[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
VN business news (Apr 1, 1997)
Asian Cash Rice Flat-Down; Vietnamese Slides On Poor Demand
Vietnam Is Tightening Control on Publication Of Financial Reporting
Vietnam Share Rule May Change
Vietnam may scale back 1.2 billion dollar oil refinery project
Vietnam Moves To Boost Confidence In Banks: Amplifier
Tuesday, Apr 01, 1997 ... Back to headlines
[INLINE] Asian Cash Rice Flat-Down; Vietnamese Slides On Poor Demand
SINGAPORE (Dow Jones)-- Vietnamese rice offers are softer late
Tuesday, having succumbed to pressure stemming from the increasing
supply of newly-harvested rice and lackluster demand, while offers
elsewhere in Asia are largely unchanged, trade sources said.
With almost 40% of the winter-spring crop harvested and no new export
contracts signed, offers for 5% Vietnamese broken rice have retreated
to $247-$250/ton, from $250-$260/ton Monday.
Quotes for Vietnamese 25% broken rice are heard at $212-$215/ton, down
from $225-$230/ton.
'The remaining (contracted) shipment of rice is only the 100,000 tons
to the Philippines and about 70,000 tons have already been inspected,'
said a source with a cargo surveyor in Ho Chi Minh city. ' Vietnam can
export about 300,000 tons of rice per month, but right now it is only
doing about 150,000 tons a month, so prices can go lower.'
However, Iranian buyers may contract a large amount of Vietanmese rice
soon, said a trade source in Ho Chi Minh city, adding talk is that
these buyers have received offers from Vinafood at $310/ton, FOB, for
5% broken rice. An official at Vinafood wouldn't confirm the offer. It
is simultaneously rumored that another offer for the same grade rice
has been made, likely by a middleman, at $280/ton, FOB, to be supplied
by a provincial exporter.
However, the buyers haven't decided if they will buy at the cheaper
price, owing to fear that the government may stop the deal, alleged
the trade source in Ho Chi Minh city.
In India, prices can be 'very fluid,' said a trader there. 'Many
people will want to get rid of their stocks because of the political
instability now.'
Quotes for Indian 25% broken rice are still unchanged at $240-$245/ton
while the Pakistani origin is offered steady at $210-$215/ton.
In Thailand, offers for 25% broken rice offers are heard stable at
$270/ton, while the 100%B rice is offered steady at $320-$325/ton amid
talk that some 10%-20% of the new crop has been harvested.
-By Joyce Teo 65-421-4825
___________________________________
Tuesday, Apr 01, 1997 ... Back to headlines
[INLINE] Vietnam Is Tightening Control on Publication Of Financial
Reporting
Hanoi (WSJ) -- Vietnam has imposed a new, vaguely worded state-secrets
policy requiring journalists to obtain central-bank approval before
publishing financial information.
Independent reporting will be discouraged and may be subject to
punishment. The policy, effective last week but not yet widely
distributed, has the State Bank of Vietnam act as a filter for all
sensitive financial information.
The central bank has yet to say what information will be guarded as a
state secret, nor has the government indicated the potential penalties
for violators.
Vietnam's criminal code provides prison terms of up to 15 years for
disclosing state secrets. However, it does not define what is secret.
Government officials did not immediately respond to requests for
clarification of the policy.
"Banking issues are always very sensitive," said State Bank of Vietnam
official Nguyen Van Binh. "Inaccurate information can affect the
activities of the whole banking sector. . . . Sometimes it is the
right information, but maybe the timing is wrong," he added.
The policy is necessary to protect the reputation of its financial
industry, Vietnam says. It comes as the country's banking structure
lurches toward worsening problems, fueled by bad loans and
mismanagement. Official media have reported that between 5% and 10% of
outstanding loans in Vietnam may be overdue.
Both domestic and foreign reporters in Vietnam already work under
strict government-imposed controls.
There is no independent media in Vietnam, where all publications and
broadcasters fall under state supervision and the close scrutiny of
the Interior Ministry. Foreign journalists are closely monitored by
the Interior Ministry and the Foreign Ministry.
In mid-March, government censors barred the publication of the
state-controlled weekly Vietnam Investment Review when it carried a
report on banking woes. More than 10,000 copies of the newspaper were
reprinted to delete the banking story.
___________________________________
Tuesday, Apr 01, 1997 ... Back to headlines
[INLINE] Vietnam Share Rule May Change
Hanoi (WSJ) -- Three state-owned Vietnamese companies are proposing to
sell shares to foreigners when they are partially privatized, which
would be a first for the country, a government official said.
Foreigners are currently not allowed to buy shares in equitized
state-owned companies. Equitization is the Vietnamese government's
term for the partial privatization of state firms. Foreigners have
bought shares in a handful of private banks, and one equitized state
company sold convertible bonds to foreigners in mid-1996.
The three companies are Savimex, a wood-processing company, An Phu
Shipyard Co. and Ho Chi Minh City Cosmetics Co. & Research Center,
said Doan Kim Dan, an official at the State Enterprise Reform
Committee. All three companies are in Ho Chi Minh City.
If the three firms do gain permission to sell shares to foreigners,
the decision would represent a trial change in policy rather than a
permanent one, Mr. Dan said.
The companies will need to get approval from local and national
equitization boards and Prime Minister Vo Van Kiet before they can
proceed.
There hasn't been a decision on the maximum percentage of shares
foreigners would be able to buy in the companies, Mr. Dan said, but
the State Enterprise Reform Committee will ask Prime Minister Kiet to
permit up to 30%. Foreigners and Vietnamese would be able to buy
shares at the same price, he said.
Separately, Truong Tuong Chien, general director of the An Phu
Shipyard, said both the revenue and profit of the shipyard increased
20% in 1996 from a year earlier, although he declined to provide
specific figures. He also said his company had recently been visited
by a representative of Japan's Nomura Securities Co.
Meanwhile, according to a report in The Saigon Times Daily Monday,
Nomura is advising Savimex on its equitization plan. A Nomura official
in Hanoi declined to comment on that report.
The Vietnamese government began its equitization program in 1992, but
progress so far has slow, with only about 10 companies having
completed the process. Efforts to accelerate the process have been
made recently.
___________________________________
Tuesday, Apr 01, 1997 ... Back to headlines
[INLINE] Vietnam may scale back 1.2 billion dollar oil refinery
project
Hanoi (AFP) - Vietnam is considering scaling back the country's first
oil refinery, which is expected to cost 1.2 billion dollars, in a bid
to make it more attractive to foreign investors, a report said Monday.
Ngo Thuong San, general director of PetroVietnam said the state-owned
corporation was considering the adjustment of the goals of the Dung
Quat oil refinery project in the backward central province of Quang
Ngai to make it more "realistic and profitable" the Saigon Times daily
reported.
San was quoted as saying PetroVietnam would give foreign partners the
new feasibility study for the project as soon as it was available.
He also said PetroVietnam had another plan to self finance the project
which will be used in case all foreign partners withdraw, the daily
reported.
PetroVietnam declined to comment on the report.
Vietnam in February rejected a feasibility study prepared by a
consortium including South Korea's LG International, Malaysia's
Petronas, Conoco of the US and Taiwan's Chinese Petroleum Corp and
China Investment Development Corp.
Hanoi also said that it would go forward with its own plan to build
the Dung Quat refinery without the help of foreign partners.
However, at an oil and gas conference held in Ho Chi Minh City last
month, a scheduled presentation on the controversial project by
PetroVietnam was pulled from the programme at the last minute.
The failure of the Dung Quat consortium to win approval for their
feasibility study has struck a mood of scepticism among foreign oil
and gas companies.
French oil giant Total pulled out in late 1995 on the grounds that
Dung Quat was too far from oil supplies and the large consumption
markets to be economically viable.
___________________________________
Tuesday, Apr 01, 1997 ... Back to headlines
[INLINE] Vietnam Moves To Boost Confidence In Banks: Amplifier
Hanoi (DJ) -- In its latest effort to shore up confidence in the
nation's financial system, Vietnam's central bank has released a
flurry of measures apparently designed to limit future problems and
muffle information about ones that might already exist.
In short order, the State Bank of Vietnam has issued a new instruction
against corruption in lending, proposed a tougher set of rules on
foreign currency borrowing and, most prominently, promulgated new,
albeit somewhat vague, restrictions on the publication of 'secret'
information.
The controversial secrecy regulations have the potential to be seen as
either a benign effort to limit wild rumors or a heavy-handed attempt
to suppress the revelation of genuine banking problems.
The moves come amid mounting concern with the health of the national
banking system. Although the State Bank repeatedly has said the level
of overdue loans in the system is about 5%, there is anecdotal
evidence of significant problems at a few private banks and widespread
lending corruption.
The latest measures also come just before the National Assembly,
Vietnam's legislature, opens its monthlong spring session. At the last
session, in October, deputies devoted unexpectedly generous time to
criticizing banking corruption and the State Bank's oversight of
credit quality.
The central bank's initiatives would seem intended to show it is on
top of a potentially threatening situation, analysts said.
But it's unclear how much impact the measures will have.
Although Vietnam is a communist state, an idea that summons images of
total subservience to central authority, government decisions are
routinely ignored.
In Vietnam, new regulations are 'sounding boards,' said a U.S. lawyer
with long experience in the nation. 'They're put out, and after a
while people often don't give a damn. It's culturally recognized as
such.'
That was the fate of a 1995 edict requiring the use of dong rather
than dollars and a 1996 decree setting real estate taxes by a formula
rather than the amount of rent individuals pay.
Of the latest State Bank measures, the secrecy regulations have been
the most difficult to learn about, making their potential impact the
hardest to gauge.
No formal distribution of the circular announcing the secrecy rules
took place. The list of forbidden topics seems to have been classified
a secret itself, given the lengths reporters have had to go in order
to get it. And no penalties have yet been drafted for violations of
the regulation, an official in the economic information department at
the State Bank said.
Vietnam's criminal code, however, does provide for up to 15 years'
imprisonment for disclosing state secrets.
The circular requires journalists to 'consult' with the State Bank
before writing about 'highly professional information' and get
permission before printing articles that deal with subjects on an
official list of banking secrets.
That list bars coverage of items that arguably ought to be secret,
like the physical location of central bank gold reserves, passwords
used in transporting money and blueprints of government mints.
But the list also forbids reporting on changes in interest and
exchange rates before they have been officially announced and
unpublished internal reports of the State Bank inspectorate.
(It was the reporting of such an inspectorate report last August that
brought to light the fact 13% of loans at the nation's joint-stock
banks were overdue.)
The government's main intention is to prevent the spread of faulty
information, said Nguyen Van Binh, director of the governor's office
at the State Bank. 'Inaccurate information can affect the activities
of the whole banking sector,' he said in a telephone interview.
To that extent, the regulations 'seem like a sensible step,' said
David Hutcheson, chief executive for Vietnam at Hongkong & Shanghai
Banking Corp. (H.HKS) in Ho Chi Minh City.
'You want to avoid something precipitous happening,' Hutcheson said,
citing a run on the Viet-Hoa Joint-Stock Bank in Ho Chi Minh City that
occurred recently on incorrect rumors the bank's president had
committed suicide. In fact, he had died of a heart attack.
But Binh said the State Bank is concerned with more than just accuracy
in the new secrecy rules.
'Maybe the information is right, but the timing isn't good because it
will hurt economic development,' Binh said. 'If very sensitive
information is released, then maybe there will be some reaction in the
public. We should publish it, but at the right time, the right place.'
The regulations apply to all journalists, domestic and foreign,
according to the official in the central bank's information
department.
While foreign bankers say they understand the State Bank's motives for
wanting to control rumors, they also say the new policy - by
restricting official information - might boomerang.
'Ideally, what the authorities should be moving toward is having good
information in the public domain, and then having a clear set of
guidelines for dealing with the media,' said an official at an
international organization.
'What we're facing here is a big problem of information,' he added.
'There's so little that's published, which is why we get all these
rumors in the first place.'
According to a foreign economist based in Hanoi, greater access to
information - not less - is likely to ease concerns about the
condition of the financial system. 'Having sound banking is all about
confidence, and confidence is helped by transparency.'
All that said, it's uncertain whether a policy of intended secrecy
could be much more secretive than the current one, in which few
official channels for the distribution of information exist. Economic
statistics aren't released in any formal manner, nor are monetary and
exchange-rate policy changes, to cite a few examples.
The U.S. lawyer said he hasn't been able to obtain a copy of a treaty
Vietnam signed 15 years ago.
And banks have no ready way of learning what property a potential
borrower has pledged as collateral to other institutions.
'One way to stop rumors is to be as open as possible,' the U.S. lawyer
said, 'but I think it'll be a long time before that mindset takes hold
here.'