Gold spikes, dips in volatile market
by Thien Ly
There was huge volatility in both gold prices and demand in Viet Nam last week.
Early in the week, although there was a big gap between local and global prices, trading was heavy. But the situation changed later in the week with both demand and prices plunging.
On Monday prices opened at VND45.3 million a tael (37.5g) in HCM City but fell to below VND43 million at 2pm before gradually recovering to close at VND45.5 million. In Ha Noi the opening was as low as VND41.8 million.
On the London commodity market that day, gold prices hit a low of US$1,531.9 an ounce before closing at $1,615, still $42.8 down from Friday's closing price.
The sales department of Sai Gon Jewellery Holding Co, or SJC, reported that the company had sold around 8,000 taels that day but there was no sign of demand abating. At Sacombank Jewellery Company, or SBJ, the selling volume was round 5,000 taels per day.
However, the gold transactions dropped sharply on last days of the week.
On Thursday the company sold 4,500 taels and bought 1,500 taels.
PNJ's sales also dropped from around 4,000 taels to 3,200 taels in that period.
Experts attributed the fall in demand to unconfirmed news that the State Bank of Viet Nam would allow some banks to open gold accounts overseas for bullion trading as a preliminary step before they introduce gold deposits.
After the market heard the news, prices dropped by VND300,000 per tael last Friday. Meanwhile, in Europe, the price edged up by $20 per ounce from the Wednesday closing to $1,629.
In recent months the central bank has licensed the import of four tonnes of gold.
But this has not satiated demand, with investors liquidating dong deposits to buy gold.
Real estate stirs
The real estate market is finally showing signs of stirring back to life.
In recent weeks property dealers in some southern provinces have been optimistic about a possible recovery thanks to a series of measures from the ministries of Finance and Construction and, especially, the State Bank of Viet Nam's moved to cut loan interest rates.
Since August many banks have been cutting rates by 1 or 2 per cent and this is expected to continue for the next few months. Meanwhile, the stock markets are also looking up, traditionally an encouraging sign for the property market in Viet Nam.
Indeed, many people looking to buy a house for occupation have begun to look for apartments and houses. Housing developers are preparing to market their projects in anticipation of a market recovery soon.
In HCM City, residential land in low-priced projects has seen the biggest jump in the number of transactions.
Tac Dat Tac Vang Company has begun to sell residential land plots in its Green River City Project in Binh Duong Province, finding buyers for 80 per cent of the total 200 plots in just two weeks. The prices ranged from VND1.5 million to VND2.9 million per square meter. The company plans to sell a further 300 plots in this project.
Quang Thai Project in HCM City's Tan Phu District also saw the number of transactions rise by 5 per cent since a few weeks ago. Here prices average VND13.5 million per square metre.
The Lotus Garden Project in Tan Phu District announced the sale of some 100 apartments at an average price of VND15.6 million per square metre. The Thu Duc House Company hopes to sell 100 land plots in its Long Hoi City Project in Long An Province at VND2.95 million.
Hoang Anh Sai Gon Corporation said since demand remained very high despite the slump, the real-estate market would recover when the financial climate loosened.
In Ha Noi too, the realty market has become busier but not by too much. Its recovery has been attributed to the city's new master plan and the monetary loosening that has begun.
The master plan for the period through 2030, approved by the Government recently, is expected to have a positive impact on the real estate sector since it paves the way for developers to choose appropriate locations and scales.
Real estate developers reckon that the Ha Noi market will soon look up due to the master plan, high demand for housing in the city, falling bank interest rates, and positive macroeconomic signs.
Property trading floors indicate that property transactions are up 20 per cent from the previous month.
Even real estate products in suburban districts like Long Bien, Dong Anh, Tu Liem, and Thanh Xuan are attracting buyers' attention.
Although the revival is gradual and restricted mainly to the VND2-3 billion segment, it remains an encouraging sign.
Costs hurt exporters
Despite rising export revenues this year, exporters' earnings have remained modest due to increasing costs of fuel, labour, and credit.
Businesses in various sectors say high interest rates have cut deeply into their profits.
Viet Nam Coffee Corporation, or Vinacafe, said the country's total coffee exports this year were expected to be around US$2.5 billion thanks to high prices, but profits would not be high because of the borrowing rates.
Coffee exporters said though banks had begun to cut interest rates, they were still too high for them.
With the coffee harvest set to start soon, traders have to take out loans to buy the beans, but they will hardly make profits given the current interest rates.
The textile industry, the country's top export revenue earner with some $9 billion so far this year, is sailing in the same boat.
Vu Duc Thinh, general director of the Viet Nam National Textile and Garment Group, or Vinatex, said his company had exported goods worth $1.6 billion in the first eight months but still failed to achieve the profit target due to the rising costs. Imports made up 80 and even 90 per cent of the industry's total input costs.
Companies also blamed the gap between the dollar buying and selling rates at banks for their losses, explaining that while they had to buy dollar from banks at negotiated price, they had to sell them at quoted rates. — VNS