News on 6 July 2016
1) VN Index reaches eight-year high
Traders at BIDV Securities Corp. The VN Index hit a fresh eight-year high yesterday as financial stocks advanced on expectations of positive performance. Photo: Trương Vị/Vietnamnews
Vietnamese shares extended gains yesterday(July 5) as financial firms advanced on expectations of positive second-quarter performance. The benchmark VN Index on the HCM Stock Exchange (HoSE) edged up 0.5 per cent to finish at 650.88 points, reaching a fresh eight-year high. The southern market index has rallied a total 4.9 per cent in seven sessions. The HNX Index on the Hà Nội Stock Exchange inched up 0.1 per cent to close at 85.91 points, climbing a total 2.8 per cent in the last six trading days. Financial firms, including banks, brokerage companies and insurers, led the markets up on expectations that these companies have performed better in the past three months.
2) Vietnam delays work on largest airport until 2021: report
A digital rendering of the planned Long Thanh Airport in the southern province of Dong Nai, around 40 kilometers to the northeast of Ho Chi Minh City
State-owned Airports Corporation of Vietnam (ACV) has confirmed that complex preparatory work will delay the construction of the country's US$15.8 billion airport near Ho Chi Minh City. In its recent report to the Ministry of Transport, the manager of 22 airports said work on Long Thanh Airport will likely start in April 2021, news website Dau Tu reported Tuesday (July 5). That will put the project in Dong Nai Province at least two years behind the original schedule. It is taking ACV longer than expected to finish all the pre-construction tasks for the megaproject, described as the "biggest ever." The selection of consultants for the project's feasibility study, for instance, will not be completed until January next year, about nine months behind the previous deadline. Long Thanh Airport, about 40 kilometers from HCMC, is designed to serve 100 million passengers and five million tons of goods annually. It is expected to replace the country's currently biggest airport Tan Son Nhat, which reached its full capacity of 20 million passengers a year in 2013.
3) Rule allowing children to use ATM cards at 6 raises eyebrows in Vietnam
Children buy snacks from a peddler with cash in Ho Chi Minh City. Tuoi Tre
A new rule lowering the legal age limit on owning an ATM card to six years old is scheduled to become effective next month, and Vietnamese parents are concerned about the potential issues once their children want a bank account of their own. Pursuant to the current rule, an ATM cardholder must be at least 15 years of age, but this bar will be lowered to six starting August 15, when a circular released by the State Bank of Vietnam (SBV) takes effect. “Vietnamese citizens from six to below 15 years old will be allowed to open and use their ATM accounts, with the consent of their legal custodians,” Bui Quang Tien, head of the SBV’s payment division, told Tuoi Tre (Youth) newspaper. Tien explained further that children from six will only be permitted to own a supplementary card giving access to the primary account of their legal custodians or parents. “The primary cardholder is fully responsible for the usage of that supplementary plastic,” he added. This means parents must reach agreement with their issuing bank on issues like daily or monthly withdrawal limits in order to register a supplementary card for their children. Duong Hong Phuong, a bankcard expert, said that the rule is in line with international practice and meets real demand from the public. “It is safer to have children pay by card than cash, meaning parents are able to control the spending,” she explained.
4) Oil prices steady after slump on Brexit, supply risks
A pump attendant works at a Petronas petrol station outside Kuala Lumpur, Malaysia, March 1, 2016. REUTERS/OLIVIA HARRIS
Oil prices were up slightly in early Asian trading on Wednesday (July 6) after sharp falls in the prior session, but gains were limited by ongoing concerns about the economic impact of Britain's vote to leave the European Union and a glut of crude. U.S. crude was up 13 cents $46.73 a barrel at 0017 GMT (8:17 p.m. EDT on Tuesday). The contract fell 5 percent to end at $46.60 on Tuesday (July 5) as U.S. investors got to digest news of an OPEC increase in production after the July 4 holiday on Monday closed trading. Brent futures were up 17 cents at $48.13. On Tuesday (July 5) they settled down 4.3 percent at $47.96 a barrel. Oil prices are up almost 80 percent from 12-year lows of around $27 for Brent and $26 for U.S. crude in the first quarter and they are ripe for supply shocks just as the so-called Brexit vote came as a body blow to global growth hopes. The rebound in crude was fueled by supply outages from Canada to Nigeria that created the perception that a two-year-old supply glut may be easing.
5) U.S. factory orders fall, but rising backlogs hint at stabilization
Robotic arms spot welds on the chassis of a Ford Transit Van under assembly at the Ford Claycomo Assembly Plant in Claycomo, Missouri in this April 30, 2014 file photo. REUTERS/DAVE KAUP
New orders for U.S. factory goods fell in May on weak demand for transportation and defense capital goods, but growing order backlogs and lean inventories suggested the worst of the manufacturing downturn was probably over. The Commerce Department said on Tuesday (July 5) new orders for manufactured goods declined 1.0 percent after two straight months of increases. May's drop was in line with economists' expectations and followed a 1.8 percent increase in April. The department also said orders for non-defense capital goods excluding aircraft fell 0.4 percent in May instead of the 0.7 percent drop reported last month. These so-called core capital goods are seen as a measure of business confidence and spending plans on equipment. Core capital goods shipments, which are used to calculate business equipment spending in the gross domestic product report, dropped 0.5 percent in May as reported last month. U.S. financial markets were little moved by the report.