VietinBank to manage capital from Gov’t bonds
Vietnam Commercial Bank for Industry and Trade (VietinBank) will be managing the capital raised from the Government’s bond issue in February, according to a deal signed by the bank and the Ministry of Finance this week.
The bank will take responsibility for capital collection, disbursement and refinance of the 1 billion USD issuance.
The bonds had a yield of 6.95 per cent at the time of issuance and carry a nominal interest rate of 6.75 per cent. American investors bought 56 per cent of the bonds, Asian investors acquired 28 per cent, while Europeans picked up the remainder.
The bonds will be listed on the Singapore Stock Exchange and due on January 29, 2020.
Pham Huy Hung, VietinBank’s chairman, said the bank planned to introduce three new service packages this year aimed at supporting ODA-funded projects. The services include a supporting product for re-lending the Government’s foreign loans, managing ODA-funded projects and providing credit for contractors involved in ODA-financed projects.
The Government appointed the HCM City-listed bank to be the major capital manager for a number of projects, including the HCM City-Long Thanh-Dau Giay expressway, which received 410.2 million USD worth of financing from the Asian Development Bank (ADB); a project to invest in and develop localities with 190 million USD worth of funding from the World Bank, and a comprehensive socio-economic development project in the northern city of Thanh Hoa, which has received 106.8 million USD worth of funding from the ADB and the Korean government, among others.
The bank plans to hold a corporate bond issuance this year worth a maximum of 6 trillion VND (315.8 million USD). The bonds, which will have a two-year term, will have a yield of 12.5 per cent in the first year.
Hung said the bank’s management board would make the final decision on the volume of the bonds and their interest rate, as well the time of issuance.
Real estate over-priced, say experts
Government agencies are seeking ways to control property prices, which are far exceeding their real value, according to a report from Government real estate market experts.
A group of interdisciplinary experts specialising in real estate recently submitted the report, which focuses on housing development and the real estate market in 2009, to Deputy Prime Minister Hoang Trung Hai.
Expenses needed to build 20 – and 25-storey buildings in Hanoi are on average 16.7-17.5 million VND per square metre, while the common price is much higher, standing at between 28 million VND and 32 million per sq.m, according to the report.
Experts blamed the price difference on several reasons, one of which was the habit of “mob” investing, with many people flocking to buy a certain kind of property only because they saw many others do the same.
Lack of information has also influenced buyers who were not aware of the real value of property.
In addition, the poor management ability of real estate market management agencies has contributed to chaotic market pricing.
The report also says that although the country’s per-capita housing area in 2009 doubled compared with the figure recorded 10 years ago, there were still seven million people in urban areas who needed to buy or rent housing.
To meet this demand, the country should build an additional 150 million sq.m metres of housing, which would require combined capital of 3 trillion VND (158 million USD) to 4 trillion VND (210 million USD).
In Hanoi , about 5.5 million sq.m of housing is needed, in addition to about 11,000 accommodations for workers in industrial parks.
HCM City needs about 5 million sq.m of housing and more than 50,000 accommodations for workers.
The real estate market faces a lack of houses at affordable prices and suitable sizes for a majority of customers.
Houses for rent were in great demand in 2009, but they accounted for just 6.3 per cent of the country’s total housing fund.
Based on these figures, experts said the country’s housing demand was still high, especially for low-income earners, including workers in IPs and the poor living in rural and urban areas.
Experts also said the domestic real estate market this year would continue to recover thanks to favourable conditions.
The Government has allowed commercial banks to automatically regulate loan and deposit interest rates, which will create conditions for a more active real estate market.
Experts predicted that there would be about 90,000 apartments sold this year and more than 80,000 others completed. Apartments of 18 million VND per sqm would attract many customers in Hanoi and HCM City , they said.
Many investment sources are expected to be poured into HCM City and Hanoi ’s neighbouring provinces like Dong Nai, Binh Duong, Vinh Phuc and Hung Yen.
Rubber exports bounce in 2010
The value of rubber exports has risen sharply this year, earning the country 479 million USD in the first five months, up 85.5 percent over the same period in 2009, according to the General Statistics Office.
However, rubber exports decreased from 94 million USD in April to just 60 million USD in May as volumes dropped from 32,000 tonnes to just 20,000 tonnes.
The Vietnam Rubber Association (VNRA) attributed May’s reduction to a decrease in exports to China , which accounts for more than 60 per cent of the country’s total rubber exports.
The VNRA attributed the price rise in January-May to hikes in the world market. However, the export volume in the first five months of the year actually dropped 4.4 percent against the same period in 2009, reaching just 176,000 tonnes.
The VNRA said the rubber export price had risen by 400 USD a tonne since early December 2009 and was predicted to remain high in the second quarter of this year.
The world price of natural rubber is projected to exceed 3,000 USD a tonne due to a reduction in supply and the rebound of the world economy, which is expected to lead to a sharp increase in demand.
Rubber is grown on 160,000ha in Vietnam . The country’s annual output is about 300,000 tonnes. Vietnam plans to extend the growing area to 520,000ha by 2020.
The export value of latex products, particularly tyres, in the first five months reached almost 638 million USD, double that of the same period last year.
According to the VNRA, tyres account for 83 percent of the country’s latex-products.
Tyres for trucks account for 63 percent of that figure; motorbikes, 20 percent, while bicycle tyres make up the rest.
Domestic producers consider the US to be a major potential export market.
Despite the large volume of truck tyres exported, the domestic market still imports international brands such as Michelin, Bridgestone and Goodyear.
Fruit, salt prices drop in Mekong Delta
Fruit prices have fallen sharply in Mekong Delta provinces with the harvest entering its peak.
A kilogram of rambutan was VND5,000 in the afternoon of May 30 while it was VND12,000 to 15,000 in mid May.
Bui Thanh Liem, head of the Department of Agriculture and Rural Development of Ben Tre Province’s Cho Lach District, attributed the sharp and continuous decrease in price of rambutan in the Mekong Delta to the overflow of Thieu litchi from the North.
He said the price is forecast to reduce to VND10,000 per three kilograms in coming days like the rambutan season of 2009.
At present, Ri-6 durian is sold at VND20,000-22,000 per kilogram, and mangosteen goes for VND15,000-20,000 per kilogram.
The price drop has been also seen among key salt farming areas, including Dong Hai in Bac Lieu Province, Vinh Chau in Soc Trang Province, Ba Tri and Binh Dai in Ben Tre Province.
A kilogram of salt is currently traded at VND200-250, down VND300-350 compared to early this year.
Though the salt price has dropped dramatically, traders are reluctant to buy, causing stockpiles of salt to accumulate in the Mekong Delta.
Gold treads water as global prices stall
The price of gold in Vietnam hovered around VND27.7 million a tael (1.2 ounces) on May 31, as global prices showed signs of stall.
The precious metal was bought at VND26.65 million and sold at VND27.7 million. Domestic gold prices, which included import tariffs and processing fees, was fetching VND350,000 a tael lower than global prices.
Muted trading prompted jewelers to fix a narrow gap between buying and selling prices.
According to gold traders, the metal was at a less attractive level for buyers, as well as for sellers.
In Asia, gold shrank to fluctuate between US$1,211 and $1.213 an ounce this morning as investors realized profits after the metal climbed to a 10-day high last week.
Ending the trading session in New York last Friday, spot gold rose as much as $2.3 an ounce to finish at $1,215.3, the highest level since May 18.
Bullion prices received a boost amid worry that the European debt crisis might worsen, in light of Fitch Ratings’ decision to strip Spain of its AAA credit grade, which pushed the euro lower.
Bloomberg quoted Gavin Wendt, senior resource analyst with Mine Life Pty Ltd. in Sydney, as saying prices will stabilize this week. Gold’s fortunes are fluctuating daily in accordance with waxing and waning investor sentiment with respect to the European debt crisis. This situation is unlikely to resolve itself any time soon.
Holdings at SPDR Gold Trust remained at a record 1,267.9 metric tons, according to figures on the company’s website. The company hasn’t sold gold since the Greece’s debt crisis threatened Europe.
The euro has lost 7.8 percent this year against a basket of major currencies while the US dollar has gained 9.2 percent, and the yen 11.4 percent.
This morning in Tokyo, the euro exchange rate slightly rose to $1.23 a euro from its closing price in New York last week.
Crude oil futures for July delivery were trading above $75 a barrel this morning in Asia. Last week, the contract slid $0.58, or 0.8 percent, to $73.97 a barrel.
The greenback exchange rate was stable at VND19,000. A dollar was bought at VND18,970 and sold at VND19,000 on free market in Hanoi. State-owned Vietcombank bought dollar at VND18,960 and sold at VND19,010.
VietNamNet/VNA, SGGP
This entry was posted on May 31, 2010 at 9:31 pm and is filed under Business, News. You can follow any responses to this entry through the RSS 2.0 feed.
