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BUSINESS IN BRIEF 2/9   2010-09-02 - Viet Nam Net

State-owned building firms prosper
State-owned enterprises managed by the Ministry of Construction saw a 23 per cent increase in earnings during the first eight months of this year, worth a combined VND93.4 trillion (US$4.9 billion).

The best-performing firms included Viet Nam Glass and Ceramics for Construction (Viglacera), which saw growth in profits of 67.4 per cent, Song Hong Corp (54.6 per cent) and Viet Nam Machinery Erection Corp (29.7 per cent).

Construction projects worth VND41.1 trillion ($2.1 billion) were completed during the first eight months of the year, an increase of 24 per cent in value over last year, the ministry said.

Meanwhile, construction materials were produced worth VND33.6 trillion ($1.76 billion), 30 per cent more than during the same period last year.

About 32.5 million tonnes of cement or 65 per cent of the yearly target was sold during the first eight months. The ministry forecasts that local demand for cement would reach 50-51.5 million tonnes, up 11 per cent against last year.

Export value during the period totalled $111 million, 72 per cent of the yearly target, the ministry said.

The ministry also reported that the construction sector imported materials and equipment worth $219 million.

Deputy Minister of Construction Nguyen Tran Nam said a number of measures were being considered to boost growth this year to 14-15 per cent, while reducing reliance on imports.

The ministry has already ordered enterprises under its supervision to use domestically produced construction materials whenever possible.

Other measures to boost profits include controlling costs and better management of material resources to stabilise production, Nam said.

Enterprises should also improve distribution of building materials to avoid speculation and stabilise prices, he said.

Indices perk up ahead of holidays

A steady performance overnight by the Dow Jones strengthened domestic investor confidence in local stock exchanges, helping lift the VN-Index for a third day to close at 458.75 points, an increase of 0.81 per cent.

The volume of trades on the HCM City Stock Exchange remained modest at 46.7 million shares, worth a total of VND1.2 trillion (US$61.5 million).

On the Ha Noi Stock Exchange, the HNX-Index moved back above the 130-point benchmark, ending yesterday’s session at 131.66, a gain of 2.54 per cent. Value once again reached VND1 trillion ($51.8 million), on a volume of 45.3 million shares.

Phan Anh Tu, the head of the brokerage department at a HCM City-based securities company, attributed this week’s rally to the more active participation of institutional investors.

"They are taking advantage of a positive market attitude to push up prices, before catching profits," Tu said, pointing to the high level of volatility during the session as a sure sign of increased profit-taking.

"Purchasing power remained strong all along," he added, predicting the uptrend would be confirmed in the coming week. "Concerns of a bull trap have passed. Investors are interested again in securities trading."

Foreign investors also continued as net buyers on both stock exchanges, picking up 1.5 million shares worth a net of VND52.1 billion ($2.6 million).

The latest report by Viet First Securities also noted that a number of listed companies had begun buying back shares, while others had cancelled planned issues of additional shares, due to the prevailing market gloom.

These moves were seen as a support to the market this month, the report said.

Meanwhile, bank liquidity has begun to improve, following a move by the State Bank of Viet Nam in July to inject capital into the system.

The report said that an uptrend should be confirmed and that investors should keep an eye on business performance before making investment decisions.

The markets will close on Thursday and Friday for the National Day holiday, with trading to resume next Monday.

Finance, property shares dominate market

On the two national stock exchanges, the twenty largest shares by value, and those which greatly influence domestic stock indices, are mostly financial and real estate shares.
The VN-Index and HNX-Index are calculated based on market value of all listed stocks, so changes in the leading shares by value – market price multiplied by the number of listed shares – most affect the indices.

On the HCM City Stock Exchange, the 20 largest shares by value accounted for more than 60 per cent of the bourse’s total value, based on closing prices on Monday.

Of these stocks, seven were financial shares, including insurer Bao Viet Holdings (BVH), the Masan Group (MSN), Sacombank (STB), Eximbank (EIB), PetroVietnam Finance (PVF), Saigon Securities Inc (SSI) and Vietcombank (VCB).

Another six were property shares, including Vincom Co (VIC), Hoang Anh Gia Lai Co (HAG), Kinh Bac City Development Corp (KBC), Ocean Group (OGC), Tan Tao Investment Industry Corp (ITA) and Song Da Urban and Industrial Zone Investment and Development (SJS).

The four most heavily-capitalised shares, accounting for nearly 24 per cent of total market value, include Vinamilk (VNM), BVH, VIC and MSN, each of which have low liquidity and therefore do not affect indices heavily. These shares are usually traded at volumes below 100,000 units per session and are bought mostly by foreign investors.

Shares with high liquidity, such as STB, SSI, EIB, and OGC – all financials and each seeing trades in excess of a million shares per session – have a much heavier impact on market development and can affect trading in other shares.

On the Ha Noi Stock Exchange, the 20 leading shares by value accounted for 55.8 per cent of total market value last Monday, with Asia Commercial Bank (ACB) alone making up 18.8 per cent of trades.

Of the 20 leading shares on the northern bourse, most were also property and financials shares, including construction giant Vinaconex (VCG), PetroVietnam Construction (PVX), Sai Gon-Ha Noi Bank (SHB), PetroVietnam Insurance (PVI), Kim Long Securities (KLS), and VNDirect Securities (VND).

Binh Duong sees significant growth in property market

Southern Binh Duong Province is experiencing a rapid economic growth along with a surge in activity in the residential property segment.

Between April and July, the province, which is near HCM City, saw four new residential projects enter the market for sale, with a total of 555 units including apartments, villas/ townhouses and land plots.

Currently, there are 20 projects with around 7,600 units in the primary market and 30 projects with around 10,600 units in the secondary market, comprising apartments for sale, villas/ townhouses and land plots, according to property-service firm Savills Viet Nam.

In addition, the 11-ha Eco Xuan, which broke ground in August by Malaysian company Setia Lai Thieu, will have a total of 1,500 apartments and houses, apart from other facilities over five years.

Di An District has the largest market share, with 46 per cent of the total primary market, and Ben Cat District, at 19 per cent, is ranked second.

In the primary market in July, the average price of apartments was US$654 per square metre.

The villa and townhouse sector achieved approximately $200,000 per unit and land lots about $359 per square metre.

The secondary price for the land-lot sector, however, has fallen approximately 16 per cent to $173 per square metre.

In the next few years, about 15 residential projects with about 5,800 units are expected to be launched.

Future supply continues to be concentrated in Di An and Thu Dau Mot districts, accounting for around 70 per cent of market share, due to the advantage of infrastructure and proximity to HCM City and the planned Binh Duong New City.

The supply of future apartment projects accounted for the highest market share, with 86 per cent of the total future supply.

Binh Duong Province’s population has grown to 1.5 million, half of whom have migrated from other parts of the country. The figure has almost doubled from what it was in 2000.

The population growth rate is nearly double HCM City’s population growth rate, which has been 3.5 per cent per year recently.

Vietnam helps to develop new urban area in Laos
The Ha Do Group in Vietnam will invest US$250 million to help develop a new urban area in the Chanthabouly district of Vientiane, the capital city of Laos.

The project was signed by the Director of Vientiane’s Department of Planning and Investment, Visay Savanna and the Chairman of the Ha Do Group, Nguyen Trong Thong, in the witness of Vientiane’s Mayor Sombath Yialiher and Vietnamese Ambassador to Laos Ta Minh Chau.

Under the project, the Ha Do Group will help improve the local infrastructure, build houses and protect the environment in the urban area.

Addressing the signing ceremony, Sombath Yialiher said that the project is one of 13 being carried out in Vientiane to celebrate the capital city’s 450th anniversary.

The Ha Do Group will modernize the area, which will help with Vientiane’s socio-economic and housing development, create higher incomes and generate more jobs for local people, said Thong.

Hanoi to offer 18 venues for Gold promotion
The Hanoi Industry and Trade Department on August 31 announced a promotion month that will begin in Hanoi as of November.

They have planned about 1,000 promotion selling points, involving more than 350 businesses. The event’s organizers will select 18 points for promoting the sale of gold on two ‘gold days’ – November 13 and 14.

The organizers have so far chosen 16 venues for this, including Parkson Trade Centre, Huong Anh Electronics Centre, HC Electrical Devices Supermarket and Eurowindow and Melinh Plaza.

Russia- a prime market for seafood exports
Russia was named a potential market for exporting seafood, said Duong Ngoc Minh, head of Managing Board for Export to Russia.

Businesses should diversify and strengthen processing products to obtain a target of earning US$100 million from tra and basa fish exports to Russia market in 2010, he said.

Mr Minh said in September, Russia will send a delegation to make a fact-finding tour of Vietnam’s seafood processing factories, providing chance for domestic businesses to meet Russian distributors.

The managing board has sent a list of businesses wanting to export their products to Russia. “However, they should set necessary conditions to prove they have safe cultivation areas which have applied Hazard Analysis and Critical Control Points (HACCP). If they meet the requirements of the Russian delegation, they will find easy to expand their exports to the market.

Many domestic businesses have registered to attend the 2010 World Food Fair in Moscow from September 14-17. This will be an excellent opportunity for them to introduce their products to Russian consumers.

According to the Vietnam Association of Seafood Exporters and Processors (VASEP), Vietnam exported around 25,000 tonnes of tra and basa fish exports in the first eight months of 2010, up 11 percent over the previous year.

EVN sends 912 million kWh of power to Cambodia in 16 mths

Electricity of Viet Nam (EVN) has supplied nearly 912 million kWh of power over the past 16 months to Cambodia.

The national power utility released these figures at a conference on the Chau Doc-Takeo 220kV transmission line held in HCM City on Tuesday.

The meeting was organised by EVN's National Power Transmission Co (NPT) and Electricity of Cambodia (EDC).

Nguyen Van Bay, head of the technology division under the Power Transmission Company No4, said the Chau Doc-Takeo transmission line had helped Cambodia deal effectively with power shortages.

He said EVN had gone to great lengths to achieve this because Viet Nam was itself facing serious electricity shortage during the dry season this year.

The two sides discussed several issues at the conference, including the operation of the transmission line linking Chau Doc in An Giang Province with Cambodia's Takeo Province; developing new power networks, as well as technical problems and maintenance work.

The 220kV Chau Doc – Takeo Transmission Line includes a 26.5-km line from Chau Doc to the border between the two countries and a 50.1-km line from the border to Takeo.

The project is part of a power purchasing contract signed between the EVN and the EDC, and an agreement on power energy cooperation between the Cambodian and the Vietnamese Governments signed in July, 2000.

In addition to this transmission line, the EVN has also signed power purchasing contracts with Chinese and Lao partners.
Agricultural sector looks to raise standards

Improving the quality of crop seeds and the professionalism of livestock breeders are two goals of the agricultural sector, according to the director of the Institute of Agricultural Science for Southern Viet Nam (IAS).

Reviewing the progress of the sector and its future until 2025, Bui Chi Buu said that output and exports of farm produce, including rice, rubber, cashew, pepper, coffee and vegetables, had increased significantly over a decade, but quality was still less competitive than in other countries.

In addition, a lack of basic research on long-term planning and zoning plans for specialised growing areas had hindered the progress of seed development programmes, he said.

According to the Viet Nam Cultivation and Breeding Development Strategy until 2020, the country aims to ensure growth of the cultivation and breeding sectors by 3-3.5 per cent and 6-7 per cent a year, respectively, in terms of value. Based on this strategy, IAS would conduct develop further study to create new crop strains that are high-quality, high-yield, tolerant to drought and resistant to disease. La Van Kinh, IAS's deputy director, said.

It also aims to increase the proportion of livestock products in the agriculture sector to 42 per cent by 2020, and control diseases in breeding to improve productivity and quality.

By then, pigs, chicken and dairy cattle populations are expected to increase by two per cent, five per cent and 11 per cent, respectively.

The country also targets to increase the output of maize, soybean and other crops for animal feed production in an aim to gradually reduce imports of these products.

To increase competitiveness in the global market and raise farmers' incomes, it would continue with research to seek measures to reduce production costs and post-harvest losses, and improve product quality in agricultural production.

Conducting studies to improve the quality of dairy cows, pigs, chickens and the professionalism of livestock breeders as well as developing new feed sources and farming methods would also be done.

The aim was to increase the ratio of uncontaminated meat produced, meeting sanitary and disease-free standards.

In addition, IAS would enhance co-operation with international and local organisations in the cultivation and breeding industries.

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