VZCZCXRO3098
PP RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB
DE RUEHHI #0847 2041015
ZNR UUUUU ZZH
P 221015Z JUL 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 8163
INFO RUEHHM/AMCONSUL HO CHI MINH 4932
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS HANOI 000847 
 
SIPDIS 
 
SINGAPORE FOR TREASURY 
TREASURY FOR SCHUN 
USTR FOR DBISBEE 
 
STATE FOR EEB/IFD 
 
E.O. 12958: N/A 
TAGS: EFIN EAID ECPS ECON ETRD VM
SUBJECT:  VIETNAM ECONOMIC HIGHLIGHTS: IMPORT LICENSING, RICE EXPORT 
TAX, OTC MARKET COMING, OPTIMISM GOING 
 
¶1.  This cable is part of an ongoing series on developing economic 
stories in Vietnam. 
 
More transparency is expected for OTC securities market 
--------------------------------------------- ---- ----- 
 
¶2.  According to Mr. Nguyen Vu Quang Trung, Deputy Director of the 
Hanoi Securities Trading Center (HaSTC), the over-the-counter (OTC) 
market, where unlisted stocks are traded, will begin operations in 
the near future.  A contact at HaSTC told the Embassy that they have 
completed the technical preparations for the new market and are only 
waiting for the government's approval of the trading regulations. 
Currently, Vietnam's unlisted stocks are traded on a gray market via 
internet websites, or face-to-face in coffee shops or restaurants. 
There are no regulations governing this trading.  The formalized OTC 
market is expected to help unlisted companies have their shares 
traded in a more transparent manner, and to help the government 
oversee unlisted share transactions. 
SMEs more cautious about economic outlook 
----------------------------------------- 
 
¶3.  According to the quarterly Asia-Pacific Small Business 
Confidence Survey, conducted by research company TNS, the number of 
Vietnamese small businesses which are still optimistic about the 
domestic economy has declined considerably.  The survey assessed 
Asia Pacific businesses' confidence in their countries' economies. 
It polled approximately 3,000 small and medium enterprises (SMEs) 
operating in Hong Kong, China, Taiwan, Singapore, India, Vietnam, 
South Korea, Malaysia and Indonesia.  In the survey, companies were 
asked about their views on the local economic outlook in the next 
six months and their plans to increase or reduce investment and 
staff.  Sixty- seven  percent of Vietnamese SMEs polled predicted 
that economic growth would continue at the same pace or get better, 
a considerable reduction from the 90 percent figure in  the first 
quarter survey.  About 44 percent of SMEs said they would hire more 
workers compared with 60 percent in the last survey.  Fifty-one 
percent of SMEs, however, plan to increase investment during the 
remainder of the year. 
 
Study predicts IT and electronics sector will slow 
--------------------------------------------- ----- 
 
¶4.  According to a market research conducted by GfK Vietnam, the 
local information and technology (IT) and electronics market will 
reach US$4.07 billion in turnover this year, up 27 percent compared 
to last year.  IT products were estimated to grow by 41 percent, 
household electronics by 34 percent, and telecommunications by 18 
percent.  The study predicted that mobile phones, which accounted 
for 23 percent of the IT and electronics market last year, will lead 
the market for the next several years.  Although estimated growth 
for this year is lower than the 33 percent growth achieved last 
year, consumer goods experts said it was still good given the 
country's overall economic performance.  According to Doan Hong 
Viet, Chairman and President of IT Product Distributor The Gioi So 
(Digital World), the Vietnamese IT market is much smaller than other 
IT markets in Southeast Asia but it is growing at the highest rate. 
Some businesses, however, are concerned for the future of the 
market.  Increased tax and a depreciating dong will make imported 
mobile phones more expensive.  Nguyen Duc Tai, President of The Gioi 
Di Dong (Mobile World) said his company now opens just one new 
outlet every month instead of two to three as earlier expected. 
Others firms are reviewing their sales targets and many have started 
to offer discount plans and reduced prices to attract more 
consumers. 
 
MICHALAK