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Economist and Hedge Fund Manager Shayne Heffernan of www.livetradingnews.com takes a look at Vietnam.

Focus this week in Vietnam will be on what the Government has planned for the spiraling bad debts that are plaguing the banking sector. Non-performing loans in Vietnam’s banking system rose to an estimated 8.8 percent of total lending by June 30 from 8.6 percent at the end of March, a state-run newspaper said.

Total loans in Vietnam’s banking system are estimated at 120 percent of gross domestic product, or between $150-$160 billion, according to government data.

Fitch Ratings has put the non-performing loan figure at 13 percent.

Vietnam recorded average credit growth of 26.56 percent a year in the 2008-11 period, while non-performing loans expanded at an average 51 percent a year, the central bank has said.

Bad debt rose swiftly in the past few years due to economic instability, high inventories, rapid credit expansion, risk management weakness and poor supervision of lenders, it said.

Exports

Between January and September 2012, total shrimp exports reached over USD 1.63 billion, falling 3.9 per cent from the same period in 2011. However, shipments to Japan – Vietnam’s main shrimp market – were valued at USD 440.6 million, having gone up 11 per cent and making up 27.11 per cent of exports, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The Ministry of Agriculture and Rural Development (MARD) has sent a good message: Vietnam’s rice exports have been increasing rapidly over the last few years, raising the hope that Vietnam’s rice exports may reach the record high of 7.7 million tons in 2012.

Analysts have also commented that it is now the “golden time” for Vietnam to boost exports, when the world’s demand increases rapidly. Rice export companies have geared up to boost the rice exports in the last months of the year in the context of the world’s fluctuating price market.

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VFA has encouraged enterprises to boost exports in the last months of the year, so that Vietnam can soon reach the goal of exporting 7.7 million tons of rice this year.

The move by VFA has surprised many exporters. Prior to that, it advised exporters to keep cautious when signing export contracts.

However, analysts believe that it is reasonable to boost exports at this moment, when the domestic supply is profuse and the Indian and Thai stocks have decreased.

MARD has reported that the total rice output in 2012 may reach 42.5 million tons, or one million tons higher than 2011, which means that the merchandise rice output may reach 7.7 million tons.

Military Commercial Joint Stock Bank

The Bank outperformed the banking sector on Thursday after the lender announced solid earnings and a dividend payment, and could rise further in the coming days, analysts said.

At 0430 GMT, shares of the Hanoi-based bank, among Vietnam’s 10 largest partly private banks in terms of assets, were up 4.72 percent at 13,300 dong ($0.64), while the second-biggest VietinBank CTG.HM was flat at 17,100 dong.

Sacombank STB.HM, the eighth-largest and which stands right after Military Bank among the top 10 banks, edged up 0.52 percent to 19,200 dong, while the VN Index .VNI gained just 0.23 percent at 389.32 points.

The Vietnam army-run bank said its net profit in the first three quarters of this year jumped 24 percent from a year earlier.

Sacombank

Despite recent staff changes, operations of the country’s eighth-biggest private lender by assets have remained relatively stable, the brokerage said in a report.

The Ho Chi Minh City-based bank’s January-September consolidated profit rose 9 percent 1.58 trillion dong ($75.9 million) from a year earlier, the report said.

Maybank also expects the bank’s gross profit this year to edge up 1.4 percent to 2.8 trillion dong from 2011.

Bac Giang

Bac Giang Exploitable Mineral JSC mines for coal, iron ore and other metals ore. The Company also produces iron, steel, cast iron, colouring metal and precious metal. Bac Giang also produces electric wire and cable and other electronics.

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