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Posts Tagged ‘Fluctuation’

Big lenders survive interest rate fluctuation

In Uncategorized on December 16, 2010 at 10:02 am

During the interest rates fluctuation period, most of small lenders tended to restrain offering loans to maintain liquidity levels, while big ones made a contrast move.

View at ShinhanVina bank (Photo:Minh Tri)

Do Minh Toan, deputy general director of Asia Commercial Bank, known as ACB, said his lender was well-prepared for the increasing capital demand at yearend, offering loans to many regular clients with reasonable rates even when interest rates started to fluctuate.

“High interest rates often bring down businesses’ earnings. However, this year’s healthy growth of local enterprises helped boost lenders’ credit growth,” said Toan.

ACB offer an interest rate of 15.5 percent per year on short-term deposits and 16-16.5 percent on long-term ones.

“Bank interest rate will remain choppy until the New Year Tet holyday on February. With the holiday coming sooner than previous years, the amount of money flowing on the market after Tet will be abundant. Therefore, I expect the deposit rate on February will be set at a lower rate of 12-14 percent a year,” Toan said.

Techcombank, which is the fifth-largest bank in term of assets, triggered an interest rate race last week when announcing it would offer dong depositor rates as high as 17 percent per year.

Other lenders reacted by pushing their own rates up, some as high as 18 percent.
But these offers were rescinded after the central bank requested them to bring the rates down to prevalent market levels – 14 percent or less.

The Hanoi-based lender then was among the first lenders reducing the deposit rate, offering the rate of 13.45-13.95 percent per annum.

Interbank lending rate also climbing
Expecting the fluctuation in interest rates to cool off in the upcoming time has seen many banks replacing monthly interbank loans with weekly ones.

Big lenders are giving interbank loans with three-month payday only, instead of two weeks or one month as they used to be, a general director of a big commercial bank in HCMC, who wants to be unnamed, said, adding the interbank lending rate last week remain at high levels of 19-20 percent per annum.

“The lending rates for shorter-payday loans are much higher. Despite knowing the fact that the rate dropping after Tet, many small banks still had to borrow at the high rate as their liquidity is low,” he said.

Analysts predicted the increasing interbank rate will end soon as the central bank extended the deadline for lenders to raise registered capital by one year to ease pressure on banks having difficulty meeting higher requirements.

Prime Minister Nguyen Tan Dung has approved the proposal requiring local lenders to raise registered capital levels to VND3 trillion ($153.9 million), by Dec. 31, 2011, the State Bank of Vietnam said on its website Tuesday.

Source: SGGP

Exchange rate fluctuation influences pharmaceutical companies

In Uncategorized on December 16, 2010 at 9:59 am

Due to the big fluctuations in exchange rates, many domestic pharmaceutical enterprises are in despairs because they cannot import materials and an adjuvant, a pharmacological or immunological agent that modifies the effect of other agents.

Employees are packaging drugs at the Pharmaceuticals and Medicinal Laboratories (Photo: SGGP)

Some production contracts might be cancelled or some pharmaceutical companies have to pay fines for the delays in production. Furthermore, Vietnam would face the risk of a shortage of medications.

Being one of the biggest pharmaceutical companies in the country, Vietnam Medical Products Import-Export Joint Stock Company (VIMEDIMEX) in Ho Chi Minh City, were extremely concerned about the high exchange rates and the soaring prices of imported materials.

The company’s general manager, Nguyen Tien Hung, said the company has stopped production of rutin-extraction, from Vietnamese flower bud of Sophora Japomica L (Hoe buds). This is because it takes US$50 to make one kilogram of the rutin ingredient, but sells at only US$12 in the marketplace.

Mr. Hung said one kilogram of the flower sold at VND25, 000 last year, but now it has soared by over VND200, 000 per kilogram and crocus has increased from VND9, 000 to VND100, 000 a kilogram this year. For years, VIMEDIMEX has focused on growing herbs, but has failed to satisfy home demand.

Due to high prices of saffron, these companies use the curcumin extract from the herb. This is causing distress to the medical companies, as they may force to pay a compensation fee, if they did not complete the contract on time.

According to the Ministry of Health, Vietnam has three factories to make antibiotic materials, but only Mekophar Chemical Pharmaceutical Joint Stock Company is still in production. Furthermore, the company directors are considering fewer contracts and are negotiating with its partners about the prices.

Moreover, imported materials from China, India and some countries in Europe, have quadrupled during the year.

Truong Duc Vong, director of the OPC Pharmaceutical JSC has, said he has just sent a petition to the city’s Department of Health (DOH) to raise some prices of the medications. While other pharmaceutical companies have now followed suit.

In addition, certain medical enterprises now face difficulties buying foreign currencies. They purchase at even higher prices or sometimes purchase imported materials from the ‘black market’.

The Boston Pharma JSC’s general manager said it needs to encourage consumption of local-made medications in the aid to reduce pressures for local enterprises.

Boston Pharma management said at a meeting, DOH should resolve registration formalities and other bureaucratic red tape as well as lead medical staffs to pharmaceutical factories to see technologies to make drugs in order to make them believe in home methodologies.

Many companies have filed a petition for preferential policies to special goods, to cease the drugs protective policies and to enforce strictly the anti-dumping law.

Source: SGGP

Fluctuation on interest rates hits economy

In Uncategorized on November 22, 2010 at 10:14 am