Bureau Chief, Vietnam
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Jun 9, 2011

Vietnam eyes more rate hikes as IMF urges tougher inflation stance

HA TINH, Vietnam, June 9 (Reuters) – Vietnam must raise
interest rates further if high inflation persists, a central
bank official said on Thursday, as the International Monetary
Fund urged Hanoi to take a tougher stance against soaring
prices.

Confidence in the government’s policies was “fragile”, the
IMF said, and it was essential that the government send “a
strong signal” that it will remain committed to macro-economy
stabilising measures beyond 2011.

Jun 9, 2011

IMF says Vietnam needs further interest rate hikes

HA TINH, Vietnam, June 9 (Reuters) – Vietnam’s economy faces
“significant challenges” and authorities need to raise policy
interest rates further to cope with an upward trend in
inflation, the International Monetary Fund said on Thursday.

The government should also do more to reduce the fiscal
deficit in support of tighter monetary policy, the Fund said in
a statement at a donors’ meeting with the government in Vietnam.

Jun 9, 2011

IMF says Vietnam needs further policy rate hikes

HA TINH, Vietnam, June 9 (Reuters) – Vietnam’s economy faces
“significant challenges” and authorities need to raise policy
interest rates further to cope with an upward trend in
inflation, the International Monetary Fund said on Thursday.

The government could also do more to reduce the fiscal
deficit in support of tighter monetary policy, the Fund said in
a statement at a donors’ meeting with government in Vietnam.

Jun 4, 2011
via Global News Journal

Party wins big in Vietnam, but with a few twists

Photo

As has happened every few years since the mid-1940s Vietnam’s Communists won parliamentary elections last month by a landslide, claiming 91.6 percent of the chamber’s 500 seats, officials announced on Friday. No surprises there. The Communist Party has a constitutionally-mandated monopoly on power.

We noted in a story on election day that the vote was rigged to retain party control although the outcome would allow for the legislature’s role in policymaking to continue to grow incrementally.

May 27, 2011

Foreign groups, diplomats decry Vietnam import rules

HANOI, May 27 (Reuters) – New Vietnamese rules on imports of
cosmetics, alcohol, cell phones and other items amount to
non-tariff barriers and may breach the country’s international
trade obligations, trade groups, lawyers and diplomats said on
Friday.

The rules are widely understood to have been introduced in
an attempt to narrow the country’s trade deficit, which
economists say is a potential drain on foreign exchange reserves
and a drag on the dong currency.

May 20, 2011

Vietnam small-cap bourse hits all-time low as confidence dwindles

HANOI, May 20 (Reuters) – Vietnam’s small-cap bourse, the
Hanoi Stock Exchange , slid to an all-time low on Friday
as liquidity and confidence dwindle, marking another milestone
in the country’s fall from favour for foreign and domestic
investors alike.

The six-year-old Hanoi market ended the week off about 5
percent at 76.98 points after dipping as low as 76.81 points on
Friday. It’s prior historical low was 77.55 points, which it
touched during the depths of the global economic crisis on Feb.
24, 2009.
    The exchange, populated with penny stocks and largely the
arena of domestic investors, has a total capitalisation of just
$5 billion. Market analysts say foreign investors are interested
in only a handful of the largest stocks. The biggest stock on
the market is Asia Commercial Bank , which accounts for
about a fifth of the total market cap.
    Still, Hanoi’s fall of more than 50 percent over the past
year can be seen as a gauge of how negative the conditions and
sentiment have become during a period of macroeconomic upheaval
at home and abroad, analysts say.
    Vietnam’s other stock market, the Ho Chi Minh Exchange
, which accounts for about 85 percent of Vietnam’s
combined market capitalisation, is off about 10 percent
for the year. By comparison, the MSCI Asia-Pacific ex-Japan
index has risen more than 30 percent over the past 12
months.
    Foreign interest is a shadow of what it was in 2006-2007
when risk appetite was higher and Vietnam, a new World Trade
Organisation member then, was the next big thing.
    “I think it’s very much a macro story,” said Sriyan Pietersz
with JP Morgan in Thailand. “No one denies that Vietnam has some
dynamic companies and the overall structural picture, from a
demographic perspective and in terms of investment
attractiveness, is there. But you need the macroeconomic
stability to hold up as well.”
   
    ADVERSE SIDE EFFECTS
    The economy has been on a rollercoaster ride since 2007 when
hefty inflows contributed to overheating that pushed annual
inflation to nearly 30 percent by August 2008. The authorities
applied the brakes, only to find themselves faced with the
global downturn, so they changed tack to promote growth.
    A political cycle leading up to the 11th National Congress
of the Communist Party, which selected a new leadership line-up
in January, kept priorities skewed towards growth, but now Hanoi
is battling double-digit inflation. In April, annual inflation
was at 17.5 percent and it is likely to be higher this month,
economists say.
    In response, the State Bank of Vietnam has repeatedly raised
interest rates in recent months, trimmed its credit growth
target and sought to aggressively cut lending to “non-productive
sectors” including securities and real estate.
    Margin calls have been on the rise as a result, said Nguyen
Hoang Long, investment director at An Binh Securities Co. He
added that banks were also under pressure from central bank
rules that require them to raise their registered capital.
    “The moves will do good to maintain macroeconomic stability
in the long term. However, they have adverse side-effects on
cash flows,” Long said.
    Since January, only about 15 stocks out of more than 300 on
the Hanoi exchange are in positive territory, Reuters data
showed. More than 45 stocks were down by 50 percent or more.
    “The southern market won’t fare as badly,” said Adrian
Cundy, director and head of research at VinaSecurities. “The big
risk for the Ho Chi Minh City exchange is if investor sentiment
turns very negative towards the large-cap stocks.”
    A recovery was still probably at least a quarter or two
away.

May 6, 2011
via FaithWorld

Rare rally tests Vietnam’s religious tolerance

Photo

(Catholic seminarians attend Easter Sunday Mass at St. Joseph Cathedral in Hanoi April 24, 2011/Kham)

Vietnam has deployed troops to contain a rare mass protest by ethnic Hmong people that is testing the government’s tolerance of minority Christians, just weeks after human rights activists accused leaders of persecuting another hill tribe. As many as 7,000 Hmong people began to gather several days ago in the far-flung mountains of Dien Bien Province, near the northwestern border with Laos and China, apparently for religious reasons although some were advocating an independent kingdom, according to diplomatic, government and other sources.

May 6, 2011

Thousands of Hmong stage rare Vietnam protest

HANOI (Reuters) – Vietnam has deployed troops to contain a rare protest by ethnic Hmong Christians, some of whom were calling for an independent kingdom, diplomatic and other sources said on Friday, and the government indicated the unrest was still going on.

The demonstration by as many as 7,000 people in the far-flung mountains of Dien Bien Province, near the northwestern border with Laos and China, began several days ago, but details were scant from the hard-to-access region.

May 5, 2011

Indonesia finmin confident of inflation within target

HANOI, May 5 (Reuters) – Indonesia’s finance minister Agus
Martowardojo said on Thursday he is confident inflation can be
kept within the government’s target this year, despite building
inflationary pressures that some economists say will make that
task difficult.

The central bank has allowed the rupiah to appreciate
some 5 percent so far this year to near a 7-year high of about
8,600 per dollar to fight inflation and help mitigate a wave of
incoming capital, and Martowardojo said he was comfortable that
exporters could be competitive at that level.

May 4, 2011

Inflation fight may keep GDP growth around 8.5 pct – Pranab

HANOI (Reuters) – India’s fight against inflation could knock about half a percentage point off economic growth in Asia’s third-largest economy this fiscal year, Finance Minister Pranab Mukherjee said on Wednesday, a day after the Reserve Bank of India (RBI) raised rates.

“It may be around… 8.5 percent. So, it will be about half a percent,” he told Reuters when asked about the impact of stubbornly high inflation on gross domestic product growth.