Last update 6/23/2012 7:00:00 AM (GMT+7)

Investors flagrantly abuse insider trading loopholes   

Lax management of the local securities market is creating opportunities for investors to violate the law.

On June 7, the HCM City Stock Exchange fined Sai Gon-Asia Financial Investment JSC, Sacombank shareholder Tran Phat Minh and Sai Gon-Exim Company VND60 million (USD2,874) each for buying Sacombank's shares without making a public announcement. These trades made them become Sacombank’s biggest shareholders.

With investors and other shareholders still in shock because of lax penalties, they received another blow when hearing the news that Sai Gon-Asia Financial Investment JSC, shareholders Tran Phat Minh had sold their stocks without making a mandatory disclosure again on June 12.

Sai Gon-Asia Financial Investment JSC sold about 900,000 shares and individual shareholder Tran Phat Minh sold 876,000 shares.

With the changes, Minh and Sai Gon-Asia Financial Investment JSC stocks dropped to below 5%, and were no longer Sacombank major shareholders, meaning they can sell their remaining shares without making a public announcement.

Answering the criticisms of being slow, the HCMC Stock Exchange said Sacombank’s legal representatives had not responded until May 29. However the management agencies took no action during three months of blatant transactions that raised suspicions among the investors.

By the end of March, the HCMC Stock Exchange fined the chairman of Hanoi Investment General Corporation, Dinh Hong Long, VND40 million (US1,916) for allegedly selling his shares in secret.

In 2011, Long sold nearly 1.4 million shares, sending the price of company shares down from VND20,000 (USD0.96) to VND1,600 (USD0.08).

Many companies' shareholders also violated the same laws such as the major shareholder of Khanh Hoi Import-Export JSC who bought 264,940 shares or the head accountant of Hanoi Maritime Holding Company who sold 100,000 shares.

Sacombank also recently bought 1,041,500 shares from the SPM Corporation and became its major shareholder.

A shareholder of Ba Ria-Vung Tau Urban Development and Construction Corporation sold 120,000 shares before the company's registered information for online transactions was announced.

However the fines for these cases are considered too low.

Vuong Dinh Hue, Minister of Finance ordered the city’s Stock Exchange to provide a report of the problems. He said punishments would also be delivered to state agencies which were slow in dealing with the issues.

Investors who have complained of these types of transactions for many years, welcomed the news. They want their rights to be protected in such cases.

Currently, the maximum penalties for manipulating stock prices and for internal transaction is VND300 million (USD14,374), while misleading or concealing information is VND500 million (USD23,957). But in reality, the penalties are only counted in the tens of millions of VND which is too small compared to the profits the violators earn.

Many investors have proposed that profiteers using insider information should face prosecution.

Exports to EU on the rise

Viet Nam's export turnover to the EU in the first five months of this year increased 22 per cent against the same period last year due to booming sales of computers, electronic spare parts and mobile phones, said the General Department of the Viet Nam Customs.

The higher earnings were attributed to the rising turnover of leather and footwear, rubber, garment, computers, electronic products and spare parts, and in particular mobile phones.

In the first five months of the year, the department said the export value of leather and footwear to the EU rose 7.5 per cent, rubber increased 13.9 per cent, while the revenue of computers, electronic products and spare parts rose 78 per cent. Meanwhile, the export turnover of mobile phones skyrocketed 152 per cent.

Exports of electronic spare parts and mobile phones produced a combined trade surplus of some US$4 billion to the EU.

However, experts warned that negative growth in major EU nations would hit imports.

The department said that over the last five years, Germany, the UK, the Netherlands, France, Italy, Spain, Belgium, Austria, Switzerland and Poland accounted for 90 per cent of the country's total exports.

However, the department said, eight of these 10 major importers had negative economic growth in the first half of this year.

Meanwhile, the European Commission said it expected economic growth to remain sluggish for several more months.

Promoting e-commerce development

E-Commerce has greatly contributed to increasing Vietnam’s export earnings in recent years.

According to a recent survey by the Ministry of Industry and Trade (MoIT), 92 percent of businesses use mobile phones as a supporting tool for their trade activities, while 82 percent conduct their transactions by facsimile, 64 percent by email and 11 percent on the websites.

Almost all enterprises use the internet to contact their clients in most of their trade performance, the survey says, adding that in the 2006-2011 period, 60 percent of businesses achieved a rise in sales revenue via e-commerce.

Mitch Free, CEO of, a world leading online marketplace for manufacturers, says e-commerce has opened up opportunities for businesses to contact their partners around the world, especially to seek new clients as international consumers tend to search for new supplies of goods.

Browsing international business websites, it is easy to see that Business-2-Business (B2B) e-commerce floors have attracted a lot of businesses from around the world, including those from Vietnam.

According to an analysis of, a well-known B2B trading floor, made-in-Vietnam goods ranging from farm produce, handicrafts, and construction materials are topping the list of foreign browsers.

Along with China, India, the Republic of Korea, Japan, and the US, Vietnam is now among ten countries and territories having their products most searched.

This means that domestic businesses will be able to gain a leg up on e-commerce competition.

As many still find it difficult to access potential consumers, e-commerce is considered the best option for import-export companies in terms of time and pricing power.

Kimmy Cheng, a sourcing manager of Office Depot, says his company uses e-commerce as an official channel to access manufacturers to make up for the inconvenience.

In the face of fierce competition, there is high pressure on businesses to grasp opportunities, CEO Free says, proposing that they take the initiative to apply new business methods, including e-commerce, which will become an indispensable trend in the near future.

For the development of e-commerce to meet the growing number of users, Vietnam has mapped out a long-term strategy.

Tran Huu Linh, Director General of the Vietnam E-Commerce and Information Technology Agency under the Ministry of Industry and Trade (MoIT), says the MoIT has received 130 applications for establishing e-commerce trading floors and 35 of them have already been licensed.

Linh says with a total of more than 3,100 members involved, these floors have conducted more than 1,500 transactions worth VND4,130 billion in total so far.

All businesses now understand the virtue of e-commerce and hope that they will benefit from a shift in the way of trade performance following the completion of infrastructure and legal framework, Linh says.

The government has issued a number of legal documents relating to the development of e-commerce in line with a resolution on building infrastructure for e-commerce by 2020 that was adopted at the fourth conference of the Party Central Committee.

To this end, Linh says, domestic businesses should take the initiative to grasp every opportunity by renewing their trade performance and applying new methods to secure their foothold in the market.

Bad debts stand at 10pct of 2011 GDP, on the rise: cbank
Vietnam’s total bad debts as of June 2012 are estimated to be worth around 10 percent of the country’s gross domestic product (GDP) in 2011 and are rising, said the head of the State Bank of Vietnam (SBV).

SBV Governor Nguyen Van Binh recently told the latest National Assembly (NA) meeting the current total bad debts at Vietnamese banks have been estimated to have surged to some VND256 trillion ($12.2 billion), up dramatically from 6 percent as of last year and less than 3 percent in 2008.

Bad debt in Vietnam's banking system rose to 4.14 percent of total loans as of April, up from 3.06 percent at the end of 2011, according to a recent written report by SBV for the national congress quoted by Vneconomy.

The monthly growth rate of those non-performing loans (NPLs) is 8.6 percent, Vneconomy added.

The total NPL at banks stood at VND108.6 trillion ($5.18 billion) at the end of April, Vneconomy reported.

Bad debts represented 3.6 percent of total outstanding loans, versus 3.2 percent at the beginning of the year, said Binh at a press conference held in Hanoi on April 11.

The newly released figures are equivalent to previous forecasts by foreign institutions on bad debts in the banking system in Vietnam.

Pham Hong Hai, Head of Global Markets, HSBC Bank (Vietnam) Ltd, told Dau Tu Chung Khoan newspaper in late April that some local commercial banks did not publicize the real figures of their bad debts.

Tackling this issue requires transparency in quantifying bad debts and consistency in loan classification practices, he said.

However, international organizations warned that the actual figure may climb up to 12-13 percent.

The NA economic committee said late last month that the NPL ratio might be higher, as the data of Fitch Ratings showed that the bad debt ratio of Vietnam in 2011 was as much as 13 percent, in accordance with international accounting standards.

“The ratio could be higher if calculated on the international standards,” Thoi Bao Kinh Te Sai Gon newspaper quoted Deepak Mishra, chief economist of the World Bank in Vietnam, as saying.

The economist declined to give comment on bad debts, but advised Vietnam to take into account the warning of Fitch Ratings.

Vietnamese experts also agreed that the ratio of bad debts might be higher than the official data.

According to a recent report, “Facing the challenges of economic restructuring”, compiled by the Vietnam Center for Economic and Policy Research (VEPR), the bad debt ratio is estimated to be 3-4 times higher than the figures given by the central bank.

Quach Manh Hao, one of the report’s authors, said bad debts must be 8.25-14 percent over the total assets.

Such a figure is calculated based on the data of 41 commercial banks, with the liabilities of Vinashin, Vinalines and similar state-run groups already excluded, Hao said.

The SBV should impose penalties, such as limiting credit growth, restricting network expansion, or raising the required reserve ratio for banks which deliberately keep their real NPL figures under cover, Pham Hong Hai said.

The country should also open more ‘room’ for the private economic sector and foreign banks to participate in dealing with weak credit institutions, he added.

According to the HSBC executive, governments have to spend on average 13 percent of their GDP to restructure their respective financial systems; yet the figure may be much higher or lower in specific cases, he said.

The International Monetary Fund (IMF) earlier estimated that the nation may need to spend 5 percent of its GDP, or about $5-6 billion, to restructure the domestic banking sector.

The IMF projected that Vietnam can grow credits by a maximum of 14 percent this year, lower than the country’s target of 15-17 percent.

SBV governor Binh recently told the NA that the government is planning to create a national asset-management companywith capital of VND100 trillion ($4.8 billion) to deal with the problem.

The experiences in tackling the same issues of the US, China and Japan may be beneficial for Vietnam in establishing the VND100 trillion debt trading company, Nguyen Tri Hieu, a banking expert with experience in the US, told newswire Vnexpress.

The closure of feeble credit institutions has also been proposed by some experts.

The American financial crisis 2008 was triggered by the collapse of the housing bubble, which is, to some extent, similar to Vietnam’s current situation.

The Federal Reserve (FED) had some $700 billion pumped into the market with an aim of purchasing commercial banks’ bad debts, improve feeble entities’ weak liquidity, and most importantly to acquire banks’ preferred shares.

The three above measures could fit with the local conditions, Hieu said. He estimated that around $7 billion, or some VND140 trillion, would be required for purchasing bad debts.

Another example is China, which saw substandard debts at many commercial banks surge above 40 percent in late 1999 and early 2000.

Four asset management companies assigned with exclusive rights were then set up in an attempt to deal with the substandard debts, worth 670 billion RMB (US$105 billion at current exchange rates).

Moreover, some 40 billion RMB from the 1998 budget was earmarked to write off state-owned enterprises’ debts and to refinance commercial banks by issuing government bonds.

With many similarities, Vietnam should, therefore, consult China’s drastic measures, Hieu said.

The early 2000s saw Japan suffering from thousands of yen in bad debts for a similar reason as the housing bubble in America in 2008.

Japan at first pumped liquidity into large banks and established a range of investment funds to purchase bad debts, which failed to bring about much change.

After further attempts, Japan eventually had their banks nationalized and feeble banks with huge bad debts collapsed.

Nguyen Tri Hieu, however, doubted the usefulness of this measure, which should only be applied to those issues of great importance to the economy.

However Pham Thanh Quang, general director of Debt and Asset Trading Corp (DATC) under the Ministry of Finance, told Tien Phong newspaper that it would take only VND20 trillion to purchase banks’ bad debts, rather than 100 trillion dong as proposed by the Governor.

The initial capital should be around VND20 trillion in order to purchase those debts of great urgency.

Malaysian group expands operations in Vietnam
Kian Joo Can Factory Bhd from Malaysia will spend 20 million USD to expand its corrugated carton factory in Hanoi , boosting capacity by 3,000 tonnes per month.

Speaking at the company’s annual general meeting in Kuala Lumpur on June 18, Kian Joo General Manager Datuk Anthony See Teow Guan said the expansion is expected to be completed by April or May next year.

With the expansion, Kian Joo’s total monthly output will reach 9,000 tonnes, while in Malaysia it is only around 2,800 tonnes per month, he said.

Kia Joo already has two factories in the southern province of Binh Duong , namely Box-Pak ( Vietnam ) Co Ltd in Thuan An district and Kian Joo Canpack ( Vietnam ) Co Ltd in Ben Cat district.

First established in 1956, Kian Joo is now the la rgest packaging company in Southeast Asia , producing all types of tin cans and containers such as two-piece aluminum beverage cans, corrugated carton boxes, PET Plastic Bottles, and other plastic products for the local and export markets.

Its products are exported to Japan , Myanmar , Indonesia , Thailand , Singapore , Australia , the Philippines , Taiwan and the Middle East.

Vietnam remains world’s top pepper exporter
Vietnam exported 15,000 tonnes of pepper in May, earning over 102 million USD, bringing pepper exports in the first five months of this year to 62,000 tonnes, worth 424 million USD.

The Ministry of Industry and Trade’s Import-Export Department says that Vietnam continues to be the world’s number one pepper exporter, making up almost half of the world’s pepper exports.

The US , Germany and the United Arab Emirates are Vietnam ’s three biggest pepper importers, with a combined export revenue of more than 30 million USD. They are followed by Egypt , India , the Netherlands , Singapore and Spain .

The department added that the United Arab Emirates is an export market with a huge potential for Vietnamese businesses as the country has no tariffs or trade barriers.

It also recommended that Vietnamese pepper businesses should seek out agents and distributors in the country to make Vietnamese pepper more widely available to consumers in the country.

Car sales in 2012 heading for a crash: MoIT
Vietnam ’s total car sales in 2012 will drop drastically and return to 2007’s level, according to the Ministry of Industry and Trade (MoIT).

The forecast is based on the seasonally adjusted annual rate ( SAAR ), when only 6,982 cars were sold in April, a 24 percent drop over the previous month and 46 percent fall against the same period last year.

It is estimated that only 81,000 cars will be sold in the country by the end of 2012.

According to the MoIT, car manufacturers and assemblers are taking measures to cut down production levels due to increasingly bigger stockpiles. The distribution network is also struggling with the back log.

On top of this, customers are becoming much more careful when buying a car due to the gloomy economic outlook, high registration fees in Hanoi and Ho Chi Minh City and high interest rates.

For the market to recover, it is necessary for manufacturers and assemblers to cut costs and reduce car prices. However, policies to reduce value add tax and luxury tax are also essential, the MoIT said.

The MoIT is to ask the government to apply preferences to products that contain a high level of domestically produced spare parts.

According to statistics released by the Vietnam Automakers Association, Vietnam sold 138,000 cars in 2011, a drop of 5 percent compared to the previous year.

Fuel firms earn big despite import tax restoration

Although fuel import duties have been reinstated together with a retail price cut earlier this month, local fuel wholesalers are still pocketing huge profits from selling the commodities thanks to a steep decline in global prices.

Import duties on oil and petrol were increased to 7 percent from 3 percent starting June 8, one day after the Ministry of Finance cut retail fuel prices by VND600-800 a liter, reducing the gasoline price from VND22,700 to VND21,900 a liter.

Meanwhile, the A92 gasoline price in Singapore, the country’s mail fuel supplier, recently rebounded to only $105.6 a barrel on June 15, after slipping to somewhere between $101 and $102 a barrel, a $16 a barrel decline compared to a month earlier.

Calculations based on import prices from June 7 to now, plus the 7 percent import tariff, show that the petrol cost price is currently VND1,670 a liter lower than the retail price.

All of that difference will go to wholesalers’ pockets.

With calculations based on the average price within the last 30 days, the profit is also as high as VND700 a liter.

Fuel businesses said it is now completely feasible to impose a further cut for fuel retail prices, while also maintaining the interest of balance between the government, wholesalers, and consumers.

Italian businesses seek opportunities in Vietnam

Nearly 50 Italian and Vietnamese businesses attended a seminar on June 18 entitled “Vietnam in Umbria”, organised by the Italian employers’ federation Confindustria and the Vietnamese embassy in Italy.

Addressing the event, Ambassador Nguyen Hoang Long emphasized that Vietnam and Italy have established a fine traditional friendship. Italy was the first Northwest European nation that actively supported strengthening cooperation between Vietnam and the European Union at international forums, as well as normalizing ties between Vietnam and international financial, trade and monetary organizations in the early 1990s.

However, the current economic and investment ties have yet to match either country’s potential, said Long.

The diplomat said in the face of the global economic slowdown both countries are actively seeking ways to boost bilateral cooperative ties in all fields, especially in economics. He said many Italian businesses are interested in investing in Vietnam, as well as other emerging markets.

Vietnam realizes that it needs to change its growth model, restructure the economy, and implement other strict measures to attract foreign investment and support its businesses in investing overseas, he added.

The ambassador urged Italy to provide technical support for Vietnam and also help train Vietnamese engineers and workers. He said that he will ask the relevant Italian agencies to extend further credit to support Italian businesses that have established trade with their Vietnamese counterparts.

India, Vietnam promote textiles cooperation

A seminar on Vietnam-India trade in the garment and textiles industry was held in Ho Chi Minh City on June 19.

The seminar, co-organized by the Vietnam Chamber of Commerce and Industry (VCCI) in Ho Chi Minh City and the Indian Textile Export Promotion Council (Texprocil), aimed to create opportunities for enterprises of the two countries to seek business partners.

Addressing the seminar, Texprocil President Amit Ruparelia noted that India is one of Vietnam’s biggest cotton suppliers, with the latter’s import turnover doubling in the last three years.

He said he hopes the seminar offered opportunities for both sides to promote cooperation in their garment and textile industries.

The two countries need to develop efficient warehouse systems and factories to serve distribution and exports, said Nguyen Van Tuan, deputy General Secretary of Textile and Apparel Association (VITAS).

The Vietnamese garment sector has a high demand for raw materials and cotton thread, which it imports mainly from the US, India, Brazil and China.

First private equity in telecom network
The State Capital Investment Corporation, the nation's sovereign fund, has completed the sale of a 15.3-per-cent stake in the CMC Telecom Infrastructure Corporation to an undisclosed buyer, raising over VND15.6 billion (US$742,800), a representative of the CMC Investment Co has told the publication Dau tu (Vietnam Investment Review) on condition of anonymity.

With the sale, CMC Telecom became the first privately-held company in Viet Nam to own and operate telecommunications network infrastructure.

"Private telecommunications infrastructure companies are an indispensable development trend on the market," said the director of the Ministry of Information and Communications' telecommunications department, Pham Hong Hai.

In the three years since its establishment in 2009, CMC Telecom has yet to turn a profit. Accumulated losses as of the end of last year totalled VND73.9 billion ($3.5 million), equal to 108.69 per cent of the company's equity.

However, Bao Viet Securities Co analysts predicted that CMC Telecom was in a position to continue operating effectively for the next few years, targeting a net profit this year of VND13.6 billion ($647,600).

The State Capital Investment Corporation (SCIC) is also preparing to divest from mobile services provider FPT Telecom, an affiliate of technology services provider FP T. FPT said it would purchase the 50.7-per-cent controlling interest in FPT Telecom that SCIC currently held. FPT Telecom's profit contributed 29 per cent to the overall gross profit of FPT in the first quarter of this year, and the figure was 31 per cent for last year.

Foreign investors have also begun to show increasing interest in telecommunications stocks. Malaysia's Maybank Kim Eng Securities became a major shareholder in Van Lang Technology after buying 56,000 shares, increasing its holdings to 5.58 per cent of the company. An individual foreign investor has also purchased 6,000 shares in Van Lang Technology (VLA), representing a 5.48-per-cent stake.

Local insurers urged to restructure to survive

While mergers and acquisition deals have heated up among banks and securities companies, the M&A picture for the insurance industry remains rather quiet despite warnings that appropriate and timely restructuring is needed in the sector if some firms are to survive.

The restructuring would help boost the financial capacity of insurers, control risks and build corporate governance towards world-class standards, said analysts at a recent conference. They recommended that insurers map out specific strategies for premiums to ensure that the revenue streasm were reinvested effectively, avoiding unexpected risks from foreign exchange, gold, securities or real property fluctuations that had caused losses to a number of insurers.

"Enterprises should restructure towards capitalising on their advantages in insurance products, clients and business networks, while improving customer care and resolving claims comprehensively and in a timely manner," said Viet Nam Association of Insurers secretary general Phung Dac Loc.

"Companies need to actively review their operations, restructure their organisations, improve business operations and investment effectiveness, map out key strategies focusing on target customers, and apply IT to cut costs and strengthen risk management capacity," the director of the Ministry of Finance's insurance management and supervision division, Trinh Thanh Hoan, told the conference.

According to the ministry, restructuring would be undertaken based on the classification insurance companies into four groups. Insurance enterprises that were performing well would be allowed to maintain and expand their current business operations. Insurers that were meeting their costs but saw high rates of compensation or which posted losses for two consecutive years would be re-evaluated for effectiveness and cost-cutting, and the business expansion of such firms would be strictly controlled and based upon the potential of each specific project.

The third class of firms would be those unable to meet their debts. These would be re-assessed for financial capacity, and management would be restructured, with ownership capital increased to help them meet their obligations or contracts transferred to other insurers.

The final class of insurers would include those which were insolvent or bankrupt under law and subject to special control by the State. These companies, if unable to recover, would be merged into larger insurers or allowed to go into bankruptcy proceedings.

Capital city to host major construction technology fair

The first International Exhibition of Construction Technology 2012 (Vietconstech) is set to kick off at the Viet Nam Exhibition and Fair Centre in the capital next Wednesday.

Head of the Construction Ministry's State Authority for Construction Quality Inspection (SACQI) Le Quang Hung said the event aimed to showcase modern technology in the fields of construction, consultancy, quality control, production as well as the provision of construction materials, high-tech equipment and software.

"It would be an opportunity to highlight the potentials and achievements of both domestic and foreign businesses in developing and applying technology to enhance construction quality," Hung said.

The three-day event will feature products from 80 enterprises, including the Viet Nam Industry and Construction Group promoting roller compacted concrete technology for irrigation dam building, a Vietnamese-Russian oil and gas joint venture (Vietsopetro) pushing technology for oil and gas exploration rigs and Beton 6 displaying technology for building pre-stressed concrete roads.

Vietconstech will attract foreign exhibitors with technologies aimed at large-scale and complex construction such as Japan's Sumitomo Mitsui specialising in large-span bridges, Germany's Bauer Company operating in foundation and large-size bore piles and IHI Infrastructure Systems who develops large-span flyovers.

Japan International Nuclear Energy Development Company (JINED) and SHIMIZU Corporation will introduce technical solutions for security and environmental safety in building nuclear power plant and subways.

The exhibition is expected to offer opportunities for co-operation as well as technology transfer between local and foreign enterprises.

The event will host conferences on "Technical Progress of Construction Technologies" as well as "Japanese Construction Technology, Policies, Experiences and Achievements" with the attendance of construction companies, State management officers and scientists.

Attendees will be able to approach, discuss and receive professional ideas for technical solutions and applications of scientific equipment to enhance project quality and cost saving.

Coffee prices recover from lengthy doldrums
Coffee prices has bounced back after months of strong declines, according to the Ministry of Agriculture and Rural Development.

The price of coffee beans in the Tay Nguyen (Central Highlands) province of Tay Nguyen has risen by VND200 to VND42,600/kg.

Nguyen Nam Hai, general secretary of the Viet Nam Coffee Club, attributed the price increase to limited supply of Robusta coffee from Viet Nam, Brazil and Indonesia. He also said there was growing demand for this variety of coffee in the US.

It is even claimed that falling supplies had aggravated the eurozone crisis.

Furthermore, it is expected that domestic exporters of the 2011-12 coffee crop will store 30,000 tonnes of coffee beans until the price climbs higher.

According to local exporters, the coffee price this month could reach VND100,000-VND110,000 (US$4.7-$4.8) a kilo. Viet Nam, the second biggest coffee exporter after Brazil, exported 160,000 tonnes last month – an increase of 52.8 per cent against the same period last year.

Viet Nam and Indonesia are ranked second and fourth in the world in terms of coffee production. Total production in these two countries accounted for nearly 20 per cent of the global coffee volume.

According to the Ministry of Agriculture and Rural Development, coffee exports in the first five months of this year are expected to reach 860,000 tonnes, bringing a turnover of nearly $1.8 billion – a decrease in volume and value of 7.8 per cent and 3 per cent, respectively.

Coal demand to plummet
Coal consumption will reduce by 3 million tonnes on cut purchases this year, according to Nguyen Van Bien, deputy general director of Viet Nam Coal and Mineral Industries Group (Vinacomin).

Speaking at a conference here on Monday, Bien said that in the first six months of the year, the group's coal production remained stable at 26 million tonnes, increasing 1 per cent against last year.

However, only 20 millions tonnes had been consumed, a 10 per cent reduction over last year and just 44 per cent of the annual target. Of the total, 7.1 million tonnes were exported while 12.9 million tonnes were used to sate domestic demand.

Coal consumption amongst key industrial sectors was 50 per cent lower than targeted.

Bien said that by the end of this year, the coal inventory would have reached 8.5 million tonnes, 3.5 million more than the estimated level. Turnover would therefore be only VND44 trillion (US$2.09 billion), 46 per cent of the amount targeted.

He blamed decreasing consumption on economic slowdown, resulting in a high inventory and affecting production, jobs and salaries.

To cope with difficulties, the group would focus on reducing its inventory while trying to save 5 per cent in costs.

In addition, it would invest in technology and management to increase productivity and promote domestic consumption.

Vinacomin also plans to restructure its State-owned businesses and issue VND3 trillion ($143 million) in Government bond this year to mobilise capital for investment and development projects.

Credit flowing freely, asserts leading bank

There is no basis for enterprises or individuals to continue claiming that they are facing difficulties accessing credit at preferential terms for real estate investments, consumer purchases or commercial purposes, says Bank for Investment and Development of Viet Nam (BIDV) deputy director Tran Xuan Hoang. Since the middle of last month, the bank had been offering loans from a VND2 trillion (US$96.15 million) lending package with preferential interest rates to support developers and buyers of low-income housing and housing for workers in industrial zones, Hoang said.

Another VND4-trillion ($192.3 million) package has been earmarked by the bank to help other homebuyers and assist real estate firms to unload unsold projects, he said.

BIDV has also targeted lending for builders and building materials suppliers, he added.

According to Hoang, BIDV has recently contracted to make loans to 20 investors totalling VND1 trillion ($48 million), of which VND300 billion ($14.4 million) has been disbursed.

Tan Hoang Minh Group chairman Do Anh Dung said banks were demonstrating goodwill by slashing lending interest rates, financing construction projects and meeting with real estate associations and clients to discuss ways to heat up the property market. Senior economist Le Dang Doanh said caution was needed, since banks and enterprises were in the same boat. He applauded the efforts of commercial banks to assist enterprises in the past few months, predicting that the fruits of these efforts would begin to become clear in the third quarter.

India textile companies seek new partners

Executives from 12 leading Indian cotton manufacturers and exporters met with their Vietnamese counterparts in HCM City yesterday to explore business opportunities.

They are in the country as part of a delegation from the Cotton Textiles Export Promotion Council of India (Texprocil).

Amit Ruparelia, Texprocil chairman, said: "Vietnamese importers are keen on looking at alternative sources for raw materials … Indian exporters of cotton textiles with their product range are geared to meet the needs of any gaps created in the Viet Nam cotton textile chain through this business matchmaking".

Nguyen Van Tuan, chief representative of the Viet Nam Textile and Apparel Association in HCM City, said the country had to import 98-99 per cent of its cotton needs at a cost of US$1 billion, mostly from the US, India, Brazil, and South Africa.

India accounted for at least 20 per cent of the imports, he said.

The industry also needed large volumes of fabric for garments, also a good opportunity for Indian companies, he said.

It needed 6.8 billion square metres of fabric last year, but domestic production was only 0.8 billion sq.m, and the rest was imported.

Nguyen The Hung, deputy director of the Viet Nam Chamber of Commerce and Industry HCM City branch, said the garment and textile industry achieved strong growth last year.

Its exports of $13.8 million were the highest by any industry.

Despite global uncertainties, it hoped to top $15 billion this year, he said.

But it had to import up to 80 per cent of raw materials and accessories like cotton, yarn, and fabric, he said.

Abhay Thakur, Indian consul in HCM City, urged the Vietnamese industry to establish bonded warehouses to ensure stable supply of raw materials.

Tuan agreed, saying: "We should have bonded warehouses to supply cotton because nowadays many countries with large industries have to stock raw materials."

He cited China as an example, saying its demand for cotton was around 9 million tonnes a year, and domestic production is 7.2-7.3 million tonnes, meaning it had to import 2 million tonnes a year.

But this year the country imported 5 million tonnes to stockpile for future use, he said.

New simplified tax registration process to take effect in July

The Ministry of Finance issued Circular No 80/2012/TT-BTC on May 22 regulating tax code registration under the Law on Tax Administration and replacing Circular No 85/2007/TT-BTC of July 2007. Under the new circular, the business licence number of an enterprise established under the Law on Enterprises is also the enterprise's tax code. The enterprise therefore does not need to apply separately for a tax code.

In addition, the procedure for registering a tax code is simplified, with a number of documents being removed from the list of required documents. Taxpayers are also only required to submit one set of dossiers to the tax authorities and the timeline for approval is no more than three working days from the date of application.

The new circular takes effect on July 1.

New regulations govern automobile warranties, maintenance policies

The Ministry of Transport issued Circular No 19/2011/TT-BGTVT on June 6, regulating automobile warranties issued by manufacturers and importers. The new decree replaces Circular No 43/2011/TT-BGTVT of June 2011. Under the circular, manufacturers and importers have to provide car buyers with warranty and maintenance policy documents, clearly stating warranty and maintenance policies and the addresses of authorised service locations. They must maintain these service locations in all provinces and cities in which they maintain dealerships. However, they can outsource warranty and maintenance services to other maintenance and repair establishments which satisfy set requirements.

In cases in which imported cars have technical errors in design or manufacturing or violate applicable technical provisions, standards or regulations, importers must repair or replace defective products in accordance with the law.

The circular also sets forth minimum technical standards for service facilities of manufacturers and importers and procedures for manufacturers or importers to obtain certification that they have satisifed standards applicable to these facilities.

The circular takes effect on August 1 for importers of complete units with nine seats and next January 1 for manufacturers and importers of other types of fully assembled vehicles.

Malaysian firm to expand in Ha Noi

Malaysia's Kian Joo Group will invest US$20 million in expanding its corrugated carton box plant in Ha Noi to boost production capacity to 3,000 tonnes per month.

The initiative would reach completion by April or May next year, lifting the company's total production capacity in Viet Nam to 9,000 tonnes a month, its general manager Datuk Anthony See Teow Guan said on Monday.

Besides a plant in Ha Noi, the company has also built two additional facilities in Thuan An and Ben Cat districts of southern Binh Duong Province.

Techcombank offers Visa card

The Viet Nam Technological and Commercial Joint Stock Bank (Techcombank), in co-ordination with Vietnam Airlines, recently introduced a new international credit card, the Vietnam Airlines Techcombank Visa Platinum.

With the card, customers can pay for their purchased goods at more than 30 million Visa terminals or withdraw cash from over 2 million ATMs worldwide as well as receive US$2,000 in advance in case of emergency.

The new card also provides preferential services to high-class passengers who often travel on Vietnam Airlines.

Bac Lieu calls for more investment

Southern Bac Lieu Province is seeking foreign and domestic investment for key projects such as agricultural infrastructure development.

Other initiatives include upgrading the Ganh Hao-Bac Lieu seaport, expected to cost VND600 billion (US$28.6 million) and the establishment of high-tech agricultural production zones valued at over VND1.36 trillion ($65 million).

The province had offered a series of incentives for investors including land rental and corporate income tax exemptions or reductions as well as support in labour training, said the deputy head of the provincial Trade, Investment and Tourism Promotion Centre Nguyen Quoc Nam.

Bilteral Mexican trade grows

Two-way trade between Viet Nam and Mexico experienced annual growth of 33 per cent, reaching US$336.4 million in the first five months of this year, according to the Viet Nam General Department of Customs.

During the period, the country exported $292 million goods to Mexico, up 32 per cent year-on-year or equivalent to 44 per cent of the yearly target. Key export items included footwear, textiles and garments, electronic components and coffee.

LCT law firm called most-trusted

LCT Lawyers, a full-service law firm based in HCM City and Ha Noi, has been awarded the title of "Most Trusted Law Firm of the Year" for legal and advisory services offered in Viet Nam by the Lawyer's World magazine.

LCT Lawyers has also won a "Employer of Choice" award granted by Asian Legal Business (ALB). The other two winners are Vilaf and YKVN.

Award winners were chosen through an online survey conducted between February 28 and March 30, 2012.

Sent out to leading law firms and lawyers across Asia, the survey questionnaire asked 15 questions pertaining to a law firm's performance as an employer.-

Veterinary pharmaceutical to issue more shares

Cai Lay Veterinary Pharmaceutical (MKV) will issue additional shares and increase its charter capital from VND11.2 billion (US$533,300) to VND30 billion ($1.4 million) between June 11 and December 31, the company has announced. It posted a pre-tax profit last month of VND251 million ($11,900), although it expects this figure to drop to VND100 million ($4,700) this month and reach a total of VND500 million ($23,800) in the third quarter.

Exporter's profits decline in first five months

Thien Nam Trading and Import-Export Co (TNA) earned VND134.36 billion (US$6.3 million) last month and posted a profit of VND4.39 billion ($209,000), marking an increase of 123.8 per cent in earnings and 6.3 per cent in profit compared to the same period last year. In the first five months of the year, the company's earnings reached VND475.05 billion ($22.6 million), up 6.6 per cent, while profit declined 17.4 per cent to VND22.2 billion ($1 million).-

Coffee firm forced to delist due to losses

The HCM City Stock Exchange will delist shares of An Giang Coffee Co (AGC) effective July 17, after the company posted losses for two consecutive years and its equity at the end of the first quarter of this year fell into the negative by nearly VND63.7 billion (US$3 million). The company's outstanding listed shares are currently worth a total of about VND83 billion ($3.9 million).-

Brokerage links up with Bloomberg, Reuters

Saigon Securities Inc (SSI) has become one of the first securities firms in Viet Nam to successfully provide direct FIX (financial information exchange) connections to both Bloomberg and Reuters routing networks. SSI said it had obtained all the required certifications. With this new system, the firm's institutional clients that are connected to those two networks can streamline orders directly to the SSI. "Orders will be authenticated and validated with minimal or no manual intervention before sending to the exchanges to ensure compliance, speed and efficiency while reducing risks," the firm said in a press release. In addition, the system will allow clients to amend or cancel orders by themselves and their order status will be automatically updated in real-time.

Law to give new life to co-ops

Lawmakers agreed that the co-operative was a collective economic organisation that should be treated the same as other economic organisations, at yesterday's discussion on the revised draft co-operative law at the third session of the 13th National Assembly.

Deputies said the promulgation of the revised co-operative law would improve the quality of co-operative management and boost the healthy and sustainable development of the economy.

"The co-operative is an organisation of people in disadvantaged positions who are farmers, craftsmen, small traders or medium-andlow-income consumers who cannot compete with other rivals in the market economy," Deputy Tran Du Lich, from HCM City, said.

"The law promulgation aims to create mechanisms and policies in helping co-operative members overcome difficulties, existing and developing," Lich said.

Meanwhile, Nguyen Huu Quang, from Thanh Hoa Province, said the co-operative should be defined as a priority form of enterprise.

Quang said the current rate of enterprise income tax for co-operatives was 20 per cent compared to 25 per cent for other enterprises.

"Enterprise income tax for co-operatives should be at a priority rate of between 10-15 per cent of profit," he added.

A Government statement said the contribution of the co-operative economy to GDP had reduced by half in the past 15 years, from nearly 11 per cent in 1995 to 5.22 per cent in 2010. The economic growth rate of co-operatives was half of the country's economic growth rate.

Deputy Nguyen Thanh Tung, from Binh Dinh Province, said that capital shortage for investment and development was the biggest problem for agricultural co-operatives in the country. Money for the investment fund of a co-operative in Binh Dinh Province was very modest, at about VND40-50 million (US$2,000 to $2,500) per year.

"I would like to propose the NA to exempt enterprises in agricultural co-operatives from income tax in order to help them accumulate capital for investment and development in the current situation of capital shortage," Tung said.

Deputy Huynh Huu Nghia, from Da Nang City, said the draft of the revised law should set out that a co-operative operated as an enterprise as regulated in the Law on Co-operatives that was adopted in 2003. Because co-operatives operate as a specific enterprise that works similarly to other enterprises and have the right to do business in fields that are not prohibited by current laws and regulations, many deputies said that it was necessary to classify co-operative forms, for example in industry, services or business fields. From that, the Government would have policies and priorities to support co-operatives' development.

Deputy Dang Thi Kim Chi, from Phu Yen Province, suggested that it was necessary to establish a co-operative supporting system legally, such as the land and income tax laws.

Deputies Huynh Van Tiep, from Can Tho City, and Nguyen Thi Thu Hang, from Nam Dinh Province, said the law should regulate priority policies or a support fund for specific co-operative forms, especially home crafts, agricultural co-operatives or those in mountainous and remote areas.

The Ministry of Agriculture and Rural Development reported that the country had 14,500 co-operatives, of which more than 9,000 were agricultural co-operatives with 6.7 million of members. The average capital of an agricultural co-operative was VND816 million (approximately $39,000).

Discussing the revised law on lawyers, deputies agreed that lawyers guilty of criminal misconduct should be prohibited from practising law.

Most NA deputies opposed permitting law lecturers at universities to practise law. Deputies said that law lecturers could not meet the demands of working in an independent job as cases often lasted months if not years.

They also pointed out that Viet Nam had set itself the goal of having 20,000 skilled lawyers by 2020.

The NA's statement said that the quantity and quality of lawyers hadn't met the country's needs. The number of lawyers per head of population was very modest (only 1.2/12,000 people), deputies pointed out. Only 1.2 per cent of the total of more than 7,000 lawyers could meet the demands of international integration, they said.

New ship built for Germans
Ben Kien shipbuilders, a member of Viet Nam Shipbuilding Industry Corporation (Vinashin), yesterday handed over a 9,200 tonne ship to German Hanse Capital.

The new ship, named HC Lara, is the third built for foreign enterprises. It has a 5,400 horsepower engine, is 129m in length and 17m wide. Average speed is about 15 knots.

International Naval Engineering Consultants B.V (INEC), a well-known Dutch ship designer and consultant, designed the ship.