September 18th, 2007 - IFCCI -

Vietnam's economy to grow 8.3 percent this year

Vietnam's economy will continue its robust growth over the next two years, but the government must rein in inflation, which is approaching "dangerous" levels, the Asian Development Bank said Monday.
The bank predicted that Vietnam's economy would grow 8.3 percent this year and 8.5 percent in 2008, which would mean four straight years of economic growth above 8 percent - one of the fastest rates in Asia, but behind China and India.
Vietnam's economy has grown by at least 7 percent a year for a decade.
ADB country director Ayumi Konishi (foto) cautioned that Vietnam must take steps to control inflation, which the bank predicted will hit 7.8 percent this year.
"It's approaching a dangerous level and the government needs to take careful measures in dealing with this issue," said Konishi, speaking at a press briefing in Hanoi.
The ADB released its projections for the entire region on Monday. It predicted that China's economy would grow by 11.2 percent this year and India's would increase by 8.5 percent.
Vietnam's economy has been booming as the government continues introducing economic reforms. The country joined the World Trade Organization this year, and foreign investment has been surging.
The bank raised its forecast for Philippine growth to 6.6 percent due to its fastest first-half growth in almost 20 years.
Indonesia continues to edge up and is now expected to post 6.2 percent growth in 2007, while growth in Thailand is expected to be close to an earlier estimate of 4 percent as political uncertainties continue to undermine consumer and private investment confidence, the bank said.

PLN to turn more to gas and coal next year

State-owned electricity firm PT PLN plans to cut the 2008 consumption of oil-based fuels by its power plants by 22 percent toseven million kiloliters (kl), down from this year's estimate of 9 million kl, as part of its efforts to switch to gas and coal. President commissioner Alhilal Hamdi (foto) told The Jakarta Post recently that the firm hoped to cut its oil consumption as a number of new coal and gas-fired power plants came on line from the start of next year. This year alone, the company has targeted to cut its fuel costs by Rp 9 trillion (US$957 million) to Rp 42 trillion from last year's Rp 51 trillion with the opening of three new coal and gas-fired power plants. "We will also cut fuel expenditure by starting to switch to marine fuel oil, which is cheaperto replace than the high speed diesel (HSD) we used to use," PLN president director Eddie Widiono said.

Asian markets advance; Nikkei jumps nearly 2 percent, HK hits record

Asian markets advanced Friday, buoyed by overnight gains on Wall Street amid hopes that the U.S. Federal Reserve will cut interest rates next week. Hong Kong soared to its third straight record close. In Tokyo, the benchmark Nikkei 225 index surged 1.94 percent, to 16,127.42 points. Investors were cheered by Thursday's rally in New York, where the Dow Jones industrial average rose 133.23, or 1.00 percent, to 13,424.88 as mortgage lender Countrywide Financial Corp. signaled a possible thawing in credit markets with the announcement it had lined up additional financing. The lender was at the center of the storm over U.S. subprime loan problems and any positive news for the company is taken as a good sign for the U.S. economy, a key export market for Asian companies. In the wake of those woes, investors are expecting the Fed will lower a key interest rate on Tuesday. Japanese markets will be closed Monday for a national holiday. "The priority for investors is to see the status of the U.S. economy," said Hiroaki Kuramochi, head of the cash equities department at Bear Stearns in Tokyo. The yen's recent weakness also helped Toyota gain 2.4 percent Friday, while Sony added 2.1 percent to 5,420 yen. The U.S. dollar was trading at 114.98 yen Friday, down from 115.29 yen late Thursday in New York, but up from 113.16 on Monday. Hong Kong shares rose to a record high close, lifted by U.S. interest rate hopes and strong bids at a government land auction next week. The blue chip Hang Seng Index rose 1.5 percent to 24,898.11. The index has risen 22 percent, or 4,511 points, in the past month after hitting 20,387 Aug. 17, when a global credit tightening sparked by U.S. subprime mortgage problems caused a sell off in worldwide stocks. Kerry Properties rose 4.3 percent after issuing strong first-half earnings figures. China Shenhua Energy jumped 5.2 percent on the news mainland Chinese regulators will review the company's share issue plan Monday. Mainland Chinese stocks rose on renewed speculation that the two mainland bourses might eventually merge with Hong Kong's stock exchange, or that Beijing might consolidate its own local and foreign-currency denominated share markets. The benchmark Shanghai Composite Index gained 0.7 percent, or 38.59 points, to 5,312.18. The Shenzhen Composite Index of China's second, smaller market advanced 1.6 percent to 1,482.86. There was no indication that any merger is imminent, despite comments by Hong Kong Exchanges and Clearing's chairman, Ronald Arculli (foto) , to the local newspaper South China Morning Post that the three bourses ought to eventually set up a single trading platform. In an interview published Friday, Arculli told the Post that it would make sense to have a single China market, though perhaps with different shareholding and company structures. Hong Kong Exchanges & Clearing, which runs the city's stock market, said Friday that no blueprint for merging the markets had been drawn up yet. "What he described was just a vision, a very long-term view," HKEx spokeswoman Lorraine Chan said of Arculli's comments. China's state-run also media played down the issue. "It's too early to talk about concrete steps for merging the mainland and Hong Kong exchanges," the China Securities Journal cited Sun Jie, a senior vice president with the Hong Kong Securities and Futures Commission as saying.