HCMC – Local rice exporters said importers have returned to Vietnam after the Lunar New Year holiday break to survey local rice prices instead of signing new contracts.
Le Truong Son, general director of Docimexco Dong Thap, said it is difficult to sign commercial contracts at present. Importers mainly come back to study prices, waiting for the peak harvest season of the winter-spring rice crop in late February and early March this year.
Meanwhile, Pham Quang Dieu, an expert of the market research firm AgroMonitor, said buyers and sellers are exploring each other while pending new developments on the rice market.
Vietnamese and Thai rice are still priced higher than Indian rice, resulting in the market slowdown.
According to a HCMC-based rice export enterprise, there are cases in which importers insist local firms to sell products at lower prices than the floor export prices regulated by the Vietnam Food Association (VFA) effective since January 18. Particularly, the FOB floor prices of the 5%, 10%, 15% and 25% broken rice are regulated at US$450, US$445, US$435 and US$425 per ton respectively.
In comparison with the floor export prices applicable from December 22 last year, the new prices are lower by US$45-50 a ton, equivalent to 10%. Rice exporters said such an adjustment was to attract large contracts.
According to VFA, local enterprises have signed deals to export one million tons of rice in this quarter, against 1.8 million in the same period last year. The delivery dates are extended to August, instead of within the quarter like in 2011.
Therefore, the rice export volume in the first months of the year will drop year-on-year.
The association has set the target to export 6.5-7 million tons of rice in 2012. Vietnam last year exported 7.1 million tons of rice, bringing in the export turnover of US$3.5 billion.
Indonesia is Vietnam’s biggest rice importer in 2011, with 1.9 million tons worth US$1 billion, but earlier this week this country has signed a memorandum to purchase 100,000-200,000 tons of the 5% broken rice from Myanmar after the latter lifted the rice export ban.
Indonesia’s deal to import rice from Myanmar is to reduce the dependence on the supply sources from Vietnam and Thailand.
Costa Crociere S.p.A. to send one more cruise ship to Vietnam
By Dao Loan - The Saigon Times Daily
HCMC – Besides the Costa Classica cruise ship, Costa Crociere S.p.A. this year plans to send one more luxury vessel named Costa Victoria to bring international visitors to the country.
Saigontourist Travel Service Company, the local tourism agent of the Italia-based ship operator, revealed Costa Victoria would make the first trip to Vietnam in May on the route HCMC-Danang-Halong and vice versa.
Costa Crociere S.p.A said on its website that the new vessel has up to 964 cabins, five restaurants, ten bars, a two-storey theater, a casino alongside many other entertainment services.
Costa Classica cruise ship carrying about 2,500 passengers and sailors dropped anchor at Halong on Wednesday. The passengers went to Halong Bay, Long Tien and Yen Tu pagodas, Hon Gai Market and enjoyed multiple artistic shows for the one-day visit only.
According to Saigontourist, Costa Classica in the first two months of the year will drop by Vietnam up to six times. The local tour operator last year welcomed over 115,000 tourists from several countries like Britain, France, Germany, Italy, Spain and Japan on large cruise ships such as Costa Classica, SuperStar Virgo, SuperStar Aquarius or Princess Daphne.
Stocks rise to over 390 points
By Phuong Thao - The Saigon Times Daily
HCMC – The local market made a slight gain in the third straight rising session on Wednesday given sudden late rebound of some large caps. The VN-Index rose 2.7 points, or 0.7%, from the session earlier to close at 390.67.
The market opened just into the black and fell sharply from the second phase. Having hit a low of 383.05 points, it reversed direction and recovered all the lost ground before closing in the black and at the daily high.
On the Hochiminh Stock Exchange, trading volume remained unchanged compared to Tuesday with 39.2 million shares changing hands but value rose 22% to VND622.5 billion.
Losers slightly outnumbered gainers by 133 to 109, including 44 stocks hitting the ceiling prices and 44 others plunging to the floor prices. Most blue-chips closed in positive territory with MSN and VCF being notable exceptions.
Eximbank (EIB) took the lead for liquidity, rising 1.4% against the previous day to VND15,000 on the volume of 2.5 million shares. Becamex Infrastructure Development Co. (IJC), the second most actively traded stock, hit the ceiling price of VND9,400 with 1.9 million shares changing hands.
Foreign trading was down but the investors were still on the buying side. They accounted for 16.1% and 7.6% of the market’s buying and selling value respectively.
The Hanoi market fell back on strong profit taking with turnover slumping 20% to VND238 billion. The HNX-Index dropped 0.12 point, or 0.2%, from the day earlier to 60.47.
There were 95 stocks advancing versus 151 falling stocks, of which 36 stocks went up to the ceiling prices and 52 stocks dropped to the floor prices. Foreigners were net buyers with 3% of the buying side and 2.2% of the selling side.
HCMC Securities Corp. (HSC) in its daily report said the market’s early correction on Wednesday was met by buying energy suggesting that the rally was still very much intact. A lack of participation earlier in the rally ensured that a lot of investors had been left out and on balance they would be looking for any weakness as a chance to participate.
“Yesterday offered just such a chance and despite a sea of red ink during the second phase, most stocks closed in positive territory. In the short term, we may see some further upside although of course, selling pressure will also increase from now as we can see in the increasing volumes seen in the past two trading days,” HSC said.
European firms’ confidence in Vietnam bounces back
By Binh Nguyen - The Saigon Times Daily
HCMC - European companies’ confidence in Vietnam’s outlook has rebounded but their sentiment and assessment of the country’s current situation remain somber, the European Chamber of Commerce in Vietnam (EuroCham) said.
In a review of its latest survey among nearly 250 member businesses for the first quarter of 2012, EuroCham commented that their concerns about the country’s current business situation and outlook appeared to have eased slightly.
The EuroCham Business Climate Index (BCI) increased four points to 56 in the first quarter of 2012 after a steep drop of 11 points in the last quarter of 2011, as shown in the quarterly business climate index that EuroCham released on Wednesday.
“The slight increase of the EuroCham BCI survey at 56 points shows a halt in the downward trend in business confidence we have seen in 2011,” EuroCham Chairman Alain Cany said. However, he noted that the business confidence was still far below last year’s level.
“This shows that uncertainty amongst investors remains. Key structural issues have not been resolved such as equitization of state-own enterprises and stabilizing the macroeconomic environment to name two examples,” Cany said.
EuroCham said there was little change in respondents’ assessment of their current business situation compared to its previous survey. A ‘good’ or ‘excellent’ view of their current business situation was held by 36% or respondents, up from 32% of last quarter but still much lower than the 64% around this time last year.
EuroCham saw signs of optimism among its member companies, as reflected in the survey that 39% of the respondents stated a ‘good’ or ‘excellent’ view of Vietnam’s outlook. “This is a 12% increase from last quarter, but is put into perspective by the 72% of respondents that had a positive business outlook this time last year,” EuroCham said in the review report.
But the survey indicated that a quarter of the respondents had a pessimistic outlook for business in the last six month.
“These results are still not decidedly positive, but we can see that the continuous downward slide of business sentiment has halted. Whether companies’ business outlook will stagnate at this level or gradually improve remains to be seen,” EuroCham said.
As a result, European companies are still cautious about investment, though some more businesses plan this. According to the latest survey, 38% of the respondents are planning to increase their investment ‘slightly’ or ‘significantly’ by 10% while 31% want to maintain their level of investment and 24% are thinking of decreasing their investment in Vietnam in the medium-term.
“This shows an easing of the “wait and see” attitude that we have seen in previous quarters. While this is a positive development, this time last year, 67% or respondents were planning more investments in Vietnam”, EuroCham said.
Despite signs of optimism, EuroCham members still hold mixed views about orders and revenue in the medium-term. Fewer companies (27%) expect their number of orders to remain constant than last quarter when this view was shared by 34% of respondents, and more forecast their turnover to fall.
Inflation remains a major concern for EuroCham members, as 53% of the respondents said inflation would have a significant impact on their business and 8% stated that inflation was actually threatening their business in the country.
European businesses still have their eyes on macroeconomic woes in Vietnam although a significant 65% of the respondents expect the difficult situation to further decline while 35% responded the situation would stabilize and gradually improve.
When asked about the link of the crisis in Europe with their companies’ investment decision for Vietnam, 55% stated that the crisis affected them but 44% said that the crisis in Europe did not impact their decision to invest in Vietnam.
To a certain extent, EuroCham Executive Director Matthias Dühn said the European debt crisis had added to investor uncertainty and impacted European investment in Vietnam. He noted European investors were increasingly looking for alternative investment destinations in ASEAN and called for Vietnam to increase its efforts to remain competitive in the region.
People rush to buy gold on God of Wealth Day
By Thanh Thuong - The Saigon Times Daily
HCMC – Locals on Wednesday still rushed to buy gold to wish for good luck on the occasion of the God of Wealth Day, the tenth day of the Lunar New Year.
According to local folklore, the God of Wealth returns to heaven on the tenth day of the first lunar month every year. Vietnamese people consider this the God of Wealth Day, thus often buy gold to wish for good luck and prosperity.
Saigon Jewelry Holding Co. (SJC)’s headquarters recorded busy retail trading, but few customers bought more than five taels. A tael is equal to 1.2 troy ounces.
Truong Cong An, vice head of jewelry sales department of SJC, said some 700 taels were sold in Wednesday morning alone, equal to the sales volume of the entire previous day. Most citizens bought from five candareens to two maces. A candareen is one tenth of a mace, ten of which make up one tael.
In addition, owners of many gold shops also went to SJC’s headquarters to exchange one-tael gold bars for smaller bars to resell to their customers.
Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry Co. (PNJ), said there was a drastic surge in demand on Wednesday, mostly for small gold bars and rings. The retail sales volume accounted for some 60% of the total gold amount that PNJ sold on Wednesday.
Cuc said her company had prepared a large amount of lightweight gold bars to satisfy people’s demand.
Meanwhile in Hanoi, Bao Tin Minh Chau Jewelry Co. said many branches of the company witnessed queues of customers waiting for their turns to buy gold. Unlike HCMC, Hanoi’s citizens preferred rings to gold bars, crowding at the areas around Bui Thi Xuan and Tran Nhan Tong streets.
SJC on Wednesday quoted gold prices at VND45 million per tael for buying and VND45.3 million a tael for selling, dipping VND30,000 over the day before.
Bad debts remain high at some city lenders: central bank
By Hong Phuc - The Saigon Times Daily
HCMC – The ratio of bad debts at a number of credit institutions in HCMC in 2011 was still high, or even sharply rose compared to the previous year, said the central bank’s HCMC Branch.
The branch unveiled the above information in a review report on last year’s performance and this year’s operation orientation.
As per the report, the fifth-group debts – seen as the worst non-performing loans - accounted for a high portion of overall bad debts among the local lenders.
A large part of the bad debts was from loans given to the property sector. A local bank even reported the value of realty loans shot up to 70% of its total outstanding loans as of the end of last year.
Another report by the branch showed that Vietnam Bank for Agriculture and Rural Development, or Agribank, has the highest ratio of bad debts, at over 15% out of the four state-owned commercial banks.
Meanwhile, the average ratio of non-performing loans of commercial joint stock banks in the city was 2.59%.
In contrast, commercial joint stock banks whose headquarters are located outside HCMC posted the figure at more than 26%. Also, finance companies in the city suffered a 16.97% ratio for the non-performing loans while that of finance leasing ones was 23.31% as of end-November in 2011.
However, people credit funds at the end of November last year had only a ratio of bad debts at 5.46%.
The city’s credit institutions reported their total bad debts in the primary market servicing residents and organizations at 3.85% at the end of last year’s November. The statistics by the HCMC Branch pointed out that most banks enjoying low profits or mired in losses or high bad debt rates are due to having been involved in real estate-related loans.
The central bank affirmed that credit activities of the banking system this year will continue facing unexpected risks as uncertainties of the property market and local enterprises remain unpredictable. Therefore, the branch urged local banks to closely supervise bad debts and give out appropriate solutions.
Also, the branch requested its members to handle and minimize arising bad debts as well as ensuring the bad debt ratio at the level of less than 5% to the total outstanding balances.
In addition to credit risks caused by rising bad debts, the branch proposed credit institutions strictly manage term risks. “It is very difficult to adjust the structure of short-term deposits in sync with long-term loans and thus the capital usage at small commercial lenders has been burdened with heavy pressure for fear of term risks,” the branch explained in its report.
Recent statistics from the branch revealed that total debts relating to non-productive sectors including consumer credits, real estate loans and loans for securities as of September 30 last year made up 18.57% over total outstanding balances, down 0.03% from the beginning of the same year.
The total mobilized deposits in the city as of December 31 last year reached VND888.9 trillion, up 10% year-on-year while the credit growth at the year’s end was estimated at 6.3% against 2010.
Staggering working hours meet grim reality in Hanoi
By Thoa Nguyen - The Saigon Times Daily
HANOI – The decision on introducing the staggering working and study hours came into force in Hanoi City on Wednesday, which improved transport not much but left the people, especially students and their parents, great inconvenience.
Le Thi Tinh, a senior high school teacher in Hanoi shared that as classes of junior high school students start 30 minutes earlier, it won’t be a big challenge for single teachers like her since she only needs to get up earlier.
However, it can pose difficulties for those teachers in managing time to pick up their children who start their classes on a different time frame.
“Parents must leave for work between 6:00-6:30am while their children start classes at 8:00 am. If they leave at the same time, their children must wander around until their schools open at 7:30. Unless they hire other people to pick up their kids for school, that scenario will happen as a matter of fact,” Tinh said.
Moreover, the classes of elementary and junior high schools end later, which could affect the schedule of tutor classes in the evening.
Therefore, many citizens in the capital city have complained of inconveniences.
Under the Directive 315/QD-UBND issued by Hanoi City’s authorities, new working and study timetable is applicable to three main groups.
College, university and senior high school students under Group 1 will start classes at 6:30 am and end at after 7:00 pm. For Group 2, kindergarten, elementary, and junior high school student start classes at 7:30am and end at 5:30 pm, while State and local officials start work at 8:00 am and end at 5:00 pm.
For Group 3, commercial centers and service providers (except for banking and financial services) start service at 9:00 am and end after 7:00 pm.
Only workers at factories and processing zones see their working hours unchanged.
In line with this change, the Hanoi Department of Transport has adjusted timetable of multiple bus routes. Particularly, peak hours for bus transport will last from 6:00 am to 9:00 am and 4:30 pm t0 7:30 pm.
The interval of bus routes running by universities and colleges will shorten to 7 minutes per trip. The number of these bus routes will increase to 123 trips a day.
Moreover, local transport department plans to establish six additional express bus routes with total number of 97 trips a day.
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