AIG insurer’s woes will not affect VN

HCM CITY — The financial woes facing US insurer American International Group Inc (AIG) would not affect the operations of its subsidiary in Viet Nam, AIG Life Viet Nam has said.

“[The difficulties facing AIG in the US] has no impact on our capacity in Viet Nam,” said Jamie Rains, AIG senior vice president and chief agency officer in Southeast Asia, at a press meeting yesterday.

“We operate independently… We are focussing on serving clients here in Viet Nam.”

He added AIG Viet Nam’s capital and liquidity exceeded the required limits set by the Ministry of Finance.

The press conference was held after local clients, worried about the insurer’s financial situation, decided to terminate their contracts with AIG Viet Nam.

“Customers should not believe rumours but should seek out expert opinion,” said Rains.

An AIG press release said AIG life insurance, general insurance and retirement service businesses, including its extensive Asian operations, continue to operate normally and remain adequately capitalised and fully capable of meeting their obligations to policyholders.

“AIG continues to pursue alternatives to increase short-term liquidity in the parent company. Those plans do not include any effort to reduce the capital of any of its subsidiaries or to tap into Asian operations for liquidity,” said the press release.

Insurance policies written by AIG companies worldwide will be upheld by the local subsidary, said AIG, noting that subsidary companies are well capitalised and meet or exceed local regulatory capital requirements.

With 400 employees and over 9,000 professional agents working in the country, AIG Life Viet Nam started operations in 2000 and has extended operations through offices in 23 cities and provinces across the nation.

Rains said AIG has invested VND920 billion (US$54.9 million) in its wholy-owned subsidiary in Viet Nam. —

VN-Index booms on share buy-up

The local stock exchange saw big gains yesterday. Financial recession in the US is appearing to be having a minimal impact in Viet Nam. — VNS Photo Doan Tung

HA NOI — Huge purchases of all types of stocks helped the VN-Index bounce back yesterday after tumbling for 10 consecutive sessions.

The VN-Index yesterday rose sharply by 19.78 points, or 4.72 per cent, to 439.06.

One hundred and sixty one of the 162 listed companies and fund certificates increased.

Newly listed Cuu Long Pharmaceuticals (DCL) was the only stock not to rise.

“The rebound today was to be expected,” said an anonymous analyst at Vina Securities, noting that share prices falling to such a low level helped the rebound.

“At the present pricing level, investors will certainly buy shares en masse,” added the analyst.

The financial recession in the US is only having a small impact on the local stock exchange, because the Vietnamese market was too small, claimed the analyst.

Since yesterday morning, US policy-makers have been trying to create some solutions for the present recession, which has helped calm investors’ panic about a spreading crisis.

“This news, more or less, spurred local investors to buy heavily,” added the analyst.

The HCM City Stock Exchange yesterday saw 23.82 million shares change hands, a number nearly double that of Thursday.

This figure represented a turnover of VND833.71 billion (US$49.63 million).

Sacombank (STB), Saigon Securities Inc (SSI), Cable and Telecom Materials (SAM) saw the most action yesterday. Their volume ranged from 1.2 to 1.9 million shares.

SSI had 300,070 shares purchased, followed by Vinpearl (VPL) with 418,060 shares, and Phu My Fertilisers (DPM) with 255,450 shares.

Foreigners in yesterday’s session bought a total of 3.19 million shares and sold 5.36 million shares.

In Ha Noi Securities Trading Centre, the HASTC-Index exceeded the regulated trading band at 7 per cent and rose 7.10 per cent to end at 145.74 points. The northern market also saw 145 codes advancing.

Big stocks of this centre, including ACB, KLS and PVS, rose sharply, contributing to the upturn of HASTC-Index.

About 11.65 million shares were traded yesterday, generating a turnover of VND325.20 billion ($19.36 million). —

Leaders in IT innovation take spotlight at awards

HA NOI — The Chief Information Officer Awards were held in the capital on Wednesday, with this year’s awards and conference focusing on the theme of transforming business through innovation.

It’s the fourth outing for the annual conference, which was organised by the International Data Group (IDG Viet Nam) and CEO&CIO Club with the endorsement of the National IT Steering Committee, Ministry of Information and Communications and Ministry of Home Affairs.

The awards aim to spotlight top chief information officers (CIOs) in different industries and sectors, including separate categories for State and private enterprises.

According to Global CIO Magazine, an outstanding CIO must be a symbol of innovation, and he or she will be an expert at managing the relationship bet-ween information and service flows.

They should be closely involved in strategic plan-ning and the decision-making processes. A CIO must have a thorough understanding of abusiness.

Innovation in technology and its application are one of the prerequisites for CIOs to optimise their competitive advantage and meet the increasingly challenging demands in global business.

While the awards are an important event for the Vietnamese IT community, they focus on recognising business innovation and leadership capacity. The awards are not a basic technology-oriented competition.

The CIO conference provides a forum for leading executives from Viet Nam and international organ-isations to discuss partnerships, share experiences and ideas on new business innovations.

This year’s conference heard from senior managers from high-ranking IT corporations including the president of EMC Asia Pacific/Japan and EMC Corporation, Steve Leonard; market-development leader in ASEAN for IBM Global Business Services, Norman Scott; and Tamai Setsuro, president and CEO of IDG Japan.

There was also a discussion panel attracting foreign speakers and CIOs who had won awards at previous conferences.

CIO Awards 2008 recognised and honoured nine outstanding CIOs who have been short-listed from 40 nominations.

Vice Chairman of the National IT Steering Committee and president of the board of selection, Do Trung Ta, said that since the establishment of the awards in 2005, they had encouraged creativity and initiatives from many CIOs.

“CIOs are those who are capable of obtaining information, analyse it and then proposing ideas to the authoritative,” said Ta. “As a result, the role of a CIO is more important in the board of management of a group, a business or a unit.”

Country General Manager of IBM Viet Nam, Nguyen Viet Hoang, said the awards were of great significance for information sharing among the CIO community in Viet Nam.

“This award also gives needed momentum for CIOs to further innovate in their work, connect closely and exchange fruitfully with the local CIO community, listen and learn from successes of regional CIOs with a view to enhance their professional capabilities and efficiencies, at the same time affirming the strong role that they are playing in both business organisations and society,” said Hoang.

The awards also included the CIO&CEO Best Choice Product, aimed at recognising the best solutions providers trusted by CEOs and CIOs and the best IT products which efficiently support CIOs in the implementation of projects.

This years winners in the category include products from Canon, Cisco, HP Compact, IBM, Kaspersky, Lenovo Thinkpad, Nokia and VNPT. —

Techmart Ha Noi under way

HA NOI — The third Ha Noi Technology and Equipment Fair 2008 (Techmart Ha Noi 2008) opened its doors at the Viet Nam Exhibition and Trade Fair Centre here on Wednesday.

More than 280 groups are taking part in the four-day event. They have set up 300 booths offering information on technological research and development institutions, universities and colleges, and scientific and technological services from domestic and foreign enterprises and individuals.

The event aims to promote the development of the technology market, linking co-operation between research and business sectors.

On the sidelines, seminars are being held on automation, application of bio-technology in agricultural production and technology development.

Techmart Ha Noi 2008 has been co-organised by the Department of Science and Technology, the National Assembly’s Committee of Science, Technology and Environment, the Ministry of Science and Technology, and Ha Noi People’s Committee. It will end tomorrow. —

Software park set for Nghe An

Ha Noi — The VTC Online Telecommunications Company (VTC) is co-operating with several foreign investors to build a US$83.8 million software park across 5.1ha in central Nghe An Province.

VTC Director Phan Sao Nam said the partners include SK Telecom, Dreamline, UniOne and Redman from the Republic of Korea.

Each company will be responsible for a separate field, such as production, distribution, training and sales and marketing, said Nam, adding that the enterprises will both provide initial investment capital and participate in the park’s operation when it is running.

In addition to software production and human resource training, the Vinh city-based software park will cover a complex serving the production and sale of digital content services such as software, graphics and telecommunications and communications services.

With an area of almost 150,000sq.m, the VTC complex will include a data centre, an office building, a training centre, an apartment building for staff and a multi-functional gymnasium.

According to Nam, the hi-tech park is expected to generate 10,000 jobs and fetch between $13-20 million in sales revenue once it becomes operational in 2011. —

Singapore investment firm opens in capital

HA NOI — Singapore based investment firm Temasek Holdings (Private) Limited has officially received a licence to open its representative office in the capital city.

The new office will enable Temasek to foster closer working ties with Vietnamese business partners in the northern areas and its expanded presence reinforces its commitment to Viet Nam as a key market in the region, says Derek Lau, Chief Representative of Viet Nam.

He said Temasek looks to take full advantage of being present in the two major cities of Viet Nam by exploring further partnerships and investment opportunities in the country.

Temasek first established its presence in Viet Nam in 2005 through a representative office in HCM City.

Incorporated in 1974, Temasek Holdings is a global investment firm that holds and managed a S$185 billion (US$134 billion) portfolio as of 31 March 2008, concentrated principally in Singapore, Asia and the OECD economies.

Temasek’s investment strategies are centred around transforming economies, growing middle class and deepening comparative advantages. Its portfolio of companies are in nine major sectors: financial services; telecommunications and media; transportation and logistics; real estate; infrastructure, industrial and engineering; energy and resources; technology; life sciences; and consumer and lifestyle. —

Investors expect big gains from expected real-estate recovery

HCM CITY — The real estate downturn is emerging as an opportunity for investors, including moneyed individuals, to buy houses at low prices and make big gains when the market recovers.

Nguyen Lam Phuong, a landlord who often visits real estate transaction floors in HCM City, says the current prices of properties were dropping rather steeply, making it the most suitable time to buy houses.

Phuong now owns one apartment in District 7’s Hoang Anh Gia Lai apartment complex, and two in District 2’s An Phu-An Khanh complex.

“I bought all these apartments from those whose bank debts were due and the owners had to sell them at very low rates,” he says.

Some customers of the Sai Gon Commercial Real Estate Joint Stock Company (Sacomreal) also say they are on the lookout for apartments at cheap prices.

“Because we are using our savings, we are not in a hurry to buy apartments. We are very cautious before making an investment decision, and want to buy properties that have prices lower than market rates,” says one.

Apart from individual investors, companies with good finances are also in the market for cheap apartments.

These investors have a lot of cash to spare, so they can make long-term investments and sell when they can make big profits easily, says Phan Nam, also from Sacomreal’s property transaction floor.

The bigger investors have their eyes on apartments at Hoang Anh Gia Lai, Phu My or Him Lam – Kenh Te apartment complexes, according to Lam Van Chuc, general director of Phu Duc Real Estate Company Ltd.

“Most apartments at these buildings have prices averaging US$1,000 per sq.m; rates that are considered rather reasonable and suitable for many investors’ coffers,” Chuc says.

He says investing in cheap houses now would return high profits whether bought directly from project owners or from other investors. —

Viet Nam loses clothing-market share

Customers select clothes at Viet Nam’s High-quality Goods Fair in Ha Noi. Made-in-Viet Nam clothing is facing tough competition from China, Thailand and Singapore. — VNA/VNS Photo Do Hung Quan

HA NOI — Made-in-Viet Nam clothing is facing tough competition from products from neighbouring countries such as China, Thailand and Singapore, especially in supermarkets.

Previously, domestically produced clothing had proved popular at supermarkets, with Chinese made clothing mostly available at boutiques, but now supermarkets are also filling with Chinese products, said Dang Quynh Doan, director of the Viet Thy Fashion Company.

A recent survey of retailers showed that Chinese made clothing occupies between 20-40 per cent of shelf-space in supermarkets.

However, Le Quoc An, chairman of the Viet Nam Textile and Apparel Association still has confidence in Vietnamese clothing.

“It is not correct to say that Vietnamese clothing is losing in the domestic market. Vietnamese clothing is facing stiff competition but still out-sells imported clothing,” said An.

According to An, Vietnamese spent an estimated US$1.8 billion on clothing last year, most of which was domestically produced.

An said domestic producers were having trouble attracting female customers in urban areas, but still hold a large market share in rural areas.

Shortcomings

Design and fabrics are the main shortcomings of the domestic fashion industry, said Phan Van Kiet, deputy director of Viet Tien Garment Company, adding that domestic designers are somewhat behind international fashion trends. Vietnamese clothing is more suitable for the middle-aged, while Chinese clothing appeals to the young and fashion conscious.

“Vietnamese producers are weak in producing female clothing because of lack of fashionable fabrics and designers. Thailand and China, on the other hand, have a stronger design team and better fabrics,” An said.

Some Vietnamese clothing is able to meet the demands of more fashionable shoppers, such as that of local brands NinoMaxx, PT 2000 and Blue. However, the price of these products is more expensive than Chinese products.

“I prefer Chinese clothing because of its fashionable design and cheap price. I can buy two shirts made in China for the price of one Vietnamese made shirt,” said Thu Trang, a student from Ha Noi.

According to Nguyen Thi Hong Huong, director of Vinatexmart, a Vietnamese garment company, domestic producers also have other hurdles to overcome. “Local garment producers don’t deliver on time, and sizes and quality are inconsistent,” Huong said.

Retailers are also reluctant to stock local garments, as profits on Chinese made clothing are higher.

Retailers can make profits of 40-60 per cent on imported Chinese clothing, which compares well to the 25 per cent profit made on Vietnamese clothing.

Viet Nam has a population of 85 million, this number will increase to about 100 million by 2015. There is huge potential in the fashion market that local producers should not miss. —

Cheap meat puts 1m out of business

HCM CITY — Exponentially increasing imports of frozen meat have hit the domestic livestock industry hard.

Almost a million breeders have been pushed out of busines so far. This has prompted calls from the Ministry of Agriculture and Rural Development (MARD) for import duties as per WTO commitments, and for stricter policies on meat imports.

During the first eight months of the year, Viet Nam imported 103,000 tonnes of frozen meat, amounting to 30 per cent of the nationwide output estimate of 400,000 tonnes this year, according to the Livestock Breeding Department (LBD).

It also marks a trebling of the imports for the same period last year, posing severe threat to the domestic livestock industry, with breeders having to sell at lower than production costs to compete with imports, says Le Ba Lich, chairman of Viet Nam Association of Animal Feed.

In the first seven months, domestic livestock exports had reached US$80.62 million while import of meat and poultry products soared to $321.8 million.

The price of imported chicken at the port, inclusive of tax, is just VND14,000 ($0.88) a kg, less than half the wholesale cost of the domestic fowl, Lich said.

Domestic livestock breeders are suffering losses of VND3,000-5,000 per kilo of chicken and VND1 million (US$63) per pig while competing with imports.

The mass import of lower-priced meat and poultry products like eggs, milk, cream and whey powder have seen about a million livestock farmers lose their vocation, the LBD says.

Yet, Viet Nam has never imposed anti-dumping taxes on imported meat, says Bui Ba Bong, deputy head of MARD.

MARD has asked the Ministry of Industry and Trade to consider favourably its proposal to tighten control over import of frozen meat.

Hoang Kim Giao, head of LBD, also says Viet Nam must improve its livestock quality by importing good breeds and speeding up the transfer of advanced breeding techniques to boost productivity and lower production costs. —

Rice growers heave sigh of relief

Farmers harvest crops at Vinh Loi District, southern Bac Lieu Province. After a prime ministerial directive to food companies to buy surplus summer-autumn rice crop, prices are rising again. — VNA/VNS Photo Huynh Su

HA NOI — Deputy Prime Minister Hoang Trung Hai yesterday required relevant bodies to continue buying rice from farmers and to speed up rice exports in a move to minimise difficulties for farmers.

At an inter-ministerial meeting, the Deputy PM also said management of rice export prices should be flexible, and said he required the Ministry of Industry and Trade to create favourable conditions for rice exporters.

The State Bank of Viet Nam, meanwhile, was instructed to apply a flexible credit policy to rice exporters to ease their current difficulties.

Rice farmers have been reeling as rice prices fall, and unsold stock mounts, however, slight price increases in the Cuu Long (Mekong) Delta region have given farmers some breathing room.

Food companies are now buying rice at VND3,800-4,500 a kg, compared to VND3,200-3,500 per kg a few days earlier.

They expect the price to rise further to more than VND5,000 per kilo.

The rice price hike comes as global rice consumption has changed, says Lam Van Quy, director of the Can Tho Food and Export Company.

With high global demand in the last months of the year, conditions are favourable for rice exports, he added.

The export price of rice has increased to US$660 a tonne this month, compared to $600 a tonne last month.

After a prime ministerial directive to food companies to buy surplus rice in early August, food companies had actively expanded their traditional export markets and actively sought new ones.

Food companies exported a total of 465,700 tonnes of rice last month compared to 405,200 tonnes in July, according to the Viet Nam Food Association (VFA).

The Ministry of Industry and Trade has also asked VFA to expedite delivery of rice export contracts and step up efforts to sign new contracts in order to help rice farmers sell their output faster in the last months of the year.

Viet Nam exported 3.38 million tonnes of rice in the first eight months of the year, earning over $2.2 billion, according to VFA.

The Phillippines is Viet Nam’s largest rice export market, accounting for more than one third of Viet Nam’s total rice exports this year.

Viet Nam is expected to export 4.5 million tonnes of rice worth more than $3 billion this year. —