HSBC opens new flagship branch in Vietnam

Hong Kong (VNA) – The Hong Kong and Shanghai Banking Corporation (HSBC) in Vietnam has officially opened its biggest branch to date in Ha Noi.

The new branch is dedicated to serving the bank’s growing number of personal and commercial customers in the capital city, said a press release on June 17 by the HSBC in Hong Kong .

The HSBC branch features the latest in ATM technology, allowing both for deposits and withdrawals, as well as numerous manned banking counters serving VIP personal and commercial banking customers.

HSBC President and CEO in Vietnam Thomas Tobin said that with 10 percent of the country’s 85 million people with bank account, Vietnam is a particularly exciting financial services market which exhibits a lot of potential.

HSBC was one of first foreign banks to be permitted in March to open wholly foreign invested subsidiary bank in Vietnam’s rapidly growing financial market.

It also successfully linked their Automated Teller Machine (ATM) networks with Vietnam Technological and Commercial Joint Stock Bank (Techcombank) last month. With the linkage, the total number of machines in the shared network between the two banks is expected to reach over 450 by the end of 2008 from the current 317.

Northern Vietnam to have more 12 thermoelectric plants by 2015

Under electric development plans for provinces in the North’s major economic zone, an additional ten to twelve thermoelectric plants with a total capacity of 6,300-7,000 MW will be built from now to 2015.

After 2015, one or two thermoelectric plants with total capacity of 600-1,200 MW will be set up to meet the electricity demand in the region.

At present, the Ministry of Industry and Commerce is directing the Vietnam Electricity Group (EVN) to research sites to develop more coal thermoelectric plants with high capacity to meet regional demand.

Hanoi Capital will become a large economic zone in the country and Southeast Asia from now to 2050. The additional plants are scheduled to have about 3,800 MW of power in the first phase and then the figure will be raised to 9,000 – 10,000 MW.

HCM City: CPI surges 2.37 percent in June

Ho Chi Minh City (HCM) saw a 2.37 percent increase in consumer price index (CPI) in June 2008 against the previous month, said the City Statistics Office.

Of this, the foodstuff sector had the largest increase of 4.5 percent in June, followed by restaurant and food service with 3.75 percent increase.

In the first six months of this year, HCM City’s CPI increased 20.14 percent on year. The largest increase was marked in food with nearly 48 percent, followed by foodstuff with approximated 30 percent and building materials with about 30 percent.

Vietnam’s foreign currency reserves reach 20.7 billion USD

Following the Prime Minister’s direction, on June 19, Minister of Finance Vu Van Ninh presided over an online dialogue with both domestic and foreign investors in Hanoi and Ho Chi Minh City (Vietnam), Hong Kong and Malaysia. The Governor of the State Bank of Vietnam attended the dialogue.

Mr. Ninh said that inflation has become a risk to the global economy. Vietnam economy is deeply integrated into the world economy, thus disadvantages the world economy and the world market’s price affect national economic growth and prices. From the beginning of 2008, the Vietnam economy faced two big problems, high CPI with a 15.96 percent increase in the first five months against December 2007 and big trade gap.

Mr. Ninh believed that the two issues are affecting production and business activities of businesses and people.

The inadequacies were quickly addressed by the Government. Aiming to curb inflation, stabilize the macro economy, ensure social security and create a foundation for sustainable growth, the Government proposed 8 solution groups. The solution groups have been shown effective in the national economy. Mr. Ninh affirmed that inflation and the macro economy are still under the government’s control. June saw better changes, as inflation and the trade gap decreased.

Foreign investors will have more opportunities to invest in domestic businesses in the near future. At present, foreign investors are allowed to buy 40 percent stakes of non-listed public companies. The decision is expected to be changed in the coming time. According to Mr. Ninh, non-listed public companies will be categorized in different groups, including those allowing foreign investors to buy more than a 40 percent stake and those following international integration commitments.

Responding to questions from Singaporean investors about the Vietnam dong (VND) exchange rate policy, Governor Giau affirmed: “Our PM said, and I restated, that Vietnam has no policy the VND exchange rate. We are capable enough to do this.” Regarding foreign currency reserves, he said: “We have received the PM’s approval to announce that Vietnam’s foreign currency reserves are 20.7 billion USD.”

According to Mr. Giau, the State Bank of Vietnam (SBV) worked with commercial banks to find solutions. With the determination of speeding up exports, limiting imports and applying solutions given by the SBV, the exchange rate will be reasonable. Mr. Giau received many questions related to interest rates from Hong Kong and Singaporean investors.

With a basic interest rate of 14 percent, Mr. Giau said, “The high interest rate is real and involved activities of businesses but our aim is to curb inflation. Businesses have to cut public spending to introduce competitive products. When inflation decreases, we will adjust interest rates.” In June 2008, bank credit still achieves 20 percent growth and banks completely ensure payment capability.

FDI continues to surge with total registered capital of 15.3 billion USD in the first five months this year, a 2.34 fold increase on year. This showed that Vietnam is still an attractive destination for foreign investors. On behalf of the Government, Mr. Ninh committed to “build a favorable, equal and transparent environment to ensure benefits of foreign investors as well as dealing with difficulties of both domestic and foreign investors.”

Standard Chartered to expand services

Hanoi – Standard Chartered bank announced on June 18 that it will provide a range of consumer banking services in Hanoi from July 1.

The Hanoi team will provide savings and flexible deposit products, an executive package, and loans for consumers and small to medium enterprises.

The bank, which also launched a similar service for its HCM City customers last year, expects massive growth in Vietnam’s consumer banking industry with 40 million of population less than 25 years old.

Bakeries, confectioners attract German firms

Hanoi – The Vietnamese bakery and confectionery market was among the most attractive markets in Asia and showed great potential as far as investing in, said Peter Becker, chairman of German Bakers’ Association.

The announcement was made at a conference held in Hanoi on June 19 introducing an international trade fair on bakery, Iba 2009.

“Joint-ventures, between German and Vietnamese companies in the coming time are inevitable,” he said, adding that Vietnam ’s confectionery production was expected to double within the next four years.

According to the association’s data, confectionery retail volume is expected to reach 476,000 tonnes with a total value of 674 million USD this year. The figures are estimated to reach 706,000 tonnes and 1.45 billion USD in 2012.

“More and more Vietnamese products are making their presence felt in Western markets, while different breads and pies are becoming more familiar to many Vietnamese,” said Peter. “We should promote this trend in order for both sides to benefit.”

Vietnam imported around 1.58 million euros (2.45 million USD) worth of confectionery production lines from Germany between 2002 and 2007, according to available data.
“We hope the exchange of machinery and equipment in this area will continue to increase,” Peter said.

He said at Vietnam should consider starting an association that connects confectionery companies nationwide in an effort to boost companies’ efficiency and co-operation with foreign partners.

Iba 2009 will take place in Dusseldorf , German between October 3 and 9 next year, and hopes to attract more than 450 companies from 30 countries all over the world. It will introduce machinery and equipment , technology and materials for the baking industry.

The trade fair is co-organised by the Germany Baker’s Association, VCCI Trade and Service Co Ltd (agent of Munich Trade Fairs in Vietnam ) and GHM Company.

“I hope with the event companies, particularly Vietnamese firms, will absorb the industry’s development trends and select suitable technology and materials for their business.”

Packaging firm lists in HCM City

HCM City – Tan Hoa Plastics Joint-Stock Company listed on June 19 on the HCM City Stock Exchange to become its 152nd company.

The company saw 520 shares traded on the first day, closing at 44,000 VND (2.4 USD) against a reference of 55,000 VND. A 20 percent price fluctuation is allowed on the first trading day.

Tan Hoa, which makes plastic packaging material, has a charter capital of 80 billion VND (4.8 million USD).

Nguyen Huy Cao An, its deputy chairman, said domestic customers account for 60 percent of his company’s turnover. Supermarkets overseas like Carrefour and Intermache are among the major buyers.

The company targets a turnover of 321 billion VND this year, 42 percent up over last year, and an unchanged gross profit of 15 billion VND.

It plans to move its workshops in HCM City to a new site in Long An province’s Tan Duc Industrial Park in the fourth quarter, tripling its annual capacity to 15,000 tonnes.

The land where the workshops are now situated will be used to develop office buildings and or factories for lease.

Central bank plans further monetary policy tightening

Hanoi – The State Bank of Vietnamese again on June 19 announced a further tightening of monetary policy over the next six months to fight inflation and stabilise the domestic monetary market.

The central bank is determined to keep total credit growth under 30 percent (year on year) by the end of this year.

It plans to do this through flexible management of exchange – rate instruments, open-market operations and refinancing activities.

The bank said the credit system would be more closely monitored in terms of credit quality, lending for real estate investment, “business on valuable papers,” consumer loans and other trading on foreign currencies and gold.

Credit loans or investment will be saved for effective business, particularly in farm production and the export sector.

Small loans will also be made available for those on low incomes and students in line with recent Government policy.

However, loans will be limited for non-production sectors, at the same time.

The money watchdog also plans to set up a master project to prevent speculation on foreign currency on parallel markets (blackmarkets).

In fact, in the past few months, the central bank has been aggressive on monetary policy, which is seen to have generated positive results.

In an effort to further curb credit expansion and raise the attractiveness of dong deposits, the base rate was further increased to 14 percent on June 10.

The central bank also responded in a timely way curbing dramatic fluctuation of the US dollar on the parallel market.

It has restricted illegal foreign currency trading and tried to bring the blackmarket rate back toward the official rate.

Previously, the daily trading band was also adjusted from plus or minus 0.75 percent to plus or minus 1 percent to reflect the real market.
In past months, lenders have tightened money for securities, property, and other investment.

Car sales rise 106 percent on May 2007

Hanoi – Commercial vehicles once again accelerated overall car sales last month to a growth rate of 106 percent year on year, at 11,404 units, according to the Vietnam Auto Manufacturers Association (VAMA).

The figure brought the total autos sales in January to May period to 58,860 units, an increase of 162 percent over the corresponding period last year.

While commercial vehicles registered 142 percent increase in May at 6,666 units, the segment posted 265 percent growth rate in the first five months of the year with 36,411 units.

Market watchers attributed the robust sales of commercial vehicles to the increasing demand for buses and light trucks in Vietnam .

Honda Civic, the only auto model from Honda Vietnam, which sells mostly to private individuals, maintained its dominant position in the sedan segment with 626 units last month, the highest figure in the sedan segment.

Meanwhile, its rivals, the Toyota Altis saw only 181 units sold while the Ford Focus experienced a mere 60 units in May.

Meanwhile, GM-Daewoo’s compact sedan Matiz saw 386 units sold last month, mostly attributed to the company’s effort to sell out the car before changing to its new model, the Spark, earlier this month.

Toyota Innova once again dominated the MPV/SUV (Multi Purpose Vehicles/Sport Utility Vehicles) segment with 1,469 units sold in May, the best selling autos in Vietnam .

Chevrolet Captiva, the only SUV model from GM Daewoo Vietnam (Vidamco), ranked second in the segment with 592 units sold last month, Ford Everest saw poor performance with 139 units.

On the company’s ranking list, Japanese-invested Toyota Vietnam led the line with 2,332 units, accounting for 20.3 percent of the market share, followed by truck and bus manufacturers Truong Hai and Vinamotor with 2,124 and 1,932 units, respectively, accounting for 18.5 and16.8 percent of the market share.

The Ministry of Finance on June 13 raised the tariff of auto parts and components by 5-10 percent, effective on June 20. This is the third tariff hike of auto parts and components in the last two months.

The ministry once again gave the same explanation for the bike, saying it was as part of a Government drive to reduce traffic congestion by curbing the mass importation of automobiles into the country, and to reduce the trade deficit.
GM-Daewoo maker Vidamco earlier this month became the fourth auto maker in Vietnam raised the sales prices for its fleet after Toyota, Honda and Ford, with the hike ranging from 200 USD-900 USD depending on the models.

Vinashin invests in Hon Gai port

Hanoi – Vietnam Shipbuilding Industry Corporation (Vinashin) plans to invest more than 1,000 billion VND (62.5 million USD) to upgrade Hon Gai Passenger Port in the northern province of Quang Ninh.

The upgrade, to be carried out according to international standards, will cover more than 5.4 ha. There will be a 500 metre-long quay capable of handling two ships at a time.

Hotels, a management house, logistics facilities and parking lots will also be built.

When completed, Hon Gai port should be able to receive up to 5,000 passengers, 1,000 cars and 400 trucks a day.

The expansion project is a part of Vinashin’s plan to open a two-way water transport route from Hon Gai to Chan May in the central province of Da Nang and South Sai Gon Port in Ho Chi Minh City .

So far, Vinashin has invested more than 325 billion VND (20 million USD) in the project.