PM approves talks for World Bank loans

Prime Minister Nguyen Tan Dung on May 16 approved draft policies for the Credit Poverty Reduction Programme 6 (PRSC6) as a foundation for talks with the World Bank (WB) on a loan package.

The PM asked government departments to begin discussions with the WB on the draft agreement and legal documents needed for the PRSC6.

Deputy Governor of the State Bank of Vietnam and Permanent Deputy Head of the Steering Board on Implementation of PRSCs, Phung Khac Ke, was appointed to head the Vietnamese delegation.

German businessmen eye Vietnam’s infrastructure

German businessmen attending an investment forum in Hanoi are eyeing infrastructure development projects in the country, Jan Noether, Chief Representative of German Industry and Commerce, in Vietnam said.

On the sidelines of the Vietnam-Germany business forum, held on May 17, Noether said many of the German companies present at the forum, which are investing in China, are keen to find new markets in other Asian countries, including Vietnam, to minimise their risk.

“Vietnam is a newly emerging market attracting us by its strong economic development and its membership in the World Trade Organisation,” said Heinz-Werner Frings, General Manager and Regional head Asia-Pacific of the NORD/LB Bank.

“Political stability and a young population are also drawing the attention of our guests today,” Noether added.

However, besides the advantage of low labour costs, Vietnam should do more to make its investment environment more attractive by putting greater efforts into educational development, said Le Duc Luong, Regional Director of GISA.

The forum also attracted the participation of many Vietnamese businesses.

About 20 German companies attending the forum came from the Lower Saxony state and are headed by the State’s Minister of Economy, Labour and Transportation Walter Hirche.

A similar forum will be held in Ho Chi Minh City, on May 18.

Fisheries industry nets award

The fisheries industry has been conferred the Golden Star Order by the State for retaining its rank as the world's fifth largest fish farmer for five years in a row.

The ranking, recognised by the UN Food and Agricultural Organisation (FAO), has put Vietnam, which farmed close to 1.7 million tonnes of aquatic products in 2006, behind China, India, Indonesia and the Philippines.

At an award ceremony held in Hanoi on May 17, Prime Minister Nguyen Tan Dung extolled the fisheries industry as a significant contributor to the national poverty reduction programme and the nation's continued socio-economic development.

Dung also called on the industry to pay greater attention to sustainable growth in the industry when it implements its 2010-20 development strategy, focus more on product quality, improve the living conditions of fishermen and ensure the safety of people fishing offshore.

In addition, FAO’s rankings have placed Vietnam 12 th on the list of fish catching nations and 9 th for fish exports for the 2001- 05 period.

The fisheries industry has recorded an annual average growth rate of 18.4 percent and provided jobs for almost 4 million workers in 2006, more than doubling the 1990 figure.

The country's seafood processing chains have seen the benefit of modernisation and now allow the nation's better-known trademarks to take a firm foothold in 140 foreign markets.

Aquaculture contributed to over 41 percent of the gross fish catch of over 3.4 million tonnes in 2005 a massive increase from the 25 percent of gross catch it recorded in 1986.

Minister of Fisheries Ta Quang Ngoc said the industry’s 2010 plan called for a production output of 4 million tonnes.

Exports revenues are also expected to increase to between 4.5 and 5 billion USD against 3.35 billion USD in 2006, he concluded.

An Binh Securities, PVFC work it out

The An Binh Securities Company (ABS) signed a cooperation agreement with the PetroVietnam Finance Company (PVFC) to supply financial, banking, investment and securities services to their customers and partners, on May 17.

ABS is a leading securities company that has a chartered capital of 330 billion VND (20.6 million USD).

PVFC is the financial arm of the State owned Oil and Gas Group (PetroVietnam).

It has a total chartered capital of 3 trillion VND (187.5 million USD) that the company plans to increase to 5 trillion VND (312.5 million USD) by late 2007.

Mekong Capital launches third fund

Investment management firm Mekong Capital has launched its 100 million USD fund, named Vietnam Azalea Fund Limited, the company announced on May 17. The fund will focus on the equitisation process of state-owned companies in Vietnam and will not be listed on any stock exchange.

Closing date for capital mobilisation is slated for May 31.

Mekong Capital is the investment manager of two funds, the 18.5 million USD Mekong Enterprise I, launched in 2002 and the 50 million USD Mekong Enterprise II, in 2006. Both funds are private equity focusing on private companies in Vietnam.

BIDV opens equitisation consultancy bidding

The Bank for Investment and Development of Vietnam (BIDV) officially opened bidding for equitisation consultancy on May 17.

Eligible contractors for the bidding package include JP Morgan, Merrill Lynch, Morgan Stanley and UBS.

The successful bidder will officially be announced by the end of June.

BIDV is a State-owned commercial joint stock bank that was permitted by the Prime Minister to equitise this year.

Course on intellectual property rights opens in Hanoi

Protecting intellectual property rights (IPR) is tantamount to safeguarding Vietnam’s economy, said the Director of the Assistance for the Development of Exchanges in Economic and Financial Technologies (ADETEF) Vietnam, Emmanuel Lybatallan, at a training course in Hanoi, on May 17.

At the two-day course centred on IPR enforcement, law and intellectual property experts from France and the European Union (EU) present the requirements on trade related to IPR enforcement and protection in the EU while Vietnamese experts introduced temporary measures to seize counterfeit products.

A similar course will be run in HCM City on May 20 and 21.

Additional 120 million USD slated for Dung Quat EZ

A total of ten investors were granted investment licenses to pour 120 million USD into the rapidly growing Dung Quat economic zone, in the central province of Quang Ngai.

The May 16 licensing decision pushed the number of foreign and domestic invested projects operating in the park to 120. To date close to 5.4 billion USD has been pumped into what has quickly become one of the country's premier economic zones.

Dung Quat is quickly becoming a prime location for investors, with construction taking place on the Vietnam National Oil and Gas Group's 2.5 billion USD oil refinery and Vietnam Ship Industry Corporation's 700 million USD ship building complex.

Foreign firms have also been quick to see the area's potential as Taiwan’s Tycoons Group has put over 1 billion USD into a steel plant and the Republic of Korea's Doosan Group came into the zone with a 260 million USD heavy industries investment.

To date there are 33 projects already operating in the zone.

Ministry of Finance proposes taxing dividends

The Ministry of Finance will gather public comments in June on a draft Law on Personal Income Tax in which dividends on securities would be subject to a 5 percent tax but interest on savings would be temporarily exempted.

This was said by Deputy Finance Minister Truong Chi Trung at a press conference in Hanoi on May 14.

The Government expected to submit the final draft to the National Assembly for consideration by the end of the year, Trung said.

He also said that after the law s implemented, the ministry would review living standards and wage levels to decide later whether or not to subject interest on savings to income tax.

The draft law circulated for public comment will propose two threshold levels of income tax: a monthly income of 4 million VND (250 USD) and a month income of 5 million VND (312 USD). The draft law also proposes that deduction for dependents be valued at 40 percent of one’s personal deduction.

Trung also said the General Department of Taxation (GDT) would soon issue a regulation governing income derived from bonus shares, a new issue for the tax department.

He explained that, as the current income tax ordinance only governed high-income earners and the new Law on Personal Income Tax was in the drafting process, the regulation would be an interim measure.

Tax on income from securities was appropriate and necessary, Trung said, as the securities market was growing rapidly, may people were earning substantial incomes from this source.
Incomes from dividends would be levied a tax of 5 percent. Capital gains from the sales of shares would be subject to a different tax.

"Of course, no one likes being levied tax, but taxing securities right now is quite reasonable and in line with development trends. Most countries worldwide have applied this kind of tax for ages," said one investors at the Hanoi Securities Trading Centre.

"Doing business is more difficult than 'playing the stock market'. Enterprises must pay tax so there's no reason why securities investors should not as well," said another investor.

Workshop on WTO dispute settlement procedures

A workshop on procedures to settle disputes in the World Trade Organisation (WTO) opened in Ho Chi Minh City, on May 17.

During the two-day workshop, co-organised by the Multilateral Trade Policy Assistance Programme (MUTRAP) and the APEC Economic Integration Programme, European and Canadian experts, with the support from local experts, are to give presentations on WTO rules and procedures on dispute settlement.

They include the main elements of the WTO dispute settlement mechanism such as role of dispute settlement in the WTO, rules of interpretation of WTO agreement, the consultation process, establishment of a panel, the issue of evidence, etc and landmark cases triggered in other WTO member countries.

In addition to these presentations, there will be another on the Vietnamese dispute settlement mechanisms and practices prior to Vietnam’s accession to the WTO. All of them are geared to assist participants in gaining experience on how to make use of the WTO rules and membership regulations in dealing with trade disputes.

In particular, the workshop will provide simulations for the participants to practise settlement of certain trade disputes.

Two similar workshops will be organised in Hanoi from May 21-24.

Securities markets picking up steam

Ho Chi Minh City's bourse, the VN-Index bounced back from a slight dip the previous day to record a gain of 18.8 points to close at 1,059.79 points, by the end of trading on May 17.

Binh Dinh Minerals Company (BMC) shares increased by 36,000 VND to finish at 769,000 VND. Investors attributed the company’s announcement of stock dividend payouts on May 24 as a primary reason for the steady increase in the firm’s listed price.

Blue chippers, the Corporation for Financing and Promoting Technology (FPT) and Song Da Urban and Industrial Zone Investment and Development Company (SJS) were also big movers on the day.

The HaSTC at the Hanoi Securities Trading Centre continued its good run of late by adding close to 1 percent to its value, up 2.57 points to close at 337.15 points.

By closing, over 1.58 million shares changed hands, worth more than 214.42 billion VND, with 30 shares rallying for gains, 21 showing no change and 35 falling.

Source: VNA