new business strategy has been applied by many
Vietnamese enterprises already.
According
to Phu, European consumers always class the products from Asian
countries (Vietnam, China, Indonesia, and Thailand) as having the
same quality and characteristics. Therefore, when thinking of applying
safeguard measures, the EU always conducts investigations on all the
regional countries at the same time.
Therefore,
Phu said, instead of trying to obtain big orders, Vietnam should strive
for the orders for the products with high values. Besides,
they should create differentiations among different products, and
associate the products with the commitments in environment protection,
social responsibility and intellectual property.
In
the first 8 months of 2011, Vietnam exported 4.21 billion dollar worth
of footwear products, an increase of 20 percent over the same period
of the last year. 45 percent of exports went to the EU, 29.3 percent to
the US, 4.1 percent to Japan, and 21.6 percent to other markets.
FINANCE - Banking system's foreign currency collection touch $809m mark in Jan-Sep
SBV | DVT
The
State Bank of Vietnam (SBV) has recently reported that till the end of
September, foreign currency collection of the whole banking system
reached $809 million while foreign currency expenditures were $745
million.
According
to the report on SBV's website on late October 5, after seven months of
implementation of the government's Resolution No 11, till
September 29, the total outstanding loans in foreign currency of the
entire banking system decreased $792 million, or 2.71 percent from the
end of August 2011.
Meanwhile,
the total deposits in foreign currency from the economy posted a rise
of 0.07 percent, or $17 million against the end of August
2011.
The
total deposits of credit institutions from international market as of
September 29 decreased $745 million, or 7.52 percent compared to
the end of August due to foreign currency loans in the international
market fall due.
Till
the end of September, the foreign currency collection ($809 million)
was higher than the expenditures for debt repayments ($745 million)
of the entire banking system by $64 million, ensuring the sufficient
repayment for foreign currency loans that fell due, the central bank
said.
In
addition, the total savings in foreign currency of Hanoi-based credit
institutions till September 29 increased up to 45.1 percent from
the end of August, 2011, equalling to a rise of $586 million, positively
affecting to the forex rate and the foreign currency flows of the
economy and the whole banking system.
Interbank overnight interest rate hits 1-month low
Vietbiz24
The
interbank average interest rate on September 30 continued to fall from
the previous day (September 29) whereby the interbank overnight
interest rate posted the strongest fall of 0.85 percent to 11.31 percent
per annum, the lowest level of this term since August 26, 2011,
Vietbiz24.com cited the State Bank of Vietnam (SBV) on its website on
October 5.
Particularly,
the interest rate for terms of 2-weeks, 1-month and 12-months decreased
by 0.14-0.25 percent to 13.06 percent per annum, 13.64
percent p.a. and 13.75 percent p.a. respectively.
Notably,
the interest rate for 3-month term surged 0.54 percent from September
29 to 13.71 percent p.a. while the interest rate for 1-week
and 6-month terms remained unchanged day on day.
As
calculated by Vietbiz24.com, in the week between September 26 and 30,
the central bank pumped net six trillion dong on open market operations
(OMO), down 77.7 percent from the previous week.
Totally in September, SBV made a net injection of 28 trillion dong on OMO.
Vietnam to keep exchange rate stable until year end-cbank
Reuters
Vietnam
will aim to keep the exchange rate stable until the end of the year,
allowing it to move within a 1 percent band, the central bank
said.
Recent
fluctuation of global gold prices, a traditionally strong gold purchase
by residents in the last months of the year and domestic gold
speculation have added pressure on the foreign exchange market and
exchange rate, the central bank said in a statement released late on
Wednesday..
"The
State Bank and commercial banks will continue selling foreign
currencies for market intervention, meeting fully the economy's
necessary
demand for foreign exchange," it said.
A
surplus in the balance of international payments, improved state
foreign reserves and good liquidity in the banking system will help the
central bank keep the dollar/dong rate and foreign exchange interest
rates stable, the bank said.
On
Thursday the central bank sets the mid-point for dollar/dong
transactions at 20,648 dong per dollar, down 0.05 percent from 20,638 on
Wednesday and 20,628 on Tuesday. The Tuesday rate had been kept
unchanged since August 24.
Vietnam
recorded a surplus of more than $5 billion in its balance of payments
at the end of July, after a deficit in the first quarter and
high surplus in the second quarter, the central bank said.
The
surplus came after improvements in Vietnam's current account and the
capital and financial accounts, said the statement posted on the
central bank's web site (www.sbv.gov.vn).
Vietnam
reported a current account surplus of $1.3 billion in the first seven
months, compared with a deficit of $3.2 billion in the same
period last year.
Vietnam's
trade deficit narrowed to $403 million from a deficit of $2.94 billion
in the second quarter and a deficit of $3.5 billion in the
first three months, while foreign direct investment at the end of
September stood at an estimated $6.1 billion, similar to the same time
last year, the central bank said.
Foreign indirect investment at the end of last month rose to $1 billion from $940 million a year ago, the statement added.
Vietnam's
trade deficit this year will narrow to around $10 billion with exports
expected to continue along a strong growth path to reach
$95 billion by year's end, a state-run newspaper reported on Wednesday.
Vietnam State Bank Authorises More Gold Imports As Prices Soar
Vietnamnews
The
State Bank of Vietnam has designated businesses that will be allowed to
import additional gold in an effort to cool down the domestic
price.
The
bank said on Monday that gold price had dropped to its lowest level in
weeks to just $1,532.45 per ounce on global markets - from a record
high of $1,920 per ounce on September 6 - leading to dramatic
fluctuations on the domestic market. The result has been a domestic gold
price that has remained for weeks much higher than the world price.
At
the same time, the exchange rate between the dong and the US dollar
also spiked dramatically on the black market, rising to 21,300 dong
per dollar, even as interbank and official rates remained at 20,628 dong
and 20,834 dong, respectively.
The new gold imports, by increasing supply, were expected to help stabilise some of these fluctuations.
However,
Nguyen Thanh Truc, general director of Agribank Gold Joint Stock Co.,
warned that gold traders would continue to be able to set
their own prices without management from authorities, and some companies
might continue to hold supplies back from the market, contributing to
price manipulation.
By
late yesterday, DOJI Gold and Germs Group was posting buy/sell prices
of 45.05-44.6 5 million dong per tael, while the world spot price
on the London Bullion Market was $1,649.90 an ounce. The black market
foreign exchange rate had also eased back to 21,270 dong per US dollar.
Eximbank
general director Truong Van Phuoc said that it was necessary to import
more gold to cool down the overheated domestic market, noting
that domestic commercial banks were holding a significant quantity of US
dollars, so the additional gold imports would not affect foreign
currency reserves.
Individuals
and organisations who wanted to do business in gold jewellery or
artworks would be required to establish enterprises and meet
several stringent requirements, he added. Meanwhile, the central bank
has warned investors to be wary of speculation and manipulation when
trading in gold.
ENERGY – IAEA pledges to help VN develop nuclear power
Businessasia.com
Nuclear
energy is for not only developed countries but also developing
countries like Vietnam which can implement and apply nuclear energy
in its economic development, said IAEA Director General Yukiya Amano.
Director
General of the International Atomic Energy Agency (IAEA) Amano made
this statement to Deputy Prime Minister Vu Van Ninh at a reception
in Hanoi on Oct. 3.
Amano
spoke highly of Vietnam’s efforts to apply nuclear energy into
socio-economic development and said he believes that Vietnam will soon
be successful in the field.
He said he hoped the cooperation between IAEA and Vietnam will be further accelerated and more effective.
Deputy
PM Ninh said Vietnam’s relatively fast economic development has
produced an increasing demand for energy and nuclear energy is a
solution
that Vietnam needs in the future.
Vietnam pledges to apply nuclear energy to its socio-economic development for peaceful purposes, said the deputy PM.
He
said he hoped IAEA will continue assisting Vietnam in finalizing a law
on ensuring nuclear energy safety, building nuclear energy
infrastructure,
completing management apparatus in the field and sharing experience in
applying nuclear energy in socio-economic development.
At
another reception for IAEA Director General Amano, in Hanoi on the same
day, Foreign Minister Pham Binh Minh asked the IAEA to continue
to help Vietnam, especially in the implementation of the nuclear power
program to serve the country’s socio-economic development.
Minh
spoke highly of IAEA’s role and contributions to coordinating
international efforts in promoting the use of nuclear energy for
peaceful
purposes and strengthening nuclear safety and security.
He
affirmed that while advocating and joining international efforts for
nuclear disarmament and nuclear non-proliferation, Vietnam treasures
countries’ legitimate rights to use nuclear energy for peaceful
purposes, with safety and security as top priorities.
Amano
spoke highly of the cooperation between IAEA and Vietnam and praised
the Vietnamese Government’s effort in ensuring nuclear safety
and security as well as using nuclear energy for peaceful purposes.
He also pledged further support to Vietnam in developing nuclear power for peaceful purposes in the future.
POWER -
EVN ensures sufficient electricity supply till year-end
Vietbiz24
In
the first nine months of this year, Electricity of Vietnam (EVN) has
ensured the electricity supply in the southern region during the
gas cut period of Nam Con Son plant (from September 15 to 30, 2011).
In
Jan-Sept., accumulated electricity output of the whole system reached
81.154 billion kWh, rising 9.2% over the same period last year.
EVN’s
electricity production and purchase in Jan-Sept. was estimated at
79.335 billion kWh, up 9.89% year on year, including electricity
production of 37.343 billion kWh (up 12.49% y-o-y) and electricity
purchase of 41.992 billion kWh, a year on year increase of 7.67%.
The
group’s commercial electricity was 70.228 billion kWh, up 11%, of
which, electricity supply for industry-construction increased 13.67%,
power supply for commercial-services was up 9.95% and electricity supply
for consumption increased 6.98% on year.
Overall,
in the first nine months of this year, the electricity supply has
gained more improvements than in 2010 thanks to favorable weather
conditions and more reasonable regulation of electricity load.
Also in Jan-Sept., EVN put into operation eight hydropower turbines in five projects with a total capacity of 1,565 MW.
As
expected in October 2011, the load of the whole power system would
reach 307.3 million kWh per day with the biggest capacity ranging
16,000-16,300
MW. Also in October, the group will suspend PM3 gas supply for
maintenance from October 8 to 22, 2011.
To
ensure the stable operation of power system, EVN will mobilize maximum
resources of coal-fired thermo power, gas turbines and power purchase
from China.
EVN
estimates the power production and purchase in the remaining three
months of this year would be 27.3 billion kWh, of which commercial
electricity would be about 24 billion kWh.
Thus,
this year, EVN’s electricity production and purchase this year would
reach 107 billion kWh, of which, commercial electricity would
be 94.2 billion.
EVN to kick off construction on Mong Duong 1 thermo power plant in Oct
Vietbiz24
In
its report on investment activities and business production in the
first nine months of this year, Electricity of Vietnam (EVN) said that
in October it would start construction on Mong Duong 1 thermo power
plant.
This
will be the group’s key task in the last quarter of this year together
with the kickoff of construction on Duyen Hai 3 thermo power
plant and preparation for the operation of official competitive
electricity market as from January 1, 2012.
Mong
Duong 1 thermo power plant invested by EVN will be one of two plants of
Mong Duong Power Centre under the national electricity development
scheme during 2006-2015, including vision till 2025 approved by the
prime minister.
The
plant with total capacity of 1,080 MW, including two turbines, will be
built in region 3, Mong Duong ward, Cam Pha town in the northern
province of Quang Ninh.
On
September 15, EVN signed construction contract for the main plant of
Mong Duong 1 thermo power plant project under the EPC
(Engineering-Procurement-Construction)
model with Korea-based Hyundai Engineering and Construction Co.Ltd contractor.
The
total contract value is $1.274 billion, including design, supply,
installation, trial run, hand-over, maintenance and insurance.
As
planned, the first turbine of the plant will be handed over and put
into commercial operation after 40 months of construction (in Q1,
2015) and the second one after 46 months (in Q3, 2015).
RESOURCES - 2012 LPG consumption to rise 6.8pct on year: PetroVietnam
Platts
Vietnam's
LPG consumption in 2012 is expected to rise 6.8 percent year-on-year to
1.257 million mt, according to a report released Wednesday
by state-owned oil and gas company PetroVietnam.
Of
the total consumption, it is estimated that 44 percent or 550,000 mt,
will be supplied locally while the remaining 56 percent will come
from imports.
In
2010, PetroVietnam subsidiary PV Gas accounted for over 50 percent of
the Vietnamese LPG market of 1.2 million mt. Platts reported September
19 that the company plans to raise its local market share to 75-80
percent in the near future.
Nearly
46 percent of the country's LPG demand is met by domestic supplies from
Binh Son, a wholly owned subsidiary of PetroVietnam and the
operator of the country's sole 6.5 million mt/year (130,000 b/d)
refinery at Dung Quat in Quang Ngai province; and by PV Gas South's
350,000 mt/year Dinh Co gas processing plant in the southern province of
Ba Ria Vung Tau.
Meanwhile,
in the first 8 months of 2011, Vietnam imported 550,036 mt of LPG, up
36 percent compared with the same period last year, according
to data released September 20 by the general Department of Vietnam
Customs. The total value of the imports was $508 million, up 70.5
percent from the same period in 2010.
For
the period, the country's main LPG suppliers were China (220,000 mt or
40 percent of total imports), United Arab Emirates (132,000 mt
or 24 percent) and Australia (75,000 mt or 13.6 percent), customs data
showed.
"The
Vietnamese import the greatest volume of pressurised LPG from ports
like Shenzhen and Zhuhai in South China because freight costs are
most economical there," an LPG trader said Wednesday.
Said
another LPG trader: "Vietnam does not export that much LPG currently so
the increased import volumes are definitely meant to meet growing
domestic demand.
"We
haven't seen that many refrigerated LPG sell tenders from PV Gas this
year, so local demand must be strengthening with more product kept
for domestic use."
Vietnam's
increased LPG import volumes for 2011 come on the back of several
outages at the Dung Quat refinery through the year, which have
led to supply problems of LPG in the country.
In
late March, the refinery was shut for two weeks of repairs and an
"overall check," according to a source at Vietnam's Ministry of Industry
and Trade, which watches over the country's oil and gas industry.
The
entire refinery was shut again July 15 for maintenance due to to
unspecified minor problems and restarted August 29. After the restart,
the refinery was expected to return to full capacity about 10 days
later, or around September 4, according to Nguyen Hoai Giang, general
director of the refinery operator Binh Son Company Limited.
However,
Platts reported September 1 that the Dung Quat refinery, which was
operating at 60-70 percent of capacity immediately after the
restart, would only hit full capacity in mid-September.
Vietnam’s RON 92 gasoline retail price lower than Laos
Vietbiz24
In
August, RON 92 gasoline price declined 2.34% from July. In September,
the price went down, according to the petroleum market news in September
of Vietnam National Petroleum Corp (Petrolimex).
Accordingly,
the average price of WTI oil in September reached $85.97 per barrel,
down $0.39, or 0.46% from August. The Brent oil average
price in September reached $109.46 per barrel, down $0.43 or 0.39% month
on month.
The retail price of RON 92 gasoline in some regional countries currently according to the forex rate on October 4 as follows:
In Laos (Lao State Fuel Co): 10,580 Kip/liter, equalling to 27,211 dong/liter
In Cambodia (SOKIMEX Co): 5,350 Riels/litter, or 27,322 dong/liter
In Singapore (SPC): 2,030 S$/liter, or 32,131 dong/liter
In China: 7,990 NDT or 25,888 dong/liter.
Thus,
the RON 92 gasoline retail price in Vietnam is lower by 6,411
dong/liter than that in Laos, 6,522 dong/liter than Cambodia, 11,331
dong/liter than Singapore and lower 5,088 dong/liter than China.
The
different retail price of petroleum in each country was attributable to
different management mechanism of petroleum of each nation.
EVN owes 10.1tr dong to PetroVietnam: Official
Vietbiz24
Till
date, Electricity of Vietnam Group (EVN)’s debts to Vietnam Oil and Gas
Group (PetroVietnam – PVN) have amounted to 10.1 trillion dong
compared with the last month’s figure (8 trillion dong), Tran Quoc Viet
reported at a 9-month conference briefing s of the Vietnamese Ministry
of Trade and Industry on Oct. 3.
Viet
expressed his concern that if EVN’s debts payments are not definitely
finished, this will impact negatively on the equitization of
subsidiaries
of PetroVietnam. Meanwhile, as for each coal-fired thermal power
project, PVN has to spend a significant amount of capital.
“If this situation lasts long, it will surely cause difficulties for the calling of our capital,” Viet complained.
Deputy
Minister of Industry and Trade, Le Duong Quang said that because of too
young competitive electricity market of Vietnam, EVN could
not avoid challenges. Quang suggested the parties should closely discuss
together and cooperate with the Government as well as ministries to
solve problems for EVN for sake’s common development.
Quang
said that EVN’s debts are no longer a new issue because the Government
has also directed to deal with this. The nature of electricity
prices is not appropriate, leading to the above difficulties.
To
date, the EVN has still owed PVN and Vietnam National Coal and Minerals
Industries Group (Vinacomin) about 11.1 trillion dong and is always
reporting big losses.
In
the next plan, Deputy General Director of EVN Nguyen Tan Loc, said in
the fourth quarter of this year, EVN is determined to ensure enough
electricity for socio-economic development. It is expected that EVN will
produce and buy a total of 107 billion kWh this year, of which
commercial electricity reaches 24 billion kWh in the fourth quarter and
94.2 billion kWh in the whole year.
PROPERTY - Vietnam's once-hot property market cools
AFP
Four
years after a real estate boom that saw investors camp out on the
streets waiting to pay cash for unbuilt apartments, Vietnam's once-hot
property market has caught a chill.
High
inflation and interest rates along with a government-imposed credit
squeeze have led to a fall in prices and other incentives to entice
residential buyers, while office tenants benefit from a glut of space,
experts say.
"The
market is really, really, really tough," said Brad Gee, director of
property management at the 68-storey Bitexco Financial Tower in
HCM City.
The skyscraper opened late last year and now has tenants in more than 40 percent of its office space.
"Obviously we have to drive hard bargains" on rents, but so does everyone else in the market, Gee said.
Monthly
rents for top-quality office space in HCM City have dropped to less
than half the roughly $100 per square metre ($9.30 per square
foot) obtainable during the market's peak in 2007-2008, said one leasing
manager.
Bitexco
and two other recently completed towers also offering prime "Grade A"
space have added to what analysts see as an over-supply in
the city, Vietnam's commercial capital of more than seven million
people.
The
residential sector is also hurting, they say, because of high interest
rates as Vietnamese authorities strive to tame soaring inflation.
"The
banks are being restricted in lending to property firms, to
non-manufacturing industries, and when they are able to lend it can be
between
20 and 25 percent interest," said Craig Wallace, of property consultants
DTZ.
"With
that, we cannot produce, we cannot invest in property development,"
said Le Hoang Chau, chair of the HCM City Real Estate Association.
At
the same time prices of luxury apartments in the city fell more than 17
percent between late 2010 and mid-2011, to around $1,500 per square
metre, according to the organisation.
But
while some property is becoming more affordable, many would-be home
owners are caught in the credit squeeze, unable to get mortgages
except at exorbitant rates.
Thai
Quang Trung, manager of research at real estate services firm Jones
Lang LaSalle, found himself caught up in the problems that he studies.
With apartment rents high, he thought about buying his own home but was
deterred by financing concerns.
Trung
suspects that many other young people would be in the same situation if
they depend on their own salaries to finance a home purchase.
"I'm just going to continue to rent," he said.
Long
focused on economic growth, Vietnam in February shifted to stabilising
an economy beset by double-digit consumer price rises, dwindling
foreign reserves and a weakening currency.
Measures
included higher interest rates, a vow to cut state spending, and an
order that growth in credit, or loans, stays below 20 percent.
Economists
insist the government must stick to its stabilisation package to
control the country's numerous economic imbalances including
an inflation rate that exceeds 20 percent, the highest in Asia.
"The government measures have really hurt the property industry in terms of pushing up interest rates," said Wallace.
Analysts say fewer projects are being launched.
"Obviously we've seen some projects being delayed. They try to avoid being on the market right now," said Trung.
Singapore-based
CapitaLand, one of Asia's largest real estate firms, said its first
Vietnam residential project The Vista condominium in
HCM City - which saw buyers lining up at its launch during the 2007
property boom - was completed on schedule in September.
But
Yip said the company was assessing the market before offering units for
sale at another high-end development in the city, where the foundations
have already been finished.
For
buildings already put on the market during the downturn, developers are
offering lower prices, financing incentives and even lucky draws
and furniture, analysts said.
"I
think that the real estate market situation will continue to be
difficult... for the investors as well as consumers," said Chau, whose
association has asked the government to gradually reduce interest rates.
The industry is looking to next year for possible relief.
DTZ's
Wallace expressed hope that an easing of some government policies might
occur early in 2012, with a drop in interest rates, while Gee
said his "gut feel" was the downturn could last until the first quarter.
Huynh
Buu Tran, head of sales and investments for Jones Lang LaSalle, said
the market's potential was reflected in Vietnam's steady economic
growth rate and population of about 86 million, more than 60 percent of
whom work.
"A
lot of that are young couples, and they all aspire to have their own
home," she said. "So fundamentally in the long term I think there's
still a lot of growth."
INFRASTRUCTURE - Another urban railway project to be submitted for approval in Q4
Dan Tri
Hanoi
Urban Railway Management Board announced to complete the detailed
project of Nam Thang Long-Tran Hung Dao urban railway route so as
to submit the city's government authorities for approval in Q4.
The
urban railway route will have total length of 11.5 kilometres, of which
there are three overhead stations and seven underground ones,
starting from Nam Thang Long (Ciputra urban area) to crossroad of Tran
Hung Dao St-Hang Bai St, running through streets of Nguyen Van Huyen,
Hoang Quoc Viet, Hoang Hoa Tham, Thuy Khue, Phan Dinh Phung, Hang Giay,
Hang Duong, Hang Ngang, Hang Dao, Dinh Tien
Hoang and Hang Bai.
In
2020, the transportation capacity of this urban railway route would be
30,430 passengers per hour and more than 45,000 passengers per
hour in 2040.
At
present, Hanoi has carried out construction project of Nhon - Hanoi
Station urban railway route. The project was expected to finish in
2016 with total length of 12.5 kilometres.
Office buildings have difficulty finding tenants
Saigon Times Daily
New
office buildings have lowered leasing prices to attract tenants to fill
up space given ample supply, said a property market expert.
Adam
Bury, head of research and consulting for CB Richard Ellis Vietnam
(CBRE), said some new Grade A office buildings needed to reconsider
their leasing strategies if they wanted to attract clients.
HCM
City's tallest building Bitexco Financial Tower, for example, has
37,000 square meters of office for lease, but its occupancy is only
35 percent after its opening in November last year. Similarly, Vincom
centre on Dong Khoi Street has occupancy of 50 percent among its 80,000
square meters for lease after the building was put into service in April
last year.
Some
other Grade B office buildings such as REE Tower in District 4, Dragon
Tower in Nha Be District and Maritime Bank Tower in District
1 that have just come into operation are still looking for tenants.
It
normally takes office building owners at least two years to have the
total office space filled up, especially when the supply is higher
than the demand like it is now.
Office
leasing prices in all grades continued to go down in the third quarter
against the previous quarter. The price of Grade A office dropped
slightly to $34 per square metre while that of Grades B and C is $18 and
$15 respectively, according to CBRE.
This
is the 8th quarter in a row to see a drop in office rent in HCM City.
Prices of grades A, B and C offices have gone down by around 7
percent, 8 percent and 9.5 percent respectively from the same period
last year.
Vacancy
is still high despite a drop in prices, at around 31 percent for Grade
A, 18 percent for Grade B and 10 percent for Grade C. HCM
City now has about 1.8 million square meters of office space for lease
in all grades.
Tenants seem to prefer smaller offices of less than 250 square meters each, contributing to a drop in demand, said Bury.
There
was some 39,000 square meters of office space occupied in the third
quarter and 120,000 square meters in the January-September period.
The figures were much lower than 220,000 square meters last year.
The
office leasing prices in HCM City might fall further in the future due
to current tough market conditions, according to some market observers.
Tokyo to build water purification plant in Hanoi
VOV
A
Tokyo based business will establish a joint-venture with a clean water
company in Vietnam to build a large-scale water purification plant
in Hanoi, announced vice Governor of Tokyo, Naoki Inose, on October 4.
As
scheduled, TSS, a clean water company based in Tokyo, and Japan's
Metawater Co. Ltd, will co-ordinate with Hanoi Water Supply Company
and a local construction company to set up the joint-venture.
The
new plant will be built in 2012 with total investment estimated to
reach 10-20 billion yen (equivalent to $130-260 million). Vietnam
will contribute 50 percent of this investment. Currently, the Japan
International Cooperation Agency (Jica) is considering a financial
contribution to the project. In the initial years of operation, the
plant is designed to produce 150,000 cu.m, and will increase
its capacity to 300,000 cu.m by 2020.
TSS
will take an active part in the management of the plant and will
directly supply the world-standard technology to prevent water loss.
Vice
Governor of Tokyo, Naoki Inose said this is the first time local
authorities in Japan will directly participate in a clean water supply
project in a foreign country. Previously, Osaka city got involved in the
construction of a water purification plant in HCM City, but only
assisted in the field of technology rather than management.
Currently,
the clean water demand of Hanoi is estimated at approximately 550,000
cu.m per day. However, the demand is predicted to increase
to 1-1.5 million cu.m per day due to urbanisation and an increase in the
number of businesses, leading to a potential risk of lacking clean
water supplies.
LEGAL NEWS - Tax changes save small firms time and money
Vietnamplus
The
government has approved a general Department of Taxation proposal to
extend the declaration of value added tax (VAT) for small- and
medium-sized
enterprises (SMEs) and family-run businesses.
Under
the Resolution 68/NQ-CP recently released, SMEs will only have to
declare VAT every quarter starting January and family-run businesses
every six months. Previously, companies had to declare VAT every month.
Director
of the Department of Administrative Reforms under the government
Office, Ngo Hai Phan said the extension is part of a tax reform
programme to help SMEs and family-run businesses pay dues more easily,
while saving both time and money by reducing the amount of required
paper work.
Phan
said that the total VAT paid by most of these small companies is very
modest. Therefore, requiring all businesses to declare and pay
the tax every month is not necessary and burdensome.
The
extension has been popular in other countries. Tax agencies of the
Republic of Korea, for example, still supervise tax payments every
quarter or every six months of SMEs with a yearly turnover of less than
46,600 USD.
Phan
said the government has also instructed the general Department of
Taxation (GDT) to set a tax threshold earlier so that only businesses
whose earnings are above the threshold would have to declare VAT on a
defined percentage of their revenue. Those with turnover below the
threshold will be allowed to pay a fixed rate for the entire year.
The
Department of Administrative Reforms estimated that the new policy
would directly affect more than 500,000 companies, 1.8 million
family-run
businesses and millions of employees, as it will help the firms save
more than 600 billion VND (30.7 million USD) per year.
Nguyen
Khuyen, director of the Tam Thinh Trading Co, a family-run business in
the capital's Tay Ho District, said his company previously
had to pay roughly 3 million VND in tax declarations every month, while
their monthly turnover is only about 40 million VND.
"With
the tax declaration extension, our business performance will improve as
we can use the savings to pay for other input costs," Khuyen
said.
According
to the GDT, SMEs are businesses whose charter capital is less than 10
billion VND. Accounting for 98 percent of all Vietnamese
companies, SMEs contribute more than 40 percent to the country's GDP and
use more than 50 percent of the country's labour force.
The
department has so far simplified 271 out of 330 administrative tax
procedures, saving 1.9 trillion VND per year (97.4 million USD). One
of the most significant changes, which took place early this year, is to
allow companies to print and use their own invoices. That alone saved
400 billion VND (20.5 million USD) per year.
Preferential import tax rates for Asean products
VnExpress
Automobiles,
steel, silver, gold, precious stone, milk, food stuff and many other
items from Asean countries will enjoy preferential import
tax rates.
The
Ministry of Finance is currently conducting a poll on import tax rates
on items imported from Asean. Accordingly, those for condensed
milk, liquid milk, and yogurt may either be zero or 5pct. Similarly,
cereal products.
The
common import tax is zero for cereal products, vegetable and fruit
powder and extract, vegetable oil, fruit juice, siro, kid items and
5pct for some others. Imported edible salt and sea salt are expected to
be taxed at 5pct and ore, coal and crude oil zero.
With
respect to petrol products, the Ministry of Finance is proposing 20
percent tax rate for gasoline Ron 97 and Ron 90. Finished oil and
petrol products, however, are taxed at 5pct.
Also,
the agency put forward the zero import tax for unprocessed and
semi-finished jewellery, precious metal, gold, silver and the like.
The
above tax rates are applicable to imports from nine Asean countries
including Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines,
Singapore and Thailand within three years (2012, 2013 and 2014).
The
import tax on nine-seat autos for carrying people is anticipated to be
70pct in 2012, 60pct in 2013 and 50pct in 2014. Specialised cars
such as ambulances, cars to transport prisoners, trucks will be taxed as
low as zero-5pct.
It
is also revealed that several types of imported automobile will enjoy
the preferential zero rate under the tax reduction roadmap till
2018. In addition, import tax on all types of autos will be slashed to
70pct after seven years' WTO membership in 2014, 47pct in 2017 and even
lower till 2019, according to WTO commitments.
Foreign diplomats urged to re-register for cars
Tuoi Tre
The
Ministry of Public Security's Road and Railway Police Department has
urged 521 foreign diplomats to re-register for their cars whose
use has been expired.
According
to the department, many diplomatic cars have recently been sold to
people who are not eligible for diplomatic immunity to continue
to use without re-registration, causing a loss of billions of dongs
(VND1 billion = $48,000) in import taxes and registration fees.
The department said those who fail to re-register for their cars would be penalised according to laws.
According
to an estimate of the Ministry of Finance, about 1,200 diplomatic cars
are being used for wrong purposes or by people who are not
entitled to use such cars.
For
example, Phu Tho Province's Police Department are detaining 4 cars and
13 motorbikes bearing diplomatic number plates that have been
bought or borrowed by Vietnamese citizens from members of foreign
diplomatic agencies in Vietnam.
The Phu Tho police said it had asked the Foreign Ministry to verify the ownerships of these vehicles.
Firm caught red handed
VIR
A big Japanese-backed firm has been hit by giant tax in arrears bills twice due to trade fraud.
Sanyo
Ha Asean (SHA), which produces washing machine, refrigerators and
air-conditioners, was said by Dong Nai province's Customs Agency
to have to pay VND7.2 billion ($360,000) in tax in arrears for its
air-conditioner component packages imported from March to July, last
year. So far, SHA has yet to pay back this sum.
The
firm, which was unavailable for comment when contacted by Vietnam
Investment Review, was reported by the agency to have another electrics
firm, namely Gree Vietnam, disassemble completely-built air-conditioners
into separate components outside Vietnam and then import them into the
country via Binh Duong and Dong Nai customs offices. Gree Vietnam then
resold the components to SHA.
A
Dong Nai Customs Agency official explained to Vietnam Investment Review
that separated components were subject to much lower import tax
rates than completely-built units.
This
is not the first time SHA has reportedly resorted to trade fraud.
Between 2007-2008, this firm was discovered to have incorrectly declared
tax codes for its sets of imported air-conditioner components.
Specifically, the firm must imported sets of components into Vietnam and
then reassembled them into completely-built air-conditioners. However,
it disassembled the sets into separated components
and then imported into Vietnam via Dong Nai's customs office in
different points of time. However, the firm's actions were detected and
it was forced to pay tax in arrears worth total VND66.9 billion ($3.345
million). SHA already paid the sum.
The
Ministry of Finance said the firm had not yet fully understood
Vietnamese law. However, the customs official said: "It is the firm's
importing separate components into Vietnam to enjoy low tax rates that
has reflected a fact that the firm has studied the country's tax law
very carefully."
He said the firm should be imposed a heavy penalty.
He added that there had been some other cases similar to SHA's in Dong Nai. All were foreign invested enterprises.
An
industry insider told Vietnam Investment Review: "The firm's action is
definitely wrong. When doing business, one should follow the market's
regulations, even if the regulations are tough. Doing business also
means that we have to pay taxes. Why did the company try to violate the
regulations? The answer is that such trade frauds can bring more
profits."
Oliver Massmann
Rechtsanwalt
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