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BUSINESS IN BRIEF 15/10   2009-10-15 - VietNamNet/VNA, TN

State Bank steps in on rice buy-up

The State Bank of Vietnam (SBV) on Oct. 13 instructed commercial banks to provide loans to the Southern Food Corporation in a move to aid the corporation in buying 500,000 tonnes of rice harvested from the 2009 summer-autumn crop for stockpile.

Under Official Letter 8042/NHNN-TD, the corporation will receive the interest-free loan, with the SBV paying all the interest rates. The loan will enjoy the lowest lending interest rates currently being applied by commercial banks.

The lending and disbursement will last until November 20 this year while the deadline for enjoying the interest-free loans is January 20 next year.

The move was made in the wake of a Prime Ministerial instruction last month that required the Southern Food Corporation to buy rice for stock-pilling to stabilise the domestic rice price.

The company will buy rice at prices which will allow local growers to make profits of at least 30 percent.
Earlier, the Vietnam Food Association also asked its members to buy 500,000 tonnes of rice in September at 3,800 VND (21 US cent) per kilogramme to stabilise prices.

Once the Southern Food Corporation’s purchase is completed, the country will raise its total summer-autumn rice stockpile to nearly 1.5 million tonnes of rice.

Vietnam to chair ASEAN Bankers Association

The Chairman of VietinBank and the President of the Vietnamese Banking Association Pham Huy Hung will assume the presidency of the ASEAN Bankers Association (ABA) for the 2010-2011 term in Cambodia in mid-November.

This is an important landmark, confirming the Vietnamese banking sector’s prestige amongst regional countries and establishing a cooperative relationship amongst other ABA countries.

It will also be a big honour for Vietnam ’s Joint Stock Commercial Bank for Industry and Trade (VietinBank), confirming the bank’s standing in the sector and its efforts to manage, plus increasing the transparency of its business and investment operations in a bid to become a strong banking and financial group throughout the region by 2015, Hung said.

The ABA will organise seminars and talks to assess opportunities in the regional banking sector after the economic crisis, enhance cooperation with other regional members and set up a multilateral relationship with leading ASEAN banks.

The association will also form sub-committees to research ways of cooperating and put forward solutions to overcome difficulties in each country’s banking associations as well as share their experiences and training programmes within the framework of regional financial institutions.

EC supports software enterprises in HCM City

The Ho Chi Minh City People’s Committee has approved a 150,000 EUR project, financed by the European Commission (EC), to assist software businesses.

The project aims to provide technical assistance and financial wherewithal for the Software Business Incubator (SBI) carried out by Quang Trung Co., Ltd.

The three-year project will help Quang Trung SBI develop successfully 20 enterprises which will fare well in the field of information and communication technology.

Hanoi’s export likely to fall short of target

Hanoi will possibly fail to fulfill its yearly export target which was even set to remain unchanged from the 2008 figure, a trade official has said.

The city is likely to earn a monthly export turnover of 594-628 million USD during the remaining months of this year provided that the world economy enjoys positive changes, purchasing power bounces back and prices of goods increase again, said Nguyen Manh Hoang, Deputy Director of the municipal Department of Industry and Trade.

However, if these figures are reachable, Hanoi ’s yearly export revenues are estimated at only 6.5-6.58 billion USD, representing a drop of 5-6.5 percent from 2008, said Hoang.

In this context, the city’s exporters have proposed Hanoi authorities and the concerned ministries and agencies to remove barriers hindering the flow of exports and create more favourable conditions for export enterprises.

According to the trade official, Hanoi has raked in more than 4.7 billion USD from exports since the beginning of this year, a year-on-year drop of 11.2 percent.

He attributed the decrease to falling prices of goods, particularly in the first two quarters, and dropping demands in key markets such as the US and the EU.

Growing number of anti-dumping and anti-subsidy lawsuits against local businesses are also a reason behind the city’s reduced exports, Hoang said.

To lay a foundation for exports in 2010, Hanoi plans to boost the export of its advantaged products to major markets, including the US , the EU, Japan , China , Africa and West Asia .

The city will also streamline administrative procedures, especially for tax and customs, and co-ordinate with overseas Vietnamese trade offices and local and foreign trade promotion organisations to help companies participate in trade fairs and exhibitions both at home and abroad, and study new foreign markets, Hoang said.

Gold reaches record high prices in Vietnam

Domestic gold Wednesday soared to an all-time high of 23.87 million a teal (US$1,104) as globally, the metal rose to hover just below record highs as the dollar extended losses against a basket of currencies.

Saigon Jewelry Holding Company, Vietnam’s largest gold merchant, announced that prices flared to hit VND23.85 million per tael in Ho Chi Minh City and VND23.87million in Hanoi as of 12 p.m. on Wednesday, up VND300,000 from Tuesday’s close. A tael is slightly more than 1.2 troy ounces.

Pham Hoang An, director of Sacombank Jewelry Company, said both buyers and sellers should be cautious in their trading as big fluctuations in gold prices contain risks.

In Tokyo, spot gold inched up 0.3 percent to $1,066.15 per ounce, approaching the all-time high of $1,068.30 an ounce hit on Tuesday. Gold has rallied 12 percent since the beginning of September.

Most-active December gold futures also edged up to $1,067.7, a rise of 0.3 percent from the COMEX division of the New York Mercantile Exchange and just below a record high of $1,069.7 reached on Tuesday.

“Gold's still on a strong momentum but I think market players will be cautious about entering into the gold market now,” said Adrian Koh, an analyst at Phillip Futures in Singapore.

“The key is still the dollar's movement and if it continues to head lower then there's more room for gold to make new highs,” he said.

The dollar index fell below 75.700 to its lowest since August 2008, while the euro climbed to a fresh 14-month high of

$1.4888 as investors bet on higher-yielding currencies and commodities on growing optimism about the global economy.

Vietnam’s first cargo airline licensed

The Ministry of Transport has issued a license to Trai Thien Air Cargo to provide air cargo transport services in Vietnam next year.

Vo Huy Cuong, head of the Aviation Transport Department at the Civil Aviation Administration of Vietnam, said Trai Thien is the first company allowed to provide only air cargo services (and not passenger services) in the country.

It is expected to start operations early next year, he said.

Trai Thien Air Cargo, with a registered capital of VND500 billion, will initially provide its services within the country using one Boeing 737-300F plane. The company said it would later expand its services to more Asian routes and add four new aircraft to its fleet.

Passenger airlines like Vietnam Airlines, Jetstar Pacific and Indochina Airlines also provide cargo services.

But Cuong said the national aviation administration encouraged carriers to use special planes for air cargo services. However, local demand for the services was still low, he added.

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