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BUSINESS IN BRIEF 26/11   2010-11-26 - VNS

Nghi Son joint-venture distributor approved

Deputy Prime Minister Hoang Trung Hai has approved the in-principle establishment of a joint venture to distribute the products of the US$6 billion Nghi Son Refinery and Petrochemical Complex.

The PetroVietnam Oil Corporation (PV Oil) will hold at least 51 per cent of the joint venture's total investment capital.

But the Viet Nam Oil and Gas Group (PetroVietnam)'s subsidiary must first show that it has the capital and assets for the partnership and the joint venture will not affect its other tasks.

These include nation-wide oil distribution and ensuring price stability in accordance with the Government's instruction.

Deputy prime minister Hai has also authorised PetroVietnam to decide if its subsidiary can contribute more than 51 per cent.

He requires PetroVietnam to carefully assess PV Oil's restructuring of its production and business plans before joining the joint venture.

Nghi Son is Viet Nam's second oil refinery.

Located in central Thanh Hoa Province's Nghi Son Economic Zone, its planned capacity is 10 million tonnes of crude oil per year, or 200,000 barrels a day, 1.5 higher than the Dung Quat refinery.

The refinery will eventually produce 2.3 million tonnes of petrol; 3.7 million tonnes of diesel and a significant amount of liquefied gas for domestic use.

Shares manage gains in HCM City, lose in Ha Noi

The VN-Index managed a rise of just 0.02 per cent in HCM City this morning to close at 439.94 and complete four successive days of gains.

Almost 45.4 million shares worth more than VND1 trillion (US$50 million) changed hands - a rise of 45 per cent in volume and 71 per cent in value against yesterday.

Advances outnumbered declines 116-81.

Penny and medium capitalised shares provided the most advances with mid-cap Viet Nam Electricity Construction Corp(VNE) the most active stock on volume of 2.87 million.

VNE rose more than 4 per cent to close at VND10,300 ($0.52).

Six of the 10 most heavily capitalised shares declined.

These included Bao Viet Holdings (BVH), Phu My Fertiliser (DPM), FPT Corp (FPT), Hoa Phat Group (HPG), Sacombank (STB) and PetroVietnam Finance (PVF).

Only Masan Group (MSN) rose - 3.1 per cent and Eximbank (EIB) increased 0.7 per cent.

Other major shares were unchanged.

In Ha Noi, the HNX-Index fell 0.49 per cent to 101.57 points although advances outnumbered declines 207-84.

Value rose more than 19 per cent to reach VND727.2 billion ($36.4 million) with more than 40.4 million shares traded.

PetroVietnam Construction (PVX) was again the most heavily-traded stock on the Ha Noi market with almost 3 million shares changing hands, but it closed down 0.5 per cent to VND18,700 ($0.94).

Quang Nam revokes licence for $4.15b resort

Quang Nam People's Committee has revoked the investment licence for the US$4.15 billion Dragon Beach eco-tourism complex after the US investors failed to start the project as required.

Licensed in September, 2009, Dragon Beach was to have been the major foreign-invested project of the central-central highlands.

The investors, Tano Capital LLC and Global C&D INC, had pledged to develop the resort on about 400ha in the Dien Ban District.

It was to have included nine hotels, international trade and conference centres, villas, entertainment facilities and a golf course.

But the joint-venture failed to provide the deposit necessary to prove their financial capacity as well as pay for site clearance and resettlement.

The Planning and Investment Ministry asked provincial administrations in early September to review the progress of several major foreign-invested projects.

These included the $9.8 billion Ca Na steel complex in central Ninh Thuan Province; the South Korean AJ Vietstar Company's $1 billion project in southern Ba Ria -Vung Tau Province and the $7.9 billion Formosa steel complex in central Ha Tinh Province.

FDI disbursement rises in last 11 months

Disbursement of foreign direct investment (FDI) in the first 11 months of this year increased by 9.9 per cent over the same period last year to reach US$9.95 billion, according to the Foreign Investment Agency (FIA).

During the period, the nation attracted $13.3 billion in new FDI, down 40 per cent against the same period last year, showing the annual target of $22-25 billion is almost certainly out of reach.

To reach the goal, the country needs to attract about $10 billion in December but local authorities said they had experienced difficulties in trying to attract large foreign-invested projects this year, particularly in the real estate sector, due to the current economic situation.

A total of 74 new foreign-invested projects were licensed in November, worth a combined $512 million. However, there was no change in additional investment to existing projects this year compared to the previous month which saw $420 million invested in 57 ongoing projects, the FIA noted.

The Netherlands remained the leading source of foreign investment in Viet Nam with $2.32 billion, followed by South Korea with $2.28 billion and the US with $1.92 billion.

Over the 11 month period, the processing and manufacturing sector attracted the largest share of FDI, accounting for $4.37 billion. Production, air-conditioning, electricity and water distribution contributed $2.94 billion, while the real estate sector ranked third, hitting $2.85 billion.

The southern province of Ba Ria-Vung Tau was the top destination for foreign investment, attracting $2.47 billion. It was followed by the northern province of Quang Ninh with US$2.2 billion and HCM City with over $1.83 billion.

The foreign-invested sector posted an 11 month export turnover of $34.8 billion, a year on year rise of 27 per cent.

Gold import quotas further eased


Some of the country's major gold dealers have received new licences from the State Bank of Viet Nam to import additional quantities of gold through the end of this year in a move to stabilise domestic gold prices.

Doji Gold and Gems Group, Agribank Jewellery Co (AJC) and several commercial banks have confirmed the information but refused to disclose the quotas, saying the total quota was bigger than previous times.

This is the fourth gold quota increase this year but the first time it was approved in a relatively stable gold market.

Doji's General Director Do Minh Phu praised the move by the central bank as it would help narrow the distance between domestic and global gold prices.

"The gold import allowance at this point in time is appropriate because dealers will have enough time to schedule their import decisions at an optimal moment. That said, it is not easy to determine the correct time to import gold at good prices," Phu said.

He also said that demand for material gold regularly falls in the global market after December when holidays are over, meaning the gold price may decline. However, Phu warned that the current European debt crisis and political tension between North and South Korea might change the regular rule.

AJC's General Director Nguyen Thanh Truc said the domestic gold price would not be significantly lowered because of the exchange rate.

According to the central bank, Viet Nam has imported 339.86 tonnes of gold since 1998 and exported 268.86 tonnes.

Gold sellers in Ha Noi and HCM City, such as Sai Gon Jewellery Co, Sacombank Jewellery Co, Bao Tin Minh Chau, Agribank Jewellery Co and Phu Nhuaân Jewellery Co, yesterday quoted buy/sell prices of VND35.75-35.86 million (US$1,678-1,683) per tael of gold, down VND150,000 per tael against Wednesday.

One tael equals 37.5g or 1.2 troy ounces.

The domestic price yesterday was just VND600,000 per tael higher than the global rate, down from VND800,000 per tael previously.

The black market rate for the US dollar rose to VND21,300, up VND40 against Wednesday, while commercial banks continued to quote the US dollar at VND19,500.

Global spot gold eased $1.56 to $1,372.15 per ounce - well below a lifetime high of around $1,424 which struck in early November. The price hit an intraday low of around $1,367 per ounce.

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