VN Buss. News (Apr. 16, 1997)

[Vu Thanh Ca <vuca@envi.env.civil.saitama-u.ac.jp>]

Apr 16: Vietnam Fund Pickings May Get Slimmer... 
Apr 16: Malaysians have invested RM2.5bil in Vietnam 
Apr 16: Asian Cash Rice Flat; Vietnam Minimum Export Prices Eyed 
Apr 16: Lazard Vietnam Fund Could Be Folded in April 
Apr 15: Vietnam Peregrine Exec Arrest Worries Businesses
Apr 15: Inoue Rubber Vietnam Building Plant For Motorcycle Tyres 
Apr 15: Vietnam Projects - Soc Trang Province Seeks Investors
Apr 15: Vietnam Improves Investment Law To Attract Foreign Companies 


Vietnam Fund Pickings May Get Slimmer ---
One of Six Options Faces Possible Liquidation 

By Pui-Wing Tam
The Wall Street Journal Europe

ONE of the six closed-end Vietnam funds available to foreign investors
has announced it may be liquidated at the end of this month. If it is,
it would be the first casualty in the sector.

Late last week, the Lazard Vietnam Fund released an official statement
notifying shareholders of an extraordinary general meeting to be held
April 28. Shareholders will on that day vote on a resolution to wind
up the fund, which is listed on the Dublin Stock Exchange, ahead of
its official 2002 expiry date.

As reported, the announcement also referred to infighting between the
fund's board and its fund manager, Singapore-based VietNamVest Ltd.,
which is a Lazard subsidiary. "In December of last year Vietnam Vest
formally recommended to your board that shareholders should have the
opportunity to consider whether they wished to liquidate the company,"
the statement said, noting that the fund manager had cited increasing
competition from other closed-end funds and the lack of a local stock
market as reasons to liquidate.

But a majority of the fund's directors "considered that the
longer-term investment outlook for Vietnam remained as at tractive as
it had been when the company was launched and that to liquidate the
company after just over two years was premature," the statement said.
The announcement didn't contain a recommendation to shareholders.

The Lazard Vietnam Fund's statement noted that the $58.8 million fund
had found few investments since its 1994 launch and remained heavy in
cash. It currently has just $9.5 million, or 16%, of its assets
invested. And according to Peregrine Securities (U.K.) Ltd., the
Lazard fund is trad ing at a 6.7% discount to its net asset value.

Other Vietnam funds don't appear to be in much better shape. Peregrine
says Vietnam funds as a sector are trading at an average 18% discount
to net asset value. And the $115.8 million Templeton Vietnam
Opportunities Fund faces a shareholder meeting on Oct. 1. Its fund
manager, Mark Mobius, has said he intends to suggest during that
meeting that the fund be changed into a diversified Southeast Asia
fund instead.

Many fund managers aren't as bearish, however. "Everybody knows the
reason that Lazard's Vietnam fund is folding isn't particularly
because of Vietnam, but because of Lazard itself," says Mark
Kenderdine-Davies at Indochina Asset Management Ltd., referring to the
differences within the Lazard fund. Mr. Kenderdine- Davies adds that
the $68.2 million Beta Vietnam Fund, which his company manages, is
still confident about opportunities in Vietnam. "It's very difficult
to make a fast buck (in Vietnam), but we're slowly but surely moving
toward full investment."

Mr. Kenderdine-Davies says the Beta Vietnam Fund is 70% invested in
Vietnamese debt, Vietnamese direct equity in vestments and in some
listed equities abroad, such as in Australia. He figures his fund will
be fully invested in another year or two.

Eric Solvet at Frontier Fund Management Ltd., the firm that manages
the $70 million Vietnam Frontier Fund, says he still sees
opportunities to invest in Vietnam's building-materials sector and in
companies that play on the country's grow ing middle class.

"There's no doubt that the climate in Vietnam is difficult, but you
can still find quality investments," Mr. Solvet asserts. "What's
become more important is the quality of management and the value that
fund managers can bring to the table."
                 ___________________________________


Malaysians have invested RM2.5bil in Vietnam 

The New Straits Times

MALAYSIANS have invested more than RM2.5 billion (US$1 billion) in
Vietnam since 1986, making the country the seventh largest foreign
investor in the emerging economy.

Firms such as Renong Bhd and Petronas have made inroads into sectors
such as construction, hotels and oil, while Public Bank Bhd and
Malayan Banking Bhd have operations there.

Malaysian investment is expected to grow as Vietnam makes considerable
improvements to its administrative procedures, the country's
Ambassador to Malaysia, Hoang Nhu Ly, said yesterday.

He said the time required to process investment licences had been
shortened to between 30 and 40 days, from two months before.

Other procedures are also being simplified, he added.

Since Vietnam implemented its open-door Doi Moi or Renovation Policy
10 years ago, the country has maintained an average growth rate of 8.5
per cent per annum.

Last year, the growth touched 9.3 per cent.

Inflation has been reduced from 12 per cent in 1990 to four per cent
last year.

So far, 54 countries have invested in Vietnam with 1,700 projects
being granted investment licences.

Investment has exceeded US$27 billion, of which US$9.7 billion worth
of projects have been implemented.

The country is now focusing on attracting foreign direct investment to
key sectors such as oil and gas, power, cement production, mining,
electronics and the processing of agriculture, forestry and fishery
products.

Three economic areas in the north, middle and south of Vietnam have
been established to accomplish this.

"I can confirm with you that the economic and political environment is
very stable and favourable for your business and government," Hoang
told participants of the 2nd Vietnam Business Conference 1997 which he
opened.

The two-day event was organised by Foreign Business Centre Sdn Bhd at
Hotel Istana.

Speakers include Vietnamese government officials and members of its
private sector.

Last year, bilateral trade amounted to US$450 million.
                 ___________________________________


Asian Cash Rice Flat; Vietnam Minimum Export Prices Eyed

SINGAPORE (Dow Jones)--Asian physical rice offers are holding firm
late Wednesday while talk in Vietnam centers on the government's
announcement of minimum support prices for rice exports which are
higher than current price indications, trade sources said.

According to a Ho Chi Minh city-based trader, the Ministry of Trade
has placed the minimum support price at $245/ton for the Vietnamese 5%
broken rice and at $210/ton for the 25% broken rice.

But current offers for the 5% rice are still at $240 while offers for
the 25% rice are around $205.

'It's good for the farmers but the traders are complaining,' he said.
'Some said it is not the right time to impose the prices. The
government should let the market decide the price.'

Another trader in Ho Chi Minh city said this is probably the second
announcement of minimum export prices by the Ministry of Trade.

'They are afraid that FOB prices will be equal to the cost of
production and exporters will push down the price they pay to farmers
(and) the farmers will suffer,' he said.

Still, trade sources doubt the price measure will be effective because
of the lack of a definite way to ensure its enforcement.

Meanwhile, the World Food Program has contracted three vessels of
Vietnamese 35% broken rice at $200/ton, FOB, for food aid to North
Korea, the second Ho Chi Minh city trader said. Shipment of the total
amount contracted, said to be slightly less than 30,000 tons, will
likely be effected at the end of April, he said.

In India, offers for 25% broken rice are steady at $245/ton while the
Pakistani grade is offered much lower at $215-$220/ton.

The 100% Indian broken rice is still quoted at $180-$185/ton.

Demand for Indian 25% brokens isn't expected to pick up since prices
can't go much lower to compete effectively with Vietnam and Pakistan,
a trader in India said.

' Vietnamese prices can be lower because they have a good crop and
about 90% or more of their crop is of the high-yielding variety
compared to 60%-65% of our crop,' he said. 'Our costs are higher than
(theirs).'

Markets in Thailand, which have been closed since Saturday, have
officially reopened, but many in the trade are still away celebrating
the Songkran Festival.

'Nothing is happening. There's no market today or this week,' a trader
in Bangkok said.

Price indications for Thai 25% broken rice should remain unchanged at
Friday's level of $265/ton, he said.

-By Joyce Teo 65-421-4825
                 ___________________________________


Lazard Vietnam Fund Could Be Folded in April 

One of the six closed-end Vietnam funds available to foreign investors
has announced it may be liquidated at the end of this month. If it is,
it would be the first casualty in the sector.

Late last week, the Lazard Vietnam Fund released an official statement
notifying shareholders of an extraordinary general meeting to be held
April 28. Shareholders will on that day vote on a resolution to wind
up the fund, which is listed on the Dublin Stock Exchange, ahead of
its official 2002 expiry date.

As reported, the announcement also referred to infighting between the
fund's board and its fund manager, Singapore-based VietNamVest Ltd.,
which is a Lazard subsidiary. "In December of last year VietNamVest
formally recommended to your board that shareholders should have the
opportunity to consider whether they wished to liquidate the company,"
the statement said, noting that the fund manager had cited increasing
competition from other closed-end funds and the lack of a local stock
market as reasons to liquidate.

'Premature' Liquidation

But a majority of the fund's directors "considered that the
longer-term investment outlook for Vietnam remained as attractive as
it had been when the company was launched and that to liquidate the
company after just over two years was premature," the statement said.
The announcement didn't contain a recommendation to shareholders.

The Lazard Vietnam Fund's statement noted that the $58.8 million fund
had found few investments since its 1994 launch and remained heavy in
cash. It currently has just $9.5 million, or 16%, of its assets
invested. And according to Peregrine Securities (U.K.) Ltd., the
Lazard fund is trading at a 6.7% discount to its net asset value.

Other Vietnam funds don't appear to be in much better shape. Peregrine
says Vietnam funds as a sector are trading at an average 18% discount
to net asset value. And the $115.8 million Templeton Vietnam
Opportunities Fund faces a shareholder meeting on Oct. 1. Its fund
manager, Mark Mobius, has said he intends to suggest during that
meeting that the fund be changed into a diversified Southeast Asia
fund instead.

'Because of Lazard Itself'

Many fund managers aren't as bearish, however. "Everybody knows the
reason that Lazard's Vietnam fund is folding isn't particularly
because of Vietnam, but because of Lazard itself," says Mark
Kenderdine-Davies at Indochina Asset Management Ltd., referring to the
differences within the Lazard fund. Mr. Kenderdine-Davies adds that
the $68.2 million Beta Vietnam Fund, which his company manages, is
still confident about opportunities in Vietnam. "It's very difficult
to make a fast buck [in Vietnam], but we're slowly but surely moving
toward full investment."

Mr. Kenderdine-Davies says the Beta Vietnam Fund is 70% invested in
Vietnamese debt, Vietnamese direct equity investments and in some
listed equities abroad, such as in Australia. He figures his fund will
be fully invested in another year or two.

Eric Solvet at Frontier Fund Management Ltd., the firm that manages
the $70 million Vietnam Frontier Fund, says he still sees
opportunities to invest in Vietnam's building-materials sector and in
companies that play on the country's growing middle class.

"There's no doubt that the climate in Vietnam is difficult, but you
can still find quality investments," Mr. Solvet asserts. "What's
become more important is the quality of management and the value that
fund managers can bring to the table."
                 ___________________________________


Vietnam Peregrine Exec Arrest Worries Businesses

Hanoi (AP-Dow Jones)--The arrest of the head of Peregrine Capital
Vietnam Ltd. on tax evasion charges Tuesday is being viewed as a blow
to the foreign business community here, reports Wednesday's Asian Wall
Street Journal.

Peregrine Investments Holdings Ltd. (PGIQY) said the arrest of general
director Nguyen Trung Truc - who was born in Vietnam but holds
Australian citizenship - was 'a bolt from the blue.'

'These kinds of stories don't necessarily engender confidence in the
business environment in Vietnam,' said Nigel Russell, a partner at law
firm Phillips Fox in Ho Chi Minh City. While corruption clampdowns may
be necessary, he said, 'I don't think foreign investors have a great
deal of confidence in the system.'

There is a 'deteriorating investment environment in Vietnam at the
moment,' agreed Alan Mercer, group legal counsel at Peregrine
Securities International Ltd.

Mercer said Peregrine's original intention was to set up an investment
banking operation in Vietnam, 'but the development of the capital
markets has been very slow, or nonexistent, and as a result we
branched out into the distribution business with limited
success...It's been a disappointment.'

Vietnamese law made it difficult to bring in foreign management to run
the distribution business, so Peregrine relied on Truc, its
joint-venture partner, to run the show, said Mercer.

'Now we have to consider the future of the (distribution) business,'
he said, adding that Peregrine is still interested in developing
investment banking and project finance. Peregrine would have full
control of these businesses, he said.

Peregrine has already named Judd Kinne as acting managing director of
Peregrine Capital Vietnam, Mercer said. Kinne, 53, who has been
managing director of Peregrine Securities Singapore Pte. Ltd. since
1989 and is a director on the executive committee of Peregrine
Investments, arrived in Vietnam on Monday.

Truc's arrest comes on the heels of several other setbacks for
Peregrine in its strategy of investing in emerging markets neglected
by other investment banking firms.

Earlier this month, Peregrine ran into problems in Bangladesh. The
company said an arrest warrant had been issued for Runa Alam, the
owner of SES Securities, through which Peregrine conducts all its
international institutional brokerage transactions in Bangladesh.

In a news statement, Peregrine said it wasn't entirely clear what the
allegations against Alam were, but that it was completely satisfied
that there is 'absolutely no justification for the issue of such a
warrant against Alam.'

Neither has Peregrine's foray into Burma been a happy one.

In October, Peregrine was awarded $4.1 million in damages by a Federal
District Court in New York against Miriam Marshall Segal, the former
chairwoman of the group's unit in Burma, where Peregrine had invested
in a prawn-processing venture. Peregrine had accused Segal of trying
to wrest control of the business from Peregrine.

'We won the court case...and have closed down the business in Burma,'
said Mercer.
                 ___________________________________


Inoue Rubber Vietnam Building Plant For Motorcycle Tyres 

Hanoi (VNA) -- Inoue Rubber Vietnam Ltd broke ground last week on a
plant to produce motorcycle tyres and industrial rubber products at
Thanh Lam commune in Me Linh district of the northern province of Vinh
Phu.

The plant is expected to start production in early 1998 to meet the
needs of domestic and export markets. The plant has total investment
capital of US$ 32.7 million and a 40 year licence.

* The Hino Motors Vietnam joint venture company held a ground breaking
ceremony for its Hino car assembly plant in Hanoi recently.

Vietnam's Car Repairing Plant No. 1, Japan's Hino Motors Ltd and
Sumitomo Corporation are partners in the joint venture. The plant's
construction is expected to be completed this year.
                 ___________________________________


Vietnam Projects - Soc Trang Province Seeks Investors 

Hanoi (VNA) - Projects for foreign investment in Soc Trang Province:

Soc Trang is a coastal province in the Mekong delta. Its major
industries include agriculture, fishery, food processing and services.

Soc Trang is a potential rice exporter. It also has good potential for
aquaculture. its current aquatic output is 40,000- tonnes a year, only
40 percent of its potential.

The province needs investment to tap available natural resources. it
has readied the following projects for foreign investment in the
1997-2000 period:

Prioritised Project:

* Growing quality rice for export. Projected investment capital: US$
15 million

* Raising shrimp for export. Location: Vinh Chau, Long Phu and My
Xuyen districts. Projected investment capital: US$ 11 million.

* Building the Tran De harbour to receive each day 100-200 fishing
boats of 400 HP capacity. Projected invested capital: US$ 10 million.

* Supplying fishing gears. Projected investment capital: US$ 7
million.

* Building a mill to produce quality vegetable oils with an annual
capacity of 4 million litres. Projected investment capital: US$ 2
million.

* Building a frozen aquatic produce factory with an annual capacity of
2,000 tonnes. Projected investment capital: US$ 3 million.

* Building a mill to produce animal feed with a daily capacity of 39
tonnes. Projected investment capital: US$ 380,000.

Industry:

* Upgrading the provincial electric grid. Projected investment
capital: US$ 16 million

* Upgrading the electric grid of Soc Trang town. Projected investment
capital: US$ 1.1 million

* Building a factory to produce canned foods. Projected investment
capital: US$ 1.8 million.

* Building a factory to produce fruit juice. Projected investment
capital: US$ 4.6 million.

* Building a factory to make leather wear for export. projected
investment capital: US$ 4.2 million.

* Building a factory to produce mineral water. projected investment
capital: US$ 1.8 million

Infrastructure Construction:

* Upgrading the Soc Trang water plant. Location: Soc Trang town.
Projected investment capital: US$ 2.7 million.

* Building the water supply system of Soc Trang province. Projected
investment capital: US$ 2.3 million.

* Building the water drainage system. Location: Soc Trang town.
Projected investment capital: US$ 4.5 million.

* Upgrading the province's urban roads. Projected investment capital:
US$ 6.8 million.

* Upgrading the Dai Ngai commercial port. Projected investment
capital: US$ 5.7 million

For further information please contact:

The Planning Committee of Soc Trang Province

Soc Trang Provincial People's Committee

21B Tran Hung Dao, Soc Trang Town

Soc Trang Province, Vietnam

Tel: (84 79) 821 208

Fax: (84 79) 821 208
                 ___________________________________


Vietnam Improves Investment Law To Attract Foreign Companies 

KUALA LUMPUR (AAP) - Administrative procedures have been improved
considerably under Vietnam's amended foreign investment law to attract
more foreign investors, its Ambassador to Malaysia Hoang Nhu Ly said
Tuesday.

"We hope that in the coming years many more corporations and companies
from Asean, especially from Malaysia, will invest in Vietnam," he said
when opening the 2nd Vietnam Business Conference '97 here.

The two-day conference, themed " Vietnam - The Emerging Tiger" will
give participants the opportunity to learn strategies and techniques
that will enhance the success of their ventures in Vietnam.

They will also be able to share the experience and expertise of the
panel speakers made up of foreign professionals working in Vietnam and
Vietnamese government officials.

Ly said amendments to the foreign investment law, introduced in 1987,
were approved by the National Assembly in November, last year.

Under the amendments, the government shortened the administrative
process which now enabled businessmen to obtain their licences within
30 to 40 days compared with two months previously.

"With these efforts taken, we hope more investment will pour in," he
told reporters later.

Ly said the investment environment in Vietnam is encouraging as it had
maintained an average economic growth rate of 8.5 percent annually for
over the past five years.

The country's inflation rate had also fallen from 12 percent in 1990
to four percent in 1996.

"Since the introduction of its foreign investment law in December
1987, 54 countries were recorded to have invested in Vietnam with
1,700 projects being granted investment licenses, and investments
exceeded US$27 billion (RM67.5 billion), of which, US$9.7 billion
(RM24.25 billion) investments had been implemented," he added.

Ly also said relations between Vietnam and Malaysia have strengthened
in recent years where two-way trade between the two countries totalled
US$450 million in 1996.

Malaysia is now the seventh largest investor among 54 investing
countries in Vietnam with a total investment capital of more than US$1
billion.

"Malaysian corporations and companies such as Petronas and Renong have
been investing in Vietnam with big investment capital and some
Malaysians banks like Public Bank and Maybank have set up their
representative offices in Vietnam," he added.