Vietnam

Vietnam

Postby winston » Sat May 17, 2008 12:47 pm

Vietnam Increases Benchmark Lending Rate to 12% (Update1)

By Nguyen Kieu Giang

May 17 (Bloomberg) -- Vietnam will raise its benchmark interest rate to 12 percent from 8.75 percent, the Southeast Asian nation's central bank said.

The increase in the base rate will take effect May 19, the State Bank of Vietnam said today in a statement released before a news conference in Hanoi.

The discount rate will also rise, to 11 percent, while the refinance rate will increase to 13 percent, according to the statement.

Consumer prices in Vietnam surged 21.4 percent year-on-year in April, the most since at least 1992. The central bank has raised interest rates and reserve requirements at commercial banks to reduce the money supply and curb inflation, while the trade deficit almost quadrupled through the first four months, driven by a surge in imports.

The central bank said on April 25 it didn't plan to increase its benchmark interest rate because month-on-month inflation showed recent policy measures were effective

Bank lending rose 14.7 percent to the end of April from the first of the year, reaching almost half the 30 percent limit set by the central bank to reduce credit growth.

Standard & Poor's Ratings Service this month cut its outlook on Vietnam's credit rating to negative from stable, citing ``rising risks to macroeconomic stability from an overheating economy.''

The amount commercial banks must set aside as reserves was raised in February to 11 percent of deposits of 12 months or less, from 10 percent. For dong and foreign currencies deposited for one year or more, the figure rose to 5 percent from 4 percent.

Commercial banks agreed on April 29 to raise the rate they give dong currency depositors to 12 percent
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Re: Vietnam - General News

Postby kennynah » Sun May 18, 2008 5:07 pm

no wonder, their property prices have been surging for the last 24 months... i had some chat with friends, and most generally agree it's a bit too late now to buy properties in hcm city...

u think so?
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Re: Vietnam - General News

Postby winston » Sun May 18, 2008 5:14 pm

Hi k,

Don't know much about Vietnam. All I know is their stockmarket was one of the better performing ones but have also corrected recently..

So I'm putting it on my radar now.

In addition, I recall that the head honcho at Capitland is very bullish on Vietnam.

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Re: Vietnam - General News

Postby helios » Mon May 19, 2008 10:18 am

head honcho refers to = influential person? big shot? big fish??

(i'll lookout for big fishes tmr lor; gtg for e Vietnam Festival launch'g tmr @ ACM)
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Re: Vietnam - General News

Postby littlecupid » Mon May 19, 2008 12:11 pm

I am rather postive on Vietnam. I visited Ho Chin Minh city 2-3 years back and I am surprise by their hardworking and rather friendly and entreprenuial attitude.

Their transition from a commnist to a capitalist econmy model is well received by the people. I read some article (forget which business magazine), that the people treat capitalism as something good and have dreams to work hard to gain wealth.

They are a good fight in the textile industry vs China/India. Nike has an outsource shoe factory there. Also I read that Intel has also set up some manufacturing plant there.

I was surprise that Singapore is one of the biggest investor there
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Re: Vietnam - General News

Postby helios » Mon May 19, 2008 12:30 pm

cupid:

1. Singapore-based drinks company Fraser & Neave and Dublin-listed Vietnam Enterprise Investment owned about 28% of Vinamilk?

2. APB on beefing up on its vietnam brewery assets?
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Re: Vietnam - General News

Postby winston » Mon May 19, 2008 2:42 pm

Vietnam Set to Rely More on Higher Interest Rates, Goldman Says
By Seyoon Kim

May 19 (Bloomberg) -- Vietnam will likely depend on raising interest rates and limiting credit to cool inflation, Goldman Sachs Group Inc. said, two days after the central bank abolished a cap on deposit rates and lifted its benchmark lending rate to the highest since it introduced the base rate in 1998.

``Vietnam is clearly at a crucial stage of its cyclical management for inflation control and ensuring a soft landing of the economy,'' Helen Qiao, Hong Kong-based Goldman economist said in a report.

``We believe the central bank will likely rely more on higher interest rates and credit control to reduce domestic overheating pressures, while maintaining the fixed exchange rate with a moderate downward crawl against the U.S. dollar in 2008- 2009.''

In an effort to cool accelerating inflation, the State Bank of Vietnam said on May 17 it will increase the base rate to 12 percent from 8.75 percent effective today. Consumer prices that surged 21.4 percent in April, the most since at least 1992, and rate restrictions have hurt banks' ability to attract deposits.

Vietnam's commercial banks raised the rates they offer depositors to as much as 14.8 percent today.

The central bank's decision is a ``positive step'' to tightening monetary policy through ``market-oriented measures, which demonstrates the government's resolution in maintaining the policy priority on inflation control over growth,'' Goldman's Qiao said.

Goldman said today the risk of ``hard landing'' of the Vietnamese economy isn't big.

`Hard Landing'

``On balance, we do not think the risk of a hard landing is large enough to make it our baseline scenario,'' Qiao said. ``With a firm stance in holding tight monetary policy, we see a greater probability that macro stability can be maintained in Vietnam.''

Vietnam's Deputy Prime Minister Nguyen Sinh Hung said in April the government would reduce the 2008 economic growth target to 7 percent from a previous forecast of as much as 9 percent. Economic growth slowed to 7.4 percent year-on-year in the first quarter. The economy expanded 8.5 percent in 2007, the fastest rate since 1996.

Goldman forecast this year's GDP growth at 7.3 percent and annual average consumer price inflation at 19 percent.

Standard & Poor's Ratings Service earlier this month cut its outlook on Vietnam's credit rating to negative from stable, citing ``rising risks to macroeconomic stability from an overheating economy.''
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Re: Vietnam - General News

Postby kennynah » Mon May 19, 2008 3:50 pm

panasonic set up a mfg plant in either hanoi/hcm in 2007.


littlecupid wrote:I am rather postive on Vietnam. I visited Ho Chin Minh city 2-3 years back and I am surprise by their hardworking and rather friendly and entreprenuial attitude.

Their transition from a commnist to a capitalist econmy model is well received by the people. I read some article (forget which business magazine), that the people treat capitalism as something good and have dreams to work hard to gain wealth.

They are a good fight in the textile industry vs China/India. Nike has an outsource shoe factory there. Also I read that Intel has also set up some manufacturing plant there.

I was surprise that Singapore is one of the biggest investor there
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Re: Vietnam - General News

Postby blid2def » Mon May 19, 2008 4:01 pm

Source: http://www.researchandmarkets.com/repor ... _id=516067

Anyone know if it's true Vietnam's the no. 2 textile and garments exporter in the world, after China?

Vietnam’s textile and garment industry has developed rapidly in recent years and has become a vital activity within the country’s economy. In 2004 it employed 2.1 mn people directly, representing 4.7% of total employment within the country. The industry has a number of leading textile and garment enterprises. One of the largest is the state-owned Vinatex, which accounted for an estimated 22% of Vietnamese textile and garment exports in 2006. One of Vinatex’s affiliates, Viet Tien Garment Company, has invested more than US$10 mn during the past five years in order to upgrade its production lines. Most of this new equipment has been imported from Japan and Singapore.

Also, in 2006 the sector exported textiles and garments to the value of US$5.8 bn, making it Vietnam’s second largest export earner after crude oil. Buyers from a number of the world’s leading textile and apparel companies have sourced apparel from Vietnam including Express, Hucke, Itochu, JC Penney, Jupitar, Kmart, Kowa, Lee Cooper, Li & Fung, Mast Industries, Nichimen, Nissho Iwai, Otto, Sara Lee, Seidensticker, Sumitomo, Tomen, Tommy Hilfiger, Victoria’s Secret, and Wal-Mart.

Three major developments over the past 20 years have led to the industry’s present vibrancy. One was the introduction in 1986 of the so-called Doi Moi economic reforms which—notwithstanding the government’s communist leanings—gave encouragement to the private sector and allowed market forces to determine the allocation of resources. A second was the collapse of the Comecon (Council for Mutual Economic Cooperation) bloc in 1990-91 and that of the Soviet Union in 1991. These events caused initial hardship but prompted the country to forge links with the West and enter the international community. The third was the granting by the USA of normal trading relations (NTR) or most favoured nation (MFN) status in December 2001, which led to a dramatic reduction in import tariffs in the US market.

The future for the textile and garment industry in Vietnam looks promising. Vietnam joined the World Trade Organisation (WTO) at the beginning of 2007 and seems set to build upon its recent export success. Moreover, the Vietnamese government is highly supportive of the textile and garment sector, and there are strong incentives to attract foreign investment. The government has outlined ambitious plans for the industry’s development. If these plans are fulfilled, employment and exports in the sector will double by 2010.
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Re: Vietnam - General News

Postby kennynah » Mon May 19, 2008 4:11 pm

and that nike also engaged in child factory workers to manufacture Nike shoes and products in vietnam?

i have since stopped buying nike products...my last purchase was a nike knapsack in 1999...
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