Period ahead ‘golden opportunity’ for investors
Experts forecast investment funds will boom in 2008, helping bolster and develop the financial market. The State Securities Commission (SSC) recently licensed a series of investment fund management companies, including the VND100bil ($6.25mil) Petroleum Financial Fund, the VND25bil ($1.5mil) Loc Viet Fund and the VND25bil ($1.5mil) Sabeco Fund management companies.
There are now 25 operational domestic investment fund management firms, boasting a total capital of VND876bil ($54.75mil) working alongside many other foreign owned fund management companies operating in Vietnam, including Dragon Capital, VinaCapital, Mekong Capital, IndoCapital and Maxford Investment Management Ltd. 
Vietnam Fund Management (VFM, the first fund management company licensed in Vietnam), has just received permission to set up the VND8tril ($500mil) VF4, aptly named because it is the company’s fourth fund. VFM is planning to set up a fifth, VF5 in 2008, which will focus on the real estate market.
Orient Management Company (OMC) has set up fund, OF1, with total capital of VND50bil ($3.12mil), and is also planning several more for 2008.
After establishing the $26mil Vietnam Focus Fund SP, specializing in listed share items, Maxford Investment Management Ltd plans to set up a second called Vietnam OTC & IPO Fund. The company hopes to raise $40mil from Investors in Hong Kong, China and Taiwan.
Lawrence Kook, Investment Director of Maxford Investment Management, said the funds will invest in six fields, banking – finance, telecommunication, retail market, real estate, power and infrastructure.
95% of Vietnam Focus Fund SP’s total capital had been invested by the end of November. Mr Kook said this is clearly the best time to buy, as the official bourse is falling.
He also revealed that his company will participate in Vietcombank’s IPO, though he thinks that the initial VND100,000/share price is relatively high.
 “Vietnam’s capital market has grown to a level that we feel the need for a second fund focusing on OTC shares and IPOs,” he said.
 “We are also planning to set up several, more specific funds soon which will focus on real estate or infrastructure,” he added.
Mr Kook says that the Government should raise the ceiling foreign ownership level of local companies to above 49%. Currently, there is no more room for foreign investors in major local companies due to limited share availability and market inelasticity.
Pham Khanh Lynh, Deputy General Director of VFM, said 2008 will be the year of investment funds. He says upcoming equitisations from 2008-2010 will be the last golden opportunity for investors.
Statistics show that 90% of listed companies have been equitised. Vietnam will equitise an additional 1,500 enterprises by 2010, including firms in major sectors such as banking, telecommunication, air transport and petroleum.
That explains why VFM decided to set up VF4 to invest in soon to be major bourse items, including Incombank, BIDV, MobiFone and Vinaphone.
VNECONOMY 26.12

Seaports in need of foreign investment
 Viet Nam is in need of US$5 billion to develop its seaport system. According Planning and Investment Ministry’s Foreign Investment Department Director Phan Huu Thang, foreign investors who wish to pour money on seaports will be exempted from tax applied to material for seaport construction and upgrading imported as well as cooperate income tax. They will also be given favourable conditions in terms of construction sites and provided with adequate information regarding Viet Nam ’s seaport system.
However, Paul Hoogwaerts from the seaport group at the Viet Nam Business Forum held in Ha Noi in early December said that Viet Nam should continue dealing with problems that hinder seaport development, mentioning important infrastructure facilities and data on port system.
Dutch Ambassador to Viet Nam Andre Haspels expressed hope for further cooperation between the Netherlands and Viet Nam in the field. He also revealed that a delegation from the world’s second largest port, Rotterdam , will pay a visit to Viet Nam and work with Ho Chi Minh City, Da Nang city and Hai Phong city to boost bilateral cooperation.
In 2007, an estimated 170 million tonnes of cargo have been shipped via seaports, an increase of 16 million tonnes over the last year. The figure is forecast to reach 250 million tonnes in 2010 and nearly 550 million tonnes in the next three years.
According to Deputy Director of the Viet Nam Maritime Department Nguyen Ngoc Hue, Viet Nam’s seaports are capable of receiving 180,000 tonnes of cargo per year from 50,000 tonne ships downwards.
It is necessary to upgrade the existing seaports and build new ones to receive the increased amount of cargo arriving in the country as well as big ships of up to 80,000 tonnes, Hue said.
The Maritime Law, which took effect in 2006, has paved way for foreign investors to pour money into Vietnamese seaports. To date, foreign investors have got involved in the country’s 10 seaport development projects.
Notably is the Cai Mep-Thi Vai seaport complex in southern Ba Ria-Vung Tau province. It was built to receive large vessels with total investment of 1.5 billion USD from the US, Denmark, Singapore and Hong Kong.
VNS 26.12

Catfish exporters off the hook
Twenty-seven companies that export catfish to the US market have been removed from the list of companies subject to administrative review by request of the Association of Catfish Farmers of America (CFA).
Administrative reviews have been undertaken by the US Department of Commerce to review allegations that Vietnamese exporters had dumped tra and basa catfish onto the US market during certain periods.
CFA’s lawyers last week sent a letter to the Department of Commerce along with the CFA petition seeking the withdrawal of 27 exporters from the list of companies subject to the fourth administrative review.
The fourth administrative review will look at lots of Viet Nam-origin catfish shipped to the US from August 1, 2006, to July 31, 2007.
The anti-dumping conflict over Viet Nam tra and basa catfish has dragged on for about five years. Domestic producers have attempted to diversify overseas markets to avoid negative impacts of the dumping action.
So far this year, catfish exports to all markets worldwide have earned nearly US$1 billion, according to industry statistics. To boost export markets, exporters have made strides to satisfy strict requirements on food safety and hygiene.
Major tra and basa catfish markets now include the EU, accounting for about half of all exports, followed by Russia, ASEAN member states, the US, Ukraine and Mexico.

 Nation posts record export, import figures, trade deficit
This year Viet Nam has clocked in record levels of export, import and trade deficit, according to the General Statistics Office.
The figures come just one year after Viet Nam’s entry into the WTO.
Export this year rose by US$ 48.4 billion, increasing 21.5 per cent over 2006. Imports reached $60.8 billion, soaring 35.5 per cent, and trade deficit was recorded at $12.4 billion, 2.4 times more than last year.
Exports in November and December rose by a record $4.5 billion and $4.7 billion, respectively.
The US headed the list as Viet Nam’s largest export market with more than $11 billion. At their heels was Japan, followed by China, Australia, Singapore and Germany.
European countries bought Vietnamese products worth $13 billion, while ASEAN countries bought products worth $6.5 billion.
The country’s key export item was crude oil, earning $8.5 billion, increasing by 2.6 per cent. The runner-up was textile – garment products, reaching $7.8 billion, increasing 33 per cent over last year.
Viet Nam earned $3.8 billion from fishery products and $ 2.4 billion from wooden products.
Imports this year sharply increased, with $60.8 billion, increasing 35.5 per cent, mostly in machinery, equipment, fuel, and raw materials to serve production. Because of these huge imports trade deficit reached a record $12.4 billion this year.
Imports of machinery and equipment reached $10 billion, increasing 56.5 per cent over last year, while petrol followed with $7 billion.
The record export growth was down to increasing turnover of key export items, including crude oil and coffee, in line with growing global demand, GSO experts said. But heavy reliance on foreign raw materials was partly to blame for import deficit, they added.
VNS 26.12

Job generation in the integration process
Deputy Prime Minister Pham Gia Khiem: Job generation is a decisive factor in the effective use of an abundant labour force, thereby promoting internal strength and allowing the seizure of opportunities to develop the national economy in a rapid and sustainable manner.
Generating 15 million jobs in the 2001-2010 period
To fulfill the goals of Vietnam’s socio-economic development strategy in the 2001-2010 period on job generation, the Ministry of Labour, Invalids and Social Affairs (MoLisa) has set up an employment strategy to restructure labour force in conform with the restructuring of the economy in order to meet the demands of employers, improve labour productivity and people’s living conditions and increase incomes. The detailed goal is to generate 1.5-1.6 million jobs, reduce the unemployment rate in urban areas to below 6 percent in 2005 and below 5 percent by 2010. The rate of skilled workers accounted for 30 percent in 2005 but is intended to grow to 40 percent by 2010.
Vu Dai Dong, Head of the Department of Labour and Employment under the MoLisa said job creation will be conducted through socio-economic development, exporting guest works and experts and implementing a national target programme on job creation which pay a special attention to young people and workers in rural areas.
High economic growth helps generate jobs
Since 2001, Vietnam’s Gross Domestic Product (GDP) growth rate remained relatively high, ranking third among ASEAN countries, achieving 7.5 percent on average in the 2001-2005 period and 8.2 percent in 2006. The GDP growth rate is expected to reach 8.4-8.5 percent this year. The attraction of local and foreign investment has increased rapidly while small and medium-sized enterprises (SMEs) have developed strongly. By the end of 2006, the total number of enterprises registering business operations reached 234,000 including 113,000 enterprises operating in the country. Currently, the country has 150 industrial parks, which have generated stable jobs for labourers.
Socio-economic development programmes generated 5.55 million jobs in the 2001-2005 period, 1.222 million jobs in 2006 and 1.17 million jobs in 2007.
Workers generate jobs thanks to national fund
Vietnam is creating a national target programme on job creation in the 2001-2005 period and till 2010. Under the programme, a project to borrow capital from the National Fund for Employment Creation has played a key role in generating jobs for workers. Annually, the government approves supplementary capital sources for the programme based on employment plans. By 2007, the fund has provided total loans of VND2,900 billion to SMEs, villages, collectives, farms and households with preferential policies.
Thanks to the national target programme on job generation, so far, about 30 provinces and cities across the country have set up funds to create jobs for local people. The capital source from the national fund and local funds for job generation which is delivered to localities thorough social organisations, such as the Vietnam Labour Confederation, the Farmers’ Association, the Women’s Union, the War Veterans’ Association and the Blind Association, has become an important factor in creating jobs for labourers.
Several many effective job generation centres using assistance loans have been established, such as a handicraft production centre in Dong Ky, northern Bac Ninh province, brocade weaving centres in south-central Bih Thuan province and northern Hoa Binh province, a ceramics production centre in southern Dong Nai province, farming development models in the southern provinces of Binh Phuoc, Tay Ninh, Lam Dong, Ben Tre and Hau Giang, and cage fishing centres in northern Hai Phong and Quang Ninh provinces.
100,000 guest workers to be recruited in 2010
So far, Vietnam has sent workers to 40 foreign countries and territories with more than 30 craft categories. The quality of Vietnamese guest workers has improved as over 50 percent of them have attended vocational training courses.
From 2001 to 2005 nearly 100,000 small projects received loans to generate jobs for 1.67 million workers.
- In 2006, 350,000 people were employed.
- In 2007, an additional 350,000 are expected to get jobs.
According to the Overseas Labour Management Department, from 2001 to 2005, 295,100 labourers were recruited to work abroad. In 2006, 78,800 people worked overseas and the figure amounted to 80,000 in 2007.
At present, more than 400,000 Vietnamese guest workers have been working abroad. Labour export activities have reduced the unemployment rate in the domestic market and have helped many people stabilize their lives. However, there still remains some shortcomings, such as the high rate of untrained workers, poor awareness of the importance of following occupational disciplines, the large numbers of guest workers violating labour contracts and weak labour management capacity.
During a recent two-day seminar on employment on December 17-18, John Hendra, a United Nations coordinator in Vietnam, said sustainable job generation is a key to develop human resources, reduce poverty rate and boost social integration.
The seminar, themed “Decent work”, aimed to created stable jobs for both male and female workers in an equal and safe manner. Stable jobs mean labourers can receive decent incomes, work in a safe environment and enjoy social welfare, he added.
According to Sachiko Yamamoto, director of the International Labour Organisation (ILO) office in Asia-Pacific, job generation in Vietnam is facing many challenges. In particular, there is an urgent need to keep balance between competition, productivity and sustainable employment in the global integration process.
VNECONOMY 24.12