S Korean banks to expand in VN
HÀ NỘI - In addition to the wave of investments in the banking and finance sector from financial institutions in Japan, UK, Hong Kong, Singapore, Malaysia and the US, there will be a marked presence of South Korean banks in the Vietnamese market in the near future, observers forecast.
The observers, who declined to be named, told Trí thức trẻ (Young Intellectual) online newspaper that there could be big deals involving South Korean companies in the future, following a series of co-operation agreements between South Korean and Vietnamese financial institutions recently.
In the middle of July, a major South Korean bank, Daegu, announced that a comprehensive co-operation agreement had been signed with Việt Nam’s Orient Commercial Joint Stock Bank (OCB).
Nguyễn Đình Tùng, general director of OCB, said Daegu would support OCB in various areas, such as international money transfer, product development, SME services, training exchange programmes on risk management, information technology, and product development in South Korea.
Daegu Bank has pledged to provide the best companion programmes to facilitate OCB’s growth among the South Korean business community in Việt Nam, and to share its experience so that OCB will eventually hold a 50 per cent market share in SME services in the country.
In South Korea, Daegu holds over 50 per cent of the market share in the loans to local small- and medium-sized enterprises (SMEs) area.
In mid-April, Korea Development Bank (KDB) marked its presence in Việt Nam through a comprehensive co-operation agreement with Commercial Joint Stock Bank for Investment and Development of Việt Nam (BIDV).
KDB is the top bank in South Korea in terms of total assets and equity, and ranks 94th in the world. It has a presence in 22 countries.
With the State holding around 95 per cent of its charter capital, BIDV, which tops Việt Nam’s commercial banks in total assets, has most room for foreign investors among Việt Nam’s privatised banks, of up to 30 per cent.
Ever since BIDV’s shares were listed on the stock market in 2014, its leaders have repeatedly stated that the bank is looking for foreign strategic partners, and could sell 25 to 30 per cent of its stake. With the co-operation, there is a possibility that the Korean partner may become one of BIDV’s strategic shareholders.
Besides co-operation agreements, financial institutions from South Korea have also been taking more direct, stronger steps into the Vietnamese financial market.
Take the case of Shinhan Bank, which received a licence and became one of the first five banks with 100 per cent foreign capital in Việt Nam in 2008.
In April this year, Shinhan surpassed its four rivals to acquire the lucrative retail segment of ANZ Vietnam.
Previously, after acquiring a 50 per cent stake in Shinhan Vina (a joint venture between the Commercial Joint Stock Bank for Foreign Trade of Việt Nam or Vietcombank and Shinhan Bank with 50 per cent stake for both), the bank was renamed Shinhan Bank Vietnam in 2011.
ANZ’s retail segment serves around 125,000 individual customers in Việt Nam and A$320 million in outstanding loans. The handover is underway and expected to be completed before the end of 2017, sources revealed.
In November last year, the largest lender by assets in the Republic of Korea Woori Bank also officially set up a wholly foreign-owned bank in Việt Nam. The bank’s representatives said that Woori Bank would boost its retail business and target becoming the top foreign credit bank in the Vietnamese market.
With the advantage of established trade relations, Việt Nam’s untapped potential and global integration goals will make it an ideal destination for South Korean banks. So Vietnamese banks, though they have been receiving investments, should be well-prepared to compete, if they want to survive and grow.
While Vietnamese banks are still struggling to lend to FDI firms and have seen very modest results in the area, foreign banks, especially South Korean ones, are showing much stronger initiative in not only providing loans to local enterprises but also to Việt Nam’s huge projects.
Most recently, South Korea’s Keximbank expressed interest in investing in several metro lines in HCM City and received enthusiastic support from the transport sector. Minister of Transport Trương Quang Nghĩa has encouraged Keximbank to invest not only in the metro lines in HCM City, but also in metro projects in Hà Nội. In particular, Nghĩa hopes Keximbank will fund three other transport projects of Tân Vạn-Nhơn Trạch, Lộ Tẻ-Rạch Sỏi and Mỹ Thuận 2 bridge. - VNS
Thứ Tư, 26 tháng 7, 2017
Electronic toll collection to begin in south
HÀ NỘI - Four more toll stations in the southern region will be equipped with electronic toll collection (ETC) systems in the next two months.
An ETC station on the stretch of National Route 1 going through the central province of Quảng Bình. - VNA/VNS Photo Việt Hùng
Experts deny worries over trade deficit towards ROK
Some experts have raised concerns over the Republic of Korea (ROK) surpassing China in trade deficit, to become Vietnam’s biggest import market, however, others claimed these worries unfounded and considered it normal as Vietnam is integrating into the world economy.
Origins of trade deficit towards the ROK
Since April 2017, the ROK has taken over China to become Vietnam’s biggest import market with US$9.3 billion of trade deficit for the first four months of 2017, slightly larger than China in this period.
For the first half of 2017, Vietnam’s trade deficit towards the ROK totalled US$16 billion, while it was US$14.1 billion towards China.
Many think that the leading position of the ROK derives from the huge import volumes of Samsung and LG manufacturing facilities in Vietnam.
In a quarterly meeting, a representative of the Ministry of Industry and Trade (MoIT) confirmed that Vietnam’s huge trade deficit towards the ROK was related to big South Korean enterprises in Vietnam, such as Samsung and LG.
“Samsung and LG’s local factories have imported a large number of machinery, equipment, and materials for their manufacturing activities, leading to the growth of Vietnam’s trade deficit towards South Korea,” the representative said.
Vietnam has been importing from the ROK for a long time, but the import volume has significantly increased since 2008, when Samsung made its first large-scale investment in the country, which resulted in an investment wave from the ROK. Currently, Samsung has invested more than US$17 billion in Vietnam and LG over US$5 billion.
From early 2017, Samsung Display Vietnam and LG Display Vietnam’s expansion projects have raised the number of imports from the ROK. In addition, according to MoIT, as the Vietnam-South Korea Free Trade Agreement (VKFTA) became effective, duties imposed on components and materials imported from the ROK dropped to zero, while duties on Chinese imports remained, meaning the increase in imports from South Korea is normal.
No concerns over rising trade deficit towards the ROK
There have been some concerns over the rising trade deficit towards the ROK, but Tran Thanh Hai, deputy director of MoIT's Import-Export Department insisted that this rising trade deficit was normal.
The reason is that in the first half of 2017, big South Korean enterprises in Vietnam largely imported machinery and equipment. Besides, the increasing imports of oil and gasoline and textile materials from the ROK were also contributing factors.
According to Dr Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research, Vietnam’s trade deficits towards China and the ROK are very different. Imports from China are consumer goods, while those from the ROK are materials, machinery, and equipment used for manufacturing.
Thus, increasing trade deficit towards South Korea is normal and it should not be much of a worry.
An economist told VIR that as Vietnam is more and more deeply integrated into the world economy, economic performance should be assessed in the global context.
“We have a trade deficit of US$16 billion towards the ROK, but we have trade surplus towards other countries,” he said.
The economist took the example of Samsung which may import a lot of materials and components from the ROK to manufacture mobile devices, but exports the finished products all over the world, not only to the ROK.
According to statistics of the General Department of Vietnam Customs, in the first half of 2017, Vietnam exported over US$1.7 billion of mobile phones and components to the ROK, while the amount of such exports to the US was worth more than US$2 billion.
Moreover, the amount of mobile phones and components to the United Arab Emirates was US$1.9 billion, to the UK more than US$861 million, to Brazil US$408 million, to India more than US$240 million, and to Germany US$860 million.
Samsung has increased Vietnam’s trade deficit towards the ROK, but at the same time, it contributed more than US$40 billion to Vietnam’s export turnover last year. This year, this amount may rise up to US$50 billion.
In addition, as the localisation rate of Samsung Electronics Vietnam in the northern province of Bac Ninh and Samsung Electronics Vietnam Thai Nguyen in the northern province of Thai Nguyen has increased to 57%, the added value that Samsung has brought to Vietnam is considerable.
Similarly, LG and other South Korean enterprises in Vietnam may import a large number of materials, machinery, and equipment from the ROK, but they also export to many other countries.
Heavy dependence on a single market is not good, but to accurately assess Vietnam’s trade deficit towards the ROK, the matter should be considered in the global context.
Vietnam may relax rules to assist foreign flyers who lose passports
Tourists are seen arriving at Tan Son Nhat International Airport in Ho Chi Minh City.
The administration of the south-central province of Khanh Hoa, a popular destination for international tourists thanks to its beachside city of Nha Trang, has suggested allowing foreigners to fly domestically even if they have lost their passports in Vietnam.
All they have to do is apply for a confirmation letter from local police and use that document to complete check-in procedures, according to a proposal sent to the Ministry of Transport and the Civil Aviation Authority of Vietnam.
At present, visitors who lose their passports must physically go to the consular agency of their countries, normally in Hanoi, Ho Chi Minh City or Da Nang.
In some cases, tourists will have to travel by air to reach these cities, while current regulations stipulate that they must have the original copies of their passports to check-in.
The Khanh Hoa administration said its proposal would save tourists this inconvenience.
The CAAV has shown its support for the proposal in a document sent to its superior body, the transport ministry, which will give the final conclusion.
TUOI TRE NEWS
BUSINESS IN BRIEF 26/7
Japan-invested firm opens 42 mln-USD factory in Binh Duong
The Japanese-invested TPR Vietnam Co. Ltd on July 21 put into operation a factory producing gaskets, electric mattress pads and plastic products for daily use in the southern province of Binh Duong.
The plant, based at the Vietnam-Singapore Industrial Park 2 in Tan Uyen township, was built at a cost of more than 42 million USD.
Kishi Masanobu, General Director of Japan’s TPR Group, said his firm highly values Binh Duong authorities’ attention to creating a favourable investment climate. It decided to expand investment here by opening the fifth factory in Binh Duong.
The new factory manufactures about 120,000 electric mattress pads and 30,000 plastic products each month, along with some other products.
Chairman of the Binh Duong People’s Committee Tran Thanh Liem promised continuous efforts to improve the investment environment and upgrade local infrastructure to better serve investment demand and economic development.
Earlier, TPR Vietnam, set up in 2006 in Binh Duong, invested in four automobile component factories at different industrial parks in the province.
Binh Duong attracted more than 1.72 billion USD of foreign investment in the first six months of 2017. It has so far housed 2,946 foreign invested projects worth over 27.4 billion USD, ranking second in Vietnam in foreign investment attraction after Ho Chi Minh City.
Vietnam aquatic, Tra fish festival scheduled for October
A Vietnamese aquatic products and Tra fish festival will run October 6-8 at the Vietnam Trade Promotion Centre for Agriculture on Hoang Quoc Viet Street, Cau Giay District, Hanoi.
Aiming to promote Tra fish in northern Viet Nam and foreign markets, especially China, the event, held by the Ministry of Agriculture and Rural Development, will showcase Tra fish, Tra fish-based products and other Vietnamese aquatic goods at 100 booths.
It is hoped to offer businesses opportunities to broaden their networks with producers, supermarkets, domestic and overseas customers while helping Tra fish become a high value product.
The event will also include workshops on Tra fish production and consumption and Tra fish-based dishes.
In the first half of this year, Vietnam’s fishery output reached 1.6 million tonnes, up 4.8 percent against the same period last year and fulfilling 54.8 percent of the yearly target.
Tra fish output hit 583,503 tonnes, equivalent to the number recorded in the same period last year and 50.7 percent of the target set for the whole year.
During the reviewed time, aquatic products worth 3.5 billion USD have been shipped abroad since the beginning of this year, predominantly to the US, Japan, China and the RoK, marking a 14.1 percent rise.
Particularly, in Japan, Vietnam’s tra fish sold at Aeon supermarkets is listed among “TopValu” products which are goods with leading quality.
Vietnam reaching a heady high in the global beer business
With the Vietnamese thirst for beer seeming to know no limits, brewers are finding it hard to resist tapping into the country's potential market.
Vietnam is forecast to lead Southeast Asia to see volume growth of 2.3 billion liters over 2016-2021, market researcher Euromonitor International said in its July report.
Southeast Asia’s volume gains will even surpass those of larger regions, such as North America, Europe, the Middle East and Africa, the report said.
An expanding Vietnamese middle class and youthful population have helped drive a 300% surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth VND147.2 trillion (US$6.5 billion) last year.
It predicts per-capita consumption will reach 40.6 liters this year, making Vietnam the biggest beer consumer in Southeast Asia.
Vietnam will be “the next key battleground for brewers”, Bloomberg cited Euromonitor as saying in a report.
Saigon Beer Alcohol Beverage Corp. (Sabeco) and Hanoi Beer Alcohol Beverage Corp. (Habeco), the nation’s two largest beer companies, will submit IPO plans to the government this month, an official from the industry and trade ministry told local media last week.
“The stake-sales will create an opportunity for international companies to expand geographically, especially those still without a presence in Vietnam,” John Ditty, managing partner of KPMG Vietnam’s deals advisory unit, told Bloomberg.
A study jointly conducted by Vietnam's health ministry and the World Health Organization (WHO) last year showed that 77% of Vietnamese men drink liquor and beer, and nearly half of them drink at hazardous levels.
Nguyen Phuong Nam, an official from the WHO, said nearly 67% of the 1,840 traffic accident patients involved in the study had high concentrations of alcohol in their blood, and 45% had driven after drinking for two hours or more.
Vietnamese drank 3.8 billion liters of beer last year. That was an average of 42 liters per person, four liters more than 2015, according to data collected by the trade ministry.
Private-label products hold high potential
The development of private-label products, also known as “phantom brands” that are made by a manufacturer and sold under a retailer’s brand name, is considered an irresistible trend despite a small proportion in Vietnamese retail market.
A research by Kantar Worldpanel Vietnam shows that private-label products account for only 0.6% of total commodities at supermarkets in Vietnam compared to 50% in France, said Nguyen Huy Hoang, commercial director of the company.
However, the domestic rate is not too low compared to that in other Asian countries with 1.2% on average. The Republic of Korea and Malaysia are among countries with high rates of 2.7% and 2.2% respectively while the Philippines, Indonesia and China have a very low rate of 0.2%.
Hoang attributed the low rate of private-label products in Vietnam to the limited number of modern distribution channels, currently accounting for only 13%.
The research by Kantar Worldpanel also reveals that 38% of Vietnamese consumers choose private-label products due to the strong confidence in retailers.
Some common products are detergents and toilet paper while packaged food, milk and beverage products do not sell well.
According to Kantar Worldpanel, Vietnamese enterprises should attend to private-label goods and develop their own brands in the context of strong competition.
Cao Tien Vi, general director of Saigon Paper Corporation, told the Daily that the company accepts to manufacture products under supermarkets’ brands to fully utilize the company’s production lines, equipment and manpower, thereby earning more revenue.
Manufacturers need to invest in attractive packaging with limited cost and create new products as Vinamit, Saigon Food, VinaCacao and Lix have implemented successfully.
Retailers prefer medium and small manufacturers as a way to help these manufacturers get more experience in designing packaging, meeting customers’ demand and boosting production.
Many retailers not only provide products of domestic manufacturers but also cooperate with foreign enterprises to offer more private-label commodities.
Meanwhile, many foreign retailers such as Lotte Mart and MM Mega Market have had private-label products manufactured by enterprises in Vietnam for export to other markets.
Multinationals view ASEAN with renewed optimism
A growing middle-income class, increasing regional integration in tandem with solid economic growth over the past few years are some of the reasons multinationals are viewing ASEAN with a renewed sense of optimism, said the Business Times.
The Deloitte Global Manufacturing Competitiveness Index for 2016, the Business Times said, noted that by 2020 – Malaysia, Indonesia, Thailand, India and Vietnam – could quite possibly rank among the top 15 manufacturing countries in the globe.
Manufacturing labour costs in Indonesia, according to Deloitte, currently run about one-fifth of those in China, while in Vietnam and India they are about half the level of the most populous nation in Asia.
The five Southeast Asian countries have a few distinct longer term competitive advantages over China, Deloitte said, such as better prospects for a continued growing younger workforce over the next three decades.
In addition, a Regional Comprehensive Economic Partnership currently under negotiation among ASEAN and India, China, Australia, the Republic of Korea, Japan and New Zealand holds great promise for higher levels of commercial and services trade for the Southeast Asian regional bloc.
Executives of leading multinationals are also taking a long hard look at these same five countries, especially Vietnam, as alternative manufacturing bases, said the Business Times, based on its review of interviews published in Voice of Asia.
The executives cited by the Business Times all stated they were currently operating in ASEAN and were sanguine on continued prospects for their companies to prosper in terms of sales and earnings within ASEAN, especially expressing optimism with respect to Vietnam.
The list of executives included those from Borden Company (PTE) Limited, which has been successfully selling its green Eagle Brand medicated oil produced in Vietnam since the 1960s.
Similarly, Singapore-listed Darco Water Technologies said it is bullish on Southeast Asia, and Vietnam, even as it expands in China through a recent acquisition. The ASEAN market for environment solutions, whether water or waste, is very big, said CEO Thye Kim Meng.
Real estate firms are also eyeing opportunities in Vietnam and other ASEAN markets, said the Business Times. Real estate broker Huttons was one of the first agencies in Singapore to expand into the Vietnamese and Cambodian markets.
Wealth management and real estate services company ZACD Group, meanwhile, noted that the governments in ASEAN have started to liberalize their real estate markets in recent years.
In 2015, new laws opened the Vietnamese real estate market to expatriates. Restrictions on foreign investors in the region would continue to ease and most likely cause investments to rise, said ZACD Group chair Kain Sim.
Lastly, the Business Times cites Surbana Jurong, a Singaporean government-owned consultancy company focusing on infrastructure and urban development. It was formed in June 2015 with the merger of Surbana International Consultants and Jurong International Holdings.
Surbana Jurong is proposing an integrated resort in Vietnam and building hydro-electric dams in Malaysia, which have benefited tremendously by the formation of ASEAN and the consequent lowering of tariff and elimination of other barriers to market entry.
Our smart sustainable city initiatives have given us first mover advantage in addressing the ASEAN region’s growing urbanization, said Jeffrey Cheah, founder and chair of Surbana Jurong.
Da Nang determined to build startup city
The central city of Da Nang is determined to a build startup destination for innovation and creativity, said Secretary of the municipal Party Committee Nguyen Xuan Anh.
Anh made the statement at the Da Nang Start-up Conference and Exhibition themed “Startup Technology and Ecosystem” on July 21, attracting more than 400 young entrepreneurs and startups from 27 countries and territories worldwide.
In order to achieve the goal of becoming a startup destination in ASEAN under a project on developing a startup ecosystem until 2020 with orientations to 2030, Da Nang is set to develop startup culture, raise young generations’ awareness of startups, continue refining relevant mechanisms and policies, develop startup network and expand cooperation to attract resources at home and abroad for the effort, he said.
Vo Duy Khuong, Chairman of the Da Nang Startup Council, said the council will work with schools, universities and colleges to add startup into their curricula and urge the municipal authorities to launch a startup fund which helps startups access capital from domestic and foreign investment funds, financial and credit organisations.
At the same time, conferences and exhibitions to share experience and introduce products to domestic and foreign markets will continue to be held.
As part of the event, 10 most outstanding startups will enter the final round of the Pitching Competition to vie for awards worth VND200 million, and an exchange with tourism billionair Jeff Hoffman will also be organised.
The event was co-hosted by the Da Nang Startup Council and the municipal business incubator.
Vietnam beats France to crack China's top 10 travel destinations
Vietnam has become the 10th most popular destination among Chinese tourists, according to new statistics.
Figures from CLSA, a Hong Kong brokerage and investment firm formally known as Credit Lyonnais Securities Asia, showed Vietnam has overtaken France to enter the top 10, which is led by Hong Kong, Thailand and the Republic of Korea.
The survey polled more than 400 Chinese travelers across 25 cities with an average age of 35 and a monthly income of 20,000 yuan (US$2,900).
Safety remains the prime concern for mainland travelers, followed by cost and sightseeing opportunities.
A series of terror attacks last year in Europe had deterred Chinese travelers, it said, as cited by the South China Morning Post.
Last May, a MarketWatch report, citing data from American Express, also showed that summer bookings to Europe’s top destinations, notably France and Turkey, had been hurt by the attacks.
China has always been Vietnam's main source of tourists, and their numbers increased by 57% on-year in the first six months of 2017, reaching nearly 1.9 million and accounting for 30% of all foreign arrivals.
Last year, Vietnam welcomed around 2.7 million Chinese tourists, a jump of 51% from the year before.
Vietnamese media said Chinese visitors have been encouraged by a new policy that allows groups of travelers to visit the border province of Quang Ninh, home to the popular Ha Long Bay, for up to three days without a visa.
CLSA reported that 135 million Chinese people traveled abroad last year, and with 200 million Chinese tourists expected to make outbound trips in 2020, Vietnam is set to become even more popular.
A Bloomberg report last December said Chinese tourists could have a big impact on Vietnam’s economy. It said a 30% increase in spending by Chinese tourists would boost Vietnam’s economic growth by nearly 1 percentage point. For Thailand, that would be around 1.6 points.
“Chinese tourism is pretty big for ASEAN now, and all the countries rely on Chinese visitors to keep coming and keep spending,” Edward Lee, an economist with Standard Chartered Plc in Singapore, was quoted as saying in the report.
PVN exports 355 million tonnes of crude oil in 30 years
The Vietnam National Oil and Gas Group (PVN) has exported 355 million tonnes of crude oil, worth US$145 billion, since the shipment of its first barrel from Bach Ho field in April 1987.
The PVN today not only ships crude oil abroad but also supplies oil for Dung Quat Refinery in central Quang Ngai province.
The firm has extracted 7.48 million tonnes of crude oil, both locally and overseas, in the first half of 2017, bringing home US$3.17 billion.
Of the amount, 3.04 million tonnes has been provided to Dung Quat Refinery, exceeding the plant’s designed capacity.
According to the state-run group, a barrel of crude oil earns Vietnam US$54.4 on average during the period, higher than the expected rate of US$50 and global prices.
Crude oil prices are projected to hover around US$46 – 50 per barrel in the remaining months of this year, lowering the entire year’s average to about US$50 per barrel.
Saigon Plant Protection company opens branch in Myanmar
The Ho Chi Minh City-based Saigon Plant Protection JSC (SPC) has recently opened a representative office in Myanmar, after obtaining a local licence earlier this year.
Currently, 20 SPC products can be used on paddy fields, vegetables and fruit trees in Myanmar.
In the past 15 years, the SPC has worked with Myanmar companies to introduce its products, including pesticides, farming equipment and rice and vegetable seeds, in the country.
The company also worked with the Myanmar Government to present new cultivation methods for dragon fruit, mango and longan.
In 2005, the SPC established branches, then subsidiaries, in Cambodia and Laos.
To date, its annual export revenue is estimated at US$10 million.
Selling price of social housing may rise
Social housing is expected to get more expensive soon as investors have not received preferential interest rates for loans, experts have said.
The Ministry of Construction has allowed investors to factor in the normal interest rate of loans into selling prices, which may cause prices to exceed those of commercial housing projects, reported Tien phong (Vanguard) newspaper.
According to regulations on social housing policies issued in 2011, enterprises that develop social housing projects are exempt from land use tax and enjoy preferential interest rates for loans for the projects.
Then in 2013, the State provided a credit package of VND30 trillion (US$1.32 billion) to loan 70 per cent of credit for apartment buyers and 30 per cent for investors of the projects at low interest rates, the moves which stimulated the social housing market..
With those policies, social housing projects were sold at VND10 million per sq.m.
After the package ended on June 30, 2016, the Government announced a policy of preferential interest rates for investors of social housing projects.
Under this policy, enterprises can take State loans from the Social Policy Bank or credit organisations designated by the State. However, this policy has yet to be implemented.
Therefore, Binh Tan Consumer Goods Production Co, Ltd has asked the Ministry of Construction for support as the company has borrowed capital from banks at interest rates of 6.9 per cent for the first year and 9-10 per cent per year from the second year to complete its social housing projects after the VND30 trillion package ended.
With the high interest rate, the company could not continue developing the project and sell apartments at low prices.
However, the ministry replied that investors who used commercial loans could factor the high interest rate into the selling and rental price of apartments.
Thus, apartments in social housing projects can now be sold at commercial prices, leading to prices in projects like Tam Trinh and Rice City Song Hong in Ha Noi to increase to more than VND15 million per sq.m.
Nguyen Chi Dung, deputy director of Ha Noi Construction Department, said there is no ceiling price for social housing apartments, though legally investor’s profits from a social housing project can not exceed 10 per cent of total investment in the project.
However, social housing projects have enjoyed many incentives so the selling price has often been lower than in commercial housing projects with similar levels of investment, Dung said.
Investors of social housing projects have proposed ceiling prices for the projects and are waiting on approval from city authorities, he said.
Tran Ngoc Hung, chairman of the Viet Nam Construction Association, said the State should encourage enterprises to build cheap, small apartments without tax incentives, and instead convert tax revenue paid by investors in the projects to a fund for poor buyers. The State can then offer loans from the fund at low interest rates, even zero interest in the first year and 1-2 per cent from the second year.
The State should let enterprises compete according to market rules, Hung said. All tax revenue paid by investors’ projects should be converted into loans for buyers that need social housing instead of being used to support firms that build the houses.
According to a Ministry of Construction report, the Ministry of Planning and Investment is building a plan to allocate funds from the Bank for Social Policies to provide loans for buying social houses.
Meanwhile, the Construction Ministry has asked the bank to create favourable conditions for low-income people and labourers in industrial zones to take loans as soon as possible.
VN property market looks to up transparency
The Vietnamese property market must improve market information transparency to attract investment and develop sustainability, experts said.
Although there are currently many sources for market information--real estate associations, property services firms such Savills, CBRE, JLL and Cushman Wakefield as well as the Ministry of Construction--the information is rarely consistent among market research firms.
In addition, the construction ministry has failed to provide regular market updates and transform the real estate market and housing information system into a reliable source.
Ultimately, experts say that real estate market information of Viet Nam still lacks accuracy and reliability.
Economist Le Ba Chi Nhan said that property market supply and demand information remains very confusing. Consultant firms provide their own sales figures every quarter, but the figures largely differ.
For example, Savills Viet Nam’s report revealed that nearly 11,600 apartments were sold in the second quarter in HCM City, touching a six-year high. The CBRE Viet Nam figure was 9,522.
Savills forecasted that mid-end segment would dominant the supply in the future, while CBRE said high-end segment would improve the second half of this year, and JLL said low-priced housing would lead the market.
Nhan said that these figures were mainly not verified by any independent organisations. Thus, they lacked reliability.
Dang Hung Vo said that market information must be provided adequately to prevent misunderstanding.
For instance, Ha Noi and HCM City recently announced projects at banks, but the announcements failed to mention details and caused confusions and misunderstandings.
Market transparency requires that information be regularly updated, accessed easily and equally, Vo said.
Le Hoang Chau, President of HCM City Real Estate Association, said the Law on Real Estate Business does not specify which organsations and companies can provide market reports. This means anyone can provide their own figures. Of course, each has their own statistical method.
Chau said the construction ministry must develop a market information system, which would provide regular updates about transactions, mortgaged projects as well as planning and policies as a reliable source to ensure market development on the right track.
However, a ministry representative said that real estate price index is just being developed, and it will take time to complete the database.
In 2016, the JLL global real estate transparency index ranked Viet Nam 68 among 109 countries, indicating that Vietnamese property market has low transparency due to difficult access to planning information and the lack of market database.
TAC announces 34% rise in profits in Q2
Tuong An Vegetable Oil Joint Stock Company has reported a 34.2 per cent year-on-year jump in profit before tax in the second quarter to VND63 billion (US$2.7 million).
Net sales grew by 4.7 per cent. The gross profit margin increased from 9.1 per cent to 10.9 per cent.
The company attributed the increase in profitability to a change in its product strategy to focus on higher margin products. It said it would be launching new oil products that are nutritious and healthy in the second half of 2017 to cater the ongoing increase in demand and consumers’ expectations.
The company also plans to introduce new packaged products this quarter as part of its larger strategy to increase utilisation of its distribution network.
SSI reports robust performance in 2nd quarter
Saigon Securities Inc. (SSI) reported pre-tax profits of VND402.3 billion (US$17.7 million) on revenues of VND762.1 billion (US$33.57 million) in the second quarter of the year, up 9.5 per cent and 10.3 per cent year-on-year.
Securities services and principal investment continued to be the biggest contributors to its revenues, with the latter accounting for VND328.5 billion.
Revenues from brokerage services doubled to VND185.9 billion and from securities services were up 52 per cent at VND316.1 billion.
SSI retained its leading position on both the HCM City and Hà Nội exchanges with a 15.35 per cent and 13.67 per cent market share.
Following its solid performance in the first half of the year -- revenues topped VND1.31 trillion ($57.79 million) and profit before tax was estimated at VND735 billion, or 69.5 per cent of the full-year target -- the company is confident of achieving its 2017 business plans.
VEIL inducted into FTSE 250 Index
The Vietnam Enterprise Investments Limited (VEIL) announced it has been inducted into the FTSE 250 Index under the London Stock Exchange (LSE).
"We are extremely pleased to be the first Vietnamese focused investment company to warrant inclusion into the FTSE 250,” Dominic Scriven, executive chairman of Dragon Capital, said in a statement.
“Since moving on to the London Stock Exchange in July 2016, VEIL has gone from strength to strength, benefitting from the strong underlying economic fundamentals of the Vietnamese economy and a highly rigorous investment approach,” he said.
“VEIL’s inclusion in the FTSE 250 should help build on the progress we have made to narrow VEIL’s discount to NAV as a higher profile investment company."
FTSE 250 Index includes 250 stocks that are traded on the LSE with total market capitalisation of 385.52 billion pounds (US$501 billion).
The decision on VEIL’s inclusion in the FTSE 250 Index came into effect on July 18. On July 5, 2016, VEIL was admitted to the LSE – a step that was expected to raise trading liquidity and transparency for the fund certificates.
Launched in 1995, VEIL is a closed-ended, focusing on Viet Nam’s listed and pre-IPO companies in the country that offer attractive growth and value metrics and strong corporate governance.
The fund started with initial value of $12 million. According to the latest announcement, at close of business on July 17, VEIL’s unaudited net asset value reached $1.2 billion, or $5.49 per share.
The top 10 Vietnamese firms in VEIL’s portfolio included dairy producer Vinamilk, phone and accessory distributor Mobile World Corporation (MWG), information-technology FPT Corporation and steel producer Hoa Phat Group, as well as aviation company Vietjet Air and PetroVietnam Gas Corporation.
The value of investment in Vinamilk occupies 12.5 per cent of VEIL’s net asset value, followed by MWG (7.62 per cent), Military Bank (6.9 per cent) and Asia Commercial Bank (5.87 per cent). Total investment in the top 10 Vietnamese companies is equal to 58.6 per cent of the fund’s net asset value.
Mercedes-Benz H1 sales in VN grow by 60%
Mercedes-Benz Vietnam (MBV) reported year-on-year growth of more than 60 per cent in automobile sales during the first half of 2017, its best performance in its 22 years in Viet Nam.
The firm sold a total of 2,900 cars during the period in spite of market fluctuation.
While many automakers are cutting prices of both affordable and luxury models sold in Viet Nam to boost demand, MBV still enjoyed high sales even with its prices ranging from VND1.34-14.45 billion.
The brand also appeared to not be much affected by the upcoming elimination of Viet Nam’s import tariff on ASEAN-made vehicles in early 2018 following the ASEAN Trade in Goods Agreement (ATIGA).
According to MBV, since the beginning of this year, the company has received over 100 orders for luxury model Mercedes-Maybach, with half of them delivered. The new-generation E-Class also saw good sales, with more than 600 units sold since its debut in late 2016.
HCM City: retail sales, services revenue up 10.2% in H1
Ho Chi Minh City’s total retail sales and services revenue are expected to hit nearly VND450 trillion (US$19.8 billion) in the first half of 2017, up 10.2% from the same period last year.
According to Nguyen Phuong Dong, deputy head of the municipal Department of Industry and Trade, of the total, revenue from retail is estimated at VND291 trillion (US$12.8 billion), 64.7% of the total and up 12.1% year-on-year.
During January-June, the Department carried out measures to stabilise the market and connect businesses and banks, while implementing projects to establish an aromatic and chemical business centre, develop the logistics and support industry sector and help enterprises tackle difficulties.
From now until the end of this year, the department will continue measures supporting enterprises, hold a second meeting for municipal leaders and enterprises and complete industry and support industry data to help connect production businesses with distributors, Dong stated.
The department will also speed up the implementation of the supply-demand linkage programme and the “Vietnamese people prioritise using made-in-Vietnam products” campaign, and intensify promotion activities inside and outside the country.
The trading of counterfeit and low-quality products will also be punished strictly, he added.
Workshop promotes sustainable rubber planting
A workshop to promote sustainable rubber forests was jointly organised by the Vietnam Rubber Association (VRA) and the Worldwide Fund for Nature (WWF) in HCM City on July 24.
Vo Hoang An, VRA Vice President, highlighted the fast development of the rubber sector, with rubber forests covering the biggest area among long-term industrial plants in Vietnam, hitting about over 976,000 hectares in 2016.
In 2016, rubber wood made up 22.1 percent of the country’s total wood export values, and 31.7 percent of the sector’s export value.
He underlined the increasing trend of using forest-based products with legal origin or sustainable forest management certification in the context that countries are making every effort to cope with global climate change.
Forest certification is considered a tool for sustainable forest management, thus ensuring socio-economic development and environment protection goals.
According to Le Thien Duc from WWF Vietnam, around 230,000 hectares of forests have been granted with the Forest Stewardship Council (FSC) certification, accounting for 42 percent of the target set for 2020.
Vietnam has yet to submit the FSC its national standards on sustainable forests management, Duc said.
Meanwhile, Truong Minh Trung, Deputy Director General of the Vietnam Rubber Group, said Vietnam has no rubber forests granted with FSC certificate.
Wood products with FSC certification have higher prices than normal ones, Truong said, adding that his group will step up FSC-met forests planting in its member units.
According to the WWF, in order to develop rubber forests sustainably, the rubber forests must follow Vietnamese and international law, gaining local support and respect while minimising their impacts on the environment.
Amended decision on anti-dumping measures against imported steel
The Ministry of Industry and Trade (MoIT) issued Decision No.2574/QD-BCT on amending Decision No.3584/QD-BCT dated September 1, 2016 and Decision No.1105/QD-BCT dated March 30, 2017 on taking anti-dumping measures against imported plated steel.
According to the new decision, Vietnam will exclude Hong Kong from the list of countries and territories subject to anti-dumping measures against plated steel imported to Vietnam.
Plated steel of Hong Kong origin that was already exported to Vietnam will receive anti-dumping tax refund.
According to the MoIT’s Vietnam Competition Authority, plated steel imported from China (including Hong Kong) and the Republic of Korea were subject to anti-dumping measures under Decisions No.3584 and No.1105.
Vietnam, Laos work closely to promote trade
Since Vietnam and Laos set up diplomatic relations in 1962, the relationship between the two countries has flourished thanks to efforts from both sides to make ties deeper and more effective, especially in economy, trade and investment.
According to Deputy Minister of Industry and Trade Tran Quoc Khanh, since a bilateral trade agreement was signed in March 3, 2015 and a border trade agreement was inked on June 26, 2015, trade ties between the two countries have developed.
Launching the Vietnam-Lao trade website at www.vietlaotrade.com has also fostered connections and trade exchange between business communities of both sides.
Deputy Minister Khanh said the website aims to provide the business community timely and comprehensive information on economic, trade, industry regulations, mechanisms and policies as well as trade promotion activities, aiming to better serve enterprises of both countries and make information cheaper to access.
Statistics of the Ministry of Industry and Trade (MoIT) showed that as of March 2017, trade between the two countries reached 236 million USD, up 4.3 percent year on year, with Vietnam’s exports at 135 million USD, a rise of 22.6 percent.
Meanwhile, Vietnam imported 101 million USD worth of goods from Laos, down 13.1 percent over the same period last year, resulting in a trade surplus of 34 million USD for Vietnam.
Vietnam mostly exported fuel, steel, iron, transportation vehicles and spare parts to Laos, while importing rubber, fertiliser, ore and minerals.
To celebrate the 55th anniversary of Vietnam-Laos diplomatic relations and 40 years of the Vietnam-Laos Treaty of Amity and Cooperation, a trade fair was held from June 29-July 3 in Vientiane to encourage stronger economic, trade and investment cooperation between the two countries.
Meanwhile, two-way trade between Vietnam and Laos dropped about 20 percent in 2016, mostly because the Government of Laos stopped exporting woods and minimised imports of some products the country can supply itself such as cement, iron and steel. Trade competition in Laos has also become fiercer.
Recently, Minister of Industry and Trade Tran Tuan Anh had a meeting with Lao Minister of Industry and Commerce Khemmany Phonexena to discuss the fall in trade and seek measures to promote bilateral trade.
The two sides have agreed to work closely in building a bilateral trade development plan for the next 10 years, and to strengthen communications on the bilateral trade and border trade agreements.
To fulfil the target of 4 billion USD in two-way trade in 2020, the two sides will launch new cooperation projects in Laos and assist existing projects, while carrying out the agreement on border and border gate management and the protocol on borderline and national border markers.
The MoIT will also review Vietnamese projects in Laos to seek measures to support investors.
Australia partially ends probe against Vietnam’s zinc coated steel
The Anti-Dumping Commission (ADC) under the Department of Industry, Innovation and Science of Australia has announced the partial rescission of its anti-dumping and anti-subsidy investigation on Vietnamese zincs coated (galvanised) steel.
Among the countries under the ADC’s probe, which also looked into zincs coated steel imported from India and Malaysia, only Vietnam gets the partial termination.
According to the Vietnamese Ministry of Industry and Trade (MoIT), the ADC concluded that Vietnamese galvanised steel producers and exporters received countervailable subsidies from the Government during the investigation period but the subsidies never exceeded the negligible level.
Therefore, the ADC decided to terminate the anti-subsidy investigation against all Vietnamese galvanised steel producers and exporters.
Besides, the commission will not give any recommendations about subsidies for Vietnam in its final report to the Minister for Industry, Innovation and Science.
The investigation also found that two out of the three Vietnamese producers and exporters who fully cooperated with Australian investigators had the dumping range lower than the minimal level. Hence, the commission has terminated the investigation into the two companies.
The MoIT said that, the Australian commission took into account complaints from concerned parties, the statement of essential facts (SEF), comments relating to the SEF and information it received from the investigation process to make the decision.
Parties may seek a review of the decision by lodging an application with the Anti-Dumping Review Panel within 30 days of publication of the notice.-
DOC stops anti-dumping investigation against VN polyester fibre
The US Department of Commerce (DOC) has announced the termination of anti-dumping investigation on polyester fibre imported from Vietnam.
Earlier, on June 20, DOC officially initiated the investigation on polyester fibre imported from Vietnam, China, India, the Republic of Korea and Taiwan (China) based on petitions filed by DAK Americas LLC; Nan Ya Plastics Corporation, and Augira Polymers.
The plaintiffs alleged that polyester staple fibre products are being shipped to the US at prices lower than their normal value. In addition, dumping has caused significant damage to the domestic industry due to price depression.
The scope of these investigations covers fine denier polyester staple fibre, not carded or combed, measuring less than 3.3 decitex in diameter, coded HS: 5503.20.0025.
The withdrawal of the lawsuit was requested for only Vietnam, and the investigation still continues with China, India, the Republic of Korea and Taiwan (China).
According to the Ministry of Industry and Trade, Vietnam exported about 13,000 tonnes of fine denier polyester staple fibre with an estimated 12.4 million USD to the US in 2016, ranking third behind China (79.4 million USD) and India (14.7 million USD).
Taiwan expo to showcase green technologies
Environmentally friendly technologies will be showcased at Taiwan Expo 2017 at the Saigon Exhibition and Convention Centre in district 7 from July 26-28.
With the theme of Greener Tech – Smarter Life, the exhibition will bring opportunities for stronger business ties between Vietnam and Taiwan.
As many as 150 Taiwanese exhibitors operating in the fields of agriculture, fishing, health, employment, food processing, tourism and education are scheduled to take part in the event.
At the exhibition, many workshops related to trade promotion and green energy development as well as other issues will organised.
Vietnam imports many products from Taiwan, including machines and equipment for production.
By the end of May, Taiwan has had 2,526 investment projects worth 32.4 billion USD in Vietnam.
Bac Lieu reviews FAO-funded project on shrimp farming
A FAO-funded project has identified the causes of shrimp breeding failure in Soc Trang and Bac Lieu province, it was reported at a seminar held by the Department of Agriculture and Rural Development of southern Bac Lieu province on July 21.
The project, began in 2016, was a joint effort of the Soc Trang and Bac Lieu departments of agriculture and rural development, the United Nations Food and Agriculture Organisation (FAO) and the Research Institute for Aquaculture No.2.
Participating scientists and specialised engineers attributed shrimp breeding failure to dramatic changes in the local environment as a consequence of climate change, poor investment in pond’s conditions and equipment, and farmers’ lack of knowledge and expertise.
Based on the finding, the project has helped 20 farming households pilot a sustainable shrimp breeding model through providing them with shrimp fry and training in farming techniques. As a result, they have earned higher incomes and gradually mastered technological application.
Speaking at the event, FAO chief representative in Vietnam Jong Ha-bae said FAO will work with the Ministry of Agriculture and Rural Development’s agenciesto work out advanced shrimp farming models adaptive to climate change in order to ensure farmers’ livelihoods and protect the environment, contributing to the sustainable development of the shrimp sector.
Conference promotes tourism in Ha Giang
A conference to promote tourism in the northern province of Ha Giang took place in Ho Chi Minh City on July 21.
Speaking at the event, Director General of the Vietnam National Administration of Tourism Nguyen Van Tuan said tourists to Ha Giang could enjoy pristine and impressive natural landscapes, and the special culture of the northwestern plateau. It is also home to unique heritages of the nation and the world.
In order to develop local tourism, he urged joint efforts of the provincial authorities and tour operators at home and abroad.
Nguyen Van Son, Chairman of the provincial People’s Committee, said tourist arrivals in the province grow nearly 32.5 percent on average each year.
He called on domestic and foreign investors to engage in tourism projects in the province and committed all possible support to them.
Tran The Dung, Director of a Ho Chi Minh City-based travel agency, said the province should further tap existing adventure tours at Tu San mountain, and tour route of Gam river, Bac Me and Hoang Su Phi terraced field.
He suggested extending road from the National Highway 4C to Lung Khuy village which is home to a pristine stone cave with strange-looking shapes.
Statistics from the provincial Department of Culture, Sports and Tourism showed that nearly 470,000 people visited Ha Giang in the first half, 85,000 of them were foreigners. The total revenue surpassed 417.8 billion VND ( USD) in the period, up 11.2 percent annually.
The province now has two outbound travel agencies and five others specialised in domestic tours.
On the occasion, the tourism associations of Hanoi, Ha Giang, Ho Chi Minh City and Ba Ria-Vung Tau, inbound and outbound travel agents signed an agreement to promote local tourism.-
Conference seeks ways to improve tourism services
Representatives of over 200 tourism businesses attended a conference on improving management of tourism operations on July 21 in Ho Chi Minh City.
Vietnam served more than 6.2 million foreign tourists in the first six months of the year, up 30.2 percent against last year, and 40.7 million domestic travellers, said Nguyen Van Tuan, Director General of Vietnam National Administration of Tourism (VNAT) at the event, which was co-held by the VNAT and Vietnam Tourism Association.
Tuan added that Vietnam raked in 254.7 trillion VND ( 11.2 million USD) from tourism, a year-on-year increase of 27.1 percent.
Towards the goal of 13 million international visitors in 2017, the country needs to enhance tourism quality and services by checking and reshuffling tourism activities, he noted.
The Director General suggested travel agencies and hospitality establishments should proactively take measures to upgrade service quality for the development of tourism as a key economic sector, adding that the Administration will continue inspecting and withdrawing star-standard certifications of disqualified hotels.
It will work with local authorities to organise inspections of tourism sites and travel agents in the time ahead, he noted.
Vu The Binh, Vice Chairman of Vietnam Tourism Association, suggested that it is necessary to give training to tour guides on the 2017 Tourism Law as well as professional skills.
He added that the Association will coordinate with the VNAT to provide businesses with latest update on tourism management policies and the Tourism Law.
Vietnam, Indonesia agree to lift two-way trade to 10 billion USD
Deputy Prime Minister Vuong Dinh Hue and Indonesian Vice President Jusuf Kalla agreed to the aim of lifting two-way trade to 10 billion USD during a meeting in Jakarta on July 21.
The two leaders vowed to actively seek opportunities for economic cooperation towards the goal, and at the same time continue stepping up national defence-security ties through maintaining joint working group of the two navies, accelerating the launch of a hotline, organising joint activities in search and rescue towards conducting joint patrols at sea.
They also agreed that the two countries will accelerate negotiations for the early signing of an agreement on demarcation of their exclusive economic zones and an MoU on marine and fishery cooperation.
Both sides committed to working closely together to strengthen solidarity and internal unity of ASEAN and to maintain consensus and ASEAN’s central role in regional issues, the East Sea issue and at regional and global forums.
They agreed to enhance cooperation to maintain peace, stability, security, maritime and aviation safety and freedom in the East Sea.
Vice President Jusuf Kalla affirmed that Indonesia supports Vietnam in successfully fulfilling its role as Chair of APEC 2017.
At the ASEAN Secretariat headquarters, the Vietnamese Deputy PM said ASEAN has recorded significant achievements in maintaining its central role and has become an important forum for Southeast Asia and related countries to hold dialogue for the common goal of preserving peace, stability and sustainable development of the region, while providing support for its member countries.
He affirmed that Vietnam considers ASEAN the foundation of and one of the top priorities in its external policy and vows to work closely with member states to successfully build the ASEAN Community on all the three political, economic and socio-cultural pillars and strengthen the bloc’s central role in the region.
The Vietnamese government is taking a range of measures to effectively implement contents set in the ASEAN Vision 2025, towards a resilient and people-centred grouping of comprehensive growth, he said.
The ASEAN Secretary-General spoke highly of Vietnam’s active contributions to ASEAN since it joined the bloc in 1995, including its role in the formulation of the bloc’s major documents such as the ASEAN Charter 2007, the Hanoi Declaration on ASEAN Vision 2020, the ASEAN Community Vision 2025, blueprints for the bloc’s pillars and other important agreements.
He pledged to coordinate with Vietnam in the implementation of the Master Plan on ASEAN Connectivity 2025 and the third-stage working plan for the ASEAN Integration Initiative.
In the evening the same day, Deputy PM Vuong Dinh Hue left Indonesia for Australia and New Zealand.