Nation works hard to bolster tourism

17:33' 04/07/2007 (GMT+7)

VietNamNet Bridge - The Vietnam National Administration of Tourism (VNAT) has been working hard to work out plans to achieve ambitious targets of over 4 million foreign and 19-20 million domestic visitors, earning 56 trillion VND (3.5 billion USD) by year-end. In cooperation with ministries, provinces and sectors, VNAT has attached importance to updating laws on tourism, issue new regulations in accordance with WTO commitments and other bilateral and multilateral commitments in the hospitality industry. The sector also focuses efforts to complete several major projects, including plans for developing tourism in the northern mountainous region and a programme on seaside tourism development. It will continue to guide provinces in tackling problems that prevent the industry from development, including those in policies aiming to upgrade infrastructure and increase investment. VNAT plans to accelerate reforms in the international travel licensing as well as hotel ratings and will focus on improving the quality of current tourism products. A programme on developing human resources in the tourism sector will also be sent to the Government for approval. It will seek to boost international coordination and exchange as well as opportunities to enter cooperative agreements with regional neighbours. In order to promote joint tourism development, VNAT has suggested that the Government focus on international bordergates in an effort to draw foreigners traveling to Vietnam by land from China, Laos, Cambodia and Thailand as well as open international airports in such cities as Hai Phong, Nha Trang and Da Lat. It has also petitioned the Government to offer visa exemptions to visitors from major tourist markets, including Russia, France, Germany, Italy, Spain and Australia. In the first half of this year, Vietnam welcomed over 2.1 million foreign visitors or a year-on-year increase of 15 percent. Tourism brought the country 28 trillion VND (1.75 billion USD) in revenue during the reviewed period. (Source: Viet Nam Net)

India ready to expand bilateral ties with Vietnam, says PM Singh

09:54' 04/07/2007 (GMT+7)

VietNamNet Bridge – Indian Prime Minister Mammohan Singh granted an exclusive interview with a New Delhi-based Vietnam News Agency correspondent on Indo-Vietnam relationship on July 3 on the eve of the state visit to India by Vietnamese Prime Minister Nguyen Tan Dung slated for July 4-6. Following is the full text of the interview: Would you please elaborate the significance of the upcoming visit to India by Prime Minister Nguyen Tan Dung? Indian Prime Minister Mammohan Singh. (Photo: press.jrc.it/NewsExplorer) An inspiring legacy of friendship and cooperation has been bequeathed to India and Vietnam by two of the greatest leaders of the 20th century Prime Minister Jawaharlal Nehru and President Ho Chi Minh. Like the leaders who preceded us, I am confident that Prime Minister Nguyen Tan Dung and I will work successfully to nurture this relationship further. There is tremendous work to be done on our bilateral ties. We need to expand the ties beyond traditional areas like trade and cultural cooperation. I met Prime Minister Dung in Cebu this January, and was impressed by his ideas and commitment to broaden the scope of our ties. I keenly look forward to his forthcoming visit from this perspective. I hope to discuss ways in which we can elevate our ties to a higher level. Would you please paraphrase development experiences which India has gone through? A process of comprehensive reform of the Indian economy has been underway for over a decade now. This has resulted in some notable successes such as rapid economic growth, greater foreign investment and technology inflows into the country and the emergence of Indian companies that are multi-national and technology leaders in their fields. We have sustained an annual 8.5 percent rate of growth in our economy for a fifth year in a row. However, much work needs to be done in the social sectors. We still need to tackle problems of poverty and illiteracy that our people face. We need to improve access to health care for a vast majority of our population who live in rural areas. We in India are inspired by what Vietnam has achieved in these areas despite having faced great challenges in the 20th century. I think that India has much to learn from Vietnam ’s experiences and we need to exchange views and share lessons learnt. What should India and Vietnam do to make a break-through in the areas of bilateral trade and investment? I agree that notwithstanding the consistent rise in the volume of trade between the two countries, the level of bilateral trade in value terms is still far below its potential. I understand Prime Minister Dung also conveyed dissatisfaction with the current level of our economic interaction during one of his recent interviews. With both the Indian and Vietnamese economies growing at a record pace in recent years, and the political will that exists on both sides to enhance our economic engagement, there is no reason why we should not be able to significantly scale up trade and investment between the two countries. Vietnam has strengths in inland fisheries, handicrafts, food processing and textiles. India can offer collaboration in pharmaceuticals, animal feed, auto components and plastics. I intend to discuss this matter in greater detail with the Prime Minister. To begin with, I would suggest that we must create a policy environment that will facilitate a much freer movement of goods, services and people between the two countries, both bilaterally, and also under the India-ASEAN framework. India has been exercising the “East-oriented” policy in order to bolster the country’s regional integration. What does India expect from Vietnam in the course of carrying out that policy? An integral part of our “Look East policy” is greater engagement with countries of the ASEAN region, both bilaterally and as a regional grouping. We are giving special emphasis to the CLMV (Cambodia-Laos-Myanmar-Vietnam), which are countries with whom we have the strongest civilisational links and with whom we are cooperating under the Initiative for ASEAN Integration programme. We consider our cooperation with Vietnam to be a key element in this overall engagement with the region. India and Vietnam share similar objectives and often have similar positions on a variety of international issues. We look to Vietnam for its support for enhancing India’s ties and interaction with the ASEAN region. (Source: Viet Nam Net)

FIEs distribute imported electronics, local companies worry

17:09' 04/07/2007 (GMT+7)

VietNamNet Bridge – Local electronics companies will have to face new difficulties once foreign invested enterprises (FIEs) are allowed to import goods directly to sell domestically. As of July 1, 2007, FIEs in Vietnam have the right to import goods directly for domestic distribution. According to Tran Quang Hung, Secretary General of the Vietnam Electronics Businesses Association, direct imports will help FIEs cut expenses for intermediaries (in the past, they had to import through a third party under authorised contracts); therefore, the selling prices of the imports will be lower – thus more competitive. Meanwhile, local electronics companies cannot lower their selling prices any more, as the currently applied prices are the floor prices. In general, locally made products will find it hard to compete with imported ones in terms of price and quality. Nguyen Thinh, Director of the Hanoi Informatics Development Support Company, said that when the tax rate on AFTA-sourced imported electronics was reduced to 5%, many enterprises asked for permission to import products under the form of complete built units (CBU). However, enterprises just imported small quantities so no big impacts on the market have been seen. However, when more FIEs are allowed to import CBU products, there will be many changes in the market. Imported genuine products and good post-sales services directly from the producers, as well as promotional programmes will help create healthy competition in the electronics market. The biggest concern of 100% domestic owned enterprises is that they will have to counter big-scale promotional programmes to be launched by FIEs, which have more experience and money for these. Meanwhile, prices will not be a big problem for local electronics companies. Pham Thanh Tri, Director of VVC Electronics Company, said that CBU products had been imported into Vietnam since the AFTA-applied tax rate was reduced to 5% one year ago, which had led to the considerable price decreases of these products. Non-AFTA products will also not be seen as fearsome rivals for locally made products as they will be expensive after tax (40% import tax and 10% VAT). An LCD 32 inch TV, for example, has the import price of $500, and the selling price of $770 (after calculating tax and expenses), while a similar TV made by VVC is priced at VND9mil ($562). In fact, local electronics companies have been suffering many difficulties recently. Sales have been slow. Enterprises cannot attract more customers as they are not financially capable enough to launch promotional programmes. Many enterprises have to expand their business scopes by jumping into other fields, including real estate, finance to earn their living and cover losses. The Deputy Director of an electronics company said that it was unsurprising to see many domestic owned companies narrow their production or shut down their workshops. The domestic market proves to be quite small, which makes production costs high; imports will bring more profit. Analysts have predicted that at the end of 2007 there will be a new wave of promotional programmes launched by FIEs. These programmes will help boost sales and polish the images of FIEs, while these will, once again, make domestic owned enterprises miserable. Tran Thuy - Viet Nam Net

Is HSBC’s warning trustworthy?

17:04' 04/07/2007 (GMT+7)

VietNamNet Bridge – The stock market has been stirred up by the prediction of HSBC’s securities expert Garry Evans who said that the VN Index would fall to the 900 point level by the end of this year. However, analysts have said that the warning is not reliable. HSBC once had to correct its report The Hong Kong and Shanghai Banking Corporation (HSBC) has relied on the P/E indexes of listing companies as the main basis for the warning. HSBC concluded that the P/E indexes of many share items were too high though they had been adjusted recently. It is not understandable why HSBC just refers to the P/E indexes to give such a conclusion. Both foreign and domestic securities experts think that it is a correct method, but ultimately insufficient. Huy Nam, a securities expert, said: “If only looking at the P/E Index, no one would dare inject money in blue chips like FPT, VNM, STB, ITA, TDH, and VHS. I think it is necessary to consider other indexes as well, including profit, prospects and demand and supply basis.” The director of a securities company said that HSBC was presumptuous to give such a conclusion. Investors should still buy share items which have a high P/E index as long as they have good prospects and profitability. If the profit is big next year, the P/E will decrease, he said. Securities expert Tran Ngoc Nam also questioned if HSBC wasn’t too hasty giving the warning at a very sensitive moment. He recalled that in May 2007, HSBC cited false information about the P/E indexes of SSI, PVD, BVS, BTS and VNR, creating bad impacts on the market. The banking corporation had to correct the information but the share items suffered before the correction. In fact, the warning has not caused havoc because investors are wise enough to question: why are foreign investors still buying shares despite HSBC’s warning? Why are foreign investors buying more than selling? In the six consecutive trading sessions from June 26 to July 3, foreign investors bought more than they sold, while they bought more than at any other time during the trading sessions just before and after HSBC’s warning was released. On July 2, when the VN Index fell down to below 1,000 points and disappointment pervaded the trading floors, foreign investors bought shares in large quantities. The purchasing volume was 2.5-fold higher and the purchasing value was 3-fold higher than the sales (bought: 1.673mil units, VND252bil; sold: 633,000 units, VND71bil). On July 3, 2007, a lot of share items that, according to HSBC report, had high P/E indexes like FPT, SJS, TAC, HRC, and PVD, were hunted by foreign investors, and many of the items have run out of room for foreign investors. Huynh Anh Tuan, Head of the Brokerage Division under ACB Securities Company, said that in most cases, domestic investors should not follow foreign investors, but they should analyse the recent moves by foreign investors. Vu Ngoc Huy, a Viet Kieu investor on SBS trading floor, noted: “If foreign investors believed the warning of HSBC, they would not buy shares in such large quantities. Having 20 years of experience as an investor in the US, I dare say that foreign investors do not pay any attention to the warning.” Director of an investment fund also said that foreign investors all had their own sources of information and analysis, and they knew what to do at a given time. Domestic investors prove to be too hasty when selling shares for fear that the VN Index will fall to below the 1,000 point level. Analysts have reminded the public that the scenario has occurred at least three times so far this year. Domestic investors, believing warnings of foreign experts, tried to sell shares while foreign investors tried to buy. And domestic investors have since had to buy shares from foreign investors at high prices. (Source: Viet Nam Net)