Work starts on $9.8 billion steel mill in central Vietnam

The construction of the US$9.8 billion Ca Na Steel Mill Complex in the central province of Ninh Thuan began Sunday.
The four-stage steel project, being developed by Malaysia’s Lion Corporation and the Vietnam Shipbuilding Industry Corporation (Vinashin), is due for completion in 2025.
The complex will be built on 1,650 hectares and will include coal and steel processing plants, two thermal power plants and a seaport.
The investment for the first phase, from 2008 to 2010, is estimated at nearly $2.75 billion.
When it becomes fully operational, the Ca Na Steel Mill Complex will have an annual capacity of 14.42 million tons and a workforce of 50,000.
Reported by Thien Nhan

VN-Index to test a new low, analysts predict

Vietnam’s major stock market in Ho Chi Minh City is on a downward trajectory to 300 points, stock experts have predicted, saying the extension of its plunge would give investors the chance to snap up some bargains.
The VN-Index fell on every trading day last week to close at 318.96 points last Friday, its lowest level in almost three years. Trading volume was fairly low, averaging 13 million trades each day, compared with an average of 16 million a day the previous week.
The benchmark index, a gauge of 166 leading companies and four closed-end funds, has lost 65 percent of its value this year.
“The market is now in need of positive news on the economy,” said HCMC-based investment fund An Phuc investment director Le Van Thanh Long, adding he expected the economy to remain gloomy over the next six months.
“The market is set to test a new low. I expect the VN-Index will fall below 300 points,” Long told Thanh Nien Daily.
He said the slightly stronger buying in the last two trading days of last week was a positive sign. “However, many investors are still standing on the sideline, waiting for share prices to drop more.”
Trading volume was a mere 10.8 million shares last Monday, 12 million last Tuesday and 10 million last Wednesday before rising to 15.7 million shares last Thursday and 17.6 million last Friday.
But Long said the level of 300 points or a little bit lower would offer investors a golden opportunity to buy shares at attractive prices.
FPT Securities Co.’s broker Nguyen Hai Son said last week’s stock market performance was dull because institutional investors weren’t buying. “They are worried about the capital gains tax, which will take effect in January next year,” Son said.
Under the Personal Income Tax Law, stock investors will have to pay tax of either 0.1 percent on every sale of securities or 20 percent on the whole year’s net profit.
Analysts from Kim Eng Securities Co. said domestic stock markets had tracked the US markets closely over the last three months. The company’s analysts predicted the VN-Index will slump to 250 points and the Hanoi exchange’s HaSTC-Index will hit 65 points if the US’s Dow Jones Industrial Average falls to 7,300.
The Dow Jones Industrial Average and Nasdaq in the US hit their lowest levels in more than five years last week and the broad-market Standard & Poor's 500 fell to its weakest since 1997.
Although the market ended Friday on a high note, with a big rally inspired by the news that president-elect Barack Obama had chosen New York Federal Reserve chief Timothy Geithner as Treasury Secretary, the losses for the week were still staggering.
In the week to Friday, Dow index tumbled 5.31 percent to 8,046.42.
Sell PPC, buy low-price shares
Pha Lai Thermal Power Joint Stock Company (PPC)’s announcement that it will delay a dividend payment this year triggered concerns about the company’s health.
The company, Vietnam’s largest listed power supplier, said on the exchange’s website last Wednesday it would struggle to pay dividend this year as its official-development assistance debts from the Japan Bank for International Cooperation (JBIC) had expanded as the Japanese yen strengthened against the dong.
JBIC loaned Pha Lai 36.2 billion yen at the end of last year, according to the Kim Eng Securities Co. The debt was then equal to VND5,153 billion (US$304 million) and the dong was only 142.34 per yen. The dong weakened to 174.84 per yen last Thursday.
“Pha Lai may suffer a loss of VND60.5 billion ($3.6 million) by repaying 1.86 billion yen in this quarter and may have to book a contingent liability of VND1.12 trillion ($66 million) for the remainder of the outstanding debt. The firm’s net profit in the first nine months of the year is a mere VND793.3 billion ($47 million), so its net profit for the year may be a minus figure,” said analyst Ngo Thuc Vu from Kim Eng Securities last Thursday. The dong reached VND178 per yen last Friday.
Stock website Vietstock, in which IDG Venture holds a 10 percent stake, has also predicted the VN-Index will fall to a new low this week.
Reported by Tuong Chau

Phu Quoc International Airport breaks ground

Construction of an international airport was started Sunday on Phu Quoc Island in southern Kien Giang Province.
The VND12,000-billion (US$704- million) Phu Quoc International Airport is located in Duong To Commune, more than 10 kilometers away from the current Phu Quoc Airport.
Phu Quoc International Airport is expected to serve about 2.65 million passengers and handle 8,600 tons of international goods and 5,700 tons of domestic goods annually by 2020.
When it becomes fully operational in 2030, the airport will be able to serve 7 million passengers and handle 27,600 tons of goods every year. It is expected to receive as much as 20 planes at peak hours.
The existing Phu Quoc Airport can only receive 248,000 passengers per year.
Speaking at the groundbreaking ceremony Sunday, Prime Minister Nguyen Tan Dung said Phu Quoc International Airport will expedite the development of Phu Quoc District, Kien Giang Province, the southern region and the whole country.
The project seeks to improve traffic infrastructure in the locality, enabling it to become a center for tourism and services and connect with other regions in Vietnam as well as other foreign countries for trade activities, Dung said.
Vietnam currently has three international airports based in Hanoi, Ho Chi Minh City and Da Nang City, along with 13 domestic airports.
Reported by Mai Vong

Signs of foreign investors withdrawing capital: expert

VietNamNet Bridge – There are signs that foreign investors are trying to sell stakes and purchase dollars to transfer abroad. Foreigners’ dollar purchases have pushed the dollar price up in the last few days, according to Dr Cao Sy Kiem, a member of the National Advisory Council for Monetary Policies.

Could you please tell us more about the signs of foreign investors withdrawing capital?


Recent happenings show that foreign investors have been trying to withdraw capital from both direct and indirect investments to save their home economies. Foreign investors have been trying to sell stakes and buy dollars to transfer home. The large purchases of dollars by foreign investors have led to the more expensive dollar and weakened VND purchasing power.

Do you think that there is a link between foreign investors’ stock market sales in recent days and the revaluation of the dollar?

Yes, I do. I think this is the reason behind the dollar fever the last few days.

Did the 1997-1998 Asian financial crisis originate from the massive withdrawal of capital made by foreign investors?

The current situation is far different from the circumstances in which the 1997-1998 crisis occurred. At that time, Thailand fell into a crisis because it had mobilised a lot of short-term capital from foreign sources, which made it unable to make payments when investors withdrew a huge quantity of capital. At that time, Vietnam’s economy was not very open, which allowed it to avoid the crisis. However, our economy is more open now. We have mobilised capital from all over the world and will have difficulties when the world’s economy has problems.

Do you worry that foreign investors will continue withdrawing capital?

We will face certain difficulties if foreign investors make big capital withdrawals, and the withdrawals become a trend.

What should we do to deal with the problem? Should we take measures to control the capital withdrawals?

The key problem now is the weakening global economy. In some cases, foreign investors have to withdraw capital in Vietnam to protect their benefits in their home countries.

I think there are two measures. First, trying to persuade foreign investors to have confidence in Vietnam with the country’s economic and financial certainties. Second, we need to increase the investment yield of Vietnamese securities so that foreign investors find it more profitable to keep investments in Vietnam.

Nguyen Son, Head of the Market Development Division under the State Securities Commission (SSC), said that if the market falls for another one or two trading sessions, SSC will intervene in the market.

The VN Index yesterday lost 5% (15.83 points), falling to 329.28 points, while the HASTC Index dropped to 105.19 points (- 6.39 points).

Explaining the sharp falls, Nguyen Mien Tuan, General Director of Rong Viet Securities Company, said that domestic investors have been heavily influenced by the big sales of foreign investors. Meanwhile, the gloomy world’s stock markets have also prompted investors to sell stakes.


(Source: NLD)

VietNamNet Bridge – The Viet Nam National Oil and Gas Group (PetroVietnam) has submitted a proposal to the Government to lower its annual crude oil exploitation output target from 16.2 million tonnes to 15.5-16 million tonnes.

According to the General Statistics Office (GSO), crude oil in the world market decreased 20 per cent in October.PetroVietnam said it was requesting the target adjustment due to difficulties in exploitation, especially for overseas oil fields.
PetroVietnam affirmed that the change was not related to the decreasing trend of world crude oil prices over the past month, which have been attributed to restricted demand caused by the global financial crisis. According to the General Statistics Office (GSO), crude oil in the world market decreased 20 per cent in October.
PetroVietnam deputy general director, Do Van Hau, said the group would still implement its exploitation plans in a move to help increase the State budget and to rein in inflation.
The GSO reported that, despite falling prices, crude oil remained the country’s biggest export earner in the first ten months of the year, with 11.2 million tonnes exported and nearly US$9.5 billion generated, accounting for 17.6 per cent of the country’s total export turnover.
Meanwhile, economists recommended that PetroVietnam reconsider its exploitation output and export volume since world oil prices were sharply falling and the nation’s natural resource are restricted.
Despite the Organisation of Petroleum Exporting Countries (OPEC)’s decision to cut exploitation output late last week, oil prices in the world market have continued to decline.
On Monday, in Asian trading, light sweet crude oil for December delivery in a contract with New York dipped to $61.30 per barrel, a level last seen in May 2007. Brent North Sea crude oil for December delivery also sank, bottoming out at $59.02 per barrel, its lowest point since February 2007.
Yesterday, prices rose to $63.90 for a barrel of light sweet crude for December delivery and $62.15 for a barrel of Brent North Sea crude.
(Source: Viet Nam News)

SBV checks out lending portfolios

VietNamNet Bridge – The State Bank of Viet Nam (SBV) yesterday asked its own branches, as well as all Vietnamese banks, joint venture banks and foreign banks in Viet Nam to report credit activities, outstanding loans and lending interest rates of the dong.

According to SBV statistics released last Friday, State-owned banks generally charged loans at 18.5 per cent per year, down 0.5-1.7 percentage points. Banks must show the percentage of loans charged at over 19.5 per cent, at 18-19.5 per cent, at 17-18 per cent and under 17 per cent per year as of yesterday.
The latest order by the central bank was designed to ensure domestic banks create favourable conditions for cash-strapped local companies to access bank loans. Central bank branch directors must report the credit status of enterprises, businesses, households and banks in each province/city to the State Bank. These directors must include information about loan structures, loan duration and the total number of outstanding loans as of October 25. SBV bank branches must report the number of approved loan applications out of the total number of applications for October, including an explanation for rejected applications.
All reports must be received by the State Bank no later than Thursday.
Last week, the central bank signalled a somewhat looser monetary policy, doubling interest rates to 10 per cent annually for compulsory commercial bank reserves and paying off treasury notes worth VND20.3 trillion (US$1.22 billion) issued to local banks in March.
The move was intended to help domestic banks increase funds to cut lending interest rates. However, several provinces and business associations reported via the State Bank’s hot-line that it was still difficult to get bank loans because the bank’s interest rate reduction was not enough.
According to SBV statistics released last Friday, State-owned banks generally charged loans at 18.5 per cent per year, down 0.5-1.7 percentage points. For preferential customers, lending interest rates stretched from 16.8 to 17.2 per cent annually. Joint stock banks generally cut lending rates by 0.5-1.0 point to under 19.5 per cent per year.
(Source: Viet Nam News)

Millionaires losing billions in VND due to falls in stock price

VietNamNet Bridge – The VN Index has been continuously creating new bottom lines, making billions of VND in the stock market belonging to a large number of millionaires ‘vanish into the air.’ In the last year, the index fell from 927 points on December 28, 2007 to 322 on October 28, 2008.


Investors are worried about the stock price decreasesDang Thanh Tam, Chairman of the Saigon Investment Group, who topped the VN Express newspaper’s 2007 list of 100 stock millionaires, is holding 45 million KBC shares and 5 million ITA shares, which means he now has the stock assets of VND 2.4 billion, a decrease of VND 3.9 billion from the end of 2007.

Truong Gia Binh, Chairman of the Management Board of the Corporation for Financing and Promoting Technologies (FPT), who topped the 2006 list with 7.6 million FPT shares, now has VND 500 billion, which means VND 1.2 billion has disappeared after 10 months.

Though Hoa Phat Group has been performing well with the profit of VND 1.1 billion in the first nine months of 2008, but Hoa Phat Chairman Tran Dinh Long has still lost VND 1.8 billion when his shares’ values dropped from VND 3.5 billion to VND 1.6 billion.

Doan Toi, Chairman of the Management Board of Nam Viet Joint Stock Company, who is holding 30 million ANV shares worth VND 2.64 trillion at the end of 2007, has seen his assets drop to VND 600 billion.

Toi’s colleague, Truong Thi Le Khanh, Chairwoman of Vinh Hoan Seafood Joint Stock Company, has 18 million VHC shares which were worth VND 1.1 trillion in early 2007, and are now worth VND 370 billion.

The assets of Chairman and General Director of the leading securities company Saigon Securities Incorporated (SSI), Nguyen Duy Hung, have also been estimated to have undergone the loss of several billions in VND due to the sharp falls of SSI shares.

A lot of big names, who are the key shareholders of listed companies, holding the blue-chips, and once were listed in the top 20 stock millionaires, such as Nguyen Duc Kien (Asia Commercial Bank - ACB), Dang Van Thanh (Sacombank), Tran Le Nguyen (Kinh Do Group), and Dang Hoang Yen (Tan Tao Industrial Zone Development Company - ITA), have also lost hundreds of billions in VND due to the dramatic falls in stock price.

Chairman of Hoang Anh Gia Lai Group, Doan Nguyen Duc, has also seen his assets decrease by VND 12 trillion, compared to the time when he sent words of his plans to buy the Arsenal Club. Duc holds 65 million of unlisted Hoang Anh Gia Lai shares. More than one year ago, the shares were traded at VND 240,000/share, but now they are trading at VND 60,000, which means that Duc’s total assets have fallen to VND 4 trillion.

Duc is still listed among the richest people in Vietnam. He is the only man in Vietnam who has a private aircraft.

Though the assets of the businessmen have decreased considerably, they are still listed as the richest people in Vietnam.

Most of the enterprises managed by the businessmen have earned big profits in the first nine months of the year. Hoa Phat, for example, gained a profit of nearly VND 1.1 billion, FPT gained VND 850 billion, ACB earned VND 1.4 billion, ITA earned VND 580 billion, and ANV earned VND 250 billion.

Big businessmen around the world have also seen their assets become smaller. Bloomberg has reported that Russian billionaires have lost US $230 billion just within five months, from May 19, 2008 to October 6, 2008 as the Russian financial market has fallen into the worst crisis it has seen in the last 10 years.

Roman Abramovich of the Chelsea Club has lost nearly US $20 billion, while the richest Russian person, Deripaska, has lost over US $16 billion.

Hundreds of billionaires have disappeared from the Forbes list of the richest people in the world due to the world’s financial chaos.

(Source: Tien phong)