CPI reflects low purchasing power

HA NOI (VNS)— The Government should pay attention to controlling CPI to achieve a 6.5 per cent growth rate this year, despite this month’s downward trend.

The advice was offered by deputy director of the Ministry of Industry and Trade’s Industry and Trade Centre Le Quoc Phuong.

After increasing for seven consecutive months, CPI decreased by 0.19 per cent in March.

And the figure rose by only 2.39 per cent in the first quarter of this year, much lower than the average rate of 4.2 per cent during the previous nine years.

The index reflected the aggregate demand of the economy and the fact that purchasing power remained low, Phuong said.

The director added that keeping CPI at 6.5 per cent might not be an easy task this year due to the scheduled price increases of medical services and electricity in addition to a possible petrol price increase and urged drastic measures.

According to Vu Manh Ha, an economist from the General Statistics Office (GSO), purchasing power fell in the first quarter. The country’s total retail sales in March were VND211.3 trillion (US$10.1 billion), down 0.6 per cent from the previous month.

And the total retail sales in the first quarter rose only 11.7 per cent from last year, much lower than in previous years. The first quarter of 2010 saw a surge of 24.1 per cent, while 2012’s Q1 saw a 21.8 per cent increase.

Ha attributed the decline to global economic turmoil, which affected both domestic production and consumption, resulting in the CPI decrease in March.

Meanwhile, economist Vu Dinh Anh said the CPI decrease and low growth rate were not worrisome because the first quarter’s CPI rarely measured up to that of the full year. — VNS


IPO Vinasugar I sells handful of stakes

HA NOI (VNS)— Only 436,600 shares, just 3.3 per cent of Vinasugar I stakes, were sold at the company’s initial public offering (IPO) on Wednesday.

The successful bidding price on the Ha Noi Stock Exchange was over VND10,100 (US$0.48) a share.

The result is disappointing in the context that the company put more than 13.3 million shares on sales, about 22.24 per cent of its charter capital.

Sugar remains Vinasugar I’s main product and it occupies 19.23 per cent of the market share.

In addition, the company imports and exports confectionery products, spices and beverages, of which Hai Chau is its most famous brand. — VNS

FPT sets 2013 profit target of $126 million

HA NOI (VNS)— Software giant FPT Corp (FPT) plans to earn a total revenue of nearly VND27 trillion (US$1.29 billion) this year, up 6 per cent on 2012.

Meanwhile, its pre-tax profit target is set at VND 2.65 trillion ($126 million), a 10-per-cent increase.

Its telecommunications business is expected to bring the largest share of the profit – VND818 billion ($39 million) – or 31 per cent of the company’s total profit.

Software production remains a core business with growth of 23 per cent over last year, bringing VND609 billion ($29 million) in. Nearly 80 per cent will come from software exports, estimated to amount to VND480 billion ($22.9 million).

FPT expects to expand its retail business with plans to open 50-60 new stores this year.

However, this expansion investment is projected to generate losses of around VND38 billion ($1.8 million) for the company.

It also plans to pay 2013 cash dividends of 20 per cent. — VNS

Two companies put under alert status

HCM CITY (VNS0— The Ha Noi Stock Exchange announced shares of Vinaconex Xuan Mai Concrete&Construction (XMC) were put under alert status from yesterday due to incurring large losses in 2012.

XMC was VND10.1 billion ($481,000) in the red last year after audit. In addition, its short-term liabilities exceeded its current assets by nearly VND206.6 billion ($9.8 million). The exchange said XMC will be put out of alert status after the company has rectified these shortcomings.

On the same day, the HCM City Stock Exchange also revealed shares of House Viet Nam Co (NVN) will be put under alert status from Monday as the company incurred losses of over VND51.3 billion ($2.4 million) in 2012. — VNS

Three Japan-funded projects launched

(KPL) The Japan International Cooperation Agency (JICA) and the Ministry of Planning and Investment (MPI) last Friday launched three new Grant Aid Projects to boost power, health and transport sector development in Laos.

The grant agreements for the three projects were signed in Vientiane between Chief Representative of the JICA Laos Office, Mr. Koichi Takei, and Acting Director General of International Cooperation Department of MPI, Mrs. Sisomboun Ounavong, in the witnesses of relevant officials from both sides.

Last Friday’s announcement followed on from the official signing of an Exchange of Notes last week between the Ministry of Foreign Affairs and the Japanese government, in which Japan agreed to provide grant aid of 3.049 billion yen (approx. US$32 million) to fund these projects. The first grant aid will provide 1.775 billion yen to implement the”Mini-Hydropower Development Project in Phongsaly province”.

The project will construct a new 450kW mini-hydropower plant in Gnod Ou district, generating a stable electricity supply that will significantly improve the livelihoods of thousands of people across the province.

It will also help the Lao government to reduce its dependence on buying and importing electricity into the region from abroad, as well as bringing the country one step closer to achieving its national electrification rate target of 90 per cent by 2020. The second grant agreement will provide 741 million yen to implement the “Project for Strengthening the Health Service Network in Southern provinces”. The project will construct 70 new health facilities and provide equipment to nine district hospitals in Saravane, Sekong, Champassak and Attapeu provinces.

This direct large-scale investment will significantly raise the quality of healthcare throughout the southern provinces and improve access to these vital services for thousands of people in rural areas where access has been limited.

The third grant agreement will provide 533 million yen to implement the”Project for the Modernization of Equipment for Transition to new CNS/ATM (communication, navigation, surveillance and air traffic management systems) Systems”. This project will upgrade communication, navigation and surveillance, and air traffic management systems in airports across the Lao PDR, in accordance with International Civil Aviation Organisation recommendations.

Introducing these new systems will enable the nation’s airports to handle greater air traffic volume with increase accuracy and efficiency. This will improve travel safety and facilitate commerce, allowing for a greater number of flights carrying business travelers, tourists and cargo, which will boost the Lao national economy. All three projects will contribute significantly to socio-economic development in Laos, helping the country meet its aims of achieving the Millennium Development Goals by 2015 and graduating from the United Nation’s list of Least Development Countries by 2020.

Last update on 30.03.2013 by Lao News Agency

Taiwan Bank enters local sector

Taiwan Co-operative Bank opened its first branch in Phnom Penh yesterday. It is second Taiwanese bank to enter the Kingdom’s market since the opening of the Mega International Commercial Bank in September, 2011.

The growing presence of  Taiwanese banks in Cambodia reflects the surge of Taiwanese entrepreneurs into the country — especially in the garment industry.

According to the bank’s press release, it received its business licence from the National Bank of Cambodia (NBC) on March 6 this year.

“The Phnom Penh branch of the Taiwan Co-operative Bank is the beginning of . . . its expansion onto the Indochina peninsula,” chairman Ling-long Shen said.

“This branch is its second stronghold within ASEAN, as it already has a Manila branch in the Philippines.”

NBC deputy governor Ouk Maly said the opening of a branch in Cambodia emph-asised private-sector confidence in the local banking and finance industry.

It would bring new technology to Cambodia and create jobs, she said.

Shen said the bank would bring experience in the Taiwanese rice sector to the Kingdom and support Taiwanese businesses in joint ventures.

Last update on 29.03.2013 by May Kunmakara, Phnom Penh Post

China to become Viet Nam’s largest trading partner

HCM CITY (VNS)— China is anticipated to become Viet Nam’s top trading partner by 2030 after taking over the position of the US, according to an HSBC Trade Connection Report released yesterday.

The report, however, notes that the US and Japan will remain the key sources of demand for Viet Nam and among the country’s top three export markets in 2030.

Since signing a bilateral trade agreement with the US in 2000 and joining the WTO in 2007, Viet Nam has become the second-largest supplier of clothing and footwear to the US behind China.

Exports to Asia, excluding Japan, are forecast to grow by more than 15 per cent a year to 2020.

Beyond China, Bangladesh, India, Indonesia and Malaysia will also be fast growing export partners for Viet Nam.

Plans to expand the ASEAN Free Trade Agreement to zero tariffs on all goods by 2015 will be an additional factor supporting Viet Nam’s trade with other economies in the region over the medium term.

As well as enjoying strong export growth, Viet Nam will also be an increasingly large importer, both of capital goods to meet its large infrastructure needs and of consumer goods to meet the needs of its rapidly expanding consumer market.

India, China, Turkey and Bangladesh will be its fastest growing import partners in the decade to 2030.

Viet Nam has been able to grow its textiles sector rapidly in recent years, helped by its wage competitiveness.

Indeed, clothing and apparel will make up around a fifth of the growth in Viet Nam’s exports from 2013 to 2015, said Jasmine Lau, head of HSBC Vietnam’s commercial banking.

The country’s exports are largely weighed towards clothing and apparel, textiles and wood manufactures and telecoms equipment. These are key sectors which advanced economies tend to need to import in quantity, she said.

She also noted that it is well located to take advantage of emerging Asia’s undisputed status as the most dynamic trading region in the world.

China, India, Malaysia, Indonesia, Bangladesh and South Korea will all be among the 10 fastest-growing export routes over the next 20 years.

Export growth to Europe, excluding Russia, is expected to average almost 10 per cent a year from 2013 to 2020.

Export growth to Australia, New Zealand and Oceania will pick up sharply in the longer term and will average 10 per cent from 2016 to 2020.

Exports to Latin America will grow by an average of more than 10 per cent from 2013-20, with trade routes to Brazil proving particularly dynamic.

Sub-Saharan Africa offers a massive domestic market with large import needs both in terms of capital goods for infrastructure development and in terms of consumer products for the domestic market.

The region offers strong growth prospects over the next twenty years, albeit from a relatively low base; export growth to this region is forecast to pick up from 8.8 per cent a year from 2013-15 to averaging more than 12 per cent a year from 2016-20.

Sectors to watch

Viet Nam’s wage competitiveness means it has a strong advantage in low-cost manufacturing sectors such as clothing, textiles and wood manufactures and as a result it has been able to grow these industries rapidly, which will together contribute around a third of export growth from 2013-30.

According to Lau, increasing production costs in China will be advantageous to Viet Nam.

Industrialisation means that the country has substantial infrastructure needs and, as a result, industrial machinery will contribute more than 30 per cent of import growth in the decade to 2030.

“Rapid industrialisation and increasing wages, coupled with maturing consumer demand in many of the countries along the South-South corridor, are driving different types of global trade growth. This report highlights how these trends are changing the types of goods imported, manufactured and subsequently exported.

“As countries shift towards higher value sectors there are significant opportunities for companies to evolve and grow. Some of the faster growing, emerging markets show a shift from basic commodities trading in sectors such as cereals or sugar, to become a refiner or producer of branded goods based on those raw materials.

“In many of the developed markets there is a shift towards increasingly specialised sectors such as chemicals and pharmaceutical products as companies seek opportunities for higher returns,” the report said.

Regarding the business environment of Viet Nam, Lau said the Government has put in place good measures including the control of inflation at around 7 per cent, and lowering interest rate.

Other things to do will include addressing bad debt, stabilising the dong value, and applying good corporate governance, especially in the banking sector, to regain confidence in the market.— VNS