BUSINESS IN BRIEF 13/8
Domestic
powdered milk firms buoyant
Domestic
milk companies have increased powdered milk production to meet a higher
demand on the local market.
Le
Nguyen Hoa, deputy chairman of Dong Tam Nutrition Food Company (Nutifood),
said the powdered milk market generated 2.36 trillion VND (111.3 million USD)
in revenue in 2012, which included 300 trademarks, mostly foreign.
However,
Hoa said, imported powdered milk is costly and domestic products are up to 60
percent cheaper and producers have better distribution systems.
That
is why Nutrifood is building a powdered milk factory in the southern
Another
domestic firm, Vietnam Dairy Company (Vinamilk) also seems to be reaping boom
benefits. Vinamilk chairwoman Mai Kieu Lien said the company’s powdered milk
in Binh Duong province has a capacity of 54,000 tonnes a year, which include
products for children and the elderly and hospital patients. It has won 25.8
percent of the market for children, she said.
Vietnam
Customer Protection Association (Vinastas) deputy general director Vuong Ngoc
Tuan said local powdered milk products meet hygiene and quality standards and
are much cheaper.
Banks
yet to give gold custody services
Half
of the 12 banks eligible for gold custody service have yet to provide this
service to their individual clients while other banks with strong gold
mobilization activities before are still not allowed to run this operation.
A
leader of Vietcombank said that the bank has yet to launch gold custody
service as it has to re-consider warehouse design. In the short term,
Vietcombank cannot decide an exact time for launching this service.
A
branch director of Bank for Investment and Development of Vietnam (BIDV) said
that his branch is unable to provide gold custody service due to substandard
facilities. The service is only available at some branches of BIDV.
VietinBank
has launched the service at head offices of its branches, meaning that
customers cannot deposit gold at other transaction points of the lender.
VietinBank charges VND20,000 per tael of gold a month and the minimum monthly
fee is VND30,000.
Among
seven joint stock commercial banks eligible for the gold custody service,
only TienPhong Bank, LienVietPostBank and ACB have offered this service to
customers while ABBank, Viet Capital Bank, Bao Viet and Military Bank have
not.
Other
banks that had mobilized large gold volumes before such as DongA Bank,
Eximbank, Sacombank and VietABank have yet to obtain approval for this
service.
Phan
Huy Khang, general director of Sacombank, said that the lender has sought
approval from the central bank’s HCMC branch to provide this service and is
awaiting feedback.
At
present, banks continue to give custody service for gold deposited before but
do not welcome new gold depositors.
Do
Minh Toan, general director of ACB, said that many customers before gained
profits from gold depositing. Now, they do not want to withdraw gold out of
banks to keep it at home.
A
leader of the central bank’s HCMC branch said that the volume of gold under
bank custody is large, suggesting that people have demand for this service.
City’s
banks report slight rise in home loans
The
number of customers asking for home loans in HCMC is still small while the
disbursed volume is inconsiderable in spite of numerous preferential loans
offered by the city’s banks recently.
A
credit executive of a lender specializing in individual loans in HCMC
informed the number of home loan applications at his bank had not risen in
the last six months and that many branches even received only one or two
applications per month in the period. He noticed the number of borrowers
applying for home loans has barely posted growth since the start of July.
Sharing
the same view, Pham Huy Thong, deputy general director of VietinBank, said
home loan applications at his bank have increased, albeit at a slow pace,
although it has introduced multiple preferential credit packages so far.
The
pervasive effect of the VND30 trillion housing package targeting low-income
earners in the market remains modest since few target borrowers are able to
gain access to the low-interest loans. Similarly, not many corporate
borrowers are given the low-cost loans, prompting Thong to believe more time
is needed until the local real estate market is warmed up with information
relating to the hefty loan package.
According
to Tran Tan Loc, deputy general director of Eximbank, his bank disbursed
hundreds of billions of dong early last year but the amount disbursed has
been bigger this year. Many have asked for home loans from Eximbank given
lower housing prices compared to last year plus current lending rate
reductions. However, he noted, the trend has just started and might increase
considerably in the next few months.
Loc
informed his bank would offer one more housing loan package in which
homebuyers can access low-interest loans. Total volume to be disbursed by the
package would be huge, Loc said, adding the program’s lending rates would be
low as credit growth at Eximbank has kept pretty low recently. The lender now
has provided loans to low-income people with housing demand in Binh Tan
District at an annual rate of 6.5%.
Despite
the difference of the target borrowers between the VND30 trillion housing
program and other credit packages by local banks to come soon, Loc noted that
the lenders would still be under pressure of slashing lending rates to lure
customers. As this is the common trend among most members in the banking
industry, homebuyers will see more advantages to own a home at a more
affordable price than before in the context that lending rates are on the
wane.
In the
meantime, at HSBC Vietnam, the disbursed volume for home loans by the bank is
rising but no sharp growth is seen, only year-on-year steady growth. The bank
ascribed the steady growth in home loan disbursement to suitable credit
policies designed for the target customers in line with its strategy.
The six-month
home loan disbursement growth at HSBC exceeded 23% against the same period in
2012, with the lowest lending rate for its home loans fixed at 9.5% per
annum.
Nevertheless,
Huynh Kim Sang of HSBC forecast that those in dire need of housing would be
given more opportunities as a host of realty developers have sought to
convert their apartment projects into low-cost homes that are more affordable
to low-income people than before.
Mobivi
to place more payment machines in District 7
Viet
Phu Payment Services Support Joint Stock Company (Mobivi) and Phu My Hung
Development Corporation signed a cooperation agreement on Thursday to place
more PayLink payment machines at Phu My Hung area and Crescent Mall in
District 7.
The
two sides agreed to place an additional 80 machines within next month, taking
to 120 the total number of PayLink machines at the area.
The
machines enable users to top-up mobile phone accounts, buy phone cards and
pay electricity, water and pay television bills.
The
machines will process each transaction in 30 seconds before giving a bill to
customers. All transactions are saved in the system to help customers check
information and deal with complaints.
Ryan
Walter Galloway, strategy director of Mobivi, said that the enterprise will
invest from US$1-2 million to develop specific products for the PayLink
machine system in the area.
City
builds special zone for Japan engineering SMEs
HCMC
will have a manufacturing zone designed for
Under
the plan,
Yasumi
Yoshinori, CEO of Unika Holdings Company and advisor of the Japanese small
and medium mechanical business association, said that with assistance from
the city government, the two partners had agreed to conduct necessary
procedures to establish the joint venture to build the zone and make its
debut next month.
The
joint venture will develop the zone on 100 hectares, but in the beginning it
will prepare a standard workshop site on 13 hectares in
According
to Yoshinori, small and medium enterprises from
He
also noted that small and medium enterprises of
HCMC
Chairman Quan said that the investment efficiency of Japanese enterprises in
HCMC was always high and Japanese manufacturing enterprises had high
technologies which the city needed. Therefore, the city would facilitate
their investments and operations, he added.
Besides,
Quan suggested that the zone should be twice as large compared to the planned
area of only 100 hectares.
According
to Hepza, Unika Holdings Company has invested in Tan Thuan Export Processing
Zone for around 18 years and specializes in producing and outsourcing
precision engineering products. This October the company will hold a seminar
in
Toll
collection right transfer proposed for expressway
Toll
collection on the HCMC-Trung Luong expressway will likely be assumed by
another enterprise from October 1, according to a proposal by the current
operator Cuu Long Corporation for Investment, Development and Project
Management of Infrastructure (CIPM).
Le Duc
Tuan, office manager of Cuu Long CIPM, told the Daily that his firm proposes
the toll collection right transfer because it has only been doing the job on
behalf of the Government. The proposal has been forwarded to the Ministry of
Transport.
Since
February 25, 2012 when CIPM officially collected toll fees on HCMC-Trung
Luong expressway, the transport ministry has still been unable to find out
any investor intending to purchase the toll collection right.
Under
the transfer plan submitted to the transport ministry by CIPM, the transfer
of the toll collection right of the 40-kilometer expressway will be carried
out via a bidding round. The toll collection will last five years, while the
transfer value is estimated at some VND1.6 trillion which will be paid in
three installments within ten months.
Still,
it is still unknown whether the ministry will seek ways to transfer the toll
collection right again after five years or will stop the fee collection.
BIDV
Expressway Development Company (BEDC) earlier had purchased the toll
collection right of HCMC-Trung Luong Expressway for 25 years at more than
VND9.1 trillion. However, due to financial constraints, this company returned
the project and the ministry has assigned CIPM to collect the toll ever
since.
Toll
amounts totaled around VND380 billion in the first year, with VND65 billion
spent on power consumption and maintenance services for the expressway
annually, according to CIPM.
The
HCMC-Trung Luong expressway has a total length of 62 kilometers developed at
a cost of VND9.88 trillion, with the expressway section stretching 40
kilometers.
Bank
restructuring takes center stage at M&A forum
The
restructuring of credit institutions and the search for strategic partners of
local lenders are expected to generate a big wave of mergers and acquisitions
(M&A) in the coming time.
This
topic was lively discussed at
Dao
Minh Tu, deputy governor of the State Bank of Vietnam (SBV), informed there
were currently 13 banks with foreign strategic partners.
A
number of banks, both State-owned and private ones, are looking for strategic
partners, said Sanjay Kalra, resident representative of the International
Monetary Fund (IMF) in Vietnam and Laos.
Investors
show a considerable interest in the restructuring of credit institutions,
especially nine banks classified as weak.
Eight
of these banks have made schemes for restructuring and the job is progressing
well, said Tu.
Investors
and experts expressed a concern that bank restructuring was moving too
slowly. In response, Tu said: “Banks are moving on the right path and at a
fast pace, not as slow as people think.”
What
matters is not the time, but the efficiency of the restructuring process, he
stated.
SBV
will let banks make self-adjustment plans first through mergers and search
for potential partners. Only in case of necessity will the central bank
intervene to prevent property loss and guarantee the efficiency of the restructuring
process, he said.
The
amended version of Decree 69 stipulates that in some special cases, foreign
investors can hold a combined stake of over 30% in a Vietnamese bank. This
amendment has caught the attention of many foreign investors.
With
the presence of foreign strategic partners, banks are changing in a good way,
from governance, business, training to brand building.
Kalra
stressed bank merger was not simply a process of combining two banks
together, which just resulted in a bigger bank, not a stronger one. The most
important part of this process is to change the way of doing business and
governance and to create momentum for better operations.
M&A
deals in
Still,
John Ditty, CEO of KPMG Vietnam and
Large
M&A deals used to be those worth tens of millions of U.S. dollars, but
now there are transactions worth hundreds of millions or even billions of
U.S. dollars.
Masataka
“Sam” Yoshida, senior managing director of RECOF Corporation, remarked
Vietnamese companies often quoted high prices, making it hard for Japanese
partners eyeing M&A deals.
Even
so, he believed the M&A market still had much room to grow.
The
Vo Tri
Thanh, vice president of the Central Institute for Economic Management, said
many investors had told him that the more challenges there were in the
market, the more chances there would be for M&A.
The
outlook of foreign capital inflows via M&A remain positive as
negotiations over the Trans-Pacific Partnership (PPP), the FTA with the
European Union and ASEAN+6 are nearing completion, with a huge market ahead.
BASF
relaunches
Starting
on August 7, the global firm sold its crop protection products directly in
The
new business also aimed to help crops tolerate drought and control weeds,
said BASF Vietnam’s managing director Petrus Ng. He added agricultural
solutions were one of BASF’s five business segments and received the highest
research and development investment.
Raman
Ramachandran, BASF senior vice president, crop protection in Asia-Pacific,
echoed the comments saying, “We aim to bring to Vietnamese farmers the full
benefits of our innovative crop protection products. As we want to focus even
more strongly on
BASF
has ended its agreement with its
As
part of the new move, BASF will establish an expert field team to provide
training and development for Vietnamese farmers. The field team members will
visit farmers and provide expertise on crop development, facilitating
experience and information exchanges between farmers and industry experts.
BASF
Vietnam has some 30 staff members for the team and Leon Van Mullekom, BASF
business director for crop protection in
The
multinational company is also considering the establishment of what it calls
an AgSolution Farm, which would showcase its agricultural innovations for
farmers, partners and employees. BASF operates AgSolution farms around the
world, including regional countries like
He
added BASF would regularly launch new crop protection products in
First
seven month exports worrisome
According
to data by the Ministry of Industry and Trade, although export turnover in
the first seven months of this year was estimated at above US$72 billion, up
14 percent year-on-year, exports showed a worrisome picture in each sector.
Compared
to the same period last year, farm produce and seafood--the country’s main
export commodities, fell 7.2 percent in July, and 8.6 percent in the first
seven months of this year. In the first seven months, export items which saw
an increase compared to the same period last year, included vegetables and
fruits with 28 percent, pepper with 17 percent, and cashew nut with 5
percent. An increase in export volume covered a slump caused by price
reduction.
Except
seafood exports of $3.38 billion, down 0.2 percent, key export items all
drastically fell over the same period last year, such as coffee at $1.9
billion, down 23 percent; rice at $1.87 billion, down 13 percent; and rubber
at $1.22 billion, down 17.6 percent.
Seven-month-accumulated
slump in exports was estimated at $814 million year-on-year, of which, coffee
accounted for $589 million, and rice $213 million, as commodity prices in
global market declined by $359 million.
Fuel
and minerals also posted decrease in volume and value. Export turnover of
fuel and minerals was estimated at $755 million in July, down by nearly 14
percent over June, and 30 percent year-on-year. In the first seven months,
exports of this group touched $5.76 billion, down 15 percent year-on-year.
Export price of all items in this commodity group fell with ore and other
minerals plummeting 49.9 percent, and coal sinking 20.4 percent. Thus, export
turnover of this commodity group dropped $562 million in value, and $456
million in volume.
Noticeably,
an increase of 14 percent in seven-month export turnover was contributed by
industrial processing products with exports surging by nearly 26 percent
year-on-year, accounting for 69.5 percent of total export turnover. Of which,
cellphones continued to have highest export turnover with $11.63 billion, up
87 percent year-on-year.
Another
highlight in last seven-month exports was that Foreign Direct Investment
companies still played an important role. While total imports of the domestic
sector reached US$24.5 billion, up 1.6 percent year-on-year, the FDI sector
export totaled US$48.28 billion, including crude oil, up 22 percent
year-on-year.
The
role of FDI sector became more important in the balance of trade as FDI
sector saw trade surplus of $6.91 billion, whereas domestic sector posted
trade gap of $7.65 billion.
The
appearance of foreign investors has helped
However,
these results still reflect that
Tea
exports earn US$120 million in 7 months
The
Ministry of Agriculture and Rural Development (MARD) reports
MARD
attributed the rise to the surging price of tea on global markets. The
US$1,526 per tonne benchmark was 4.4% higher than last year’s figure.
More
than 16,000 tonnes of tea were shipped abroad in July alone, reaping nearly
US$27 million.
The
The
68-floor lotus tower invested by the Bitexco Group is the only Vietnamese
construction work entering the list.
As a
Grade A+ commercial construction in
Meeting
world-class standards, the 262-meter skyscraper provides the city with more
than 37,000 square metres of prime office space and 8,000 square meters of
prime retail space.
The
tower has a helipad on the 52nd floor that juts out 22 meters. The project
has total investment capital of US$270 million and was completed in October
2010.
At the
time of inauguration,
Long-term
strategy needed to boost rice export
This
year, one million tonnes of rice from the summer-autumn crop was scheduled to
be stockpiled by July 31, but only 80-85 percent of the target was fulfilled.
As
proposed by the Ministry of Agriculture and Rural Development (MARD), the
Prime Minister agreed to extend rice procurement to August 15 in a bid to
stabilise rice prices during the main harvest period in the Mekong Delta.
According
to MARD’s Plant Cultivation Department, the region’s summer-autumn crop
covers 1.68 million hectares, expecting to result in more than 9 million
tonnes of unprocessed rice, or 4.6 million tonnes of husked rice. About
680,000 hectares will be harvested each month during the main season, which
falls in July and August.
The
latest statistics show that as of the end of July, about 800,000 hectares of
rice have not been harvested, so ending the rice procurement programme at
this time would not benefit farmers in some Mekong Delta provinces like Long
An, Kien Giang, Tra Vinh and Soc Trang.
At
present, rice prices in these localities have gone up by VND500-700/kg from
the level at the beginning of the harvest, since businesses are accelerating
their procurement for stockpile and commercial purposes.
The
Vietnam Food Association reports that aromatic rice is being sold at healthy
prices. This kind of rice accounted for 12.6% of
Nonetheless,
many businesses complained that the quality of aromatic rice is not high, due
to the cultivation of a wide range of aromatic long grain varieties.
At a
meeting on rice procurement and export in July, Director of the An Giang
Import-Export Company Nguyen Van Tien said that instead of cultivating lots
of varieties, localities should focus on several key ones for export.
He
proposed that the agricultural sector work with research institutes to
produce certain varieties that can be grown on a large scale for the long
term, so that rice is produced in large amounts with the same quality,
helping create
Le
Thanh Tung, an official from the Plant Cultivation Department, said farmers
will be willing to supply rice in line with exporters’ demands if the
businesses are committed to buying all the products.
However,
he said not many rice exporting companies have done this until now. Their
procurement is made mainly through trade mediators. The linkage between
farmers, rice processors and exporters is still weak.
In
addition, many participants said that as selling prices are decided by the
global market, farmers should try to reduce production costs in order to
ensure profits.
To
address the problem, they said, guidance should be provided to farmers in how
to apply new cultivation techniques and make good use of agricultural
materials, while the prices of fertiliser and pesticide prices should be
stabilised.
IMF
praises
The
IMF Executive Board released its Article IV consultation with Vietnam on
August 9, saying that the export sector is performing well—especially
foreign-invested enterprises—but the domestic sector, though improving, has
yet to find a solid footing because of several factors, including low
productivity, structure of resource allocation, impaired bank balance sheets,
and inefficiency in several state-owned enterprises (SOEs).
Credit
growth has picked up modestly in real terms, mostly concentrated in the
export-oriented and agricultural sectors. Headline inflation has declined
significantly, but underlying pressures persist, said the IMF.
The
current account surplus surged to US$9.1 billion in 2012 from US$0.2 billion
in 2011 given a slowdown in imports and the strong export performance.
The
exchange rate has been stable, and gross international reserves more than
doubled in February 2013 from end-2011, although they are still inadequate at
about 2½ months of prospective imports.
According
to the IMF, during the next two years, the current account surplus is
expected to remain sizable, and foreign direct investment (FDI) inflows would
remain strong, supporting international reserves. This outlook depends on an
improvement in the global economy, broadly unchanged monetary and exchange
rate policies, and a measured withdrawal of fiscal stimulus.
The
authorities have made significant progress in macroeconomic stabilization and
containing vulnerabilities in the banking sector and advancing reforms in the
SOE sector. Calm has returned to financial markets after the State Bank of
Vietnam (SBV) provided liquidity and facilitated the merger of several small,
weak banks over the past two years.
Moreover,
the IMF said, to reduce bank balance sheet risks from gold speculation, the
SBV has also implemented a measure to stop gold deposit taking and lending
activities. While some weak banks cannot meet the required conditions to
access the interbank market and must rely on the SBV’s refinancing facility
and open market operations for liquidity support when needed, the interbank
market’s function has largely been restored. Banking system liquidity has
eased, as evidenced by higher deposit growth and significantly lower funding
costs.
IMF
Executive Directors commended the authorities for significant progress in
stabilizing the economy over the past two years, but cautioned that
They
underscored the importance of reforming SOEs to enhance
Steel
exports face anti-dumping lawsuit in US
The US
Department of Commerce (DOC) has officially begun antidumping duty
investigations into oil country tubular goods (OCTG) imported from
On
July 22, the DOC asked Vietnamese steel producers answer its inquiries into
the price and value of made-in-Vietnam OCTG by August 12, 2013.
The
Department on July 30 launched all anti-dumping investigations based on
individual tax rate registration documents.
It
said that the inquiries into the price and value will be used as criteria to
define compulsory defendants sued by US plaintiffs. Those businesses getting
involved in the anti-dumping lawsuit will enjoy tax rates lower than the
national levels.
In
addition, businesses operating in non-market economies can register for
individual tax rates to avoid being subjected to the national rate, which is
much higher. They have 60 days to complete the registration since the DOC
initiated the dumping inquiries on July 23, 2013.
Real
estate value drops off in Q2
The
value of the country's real estate currently on sale on the market at the end
of June was roughly VND108.77 trillion (US$5.06 billion), down 15.4 per cent
against the first quarter, said Deputy Minister for Construction Nguyen Tran
Nam.
There
are also more than 2 million square metres of land plots on the market, Nam
disclosed at a meeting in the capital yesterday of the Central Steering
Committee on Housing Policy and Real Estate Market.
The
value of unsold real estate in
In Ha
Noi, there were 9,651 apartments and houses available, up 3,862 units against
December last year. The total value came to more than VND17 trillion.
During
yesterday's meeting, the State Bank of Viet Nam also reported that total
outstanding loans to the real estate industry in the first half of this year
rose by 4 per cent against December last year to reach VND237.5 trillion
($11.04 billion).
Of the
total, lending to industrial and processing zones came to VND14.96 trillion,
up 0.1 per cent. Loans to residential urban developers were VND46.68 trillion
while VND55.84 trillion was allocated for purchasing houses and repairs.
However,
the central bank noted that non-performing loans in the real estate sector
stood at 6.53 per cent at the end of June, against 5.39 per cent in December
last year.
As for
the VND30 trillion housing stimulus package, the central bank said that it
would pay more attention when carrying the programme, out as currently it is
difficult for individual borrowers to access the package that offers the
preferential interest rate of 6 per cent per year.
Viet
Nam-Japan Economic
The
The
three-day event aims to build closer economic and business ties, exchange
business updates and review economic relations between the two countries.
VJES
2013 is expected to draw the participation of 400 delegates to provide
professional insights and updates on business opportunities in the two
markets.-
Petrol
imports fall across the board during first seven months
Petrol
imports have declined in both volume and value, according to the Ministry of
Industry and Trade.
Statistics
from the ministry showed that during the first seven months of this year,
The
ministry forecast the volume of petrol imports into the country for the full
year would not be as high as that of last year.
IBM
advises OCB on security, provides hi-tech software
IBM
Viet Nam said on Thursday that the Orient Commercial Joint Stock Bank (OCB)
was the first Vietnamese bank to use its Qradar security system.
The
system has been protecting OCB from security risks, including on-line threats
and fraud operations for the past five months.
Nguyen
Ba Quynh, general manager the software department at IBM Viet Nam, said that
the security environment had become more complicated with the rapid development
of sophisticated attacks.
Using
modern technology in gathering, evaluating and analysing documents from
different sources can help organisations protect their information, he added.
Founder
sells entire stake in AAA to Insurance Australia Group
Do Thi
Kim Lien, founder of the AAA Assurance Corporation (AAA) has sold her entire
stake to Insurance Australia Group Ltd (IAG).
Lien
said the move is part of her new financial investment strategy this year,
giving her more time for other activities.
As the
Honorary Consul of South Africa in
She
would also engage in more charity work, including giving scholarships to poor
students, and building bridges and schools, she said.
City
distributes social housing
The
HCM City People's Committee and Real Estate Sai Gon Co Ltd recently handed
over 114 social housing homes - out of the 233 units at To Hien Thanh
apartment building in District 10 - to 100 State officials and members of the
armed forces.
The To
Hien Thanh apartment building is part of the city's plan to build 3,000
social housing units this year.
Real
Estate Sai Gon Co also plans to build 540 social housing apartments in District
12's Tan Thoi Nhat Ward in the fourth quarter this year, plus 1,750
low-income houses in Binh Chanh District at the beginning of 2014.
FLC
buys
Alaska
Land, investors of urban area project Alaska Garden City, sold 99 per cent of
its stake to FLC Group for VND300 billion (US$14.285 million) on Thursday.
The
urban area - with a total investment of VND3.5 trillion ($166.7 million) -
covers 7,895ha in Dai Mo Commune, Tu Liem District.
The
project is scheduled to begin construction at the end of this year and be
completed in 2017.
The
HCM City People's Committee recently approved the auction of more than 1,000
land plots in District 2.
The
money collected from auctions would be spent on developing infrastructure for
relocation areas in the district.
Of
them, 853 plots in Nam Rach Chiec relocation area totalled 30ha in area and
the remaining 202 covered 50ha in Cat Lai Ward.
Times
City gets insurance service
BIDV
Insurance Corporation officially became insurer of Vingroup's complex
Petrolimex
Joint Stock Insurance Company was the co-insurer.
The
insurance service covered asset risks, fires, business interruptions, public
liabilities and machinery breakdowns.
The
37-ha project on
The
corporation said it has attracted several big companies to move their offices
into the tower, such as Japanese Obayashi Corporation, South Korean Samsung
Electrics Viet Nam and Canadian Sunlife Insurance Company.
Statistics
show that Ha Noi has 146 office buildings with a total area of more than 2
million sq.m for rent, twice that available over the past 10 years.
Non-voting
depository receipts expected to lure foreign capital
The
HCM City Stock Exchange has proposed to the State Securities Commission to allow
issuance of non-voting depository receipts (NVDRs). This is a new trading
instrument which aims to stimulate foreign trading activities in the local
stock market.
The
proposal would counter the fact that foreign investors who want to invest in
some listed companies may be prevented from doing so by foreign ownership
restrictions.
Nguyen
Thi Viet Ha, head of Research and Development at the HCM City Stock Exchange,
said lifting foreign ownership ratios in listed companies was not the only
way to attract foreign capital.
"Raising
foreign ownership needs careful consideration to manage the investment
structure between domestic and foreign investors. More developed markets,
such as Thailand, also still restrict foreign ownership," Ha told the
Dau tu chung khoan (Securities Investment) newspaper.
The
HCM City exchange was seeking solutions to facilitate foreign investment and
trading and NVDR could be an option, Ha said.
Issuing
shares without voting rights also had its own problems. Issuers may be not be
qualified to issue shares or they may not want to raise capital through
issuing shares, Ha said.
Investing
in NVDRs, investors would receive the same financial benefits, including
dividends, right issues or warrants, as ordinary shareholders. The only
difference between ordinary shareholders and NVDR holders was the latter
could not be involved in company decision-making.
Ha
said the HCM City exchange would establish a wholly owned company which would
be responsible for issuing and selling NVDRs to investors.
With
regard to the concerns that NVDR holders not attending a company's
shareholder meeting could lead to the meeting being a failure, Ha said the
regulator could limit the percentage of NVDRs in the first stage of
deployment to ensure the holdings of the shareholders' meeting.
"Investors
who own 5 per cent of capital of a company, including NVDRs and common
stocks, will be obliged to disclose information as a large shareholder. When
reaching 25 per cent of ownership, they also have to make public offer of sale,"
Ha said.
However,
under the current regulation, exchanges are not allowed to establish a
subsidiary company or issue and receive depository certificates. Thus, in
order to implement such incentives, other relevant laws should be amended.
In
addition, trading regulations should also be more defined in law.
The
State Securities Commission has approved the exchange's proposal and
submitted it to the Ministry of Finance for consideration.
Falling
home prices create buyer's market
Home
prices have continued to decline in Ha Noi and HCM City, leading to an
improvement in property sales, according to a report released by Savills Viet
Nam early this week.
In the
second quarter, the Savills Property Price Index (SPPI) for Ha Noi
residential area was 104.7, dropping 3.6 points quarter-on-quarter and down
17.7 points year-on-year.
The
index has decreased for eight consecutive quarters by roughly 25 per cent
since its peak at 138.7 in the second quarter of 2011.
The
inventory ratio decreased two percentage points, reaching 93 per cent.
"It is a good sign for the overall improvement of the market's
performance," the company said.
The
average apartment price has decreased 30 per cent in the last two years due
to the entrance of new projects and price reductions.
In HCM
City, the residential price index stood at 89.4 in the second quarter, with a
slight increase of 0.2 points quarter-on-quarter, but decreased by 3 points
year-on-year.
The
absorption rate increased one percentage point quarter-on-quarter and two percentage
points year-on-year to 8 per cent.
The
number of transacted units surged 59 per cent year-on-year, and the volume
has been trending upwards for four consecutive quarters.
The
increase of newly launched apartments with lower selling prices led to the
decrease in the average market price by 21 per cent in four years since 2009.
Savills
noted that the residential price index had gradually climbed up since the
bottom of the second quarter last year.
"Thanks
to flexible prices, better product mix and Government policies such as
lowered interest rates, the confidence of home buyers rose indirectly. The
substantial year-on-year increase in transaction volume is a sign that the
market is recovering," the company said.
Meanwhile,
in the office sector, the SPPI for Ha Noi dropped 12 points year-on-year to
reach 56 in the second quarter. The office index stood at 71, down 4.2 points
over the same period last year.
Imports
put pressure on local paint firms
Foreign-invested
paint companies in Viet Nam are putting pressure on local manufacturers.
The
Viet Nam Paint and Ink Association said Viet Nam says the country has an
annual total output of 250 million litres of paint, including 180 million
litres of decorative paint.
Chalermsak
Pimolsri, marketing director of the foreign-invested Four Oranges Paint
Company, said the average consumption was 1.5 litres of paint per head per
year in Viet Nam, much lower than the four litres a year in Thailand and
seven litres in developed countries.
Foreign-invested
paint makers already hold 65 per cent of the local market and have advantages
with trade marks, finance and diversification of products, he said.
Another
foreign-invested paint firm, Jotun Viet Nam Co Ltd, has expanded its factory
and increase capacity to 25 million litres of paint per year.
Director
of AkzoNobel Paints Vietnam, David Teng, said the company had invested 13
million euro (US$17.3 million) to develop a factory in southern Binh Duong
Province.
The
association said Viet Nam has about 600 paint companies, including 30
foreign-invested firms holding the lion's share of the market. Local paint
companies produce lower quality paint.
However,
some domestic paint is becoming competitive, including Kova, Dong Tam, Tison,
Alphanam and Hoa Binh.
The
local firms mainly sell their products in provinces while the foreign firms
dominate the large cities.
Hoang
Van Hung, director of Nero Paint Co Ltd, said domestic companies must
diversify their products to increase market share.
Local
companies also seem to have an edge in non-decorative paints, including the
Hoa Binh Paint Company's paints for coastal environments - and waterproofing,
heat and nano paints [produced by the Kova Company].
Nguyen
Thi Hoe, chairwoman of Kova Group, said her firm had sustainable development
on the local market but aimed to develop exports. It already sells to
Singapore and Indonesia.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
|
Thứ Hai, 12 tháng 8, 2013
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