Vietnam - sure Bets in gold
03-02-2008 newspaperThe activity is in rise in the bag of the gold of Saigon, located in a lugubrious quarter of the city of Ho Chi Minh, while the Vietnamese investors bet him on the gold in the middle of a convulsed stock market, what has increased the worry on the inflation and the currencies.
Although the Vietnamese historically have invested in physical gold, buying ingots and even acquiring housings with gold, they now are hoping that the future of the metal should be a cheaper way of negotiating in a beautiful mineral considered a sure bet in uncertain times.
The professional operator Truong, who asked to be identified only by his name because he wanted to preserve the low profile, trades golden futures for a value for 200.000 daily dollars in the bag, a small room where the clients crowd together concerning a 14 inches flat screen that shows the orders of buy and sale and the international prices of the metal, oil and silver.
“The negotiation in solid gold is highly risky these days because it needs of a big investment, but more and more investors are going on to the operation of futures of the metal in the stock exchange,” he explained.
The futures in gold provide a major liquidity that the actions and they are more attractive than the physical gold because the only one has to pay deposits of 7 %, what reduces the capital need, ”Truong added.
The bag, which is administered by the Commercial Bank of Asia, is the only golden square in this country of the Asian Southeast of communist government. Inaugurated in May, 2007, his daily deals divide equally the 90.000 to 100.000 ingots, by a value for 100 million dollars.
Although the jewelry shop buys in gold in Vietnam have fallen down 30 % last year, it has raised the buy of golden ingots, which in times of economic suspense are stored like the best protection.
And there is much of that at present current in Vietnam. In December, the inflation reached two digits with 12,6 %, much higher than other economies of the Asian Southeast. The stock market is weakening and it is very probable that dong raises this year due to the weak American dollar.
“For the poor workpeople, the gold is still the best protection from the fall of the value of the currencies,” there said the contractor of the construction Nguyen Van Thang, a metal buyer. “For the first time my workers asked me to pay to them in the equivalent in gold.”
On the international markets, the speculators and investors acquired the metal as a coverage against the fall of the dollar and the record prices of the crude oil.
AMBIGUOUS FEELING
The investors in some countries undressed his investments in gold when the metal reached record prices at the beginning of January, but the feeling is much more ambiguous in Vietnam, where some analysts predict that the golden ounce will come to 1.000 dollars in 2008.
The operators mention to the biggest investment in gold and in real property like the reasons for the fall of the stock exchange of Ho Chi Minh, which in the last two years has been between those of more rapid growth in Asia.
In what it goes of 2008 it has fallen down 12 % after raising 23 % in the whole 2007.
In the middle of January, when the international prices of the metal were coming to his roof, Saigon Jewellery Corp, a signature of commerce, he said to have sold 15.000 ingots of massive gold a day, or one 15 millions of dollars in gold. It had four times more buying than selling.
Compared with that of India and that of Thailand, the market of Vietnam is small. The Vietnamese consumers bought only 86 tons of gold in 2006, last year of the one that numbers arrange to themselves.
But big part of these golden procurement was for investments in ingots, doing that Vietnam is the second biggest golden buyer in Asia for investments, instead of jewels.
With the rise of the income of a new middle class product of the rapid expansion, one hopes that the golden consumption should grow of 7 to 8 % a year, as say the operators of the metal.
Approximately 95 % of the gold of Vietnam is imported from Hong Kong, Singapore, Japan and Switzerland.
“The investment in golden bars is more popular (that the jewelry shop) because any persons do not seem to entrust the sufficient thing in the banks so that they use the gold to store his wealth,” there said Ludo Drijbooms, president of Discovery Diamond Ltd.
03-02-2008 Reuters
