| It’s necessary to filter foreign portfolio investment: officials (21/03) | |
Investors once breathed a sigh of relief when the Government announced it would not apply measures to control foreign portfolio investment flow in the stock market. However, the market has become stirred up again by the news that the Government will enact the regulation of monitoring securities companies, investment funds and fund management companies through many restrictions. The draft regulation has been facing strong opposition from the Vietnam Association of Financial Investors (VAFI), which said that 80% of investment funds would withdraw from Vietnam if the draft regulation was enacted. Phung Khac Ke, Deputy Governor of the State Bank of Vietnam (SBV), said that every country applies certain technical barriers to monitor the market and make it develop on the right track or the way the Government wants. Every country wants to seek prestigious and capable investors, which can ensure the sustainable growth of the market. “These are technical barriers, not policy barriers,” Mr Ke stressed. When asked if the majority of the investment funds would withdraw from the market, Mr Ke said that the regulation, if enacted, would not be retroactive, which means that the operational funds that cannot meet the new regulations would still be allowed to operate in Vietnam. “Only the investment funds to be set up after the regulation is enacted would have to meet the requirements. I think that the State Securities Commission (SSC) also thinks this way,” Mr Ke said. He added that the principle of non-retroactive effect would be suitable in this case, as investors have come to Vietnam in the early days of the stock market. Truong Van Phuoc, Director of the State Bank of Vietnam’s Transaction Centre, said that the question that policy makers always raise when compiling regulations is which goals the policies aim to. “If Vietnam wants to attract stable capital flow which can serve long-term development, it must have a suitable mechanism to filter capital. We have to, as Vietnamese people always say, pick our company,” Mr Phuoc said. However, Mr Phuoc said that state management authorities should consider carefully the measures to be applied, adding that administrative orders sometimes do not bring the desired effects. “The market should be controlled by economic measures rather than administrative orders,” he said. |
Sunday, September 2, 2007
It’s necessary to filter foreign portfolio investment: officials (21/03)
Wednesday, August 15, 2007
Korean Fashion Brand for Vietnam
A Korean Fashion Brand for Vietnam
This is the third time VIENUS organized a fashion show and attended a fair in Vietnam. As a new fashion brand-name in Vietnam but Vienus promises to be one of the leaders in the Southeast Asian region. The Vienus products are made of special material that is used for the first time in the world. The designers have tried to find fabric that is quickly moisture-absorbed and fast-dried. Especially it is used for making raincoats. They said when we wear normal a raincoat, we feel a little sticky because of humidity. But this special kind of fabric which has two opposite functions that the supper water repellent outer layer sheds rain, can absorb and dry body sweat at an incredible rate. The idea is from data of hot and humidity weather in Vietnam. It is over 25oC except December, January and February in Hanoi. The yarn of PTT is newly developed by Dupont. It is differentiated from existing Coolever, which is obtained by using PTT polymer. In addition, PTT provides various benefits such as soft touch, vibrant color, chlorine and UV-resistance resulting from unique molecular structure. The second fabric used is Bi-tech with two main functions which compliment each other ultra water repellent outer layer super wicking and absorption inner surface. And the last is ice fill. It has the larger dimension of yarns than others so a person is going to feel to be cooled by physical heat absorption. It also blocks IR rays by Nano Aqua Chemical. The last characteristic is ice fill is to be made with Xylitol. Xylitol takes more heat from the body when the sweat evaporates so when a person wears these clothes, he/she feels much cooler as three degrees less than normal temperature.
Last year, Vienus created characters of the twelve zodiac, created traffic signal. The idea was created when the fashion designer Dolien Han drove from Tan Son Nhat Airport to the center and saw three accidents. Right there he wondered why he didn't create something to help Vietnamese people to prevent from accident. Then he thought of using fluorescent and luminous paint, also using reflection sheet for the clothes of motorcyclists. Vienus, a fashion brand, comes from the Vietnamese flag. The yellow star in flag is called Venus in astronomy. So they attached three front digits in Vietnam and Venus to make Vienus. It means Vienus is created only for Vietnamese people? Mr Han said yes. He loves Vietnam and always thinks of the way that contributes to Vietnam, not just for benefits. But he also hopes that he will be successful in franchising and enlarging the market in America, Europe and Southeast Asia after he set up a fabric factory in Vietnam. Now Vienus company is launching T-shirts, pants and skirts (65 percent of total), 10 percent with jumper, one-piece and vest, raincoat is 15 percent of total and the last group is 10 percent with gloves, cap, and neck cover for women who want to have white skin in this area. Particularly, all of them are casual, sport and loved by the young people who like convenient and young clothes. Vienus is planning to open a range of shops, department stores, branches and outlets in big cities which have a population of over two million.
Designer Dolien Han whose name goes with a lot of fashion brands in Europe and North America comes from Korea. He has graduated from fashion designing in Paris. He has experience in designing at the biggest fashion centers of the world like Paris, Rome, New York and Seoul. When he started investing in the Vietnamese market, many people advised him not to do that. "He is going to be broken", they foretold. But Dolien Han determined to follow his plan. He thinks he will be successful, but more importantly, he wants to do something for the country he loves. He said, "I don't know why I feel close to Vietnam". Last year, he found a model who has endorsed his product. Miss Nguyen Thanh Ha entered the final contest of Nguoi dep Kinh do Viet Nam (Miss Vietnamese Capital Cities). She was not the most beautiful contestant but Dolien Han believes that she has a face suitable for his products and she can contribute to promoting his brand image.
(ven.vn/English)
Sunday, August 12, 2007
With duties cut, will prices go down?
With duties cut, will prices go down?
The Ministry of Finance has issued decisions reducing import duties levied on over 20 categories of goods in an effort to cool inflationary pressures, but whether prices will go down still remains to be seen.
The duties on many categories of goods have been reduced by half or more. Businesses, however, are doubtful that the new measures will have much significance.
"Taxes only account for a small part of the prices of our products," said Viet Nam Dairy Products Joint Stock Company (Vinamilk) deputy general director Tran Bao Minh. "Meanwhile, now we have to import materials at a cost nearly double that at the beginning of the year [US$5,200 per tonne compared with $2,700]."
For steel makers, cutting prices at the moment seems impossible, as the prices of steel ingot have increased rapidly. Ingot costs have reached $500 per tonne, up $60-70 per tonne over last year’s average.
"The price of steel ingot can be reduced only $15 per tonne as the import duty applied has been reduced from 5 per cent to 2 per cent – it’s not very significant," said Viet Nam Steel Corporation’s marketing department deputy director Le Thiet Hung.
Prices of foodstuffs are not likely to go down, according to Vissan Company general director Bui Duy Duc, who explained that supply is now scarce on both the home and world markets.
Duc gave pork as an example: the local supply has been reduced due to an epidemic, and on the world market, China is also a big importer, so it’s not easy to maintain a sufficient amount from imports to meet domestic demand.
The Ministry of Finance, however, sees the situation differently.
"We believe that the tax policy will help improve the current situation," Deputy Minister of Finance Truong Chi Trung said yesterday at a press conference discussing measures to stabilise market prices.
"All of those categories of goods with reduced import duties] previously had high tax rates imposed, so now with many articles seeing duties cut in half or more, prices will decrease considerably," he said.
Trung stressed the importance of maintaining strict controls over companies artificially setting prices, saying the ministry had set up groups of inspectors to check large steel and gas companies next week.
"Managing prices will be a key task in the final months of the year," he said.
A set of financial and monetary measures would also be carried out to curb inflation, Trung said.
The CPI has increased 6.19 per cent since December, according to the General Statistics Office. Inflation can increase by no more than 0.4 per cent per month over the rest of the year to keep inflation for the whole year below the GDP growth rate.
Source: Vietnam News
Vietnam’s economy remains healthy despite price storm
Vietnam’s economy remains healthy despite price storm
Economist Nguyen Dinh Bich said that one of the most important and urgent tasks for the coming months was to curb inflation. However, he said that despite the high CPI, Vietnam’s economy remained in good health, and there was no need to be too worried.
In an article published in Saigon Tiep Thi newspaper, Economist Nguyen Dinh Bich, Expert from the Institute for Trade Research, said that the national economy remained in good condition.
“No one can deny the necessity of curbing the inflation rate, as the price hike has been badly affecting 60% of the population which has low income. However, the national economy will remain healthy if the government can keep the CPI growth rate lower than the GDP growth rate. It would be okay even if the inflation rate is a bit higher than the GDP growth rate,” Mr Bich said.
In fact, the price increase is the problem of the whole world, as material markets are seeing continued fever with price escalations setting a series of 27-year records.
In April, both the World Bank (WB) and the International Monetary Fund (IMF) predicted that the oil price would reduce rapidly, while non-oil material would not skyrocket by 20-40% as seen in 2004-2006, but would just move by another 4.2-6.2%. However, both WB and IMF were wrong. The crude oil price in July hit the $73.6/barrel level, exceeding the peak of $72.45/barrel in 2006, setting a 27-year record. Meanwhile, the prices of other non-oil materials including aluminium, iron ore and wood have been escalating. The material price increases, of course, are not good for Vietnam, an economy that relies on material imports (accounting for 65-70% of total import turnover, and 50% of GDP).
In order to curb inflation, the government has instructed its ministries to initiate measures to raise supply and control prices. The government has also decided to lower import taxes in order to make goods cheaper on the domestic market.
Despite the big challenges, Mr Bich said that the national economy remained in good health, citing two factors to prove his viewpoint.
First, the price level in Vietnam is low; therefore, it is inevitable to see prices increase in the context of global economic integration.
If looking back at the development histories of other nations, one can see that those countries also had to experience such a stage of development. For example, in order to get the high economic growth rates in the last 10 years, giant China had to experience five years (1992-1996) of witnessing CPI booms. The lowest CPI growth rate was 6.4% in 1992, while the highest was 24.1% in 1994, which means a 13.9% growth rate per annum.
Second, the index that measures the health of the national economy shows good signs. It is the ratio between the GDP growth rate and the CPI growth rate. If comparing the GNI (Gross National Income) of Vietnam and other nine countries over the last six years, the ratio of Vietnam is 0.7, just higher than Cambodia (0.35), India (0.62), and lower than seven other countries (the highest was 0.84 and lowest 3.53).
If only comparing the GNI for the last three years, which witnessed the biggest price increases, the ratio would be 1, the same as Pakistan (which has the same development level as Vietnam), but Vietnam has the higher GDP growth rate (8.13% vs 5.26%).
In general, high economic growth rate always results in high inflation rate, especially as the world’s prices keep escalating. And the price Vietnam has to pay for the development is acceptable.
Therefore, Mr Bich said that curbing inflation should not be seen as the ‘supreme’ task, and it would be fine even if the task could not be fulfilled. The government should think of another important task: seeking solutions to support low-income earners and protect them from the price hikes.
Source: Sài Gòn Tiếp thị
ASEAN’s investment in Vietnam below potential
ASEAN’s investment in Vietnam below potential
Prime Minister Nguyen Tan Dung today begins his visit to five member countries of the Association of Southeast Asian Nations (ASEAN): Brunei, Indonesia, Myanmar, the Philippines and Singapore.
This is the first official visit to ASEAN countries by PM Nguyen Tan Dung and is also a visit under the routine of this organisation. The visit is more meaningful since it happens at the same time as the 40th anniversary of ASEAN (8/8/1967 – 8/8/2007).
Vietnam and the five member countries of ASEAN, Indonesia, the Philippines, Singapore, Myanmar, and Brunei, have developed cooperative relations in various fields. The visit by PM Nguyen Tan Dung aims to strengthen and promote those relations, especially in the fields of economics, trade and investment.
At present, all ASEAN member nations have invested in Vietnam, except for Myanmar. According to statistics of the Ministry of Planning and Investment (MPI), among ASEAN member countries, Singapore has the most investment in Vietnam with 474 projects and US$9.07 billion of investment capital, ranking second among 78 countries and territories investing in Vietnam.
Following Singapore is Malaysia with 219 projects, $1.7 billion of capital, ranking 10th; the Philippines, with 30 projects worth $247 million; Indonesia, 14 projects worth $137 million; and Brunei, with 37 projects worth $125 million.
Singaporean investors are involved in most economic sectors of Vietnam, from oil and gas exploration and exploitation to industrial production and fisheries, agricultural and forestry processing. However, they are most keen on the service field, with 207 projects totalling $5.5 billion of investment, accounting for 60.7% of the total registered capital, followed by industry and construction with 230 projects and $3.3 billion, accounting for 36.4%; agriculture-forestry-fisheries with 37 projects and $254 million of capital.
Many Singporean-invested projects are running very effectively, including the Vietnam-Singapore Industrial Zone, a joint venture between the Trade and Investment Company and the Vietnam Singapore Industrial Park Pte.Ltd (VSIP), with total investment of more than $139.1 million. The Vietnamese side holds 49% of capital and the Singaporean partner, 51%.
Malaysia is one of the ten top countries and territories investing in Vietnam. Malaysian projects mainly focus on industry with 140 projects worth $1.19 billion of registered capital, followed by services with 47 projects worth $336 million and agriculture-forestry-fisheries with 32 projects worth $208 million.
However, investment into Vietnam by Malaysia is below the potential for cooperation between the two countries. Most Malaysian-invested projects in Vietnam are small ones.
Investment from the Philippines, Indonesia and Brunei into Vietnam is also quite modest.
According to the Foreign Investment Agency under the MPI, the Philippines currently has 30 projects worth $247 million of registered capital in Vietnam, $85.9 million of which has been disbursed. This country’s projects are mainly in the field of industry with 14 projects and $157.4 million, accounting for 63.5% of total investment capital, and agriculture with 8 projects worth $88.8 million. The service sector accounts for a small amount of capital with 8 projects and $855,000 only.
Indonesia has 13 projects in Vietnam totalling $130 million, including 11 projects in industry worth $73.8 million (accounting for 56% of total capital), three in services worth $63.7 million, and no project in agriculture.
Brunei invests in 37 projects worth $125 million. Like the two above countries, Brunei’s investment focuses on industry with 31 projects and $116 million, accounting for 92% of the total capital. Agriculture and services account for a small proportion with five projects and $9.6 million for agriculture and one project worth $120,000 in services.
To further attract investment from ASEAN countries, especially potential partners, Vietnamese authorities are checking and classifying projects from ASEAN to create suitable supportive measures.
For example, Vietnam gives priority to accelerating the implementation of Singaporean projects. The Ministry of Planning and Investment of Vietnam and the Singaporean Economic Development Agency are adjusting the rapid agreement mechanism on granting investment certificates.
In the relations with Malaysia, the two governments have approved the establishment of an agency to support Malaysian-invested projects that have investment certificates already but are facing difficulties in operation.
Vietnam plans to attract Malaysian investment in oil and gas, metallurgy, chemicals, hotels and new residential area construction, timber processing, food processing, aquaculture and seafood processing, education and training, including short-term vocational training for labourers to be exported to Malaysia.
Regarding investment partners, besides Malaysian companies, Vietnam wants to attract big groups investing in Malaysia to come to Vietnam in an effort to bring Vietnam into the production system of multinational companies in the region.
Another measure that is being performed to promote investment cooperation between Vietnam and ASEAN member countries is encouraging and assisting the investment of Vietnamese companies in ASEAN countries through diplomatic representative agencies of Vietnam in ASEAN nations in the forms of workshops, information exchanges and organising business visits.
Source: Thời báo Kinh tế Việt Nam