FXstreet.com (Córdoba) – The Euro rebounded on American hours at 1.4435 and rose to 1.4495. The EUR/USD has been steady in the last hours, hovering below 1.4500, consolidating a gain of 50 pips from the price it had at the beginning of the Asian session.

“The pair is trading above the critical support level at 1.4480 and so long the pair remains above this level, the target is set at the 1.4625 resistance level, but breaching the support at 1.4480 would send the pair to the support at 1.4375”, the ecPulse.com Analysis Team said.



The EUR/USD reached on European hours a fresh 14-month high at 1.4517, extending its rally from January lows that lie at 1.2865/70. Andrei Tratseuski from Forex Club attributes the rise to three main reasons: 1) interest rate differentials between the ECB and the FED, 2) European Union sovereign debt fears receding and 3) technical weakness in the Dollar Index.

Read more »

Retail sales rose 352 percent in the ten years since 1997, while gross domestic product (GDP) increased by only 264.77 percent, according to the General Statistics Office.

The difference in the growth rates shows that the domestic market significantly contributed to the economic growth. Even during the Southeast Asian financial crisis of 1997, retail sales remained on an upward trend. It rose 5.7 percent in 1998 and 4.1 percent in 1999 against a GDP rise of 5.8 percent and 4.8 percent. Retail sales between 2001 and 2005 rose by an average of 10.3 percent a year, far in excess of GDP growth which averaged a mere 7.5 percent in the period. In 2006 and 2007, retail sales surged by an average of 14.5 percent annually, double the GDP growth of 8.4 percent in the period. In money terms, it rose from US$10.8 billion in 1997 to $45.7 billion in 2007. Sales of consumer products increased from 81.4 percent of total retail sales in 1997 to 83.4 percent in 2000. But by 2007 they had slumped to 77 percent, but remained at a hefty $35.2 billion as the size of the overall retail market had skyrocketed. The Red River Delta, Mekong Delta and southeastern region accounted for 75.9 percent of the retail market. By Nguyen Van Son* *Nguyen Van Son is an economist Source: SGTT

Read more »

A sculpture depicting the Maitreya Buddha to be displayed at an exhibition in Ho Chi Minh City for the Buddha’s birthday Buddhist and other art works will be on show in Ho Chi Minh City from Sunday until next Friday for the 2553rd anniversary of the Buddha’s birth.

The profits from the exhibition of paintings, calligraphy, sculptures and decorated stones by local artists and monks will be given to 80 city workers with fatal diseases. As well as art to examine and buy, there will be poetry chanting, martial art demonstrations, and performances of cai luong (southern folk opera) and other music. La Pagoda in Go Vap District is the main organizer of the event at the HCMC Labor and Culture Palace, 55B Nguyen Thi Minh Khai Street, District 1. Reported by Ha Dinh Nguyen

Read more »

A broker (2nd, L) at real estate company Dat Xanh points out locations to potential buyers Interest rate cuts and cheaper construction material costs have pushed down housing prices in Ho Chi Minh City, said a senior executive at a property company.

Some developers have reduced apartment prices by 40-50 percent from last year as construction material prices have fallen to a three-year low, said Luong Tri Thin, general director of property firm Dat Xanh. He also said builders could now borrow easier from banks, enabling them to complete projects at lower initial costs. Efforts to stimulate the economy have seen the central bank slash the key rate from 8.5 percent to 7 percent, allowing commercial banks to charge interest on dong loans up to 50 percent above the benchmark rate, which is now only 10.5 percent a year. Dat Xanh plans to offer 224 apartments in the SunView Apartment building in HCMC’s Thu Duc District at the price of US$764 per square meter, a drop of more than $500 a square meter from last year. According to the HCMC-based firm, 60 percent of its customers wanted to pay no more than VND1 billion ($57,200) for a full apartment while only 10 percent were in the market for apartments at $1,500 per square meter or more. Property firm Vinh Tuong has begun selling apartments in Block 3 of the Tan Tao Building in Binh Tan District at some VND9 million ($515) per square meter. Each 70-120 square meter apartment has two bedrooms. Apartments in Nam Long Company’s Ehome Building in District 9, which is under construction and scheduled to open by September, are on sale for VND11.5-14.5 million ($671-847) per square meter. Apartments larger than 50 square meters at the 17-storey Sunshine Building under construction in Thu Duc District are expected to be sold for only VND500-VND600 million ($29,197-35,036). HAGL Land cut prices for its new Hoang Anh River View apartments in District 2 by 40 percent to US$1,350 per square meter last week. It has also lowered prices at another project in Nha Be District to $1,250 from $1,800 per square meter. Le Hung, director of HAGL Land, said the price cuts would “revolutionize” the HCMC property market in line with government efforts to stimulate the economy. In Hanoi, medium and low-income apartments are selling for a whopping VND25 million per square meter, said Le Xuan Truong at property firm B.D.S Co. Thin told Thanh Nien that property firms didn’t expect profits this year to look anything like they did in 2007, when prices and sales went through the roof. But 2009 is set to beat dreary 2008. “Their earning growth target is 20- 30 percent this year,” said Thin. In another boon to the local property market, several banks have recently begun offering loans for house and apartment purchases. Western Bank is lending a maximum of VND1 billion to potential homebuyers at interest rates of between 10.5-13.2 percent a year for the first three months. Tien Phong Bank is offering 15-year mortgages worth 70 percent of the house value at 10 percent interest. Vietnam Export-Import Commercial Joint Stock Bank, or Eximbank, Asia Commercial Bank and Sacombank are also offering housing loans. Reported by Thanh Nien staff

Read more »

The Ministry of Construction has issued policies on the use of public and private space in apartment buildings as well as on fees charged to condominium owners.

The ministry circular requires the apartment sales contract to distinguish between the buyer’s private space and the building’s public space, such as the hallways, stairs, lifts and parking lots. Both the Housing Law and ministry regulations state that apartment building residents do not have to pay to use public spaces. Condominium contracts must designate what facilities might be owned by the buildings’ developers such as swimming pools, tennis courts or supermarkets. Deputy Minister Nguyen Tran Nam said the instructions should have come sooner to prevent the many conflicts that have flared up between apartment occupants and investors. Some apartment building developers in Ho Chi Minh City asked residents to pay enormous fees of up to US$25,000 for a car parking space or to use meeting areas, child care facilities and even libraries. Also in line with the new circular, all contracts must specify the apartment’s exact measurements in detail. Two percent of each apartment price will be used for maintenance fees. If the amount is not enough, the developers can ask residents to contribute extra fees based on the size of their apartments, according to the ministry. The sale contract must mention these fees and estimate the amount each household must pay to cover the other costs of operating the buildings, Nam said. City and provincial People’s Committees will decide the maximum operation fee for apartment buildings in their jurisdiction, according to the ministry. The developers and buyers will rely on those ceiling fees to work out specific payments in their sales contracts. Nam said committees are allowed to change the ceiling fees every year depending on market prices.

Read more »

Oil tanks at the Dung Quat Oil Refinery, Vietnam’s first such facility, in the central province of Quang Ngai. The country imported 26.2 percent fewer oil products by volume but the value fell 60 percent to $753 million during the first two months. Vietnam has reported its first year-to-date trade surplus since 2006, as companies slash overseas purchases of equipment and raw materials amid tumbling demand.

The surplus for the first two months of the year totaled US$290 million, compared with a deficit of $5.13 billion in the same period a year earlier, the General Statistics Office (GSO) said Wednesday in Hanoi. Exports fell 5.1 percent to $8.02 billion, while imports plunged 43.1 percent to $7.73 billion, according to the preliminary figures. The GSO also revised the trade surplus for January to $390 million, up from an initial estimate of $300 million. “Due to the impact of the world economic turmoil on the Vietnamese economy, the country was forced to strongly reduce its imports. It is the first [monthly] trade surplus we’ve had since 2006,” AFP quoted a GSO official as saying. Vietnam has not posted a full-year trade surplus since 1992. The economy last year suffered from a widening trade deficit and double-digit inflation but both have been brought back under control. Now, however, the government faces the challenge of protecting the economy from the worst of the global recession, and the authorities have taken aggressive monetary easing steps while drawing up a modest fiscal stimulus package. Still, the trade data suggested the economy was feeling the effects of the downturn. This year’s reversal may indicate a sharp slowdown in Vietnamese economic activity. “A positive trade balance in Vietnam would worry me a bit, because it would suggest that economic growth isn’t there,” said Alain Cany, chairman of the European Chamber of Commerce in Vietnam. “Vietnam needs to import in order to grow. It is not self-sufficient.” Economic growth slowed to 6.2 percent last year from 8.5 percent in 2007. The government hopes to keep it at 6-6.5 percent this year, though the International Monetary Fund and others forecast growth to be closer to 5 percent. Prime Minister Nguyen Tan Dung earlier this month said he expected the slowdown to end by May. The improvement in Vietnam’s trade balance “is largely a reflection of weaker domestic demand, which is cutting into imports,” said James McCormack, head of Asia sovereign ratings at Fitch Ratings in Hong Kong. “It’s been surprising to see just how weak the import numbers have been in Asia.” In the first two months of 2009, Vietnam spent $412 million on steel, down by 74.2 percent and $169 million on fertilizers, down 33.7 percent. Machinery and equipment imports fell 24 percent to $1.77 billion, while petroleum-product imports fell 26.2 percent by volume and 60 percent by value to $753 million. The country on Sunday opened its first crude oil refinery in the central province of Quang Ngai, which operator Vietnam Oil & Gas Group, known as PetroVietnam, says may meet about one-third of the country’s fuel demand next year. Imports of inputs used in garment production slumped, with purchases of cloth slipping 4 percent to $494 million. “Orders are down for light export industries,” said Cany of the European Business Chamber in Vietnam. “Probably some companies were surprised by the extent orders fell and they were overstocked, which significantly reduced their import demand.” Mixed export results Exports were buoyed by an estimated rise of more than 3,000 percent in sales of precious metals and gemstones to $939 million. Garment and textile exports were up by 0.7 percent to $1.27 billion. Rice exports were estimated to have more than doubled at $399 million. The US Foreign Agricultural Service this month cut its forecast for rice exports this year by Thailand, the world’s biggest shipper of the grain, citing “increased competition” from Vietnam. Rubber exports, however, slipped 50 percent to $101 million in the first two months of the year. Coffee exports slipped 10 percent by value to $440 million. Vietnamese coffee farmers have been withholding sales to the market since the end of the country’s Tet (Lunar New Year) holiday in late January, according to a February 23 note from Hong Kong-based SW Commodities. “Exports from Vietnam depend largely on the prices of key commodities,” said Adam McCarty, chief economist at Mekong Economics Ltd. in Hanoi. Crude oil shipments fell 42 percent by value to $958 million, as global prices of the commodity have been an average of 57 percent lower so far this year than during the same period a year earlier. By volume, crude oil shipments rose 27 percent. Crude oil is Vietnam’s biggest foreign exchange earner. “Vietnam’s oil output should increase to about 16 million tons this year,” said PetroVietnam Chairman Dinh La Thang, in a February 21 interview in the town of Quang Ngai. The state-owned company said at the end of December that it produced about 15 million tons of crude oil and condensate in 2008. Vietnamese crude oil production may reach 20 million tons annually by 2012 and the country hopes to be able to sustain that level of output for as many as seven years, Thang said. Although crude oil output is expected to rise, the government said December 31 that crude exports may decline 13.7 percent this year because of the operation of Dung Quat oil refinery. FDI down Vietnam drew more than $5.3 billion from foreign investors in the first two months of the year, or 70 percent of the same period last year, the Ministry of Planning and Investment’s Foreign Investment Agency said in a report Wednesday. The country granted licenses for 67 new projects with total registered capital of more than $1.5 billion in January and February. Investors of 10 existing projects were allowed to increase their capital by a total of more than $3.8 billion, according to the statement. Vietnam expects to receive $12 billion of pledged foreign investment in 2009, Phan Huu Thang, director of the ministry’s foreign investment department, said on Vietnam Television’s InfoTV early this month. The country last November said the overseas disbursement level, which represents actual cash received from promised foreign investment, may drop to as low as $10 billion in 2009 amid the global financial crisis. Source: TN, Agencies (With additional reporting by Ngan Anh)

Read more »

The construction site of an apartment building project in Ho Chi Minh City’s Binh Thanh District. The Vietnamese real estate market could remain in limbo next year because of the global economic slowdown, property industry executives and other experts said at a recent conference in Hanoi.

Dang Hung Vo, the former deputy minister of natural resources, said property prices could continue to fall if there are no measures to attract more capital into the industry. “It will be difficult for the market to recover in the coming year.” The need to repay bank loans would see developments cutting prices, he said, adding that many of them were unable to sell after the market began to plummet in the second quarter. Prices in large cities have fallen 40-60 percent since early this year. The number of property transactions too has fallen dramatically, by 80-90 percent compared to last year. The fact that banks are set to auction off properties pledged by borrowers would also increase supply in the market, further eroding prices, Vo told the conference on Friday. Bank interest rates are still high and unprofitable if investors borrow money to invest in real estate, delegates said. The peak rate is over 11 percent compared to just 5 percent or less in many other countries. Foreign investors would keep away due to the global financial turmoil, Vo said. Others added that this means the housing market, especially the luxury segment, is unlikely to recover in 2009. Nguyen Thi Cam Van from the Ho Chi Minh City Department of Natural Resources and Environment said the government should improve both the real estate business environment and urban planning, and make it transparent. It should also simplify investment and construction procedures, define the responsibility of all agencies in land administration, make land clearance a simpler process, and help public servants get long-term loans to buy houses, she added. Stimulus hopes Meanwhile, Le Hoang Chau, chairman of the HCMC Real Estate Association, has said the government’s proposed US$1 billion package to stimulate domestic consumption will thaw the frozen real estate market. Chau said it would give property developers cause for optimism. The general secretary of the Vietnam Real Estate Association, Tong Van Nga, also hoped that the stimulus package, part of which will be spent on housing for low-income people, would help the market. There is still great demand for medium- and low-income housing, he said, adding that demand has fallen only in the luxury segment, which accounts for just 10 percent of the market. The Ministry of Construction has asked the government to spend part of the package on a plan to build 10,000 apartments for low-income people by 2015. The plan, which seeks to build 5,000 flats each in Hanoi and HCMC, could cost around VND2.5 trillion ($151.5 million). Chau said the medium and low-income market segments are likely to benefit, but not the luxury segment, once the money begins to flow in the first quarter of 2009. Nguyen Kim Lan, chairman of Incomex Saigon, said his firm plans to seek funds from the government for an apartment project in HCMC’s District 7 meant for medium- and low-income buyers. “We are completing the feasibility study and hope it will get off the ground in six months’ time.” Lan told Thanh Nien Daily that it would cost VND200 billion ($11.8 million) to build 700 apartments of 40-60 square meters each. They would cost around VND400 to 600 million ($23,500-35,000) each, he said. Following the property market collapse earlier this year, apartment prices have fallen sharply, with a 30 percent drop in places like Phu My Hung and even 60 percent in some other areas. But Chau said the slump has been in the luxury segment and did not affect the medium- and low-priced segments, thanks to continuing demand from a young population in big cities. Bui Kien Thanh, an independent financial expert, said local developers had focused on luxury properties not targeted at end users who are in need of housing but do not have much money. He said the luxury segment is set for more trouble since customers have raised complaints about the quality of the apartments they have bought. The complaints have to be addressed and the economy has to recover for the segment to look up again, he said. NEW PROPERTY TAX REGIME IN 2009 Real estate transactions saw a sudden spurt in recent weeks as people rushed to complete deals by the end of this month to avoid paying higher taxes next year. With the introduction of the new Personal Income Tax Law on January 1, owners of more than one house will have to pay a two percent tax on each house they sell. Another option is to pay a 25 percent tax on the remaining money after they have bought a new house, with proceeds of the sale of a property for which all fees have been paid. Analysts say sellers would favor the first option for its convenience. With the city land valuations for 2009 having been increased by at least 10 percent from last year, residents in Ho Chi Minh City will have to pay higher land use taxes. Also from January 1, 2009, all traders are required to conduct property transactions through real estate exchanges. As a result, developers and agents are setting up real estate exchanges. The Saigon Real Estate Corporation and Nam Long Real Estate Company are among the companies that have opened their exchanges recently. Some other companies such as Eden Real and Phu My Hung have also announced the opening of their trading centers next month. The establishment of real estate exchanges in Vietnam is expected to help improve transparency in the local property market next year. Although the exchanges have been opened, the number of products listed could be limited. Many projects have been halted since the second quarter this year and almost all businesses have stopped implementing new projects, analysts say. Pham Van Hai, general director of ACB Real Estate, an arm of Asia Commercial Bank, says not many new housing projects will be started in the first quarter next year. Even large developers with extensive financial resources will need to wait and judge market movements before making decisions concerning their projects, he says. Reported by Nguyen Hang Reported by Bao Van- Minh Quang

Read more »