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Wednesday, January 17, 2007
Johnson Controls opens automotive interiors plant in Binh Duong
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The US-based Johnson Controls group has recently inaugurated a plant producing automotive interiors in the Viet Nam-Singapore industrial zone in southern Binh Duong province. The US$8 million Jonhson Controls Viet Nam has a capacity of churning out 833,000 products per year and generates jobs for 530 workers. Its products are not only geared to foreign customers in Japan and Malaysia but also potential ones in Viet Nam. The corporation's board of managers highlighted Viet Nam's propitious investment environment, intensive labour force and promising market of over 80 million people as the main factors prodding them to increase investment in Viet Nam. A global leader in automotive devices and power solutions, Johnson Controls also plans to expand their business to other fields in Viet Nam, including production of power equipment like batteries and power solutions for the automobile sector in the future, said the managers. Jonhson Controls has an annual turnover amounting to more than US$32 billion. | ||
Source: Vietnam Agency |
Stock market will develop but not make rapid leaps: expert
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Mr Nghia started the interview with the press by saying that the stock market will see further increases. The P/E (price on equity) index is now 38, quite high if compared to the normal level (12-17 times higher). However, the stock market will still see further increases since Vietnam is an emerging market, while the international capital flow is moving towards Asia. A watchdog specializing in supervising the financial market will be set up in the near future, which will not directly interfere in the market, but will only support the market development. Vietnam’s stock market has not been so hot that it needs to be restrained. Do you mean that Vietnam will have a watchdog to supervise financial activities? The Government plans to set up a committee in charge of supervising the financial market operation (securities, banking and insurance). The committee will take remote supervision over the management agencies like the Ministry of Finance and the State Bank of Vietnam (SBV). SBV is also considering setting up a supervision and inspection agency, which will be the result of the reunification of the departments with the same functions. Is it true that the establishment of the financial supervision committee aims to receive the new capital flows and assist the development of the stock market? The international capital is now flowing into Asia. In Asia, China and Vietnam prove to be the two most attractive destinations. Vietnam’s stock market will develop quickly for two reasons. First, Vietnam plans to equitze 70 groups and big generations. If one third of the 70 units list on the bourse, it would be enough to make the total supplies in the market increase sharply. I think this will happen from July towards the years end. The profuse supplies will make the market less hot. Second, there will be several hundreds of foreign investors coming to Vietnam. Many famous financial consultancy groups and banks will be present on the market. Their clients are big investors, who will ask them to do research about Vietnam. There will be a big capital flow into Vietnam’s securities. The stock market will develop strongly, and it will need to be supervised in order to avoid sudden changes, that can cause shocks. You seem to be very optimistic. But why does SBV plan to control the commercial banks that make investment in securities if you believe that the stock market will develop? The Government has been aware of the need to keep the stock market in stable operation. Any troubles in the stock market will directly influence the monetary market. It is the SBV’s task to guarantee the capital raised from the public. Commercial banks have been advised to think carefully before making decisions on funding securities trading deals. For example, when the P/E is three times higher than the normal level, banks should give the loans valued at 1/3 of the securities’ market values. If banks keeps cautious with the loans mortgaged by securities, it would be safer for investors, the stock market and banks as well. Do you mean that SBV will not ask banks to tighten the funding of securities trading deals? No, not to tighten the loaning to securities traders, but to protect them, give advice in order to avoid risks. Foreign investors always are methodical when making investments, even if they just make short term investment. Meanwhile, domestic investors buy or sell securities just by feelings or follow the moves of someone else. It is very risky. Will the Government consider raising the maximum foreign ownership ratio in local banks from the current 30% limit? From April 2007, foreign bankers will have the right to set up 100% foreign owned bank entities in Vietnam. However, I think that many foreign banks will be set up in the first years after Vietnam joins the WTO as they still expect that the 30% foreign ownership ratio will be raised. You may see that the current laws allow local banks to get M&A (merge and acquisition), but aim to prevent foreign banks from swallowing domestic banks. | ||
Source: Thời báo Kinh tế Sài Gòn |
Bank revenues drive up dividends
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Following announcements of double and even triple annual earnings growth over the last few weeks, bank stocks are again in vogue as investors prepare to reap high dividends payments. Asia Commercial Bank (ACB) topped the money list, reporting VND568 billion (US$35.5 million) in 2006 pre-tax profits. ACB mobilised nearly VND39.5 trillion (US$2.5 billion) through selling shares and deposit services, and provided VND17.1 trillion (US$1.1 billion) in loans, a 77 and 79 percent year-on-year increase respectively. The bank is expected to issue a 38 percent dividend payment, 8 percent of which will be issued in cash while the remaining 30 percent will be through share options. With pre-tax profits at VND447 billion (US$27.93 million), Sai Gon Thuong Tin Commercial Bank (Sacombank) plans a 20-22 percent dividend issuance. Sacombank intends to use much of last year's earnings as legal and working capital. Meanwhile, shareholders of the Export and Import Commercial Bank (Eximbank) expect to receive a 55 percent dividend payment on the back of VND340 billion (US$21.3 million) in pre-tax profits. In addition to strong profits, banks also reported strong asset accumulation. ACB reported VND42.5 trillion (US$2.65 million) in assets, more than double from where it was at the start of 2006. Sacombank and Eximbank saw similar results with VND24 trillion (US$1.5 million) and VND17 trillion (US$1.06 million) in assets, up 58 percent and 49 percent respectively over the previous year. Industry insiders attributed the impressive results to the country's economic growth, and the development of financial products and services, like term deposit accounts and preferential credit policies. | ||
Source: Vietnam Agency |
Thursday, January 11, 2007
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Wednesday, January 10, 2007
Vietnam produces only 5% modern medical equipment
| VNECONOMY updated: 21/12/2006 | ||
Vietnam has produced 621 kinds of medical equipment so far, but only 5% of it is modern. The information was released at the medical equipment meeting recently held in Hanoi to discuss the implementation of the national strategies on medical equipment development after WTO accession. So far, the whole country has 56 medical equipment producing units with legal licences including 27 private and joint stock companies, 10 state-owned enterprises and 12 joint venture companies or companies receiving foreign investment. The 621 kinds of medical equipment produced by Vietnam are mainly instruments used in hospital interiors, surgery rooms and other advanced electronic devices. However, the percentage of modern pieces of equipment stands at only 5%. This includes physiotherapy machines, functional rehabilitation machines, electrical surgery knives. Additionally, the quality and durability of these products are much lower compared to imported ones. In the 2007-2010 periods, the Ministry of Health will implement a project titled “Research and Development of Medical Equipment in Vietnam by 2010”. This projects aims at expanding the manufacturing of common equipment to be able to meet 60% of the country’s demand for medical instruments by 2010 as well as minimise the number of imported medical machines. | ||
Source: VietnamNet |
Viet Nam lures Chinese investors
| VNECONOMY updated: 08/01/2007 | ||
Representatives of more than 430 Chinese businesses and industrial associations in Guangzhou, capital of China’s Guangdong province, took part on Jan.5, in a conference for promoting Chinese investment in Viet Nam. The conference introducing Viet Nam’s investment environment was organized by the Vietnamese Ministry of Investment and Planning in coordination with the country’s consulate general in Guangzhou. Participants at the event were updated about Viet Nam’s investment environment and its preferential policies designed to attract foreign investments. According to Viet Nam’s Consul General to Guangzhou, Vo Thinh, China is Viet Nam’s big market, with two-way trade turnover of US$10 billion in 2006. As of November 2006, China had 402 investment projects in Viet Nam, making up a combined registered capital of US$825 million. | ||
Source: Vietnam Agency |
ACB records 77 percent rise in pre-tax profit
| VNECONOMY updated: 10/01/2007 | ||
The Asia Commercial Bank (ACB) has reported a pre-tax profit of 682. 4 billion VND (roughly 42.7 million USD) in 2006, up 77.2 percent over the previous year. During that year, ACB mobilised nearly 39.5 trillion VND (2.5 billion USD) and provided loans worth more than 17.1 trillion VND (1.1 billion USD), year-on-year increases of 77 percent and 79 percent, respectively. The bank had nearly 44.9 trillion VND (around 2.8 billion USD) in total assets by the end of 2006, up 85 percent against 2005. Each of ACB shareholders is expected to earn a dividend of 38 percent in the year, including 8 percent in cash and 30 percent in shares. | ||
Source: Vietnam Agency |
Contrary to the gloomy situation in the first month last year, the Ho Chi Minh City stock exchange rebounded last week, with VN-Index level exceeding
| VNECONOMY updated: 09/01/2007 | ||
According to the Mr. Trieu Dinh Phu, Director of the Hanoi Planning and Investment department, Hanoi plans to attract more than 200 projects of foreign direct investment (FDI) worth US$1.5 billion in 2007. Mr Phu said that the fields that Vietnam will prioritise for investment are electronics, electrical equipment, mechanics, high-grade construction materials, pharmaceuticals, cosmetics, and meat processing. City authorities are also striving to attract foreign direct investment into developing a banking and finance centre, new urban areas in the north of the Red River, a new office – trade – exhibition centre, a centre for education, research and development, and the Hanoi high-tech zone. Hanoi has been successful in attracting foreign direct investment. In 2006, the total registered capital of FDI projects reached US$1.1 billion. Of this amount, the newly registered capital was US$609.4 million (148 projects). In 2006, the investment from foreign invested enterprises in the city amounted to 15% of the total investment capital in the area, which contributed 16% of GDP, 38% of total export turnover, while creating 10% of the total local budget, and generating 60,000 jobs. Since January 2, 2007, Hanoi has been applying the one door policy in business registration. This is an important part of the city’s strategy to improve the investment environment and improve administrative procedures. | ||
Source: Thời báo Kinh tế Việt Nam |
VN-Index exceeds 800 points
Contrary to the gloomy situation in the first month last year, the Ho Chi Minh City stock exchange rebounded last week, with VN-Index level exceeding 800 points.
During Jan. 5 trading session, VN-Index climbed up to 816 points, with 8.7 million shares and fund certificates, worth 927 billion VND, being traded at the Ho Chi Minh City Securities Trading Centre.
This was the second time VN-Index level exceeds 800 points, following a sharp drop for two weeks of nearly 70 points, from 810 late last year.
Experts attributed VN-Index's bounce to listed companies' commencement to pay dividend and their plans to issue more shares. They added, information that foreign investors will be allowed to buy shares in some business areas in the first quarter of this year was particularly the major reason behind the rebound.
On Jan. 5, foreign investors purchased 3.3 million shares and fund certificates, worth 555 billion VND, at the Ho Chi Minh City stock exchange.
The same day, HASTC-Index increased 10 percent to nearly 266 points at the Ha Noi Securities Trading Centre.
Source: Vietnam Agency
VN-Index consecutively up to new record
| VNECONOMY updated: 10/01/2007 |
| During the Jan. 8 trading session, the Vietnamese securities market saw new records in share volume and value traded, sending the VN-Index past the 825 point level. The increasing trend of the index has been maintained through four consecutive trading sessions. Over 9.1 million shares, worth 1,034 billion VND were traded on Jan. 8. Of the figures, foreign investors paid a total 608 billion VND to purchase 3.9 million shares. The VN-Index's rise of 83.84 points over the previous session was led by the rebound of major shares including PVD, STB, GMD, SAM and TDH. The same day, HASTC-Index increased only 0.95 points to 266.57 points at the Ha Noi Securities Trading Centre, the highest closing level so far. |
Source: Vietnam Agency |
US$100 million FDI project in Thai Nguyen licensed
| VNECONOMY updated: 10/01/2007 | ||
The Japanese group Intra on Jan. 9 received a licence to invest US$100 million in building a reservoir and a new urban area in the northern province of Thai Nguyen. Under the project, Intra will enlarge the Xuong Rong reservoir to 18.84 ha and build a complex of high-grade residence quarters, offices for lease and hotels. The investor plans to commit US$70 million to building the Xuong Rong urban area, US$18 million to clearing the ground, and US$12 million to enlarging the reservoir. In the first phase of the project (2007-2008), the investor will implement build-transfer contracts signed with Thai Nguyen province on development of the Xuong Rong reservoir and a number of periphery infrastructure facilities. The building of apartments and offices will start in the second phase from 2008-2009. | ||
Source: Vietnam Agency |
Tuesday, January 9, 2007
Monday, January 8, 2007
Fisheries association aims to connect with fishermen
To establish a direct link between fishermen and associations of aquatic farmers and processors nationwide, is the main objective of the Vietnam Fisheries Association (VFA)'s development strategy for the 2006-2010 period.
VFA President Nguyen Huu Khanh said at the association's second conference in Hanoi on Jan. 6, that, to this end, the association will work to establish 35 chapters with 50,000 members nationwide by 2010. The VFA currently has 29 chapters with 27,000 members.
Deputy Fisheries Minister Nguyen Viet Thang said the association should strive to build a close cooperation among its chapters as well as with processing businesses in order to ensure materials supply for processing, thus boosting exports.
(CPV/VNA)
Pooling all resources to achieve economic growth rate of 8.5 percent
Prime Minister Nguyen Tan Dung emphasised the need to successfully implement the three major tasks of achieving an economic growth rate of 8.5 percent, reinforcing administrative reform and combating corruption and wastefulness in 2007.
A conference was held in Hanoi on January 8 to implement State budget plans for 2007 which drew the participation of Prime Minster Nguyen Tan Dung and deputy Prime Ministers Nguyen Sinh Hung and Truong Vinh Trong.
Opening the conference, PM Dung highlighted the remarkable achievements in socio-economic development recorded in 2006.
Delegates to conference heard a report from Minister of Planning and Investment Vo Hong Phuc on the implementation of the plan for socio-economic development and the State Budge for 2006 and implementation solutions for 2007. Trade Minister Truong Dinh Tuyen briefed them on a number of major guidelines and policies to help the national economy maintain its fast and sustainable development after Vietnam’s entry into the World Trade Organisation (WTO).
Minister of the Interior Do Quang Trung reviewed administrative reform programs and set tasks for 2007 while Chief Government Inspector Tran Van Truyen reported on the government’s action program on implementing the Anti-Corruption Law.
Minster of Planning and Investment Phuc said in 2007, the focus will be on seven key solutions for perfecting mechanisms of the market economy, improving the investment environment, raising the operation efficiency of the State apparatus, practicing thrift and combating wastefulness.
Minister of the Interior Do Quang Trung underscored the need to enhance administrative reform by effectively handling bureaucracy, ironing out snags in people and enterprises’ activities and removing unnecessary sub-licenses used by ministries and sectors at the central level.
Many delegates said it is essential to build a central anti-corruption agency and issue documents on implementing the Anti-Corruption Law and dealing with leaders of agencies involved in corruption. They also proposed some measures to coordinate with the Government in boosting production and business activities, reinforce administrative reform and combat corruption in the most effective way.
The conference will close on January 9.
(CPV/VOV)
US closer to building first nuclear warhead in 20 years
The US has been carrying out its plan to build its first nuclear warheads in nearly 20 years.
The New York Times reported that a hybrid design for the new weapon will be unveiled by the interagency Nuclear Weapons Council.
It will not add to but replace the nation’s existing arsenal of aging warheads.
If this plan is approved by US President George W. Bush and financed by the Congress, it will cost over 100 billion USD.
Exploratory research for the weapon was authorized three years ago, and has been financed since. Now the costs will begin to increase.
With a generation of more reliable arms, the military could abandon holding onto huge inventories of old weapons, and reduce the American arsenal from some 6,000 warheads to 2,000 or less.
However, the new weapon called the Reliable Replacement Warhead (RRW) will combine elements of designs from two weapons laboratories in an approach that some experts argue is untested and risky, reported Xinhuanet.
Last week, a spokesman for the National Nuclear Security Administration said the government will not proceed with the RRW if it is determined that testing is needed.
Edited by T.H
A big New Year thanks from Thanh Nien
On the occasion of New Year, Thanh Nien would like to express heartfelt gratitude to its readers for contributing to its programs to help the poor and talented for the last 21 years.
Thanks to them Thanh Nien raised over VND17 billion (US$1.07 million) last year to help thousands of victims of destructive typhoons which devastated the country’s central and southern areas.
Part of the amount was also used effectively for the newspaper’s Nguyen Thai Binh Scholarship for poor students as well as the Thanh Nien-sponsored Funds for Vietnamese Talents.
Since the newspaper was founded 21 years ago, its readers have contributed over VND50 billion ($3.1 million) to help the needy.
Recently, thousands of people disregarded heavy rains to attend Thanh Nien’s Duyen Dang Viet Nam (Charming Vietnam) music show, which is held every year to raise money for the Nguyen Thai Binh scholarship.
Earlier, thousands others in Da Nang flocked soon after a typhoon devastated the city to see Thanh Nien’s under-21 football championship, a national event that has helped boost many talented footballers.
Thanh Nien pledges never to betray its readers’ trust.
We hope all Vietnamese, no matter where or who they are or what ideology they adopt, give utmost priority to national interest and join hands to help develop our country.
We would also like the government to have a transparent mechanism in exchanging information with the media and a balanced view on the role of the media in society.
In the past, the media has raised questions about many controversial issues like major construction projects and corruption scandals. And in many cases, there have been no answers from the authorities.
There were even instances in which media reports blowing the lid on corruption were condemned as attempting to “befoul” society.
Only the government’s balanced attitude and frank exchange of information with the media can ensure a strong media that can play an effective role in building and protecting our country.
Written by Editor-in-Chief Nguyen Cong Khe
Fitch affirms ratings of Sacombank
Fitch Ratings has affirmed Vietnam-based Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)’s Individual and Support ratings of 'D' and '5', respectively.
The ratings reflect Sacombank's adequate balance sheet strength and good profitability.
The bank has grown rapidly over recent years, registering a 237% growth in its balance sheet over the three years to end-2005.
Its loan book is split 40:60 between consumers and private businesses, reflecting its niche focus in the retail business segments which has been considerably neglected by Vietnam's larger state-owned banks.
Despite its rapid growth, Sacombank has maintained good asset quality, with a very low reported NPL ratio of 0.6%, down from 0.9% a year prior thanks to loans growth and very few new NPLs.
Additionally, almost all loans are tangibly secured on a low/conservative loan-to-value basis, although this provides only limited comfort in a country where foreclosure is a time-consuming and uncertain process due to a relatively inefficient legal system.
Meanwhile, profitability has been good with the bank achieving a RoAA of 1.8%, thanks to strong margins from its retail deposit-taking/lending focus, good fee income and limited credit costs.
Sacombank's capital strength is also sufficiently adequate, with an end-2005 equity/asset ratio of 13.0%, up from 9.3% at end-2004 due to capital injections and to a lesser extent retained earnings.
Such substantial capitalization, however, is unlikely to remain over the longer term if the bank continues to grow so fast. In this regard, the bank advises that it plans to retain all of 2006's earnings and further boost its equity base by 5% to 10% through a public share issuance over 2007.
Sacombank was formed in 1991 through the consolidation of four credit institutions in Ho Chi Minh City.
The bank has three foreign strategic shareholders, ANZ, the IFC and Dragon Financial Holdings (a Vietnam-based, UK-owned asset management company). It was listed mid-2006 with management holding a 34% share and the public 29%.
Source: The Asian Banker
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