Vietnam Business and Financial News

Vietnam Financial News Network

BUSINESS IN BRIEF 4/11 2009-11-05 - VietNamNet/VNA

WB: Vietnam navigated global financial crisis relatively well

The Washington-based World Bank (WB) has said, in its economic update for the East Asia and Pacific, that Vietnam 's economy navigated the global financial crisis relatively well.

The WB said the global financial crisis and economic recession slowed economic growth in Vietnam . The impact was apparent in the first quarter of 2009, when GDP increased only by 3.1 percent from a year earlier, or 4 percentage points below the average first-quarter growth for the last few years. However, positive signs of recovery have been emerging as a result of the government efforts to support economic activity.

The government announced its stimulus package which included various measures, from an interest rate subsidy, to tax breaks, and to additional capital spending.

As a result, GDP grew by 4.5 percent in the second quarter and 5.8 percent in the third, raising real GDP growth to 4.6 percent year-on-year for January-September.

According to the report, the global economic recession has had a significant impact on Vietnam’s external sector. Over the first eight months of 2009, exports declined by 14.2 percent year-on-year in dollar terms. Export turnover is down across most items and most of Vietnam ’s traditional markets. This decline is less than in other developing countries, but could make 2009 the first year with declining exports since the beginning of Vietnam ’s economic reforms.

It said that the fiscal deficit is expected to widen to 9.4 percent of GDP in 2009, reflecting a decline in revenues and a significant increase in expenditures. Revenues are projected to fall in line with the slowdown in economic activity, lower oil prices and various tax breaks included in the stimulus packages.

Monetary policy has been loosened substantially to support domestic demand after a period of tightening in 2008 to tackle overheating. The central bank cut its policy rate by half to 7 percent from mid-2008 to February 2009, the report said.

The report added that poverty levels continued to fall in Vietnam, despite the sharp increase in food and fuel prices through the first half of 2008, followed by a period of sluggish growth in late 2008 and into 2009.

Local gold price hits record

The gold price hit a new record of 24 million VND (1,348 USD) a tael on the domestic marker on Nov. 3.

This follows the weakening of the US dollar and the sale of 200 tonnes of gold by the International Monetary Fund to the Reserve Bank of India.

At Sacombank Jewelleries at 2.45pm on Nov. 3, gold was bought for 24 million VND a tael and sold at 24.05 million VND.

Market watchers said this was the highest price ever for domestic gold. Several times previously, the price reached nearly 24 million VND, but this was the first time it reached - and passed - this level.

Bao Tin Minh Chau, a major gold distributor in Hanoi, listed the buying and selling price at 24.06 million and 24.16 million (1,351 – 1,357 USD) a tael (one tael is equivalent to 1.2 ounce).

Hoang Huu Dinh, from Bao Tin Minh Chau, said the new record price followed favourable moves on global gold markets caused by the weakness of the US dollar.

He said the IMF’s decision to sell tonnes of gold to India was also behind the price climb on global and local markets.

“This means the gold price will climb further in the foreseeable future,” he said, pointing to soaring prices as the reason for the easing trade in jewelry shops on Nov.3.

A commercial bank analyst said the IMF sale would signal fewer official sales of gold on the market, but would be positive for market growth.

However, he said the possibility of low interest rates remaining as a US Federal Reserve meeting could boost gold prices in the near future.

The gold price on the New York Stock Exchange on Nov. 3 was 1,061.3 USD an ounce while the price in kitco.com, leading retailer of the metal, was around 1,067 USD an ounce.

“As a consequence, the domestic gold price will soon peak to new record, and for day traders, it would be a’good smell’ to participate,” the bank’s analyst said, forecasting that gold trading would soon be noisy again.

Rice export volume rises 33%

Rice exports increased in volume but declined in value in the first 10 months of the year, according to the Ministry of Agriculture and Rural Development.

Exports reached 5.37 million tonnes, earning 2.39 billion USD, an increase of 33.23 percent in volume but a fall of 7.65 percent in value compared with the same period last year.

For October, rice exports increased 29,000 tonnes to 370,000 tonnes and 14 million USD in value to 140 million USD compared with September, the ministry said.

Major export markets included the Philippines, Indonesia, Cuba and Iraq. Exports increased sharply to African countries and the Middle East.

In the first nine months of this year, the rice exports obtained a year-on-year increase of 98 percent in volume to 1.4 million tonnes to African countries and 65 percent to 250,000 tonnes to the Middle East .

The ministry said the domestic market price was expected to continue rising bcause of demand before the Tet festival.

The world market price was also expected to rise, including that of Vietnam rice, the centre said.

Producers, processors and exporters should cooperate in producing and exporting rice to get the best export price, Le Quoc Dung, deputy chairman of the National Assembly’s Economic Committee, told a seminar in Hanoi on Nov. 3 on managing rice export activities.

Ministry planting department head Nguyen Tri Ngoc said rice export management was difficult and required close attention to market developments.

Meanwhile, Vietnam’s first rice expo will take place in the Mekong Delta province of Hau Giang on Nov. 28 two days later than initially planned.

The expo’s organising board said that by October 27, hundreds of enterprises from 30 provinces and cities nationwide had registered to open more than 400 stands at the event.

Apart from a central exhibition area, a number of areas will showcase rice growing models from three Vietnamese regions. There will be agricultural and fishing equipment, engines and agricultural machinery and seed plants on display.

Several seminars on Vietnamese rice exports and the promotion of agricultural investment will also be held, co-organised by several ministries and Hau Giang province.

The event will last until December.

Vietnamese firms look for partners in Australia

Representatives of 30 companies from Vietnam’s southern province of Binh Duong and the state of New South Wales, Australia, met in Sydney on Nov. 3 to seek partners and explore each other’s markets.

At the meeting, Director of the Binh Duong Department of Industry and Trade, Nguyen Thi Dien, delivered a presentation on the province’s potential and its rapid economic growth, especially in industry and services, with handicrafts and wooden furniture as its spearhead sectors.

Also at the meeting, the participating businesspeople shared experiences regarding import-export activities and seeking out supply sources for both raw materials and investment funds.

Talking with a Sydney-based Vietnam News Agency correspondent, Dien said Binh Duong welcomes Australian companies into their province, and also wants to seek partners in Australia to provide raw materials and help with the expansion of distribution networks in the country.

The Vietnamese Consul General in Sydney, Vu Hong Nam, said New South Wales is home to the largest number of companies in Australia. Both sides harbour numerous opportunities for trade cooperation, particularly in areas where Binh Duong has strengths, such as wooden furniture, handicrafts and interior products.

Vietnam, Denmark hold business forum

The Vietnamese government will work closely with the Danish government to facilitate business relations to increase the value of two-way trade to a targeted 1 billion USD.

Deputy Permanent Prime Minister Nguyen Sinh Hung made the statement while addressing the Vietnam-Denmark business forum in Hanoi on Nov. 3.

Prince Henrik, who also joined the event, said the forum, which attracted 70 leading enterprises from Denmark and hundreds of Vietnamese businesses, offered a chance for entrepreneurs of both countries to set up future trade ties.

It is also an opportunity for Danish participants to promote their outstanding industries.

In his opinion, the impressive development of Vietnam’s economy has created a high demand for the import and export of goods and technology solutions between the two countries.

At the forum, Vietnam’s Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said the country hoped to receive agricultural assistance from Denmark, especially in animal husbandry.

There will be numerous opportunities for Danish businesses to cooperate with Vietnam in this sector, the official said.

In the development strategy for the husbandry through 2020, Vietnam will move from small- to large-scale breeding farms in order to increase livestock production in proportion to other types of agriculture to 42 percent while ensuring food safety and hygiene, he said.

According to the strategy, the sector plans to attain an annual growth rate of 8-9 percent in 2010, and 5-6 percent over 10 years later.

According to the Ministry of Agriculture and Rural Development, the animal husbandry sector plays an important part in agricultural development. It has posted an annual growth rate of 7-8 percent over the last decade, accounting for 27 percent of the total agricultural production value.

Vietnam is running 20,000 animal breeding farms, which churn out 3.5 million tonnes of meat every year.

Within the framework of the forum, a seminar on cooperation in tertiary education between Vietnam and Denmark was held with the participation of Niels Brock Copenhagen Business College and some Danish investors who are doing business in Vietnam.

The Rector of Niels Brock shared experiences in tertiary education at his college, which focuses on the learner-centred teaching method for its 30,000 students.

Managing Director at Mascot Int’l Vietnam Ltd, Thomas Bo Pedersen put forth the strong and weak points of the Vietnamese labour force, saying that Vietnamese workers are intelligent and clear-headed in acquiring knowledge, however, weak in mastering foreign languages and IT.

The Danish side proposed joint training programmes with Vietnamese universities, applying advanced teaching methods to increase not only the professional skills of students, but also their level of accomplishment in foreign languages (especially English) and in IT.

The same day, Vietnamese and Danish businesses also joined in symposiums on clean technology solutions, aviation, architecture and meat processing.

Many deals signed at Vietnam-China border fair

Fourteen pairs of contracts worth nearly 114 million USD were signed by some 30 businesses from Vietnam and China at an international tourism fair held in the northern border province of Lao Cai on Nov. 3.

This year’s fair saw increases in the number of contracts and the value as compared to the previous event in 2007.

The newly-signed deals are mainly in trading minerals, fertilisers, equipment and agricultural products, with minerals and fertilisers representing 60 percent of the total value.

Also on Nov. 3, Lao Cai province and its neighbouring Chinese province, Yunnan, held an investment promotion conference to introduce the potentials and strengths in industry, trade and tourism of the two countries.

More than 100 businesses from the two countries attended to study policies and regulations in order to increase their investment in coming years.

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BUSINESS IN BRIEF 5/11 2009-11-05