Saigon Co.op, Vietnam’s largest supermarket chain, would open 10 more supermarkets and 30 food stores this year, Nguyen Thi Hanh, general director Nguyen Thi Hanh said last Thursday.

The HCMC-based retail chain now operates 50 Co.opMart supermarkets, 16 Co.op Food stores and Co.op convenience stores across the country.

The new outlets would come up in several cities and provinces including Ho Chi Minh City, the Central Highlands Lam Dong Province, the central Quang Binh Province and the southern Bac Lieu Province, Hanh said.

Saigon Co.op plans to have 100 supermarkets by 2015.

Vietnam’s central bank said on Saturday it had lowered the official exchange rate between the dong and the dollar by another 0.1 percent to VND20,713 per dollar after a major devaluation on Friday.

The new official rate applies to interbank transactions on Saturday, the State Bank of Vietnam said on its website (www.sbv.gov.vn).

The country’s interbank market is closed on weekends.

Given the latest midpoint rate, the dollar could move between VND20,506 and VND20,920 in interbank transactions, within the central bank-imposed daily trading band of 1 percent.

The interbank rates would therefore stay below the unofficial market rate, which stood at VND21,520/21,580 per dollar on Saturday, from VND21,450/21,550 on Friday after the central bank’s devaluation of 8.5 percent.

Vietnam devalued its beleaguered currency on Friday for the third time in a year, as authorities started to try to address economic problems that critics say have been brushed aside in the pursuit of growth.

After the devaluation, the central bank said it could raise or cut the midpoint rate in time, instead of only lowering the dong against the dollar as it has done since at least June 2008.

“In the near future, the State Bank will regulate the exchange rate in a relatively flexible way in both directions,” Nguyen Quang Huy, head of the central bank’s foreign exchange department, said in a statement on Friday.

Bank loans in Vietnam will double by the end of 2013 on the back of subsidized interest rate schemes and large consumer credit demand, according to a recent survey conducted by an India-based market research and information analysis company.

Bank lending in Vietnam is treated as an arm of the government policy, with banks directed to offer preferential interest rates and debt relief to farmers and still often enjoying a cozy relationship with large state-owned enterprises (SOEs), said ENCOS’ “Vietnam Financial Sector Forecast to 2013” study.

However, the lending practices of state-owned banks, generally favor state-owned firms over private companies. As a result, private firms often have to use short-term borrowing to finance long-term investments.

The growing rate of interest on depository products offered by banks and increasing consumer confidence on the banks, the bank deposits are projected to grow at a fast pace.

Most of the banks in Vietnam are raising interest rates to attract more funds to meet their capital requirement.

Banks, which have not announced hike in interest rates, have launched promotion programs to mobilize more capital as their capital demands have become increasingly high. Besides, a number of banks in Vietnam are offering negotiable deposit rates to attract more customers.

The banking sector in Vietnam has shown unprecedented growth during the past few years with increase in penetration of foreign insurers and improvement in services offered by domestic banks.

However, the sector remains largely underdeveloped compared to the banking sectors in other Asian economies such as, India and China.

Vietnam’s banking sector is transforming and ongoing deregulation will fuel the sector’s growth in coming years. The country’s banking and financial services sector is developing at twice the country’s rate of GDP growth with growing consumer demand, and increased internationalization of the banking system.

“Vietnam Financial Sector Forecast to 2013” explains the banking sector performance of Vietnam in the current scenario with valid rationale for future landscape till 2013.

The report covers assets, loans, deposits, net interest income, and payment instruments of banking system. The report also covers insurance sector of Vietnam and studies industry trends with focus on latest developments to give an appropriate insight to the clients.

Retail sales during the traditional Tetholiday increased by between 20 and 25 percent compared to the same period last year, the government said in a report on Saturday.

The eight-day Lunar New Year holiday, which is longer than usual this year due to weekends at the beginning and end, has driven up demand for goods and services, the report said. It did not give comparative figures.

Despite higher demand there was ample supply of goods and prices were stable, the report said.

It said efforts to store goods and keep prices stable in big cities like Hanoi, Ho Chi Minh City and Da Nang have paid off.

The government report also cited the Ministry of Industry and Trade as saying that the trade in smuggled goods was also controlled successfully during this year’s Tet holiday.

Vietnam, which has determined to continue applying technical barriers this year to curb the prolonged trade deficit, spent $10 billion on imports of luxury items last year.

Of the sum, imports of wines, cigarettes, jewelries and mobile phones accounted for around $9 billion, the newspaper cited the government’s General Statistics Office as saying.

The figure was high as compared to the country’s trade deficit of $12.375 billion last year, indicating that imports of luxury products have put heavy burden on the country’s trade balance, local economists said.

Le Dang Doanh, an independent economist and former government adviser, attributed the situation to the fact that Vietnamese people are fond of foreign-made products, calling on the government to take measures to restrict imports of such products.

Given recent shortage of U.S. dollar which has badly affected the country’s macroeconomic stability, Doanh proposed to apply more non-tariff barriers and raise the special consumption tax to ease local demand for foreign-made products.

Sharing the same view with Doanh, economist Nguyen Minh Phong said the government could request local banks to limit U.S. dollar lending to importers of high-end products or even allow local firms to make payment in other currencies, instead of U.S. dollar only, for their luxury imports.

Doan Hong Quang, a World Bank’s specialist in Vietnam, earlier said the country imported luxury items while its export products remain basic goods such as rice, seafood, garments and textiles, and crude oil.

“It is impossible to avoid a trade deficit as we received VND9 from exports and spent VND10 on imports plus money spent on machines,” Quang said. Vietnam should impose higher taxes on luxury items, he added.

Nguyen Dinh Cung, deputy head of the Central Institute for Economic Management, said “We need long-term plans including income control, creating investment opportunities and encouraging savings to avoid a trade deficit.”

Vietnam has been ranked 16th out of the 30 countries that have received the most remittances in the world, according to the government-run newswire Chinhphu.vn.

The country received a record of more than $8 billion last year.

From 1991 till now, the amount of remittances, mostly in dollars, sent by overseas Vietnamese and guest workers to Vietnam has been increasing continuously.

Vietnam’s inbound remittances doubled from $135 million in 1991 to $285 million in 1995.

The figure increased six-fold to $1.757 billion in 2000, and in 2005 reached $3.8 billion. The remittance only saw a drop to $6.238 billion in 2009 from $7.2 billion in 2008 due to the global recession.

The increase of inbound remittances has had a positive impact to families and relatives in the country, serving to overcome difficulties and improve their lives.

On the macroeconomic scale, the remittances have contributed to reducing the imbalance in the balance of payments, improve forex reserves, and reducing the pressure on exchange rate.

The positive achievement of remittances has come from the government’s open policy in the 1990s and integration of Vietnam after joining the WTO.

The country’s economic growth in 2010 reached 6.78 percent, exceeding targets.
With GDP per capita estimated at $1,160, Vietnam has escaped from the group of low-income nations to enter middle-income countries – a position shift between the two decades.

But Vietnam needs to consider the exploitation and use of remittances on both micro and macro scales. Many recipients of remittances have let the money flow into the black market, posing high risks in managing the forex rate fluctuation.

Banks have not yet taken really effective measures to attract this foreign currency flow.

Besides, the rate difference between black market and official market is bigger, so it is hard to attract remittances to banks.

The information technology (IT) industry had become an important economic sector that contributes significantly to gross domestic product (GDP), Deputy Director of the National Steering Committee on Information Technology Do Trung Ta said yesterday.

Ta said that from 2001-09, the IT sector had an annual 20 to 25 per cent increase in revenue, triple the nation’s average rise in GDP.

Up to the end of last year, revenues of the IT and telecommunications sector were more than US$13 billion, 15 times that of 2000.

They contributed about 6.7 per cent to the country’s GDP. Of this, software and digital industries earned $1.5 billion, hardware, $4.6 billion; and telecoms services, $6.9 billion.

This year, revenue was estimated at $16 billion. In particular, the digital industry has seen growth of more than 50 per cent per annum. Ta said this brought in $690 million last year.

At a meeting held yesterday to review implementation of Directive 58-CT/TW calling for widespread IT development to enhance socio-economic growth, Ta said that after 10 years of implementation, ministries, cities and provinces, economic groups and corporations had made significant progress.

His conclusion was based on reports from 21 ministries, 55 cities and provinces – and 16 economic groups and corporations.

Up to 2009, the percentage of households owning computers was 13.6 per cent, five times that of 2002. Households connected to the internet grew by 12.2 per cent a year.

About 90 per cent of businesses are also connected to the internet, 67.7 per cent of companies have local area networks, and 67.8 per cent of enterprises use accounting software.

Viet Nam was ranked one of the 10 most attractive countries for the software industry last year, according to global management consulting firm A.T.Kearney.

However, the industry has received little support from the State budget compared to other countries in the region.

Last month, a Ministry of Information and Communications (MIC) meeting agreed that Viet Nam’s IT sector was facing unstable growth although it had attained rapid progress under Directive 58.

Operational efficiency in companies had slowed, and turnover, investment capital and tax contributions to the State budget had all declined, Le Nam Thang, deputy minister of Information and Communications said, adding that turnover per capita in IT companies had fallen year-by-year, which could lead to a decline in foreign investment.

Service quality had also shown many weaknesses, especially in broadband and internet services.

In addition, Thang said, internet service providers could not ensure information security and prevent problems caused by internet hackers and online viruses.

Residents in rural and mountain areas had not been able to take advantage of the services and had received no instructions in internet use.

Massive installations have led to a tangled web of cables and antenna sprouting in the sky of both rural communities and major cities.

According to a recent United Nations report, Viet Nam this year ranked 90th out of 200 United Nations’ member countries in the e-government readiness index.

The country ranked sixth among ASEAN-member countries, up by only one place to replace Indonesia after 10 years.

Viet Nam now has 24.7 million internet users, accounting for 30 per cent of the population, while the global average rate of internet users is 26.6 per cent.

There are about 117 phones for every 100 people and there are a total of 115.7 million telephone subscribers.

All rural communes have telephones and at least 8,025 communes have a post office offering public telephone, postal and internet services.

US financial investment firm Goldman Sachs has signed contracts worth US$55 million this week to buy convertible bonds from two HCM City Stock Exchange-listed companies, the HCM City Infrastructure Investment Company (CII) and Masan Group (MSN).

In the contract with CII concluded on Thursday, Goldman Sachs Investment Partners, managed by Goldman Sachs Assets Management Company under the Goldman Sachs Group, will buy $25 million in convertible bonds, which have a term of five years and an annual coupon of 4 per cent.

Holders will be able to convert their bonds into CII shares from the second year at the price of VND43,500 ($2.16). They can also ask the company to buy back their bonds from the third year onwards.

CII is looking to attract a further $15 million from Goldman Sachs after obtaining its shareholders’ agreement.

On Wednesday, the Masan Group signed a five-year convertible loan of $30 million with Goldman Sachs.

The loan will have a semi-annual coupon payment of 2 per cent for the first two years with a step up to 4 per cent in the third year and 6 per cent for the remaining two years. The loan can be converted into primary shares of Masan at VND65,000 per share converted into US dollars at the exchange rate at the time of the transaction.

This year, the group has raised around $120 million from investors including Goldman Sachs, Orchid Fund Pte Ltd – a wholly owned subsidiary of R.F. Chandler, and the International Finance Corporation, the private sector funding arm of the World Bank, for its business development.

Masan Group is one of Viet Nam’s largest private sector companies focused on building market-leading businesses including Techcombank and Massan Food.

It has recently acquired a world-class tungsten mining asset, the Nui Phao Project in northern Thai Nguyen Province.

Improvements in easing business start-up, construction permitting and credit information sharing helped Vietnam earn a spot among the 10 most-improved economies in the ease of doing business for local firms in 2009/2010, according to the “Doing Business 2011: Making a Difference for Entrepreneurs”, the eighth in a series of annual reports published by IFC and the World Bank.

Three significant improvements

Vietnam moved up 10 places in the global rankings in the ease of doing business for local firms to 78 among 183 economies. Three improvements in easing business start-up, construction permitting and credit information sharing helped Vietnam earn a spot among the 10 most-improved economies in the ease of doing business for local firms in 2009/2010.

Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and a tax license and by eliminating the need for a seal for company licensing. It also halved the cost of registering newly completed buildings. This and the transfer of the authority to register buildings from local authorities to the Department of National Resources and Environment made dealing with construction permits easier. In addition, the credit information system has been improved, allowing borrowers to examine their own credit report and correct errors.

“The Vietnamese government’s efforts on regulatory and public administrative reforms are reflected in Doing Business 2011 and in the improvement of Vietnam’s overall ranking,” said Simon Andrews, IFC Regional Manager for Vietnam, Cambodia, Lao PDR and Thailand. “Looking forward, it will be important to continue the focus on implementation of reform and maintaining the momentum of reform.”

East Asia – Pacific: Most active reformers

For the first time in eight years, the economies of East Asia and the Pacific were among the most active reformers. Eighteen of 24 reformed business regulations and institutions in the past year- more than in any other region.

Emerging-market economies such as Indonesia, Malaysia, and Vietnam took the lead, easing business start-up, permitting, and property registration, and improving credit information sharing. Malaysia reduced the time and cost to transfer property by introducing more online services.

Since 2005, about 85 percent of the world’s economies have made it easier for local firms to operate, through 1,511 improvements to business regulation. China was among the 15 most-improved economies, having introduced in the past several years 14 regulatory changes that make it easier to do business – affecting nine areas covered by Doing Business.

Singapore has been the world’s top-ranked economy on the ease of doing business for five years running. Hong Kong SAR China held onto the number-two spot in part by increasing the efficiency of commercial dispute resolution. The Republic of Korea, Thailand, and Malaysia held onto their spots among the world’s top 25.

Globally, doing business remains easiest in OECD high-income economies and most difficult in Sub-Saharan Africa and South Asia. But developing economies are increasingly active. In the past year 66 percent of developing economies reformed business regulation; six years before, only 34 percent did.

The Binh Minh Import Export Production and Trade Co (Bitexco) inaugurated yesterday the country’s tallest building to date in HCM City, towering 262 metres.

Bitexco chairman Vu Quang Hoi said the 68-storey Bitexco Financial Tower (BFT), bordered by District 1′s Ngo Duc Ke, Hai Trieu and Ho Tung Mau streets, offed grade A+ space with facilities for the most demanding tenants.

Advantages of the US$270 million tower, whose design is said to be inspired by the lotus flower, include a helicopter pad on the 50th floor.

The building is also built to withstand earthquakes that measure up to eight on the Richter scale.

Around 40 per cent of BFT’s 37,000sq.m. of office space are under procedures for lease to tenants and contracts are expected to be signed in a month. The chairman said he hoped up to 90 per cent of the space would be leased out over the next 12 months.

Architect Carlos Zapata, whose works include the Cooper Square Hotel in New York and the Soldier Field in Chicago, designed the tower, while the US-Korean Hyundai E&C was its main contractor.

Bitexco was set up in 1985 as a textile and garment firm, and it has since developed itself into a group with diverse activities including real estate, hydropower, mining and investment.