Lawyers: ACB illegally accessed investor’s account

VietNamNet Bridge – Lawyers believe that the action by the Asia Commercial Bank (ACB) of accessing investors’ accounts and spontaneously placing gold sale orders was illegal.

Gold traded at VND 17,000/tael on ACB trading floor

There is no perfect legal framework for the operation of gold trading floors

On December 10, some of VietNamNet’s readers, who are also investors on the ACB gold trading floor, came to VietNamNet’s office, and said that ACB did not contact them to explain the employees’ mistakes in quoting the gold sale prices as the bank wrote in its press release.

Meanwhile, the lawyers who VietNamNet has consulted with all said that ACB’s actions were illegal.

Lawyer Bui Quang Nghiem, Head of Nghiem & Chinh Law Office, said that the transaction between a legal entity and an individual is covered by the Civil Code. Article 389 of the law says that the transaction must be ‘voluntary, fair, good-willed, cooperative, honest and straightforward.’ The behavior by ACB of spontaneously selling investors’ gold and amending investors’ accounts must be seen as violating the said above article.

“The fact that an individual or legal entity spontaneously accessed other people’s accounts to sell other people’s assets or amend the information of the accounts to benefit the individual or the legal entity is illegal,” said Lawyer Tran Duy Canh, Head of the Luat Viet Law Office.

Canh stressed that the behavior should be seen as illegal even when the individual or legal entity changed the information to bring benefit to the owners of the accounts. In this case, ACB did this without asking for the permission from the account owners, and without the direction of competent agencies.

Canh said that under the current rules, there are not ceiling nor floor gold prices, which means that investors’ successful purchase of gold at the low price was legal. If ACB wants to repair the damages caused by the employees’ mistake, it must negotiate with investors, while it should not have spontaneously accessed the investor’s account.

When gold trading floor runner also makes trading deals

Lawyer Bui Quang Nghiem said that the current laws do not prohibit the runners of gold trading floors to make trading deals for themselves. Therefore, Nghiem said, this requires very strict requirements in order to ensure the fair and transparent operation of trading floors.

The problem now lies in the fact that state management agencies have not set up a perfect legal framework of the operation of gold trading floors. That explains why, in most disputes, investors always are at a disadvantage.

ACB is acting as both the owner of the gold trading floor, and the investor who makes trade deals for themselves. It also provides technology solutions, and it sets the rules for the trading floors, which means that ACB holds the handle of the knife. Therefore, ACB has not taken any responsibility for the troubles on the trading floor that occurred recently. Investors could not understand why the computers were suddenly suspended when the gold prices skyrocketed, which made them unable to sell gold, but able to buy gold.

ACB must not repair a mistake by another mistake In principle, ACB must bear all the damages as the transactions have been completed. Also in principle, ACB must not repair a mistake by another mistake, i.e it must not spontaneously buy or sell gold in investors’ account. The amendment of the entries can be carried out only when this is allowed by the laws, or it is sure that this will not cause any damage to clients. If ACB apologizes to clients and the apology is accepted by clients, the issue will be settled by negotiations, which are respected and encouraged by the laws.

Nguyen Nga – Phuong Nam

Consumers tighten belts ahead of Tet

VietNamNet Bridge – Financial troubles will cause consumers to tighten their budgets and alter traditional spending habits for the upcoming Tet holiday.

The Ha Noi Industrial and Trade Department said it expects total retail sales of goods and services to reach VND9.5 trillion for the Tet festival in 2009 in Ha Noi.

The purchasing power of consumers is expected to be lower during the month of the holiday, as compared with the month of the holiday last year. This will particularly affect consumer choices at supermarkets and wholesale markets.

Vu Vinh Phu, chairman of the Ha Noi Supermarket Association, said consumer purchasing power at supermarkets in Ha Noi is forecast to increase only 20 per cent this coming January, much lower than the 30 per cent growth rate in the same festival period in 2008.

Enterprises in the capital city have not had good business results this year, and they will not be handing out customary high bonuses for their workers. This will be one big driver behind the public having a lack of funds for Tet preparations, Phu said.

In the past, each citizen in ha Noi spent an average of US$17.85 for supermarket purchases in every year's Tet festival month. However, this coming Tet, the amount for shopping is expected to be only $11.9 per person, he said.

The Ha Noi Industrial and Trade Department said it expects total retail sales of goods and services to reach VND9.5 trillion ($565.5 million) for the Tet festival in 2009 in Ha Noi.

In the month of Tet, residents in Ha Noi are expected to consume 70,000 tonnes of foodstuff, 13,000 tonnes of pork, 3,000 tonnes of beef, 4,000 tonnes of poultry, 80,000 tonnes of fruit and vegetables, 1,200 tonnes of confectionery and 7-8 million litres of beer, alcohol and other beverages.

The People's Committee of Ha Noi made a decision already to provide five-month loans worth a total of VND160 billion ($9.7 million) from the city's budget, for key enterprises that produce and supply foodstuffs in the capital to stock goods for the upcoming Tet.

Meanwhile, food traders at Dong Xuan Market, specialising in wholesale and retail of all kinds of goods, and the temporary market in Phung Hung Street, receiving traders who moved from Hang Da and December 19 markets due to construction at these sites have not had stocks of goods for the Tet festival due to low purchasing power.

The owner of Kim Dinh Shop, specialising in the trade of confectionery, alcohol and beer at Dong Xuan Market, said the melamine scandal has caused consumers to shy away from sweets and candies, which means businesses are not stocking as much for the Tet festival.

Nguyen Thi Nghia, the owner of Loi Nghia Shop said that fluctuations of the price of goods and slow sales make shop owners nervous about stocking up.

The owner of Lien Hoa Shop specialising in the trade of fresh and dry food, fruits and vegetables at the temporary market said there are simply not enough customers to warrant keeping a lot of products in stock.

(Source: Viet Nam News)

Exports to Japan may soar after trade deal

VietNamNet Bridge – The number of Vietnamese exports to Japan is expected to soar, following an agreement between Japan and Southeast Asian countries on the elimination of tariffs on nearly 80 per cent of Vietnamese goods.

Vietnamese agricultural exports to Japan that will be tariff-free, include ginger, garlic, durian, rambutan, apricot, canned litchi and fresh bamboo sprouts. Mushrooms, potatoes, tea, coffee, frozen fish, shrimp and crab.

The agreement, called the Association of Southeast Asian Nations (ASEAN)-Japan Comprehensive Economic Partnership, came into effect on December 1.

"The agreement creates more advantages for some of our strongest exports, but it will also raise obstacles," said Le Quang Lan, deputy head of the Ministry of Industry and Trade's Multilateral Trade Policy Department.

The Japanese market, for example, imposes strict trade standards on country of origin and sanitary standards for imported goods, two areas that remain underdeveloped and poorly enforced in Viet Nam.

"Viet Nam will co-operate with Japan to set up a joint commission that will define quality and food safety and hygiene. Additionally, Japan will help Viet Nam set up a centre on international sanitary standards," Lan said.

Under the new agreement, the import tariff on Vietnamese garment and textile exports has dropped to zero from 5-10 per cent.

Textile and garment exports to Japan, however, remain modest. Last year's total value was US$800 million, or only 9 per cent of the total export value of the industry.

In exchange for the elimination of tariffs, the ASEAN member countries including Viet Nam, will have to meet certain criteria on the use of materials.

Raw materials used for garments and textiles, for example, must be sourced only from Japan or Southeast Asia, including Viet Nam.

The raw material requirement also applies to leather shoes, a major Vietnamese export to Japan.

"The biggest goal of Viet Nam is not focusing on export growth to Japan, but creating an improved position in the global market by meeting the strict criteria set by Japan," Lan said.

Vietnamese agricultural exports to Japan that will be tariff-free, include ginger, garlic, durian, rambutan, apricot, canned litchi and fresh bamboo sprouts. Mushrooms, potatoes, tea, coffee, frozen fish, shrimp and crab.

(Source: Viet Nam News)

Crude oil price falling, lubrication oil rising

VietNamNet Bridge – The lubricants for engines have not seen any price decreases, but have even been increasing, despite the sharp falls of the crude oil prices in the world market. Why?

Many lubricant trading companies said that they cannot slash the sale price of lubricants because they still need to sell the stocks that they previously imported at high prices.

However, the explanation seems to be unconvincing. A General Director of a domestic lubricant trading company, who has 10 years of experience in the field, said that the companies are proving to be unfair in not having slashed the sales prices. He said that while the lubricants for production are seeing decreases in consumption, the lubricants for engines can be sold as soon as they are churned out. The biggest dumps for the companies are just big enough to store lubricants for less than two months of consumption.

The quotations of base oil in the markets of Singapore, Saudi Arabia, Japan and Europe have all showed that the base oil products, from which lubricant is made, like SN150 and SN500, have all been decreasing sharply in price since September.

In September 2008, the price of oil products hovered around $1,300-1,400/ton, but the prices then dropped to nearly $900/ton at the end of November.

According to baseoilreport.com, South Korean base oil N-60/70 products have decreased by $200 in price to $890-910/ton. Meanwhile, J150 and J500 of Singapore have reduced by nearly $300/ton to $885-905/ton.

Experts said that the current prices have represented the ½ price decrease when compared to the period when the crude oil price was at over $140/barrel at the end of July.

Meanwhile, in HCM City, the lubricant sales agents on Tran Huy Lieu and Hoang Van Thu streets in Phu Nhuan district, or the sales agents on Nguyen Trai street in district 1, all said that the lubricant prices have not seen any decreases. They even said that the prices went up by VND 3-4,000/litre in November.

A salesman at a motorbike shop specializing in selling Piaggio model bikes, on Cong Hoa street in Tan Binh district, said that Mobil lubricant for scooters has been offered at VND 245,000/litre, an increase of VND 30,000.

Lubricant market dominated by foreign brand names

It is estimated that there are over 30 companies in the south that import base oil to make lubricant domestically, including big names of the world, like BP, Castrol, Exxon Mobil, Shell, Caltex and Total.

As for the market of lubricant for engines, foreign brand names are now holding 75% of the market share, while they hold 90% of the market of lubricant for equipment and machines in production workshops.

In fact, Vietnam also has its own brand names for lubricants like Petrolimex, Vilube, Solube, S-lube or T-lube. However, they just hold a modest market share, and the sale prices of the products are also modest. While a foreign brand name lubricant tank is selling at over VND 50,000, a domestic brand name tank is priced at VND 35-47,000.

Representative from Shell in Vietnam said that the price of base oil proves to have no direct relation to the crude oil price. The base oil prices have not decreased in accordance with the crude oil price decreases.

However, domestic experts still insist that, in general, the base oil prices always increase or decrease one month after the crude oil price increases and decreases. They affirmed that the retail price of lubricants should have been lowered since November.

(Source: Tien phong)

Vietnam economy in good shape

WB Acting Country Director, Martin Rama.

VietNamNet Bridge – Speaking at a ceremony, held in Tokyo on Wednesday, to release a new World Bank report about East Asian economies, Vikram Nehru, the WB’s chief economist for East Asia and the Pacific, advised the economies that have a strong reliance on foreign investment to be cautious to avoid risks.

Nehru said the world is now in the most serious financial crisis in history, which is affecting even countries with good management capability. However, Vietnam has taken suitable measures to deal with difficulties and stabilize its economy.

While East Asian countries have entered the current crisis substantially better prepared than they were for the 1997 Asian financial crisis, none have been spared the full fury of the global economic storm, says the WB’s latest six-month assessment of the East Asia and Pacific region’s economic health.

The report notes that the downside risks to East Asia are substantial in the near-term, but highlights that countries will be better positioned to deal with the crisis if they are able to maintain macroeconomic stability, shift exports to faster growing regions in the world, substitute external with domestic demand, and continue with structural reforms to strengthen competitiveness.

According to the WB, economic growth in all East Asian countries, except for Malaysia and Indonesia, was slowing down before the crisis reached its peak in mid-September. Despite efforts to encourage demand in many countries, economic growth is anticipated to continue slowing down in 2009. Despite the slowdown, East Asia will contribute to approximately one-third of total global growth in 2008.

World Bank Vice President for the East Asia and Pacific region, Jim Adams, applauded East Asian governments for their swift and effective policy interventions to avert the worst impacts of the global crisis so far.

"Thanks to the quick action of policy makers from virtually every East Asian country, banking systems have been able to deal with the crisis so far and in a number of countries, economic stimulus packages are being put in place. These actions are helping East Asia to continue playing a key stabilizing role and are acting as a growth pole for the global economy," Adams said.

"Despite the difficult road ahead, those countries that sustain sound policies pursued thus far and tackle new challenges decisively will be the ones to emerge in a strengthened position when the global economy begins to recover," said Nehru.

With regards to Vietnam, Nehru said Vietnam has had an outstanding economic development period. In the difficult situation, the country had suitable measures to stabilize its economy.

In Hanoi, the WB Acting Country Director, Martin Rama, said the global economic downturn would hit Vietnam but at slower pace than other economies. But the expert emphasized that Vietnam needs to take flexible and quick responses to possible impacts.

Vietnam is perceived as reacting well to the crisis with its impressive performance this year, demonstrating the resilience of its economy, Rama said.

The growth of the economies of developing East Asia countries will slow down to 6.7% in 2009 and 7.8% in 2010, from 8.5% in 2008, as the impact of the financial crisis reaches the region, the latest economic update of the WB said.

The WB’s report forecasted approximately a 6.5% economic growth rate for Vietnam in 2009, which is similar to the Vietnamese Government’s goal. However, Martin Rama said that the figure may be closer to 6% or just over.

Related to the Vietnamese Government’s $1 billion package to stimulate production and consumption, the WB said the spending may increase. Rama said the most important thing for Vietnam is that it has to “take this opportunity to perform financial reforms.”

The report warns that the region’s most vulnerable countries are those with more open capital accounts, large non-resident holdings of equities, and a strong reliance on foreign portfolio investment. According to WB, the outside capital flow accounted for 30% of Vietnam’s GDP in 2006.

Poverty rates are likely to fall further in 2009, declining to 10.68 percent for developing East Asia as a whole, compared with the 10.36 percent projected earlier this year. While the number of poor people in the region will continue to decline, an estimated 5.6 million more people would have emerged from poverty next year if not for the slump.

Developing East Asia includes China, Indonesia, the Philippines, Thailand, Vietnam, Cambodia, Lao, Mongolia, Papua New Guinea and the island economies of the Pacific.

XL

Many companies lowering 2008 business targets

VietNamNet Bridge – The fiscal year is ending, but several companies have just announced adjustments of their turnover and profit plans for this year, surprising shareholders with big adjustments. Are the late announcements the result of poor forecasts by enterprises or were they deliberately delayed to prevent share price decreases?

Investors need update information

Construction Joint-stock Company No 5 (SC5) has announced its 2008 turnover plan of VND818bil is kept intact, but the targeted pre-tax profit has been lowered to VND40.48bil from VND87.2bil.

Invesco, an investment and construction development, has lowered its targeted production value from VND660bil to VND480bil, targeted turnover from VND570bil to VND400bil, and pre-tax profit from VND30bil to VND17bil.

Vinaconex 11, a construction company, has cut its 2008 turnover target from VND500bil to VND380bil, and post-tax profit from VND22bil to VND13.2bil.

It has come as quite a surprise that these companies did not begin consulting with shareholders about adjustments of production and business plans until December. UIC, an investment and urban development company, is another example. It is asking for shareholders’ opinions about the lowering of its post-tax profit target from VND19.48bil to VND13.172bil, and dividends from 15% to 13.5%. It announced that the collection of opinions would last from December 10 to December 22. When will the company make a final decision on the adjustment then?

Explaining the adjustment of its business plan for this year, a representative of SC5 said that earlier this year, when drawing up the 2008 business plan, the company anticipated that fuel and construction material prices would increase in 2008, which prompted the company to ask partners to sign open contracts (contracts which allow for adjustments of material prices in accordance with price increases in the market).

However, the company could not anticipate other changes. Bank interest rates increased sharply, high petrol prices were kept for a long time, and the wages the company has had to pay have increased from VND40-50,000 to VND120-150,000 per day. All these increases have led investment costs to skyrocket. As a result, the company thinks that it will still be able fulfill its turnover plan, but not the targeted profit one.

Why has the company just announced its new targets recently? The representative said that even in Q3, the company still believed it would be able to fulfill the plan thanks to the open contracts. However, the company is now sure that the previously set profit target is impossible, and that the more realistic profit goal is VND40bil.

“We have made the announcement so that shareholders know exactly how much profit we will earn this year. We want to provide updated information for investors; the tardiness in making the announcement should not be seen as a deliberate action,” he said.

Vietcombank, one of the biggest banks in Vietnam, has also consulted with shareholders on adjusting its 2008 business plan. The total assets of Vietcombank are expected to see a decrease of VND9tril to VND200tril, the credit growth rate is expected to reach only 15%, while the capital mobilisation growth rate 0%.

A member of Vietcombank’s board of directors said that the bank believes it will still be able to fulfill the planned profit target, but fail to fulfill the plans on capital mobilisation and non-performing loans.

In fact, investors well understand the reasons why listed companies have to adjust their business plans. However, Nguyen Hong Quan, acting Director of An Binh Securities Company, said that in general, companies do not adjust business plans in the ‘last days of the year’ as this affects investors.

Nguyen Thi Hoang Lan, Deputy Director Hanoi Securities Trading Centre (HASTC), also said that it is quite normal for companies to adjust their business plans. However, companies need to announce target adjustments earlier in order to help investors make the right decisions.

Lan said that listed companies should change their viewpoints about information exposure. Enterprises tend to conceal information about labour-cost cuts and production decreases, which they consider ‘bad information’. Lan stressed that investors need to be well informed about the health of businesses, or they will seek unofficial information in the market.

(Source: DTCK)

WB, ADB to lend $110 mln to Vietnam

The World Bank (WB) and the Asian Development Bank (ADB) will offer a combined credit of US$110.3 million to help Vietnam improve its agriculture, reduce poverty and rebuild rural infrastructure damaged by typhoons.

According to an agreement signed in Hanoi Tuesday, the WB will loan $59.8 million to help Vietnam improve its agricultural competitiveness.

The loan, funded by the International Development Association (IDA) – the WB’s concessional lending arm for low-income countries – will be used to help smallholding farmers in eight central Vietnamese provinces through the Agriculture Competitiveness Project.

The funds will also be used to help smallholding farmers access markets through the provision of technology services, public infrastructure for agriculture, and will facilitate farmer organizations and linkages to agribusiness.

Meanwhile, the ADB will provide a $25 million loan to help Vietnam carry out policy reforms for its poverty reduction program in cooperation with a number of other development partners, according to a press release Tuesday.

The ADB will also offer $25.5 million in supplementary financing to an existing emergency assistance loan to Vietnam for the rebuilding of rural infrastructure severely damaged by typhoons and storms in 2005.

The project was initially approved in 2006 by ADB with a loan of $50.97 million. However, high inflation has increased the cost of civil works, materials and labor. Additional damage to rural infrastructure caused by typhoons in 2006 and 2007 has contributed significantly to cost overruns.

The supplementary ADB funding will ensure completion of the project, which targets 10 of the most badly affected provinces in Vietnam’s northern and central regions.

Reported by Bao Van

Wildlife wonderland

Take a boat to see bats and birds at U Minh Thuong National Park in the Mekong Delta.

About 50 kilometers from Rach Gia Town, the administrative and economic center of Kien Giang Province, U Minh Thuong National Park is an ecotourist site which nature lovers should not miss when visiting the Mekong Delta province.

From Rach Gia, tourists can go to U Minh Thuong National Park by different means of transport. If they use the hydrofoil, they will have to take a honda om (motorbike taxi) to travel some distance from the boat quay to reach the park.

Using a taxi is the most convenient way for tourists with limited time to visit U Minh Thuong National Park because a taxi can take them to Hoa Mai Lake deep in the park, where they can take a boat tour of the forest. They will not have to buy a VND7,000 (US$0.40) entrance ticket for the taxi driver.

From Hoa Mai Lake, tourists can take a boat to visit Bat Field, a trip that takes about 45 minutes. They can also rent a speedboat for VND200,000 ($11.80) to visit both the Bat Field and Bird Field in about two hours.

Bat Field is part of a primeval forest that covers about one hectare. It is the habitat of about 1,000 large bats which usually feed in Can Tho City, several kilometers away.

Boating from the Bat Field to Bird Field, tourists will see plenty of water ferns. Some places have so many water ferns that the water is no longer visible. After a big fire of 2002, an embankment was built to store water all year round to protect the core area of the national park from fire.

At the Bird Field, the speedboat will stop at the observation tower. Visitors have to climb up a ladder to observe the birds from the tower. Dozens of different species can be seen, as well as plenty of birds’ nests.

At U Minh Thuong National Park, you may encounter some people from Saigon enjoying a spot of fishing. Some Saigon anglers have landed fish weighing more than 10 kilos here.

Visitors to the park are served mainly grilled snakehead fish and eel hot pot, two main specialties of the region.

Reported by Tan Tu

Tan Tao seeks contractors for $7.7 bln power plant

Tan Tao Investment Industry Corp. Wednesday opened up the bidding for construction engineers for a US$7.7 billion power plant and seaport in the southern province of Kien Giang.

The Ho Chi Minh City-based industrial park builder and operator, also known as ITA Group, said the complex will be located in Kien Luong Town and comprise Kien Luong 1 and Kien Luong 2 power plants and the Nam Du deep seaport.

Construction of Kien Luong 1 plant will begin next year at an investment of $2.5 billion, said Tan Tao’s vice president Nguyen Tuan Minh. Its capacity will be between 1,200-2,000 megawatts with initial generation of 600 megawatts by late 2013.

In an interview with Bloomberg, Minh also said that the complex would supply a total 4,400- megawatts after its completion.

The plant will require about 3 million tons of coal imported from Indonesia, Australia and Russia in the first stage, according to Minh.

The UK's International Power Corp., Japan's Sojitz Corp., and Kyushu Electric Power Co. are Tan Tao Investment's strategic partners who will help secure loans and seek appropriate technology for the project, Minh said.

The plants, about 300 kilometers (186 miles) from Ho Chi Minh City, falls under a government program that guarantees up to 80 percent of the loans earmarked for investment, Minh said, adding that the project will be the nation's largest thermal power project by a private company.

ITA group is involved in infrastructure, industrial parks and power projects like the Tan Son Nhat Express Way, Nam Na 3 Hydro Power and Long An Water plants.

Source: TN, Bloomberg

Thais hope to win over Vietnamese tourists

In the wake of political protests that left many travelers stranded in Thailand, Thai authorities are planning to lure Vietnamese to visit their near neighbor with discount tour packages and a new advertising campaign.

At a press briefing in Ho Chi Minh City on Monday, Tourism Authority of Thailand Director Pichai Raktasinha said as the Suvarnabhumi International Airport had resumed normal operations, Thai tourism authorities were working to regain the trust of international tourists.

Flights resumed to Bangkok’s main international airport last week, after antigovernment protestors shut down the city’s two international airports for more than a week.

Last year, more than 250,000 Vietnamese traveled to Thailand, a 50 percent year-on-year increase, according to the Tourism Authority of Thailand.

“Of this year’s target of 300,000 (Vietnamese visitors), we now hope to achieve about the same figure as 2007 because of the recent turmoil in Thailand and also the global economic crisis,” Pichai said.

“Our current occupancy rate is only 20-40 seats of the 100-seater Boeing 717’s daily flight between Bangkok and HCMC and it would be worse after the turmoil,” Nitikorn Komkris, a senior sales executive at Bangkok Airways said.

However, the situation was expected to improve during the Tet (Lunar New Year) holiday early next year, he said.

This year, around 169,000 Thai tourists visited Vietnam between January and November, accounting for a third of the Thais who traveled overseas.

Reported by Vinh Bao

World Bank lowers growth forecast for Vietnam

Vietnam is expected to post gross domestic product (GDP) growth of 6.5 percent in both 2008 and 2009, lower than earlier predictions, the World Bank said in its semi-annual report released Wednesday.

In April, the Washington-based lender predicted 8 percent growth for Vietnam this year and 8.5 percent next year.

But its latest prediction is still more optimistic than the International Monetary Fund’s recent forecast of 5 percent for 2009. The growth rate last year was 8.5 percent.

The World Bank’s prediction is based on the expected impacts of the global financial crisis on Vietnam’s poverty reduction programs, export and investment, the bank’s acting country director in Vietnam, Martin Rama, said at a video conference.

The country’s shipments of some staple items like garments and seafood, which until recently saw high export growths, are not expected to fall sharply, he said.

But the global economic recession would see foreign direct investments decline, though not by too much, he said.

FDI inflows have remained robust so far, with approvals this year reaching a record level of US$59.3 billion, equivalent to about two-thirds of the GDP.

Assessing the government’s reaction to current difficulties, Martin Rama said the country has taken fairly good and effective action, but it should take more rapid, accurate and flexible measures.

Recently, the World Bank advised Vietnam to place priority on ensuring economic stability, developing its infrastructure and improving the efficiency of investments.

East Asia growth forecasts

East Asian economies would probably expand at the slowest pace in eight years next year, as easing export demand and declining investment and consumer spending portend “hard times” for the region, the World Bank said.

East Asia, excluding Japan, would expand at 5.3 percent next year, slower than the 7.4 percent rate the World Bank had predicted last April. Growth would probably be 7 percent this year, the bank said.

Fiscal stimuli and coordinated interest-rate cuts by governments and central banks around the world have failed to reverse a worldwide economic slump and the worst credit crunch in seven decades.

The World Bank Tuesday lowered its global growth projections, and predicted international trade would shrink for the first time in more than 25 years in 2009.

“The contraction of output in the developed economies may well last longer and run deeper, delaying a recovery in growth in East Asia,” the bank said. “In the near term, downside risks are substantial.”

The World Bank had said in April inflation would pose a greater threat to East Asia than the global slowdown this year. As crude oil and commodity prices fell from record levels, and consumer price gains peaked, it is now pointing to a worsening economic outlook.

Weaker exports

“Prospects for weaker exports, together with a projected decline in capital inflows, will constrain investment spending,” it said. “Private consumption is likely to be hit by more sluggish earnings, higher levels of unemployment, a reduction in household and corporate wealth, and an increased desire to save in uncertain times.”

Asian governments and their counterparts around the world are spending hundreds of billions of dollars to protect their economies from the global financial crisis. Slowing inflation would allow the governments to boost growth through expansionary fiscal measures, the World Bank said.

China last month announced a $582 billion economic stimulus plan, while South Korea unveiled a 14 trillion won ($9.7 billion) package of extra spending and corporate tax breaks, adding to almost $20 billion in income-tax reductions announced in September.

“A number of countries in East Asia have some room to loosen policy, as fiscal positions have generally improved in recent years,” it said. “To ensure fiscal stimulus packages achieve their objective of generating demand and jobs in the domestic economy, such packages will need to be well-targeted and temporary in duration.”

‘Do better’

The World Bank said developing East Asian economies would be more resilient during the slowdown compared with other emerging-market regions such as Latin America, which it has projected will grow 2.1 percent next year.

“East Asia is expected to do better than the other developing regions in the world” by growing 4 to 5 percent in the next year, Vikram Nehru, the World Bank’s chief economist for East Asia, said in an interview with Bloomberg Television earlier this week. “That’s not spectacular, but still reasonably good.”

East Asia probably contributed to a quarter of global growth this year, and that may rise to a third next year, the World Bank said.

“The countries in the region will be better positioned to deal with the crisis to the extent that they are able to maintain macroeconomic stability, shift exports to faster growing regions in the world, substitute external with domestic demand, and continue with their structural reforms to strengthen competitiveness,” the report said.

Global forecast

The bank forecast slowing growth of just 0.9 percent for the world economy and said global trade volume would fall 2.1 percent, as the financial crisis takes its toll on rich and poor nations around the world.

“The global economy is at a crossroads, transitioning from a sustained period of very strong developing country-led growth to one of substantial uncertainty,” said World Bank chief economist Justin Lin.

The bank’s report came amid a slew of more bad news from companies and countries worldwide.

Anglo-Australian mining giant Rio Tinto said Wednesday it would slash thousands of jobs globally to cut its debt by $10 billion, as it battles falling mineral prices.

Canada’s central bank said the Canadian economy has slid into a recession.

The International Air Transport Association forecast that airlines would likely lose $2.5 billion in 2009.

“We face the worst revenue environment in 50 years,” said Giovanni Bisignani, the chief executive of the Geneva-based association.

Reported by Ngan Anh (With inputs from AFP and Bloomberg)

Going native

Vietnamese singers abroad are becoming increasingly popular in their adoptive countries.

Overseas Vietnamese singers are not only popular in Vietnamese communities but also with native Europeans.

Hungary’s megastar

Nguyen Thanh Hien caused a stir in the Hungarian-Vietnamese community when she became the first singer of Vietnamese origin to enter the final round of the nation’s Megasztar contest.

Hien was one of five singers of Vietnamese origin to compete in the show that attracted some 10,000 initial contestants.

Megasztar, which began in 2003, is an annual singing contest that searches for the country’s best singers following the American Idol model.

Though Hien didn’t pass the Top 6 Round, she strongly impressed the jury with her mellifluous voice and vivacious, youthful performing style.

Friderikusz Sándor, known as the TV King of Hungary and the contest’s most hard-to-please juror, called Hien’s rendition of “Crazy in Love” in the Top 8 Round a world-class performance.

Fenyó Miklós, known locally as the King of Rock and Roll, said Hien’s sweet voice and performance were mature and that she expressed strong feelings in difficult songs.

Swedish Idol

Vietnamese Swedish singer Alice Svensson has also caught the attention of local audiences when she made it to the final round of the 2008 Swedish Idol contest, one of the country’s most popular TV programs.

She was chosen as one of the top-five viewer’s choice contestants.

Her charm and her strong, resonant voice, like that of a 70’s soul singer, won over the judges.

The final results of this contest are expected to be announced next month.

Svensson, born in 1991 in Hanoi, Vietnam was adopted by a Swedish family when she was only 10 months old, and has since lived in Gavle.

The 17-year-old also won the 2007 Music Popcorn contest and played piano for a rock band.

Svensson, who says music is her life, began studying music at the Jazz School in Vasaskolan last year.

One of her hit songs, “Heaven's On Fire,” was listed for one week on the Sweden Singles Top 60.

Nostalgia from Belgium

Vietnamese-Belgian singer Pham Quynh Anh, who just visited Vietnam for the first time earlier this month, is another phenomenon.

She is most well-known for Bonjour Vietnam, written by French singer-songwriter, and heartthrob Marc Lavoine in 2005.

The song, written especially for Anh, is about an overseas Vietnamese woman’s deep feelings for her home country.

When a version of the song was posted on the Internet in early 2006, it spread through overseas Vietnamese communities like wildfire and became a smash hit among young listeners before the song was officially released.

Anh released the English version “Hello Vietnam” earlier this year.

She and Lavoine toured together through Belgium, France, Switzerland and the US in 2005.

The young singer born in 1987 in Belgium, is looking to release an album next year.

Reported by Chau Yen

Vietnam-born lawyer enters US Congress

Receiving about 50 percent of the vote in Louisiana on Saturday, Republican attorney Joseph Cao has become the first Vietnamese American in the US House of Representatives.

Forty-one-year-old Cao Quang Anh, as his full Vietnamese name reads, defeated Democrat William Jefferson, who received 47 percent of the vote, Reuters reported.

Two other candidates each received small percentages.

Cao won in the 2nd congressional district, including most of New Orleans, which was ravaged by Hurricane Katrina in 2005. Saturday’s election had been put off because of Hurricane Gustav, which threatened the city in September and delayed the Democratic primary.

Jefferson, who has been in Congress since 1991, was accused last year of soliciting millions of dollars in bribes from a dozen companies while using his office to broker business deals in Africa. In a search of his home in 2005, FBI agents said they found US$90,000 in bribe money in a freezer.

Cao, a political newcomer, started his bid for Congress following his successful campaign to help New Orleaners rebuild their city after Hurricane Katrina.

He came to the US in 1975, having acquired law, physics and philosophy degrees.

As an emigration lawyer and now Louisiana’s representative in the lower house, Cao said he would talk more about immigration matters to the Congress.

“The people of the 2nd District have spoken. We want new direction. We want action. We want accountability,” BBC cited Cao as telling supporters.

Source: Agencies

Vietnamese-American wins US beauty pageant

A Vietnamese-American student was named National American Miss 2008, according to a newswire service.

Twenty-year-old Christina Hoang Mai Nguyen took out the title on the final night of the competition on November 30, winning a convertible car, two scholarships and a free trans-America tour, according to the America-based Vietnamese newswire Belinews.

According to Belinews, Nguyen is a business student at the Marymount College. She lives with her parents in Fairfax County, Virginia.

Nguyen participated in the contest’s preliminary round in 2006 and won the title of Miss Teen Virginia in 2007. In July she was crowned National American Miss Virginia 2008.

The National American Miss 2008 does not have swimsuits or eveningwear sections like other beauty pageants. Instead, the competition includes formal wear, personal introduction, interview and community involvement sections.

Reported by Trong Kha

Intel Vietnam launches study abroad program

Intel Products Vietnam Friday announced in Ho Chi Minh City the launch of its US$2 million Vietnam Study Abroad Program.

The program aims to provide scholarships to 40 top Vietnamese engineering students to study at Portland State University in Oregon, the US for the academic years 2009- 2011.

The 40 students will be selected from six technical universities in Hanoi, HCMC, Da Nang and brought back to strengthen the Intel Vietnam workforce after graduation.

In 2006, Intel announced a record investment of $1 billion in Vietnam for its largest Assembly and Test (A/T) factory which is currently under construction in District 9, HCMC.

The facility is expected to employ approximately 4,000 workers and is the seventh assembly and test site in Intel’s global network.

Reported by Vinh Bao

Advertising to be hit by economic woes next year, warns industry

Though the advertising industry has not yet felt the full effect of the economic downturn, the year ahead is likely to be tougher, industry insiders fear.

Tran Thi Thanh Mai, general director of market research company TNS Media Vietnam, said she expected total spending on advertisements this year to hit US$500 million, a 17 percent rise over last year.

Last year, the growth rate had been 18 percent, compared to 40 percent in 2006, according to TNS Media.

Mai said despite the decline in the growth rate, the situation has turned out to be better than expected considering the global economic downturn.

A recent survey by TNS Media found that in the first three quarters of this year, the biggest spenders were mobile phone service providers and producers of fast-moving consumer goods, beverages and dairy products.

The top 10 comprised Unilever Vietnam, P&G Vietnam, Vinamilk, Dutch Lady Vietnam, VMS-Mobifone, Tan Hiep Phat Beer Company, Nestle Vietnam and Vinaphone.

Nguyen Hoang Anh, managing director of Golden Advertising Company, said such companies cannot cut ad spending but have to continue promoting their products and services even during difficult times.

Besides, most companies had decided on their advertising budgets before the economy started slowing down and so did not have to change their plans, she explained.

But not all companies could afford to continue with their earlier plans. The TNS Media survey found that businesses in the banking and tourism sectors, the hardest hit by the economic downturn, have spent less money on advertising this year.

Mai said 2009 would be a tough year for the advertising industry though it is hard to say yet how much it would be affected by the economic crisis.

“The US and EU are now in recession. But in the Asia Pacific region, even experts cannot predict what will happen next.”

Mai said if the region does not fall into a deep recession, Vietnam would see an 8 percent increase in advertising expenditure.

But Nguyen Quy Cap, director of Youth Advertising Company, warned that when the economy slows down, businesses have to cut spending on advertisements.

Unilever, for instance, could slash its advertising budget by 40 percent, he said.

Anh said, however, companies with deep pockets can step up promotion even during a downturn to boost market share.

Advertising executives said at a time like this it is very important for businesses to carefully consider which medium would suit them best.

Vietnamese businesses tend to choose media arbitrarily instead of doing it on a rational basis.

According to the TNS Media survey, 76.9 percent of the total advertising revenue went to television. Print media ranked second with a 22.8 percent share. Radio ads accounted for 0.3 percent.

Although cable television and the Internet were not included in the survey, Mai said they are the two media that are attracting more ads.

Ong Xuan Minh, project manager of 24h Online Advertising Company, said from an admittedly small base, online advertising has been growing at an annual clip of 120-150 percent in the last few years.

Minh said he soon expects it to account for 2 percent of the total industry revenue.

Small businesses like fashion shops, restaurants and clinics favor online ads, he said, noting that some of them spend their entire advertising budgets on these.

Since advertising space on websites is cheap, it is suitable for small businesses, especially now.

But to attract more clients, online advertising companies need to bolster their reputation by providing statistics using reliable Web traffic counters, he said.

Online advertising companies now use different Web traffic tracking systems, making businesses hesitant about buying spots on websites, he added.

Many ad agencies also said they are worried that the draft Advertising Law would hurt the development of online advertising.

For instance, they said, a proposed provision banning ads on front pages of online newspapers should be scrapped.

Source: TBKTSG

Three arrested in slave-masseuse horror

Police in Ho Chi Minh City Monday arrested three people at a massage parlor in Thu Duc District for illegally detaining and extorting money from their female employees.

The three arrestees were owner Phan Cao Tri and his wife Phan Thi Yen, and Tri’s brother-in-law Phan Viet Hau.

In addition, police found another parlor run by Tri on Kha Van Can Street in the same district and three more managed by his relatives in Binh Duong and Dong Nai provinces, a local newswire reported.

Monday, police rescued more than 100 women who were forced to work as masseuses and prostitutes at the four aforesaid parlors. The women reported being treated like slaves.

Police also seized an RG-88 pistol and seven cartridges during the raids.

In an initial raid on Saturday, police found more than 130 women being detained in Tri’s Tan Hoang Phat massage parlor on Street No. 4 in HCMC’s Thu Duc District.

Dozens more women told police Monday of maltreatment while working at Tri’s parlors.

All the businesses allegedly detained women; beat them; forced them to perform sex acts on customers; controlled their meals; extorted money from them; and locked them in dog cages as punishment.

A 21-year-old woman from Dong Thap Province said she had suffered vertebral injuries last year while trying to escape from Tri’s parlor through the second floor after five months working there.

She said Hau had punched her after she fell to the ground and her family was forced to pay VND13.5 million (US$800) to her captors for her release.

Phan Van Vu, who worked as a waiter at the parlor, said Tri used to threaten him at gunpoint and would fire into the air.

Vu also said he witnessed Tri and Hau speaking with the head of the neighborhood and a policeman in charge of the area every week.

A police source said Tri, a former xe om (motorbike taxi) driver, had opened the Tan Hoang Phat between 2001 and 2002.

He said the arrested couple reported earning more than VND2 billion ($118,000) a month from massage services.

Reported by Nguyen Bao

New rule limits banking risks

VietNamNet Bridge – The State Bank of Viet Nam has issued a new regulation aimed at securing the stability of the nation's banking system.

Under Decision No 34/2008/QD-NHNN, issued on December 5, a credit institution is not allowed to invest more than 11 per cent of its registered capital to any single enterprise.

Under Decision No 34/2008/QD-NHNN, issued on December 5, a credit institution is not allowed to invest more than 11 per cent of its registered capital to any single enterprise.

The decision also limits the total capital contribution of a single credit institution and its affiliates in a single enterprise, investment fund, project or other credit institution to no more than 11 per cent of the charter capital of that enterprise, investment fund, project or credit institution.

Total capital contribution by a credit institution in all related enterprises, investment funds, projects or credit institutions must not exceed 40 per cent of the credit institution's charter capital and reserves.

The new decision also requires credit institutions to institute policies aimed at maintaining non-performing loans at a ratio of less than 3 per cent of total outstanding loans. Financial institutions are also forbidden to extend credit without collateral, or to provide loans at preferential terms to an enterprise in which the institution has a controlling interest.

Total loans made to and capital underwritten by a credit institution for an enterprise in which the credit institution has a controlling interest must not exceed 20 per cent of the credit institution's equity.

Loans without collateral to an in-house financial leasing company are further restricted and must not exceed 5 per cent of the institution's equity.

(Source: Viet Nam News)