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Vietnam-world’s most dynamic bank card market

9/12/11  english.vietnamnet.vn

Vietnam is considered the most dynamic market for banking cards with an annual growth rate of 18.5 percent until 2014, announced the US-based Research and Markets company.
The assessment was made at the 2011 ASEAN Banker Forum, jointly held by the International Data Group (IDG), the State Bank of Vietnam (SBV), and the Vietnam Banking Association and Deposit Insurance of Vietnam, in Ho Chi Minh City on December 7.

The number of payment cards in Vietnam, which are widely accepted at more than 12,000 ATM and 50,000 POS nationwide, has more than doubled from14,7 million in 2008 to 33 million this year.

Meanwhile, 20 banks utilize internet banking and 8 banks offer mobile banking services, according to the SBV.

Karolyn Seet, an analyst at Moody’s Investors Service in Singapore, said Vietnam has great potential for developing the retail credit market retail banking expected to grow at 30-40 percent.

The forum featured one keynote address entitled “Overview of Retail Banking Market and Key Technology trends that will matter in 2012” with one panel discussion of “Initiatives and Suggestions for Future Growth of Retail Banking in Vietnam” and three sessions entitled “Transforming Technology Infrastructure Towards a Service-oriented Banking Sector”, “Enhancing Market and Customer Insights Towards a More Effective Strategy for Retail Banking”, and finally, “Retail Payments: facing the challenges”.

The forum also included a special panel discussion with the theme Retail Payments & Channel Management for Retail Banking Services focusing on non-cash payment methods for retail banking with experiences shared by leaders of major regional financial companies.

Vu Bich Ngoan, Chairman of the National Financial Supervisory Commission, said the retail banking services in Vietnam are still very limited while there is a huge and increasing demand from people wishing to use these services.

An exhibition showcasing products, services and new solutions provided by banks and technology companies was also held as part of the event.

ASEAN banking forum opens in HCM City

The ASEAN Bankers’ Forum 2011 opened in Ho Chi Minh City on Dec. 7 under the theme, “Retail banking: Identifying key successful factors and the role of technology in building competitive advantages”.

The two-day forum was organised for leaders in banking and finance sectors, and IT suppliers for the banking sector from Japan, India, Thailand, Singapore, Cambodia, Laos and host Vietnam to share experiences and discuss key issues.

The discussions focus on developing retail banking, opportunities and challenges, key successful and decisive factors for retail banking infrastructure and service, as well as IT solutions for creating a competitive advantage.

Vu Viet Ngoan, Chairman of the National Financial Supervision Committee, said Vietnam is considered as a promising market in retail banking with a dynamic young population and IT development level.

Vietnam has 33 million payment cards, over 12,000 ATMs together with 50,000 points of sale. Over 20 banks use internet banking and eight banks have mobile banking service at different levels.

Nguyen Van Dung, Deputy Director of the State Bank of Vietnam Ho Chi Minh City branch, said in the next five years, Vietnam forecasts an annual average growth of banking deposits of 22-30 percent, credit and capital supply service, 20-25 percent, payment via banks, 30-35 percent and card payment, 30-40 percent.

Stiff competition to hit rice exports next year 

Viet Nam did very well in rice exports this year, but next year is going to be a tough one with unpredictable changes in the world market and stiff competition from cheap rice sources in India, Pakistan and Myanmar, the Viet Nam Food Association (VFA) said.

Speaking at a meeting held in Tiêen Giang Province yesterday, VFA general secretary Huynh Minh Hue said local businesses exported more than 6.7 million tonnes of rice for a free-on-board (FOB) value of US$3.29 billion in the first 11 months of the year.

This represented a year-on-year increase of 7.59 per cent in volume and 23.3 per cent in value, he said.

The average FOB price in the period was $488.6 per tonne, up $62 over the last year.

However, Viet Nam’s rice trade has been stagnant recently under the pressure of cheap rice sources from India and Pakistan, Hue said, noting that commercial rice export contracts reduced strongly last month, with only a few signed for fragrant and glutinous rice.

“World rice market is at a special stage and has four different price levels now,” Hue said.

Thailand is offering 5 per cent broken rice at $800 per tonne under the Government’s scheme to ensure higher minimum prices for farmers and $600 per tonne for stockpiled rice.

Viet Nam’s 5 per cent broken rice is traded at $550 per tonne while a tonne of 5 per cent broken rice from India and Pakistan are priced at $440-450.

Myanmar is also a competive rice source with its price even cheaper than that of India and Pakistan.

“Due to a big gap in prices among supply sources, many importing markets, especially in Africa, have shifted to rice from India and Pakistan, except for contracts that have strict quality requirements and quick delivery times,” he said.

Hue said the Thai Government will continue its scheme to buy rice from farmers at higher prices, but the move has not had the expected impact on world rice prices since Thai exporters have huge reserves and need to sell them.

Despite stable supply and competitive quality, Viet Nam cannot compete with India and Pakistan in the export of low-grade rice since the latter offer very low prices.

However, regarding fragrant rice exports, Viet Nam is expected to gradually take over this segment from its Thai rivals in certain markets thank to its competitive prices and good quality, said VFA chairman Truong Thanh Phong.

Le Truong Son, general director of Dong Thap Trading Corporation, said with huge losses caused by the historic flooding floods, Thailand would reduce its exports next year. Viet Nam should tale steps to fill this gap, he said.

Meanwhile, China is emerging as a potential market for Vietnamese Jasmine rice, Phong said.

He said that VFA would organise trade promotion programmes in China and work with Chinese counterparts to set up a China-Viet Nam Business Club to boost exports to the lucrative market.

The Philippines will also import rice next year, and one of the exporters may be Viet Nam, Phong said, adding the VFA will keep a close watch on this development and pass on appropriate directions to its members.

Vietnamese enterprises had signed contracts to export 7.35 million tonnes of rice from the year to November-end, meaning another 617,000 tonnes had to be shipped in this month and earlier this year.

Phong said local traders have currently reserves of 1.14 million tonnes stored in warehouses plus output from the autumn-winter harvest, meaning that the stockpile for the first quarter of next year is expected to exceed one million tonnes, much higher than last year.

Le Minh Truong, director of the Can Tho-based Song Hau Food Co., said with the increase in supply from India, Pakistan and Myanmar at “attractive” prices, Viet Nam will certainly be affected.

It is important that enterprises and farmers prepare for this situation psychologically as the current high prices are not likely to last, he said

Mexico, Viet Nam examine free-trade agreement 

During a visit to Mexico last week, Nguyen Thi Kim Ngan, Vietnamese National Assembly Vice Chairwoman, met with Senator Alberto Anaya Gutierrez, General Secretary of the Mexican Labour Party, to review the friendship between the two countries.

Gutierrez suggested Viet Nam and Mexico consider negotiating the signing of a Free Trade Agreement which he believed would help tighten the ties between the two countries.

While reviewing achievements of agricultural co-operation projects between the two countries, he also said that some Mexican States, including Sinaloa, Guerrero and Baja California Sur, wished to learn from Viet Nam’s experiences in seafood farming and breeding.

With regard to the East Sea conflict, Gutierrez reaffirmed his support for Viet Nam’s position on the issue.

Later in Ha Noi yesterday, General Nguyen Van Rinh, chairman of the Viet Nam Association of Agent Orange/Dioxin Victims, received 120 wheelchairs donated by Gutierrez and a group of Mexican senators and members of the Labour Party.

Ministry vows to tackle petrol fraud

At a meeting on December 5, he instructed the municipal Department of Market Control to coordinate with petrol companies in order to monitor sales at the retail level.

Huynh Khanh Hiep, Deputy Director of HCM City’s Department of Industry and Trade,  said that after the Department of Science and Technology found some dealers selling poor-quality gasoline, they have resolved to tighten sanctions to reduce fraud. “The licenses of violators will be withdrawn for 6 months,” he said.

A representative from the Vietnam National Petroleum Group (Petrolimex) said at the meeting that the fraud exists mainly in HCM City and the Mekong Delta region, and is less likely to occur in the north because high transportation fees lessen the price difference between different types of fuels.

The HCM City’s Department of Science and Technology recently announced a list of 11 dealers that have been selling substandard gasoline. The violators were detected during a joint inspection with the department’s inspectorate agency and the municipal Department of Market Control, which lasted from September 27 to November 16.

There have been 55 unannounced inspections on retailers around the city. It was found that 16 out of 32 gasoline samples failed to meet the national technical standards. Samples of A92 petrol had the highest percentage that failed quality tests, with 11 out of 16 samples not meeting standards. The rate for A95 was 50%.

Many fuel dealers claim to sell A82 gasoline while calling it A92. Most of the samples taken ranged from A82 to A90, officials said. They added that this type of fraud has been going on for years.

Gas shortfall may cost EVN trillions to turn on oil-fuelled electricity generation

The state-owned Electricity of Vietnam Group (EVN) may have to spend as much as VND18 trillion (USD856.7 million) on oil-fuelled power generation next year.

The move is expected to ensure the country’s power supply amid forecasted declines in gas supplies for electricity production in 2012.

According to Deputy Minister of Industry and Trade Tran Quoc Vuong, EVN may fall short of one billion cubic metres of gas for power generation next year as the state-owned Vietnam National Oil and Gas Group (PetroVietnam) may only be able to supply 5.7 billion cubic metres for EVN during the year.

In a bid to help ease EVN’s financial difficulties, the ministry has requested PetroVietnam to try to increase gas production in order to supply from 6.5-6.6 billion cubic metres in 2012 to EVN.

An anonymous PetroVietnam official said EVN preferred gas from the Nam Con Son-Bach Ho fields due to cheaper prices. Even though gas from PM3-Ca Mau is more readily available, gas sales are modest because of higher prices.

EVN is concerned about the possibility of increased losses as a result of their turn to oil-fuelled power generation.

The group’s recent report showed that it had incurred losses of VND6.5 trillion (USD309.3 million) from oil-fuelled power generation last year.

Russian investment in VN to increase 

Russian investment in Viet Nam would increase significantly after Russia officially joined the World Trade Organisation late this month, said deputy head of the Ministry of Industry and Trade’s European Market Department Dang Hoang Hai.

In the past, many Russian enterprises showed an interest in investing in aircraft assembly and repair in Viet Nam but they failed to do so, Hai told Dau Tu (Vietnam Investment Review). After Russia joins the WTO, Russian firms would surely have more confidence to invest in these sectors in Viet Nam due to the similar and favourable investment conditions in the two countries.

In addition to the aviation industry, Russian businesses have also expressed an interest in enhancing their presence in nuclear energy, oil and gas, communications, agriculture, automobiles, and equipment for mining, construction and electricity sectors.

During the fifth session of the Trade and Investment Sub-Committee under the Viet Nam-Russia Intergovernmental Committee for Economic, Trade, Scientific and Technological Co-operation held in Moscow in October, the Russian delegation urged the Vietnamese Government to further facilitate Russian investment in the country.

Russia invested US$38 million in five new projects in Viet Nam during the first 11 months of this year, according to the Ministry of Planning and Investment.

The latest addition has brought total Russian investment in the country to $930 million to date, the ministry said, adding that these figures, still lagged behind the potential.

Inefficient agri projects halted 

The Mekong Delta Kien Giang Province People’s Commitee has put a stop to 13 agricultural projects due to poor operation.

The projects, covering a total area of nearly 3,000 ha, received approval to develop the farm economy and aquaculture in the Hon Dat, Kien Luong and Ha Tien townships during 2004-07.

Only 10 out of the 13 ventures managed to obtain land right certification while 4 subleased over 143,000 ha for personal benefit.

Most failed to establish effective operations, build infrastructure or cultivate land.

To date, the committee has returned around 360ha of revoked land to authorities in Hon Dat and Kien Luong.

Banks compete for year-end deposits 

Banks in HCM City are competing fiercely to raise capital through promotion programmes to meet rising market demand towards the end of the year, industry insiders say.

They say it is normal that most commercial banks face liquidity problems in last months of the year because the market’s capital demand often increases significantly at this time.

However, the problem appears to be more acute this year because the central bank has asked commercial banks to strictly apply a 14 per cent deposit interest cap.

To improve their liquidity, most banks have launched promotion programmes to keep old customers and attract new ones.

The Saigon Thuong Tin Joint Stock Commercial Bank has started a promotion programme with gifts and prizes valued at a total of VNÑ18 billion (US$857,000) that will given to depositors in both Vietnamese dong and the US dollar.

A VNÑ9 billion ($428,000) promotion programme is being implemented by the Vietnam Property Joint Stock Commercial Bank (VPB) while the Hanoi Housing Development Bank (Habubank) is set to spend money equivalent to 10 taels of gold.

Many other banks, namely VietinBank, BaovietBank, HDBank, TrustBank and SCB, have also launched similar promotion programmes that offer attractive gifts and prizes to depositors.

Given the tight monetary policies in place at present, promotion programmes are considered an effective way to raise more capital from the public. But it is not as easy as it looks, market analysts say.

The scale of the promotion programmes would depend on the relative strengths of the banks. Banks with a strong capital base and a wide network tend to have more attractive gifts or prizes, and consequently, are often the winners in this year-end competition.

The deputy general director of the Maritime Joint Stock Commercial Bank (Maritime Bank), said mobilising capital at this time was a really difficult task, especially for small ones like his.

He said the promotions that have been launched recently have had some positive effect, but not as much as expected, Ñöùc said.

In strictly implementing the deposit interest rate cap, big State-owned banks have more advantages than smaller commercial banks, Ñöùc said.

Nguyen Tri Hieu, former general director of Deutsche Bank in Vieät Nam, told the VnEconomy newspaper that in general the entire banking sector’s liquidity was stable, but the situation looked more serious for smaller banks.

Vietnam, Belgium boost financial cooperation

Finance Minister Vuong Dinh Hue had a working session with Belgian Deputy Prime Minister and Finance Minister Didier Reynders in Brussels on Dec. 6.

At the working session, which is part of National Assembly Chairman Nguyen Sinh Hung’s visit to Belgium , Minister Hue congratulated Minister Reynders on being appointed as Foreign and Trade Minister in the new Belgian government.

He spoke highly of Minister Reynders’ support to Vietnam, expressing hope that in his new position, Minister Reynders will continue to make contributions to Vietnam-Belgium relations, support the signing of the Vietnam-EU Partnership and Co-operation Agreement (PCA) and speed up negotiations for the Vietnam-EU Free Trade Agreement.

Minister Hue also informed his host about Vietnam ’s socio-economic situation, its macro-economic policy and its plans for development and economic restructuring.

The two ministers exchanged experience in public debt management, fiscal policy and the Belgian experience in joining the EU, which Vietnam may relate to its plans to join the ASEAN Economic Community in 2015.

Minister Reynders affirmed that in his new position, he will continue to support Vietnam in boosting cooperation with Belgium and the EU as well as intensifying financial, investment and foreign relations with Vietnam .

Minister Hue pledged Vietnam will do its best to strengthen the close relationship between the two Finance Ministries, support Belgian businesses to invest in Vietnam and contribute to building the Vietnam-Belgium partnership.

The same day, Minister of Transport Dinh La Thang had a working session with Minister of Transport of the Dutch-speaking community in Belgium , Hilde Crevit.

The two sides reviewed and highly valued the results of the cooperative agreement signed between them in 1995, which was signed again in 2010.

The two sides agreed to cooperate in research and implement investment projects in transport as well as plans to train personnel in Vietnam ’s transport sector.

On Dec. 7, Minister Thang paid a working visit to Liege province.

Retailers commit to hold line on prices 

Many companies in HCM City have committed to keep prices of essential goods unchanged and to ensure adequate supply for Tet (lunar new year), the biggest consumption season in Vietnam.

The companies, which are participating in the city’s goods stabilisation programme, reiterated their commitment during a meeting with the city’s Department of Industry and Trade and the HCM City Food and Foodstuff Association on Tuesday.

Price hikes normally occur ahead of Tet in the consumer goods market, which is also flooded with counterfeit products during this time.

This year’s price stabilisation programme for essential goods was set in place in June with 22 businesses participating in it, eight more than last year.

Reserves of Tet goods under the programme are estimated at 30-40 per cent of the market’s demand, roughly 20 per cent higher than the amount kept for last year’s holiday season, according to the department’s deputy director, Le Ngoc Nam.

Most of the participating businesses have already stocked their reserves for the Tet season, according to the department.

The total investment in this year’s price-stabilisation programme is VND412 billion (US$19.6 million), 89 per cent of which has been spent on stocking goods for Tet

Participating companies have increased production and maintained their prices.

The Saigon Beverage Corporation (SABECO), for instance, has increased its productivity by 17 per cent in the last three months of the year compared to the corresponding period last year, its representative Le Tho Hoa said at the meeting.

SABECO has committed to provide 1.2 billion litres of beer for the Tet season at unchanged prices.

The Tan Quang Minh BIDRICO, which provides soft-drinks and other beverages, has also committed to keep their products’ prices unchanged and ensure supplies of more than 50 million litres.

Meanwhile, city authorities have beefed up surveillance of the consumer goods market ahead of Tet to make violations , including price fluctuations, are kept to a minimum.

There are nearly 3,000 retail outlets selling goods under the price stabilisation programme in HCM City.

Myanmar- VN trade rises 48% 

Two-way trade between Vieät Nam and Myanmar rose 48 per cent to US$135 million during the first 11 months of this year, according to the Vietnamese Trade Office in Myanmar.

During the period, Vieät Nam exported $65 million worth of products to Myanmar, up 99 per cent year on the previous year, helping Vietnam become Myanmar’s 14th biggest exporter.

Among Vietnam’s key exports were steel, garments, textiles and accessories, medicines and medical equipment, construction materials, electronic appliances, tubes and tyres, machine spare parts, chemical fertilisers and machinery components.

From January to November, Vietnam mainly imported agricultural and seafood products from Myanmar, worth $70 million, making the country Myanmar’s 11th biggest importer.

Last year, the country earned $47 million from exports to Myanmar. Two-way trade in 2010 increased 60 per cent compared to the previous year.

Vietnam expects exports to Myanmar to increase due to improving economic co-operation between the two countries. Myanmar is considered a promising market due to its relatively large 54 million population.

Vietnamese authorities have produced a handbook on Myanmar detailing foreign trade and tax policies, transport networks and legal procedures for imports and exports.

Inflation to stay around another year 

The inflation rate may fall to one digit in the third quarter of 2012, a significant drop from the peak of around 23 per cent in last August, according to a representative of Standard Chartered Bank (SCB).

Tai Hui, SCB’s regional head of research in Southeast Asia, said at a seminar yesterday that the rate might reach 21 per cent for this year’s fourth quarter, then fall to 17 per cent in the next first quarter, and 10.9 per cent in the second.

The third quarter will see the first one-digit inflation rate, at 8.9 per cent, then drop to 7.9 per cent in the fourth quarter of 2012. However, the average rate for the year will be at 11.3 per cent.

Building materials, equipment shown

The 5th international machinery and construction materials trade fair opened in HCM City yesterday.

ConBuild 2011, which runs until Saturday, has attracted 180 companies in construction, building and mining machinery and materials, vehicles, and technology and services from Germany, Korea, China, India, and Vieät Nam exhibiting their products.

Work begins on City apartment project

Work began on Tuesday on a US$40 million apartment project in HCM City’s suburban District 9 by HVK, a joint venture between Huøng Vieät Construction and Investment Company and KRDF 03, an investment fund managed by the Korean Investment Management Company.

The Eastern Project, being developed on a 1.5ha land lot in Phuù Höõu Ward, will offer 648 apartments measuring 56-112sq.m when completed in 2013.

Koreans gaze into communications 

Korean specialists spoke about new digital communications trends in areas such as smart TV, pay television, and mobile phones as well as information security solutions at a forum held in HCM City on Monday. The forum was organised by the Korea Internet and Security Agency and the Government’s Vieät Nam Computer Emergency Response Centre.

Confab promotes Mideast trade 

The advantages and challenges of bilateral relations between Vietnam and the Middle East came under the spotlight at a conference yesterday in the southern province of Ba Ria-Vung Tau.

Speaking at the event, deputy head of the the Ministry of Industry and Trade’s Africa – Western Asia – Southern Asia Department Le Thau Hoa outlined crude oil, tourism, labour, and science and technology as promising sectors for bilateral co-operation in the future.

Last year, Vietnam exported US$1.65 billion worth of goods to the Middle East, mainly seafood, textiles, footwear, iron and steel, electronics, handicrafts, agricultural products, machinery and equipment, surging 45 per cent over the same period of the previous year.

Exports were likely to reach approximately $2.4 billion by the end of the year, up 69 per cent year-on-year.

Despite these encouraging results, Vietnam was still faced with several barriers in fostering trade relations with the Middle East, such as cumbersome administrative procedures, political instability and insufficient market information, Hoøa said.

Other experts at the event called on Vietnamese exporters to foster their understanding of the market’s culture, communication and business customs. They were also urged to win Halal certification, necessary if the firms wanted to effectively access the market.

The Halal certification is a global scheme for products and services. It is an independent process to verify halal and haram ingredients and purity conditions required to meet Qur’an and Shariah standards.

Halal (permitted) and Haram (prohibited) are universal Arabic terms applied to all facts of life and commerce. Shariah is defined as a legal framework under Islamic Law.

Vieät Nam now has Halal certification agencies in both Ha Noi and HCM City.

In a move to help local businesses better understand the respective business customs and market demands before meeting potential partners, the department planned to organise online business meetings between Vietnamese enterprises and firms from six Middle Eastern countries early next year.

Customs officials discuss impact of regulations 

The city’s Customs Department and enterprises met yesterday to discuss problems related to new regulations issued this year on the management of imports and exports.

Nguyeãn Höõu Nghieäp, deputy head of the HCM City Department of Customs, said both companies and customs staff were confused about many new regulations because relevant ministries had not issued guiding documents on the new rules.

For instance, the new Food Safety Law came into effect at the beginning of July, but no guidance decree has been issued for implementing it, according to Nghieäp.

Regarding imports of animal feed, the Ministry of Agriculture and Rural Development (MARD) a few months ago issued Decree 66 which regulates animal-feed imports. However, there has been no specific guidance for implementing the decree.

As a result, hundreds of containers of agro-products, foodstuff and animal feed have remained backed up at ports since July.

Following a request from companies and the customs sector, MARD extended Decree 66 to June 30, 2012 to provide more time for businesses and the customs sector to prepare for the new decree.

To help companies and customs offices, Nghieäp has also asked the Ministry of Industry and Trade to provide clear guidance on Decree 197, which regulates import of cosmetics, mobile phones, wines, and cars with nine or fewer seats.

In addition, the department will implement a “one-door” customs office at Caùt Laùi Port in the near future to enable faster goods clearance, he said.

The department also answered the enterprises’ questions on issues related to customs regulations.

Organised by the HCM City Investment and Trade Promotion Centre (ITPC), the meeting yesterday was attended by representatives from 100 enterprises.

Conference to focus on overseas markets 

The Commercial Counsellor Conference 2011 will open in Ha Noi on December 12, Deputy Minister of Industry and Trade Nguyen Thanh Bien revealed at a press conference yesterday.

The two-week event will involve representatives from ministries, Vietnamese ambassadors, commercial associations, enterprises and trade counsellors , among others.

A series of seminars within this year’s conference will be held in Ha Noi and HCM City, the key seminar of which was slated for December 12 and the following morning, which will be presided over by Minister Vu Huy Hoang.

“The conference plays an important role in supporting firms to expand their overseas markets while narrowing the excess of imports over exports,” Bien said.

Also, international co-operation in the fields of industry, energy and agriculture would be boosted, he added.

Viet Nam forecasts an export turn-over of US$96 billion this year, an increase of nearly 33 per cent on last year.

To date, Viet Nam has established economic and trade relations with over 200 countries and territories world-wide and has become one of the leading exporters of products such as rice, coffee, seafood and textiles.

The previous Commercial Counsellor Conference was held in 2008.

Finding bright spots amid gloom 

The market has little prospects to grow in the short term but there are still opportunities for investors, including Da Nang Rubber Co (DRC) and PetroVietnam Southern Gas (PGS), say FPT Securities Co analysts.

“Da Nang Rubber had positive performance in the first nine months of this year despite economic difficulties and rising input prices,” said analyst Nguyeãn Ngoïc Tuaán.

DRC had earned VNÑ1.97 trillion ($92.5 million) by the end of the third quarter, 85.5 per cent of the entire year’s target, and posted a profit of VND139 billion ($6.5 million), 92.7 per cent of the target. It also had higher earnings-on-assets and earnings-on equity ratios than its competitors, and there was potential for the company to increase its margins, Tuaán said.

DRC’s new plant in the central city of Ñaø Naüng was also expected to begin operations next year. The plant was built at a cost of about VND2.4 trillion ($113 million), 70 per cent of which came from financing.

The companies’ debt load therefore rose last year but remained low compared to other companies, Tuaán said.

“DRC has a long-term potential appropriate for a value investment portfolio,” he said.

DRC shares yesterday tracked overall market trends and closed down by 1.1 per cent to VND18,700 per share after two weeks of gains.

Meanwhile, PGS offered advantages in terms of resources from its parent company – PetroVietnam Gas Corporation – and financing from PetroVietnam Finance (PVF), said analyst Traàn Quang Vinh.

PGS currently holds a 33-per-cent of the southern gas market, and aims to increase this to 50 per cent by 2015.

“Profitability indicators for the share are better than for other firms, and its share price has been increasing for the past six months,” Vinh said. He recommended buying this stock when it hit around VND20-23,000. Yesterday, it declined to a close of VND24,000 per share.

Shares on the HCM City Stock Exchange lost ground overall yesterday, with trades sluggish on both of the nation’s stock exchanges.

On the HCM City bourse, the VN-Index closed at 387.21 points, a slump of 0.77 per cent from Tuesday’s session. Nearly 31 million shares changed hands, pulling the value of trades down 19.6 per cent from the previous day to VNÑ406.7 billion (US$19.1 million). By the closing bell, advancers had outnumbered gainers by 133-81.

Blue chips witnessed a harsh day with only Sacombank (STB) out of the 10 leading shares by capitalisation posting gains. STB was also the most-active share on the HCM City Stock Exchange, with over 2.6 million traded.

On the Hanoi Stock Exchange yesterday, the HNX-Index closed up by 0.43 per cent to 62.51 points. Trades slowed to a value of just VND245.2 billion ($11.5 million) on a volume of 26.2 million shares, as losers overwhelmed gainers by 174-59.

With three million shares changing hands, VNDirect Securities Co (VND) emerged as the most-active share nationwide.

Experts talk up retail banking sector 

Viet Nam’s 85 million population means the country’s retail banking sector holds great promise, experts told a regional conference in HCM City yesterday.

Speaking at the opening ceremony of the ASEAN Bankers Forum, Vu Viet Ngoan, chairman of the National Financial Supervision Committee, said: “The Government is focused on the non-cash payment system which will help improve management as well as bring more benefit to society.”

Development of retail lending held the key to the banking system overcoming the financial crisis, he said.

Karolyn Seet of US ratings agency Moody’s hailed the potential of the country’s retail banking market, saying it could possibly grow at 30-40 per cent annually.

Only around 15 per cent of the population used the banking system, mostly in urban areas, though young people want to do so.

“Retail banking will create a consumer culture by increasing the application of IT and modernising the banking system,” Ngoan said.

The conference, which ends today, was organised by the International Data Group, Viet Nam Banks Association, Viet Nam Deposit Insurance under the sponsor of State Bank of Viet Nam.

It was attended by international and national banks, financial institutions, and IT companies like Polaris, APC, IBM, Capgemini, TIS, Netapp.

Transaction settlement periods to be cut 

The State Securities Commission will propose new regulations this month to the Ministry of Finance that would shorten transaction settlement periods from the current three days after the transaction (T+3) to two days (T+2), commission chairman Vu Bang has said.

The move, if approved, was expected to boost market transactions by reducing settlement times for investors.

Bang also said a restructuring scheme for the securities market would be sent to the Prime Minister for approval in the first quarter of next year. A separate plan for restructuring securities companies has already been submitted; the plan was aimed at improving their corporate governance and risk management to ensure financial safety as stipulated in Circular No 226.

Over the next two quarters, the commission also expected to issue regulations on application of CAMELS standards, a system on which regulatory authorities base their ratings of financial institutions.

On the HCM City Stock Exchange this year, the VN-Index has lost 20 per cent of its value, while shares on the Haø Noäi Stock Exchange – as represented by the benchmark HNX-Index – have lost 40 per cent of their value.

Dragon Capital director Dominic Scriven, head of the Vieät Nam Business Forum’s Capital Markets Working Group, said most of the 400 listed companies which have reported third-quarter earnings posted profits down 6-7 per cent from last year.

Capital mobilisation through the stock market in the first nine months of the year was only at 10 per cent of last year’s level, Scriven said.

Along with restructuring securities companies and shortening transaction settlement periods, authorities needed to promulgate regulations on overseas listings; issuance of global depository receipts (GDRs); and establishment of wholly foreign-owned investment funds and securities companies in accordance with WTO commitments, he said.

Deputy Minister of Finance Traàn Xuaân Haø said most of these desires would be met with a decree guiding the implementation of the amended Law on Securities to be issued this month.

Energy shortage a challenge 

Viet Nam is at risk of a coal, gas and electricity shortage, which poses a medium and long term challenge to the industry and trade sector, Deputy Prime Minister Hoang Trung Hai has said.

Speaking at a working session with the Ministry of Industry and Trade (MoIT) in Ha Noi yesterday, Hai pointed out that to overcome the challenge, the Electricity of Viet Nam, the Viet Nam National Oil and Gas Group and the Viet Nam National Coal and Mineral Industries Group must work together.

“Gas tapped must first go to the generation of electricity,” he stressed.

The deputy PM asked the MoIT to join hands with the Ministry of Science and Technology to improve human resource capability and to work out legal documents on the generation of nuclear electricity as the construction of the first plant was scheduled for 2014.

Along with improvements in the energy supply, Hai also urged the MoIT to accelerate negotiations so as to sign the Trans-Pacific Partnership Agreement as well as bilateral and multilateral trade agreements, thus broadening the market for Viet Nam’s exports.

The MoIT has set a number of targets for the 2011-15 period, including an average annual increase of 9-10 per cent for industrial production, 13.5 per cent for industrial production value and 12.1 per cent for exports while the trade deficit must be kept at 9.8 per cent of the export revenue.

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