Vietnam business

Gold and securities, once the most attractive investment options for many people, are no longer the top choice as minor price fluctuations bring tiny profits.

In previous days, people rushed to purchase and sell gold when the ‘gold price wave’ towered. Investors profited hugely by buying when the price was low and selling when the price rose. However, others lost a lot of money surfing this wave and, since then, gold has become less attractive.

Stronger policies are needed to support small- and-medium-sized enterprises (SMEs) and help them better perform their role in the nation’s development, said Enterprise Development Agency deputy director Nguyen Trong Hieu at a workshop in Ha Noi yesterday, July 9.

"SMEs help mobilise all possible resources, bringing opportunities to all businesses and improve overall competitiveness," Hieu told the workshop entitled SME Development Support: Policies and Solutions for Implementation.

SMEs are also important in creating jobs and improving incomes, he added.

Vietnamese enterprises have moved into new international markets as they shift their overseas investment focus from farming and mining to the service sector.

According to the Ministry of Planning and Investment (MPI), as many as 38 overseas investment projects worth a total of US$170 million were licensed in the first four months of this year.

The projects were not only in traditional sectors like agriculture, mining and industrial forestation, but also in construction services, online games, trade centers, restaurants, investment consultancy services and real estate, the ministry said.

Domestic investors say that they now have to keep wary of reports and forecasts released by foreign institutions, after they tasted losses because of these predictions.

The State Bank of Vietnam (SBV) recently requested foreign bank branches in Vietnam to stop providing information relating to the global economic crisis. Though the bank did not cite the reason behind the request, investors say they can guess.

In late March 2010, HSBC forecast that SBV would raise the basic interest rate by one percent in a couple of weeks and the inflation rate would reach 12 percent by the end of the second quarter of 2010. Instantly, the VN Index dropped from 512 to 503 points.

The downward pressure on the dong has been eased as liquidity on the currency is improving, State Bank of Vietnam Governor Nguyen Van Giau said in a statement Friday.

“Enterprises have sold foreign currencies to commercial banks, which helps increase market liquidity,” Giau said, noting that local people are also considering selling their personal forex reserves and saving money in dong deposit accounts.

The government will take “strong measures” to control trade deficit and encourage exports, the governor said in the statement in which he answered several questions by local reporters.