SBC: December 2012

Dec 31, 2012

Happy New Year !!!

I WISH YOU and YOUR FAMILY

A VERY HAPPY NEW YEAR

Business & Investment Opportunities Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.

Dec 27, 2012

Myanmar - Suu Kyi President in 2014? Just Ask the Stars

RANGOON — As New Year approaches, The Irrawaddy interviewed renowned Burmese astrologer San Zarni Bo to get his predictions for 2013. He forecasts a significant slowdown in the pace of political and economic change in Burma next year due to cosmic factors. But don’t worry, 2014 will see major changes with Aung San Suu Kyi becoming president.

The affable soothsayer and former political prisoner, who was awarded the prestigious International Man of the Year award in Astrology and Palmistry by the International Biographical Centre in Cambridge, UK, in 1997, also discusses his new prison memoir and explained why the world did not end on 21-12-2012.

Question: What is your prediction for events in 2013?

Answer: There will not be fast changes like 2012. In 2012 all sorts of things happened. But in 2013 all the reactions will slow down. All things can happen expectedly, but not unexpectedly like in 2012.

Between Jan. 4 and Feb. 19, from April 26 to May 2, and between July 24 and Aug. 26, these days will be able to bring some [political] changes. But nobody can make amendments to our Constitution. There will be some rules and acts that are a little bit positive, but only in these three periods. [Aung San Suu Kyi and ethnic rebel groups are seeking broad changes to the controversial 2008 Constitution.]

There will be no changes to the head of the country, but … in January and March there will be some changes in the head of the ministries. Aung San Suui Kyi can get more power, not only as an MP, but she can reach higher in the year 2013, like the vice-presidential level or minister post, but not yet the president.

Finance and business next year will not be very nice. April, May, these moments are not good for the traders and business persons. The weather has to be taken care of in May and August and November. … Earthquakes and floods—the earth and water—can then give minor trouble.

Q: What about the ethnic conflict situation, do you forecast peace next year?

A: Nobody will waive the white flag in 2013. Even if both sides say peace, they will use weapons again. All the peace talks are on the table but in reality in the field they fight each other. That will continue in the whole year of 2013.

Q: Why do you think 2012 was a year with so many changes?

A: Because of the status of Mars and Jupiter, they were moving so nicely.

Q: What about your predictions for after 2013? Will Aung San Suu Kyi become president of Burma?

A: Major political changes will happen in 2014, before the election. … [But] there will be no military coup before the election, I predict that. After July 7, 2014, everything will be alright. 2014 and 2015 will be very nice. All the dreams of our country will come true; all the dreams of 1988 will come true! [Laughs loudly]

Maybe after July 7, 2014, onwards Aung San Suu Kyi will become president. Before the next election, she will be the president. … There might be a coalition government or something like that and then she can get the post of president. Then in the 2015 election she will be elected as president again.

Q: Can you tell us about your new prison memoir?

A: It was launched on Dec. 22. The book is called “One Jail and the Article 5J Stories.” [Emergency Provision Act Article 5J was commonly used to jail political prisoners for supposed subversive activities.] This book is not for me, it’s a fundraising book. The money will go to the Former Political Prisoners League. All these stories were published before in a humorous magazine in Burma called “Ye Sa Ya.”

I was sent to prison three times [in the 1970s and late 1980s]. .… These are all short stories about the prisoners, about how we live together. It’s also a book of humor. Even when we are inside we did not lose our humor. I wrote about all these humorous plots.

There were also many traumas because of the times we had. There were a lot of pains, a lot of suffering. Some of our friends died. But some days are very nice, we are laughing with each other. We make fun with each other. It needs to be like that, if not, we can die and we can become insane. We love each other too, the brotherhood is there.

Q: One last question, why did the world not end on 21-12-2012 as many astrologists predicted?

A: The changes are happening now, the new age is commencing. It doesn’t mean the whole world is over, [it means] the new world is commencing. In Myanmar [calendar] predictions it will actually commence by 24 of December. Today.

Q: Today? So I came here on an auspicious day?

A: Yes. We are now entering into the new age. Within months [from now] all the bad things will start fading and the good things will commence.

PAUL VRIEZE / THE IRRAWADDY

Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.

Thailand - Tiny Brunei takes on Asean chair

Many challenges lie ahead for Asean in the year ahead. Security concerns will be characterised by heightened tensions in the South China Sea as the dispute remains unresolved. China has not been shy in asserting its interests in the territories it disputes with Asean countries and Japan.

Next, uncertainty over the global economy will be characterised by the rise of Asia, the slow recovery of the US and the ongoing eurozone debt crisis. Lastly, the worsening effects of climate change will be more apparent as Thailand withstood 2011's flooding, while the Philippines is still reeling from Typhoon Bopha.

Asean countries stand a greater chance of success if they face these challenges together. What is clear is that these forces will be testing the region's political economy. Only through cooperation can member states become more resilient against external pressures and shocks.

The incoming chair of Asean is Brunei. As chairman, Brunei's mandate will be to set the agenda and issue the chairman's statements at ministerial meetings and leaders' summits. This is a powerful tool for a country with a population of 400,000.

Observers have dismissed Brunei as a diplomatic featherweight. However, it has considerably high stakes in Asean's success. Unlike Cambodia, Brunei is a disputant in the South China Sea. This compounds the issue and suggests that Brunei may take a stronger line against China's claims.

How well it can persuade other Asean countries will hinge on the diplomatic prowess of its statesmen. Brunei's Foreign Minister, Prince Mohamed Bolkiah, has famously advocated "defence diplomacy" _ a doctrine that focuses on continuous dialogue and personal relationships. This may give some indication of how the Sultanate will use its status as Asean chair to approach the dispute.

In the economic realm, the grouping will continue to work towards the Asean Economic Community (AEC), which is severely behind schedule. However, the AEC will be high on the agenda of the next chairman.

While it is the responsibility of member states to accelerate the AEC blueprint, Brunei will have to be the stimulus. Economic cooperation matches Brunei's policy of diversifying from its oil wealth and developing other sectors of the economy; all the new partnerships in the AEC can help it achieve this objective.

Cooperation in humanitarian assistance and disaster relief (HADR) is also pressing. This provides a venue for Asean, through Brunei's chairmanship, to engage with the block's dialogue partners. In addition to the urgency, leaders consider HADR less politically sensitive, making it a good area for collaboration.

Asean can work with its dialogue partners in improving HADR, such as faster response time and long-term solutions to address climate change.

Lastly, the Asean Secretariat will also welcome a new secretary-general, Le Loung Minh from Vietnam. A seasoned diplomat, Mr Le was formerly Vietnam's ambassador to the United Nations and president of the UN Security Council in 2008. His five years at the Secretariat will be devoted to increasing the efficiency of the Secretariat and improving the monumental task of coordinating the actions and commitment of the 10 countries.

The year 2013 will be a critical one for Asean. The challenges carried over from the previous year will be more intense. The Asean integration process is deeply under-resourced and commitment to Asean community building from the people, businesses and political leadership from all the countries will be crucial. The message Brunei is sending to Asean and the world is "thrusters on full".

Chayut Setboonsarng

http://www.bangkokpost.com

Cambodia - Cambodia’s “War” On Internet Cafes

Internet cafes are seen as information hubs in most countries, but in Cambodia the government seems terrorized by their presence.

Last February, the government mandated internet cafe owners to set up surveillance cameras in their shops and register the names of all customers as a “crime deterrence measure.” Then it issued a new circular last month banning internet cafes within 500 meters of schools or educational buildings. The circular also prohibits internet cafes from extending their services to minors allegedly to protect them from cyberbullies and cybercriminals.

The Ministry of Post and Telecommunications justified the new order by reminding the public, especially parents, that criminals use “telecommunication means to commit offenses such as robbery, murder, extortion, illegal drug trafficking, human trafficking, pornography and other immoral acts, which have affected (Cambodian) tradition and social morality.” It also cited the youth’s rising addiction to several internet-based games.

The ministry warned that internet cafes located in the forbidden zones would be closed and their equipment confiscated. Shop owners would also face arrest and prosecution. The penalty could be higher if a cybercrime was committed in the cafe.

The new circular was immediately condemned as an anti-business measure since its strict implementation would force almost all internet cafes in the center of the capitol city, Phnom Penh, to close. Furthermore, small shop owners are worried about the threat of closure and arrest even if they didn’t directly commit petty cybercrimes in their establishments.

Travel writer Faine Greenwood predicts that the new decree “could easily be used as a rationale for unscrupulous sorts in the government to collect hefty bribes from owners if they want to continue operating.”

For human rights group Licadho, the new regulation is “a transparent attempt [by the government] to block part of the population’s access to independent sources of information through news sites and social media.”

“In a country where traditional media such as TV and radio stations are for the most part in the hands of the ruling party, the ability to access independent and critical voices through the internet is crucial,” it added.

This year’s laws are not the Cambodian government’s first attempts at imposing political-driven web regulations under the guise of protecting public morality. In 2008, it ordered the closure of an artist’s website for depicting bare-breasted Apsara dancers. In 2011, it asked local Internet Service Providers to block several “harmful” opposition websites. Even Blogspot was temporarily banned because it hosted several websites that were critical of the government.

It’s convenient for the government to raise the specter of cybercrimes to justify unreasonable and unnecessary regulations that could seriously harm local businesses and freedom of speech. Indeed, internet gaming addiction is a social problem but the solution is not to stop young people from having access to the internet but to teach them the value of moderation and responsible online behavior.

Perhaps the government should focus more on how to improve computer access in rural areas, expand internet penetration, and enhance digital literacy among its citizens instead of outright banning internet cafes which alternately serve as virtual knowledge centers.

Mong Palatino

http://thediplomat.com

Thailand - Thailand, Cambodia launch single-entry visa

From today, tourists from 35 countries need only apply for one visa to visit both Thailand and Cambodia. This is part of Acmecs Single Visa - the first step toward an Asean version of the European Union's Schengen Visa scheme.

Visitors who want to visit both countries can apply for a visa at either country's embassy.

The Acmecs Single Visa should boost tourism in both countries as well as fulfil Thailand's objective to become a regional hub for tourism, said Foreign Minister Surapong Towichuk-chaikul, who jointly chaired a joint commission on bilateral cooperation with his Cambodian counterpart Hor Namhong yesterday.

Acmecs stands for the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy, which groups Cambodia, Laos, Myanmar, Thailand and Vietnam. All Acmecs members are part of Asean, and the Acmecs Single Visa is expected to pave the way for an Asean Common Visa.

The original idea to have a Schengen-style tourist visa was introduced at a meeting in Bagan, Myanmar in 2003 between leaders of Cambodia, Laos, Myanmar and Thailand. At the meeting they launched the "four countries-one destination" scheme, which Vietnam joined later. Foreign ministers of Acmecs then agreed at a 2005 meeting in Siem Reap that Thailand and Cambodia would try to implement the single-visa strategy first. "If the initial project is successful, then the remaining Acmecs members will join the scheme," Surapong told the press.

Hor Namhong said the two nations would most certainly benefit from the single-visa scheme as it would make travel between the two countries more convenient.

As for concern that traffickers might exploit the scheme, both countries have a "pre-clearance" system.

For instance, if a visitor applies for a visa at a Thai embassy, the documents will be forwarded to its Cambodian counterpart for approval, which will have the authority to reject the application, and vice versa. Also, visa fees for both countries will have to be paid. For instance, the Thai embassy will charge 1,000 baht (US$32) for entry into Thailand and the tourist will have to pay the Cambodian visa fee upon arrival in that country and vice versa.

As per details provided by the Thai Foreign Ministry, neither country will issue a "multiple-entry" visa.

Up to 21 million people have visited Thailand this year, while Cambodia has had 2.3 million visitors in the first eight months of 2012.

Piyamarn Tejapaiboon, president of the Tourism Council of Thailand, said the scheme will be slightly more beneficial for Cambodia, as tourists visiting Thailand will be able to extend their stay.

Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, added that the scheme should help boost tourism in Thailand because travel agents will now be able to offer Cambodia as an additional destination.

Apart from the single visa, the two ministers also discussed several cooperation strategies at the meeting yesterday, including joint efforts in the security, economic, social and cultural spheres. They also agreed to set up a permanent border checkpoint between Ban Nong Aian in Sa Kaew province and Stung Bot in Cambodia's Banteay Meanchey province, as well as a temporary checkpoint at Sa Kaew's Ban Non Mak Moon and Banteay Meanchey's Ban Pray Chan.

Thailand will also do a feasibility study on upgrading a road linking the Stung Bot checkpoint to Cambodia's Highway No 5 to Phnom Penh. The State Railway of Thailand will also provide assistance in building a railway bridge connecting Sa Kaew's Kongluek village with Poi Pet in Cambodia to facilitate trade and tourism.

So far, the two countries' annual bilateral trade is worth about $2 billion (61 billion baht), Hor Namhong said. "Both countries have agreed to increase some 30 per cent of trade annually, but I expect more," he said.

Surapong also spoke to Hor Namhong about allowing jailed Thai activists Veera Somkwamkid and RatreePipattanapaiboon to return home. The two were imprisoned for trespassing and espionage two years ago. Ratree, who has served a third of her term, is qualified to return to Thailand as per a bilateral agreement, he said, adding that officials were working on the case.

Supalak Ganjanakhundee

The Nation

Philippines - Philippines among Asian nations worst hit by disasters in 2012

The Philippines is among Asian countries worst hit by disasters this year, according to a report of the UN Office for Disaster Risk Reduction (UNISDR).

In a report released in Bangkok this month, the UNISDR said the Philippines had the second most number of disasters in the first 10 months of the year with 16 recorded disasters, next only to China with 18 recorded calamities.

The document covers disasters between January and October and does not include Typhoon “Pablo”, which struck Mindanao on December 4 and left more than 1,000 dead and another 800 missing.

According to the report, the Philippines endured two disasters rated as among the 10 deadliest: the monsoon flooding around Metro Manila and nearby provinces in August, which claimed 116 lives, and the February earthquake in the Visayas, which left 113 dead. It said 6.2 million Filipinos were affected by floods, quakes and other calamities.

Pakistan suffered the worst loss of lives during the period with 480 deaths.

North Korea, which was hit by severe flooding in July, topped the count with 13.3 million affected residents while Sri Lanka, which suffered quakes and storms this year, had 8.6 million people exposed to disasters.

A total of 83 disasters hit Asia from January to October of this year, leaving some 3,103 people killed and some $15.1 billion in damages. About 64.5 million people were affected by these disasters across the region.

The UNISDR said Asia accounted for more than half the total disaster-related deaths in the world, 74 per cent of affected people and a third of the economic toll due to natural calamities in the first 10 months of the year.

There were fewer disasters this year than the annual average of 136 in the last decade, but the reduction should not be “a cause for complacency” as the economic cost of calamities continues to rise, said UNISDR Asia Pacific head Jerry Velasquez.

“We must still contend with the fact that risk is growing faster than wealth is being created. Exposure is on the rise and flooding represents a serious challenge to Asian cities as we have seen earlier this year in Beijing and Manila where these two cities were partly flooded in a couple of hours,” Velasquez said in a statement.

“Flood risk must be addressed in a more systematic manner and integrated in all urban and development management plans if we want to ensure sustainable economic growth and better protect people and their assets as extreme weather events will be more frequent and severe in the future,” Velasquez said.

Tarra Quismundo

Philippine Daily Inquirer

Indonesia - Pertamina finds new hydrocarbon reserves

PT Pertamina EP, the upstream unit of state oil and gas company PT Pertamina, announced on Tuesday new hydrocarbon reserve findings in its operations in Sumatra that will boost the company’s future oil and gas output.

Pertamina EP’s spokesman Agus Amperianto said the discovery was made following exploration activities in its working areas in Binjai, North Sumatra, and Prabumulih, South Sumatra.

“The result at the end of the year increases the firm’s optimism in finding new crude oil and gas reserves in our operational areas, particularly in the Sumatra region,” he said.

However, Agus declined to reveal company’s estimates of the reserves, arguing that it was classified information tied to the country’s energy security.

Pertamina’s initial production test in the Benggala gas field (BGL-1) in Binjai rendered 13.2 million metric standard cubic feet per day (mmscfd) of natural gas and 857.5 barrels per day of condensate, according to the company’s data.

The exploration well drilled in the Benggala gas field in the North Sumatra basin was 3,150 metres deep. The drilling was aimed at reactivating exploration activities in Pertamina’s upstream operations in the areas of North Sumatra and Nanggroe Aceh Darussalam after seven years of inactivity.

The discovery is expected to spur more hydrocarbon exploration in the region.

“We are hoping for the Benggala field to enter the production phase in the first half of 2013 with an average daily production of around 10 to 15 mmscfd of gas, which is projected to supply the gas demand of industries in North Sumatra,” he said.

The peak production of the Benggala field is projected to reach up to 15 mmscfd and continue at that level for around 10 years before entering a period of decline, Agus said.

However, he said, the company would conduct more studies to refine estimates of when the Benggala field would hit peak production.

Aside from the field, Pertamina is also betting on the development of the Hibiscus Selatan oil field (HBS-1) in South Sumatra.

The field’s production trial has rendered 119.9 barrels of crude oil per day and 0.2 mmscfd of gas, according to the company’s data.

Agus said the Hibiscus Selatan oil field was also projected to enter production in the first semester of 2013 with an average output of around 100 to 125 barrels of crude oil per day as well as 0.2 to 0.5 mmscfd.

Pertamina EP expects peak production at the Hibiscus Selatan oil field to deliver more than 125 barrels of crude oil and more than 2 mmscfd for around 10 years before the block enters a period of declining production.

From January to early December this year, Pertamina EP conducted 2-D and 3-D seismic surveys to discover new hydrocarbon reserves on 3,645 kilometres and 2,285 square kilometres of its working areas.

The company has drilled as many as 22 exploration wells throughout 2012.

For 2013, Pertamina EP plans to drill 28 exploration wells as well as to conduct 2-D and 3-D seismic surveys on 817 kilometres and 1,488 square kilometres of its working areas.

However, despite the plan, problems related with land acquisitions remained the biggest challenge for Pertamina, according to Agus.

He said many of its planned exploration activities had been delayed due to disputes with local leaders over customary lands (tanah ulayat) belonging to local communities, and coal-mining areas.

This year, Pertamina EP expects average daily output to reach 127,000 barrels of crude oil per day — slightly below the government’s target of 134,000 barrels per day — and 1,050 mmscfd of gas, also lower than the targeted 1,070 mmscfd.

Pertamina EP is slated to receive capital worth US$3.1 billion next year, or around 46 per cent of the total $6.77 billion the Pertamina group plans to invest.

Amahl S. Azwar

The Jakarta Post

Vietnam - Can a future be built with blackened hands

VietNamNet Bridge – Many of her peers are blind to corruption. But 21-year-old Nguyen Thi Diem, a student in Ha Noi, is trying to lead a truthful life.

Diem once went to a teacher's house with the intention of bribing her to get higher marks so that she could get a scholarship.

"I sat at a cafe next to her house for several hours," the student said. "But I ultimately decided not to go in. My decision meant I wouldn't get a scholarship. But if I'd done it, I would have slipped into a vicious circle of bribery and corruption and endless greed."

Le Van Lan, deputy head of the office of the Central Steering Committee on Anti-corruption, says corruption can be defined as someone using personal advantages to earn private benefits. Corrupt deeds can be committed by anyone from young people to officials.

In Viet Nam, corruption is steadily increasing. The country is ranked 123 out of 176 countries and territories in corruption, he says.

The deputy head cites an anecdote where a nine-year old student is assigned to report on her classmates' progress. Some of her members, afraid their mistakes will be reported to the teacher, give her candy and picture books in order to convince her not to tell on them.

People laugh at this story and think nothing of the incident. But to Lan, it reveals how corruption is deeply embedded in Vietnamese society.

"When this student is small, she doesn't have much power. But when she grows up, the stakes will be higher," he said.

The country cannot grow and become prosperous, emphasizes the deputy head, if the youngest generation fails to lead a truthful life.

"Most of us, as young people, think we have no power and assets so there is no chance for us to commit corruption. However, corruption is not always at such a high level," said Dang Ngoc Anh, leader of a student anti-corruption group.

The student used to assume only receivers of bribes (such as traffic policemen) were culprits of corruption, while those forced to give bribes were victims. But now, she says, she understands that both parties are equally at fault.

Students also point out that corruption and lack of transparency occur frequently at school. Whenever examinations come, many teachers ask for money from students - or students voluntarily give money to teachers to get the results they wish.

Wondering how the country can be built up with such "blackened" hands, Anh and many other leaders of anti-corruption groups have been hosting activities and events to change young people's knowledge about corruption in ways that fit in with their daily lives.

Nguyen Thuy Hang, an official of Live and Learn for Environment and Community, which has organised courses on corruption and transparency for youth since 2009, says that after understanding the true nature of corruption, many young people have taken an interest in sharing their knowledge with others.

Many groups have formed online forums where students can read about corruption and express their ideas and experiences about living a truthful life and relations with teachers. Students can also get advice on dealing with life situations in non-corrupt ways. Others have hosted game shows and festivals to boost the image of honesty. Anh says her group has organised dialogues between young people and experts and published videos of meaningful life stories on this issue.

More than 4,500 students and teachers have created and signed a code of conduct that aims to "form a transparent studying environment in universities where there is no corruption." Writing contests about corruption have drawn hundreds of entries from young people.

While last year these events focused directly on corruption, this year the focus is on leading a truthful life, she said:

"When people acknowledge the meaning of a truthful life, see their life from a different angle and then make changes, the goals of anti-corruption are satisfied."

Statuses posted on online social networks reflect these changes, she added, citing two examples: "Today I dared to live truthfully and go against corruption by accepting my fault and refusing to give money to a corrupt traffic policeman," "Today I did not give money to a doctor but waited patiently in a long queue."

Since we all make choices in our lives that lead us into certain situations, Anh concluded, "there is no excuse for committing corruption and blaming it on the situation."

Diem's hope is even bolder.

"Young people will act as the change agents of society," she said. "Our efforts to convey perceptions of corruption to today's young people and orient them toward a truthful life are like small waves which will disperse everywhere to make thousands of other waves. There will be no ending. Being yourself in a world trying to turn you into a liar - that's the best way to avoid corruption."

Source: VNS

Vietnam - Stricter rules to strengthen securities businesses

VietNamNet Bridge – Securities company operations will be strengthened from January 15 under new regulations circulated by the Ministry of Finance and prompted by scandals surrounding securities companies.

The ratio of total debts over total equity capital of a securities firm will be cut from the current 6 times to not over 3 times. The new regulation also gives details on eligible total debt value, which does not include investor deposits, bonuses and welfare funds or compensation for investor losses.

Securities companies will not be permitted to invest in real estate, except for the purpose of making a property their headquarters, branch or transaction office. The value of property purchases will not exceed 50 per cent of total asset value of a company.

Securities firms will not be allowed to use more than 70 per cent of their equity to buy corporate bonds or make capital contributions to other companies. Investments in listed companies also may not exceed 20 per cent of their equity.

However, the circular also opens a door for the investment of securities companies. A fund management company is allowed to hold more than 20 per cent of the outstanding shares of a listed company but not over 15 per cent of a unlisted company.

A securities company having associated companies can record profits of these companies into its financial statement based on the capital contribution rate. In addition, they are not required to make provision for such investments.

Only Saigon Securities Inc (SSI) has seven associated companies and all of them are listed. Combined profits from these companies to SSI were VND89 billion (US$4.2 million) in the first nine months of this year.

SSI chairman Nguyen Duy Hung said profits from long-term investments in affiliate companies helped SSI complete its business goals.

However, in the context that most securities companies were struggling to survive on the market, the new regulations were strictly requiring companies to set up a risk control system. Also in bid to curb the prevailing situation in which many companies had abused customers' deposit accounts, the circular forces companies to separate accounts of customers from those of the company.

The circular also gives details on procedures of merging securities companies as well as regulations on the dissolution and bankruptcy of securities companies if they fail to meet new operation requirements of the State Securities Commission.

Circular 210/2012/TT-BTC takes effect from January 15, 2013, and will replace Decision 27/2007/QD-BTC guiding the establishment and operation of securities companies.

Source: VNS

Vietnam - VN prioritizes investments in logistics, encouraging PPP

VietNamNet Bridge – Vietnam, which expects the export turnover increase by three folds by 2020, is now calling for investments in the logistics industry in order to improve its competitiveness.

Bad logistics services install barriers to foreign trade

In principle, good infrastructure system and logistics services would help increase the GDP by one percent, and if the logistics expenses can be reduced by 10 percent, Vietnam would save the natural resources worth two percent of GDP to develop economy.

The transport fees, logistics and border service management expenses have been described as the “trade barriers,” which are nearly equal to 70 percent of the tariffs of 70 out of the 91 surveyed countries.

According to the General Statistics Office, in 1997-2011, while the cargo transportation volume increases by 12.1 percent per annum and trade by 18 percent per annum, the investments in infrastructure and transport services did not grow. Especially, the minus investment growth rates were seen in 2004, 2005, 2006, 2010 and 2011.

As a result, the trade infrastructure system and logistics services remain very poor, which has put Vietnam on the lower positions than its regional rivals in terms of time, expenses and reliability, according to Pham Minh Duc, a senior economist of the World Bank Vietnam.

Vietnam has got considerable improvement in the Enabling Trade Index (ETI) report by the World Economic Forum in recent years with the grade upgraded from the 89th in 2010 to 71st in 2011 and 68th in 2012. However, Vietnam is still on the lower grades in the customs management efficiency index and the transparency in border management due to the unreasonable procedures conducted manually, thus causing corruption.

Meanwhile, the World Bank has found out that enterprises would have to bear 0.8 percent of the value of the goods for every day of getting stuck at the border gates.

Vietnam vows to develop logistics industry

Duc of the World Bank said that it is reasonable for Vietnam to push up the investments in the logistics industry, since it hopes to see the export turnover increasing by three times by 2020.

Former Deputy Minister of Industry and Trade Luong Van Tu noted that the logistics industry has not developed, even though there are thousands of logistics companies. The problem is that they are all small which lack experiences and financial capability.

However, investments in the sector would gobble up a lot of money, while the financial capability of Vietnam remains limited once it heavily depends on public investments.

In principle, Vietnam can think of developing the logistics industry under the mode of private public partnership PPP, the one being applied in many other countries in the world. However, PPP, though having been activated in Vietnam for a long time, still has not become a favorite choice, because of the disagreement between the state and the investors in sharing profits and risks.

In fact, Vietnam has been repeatedly calling for the investment in PPP transport infrastructure projects for a long time. Nevertheless, very few projects have been developed under the unfamiliar mode.

The government of Vietnam has been urged to set up necessary legal documents on PPP-mode investments which can harmonize the benefits of the State and the investors. Only by doing this, will Vietnam be able to successfully mobilize capital from non-state different investment sources.

DNSG

Vietnam - Ten laws to be operational early next year

VietNamNet Bridge – Ten laws that clarify the responsibilities of State agencies and the rights of both enterprises and individuals will go into effect in January.

Some laws come from ordinances, while others are revised versions of previous laws that update the legal system in accordance with the country's socio-economic development.

The Law on Higher Education makes it mandatory that universities be ranked according to the quality of the education they provide, while the Law on Deposit Insurance protects the rights and interests of depositors and contributes to maintaining the stability of credit institutions. The law states that the State Bank of Viet Nam will be responsible for managing deposit insurance. Beneficiaries will be individuals, rather than family businesses, private enterprises and companies.

The Law on Advertising prohibits goods such as tobacco and wine with 15 per cent alcohol or lower from being advertised. According to the law, milk cannot be marketed to children under two years old and nutrient products cannot be advertised to children under 6 months old.

The Law on Prices stipulates that prices be made public for State agencies, organizations, personal production and businesses, making the market more transparent and limiting the operation of black markets. The law also regulates that the State will assess goods and services to ensure consistency with market principles.

Meanwhile, the Law on Judicial Assessment creates conditions for persons involved in civil and administrative cases to take initiative in collecting evidence to protect their rights and interests.

The other laws include the Law on Trade-Union, Law on Anti-money Laundering, Law on Water Resources, Law on Legal Education and Dissemination and Law of the Sea.

Source: VNS

Vietnam - Vietnam faces serious decline in retail sector

The Hanoitimes - The economic downturn along with many operating difficulties has greatly reduced purchasing power, resulting in a decline in the country’s retail sector in the last four consecutive years, according to the 2012 A.T. Kearney’s Global Retail Development Index (GRDI).

Due to several factors, Vietnam has lost its shine as an attractive location for retail investment since 2009. The country used to be among the top 30 emerging retail markets in 2008.

At that time, the country was valued by international economic experts as a strong economy having abundant FDI capital and a young population who favored fast spending.

However, in just one year, the country fell to 6th place in 2009, 14thin 2010, 23rd in 2011, and 32nd in 2012.

According to A.T. Kearney’s annual GRDI report, the cause of this slide is the macro-economic policies that are unpredictable and which affect purchasing power; and obstacles and barriers faced by investors when applying for business licences.

Moreover, Vietnam’s retail sector has poor planning, resulting in ineffective investments and shortage of resources, manpower and a proper distribution network.

While Thailand and Indonesia have seen strong consumer growth this year, Vietnam saw a downslide. Experts say it will take two to three years for Vietnam’s retail sector to recover like in 2008 and an additional 10-15 years to keep pace with other countries in Asia.

One of the disadvantages is costly rental space and difficulty in regaining consumer confidence. Most people have tightened spending and prefer bargain sales, for which enterprises have to continuously launch promotional programs, offer discounts and give gifts to keep the consumer coming back to stores.

Companies are facing stiff competition and only enterprises with financial potential can best satisfy customer needs and make substantial profits, as in the case of Big C, Metro, Co.opMart, Vien Thong A and Nguyen Kim supermarkets.

Taking into account the last six years, this is the first year to see such a sharp decline in purchasing power of electronic items, despite a year-end reduction sale of 10-50%. However, food and essential commodity businesses are maintaining optimism, though markets are showing no positive signs.

However, enterprises should not be discouraged and consider Vietnam’s GDP growth at 5% and the young population accounting for 50% in the country. Sales of consumer appliances in Vietnam registered a 15% rise in 2013 and 100% in smart phones, said a recent report from GFK Group, one of the world’s leading market research companies.

However, enterprises have to improve their financial and management ability and services. In addition to stimulating purchasing power, enterprises must cooperate with each other to cut costs in rentals and transportation fees.

Major brands such as Sony, Samsung, and Panasonic have coordinated with retailers to launch promotional programs that are tempting and can lure consumers.

Vietnam - Gov’t suggests ways to save businesses, spur market

HANOI – Saving businesses, developing the market and settling bad debts are the main tasks Prime Minister Nguyen Tan Dung highlighted at an online meeting between the Government and localities on Tuesday.

The two-day meeting will continue today with a focus on the key measures to achieve the socio-economic and State budget targets for 2013.

When presenting a draft resolution on solutions to remove difficulties for production and business, support the market and tackle bad debts, Deputy Prime Minister Hoang Trung Hai placed an emphasis on inventory reduction.

As per the draft resolution, the localities with high volumes of unsold property products should reduce the use of their budget funds for development of new resettlement housing projects. Instead, the budget capital should be used to buy appropriate commercial houses to serve resettlement or turn them into low-cost houses for sale or for lease.

The central bank is asked to set aside VND20-40 trillion for refinancing with reasonable interest rates and a maximum term of ten years to help State-run commercial banks serve home loan borrowers.

Besides, a 50% land rent cut in 2013 and 2014 is proposed. Investors will also enjoy a land rent payment extension for up to 24 months depending on their sales performance.

The Government agreed with the Ministry of Finance on the proposed solutions to rescue businesses. They include a corporate income tax rate of 20% for small and medium-sized enterprises (SMEs) and a special rate of 10% on earnings from low-cost housing trading starting from July 1, 2013.

In addition, a 50% value added tax (VAT) reduction from July 1, 2013 to June 30, 2014 is proposed for low-cost housing investment and trading.

Labor-intensive enterprises and SMEs should enjoy a six-month extension in corporate income tax and VAT payments in the first quarter of 2013 and three-month extensions in the following two quarters.

As for bad debts, the Government requested relevant agencies to complete and submit the model of the national asset management company so that the Government could issue a decree in January and report it to the Politburo.

Specifically, the finance ministry will be in charge of drawing up a plan for issuance of government debt instruments to handle bad debts. In addition, the ministry will study and submit policies and regulations on tax exemption or reduction and charges related to the purchase and sale of bad debts and collateral for loans at credit institutions.

Deputy Prime Minister Vu Van Ninh stated the scheme for weak bank restructuring was underway and bad debt issue was under control. Only one of the nine banks classified as weak is still waiting for the central bank to consider an appropriate restructuring scheme.

To reach the macroeconomic targets for 2013, especially GDP growth, inflation control and export growth, the Government will direct the central bank to practice prudence in the monetary policy with interest rates consistent with macroeconomic developments, overcome shortcomings in management of the gold market and basically complete the restructuring of credit institutions.

Regarding the fiscal policy focusing on the fight against tax evasion, tax arrears and transfer pricing, Ninh suggested local governments to increase tax collection by 3-5%.

From now to 2015, the Government will announce budget capital allocations early so that localities can balance their capital sources and avoid dispersed investment. However, localities must contribute to the settlement of capital construction debt, he said.

Minister of Planning and Investment Bui Quang Vinh reported the total State budget revenue in 2012 was estimated at VND714.5 trillion, 0.14% higher than the estimate and up 5.3% compared to 2011. The total budget spending is around VND904 trillion, 0.11% higher than the estimate and up 14.6% against 2011.

Budget deficit stays at 4.8% and GDP growth is put at 5.03%.

Ngoc Lan - The Saigon Times Daily

Singapore - S'pore equity markets performed better in 2012 than in 2011

SINGAPORE: Stocks of listed companies dealing in properties have fared the best in 2012.

Data from Bloomberg, compiled by OCBC Investment research, showed the ST RE Hold & Dev Index gained some 53.2 per cent as of 12 December. The index comprises property stocks from companies like Fragrance Group, CapitaMalls, Keppel, Wing Tai and Ho Bee Investments.

Sentiment in these segments was boosted by the record property sales and rising prices in Singapore.

The ST Real Estate Index came in second, gaining 44.9 per cent.

Some experts say property stocks may see some correction in the coming months, but overall they do not foresee too many surprises in Singapore's stock market in 2013.

Kelvin Tay, chief investment strategist at UBS said: "I think next year is going to be very similar to this year actually, because where real interest rates are concerned, they are still pretty much negative. We do expect the (Singapore) dollar to actually strengthen further, and we are looking at a target of 1.19 to the US dollar in the 12 months, so if that is a case it means that a lot of the high-yielding stocks we like this year will still be in focus for 2013."

This year has not been rosy for some SGX-listed companies. Their corporate earnings have been hit by the economic headwinds from Europe, US and China in 2012.

OCBC Investment research said in its latest report that earnings in the third quarter of 2012 has been the weakest since the second quarter of 2009, raising fears of earnings disappointment.

2012 also saw Singapore making structural changes to its economy, like reducing its reliance on foreign manpower.

"A sector that I would avoid are those that will feel the biggest punch from the productivity drive from the government - they have already stopped or at least they have restricted the number of foreigners and those sectors that are aligned or dependent on foreigners such as F&B, retail, as well as construction sector," said Terence Wong, co-head of research at DMG & Partners.

"All these will probably feel the crunch at the year end - as you see more complaints, I think the margins will continue to come off and I don't think that is a good place to park your money."

To seek refuge from volatile markets, equity investors have turned to real estate investment trusts (REITs), which give steady income.

Besides REITs, traditionally defensive stocks with attractive dividends, like telcos and banks, have also found favour with investors.

Telcos and banks are providing yields around 4 and 5.8 per cent, according to Credit Suisse estimates.

Still, some upbeat analysts say Singapore stocks are now attractively valued and are poised for higher growth.

Nomura noted that the the market is trading at an FY13F P/E of 12.5x on EPS growth of 11 per cent.

Chew Soon Gek, head of strategy and economic research in Asia Pacific for Credit Suisse Private Banking said: "The Singapore stock market looks fairly attractive - I think on our fair value dividend discount model, we are expecting a target of 3400 on the STI, valuations are reasonable and the PE on a forward basis at 13 times and the price to book is 1.4 times so it is fairly neutral to slightly cheap on a ten-year history."

Looking ahead, experts warned of continued volatility in global markets that may have an impact on Singapore.

This includes the looming risks for the US fiscal cliff, as well as continued uncertainties in Europe.

They added that investors can still find good investment opportunities in the market but they need to be selective in their stock picks.

- CNA/xq