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BUSINESS IN BRIEF 19/10   2010-10-19 - VNS

Vietinbank to begin work on tower project

Construction will begin on the long-waited Vietinbank Tower project tomorrow in the capital city’s Ciputra area, Vietinbank announced today.

The bank’s chairman Pham Huy Hung stated that the project’s total investment of $400 million was sourced from Vietinbank’s equity, of which, $200 million would be taken from sales of three office buildings on Ba Dinh, Ly Thuong Kiet and Tran Hung Dao streets, while the remaining $200 million would be taken from business profits.

The tower complex, which is expected to be completed early in 2014, will include a 68-floor tower featuring office space, a 48-floor tower for hotel businesses, and a trade centre. London-based architects Foster & Partners designed the project while US-based firm

Turner is the project’s supervisor.

Vietinbank’s chairman Pham Huy Hung affirmed that no apartments are available for lease or for sale in the complex.

The building is designed with environmentally-friendly features and
modern technologies that are expected to save at least 35 per cent of energy compared with typical buildings.

The Vietinbank tower is the first project of Foster & Partners in Viet Nam.


Finance Ministry to control prices

The Ministry of Finance has said it will step in to control prices on the domestic market following predictions that they are expected to rise by the end of the year.

Nguyen Tien Thoa, director of the ministry’s Pricing Management Department, said the recovery of the world economy and increasing demand for materials for production and business would push prices up on the world market by the end of this year.

He said the department should be able to keep the expected increases down to a modest level. However, the high demand for goods and services before Tet, plus any diseases in livestock would keep the pressure on prices.

Difficulty in raising capital for production and electricity costs would also add to the pressure.

Thoa said the State would check on the amount of goods in stock and register sales prices of 17 essential goods to avoid speculation.

By the end of December, prices of electricity, coal, paper, cement, tap water, transport would be stabilised.

Last week, Prime Minister Nguyen Tan Dung called on ministries, agencies and municipal and provincial authorities to implement strategies to stabilise the market and boost production.

Directive No1875/CT-TTg has been designed to ensure Viet Nam’s growth rate reaches 6.5 per cent and the consumer price index (CPI) does not rise above 8 per cent.

Confab examines new housing policies

More than 200 representatives from property companies learned about new housing policies during a meeting held yesterday in HCM City with the Viet Nam Real Estate Association and the Ministry of Construction.

The ministry explained that Decree 90, which took effect four years ago, was replaced with Decree 71.

The new decree contains detailed regulations covering different sectors in the local property market, and guides the implementation of the Law on Housing, according to Nguyen Trong Ninh, deputy director of the Housing and Real Estate Market Management Department.

In addition, Circular No 16 issued by the Ministry of Construction provides detailed guidelines for the implementation of Decree 71 regarding residential real estate transactions. The circular came into effect October 16.

Decree 71 contains regulations on the selection of developers, the appraisal and approval process of housing, commercial housing, individual housing, social housing projects and housing projects for public employees.

It also describes ways that project developers can raise capital for their projects.

Unlike the previous decree that contained vague language, the new decree allows developers to raise capital from banks, credit institutions, investment funds, corporate bonds, secondary investors and other organisations or individuals.

Under Decree 71, housing developers will be permitted to sell in advance a maximum of 20 per cent of the total number of apartments in a property project before finishing the foundation of the building.

The remaining sales must be traded via property exchange floors when the projects’ foundations are completed.

The decree also outlines regulations and preferential policies for investors who develop social housing projects.

The aim is to encourage them to develop more housing projects and meet the housing demand of low-income earners.

In addition, Decree 71 has detailed guidance concerning housing transactions of Vietnamese residing abroad and of foreigners leasing houses in Viet Nam.

Regulations in previous decrees on housing policies that conflict with the new decree are no longer valid, according to Ninh.

Housing proposals submitted before August 8, the effective date of Decree 71, to provincial governments will be considered in several ways, he explained.

If the project has fewer than 2,500 apartments and is being built with State funds, the provincial People’s Committee will make a decision based on Decree 90.

If it is being built with non-State funds, the local authority can issue an investment approval document to developers without asking them to submit a statement again.

If the project proposal has more than 2,500 apartments but does not mention investment sources, the provincial authority must send a statement to the Government for approval before it is turned over to the provincial government for final approval.

Exporters face production challenges

Enterprises producing export goods are grappling with rising prices for raw materials during the final months of this year, with many firms bracing for higher production costs.

Rising materials and input prices have hit enterprises in the seafood, garments and wooden products sectors. Firms in these sectors are also trying to overcome a lack of capital for production and electricity.

The price of wooden materials increased by VND2 million per m3 to VND5million against the same period of last year, said director of Kien Phuc Export Wooden Products Enterprise in Dong Nai Province.

Dow Jones’ rally see no impact in Viet Nam

The Dow Jones’ rally overnight couldn’t prevent the VN-Index at the HCM City Stock Exchange from shedding another 0.73 per cent today, ending at 454.25.

About 198 among 268 listed stocks fell, including 22 stocks matching the floor prices, such as Hari Hamico Mineral (KSS), down 1.5 per cent to VND29,400, Sao Vang Rubber (SRC) and Tai Nguyen Corp (TNT), 1.2 per cent each to VND24,300 and VND23,500, respectively.

Trading volume on the southern bourse increased to 32.3 million shares today, for a total value of VND811.1 billion (US$41.6 million).

Foreigners reinforced purchases in blue chips, contributing to slowing down the correction. For example, they bought 589,920 shares of Phu My Fertilisers (DPM), 225,130 shares of the Corporation for Financing and Promoting Technology (FPT), 298,210 shares of Tan Tao Industrial Park (ITA), and 149,600 shares of property traders Kinh Bac Corp (KBC).

These stocks saw a tiny fall, including DPM, down 0.6 per cent; FPT closed unchanged, ITA and KBC, 0.1 per cent each.

Only Bao Viet Holdings (BVH) and Masan Group (MSN) were among blue chips managing a gain of 0.5 per cent each.

In Ha Noi, the HNX-Index continued surging 1.73 per cent to 116.59 points, with decliners outnumbering advancers by 255 to 38.

None of blue chips gained points, while only two stocks gained the highest prices, including Ha Noi Textbooks Printing (TPH), up 0.5 percent to VND8,700 and PetroVietnam Southern Gas (PGS), 2.5 per cent to VND38,300.

Volume rose to 24.6 million shares, from 17.3 million on Monday, posting a turnover of VND523.8 billion ($26.9 million).

Bac Lieu farmers stuck with salt

With the next production season all set to start, farmers in Bac Lieu Province have 134,000 tonnes of black salt still in stock, according to the province’s Department of Agriculture and Rural Development.

During the last season at the beginning of this year, Bac Lieu, which, at 3,500ha, has the largest salt-production area in the Cuu Long (Mekong) Delta, produced a record output of more than 266,000 tonnes, or two times the quantity produced a year earlier.

Of this, nearly 90 per cent was black salt.

In late June, the Ministry of Agriculture and Rural Development had ordered the Northern Food Corporation to buy salt from farmers in Bac Lieu who had around 200,000 tonnes in stock.

The corporation assigned the Bac Lieu Salt Trading Joint-Stock Company to buy 30,000 tonnes.

However, Bac Lieu and other companies could only buy a total of 7,000 tonnes of white salt due to finance, warehousing, and transportation problems.

To help farmers build warehouses to store their stocks, the provincial People’s Committee has provided more than 400 of them interest-free loans worth a total of VND1.3 billion (US$68,000).

Can Tho City leads Mekong Delta growth

Can Tho City leads the Cuu Long (Mekong) Delta region in per capita income, estimated to reach US$1,950 this year, for an increase of nearly 30 per cent over last year, according to a report just released by the municipal People’s Council.

This figure also presents a two-fold increase over the region’s average growth in per capita income, the report says.

The city’s gross domestic product (GDP) growth rate is likely to reach 16 per cent this year, with industrial, construction and services sectors posting the highest growth rates.

The industrial and construction sectors together account for 44.1 per cent of GDP, followed by commercial and services with 45.2 per cent and the agro-forestry-marine sector with 10.6 per cent.

Industrial production value of the city is approaching the VND20 trillion (US$1.02 billion) mark this year, the report says. It estimates the city’s export revenues at more than $900 million this year.

The report notes that the city has implemented many projects to assist local enterprises integrate into global markets, including personnel training, enhancement of foreign trade capacity and business strategy orientation.

Enterprises have also received preferential interest rate loans worth trillions of dong to expand production and other business activities, it adds.

PM orders review of industrial projects

Prime Minister Nguyen Tan Dung has instructed the Ministry of Industry and Trade to work with relevant institutions to inspect national industrial projects.

Eight major industrial projects are stalled or have failed to make significant progress. The ministry has been ordered to find out why the projects are stalled and to propose solutions to the Government.

The stalled projects include a transformer production plant, shipping factories, and a crane production plant, each pending financing or capital disbursement.

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