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» Business Confidence Index decreased 17 points in Quarter I, 2011

Hanoi, 19th April 2011. Today, Vietnam WVB Financial Intelligence Services (WVB Vietnam) with PetroVietnam Finance Investment and Consultancy Company (PVFC Invest) jointly announced the WVB-PVFC Invest Business Confidence Index (BCI) for Quarter I, 2011.

This survey is jointly conducted quarterly by the two companies WVB Vietnam and PVFC Invest. The survey participants are the country’s leading enterprises regarding branding, total assets, total revenue, and a number of employees across various industries in Vietnam. This survey extended from 18th March 2011 to the first week of April 2011 attracted the participation of 333 companies across 11 primary sectors and industries of Vietnam. Over 78% of the survey participants selected also is Small and Medium Enterprises (SMEs) as representatives of Vietnamese SMEs.

According to this survey results, the business confidence index (BCI) in this Quarter of 2011 represents a 17 points decrease over the Fourth Quarter of 2010, which only demonstrates a 9 point rise compared to the first index score in the Third Quarter of 2008.

The index in this Quarter of 2011 decreased 17 points in comparison with the last quarter (Fourth Quarter of 2010). It is the strongest decline since the Business Confidence Index Survey was conducted and the second the index kept going down.

Here are some key results for the 06 subcomponents of the WVB-PVFC Business Confidence Index in Quarter I of 2011:

• Current economic conditions: 25.83% thinks the overall economic conditions has improved in comparison with last year, which decreases -23.1% in comparison with the 4th Quarter of 2010; 45.95% said that current economy conditions have become weak, which increases 32% over the last quarter. Only 28.23% said that current economy conditions remained the same 13.72%.

• Economic outlook: 54.05% expects the overall economic conditions will become better over the next twelve months, corresponding to -21.92% decreases compared to the last quarter; 27.93% thinks that the overall economic conditions will be the same and 18.02% is worried about a dismal economy over the upcoming year, which increases 14.59% compared to Q4_2010.

The responses of the businesses on Vietnam's economic conditions have shown the lack of Vietnamese business’ confidence in the economy now. The strong declines of two above components are the most important factors to confidence index and makes the index goes down -12.7 points in total -17 points decline.

• Expected change in employment: Up to 35.14% of business expects to increase the total number of employees, which decrease -10.78% compared to Q4_2010; 6.31% thinks there will be a cut down the workforce in their companies and 58.56% thinks the number of their company employees will stay the same over the next twelve months.

• Planned fix investment: 50.75 % thinks they will continue to invest more, which decrease -0.32% compared to Q4_2010; 44.44% thinks they will keep the same investment in fixed assets over the next 12 months and 4.08% thinks they will reduce investment in fixed assets over the next 12 months, corresponding to 0.94% increases in comparison with the last quarter.

            Being the same as the 4th Quarter, the businesses continued to maintain the plans of cut down the workforce in their companies and reduced investment in fix assets to cut down costs.           

• Expected revenue growth: 67.87% is confident their company’s sales revenues will increase over the next 12 months, 14.41% thinks their company’s sales will stay the same and 17.72% of enterprises is worried about the decline of their revenues in 12 months. We can see that the highly optimistic rate of 67% but has fallen -0.37% while the proportion of pessimism rose 13.86% compared to Q4/2010. This is the 3rd factor causing this growth strength reduced, making the confidence index goes down by 2 points this quarter in comparison with the previous quarter.

• Expected profit growth: 63.96% of the interviewed businesses believes their profits will increase in the coming years, corresponding -8.56% decrease from the last quarter. 30.03% of enterprises said that their profits will remain unchanged, which increase 6.37% and 6.01% of enterprises is worried about the decline of their profits in the next 12 months, increasing 2.19% compared to 4th Quarter 2010.

Vietnam's economy in 2010 ended with the GDP growth nearly 7%, but the rate of inflation over 11% in parallel with a lot of changes and potential challenges, causing great  impact the view points and development orientation of enterprises.
In this survey, the team survey WVB Vietnam and PVFC Invest also investigated the opinions of the enterprises on the significant issues their companies are facing in Vietnam such as : Factors affect production and business activities of enterprise; The impacts of the dollar's exchange rate rose to business activities of enterprises; The impacts of the increasing prices of essential inputs such as electricity, petroleum, coal to selling prices; Do enterprises have any plan to expand their production this year and what may brings them business confidence in 2011.

The team survey WVB Vietnam and PVFC Invest also find out the opinions of businesses for the impacts of the hot economic issues to the their business confidence in this quarter, namely: The survey results showed that 71.77% said that business activities were affected by exchange rate fluctuations. 45.95% of enterprises said it will raise prices of their products and services due to the impact of a price increase of essential inputs. 43.40% thinks that the operating policy of the State economy is a factor directly affecting the operation of businesses; With the economic development situation last time, 74% believed that businesses is not going to expand their production and business activities this year. The factor influence that’s the most powerful beliefs of the enterprise is the policy of macro-economic stability of the Government. Besides, the business results last year and the situation the world economy are factors contributing to the confidence building business for corporations in 2011.

Survey Result

WVB-PVFCI Business Confidence Index Score - QI/2011:         109
WVB-PVFCI Business Confidence Index Score - QIV/2010:      126
WVB-PVFCI Business Confidence Index Score - QIII/2010:      137
WVB-PVFCI Business Confidence Index Score - QII/2010:       134
WVB-PVFCI Business Confidence Index Score - QI/2010:         138
WVB-PVFCI Business Confidence Index Score - QIV/2009:      135
WVB-PVFCI Business Confidence Index Score - QIII/2009:      136
WVB-PVFCI Business Confidence Index Score - QII/2009:        130
WVB-PVFCI Business Confidence Index Score - QI/2009:           99
WVB-PVFCI Business Confidence Index Score - QIV/2008:        93
WVB-PVFCI Business Confidence Index Score - QII/2008:        100

Component Score

Respondent breakdown by Sector/Industry

About World Vest Base:
Established in 1985 in Chicago, USA, World'Vest Base (WVB) has becomes the world’s leading global provider of financial fundamentals serving the research and analytic needs of thousands of top companies in the financial services, media and corporate markets. The WVB global database is the financial industry’s premier source of detailed and transparent financial statement data on public companies. The database universe spans over 50,000 public companies over 130 countries from Asia, Africa, Australia, Europe, Latin America and North America. WVB Regional databases also cover hundreds of thousands of private companies in Thailand, Vietnam, Laos, Cambodia, Malaysia and Egypt. WVB also provides databases with Insider & Major Shareholders Transactions, specialized End-of-Day pricing for emerging markets and worldwide credit risk and business risk scoring.
Further information can be reached at the company’s official website: http://www.wvb.com

About PVFC Invest
PetroVietnam Finance Investment and Consultancy Company (PVFC Invest) is the subsidiary of PetroVietnam Finance Company (PVFC). Our main investment priority fields are oil and gas industry, energy, high-end tourism, real – estate, manufacturing... Besides, PVFC Invest’s professional consulting services includes: financial advisory, investment advisory, merge and acquisition. PVFC Invest is proud of 100 employees who obtain in-depth experience, full-understanding about financial market and management from working for domestic and international financial organizations or graduated from privilege universities in Viet Nam and abroad. At present, The Company has more than 500 customers spreading all over the country.
For further information, please visit website: http://www.pvfcinvest.vn

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Ms. Dao Phuong Thao                                           Ms. Tran Thi Thu Hien
WVB FISL                                                           PVFC Invest
                                               
   
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