Banking & Finance
- Hanoi's banks report fast credit growth in Q1
- Govt bond auction falls short of expectations

Investment
- Norfolk finds its diamond in the sand

Import - Export
- Shrimp exporters required to pay bonds for U.S. market entry
- Vietnam textile sales up in U.S., Japan, down in EU
- MoF keeps up import taxes on steel ingots
- Handicraft export seeing no more increase

More business news
- Private sector likely to be allowed to build seaports
- HCM City to deregister ten travel firms
- Prudential announces profit after 5-years in VN

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Banking & Finance

Hanoi's banks report fast credit growth in Q1

The Hanoi-based commercial banks reported a sustainable credit growth rate in the first quarter of the year, giving them a nationwide lead in deposits and making the capital second only to Ho Chi Minh City in outstanding loans.

Hanoi reported total deposits of VND183 trillion (US$11.6 million) in the first three months of 2005, an increase of 20.16% on the same period last year.

According to the State Bank of Vietnam, the growth in the capital's deposits, which comprised one-third of the nationwide total, is partly a result of various measures intended to augment the position of Hanoi's banks, including promotional campaigns, interest rate hikes and general improvements in service quality.

Due to a high demand for funds among companies, the capital's banks also provided outstanding loans totalling VND99 trillion (US$6.27 million), indicating a yearly rise of 24.6%.

Of this amount, short-term loans made up VND55.7 trillion, while medium- and long-term loans accounted for VND42.3 trillion. The rising demand for funds is expected to maintain strong credit growth in the forthcoming quarters. (VNA)

Govt bond auction falls short of expectations

An initial public offering (IPO) auction for Development Assistance Fund bonds fell short of economists' expectations on Tuesday.

Only VND35 billion (US$2.2 million) out of an offering of VND200 billion (US$12.7 million) was sold at the Hanoi Securities Trading Centre.

Interest rates for the five-year maturity bonds were posted at 8.6% and 9.1% for the 15-year maturity.

Before the auction, a recent survey conducted on 30 financial institutions by the Hanoi Securities Trading Centre found that DAF bonds were attractive to investors because the bonds and the interest generated are guaranteed by the Government.

Nguyen Manh Tuan, who represented the Hanoi Securities Trading Centre, said that despite the small number of bonds sold, the auction was still considered successful given rising interest rates at commercial banks.

Next week, the Hanoi stock exchange will auction another batch worth VND300 billion in DAF five-year, 10-year and 15-year maturity bonds.

Currently, more than 200 types of Government bonds at a total value of VND20 trillion (US$1.26 billion) have been listed on the HCM City exchange. The DAF bonds will be listed on the stock market in June, said Tran Van Dung, director of the Hanoi Securities Trading Centre. (VNS)

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Investment

Norfolk finds its diamond in the sand

The Australian-owned Norfolk Group will take over the management reins at the Sandy Beach Resort in Da Nang from May, marking the company's first foray into resort management.

A joint venture of Ben Thanh Tourist and Da Nang Tourist Co., Sandy Beach is about 15 minutes from Da Nang airport and spans 16 hectares of land, including beach frontage of the coastline internationally known as China beach.

About US$5 million will have been spent on developing the property by the time of handover next month. Sandy Beach Resort's first phase development includes 30 split bungalows, 123 rooms, tennis courts, food and beverage services, and conference facilities on six hectares.

"Sandy Beach Resort is a diamond in the rough in a relatively untouched and secluded area, surrounded by pines. The land is ideal for back-to-basics relaxation and has a great outlook onto China beach," said Voughn Nguyen, the group's marketing director.

Norfolk currently manages and has interests in the Norfolk Hotel, Norfolk Mansions serviced luxury apartments, Project Design Building, and Colonnade office building in Ho Chi Minh City.

Nguyen said the group will focus on accommodating niche travel markets, and had appointed a specialist resort general manager from the Maldives to take the helm at the resort, as well as an international chef to revamp its food and beverage services.

The marketing director added that Norfolk, a consultation, investment and management company operating in Vietnam since 1991, was also working on plans to develop a 27-hole golf course and apartments for sale in HCM City. (VIR)

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Import - Export

Shrimp exporters required to pay bonds for U.S. market entry

Vietnamese shrimp exporters to the U.S., already suffering from an anti-dumping duty imposed by the U.S. last year, now face a more onerous trade burden under a new U.S. customs requirement.

The Ministry of Fisheries announced last week that Vietnamese exporters will be required to pay bonds to U.S. insurance companies to insure payment of the exporters' anti-dumping duties to the U.S. Customs. These bond payments are required to gain entry to the U.S. market.

The new regulation, issued by the U.S. Customs and Border Control, comes after pressure from the U.S. Congress.

The formula used by the U.S. Customs sets the bond at an amount equal to the exporting country's current anti-dumping rate multiplied by the gross amount of business done by the exporter in 2004. However, refund of the bond payments may take several years, and would hurt small and medium-sized shrimp enterprises in Vietnam, said a Ministry of Fisheries spokesman.

Thus, for Vietnam shrimp exporters as a whole, the 4.58% anti-dumping rate on shrimp, multiplied by the US$420 million in Vietnamese export receipts in 2004 for shrimp, would equal a total bond value of US$20 million. Vietnamese exporters would receive refunds after the U.S. Department of Commerce reconsiders the shrimp anti-dumping rates in August 2007.

In all likelihood, Vietnamese companies would not be able to get the sum back if the U.S. raises shrimp anti-dumping duties in 2007, according to the Vietnam Association of Seafood Exporters and Producers (Vasep).

Vasep deputy general secretary Pham Dinh Hoe said since February the volume of Vietnamese shrimp exports to the U.S. had fallen significantly compared with the same period last year. (VNS)

Vietnam textile sales up in U.S., Japan, down in EU

Vietnam's textile sales rose in the U.S. and Japanese markets in this year's first quarter, but dropped substantially in the European Union, even though the EU removed quota restrictions on textile imports.

In the first three months, the country's textile exports to the U.S. and Japan surged by as much as 5%, while sales were down roughly 12% in the EU market, the Vietnam Textile and Apparel Association (Vitas) said at a seminar Apr. 19.

The textile industry saw healthy growth in exports to the U.S., which still retains quota limits, as Vietnam has given a large number of export quotas in "hot" categories, said Le Quoc An, Vitas chairman.

Japan does not impose quota curbs on textile imports from Vietnam.

Meanwhile, although the EU has abolished quotas on Vietnam's textiles since Jan. 1, 2005, exports to this market slipped because of the low competitiveness of Vietnamese products, An said.

The industry has also been struggling to boost exports to the European market as the EU began tax incentives for imports from the tsunami torn countries of Indonesia, Bangladesh, and Sri Lanka as of Apr. 1. The country's textiles are still subject to a 14% tariff rate on average in the EU market.

In the first quarter, the country's textile exports reached US$950 million, up 8% from the same period last year. However, the figure failed to beat the set target of 12%. (TN)

MoF keeps up import taxes on steel ingots

The Ministry of Finance (MoF) will not reduce import tax of 5% levied on steel ingots in order to encourage domestic enterprises to produce them, said Dr. Quach Duc Phap, head of the Department of Tax Policies.

The intention to promote the domestic production of steel ingots is in itself expected to alter the fact that up to 80% of steel ingots is imported, said Phap.

Moreover, a survey of the production capacity of each producer must be conducted before any tax adjustment can be made, he added.

The MoF recommended that the steel industry should have a strategic view and try to push up domestic production in order to control steel prices, instead of relying on the State's tax cut.

President of the Vietnam Steel Association Pham Chi Cuong said the association and the Ministry of Industry have asked for the removal of import taxes on steel ingots because many big producers are facing heavy losses because steel prices have risen in the world market.

Many experts agreed with the MoF's view that steel is an important product so a change in its prices and taxes must be considered carefully to avoid causing troubles for the domestic economy.

Experts said the steel industry as well as some other major industries should improve their distribution systems to control market prices and not just respond passively to world price fluctuations. (VNA)

Handicraft export seeing no more increase

Export turnover of handicrafts has stopped rising according to the Ministry of Trade. Export turnover of these products in the first quarter of this year rose by only 2.9% above last year's same period. The figures for year 2004 and 2003 were 14.9% and 11% respectively.

Experts become concerned that the sector will probably not able to reach the goal of an export turnover of US$500 million this year due to low competitiveness and prestige.

Such weaknesses result from poor models and higher prices than similar products from other countries in the region. Furthermore, manufacturers have not thoroughly known what consumers want while exporter's just attaches attention to low buying prices and easy profits.

Experts said handicraft enterprises should improve competitiveness of their products by spending more money improving models and quality, rising productivity as well as cooperating with each other to form joint-stock or joint-venture companies so as to better attract investment in production line and technology. (Vneconomy)

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More business news

Private sector likely to be allowed to build seaports

The private economic sector in Vietnam will be likely allowed to invest to build seaports, according to a meeting to discuss a draft of the Maritime Law in Hanoi on Monday.

Under the draft Maritime Law, seaports in Vietnam will be classified into national, local and other ones.

The Government will decide upon the form of investment into national ports, while investment into local ports will be governed by local authorities, said the draft law, which was discussed by the National Assembly Standing Committee.

All economic sectors, including the private sector, will be allowed to invest and develop coastal potential spots into ports, according to the draft law, which will be put forward for approval later this year by the National Assembly, Vietnam's legislative body.

At the meeting, many NA deputies, however, voiced their concerns over the classification and governance of ports.

One deputy commented that without a uniform master plan for port development, there was the possibility of a "rush" of incongruous port development before identifying which are needed.

Ports must be divided into national ones and international ones, said another deputy, pointing out that it was not clear what central or local authorities would operate international and regional ports. (TN)

HCM City to deregister ten travel firms

The HCM City Department of Tourism will ask the Department of Planning and Investment to deregister 10 travel companies for failing to make the regulated bank deposits, said a department official.

"Even though they have been penalized already, these enterprises have refused to comply with the rules," explained Nguyen Thi Khanh from the Department of Tourism.

By law, a travel firm must make a VND50-million bank deposit for operating tours within Vietnam and a VND250-million bank deposit for outbound tours. The money should be there to compensate clients and business partners when things go wrong.

As the last long vacation was approaching, many travel firms started up sub-standard tours and even billed tourists and other companies for services that failed to materialize, she pointed out.

The department is also checking the operators of tours into and out of Vietnam, many of which are unlicensed, even some of the foreign-owned ones.

In the department's estimate, barely 300 of the city's 6,000 registered travel businesses stick to the regulations.

Specifically, Khanh said there are 119 inbound-tour operators, 165 outbound-tour operators (10 of them being joint ventures with Japan, France, the Republic of Korea, Hong Kong, Singapore) and 28 representative offices of foreign companies on the department's good books.

The list of ten deregistered travel firms. (SGT)

Prudential announces profit after 5-years in VN

Prudential Vietnam has announced a profit for the first time after five years of operation in Vietnam. The UK life insurance company said Monday that it had made a profit of VND61 billion (US$3.85 million) last year.

General director Huynh Thanh Phong said Prudential's success reflected the company's commitments to a long-term investment in Vietnam, as well as its effective business strategy and its efforts to provide Vietnamese clients with the best quality of service.

Statistics released by the Ministry of Finance indicated that Prudential's insurance premiums reached over VND3.1 trillion last year, making up 41% of the domestic insurance market. Prudential continues to lead the insurance industry in terms of market share, number of customers and premiums. Prudential Vietnam now boasts nearly 70 branches, offices and customer care services in nearly 50 localities nationwide. (VNA)

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