WB lends 1.9 mln USD to Ca Mau power project
The World Bank has recently provided an additional loan of 1.9 million USD (42 billion VND) to Vietnam ’s southern-most province, Ca Mau, for a rural electrification project.
According to the Director of the Ca Mau Department of Industry and Trade, Le Minh Khoi, the financing will be spent to build an electricity grid spanning six communes of Khanh Hoa, Phu Thuan, Rach Cheo, Phu My, Vien An Dong and Dat Mui.
Once completed in September 2010, the project will provide electricity to a total of over 4,300 households.
The project will have a significant impact on people’s lives, helping thousands of households in remote and far-flung areas escape from the blurry light of oil lamps and thereby greatly improve their lives, said Nguyen Van Khai, head of the electricity management office at the provincial Department of Industry and Trade.
The total cost of the project is estimated at 52.6 billion VND, with the majority (42 billion VND) being funded by the WB and the remainder coming from the provincial budget. The WB’s no-interest loan has a 40-year period with a 10-year grace period.
This is the second loan that the bank has given to Ca Mau’s rural electrification project, following a previous grant of nearly 2 million USD in 2006.
Securities investors on trading floor
Construction firm expected to stir up IPO market
The Song Hong Corporation under the Ministry of Construction will make an initial public offering (IPO) of 30 million shares via the Hanoi Stock Exchange (HNX) on November 5.
Experts say with an initial price of 14,000 VND, shares of the Song Hong Corporation – a construction giant of a great number of realty, industrial and energy projects – are expected to stir up the gloomy IPO market.
Although the HNX-Index and the HOSE-Index are on the increase with the traded value of each session reaching trillions of VND, only 20 businesses have made their IPOs through the HNX and the Ho Chi Minh Stock Exchange (HOSE) so far this year.
Of the figure, HOSE organised six IPOs, a sharp drop from 16 last year. The number of IPOs organised by the HNX was also equivalent to one-third of last year’s total.
Securities experts said that without the participation of big businesses with strong trademarks, IPOs fail to attract investors, leading to unsuccessful IPOs or low IPO share prices.
In addition, sluggish transactions on unlisted markets prevent investors from pouring their investment into IPO to focus on the listed market.
Cassava exports double this year
Cassava has been listed as a key agricultural export, with the industry exporting 158,000 tonnes, worth a total value of 36 million USD in September.
“While other agricultural and forestry products have witnessed a down turn, the cassava industry has recently seen growth in both value and volume,” said Duong Long Tri, deputy head of IT and Statistics Centre under the Ministry of Agriculture and Rural Development.
Tri said that total cassava export volume in the first nine months of the year totaled 473 million USD, double the number in the same period last year.
Demand for cassava from importers has increased as it can be used to process feed and produce ethanol-blended petrol.
“As the third biggest ethanol-blended petrol producer in the world [following US and Brazil ], mainland China has huge demand for cassava. This market its recovering, so demand has increased,” said Tri.
It was estimated that China needs to import about 6.5 million tonnes of cassava per year, he said, adding: “ China is the biggest importer of Vietnamese cassava. It imports about 90 percent of Vietnamee export cassava volume.”
The other big importers of Vietnamese cassava include Taiwan and the Republic of Korea .
As demand has recently increased, cassava export prices have sharply risen.
In 2008, the average price of cassava was 3 million VND (165 USD) per tonne. It declined at the end of 2008 and at the beginning of 2009 it rose to 2 million VND (111USD) per tonne.
However, with the global economy recovering, cassava price has risen. At Sai Gon Port , cassava prices are now running at 180 USD to 195 USD per tonne.
According to the Ministry of Industry and Trade, the country can harvest about 8.1-8.6 million tonnes of cassava this year, a 0.3 million tonne improvement on last year.
Business strapped by tight banks
Companies and individuals in HCM City continue to face difficulties in accessing bank loans, even though many of them are willing to pay a higher interest rate.
Many local commercial banks have increased interest rates on some types of loans, and others have temporarily suspended offering of new loans.
Nguyen Thu Hien, who works at a major commercial bank’s transaction office in district 6, said that all loan applications were being considered carefully by bank managers.
“We give priority to old customers but we also are reducing their credit limit. We have to refuse applications for new loans,” Hien said.
Independent market watch-dogs said that local banks were restricting new loans because the central bank had asked them to ensure credit growth to no more than 30 percent to help ensure the security of the banking system and help prevent inflation.
In addition, under another new central bank policy, local financial institutions were asked to limit the use of short-term mobilised capital for medium-and long-term loans to ensure credit quality and reduce risks.
In particular, commercial banks can use only 30 percent of their short-term deposits for medium-and long-term loans.
Under the previous regulation, the banks could use up to 40 percent of their short-term mobilised capital for long-term loans.
The Vietnam Thuong Tin Commercial Joint-Stock Bank (Vietbank) has increased its lending interest rate from 14.5 percent annum to 15.5 percent.
The Asia Commercial Joint Stock Bank (ACB) has a new interest rate of 13.47 percent instead of 12.75 percent for real estate loans.
One bank customer, Huynh Thi Kim Hoa, said that she was waiting to hear from Vietbank about a 300 million VND (16,853 USD) loan to buy an apartment.
“At first, I was told that the new interest rate was 15.57 percent a year instead of last month’s 14.5 percent, and then I was required to wait for three days,” Hoa said.
Vietnam, China look towards 25 bln USD in trade by 2010
A delegation from the Ministry of Industry and Trade led by Minister Vu Huy Hoang is on a working visit to China from Oct. 11-14, to discuss measures to raise two-way trade to 25 billion USD by 2010.
The visit is to implement agreements signed in Hanoi last month at the first meeting of the Vietnam-China trade cooperation working group under the economic-trade cooperation committee, and discuss detailed measures to reach the goal laid out by the two countries’ leaders of raising two-way trade to 25 billion USD by 2010 as well as finding ways to overcome obstacles and facilitate two-way trade.
At the talks with a Chinese delegation led by Chinese Minister of Commerce Chen Deming, the Chinese side agreed with Vietnam’s proposals on issues such as bilateral and multilateral trade, regional and bilateral cooperation in industry and investment, and the two ministries’ joint participation in Vietnam-China Friendship Year 2010 as well as all-around cooperation.
While in China, the Vietnamese delegation made a tour of Chinese companies managing projects which are involved in electricity, construction, metallurgy and paper in Vietnam.
VIB meets yearly targets ahead of schedule
The Vietnam International Commercial Joint Stock Bank (VIB) racked up a nine-month, pre-tax profit of 124 percent of its yearly plan and double last year’s figure, fulfilling yearly targets three months before schedule.
VIB also made headway in capital mobilisation and granting loans. The bank’s total capital mobilised during the period was more than 44 trillion VND or 99 percent of its yearly target, representing a year-on-year increase of 38 percent.
Its total loans outstanding were 25.5 trillion VND, equivalent to 103 percent of the yearly plan and up 29 percent compared to 2008’s correspondent period.
The rate of controlled bad debts was kept low, about 1.5 percent of the total.
In October, the bank plans to offer 20 million shares at a face value of 10,000 VND per share in order to increase its chartered capital to 2.4 trillion VND from the current 2.2 trillion VND.
Early last month, VIB kicked off its overall business strategy in the 2009-2013 period through the launch of a trademark strategy and a new logo with the “Devoted Bank” slogan.
Under the overall strategy, in the next five years, the bank will offer new products and services to clients with focusing on products for individuals and small- and medium-sized enterprises.
As one of the leading commercial joint stock banks in Vietnam , the bank has performed well in recent years, doubling its growth annually.
VIB was ranked second among four leading Vietnamese banks in Moody’s August assessment of banks’ financial strengths.
VietNamNet/VNA
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