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VN Buss. News (Mar. 17-18, 1997)
Mar 18: Vietnam will rate a Ba3 credit rating: foreign banker
Mar 18: Singapore industrial park to issue investment licences in Vietnam
Mar 18: Ho Chi Minh City's exports jump 34 percent: report
Mar 18: Swiss ABB Forms Switchgear Jt Venture In Vietnam
Mar 18: Japan Mitsubishi Heavy Wins Vietnam FSPO Oil Plant Contract
Mar 17: Indonesia's investments in Vietnam reach US$ 2.4 billion
Mar 17: Vietnam to Study Feasibility of North-South Highway
Mar 17: Vietnam to set up overseas travel offices to boost sagging growth
Tuesday, Mar 18, 1997
Vietnam will rate a Ba3 credit rating: foreign banker
HANOI (AFP) - Vietnam is likely to receive a Ba3 sovereign credit
rating, which constitutes a medium risk for international
borrowers a foreign banker said late Monday.
In a presentation made to state-owned corporations and the
central State Bank of Vietnam on Monday, David Seto, senior
country analyst for HSBC Markets, said the country deserved
a rating comparable to Turkey, Kasakhstan, Roumania and
Jordan.
Seto based his ranking on Vietnam's strong political
climate, improving credit management, strong investor
sentiment, robust growth and falling inflation.
However he cautioned that Vietnam's burgeoning current
account deficit could create problems in its future ability
to service foreign debt.
"The current account deficit, reaching 2.85 billion dollars
in 1996 or 11.9 percent of GDP (gross domestic product), is
worrisome," he said.
A Ba3 rating is below investment grade, which means
institutional investors are prohibited or severely
restricted from buying the bonds, said one foreign bank
advising the Ministry of Finance.
"It's not a positive stamp of approval, and Vietnam should
never expect much more at its stage of investment," he
said.
"We said it's not a good idea to seek a rating at this
time, it's better to not have yourself compared to other
countries yet," said one foreign banker.
Vietnam is expected to be assigned its first international
credit rating, which is normally assigned by
internationally recognized risk rating agencies such as
Moody's Investors Service Inc and Standard and Poor's, when
it floats its first bond issue at the end of 1997.
A team from Moody's completed a week of meetings with
Vietnamese officials last week a foreign banker said.
Merrill Lynch and Co and Nomura Securities have been chosen
to underwrite the benchmark issue to be floated by the
Ministry of Finance, which is expected to raise about 150
million dollars with a five year maturity.
However bankers said that Vietnam must first finalize the
rescheduling of its roughly 900 million dollars of London
Club debt owed to private creditors since the early 1970s.
A source from the State Bank of Vietnam told AFP that all
of the creditors have committed themselves to rescheduling
options which include some debt forgiveness.
"We closed the commitments on March 14 and expect to have
the final figures for commitments within a couple of days,"
he said.
The complete plan is expected to be finalized by the end of
June, paving the way for Vietnam to tap international
financial markets.
The ultimate terms of bond issues will also depend on
Vietnam's current account balance, Seto said.
Seto said government measures to rein in imports and loosen
export restrictions should help reduce the current account
shortfall to 11 percent this year.
He said other traditional measures of Vietnam's
creditworthiness, or its ability to meet its foreign
borrowing obligations, such as debt service-exports ratio
and size of foreign reserves relative to imports, though
weak, were improving steadily.
Another HongkongBank executive said that once the State
Bank of Vietnam and Ministry of Finance had issued their
first two bond flotations, state-owned companies would be
next to tap foreign markets.
He said that perhaps in 1998 the first international bond
issue by a Vietnamese company would be in the range of 50
to 70 million dollars with a maturity of five years.
Possible candidates for the first non-sovereign
international borrowing were Vietnam National Posts and
Telecommunications (VNPT), Vietnam National Steel
Corporation (Vinasteel), Electricity of Vietnam (EDV) and
several Vietnamese state-owned banks.
Tuesday, Mar 18, 1997
Singapore industrial park to issue investment licences in Vietnam
HANOI (AFP) - A Singaporean-backed industrial
park has received permission to issue investment licences
to its prospective tenants, an official at the park said
Tuesday.
"We have a managment board which is permitted to issue
investment licences," an official from the 53 million
dollar Vietnam-Singapore Industrial Park (VSIP) told AFP.
He did not disclose the maximum amount of investment
licence the group is authorised to approve. However the
Saigon Times daily reported that the management board of
VSIP would be allowed to approve projects worth up to five
million dollars.
The right to vet and licence projects by VSIP should help
kickstart the group's plans to develop the industrial park,
which is located in Song Be province outside of Ho Chi Minh
City.
A perennial lament among foreign investors is the laborious
licencing procedure needed to get approval from the
Ministry of Planning and Investment for projects, a process
which can take up to two years.
"This is a type of one-stop shopping" the VSIP official
said.
Several top Singaporean firms are involved in the
industrial park project including Sembawang Industrial, the
island's largest industrial estate developer JTC
International, the government's investment holding company
Temasek Holdings and the United Overseas Bank. <p>
Other partners include Sembawang Engineering, LKN
Construction and KMP, part of Indonesia's Salim Group.
Tuesday, Mar 18, 1997
Ho Chi Minh City's exports jump 34 percent: report
HANOI (AFP) - Exports from Vietnamese domestic
enterprises in Ho Chi Minh City surged 34 percent
year-on-year in the first two months of this year, a report
said Tuesday.
Exports from Vietnamese enterprises in January and February
reached nearly 572 million dollars, an increase of 34
percent over the same period last year, the the Nguoi Lao
Dong newspaper said.
Exports of garments, one of Vietnam's most important
labour-intensive industries soared to 74.9 million dollars,
up by 68.7 percent year-on-year, it said.
Other export items posting big increases included
agricultural and aquaculture products which were up 17.8
percent to 104.6 million dollars and 30.9 percent to 30.9
million dollars, respectively.
Footware exports, one of Vietnam's fastest growing
industrial exports, recorded the highest rise, soaring 88.4
percent to 37.2 million dollars.
Tuesday, Mar 18, 1997
Swiss ABB Forms Switchgear Jt Venture In Vietnam
ZURICH (AP) -- ABB Asea Brown Boveri AG (z.bbb) announced on Tuesday its
second joint venture in Vietnam.
The latest will produce advanced switchgear and distribution transformers.
The unit, called ABB Transformers & Switchgear Ltd. and based in
Ho Chi Minh City, is 65% owned by ABB and 35% held by THIBIDI, a company
owned by the Vietnam Ministry of Industry.
ABB's first joint venture company was formed in Hanoi in 1994 to make
power transmission and distribution products.
Tuesday, Mar 18, 1997
Japan Mitsubishi Heavy Wins Vietnam FSPO Oil Plant Contract
TOKYO (DJ) -- Mitsubishi Oil Co. (J.MBO) has awarded Japan's Mitsubishi Heavy
Industries Ltd. (J.MHI) and Single Buoy Mooring Inc. (SBM) of Switzerland a
contract for the construction of floating production, storage, and offtake
(FPSO) facilities for oil production at its offshore Vietnam concession, a
Mitsubishi Oil official said Tuesday.</p>
Mitsubishi Oil signed a production-sharing contract with PetroVietnam,
Vietnam's state-run oil and gas company in October 1992. After a series of
successful appraisal drillings, the company now plans to begin commercial
production at the northern part of its Rang Dong prospect at the offshore
oil field during 1997.
Mitsubishi Oil will sign an official agreement soon with a joint venture
which is expected to include Mitsubishi Heavy, SBM and one other Japanese
company, he said.</p>
The Mitsubishi Oil official added that the company hopes the FPSO facilities
will be fully operational by May 1998.</p>
FPSO facilities which will be constructed by converting a 120,000-metric-ton
floating tanker, will store crude oil transported from the oil field through
a two-kilometer underwater pipeline, and remove water and gas from oil. The
facilities will have a storage capacity of about 800,000 barrels, the
official said.</p>
The company currently expects at least 45,000 barrels per day of production
at its Block 15-2 offshore concession in Vietnam, he added.</p>
-By Mika Watanabe 813 3505-5901
Monday, Mar 17, 1997
Indonesia's investments in Vietnam reach US$ 2.4 billion
Jakarta (ANTARA) - Indonesia's investments in Vietnam
now total US$ 2.4 billion and are ranked seventh in terms of foreign
investment in this country, Indonesia's ambassador to Vietnam Djafar
H. Assegaf has said in a release.
The release of the Indonesian embassy in Vietnam made available
to ANTARA here Friday said that about 70 per cent of Indonesia's
investments in Vietnam are found in the northern part of the
country.
Ciputra, one of Indonesia's business tycoons, is the largest
Indonesian investor in Vietnam with an urban contruction project in
the West Lake area worth some US$ 2.1 billion.
Indonesia's trade with Vietnam in 1996 stood at US$ 400 million
with Indonesia enjoying the surplus.
To bolster Indonesia's exports to Vietnam and its investments in
this country, a trade exhibition called "Promotion of Indonesia's
Trade, Business and Tourism" will be held on March 20 - 23 in Hanoi,
the capital of Vietnam.
Monday, Mar 17, 1997
Vietnam to Study Feasibility of North-South Highway
HANOI (Xinhua News) - A feasibility study for the construction
of a new trans-Vietnam highway is expected to begin in April, the
Transport and Communications Ministry said.
The new 1,800-kilometer highway will be built on the basis of the
legendary Ho Chi Minh trail and Highway 14 running along the Truong Son
mountain range.
The new road will be constructed to develop the socio-economic
structures west of Thanh Hoa and Nghe An, linking all northern central
provinces to Da Nang, and to promote the strategic development of the
central highlands region of Tay Nguyen.
The proposed highway, 23 meters wide, will have four lanes for
motorized vehicles and will be built in two phases.
Experts will study the social and economic factors as well as the
natural conditions in this area to find whether this project is
feasible.
Monday, Mar 17, 1997
Vietnam to set up overseas travel offices to boost sagging growth
HANOI (AFP) - Vietnam plans to open its first
overseas tourism offices to boost sagging growth in the
market, an official said Monday.
A senior official at Vietnam's National Administration of
Tourism (NAT) said it plans to open representative offices
in Singapore, Japan and France to promote tourism and
attract investment in tourism.
The plan, which was mapped out as part of a tourism
strategy announced in a conference on tourism sponsored by
the European Union earlier this month, must first be
approved by Prime Minister Vo Van Kiet.
Vietnam tourism growth slowed down in 1996 after booming in
previous years. The year-on-year tourism growth rate was
just 18 percent compared to 33 percent in 1995.
The roughly 1.6 million arrivals last year was 10 percent
short of the government target.
Vietnam plans to increase the number of foreign tourists by
2000 to between 3.5 millin and 4.0 million, requiring an
annual growth of at least 25 percent.