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BUSINESS IN BRIEF 17/8
Viettel
joint venture wins award in Mozambique
Movitel-
a joint venture between
After
10 rounds of appraisal it got 9 marks, double the level of famous rivals,
such as Vodacom and TM which have secured a firm foothold in
Frost
and Sullivan experts said Movitel focuses on large number of low income
people through its social programs, such as offering free Internet assess at
school, and supporting rural people in using its services.
Over
the past year, Movitel has won 80% of new subscribers in
The
country is now ready to implement management tools such as e-Government and
apply information and communication technology into health care and education
for socio-economic development.
Movitel
CEO Safura da Conceicao said the award acknowledged Movitel’s contribution to
telecommunications development in
In
2012, Movitel was also awarded by Africacom for its best solutions to improve
telecommunications in rural
Exports
to
According
to the Trade and Industry Information Centre (TIIC) under the Ministry of
Industry and Trade (MoIT), products exported to
Telephones
and its components topped the list of export commodities with more than
US$383 million in revenue (up 25.1%), followed by computers, electrical
products and components with US$112.7 million (up 156.9%) and footwear with
US$109.8 million (down 15.3%).
Some
other items also achieved high export growth, such as garment, pepper,
confectionary and cereals.
7-month
trade deficit runs at US$277 million
Despite
recent considerable export growth, the national economy slipped into a trade
deficit of US$277 million in the first seven months of this year, according
to Vietnam Customs.
The
figure is still far below the General Statistics Office’s (GSO) US$733
million estimate.
Vietnam
Customs reported that the country’s total 7-month import-export value reached
US$146.91 billion, a year on year increase of 15.2%.
Export
earnings rose 15.2% to 73.32 billion, and imports also grew by 15.2% to
US$73.55 billion.
In
July alone,
In
seven months, mobile handsets and spare parts topped the list of export
items, earning US$11.5 billion, followed by garments (US$9.7 billion),
computers, electronics and spare parts (US$5.78 billion), crude oil (US$4.27
billion), and seafood (US$3.41 billion).
Foreign
direct investment (FDI) businesses raked in US$44.3 billion from exports,
increasing 27.2% year on year and accounting for 60.4% of the country’s total
export value.
IFC
supports
A
leading official from the International Finance Corporation (IFC) of the
World Bank Group has affirmed that the IFC has confidence in
IFC
Vice President for Asia Pacific Karin Finkeiston made the remark at an annual
press conference held in
“Looking
forwards, we will focus our efforts on helping accelerate necessary
structural reforms, particularly in the banking sector, in order to see
The
IFC has invested around US$805 million in
In
response, the IFC’s Global Trade Finance Programme has helped Vietnamese
banks improve access to finance by increasing lending for local exporters and
importers, thus facilitating cross-border trade that is vital to private
sector growth.
During
the 2013 fiscal year, which ended on June 30, the IFC’s trade finance
programme enabled participating banks to issue 155 guarantees worth US$800
million, making
The
IFC’s total investments in East Asia Pacific reached a record US$3.4 billion
in 83 projects for the whole period, up around 15% on an annual basis.
Andrews
also revealed that his corporation will help banks improve their management
ability, recover bad debts, and achieve international standards in risk
management and corporate governance.
The
moves will help banks run more efficiently so that the private sector,
particularly small and medium-sized enterprises, is able to get financing at
a lower cost, Andrews added.
Local
firms aim for trademark popularisation
Business
players from home and abroad converged at the 2013 Shape the World conference
in
Co-hosted
by the Vietnam Chamber of Commerce and
Participants
talked about steps to address their difficulties, ranging from workforce
management, business models and trading risk control to promotion of
Vietnamese trademarks in global markets.
According
to statistics, over 95% of domestic firms are unaware that branding can
result in a strong competitive advantage in the business arena. More than 70%
of local companies do not have staff specialising in brand strategy or public
relations, and 50% have yet to hire relevant professional services.
Consulus
Chief Executive Officer Lawrence Chong said in order to achieve the goal,
there should be stronger coordination among businesses, management agencies
and industry insiders.
He
also recommended firms pay attention to customer psychology and demand in
target markets, product quality and selling prices, brand recognition, public
relations and business consultancy services in localities.
Competitive
businesses rewarded with preferential treatment
Six
highly competitive economic industries will be graced with the government’s
undivided attention, a Ministry of Industry and Trade (MoIT) seminar was told
in
Participants
recommended rewarding business efficiency with tax cuts, official development
assistance, and other preferential loans.
The
industries expected to benefit from the 2013–2020 plan include agriculture
and aquaculture, processing and manufacturing, construction, logistics and
forwarding, hospitality services, and information and communications.
MoIT
Planning Department Deputy Head Hoang Thinh Lam said prioritised businesses
can expect to enjoy lower corporate tax rates (15%) until 2020 in an effort
to lengthen their already competitive strides.
Lam
also revealed the MoIT is drafting a trade and export promotion programme and
plans on building a number of bonded warehouses and goods distribution
centres abroad some time in the near future.
Belgium
– Vietnam’s key consumer in EU
According
to the Ministry of Industry and Trade’s Trade and Industry Information Centre
(TIIC), shipments to
Footwear
led the country’s export commodities with US$250 million in revenue
(accounting for 39.2% of total export value), followed by garments (US$75.7
million or 11% of the total) and coffee (9.3% of the total).
The
TIIC said
Belgian
Ambassador to Vietnam Bruno Angelet recently worked with Deputy Minister of
Industry and Trade Tran Tuan Anh on building a distribution and auction
centre for Vietnamese seafood products at
Angelet
said the initiative is a joint proposal from the Vietnam Association of
Seafood Exporters and Processors (VASEP) and the Belgian Embassy. The centre
would guarantee a reliable supply of exported tra (Pangasius) fish to EU
markets.
If
plans are realised, Vietnamese tra fish export businesses can expect
reductions in transport expenses and opportunities to cut out costly
intermediaries when supplying major supermarket chains and retailers.
The EU
is currently one of
One of
The
Australian Live Export Council estimates 20,000 head of cattle have been
exported to the country so far this year.
Darwin
Port Manager for South East Asia Livestock Services, Sid Parker, says
"
The
Australian Livestock Exporters Council says
CEO
Alison Penfold says
Last
year, 2.8 percent of all cattle exported out of
Wood
processing sector still lacking in support industry
Even
with its annual export revenue surpassing US$4.5 billion, the wood processing
sector still suffers from support industry deficiencies.
Every
year around US$700 million is spent on importing miscellaneous parts
including wood glue, paint, padlocks, screws, and hinges.
Vietnam
Timber and Forest Product Association (Vietfores) Vice Chairman Nguyen Ton
Quyen said the imported parts make up 30–40 percent of the production cost
for each product on sale.
In the
first half of this year, the wood processing sector surpassed the
agriculture, forestry and aquaculture sector by fetching US$2.46 billion in
export earnings, up 12.5 percent on 2012.
However,
the industry had to import US$689 million worth of materials and US$360
million miscellaneous parts.
Nguyen
Manh Dung, Head of the Ministry of Agriculture and Rural Development’s (MARD)
Wood Processing Department, said integrating
The
glue used in producing plywood is the most important determinant of its
quality and international competitiveness.
On
average, one cubic metre of plywood uses 100kg of urea-formaldehyde glue.
A
cubic metre of particle board needs 90–100kg of glue, 8–10kg of silica gel,
and 2kg of ammonium chloride, while the same amount of medium-density
fibreboard (MDF) requires 80–100kg of glue, 10kg of paraffin, and 1.7–2kg of
ammonium chloride.
From
2016–2020, the MARD plans to turn out 100,000 cubic metres of particle board,
1.5 million cubic metres of plywood, and 500,000 cubic metres of other
man-made wood products.
Achieving
such targets it annually needs at least 250,000 tonnes of glue, 5,000 tonnes
of ammonium chloride, and tens of thousands of tonnes of silica gel.
Each
square metre of wood surface requires 250gr of paint and other finishing
chemicals, and there is an urgent need for hundreds of thousands of
tonnes each year.
In
fact, only 10 percent of the total volume of such materials can be
domestically produced, but the remainder has to be imported at an annual cost
of US$400 million.
Almost
no Vietnamese factories specialise in manufacturing spare parts for wood
processing industry.
The
limited quantity of padlocks and handles manufactured domestically are of
substandard quality.
Compensatory
Chinese imports are unacceptable for use in luxury or export timber products.
In the
forestry sector’s 2016–2020 strategy there is no mention of support industry
for wood and timber processing.
The
Department of Processing and Trade for Agro-Forestry-Fisheries and Salt has
only outlined orientations for developing such an industry in future.
The
focus will be on encouraging domestically manufacturing wood glue for
man-made board and furniture construction by 2020.
The
chemical industry will be asked to produce non-toxic paints and metallic
finishes to reduce the reliance on imported materials and improve the quality
of wood products for export.
Access
to loans gives farmers a lift
The
total amount of credit available to the agricultural sector has increased by
2.1 times to VND622 trillion (US$29.6 billion), three years after a
Government decree to improve the flow of credit to farmers came into effect.
This
figure accounts for 18-19 per cent of the total credit available to every
sector, said the Director of the State Bank of
The
Decree became effective in July 2010, and has had several positive impacts on
farmers, particularly in helping them to get better access to credit, he
said.
The
credit programme has helped to increase the amount of loans available to
farmers from VND10 million ($476) to VND50 million ($2,380), from VND50
million ($2,380) to VND200 million ($9,500) for farm owners and from VND100
million ($4,760) to VND500 million ($23,800) for co-operatives without any
guaranteed assets.
However,
many involved say that the credit policy needs to be complemented to meet
demands from farmers as well as ensuring it is efficient.
The
Vice Chairman of the Viet Nam Farmers' Union, Lai Xuan Mon,said credit for
farmers through the Union reached VND13 trillion ($619 million), while there
are 14 million farming households nationwide. This means that only 4 per cent
of households could access credit.
The
Deputy Director General of the Bank for Agriculture and Rural Development
(Agribank) Nguyen Tien Dong, said that apart from providing loans for farmers
via intermediary groups such as the Farmers' Union, the Viet Nam Women's
Union or the Viet Nam War Veterans Association, the bank's credit department
also sent representatives to every commune and village, offering credit to
farmers directly.
Credit
for farmers via intermediary groups accounted for 17 per cent, he said.
When
explaining why credit institutions preferred offering loans to businesses
rather than farmers when they visited rural areas, Dong stressed that farmers
were the most vulnerable borrowers because of the impacts of natural
disasters, diseases and their limited management capacity.
Concerning
the limited operations of local agricultural businesses due to their shortage
of capital, Deputy Minister of Agriculture and Rural Development Vu Van Tam
said that not only farmers but businesses as well, needed credit support.
However,
apart from State assistance, businesses should take advantage of trade
opportunities and study the market to introduce appropriate production and
trade strategies, he said.
Most
businesses operating in agriculture in
When
asked about the debts run up by agricultural businesses, Tam said that the
Government had instructed all banks to review the debts of big businesses and
restructure them following their own individual plans.
He
pointed to the need to introduce measures to tackle the difficulties in the
consumption of farm products and develop the market for agricultural
businesses.
"The
next credit policies should have different credit programmes for each key
agricultural product such as "tra" fish, rice and coffee," he
said.
Tam
also proposed a credit policy for fishermen, which he said was an important
sector that also contributed to protecting national sovereignty, but is
facing very high risk.
Manh
stated that the banking system would continue to relax the tax laws and will
allow for delays and reduced payments for bad debts from now until the end of
the year.
The
State Bank of
Coal
group proposes export tax reduction
The
Viet Nam National Coal and Mineral Industries Group (Vinacomin) has proposed
lowering coal export taxes to 10 per cent in a bid to lift coal consumption
by the end of the year.
At a
meeting with Deputy Prime Minister Hoang Trung Hai in northeastern
Vinacomin's
coal exports showed significant declines last month, falling to 100,000
tonnes following the increase in export tax to 13 per cent in mid July.
The
group added that keeping the current rate would likely result in the company
failing to meet its end of year consumption target of 39 million tonnes.
Vinacomin
reported coal production in the first seven months of this year estimated at
25.7 million tonnes. By contrast, coal sale was estimated at 23.7 million
tonnes, roughly 60 per cent of this year's target.
The
group's leaders urged the deputy PM to fast track project licenses, extend
invitations for upcoming projects, as well as purchase and manage the
implementation of the group's affiliates' projects. The leaders also pushed
for the government to favour housing projects for workers.
The
Deputy PM emphasised the important role the coal industry played in national
energy security and praised co-operation between
Calling
for ongoing efforts in environmental sustainability, Hai also advised
Vinacomin to continue efforts in effective coal consumption, including
greater investment in new technology.
The
deputy PM particularly affirmed the importance of workplace safety and the
importance of safeguarding jobs and income.
Pepper
exports up in seven months
Pepper
exports achieved a year-on-year increase of 22.8 per cent in volume to 94,000
tonnes and 17.7 per cent in value to US$618 million during the first seven
months of 2013, the association said.
Pepper
was one of few farming products to see a surge in export value during the
past months, partly thanks to pepper prices of VND135,000 ($6.4) per kilo,
VND18,000-20,000 ($0.85-0.95) higher than the prices earlier this year.
However,
by the end this year, supply of pepper was expected to fall and this year's
total pepper exports are forecast to be lower than last year, according to
the association.
VPA
chairman Do Ha
The
decrease in output was blamed on a long rainy period in June 2012, which
resulted in fewer pepper trees flowering.
The
country's average annual pepper output is 100,000 tonnes, accounting for 50
per cent of pepper traded on the global market, he said.
These
prices were expected to increase this year due to falling supply in
The
export price of Vietnamese pepper was expected to surge as foreign traders
take more notice of Vietnamese pepper.
Therefore,
Vietnamese traders should be carefully in signing export contracts so that
they can benefit from expected price rises later this year.
Vehicle
sales drop slightly, up on last year
However,
it noted that this figure was still up 26 per cent against July last year.
This is the fourth consecutive month the total sales have been higher than
the same period last year.
Of the
sum, 3,959 cars were sold apart from 5,401 trucks and commercial vehicles.
Car sales were up 2 per cent against June, while trucks were down by 7 per
cent.
The
sales of locally assembled cars in July rose by 3 per cent month-on-month to
7,676 units, but the increase could not compensate for the sharp 24 per cent
drop in Completely Built Unit (CBU) sales to 1,684 units. The decrease was in
marked contrast to the previous four months' upward trend.
VAMA
members sold 8,209 vehicles in July, almost the same as June's figure and up
23 per cent year-on-year, said association chairman Jesus Metelo Arias.
Notably,
while multi-purpose vehicles and passenger cars posted higher sales than both
previous months and their 2012 equivalent, commercial vehicle sales fell 24
per cent and 10 per cent compared to June and same period last year
respectively.
VAMA
said that two agents, Vinacomin-Vinacoal and Vinaxuki, reported zero sales in
July.
Impressive
sales surges were recorded by
The
July figure has extended auto sales to 59,197 vehicles from the January to
July period, an increase of 18 per cent from a year ago. Of these, car sales
were up 25 per cent and sales of trucks and commercial vehicles were up 13
per cent.
With
the current trend of recovery, together with the implementation of
registration fee reductions in major cities, auto sales this year could be as
high as 110,000 to 112,000 units, VAMA said in the report, having revised its
earlier forecast of 100,000 units.
IFC
invests $805m in VN this year
The
International Finance Corporation (IFC) provided up to US$805 million in
trade finance to
The
agency, which is a member of the World Bank, supplied the funds in the
previous fiscal year ending June 2013, in an effort to boost lending to small
and medium enterprises, create jobs and lift economic growth.
"
As
high borrowing costs became a key factor in company closures and bankruptcies,
the IFC's Global Trade Finance Program helped Vietnamese banks increase
lending to domestic businesses and facilitate cross-border trade that was
vital to private sector growth.
During
the 2013 fiscal year, the IFC's trade finance programme enabled participating
banks to issue 155 guarantees to support more than $800 million in trade
finance, making Viet Nam one of IFC's top markets in this field.
"After
operating in
"Looking
forward, we will focus our efforts on helping accelerate necessary structural
reforms in the state-owned enterprises and in the banking sector, in order to
see
The
IFC pledged to help banks manage and recover non-performing loans as well as
meet international standards on risk management and corporate governance.
In an
effort to promote low-carbon growth, the IFC has ramped up efforts to improve
energy efficiency in
Backed
by financial and advisory support from the IFC, two Vietnamese lenders –
Techcombank and VietinBank – have raised energy-efficiency portfolios to more
than $60 million during the last three years.
The
IFC is also partnering with the Ministry of Construction to revise the
Building Energy Efficiency Code that aims to reduce building energy consumption
by up to 15 per cent per square meter, in new buildings.
The
IFC's total investments in the East Asia Pacific reached a record of $3.4
billion across 83 projects in the 2013 fiscal year, an increase of 15 per
cent from the previous fiscal year.
Hopes
rise for huge oil plant
A
group from
The
two entities were given the nod by the Vietnamese Government in May after
preparing a pre-feasibility report.
Representatives
from
Sukrit
Surabotsopon, senior executive vice-president of the petrochemicals and
refining business unit at PTT said the area was a perfect location.
At a
press briefing in the province, Surabotsopon said factors attracting the PTT
Group to the locality were the great support from local authorities and
2,000-ha land that has already been cleared and "embedded with fine
infrastructure".
The
Petroleum Authority of Thailand yesterday announced three international
companies as consultants for the project.
The
McKinsey Company was selected as a strategic project manager, Foster Wheeler
would carry out engineering consultation and the preliminary stages of the
project, and IHS Inc would support import and export from now to May next
year.
PTT
Group has plans for a complex that would compete with companies from
"We
are aiming at exporting our products to countries in the ASEAN economic
community, including Viet Nam, thus the complex based here would be more
economically profitable," said Surabotsopon.
The
Thai group will contribute about 40 per cent of the total expected investment
of US$30 billion.
During
the feasibility study process for final approval by the Government next year,
the PTT Group intends to lure international investors from various sectors to
the project.
Meanwhile,
Binh Dinh People's Committee said it would find qualified domestic investors
to work with the group in different sections of the project.
The
scale of the complex, which will refine oil and produce petrochemical
products such as olefins and aromatics, will be decided by PTT Group after
the feasibility study is done.
"We
might complete this world-class complex in one go or separate it into two
stages," Surabotsopon said.
With
proposed capacity of about 32 million tonnes of crude oil a year, the complex
is expected to be able to supply all demands for oil and petrochemical
products in
Le Huu
Loc, chairman of the provincial People's Committee, said the refinery complex
would be a key impetus to the province's development.
"It
is clear that it will lift up the province's economy and create jobs for
thousands," he said.
The
refinery complex will be the biggest one in the economic zone, where, so far,
Loc
pledged to implement strict environmental assessments before submitting the
complex proposal to the Government, ensuring the least impacts to nature at
locality.
Low
raw materials hit fisheries sector
Ensuring
reliable sources of raw produce has become a major headache for many of the
country's fisheries processors.
Nguyen
Thi Tinh, chairwoman of the Phu Quoc Fish Sauce Association, said Phu Quoc
fish sauce was missing out on its great potential to gain market share
overseas due to a shortage of anchovies.
The
domestically well-known brand of fish sauce has been granted Protected
Designation of Origin (PDO) status in the EU and passed all of the union's
food safety regulations.
But
the famous sauce, the first-ever Vietnamese product to be granted PDO status
in the EU, is now failing to exploit this status, said Tinh.
During
the past two years, fish sauce producers in southern
On
average, the island's fish sauce sector uses 40,000-50,000 tonnes of fish
every year to produce fish sauce, Tinh said. But so far this year, fish sauce
processors have only managed to secure 30 per cent of the annual volume for
processing, while fish sauce sales have reduced by 60 per cent against 2012.
Tinh
said part of the problem was that fishermen were selling less of their
anchovy catches to fish sauce producers as they were making more money
selling directly to traders.
Anchovies
were sold to traders at prices of VND18,000-20,000 (US$0.85-0.95) per kilo,
2.5-3 times higher than prices for sales directly to fish sauce processors.
Due to
a lack of raw materials, 60 per cent of the fish sauce producers on
Nguyen
Huu Dung, deputy chairman of the Viet Nam Seafood Exporters and Producers
(VASEP), said seafood processors often faced a lack of raw materials and 90
per cent of processors in the sector needed to import material every year to
ensure production.
This
year, the fisheries industry was expected to increase imports of raw material
by 20 per cent against last year, Dung said. The import value of seafood
products for export processing was estimated to reach as high as $1 billion
this year.
Experts
said the lack of raw materials was a persistent problem for processors as the
sector didnot have an effective general plan on developing cultivation of raw
materials while co-operation between enterprises and regions was also
ineffective.
Some
provinces had general development plans, however these plans were not
implemented effectively, he said.
This
had resulted in an imbalance between the great number of seafood processors
and limited areas for aquaculture cultivation.
To
solve the problem, experts said enterprises should invest into cultivation
and strive to secure the support of farmers in developing these areas. They
should also work more closely with farmers to ensure raw materials for
processing.
The
central city licensed 19 foreign-invested projects, with a total investment
of US$26.5 million, while nine established projects raised their total
investment capital to $62.8 million last month.
Officials
announced on Tuesday that the city has drawn in 259 FDI projects worth $3.62
billion, of which 164 projects are now in operation, costing $1.64 billion.
Also
last month, 210 domestic businesses registered their total investment capital
of VND388 billion or $18.5 million.
The
city exported goods and services worth $156.3 million in July, an 11.1 per
cent surge in comparison with the same period last year.
The
ports of Tien Sa and Lien Chieu shipped 2.8 million tonnes of cargo last
month.
Bike recall for
faulty fuel lines
Owners
of Yamaha Nozza scooters have been urged to bring their vehicles to Yamaha
dealers following concerns over a fault that leads to petrol leaks.
In
May, Yamaha Viet
However,
the department has found that as many as 26,600 Nozza scooters have not yet
been taken to Yamaha dealers for repairs.
The
Japanese motorbike manufacturer said it would fix and replace all the pipes
and their holding systems, which were not correctly assembled and positioned
during manufacture.
Nozza
owners can bring their bikes to Yamaha dealers for the repairs and
replacement work, which would take about 30 minutes and be free of charge,
the company said.
They
said that frequently used motorbikes were more likely to suffer leaks.
The
recall applies to models produced between August 20, 2011 and March 30, 2013,
said Yamaha Viet
The
Korean International Cooperation Agency (KOICA) and the Hanoi University of
Technology (HUT) have signed a project on strengthening the research capacity
in waste recycling technology.
The
South Korean government will provide US$1.5 million in non-refundable aid in
the 2013-15 period to build a recycling technology development centre
complete with research and analytical equipment.
In
addition, the agency will also transfer waste recycling technology to
Budget
revenue surges in July
State
budget revenues in July rose by a staggering 41.9% against June to VND73
trillion, or an additional VND21.55 trillion over the preceding month, said
the Ministry of Finance in a statement last week.
The
ministry noted that budget incomes in July showed a marked turnaround
compared to the first six months of the year, when revenues always fell far
short of targets.
The
ministry did not give a breakdown of revenue sources, nor gave explanations
for the steep increase.
In a
previous report, the ministry said revenues for the State budget in the first
half was much lower than the target. Up to 42 provinces and cities collected
revenues at less than 50% their annual targets, including major economic
centers like HCMC,
With
the upsurge in budget revenues in July, the accumulated incomes for the State
coffer in the January-July period totaled over VND429 trillion, equal to
52.6% of the year’s estimate and rising 6.3% year-on-year, according to the
ministry.
Of the
total figure in the seven-month period, domestic revenues amounted to
VND281.7 trillion, rising 8.2% on-year, while income from crude oil reached
VND64.33 trillion, and foreign trade revenue contributed VND119.7 trillion.
As of
end-July, Government bonds had contributed VND127.33 trillion, or 65.3% of
the annual target, according to the ministry.
In a
recent TV program, Minister of Finance Dinh Tien Dung stressed budget
collections this year would prove difficult as the Government had introduced
programs to exempt, reduce or reschedule taxes for enterprises, which would
lead to a shortfall of VND7 trillion for the State budget this year and VND36
trillion in 2014.
PRUBF1
rises to one-year high
Although
Prudential Balanced Fund (PRUBF1) managed by East Spring Investments will
officially close on October 4 as scheduled, the price of the fund unit
increased to VND10,500 last Friday, the highest in the past year.
According
to a report of PRUBF1 in July, the fund had net assets of VND539.5 billion as
of the end of July, including VND526.4 billion in cash. Its net asset value
(NAV) per unit was VND10,791 by late July, higher than the par value.
PRUBF1
closed last Friday’s session at VND10,500, which was still lower than its NAV
by July 31.
This
is why the price of the fund unit has increased steadily with high trading
volume in recent times. Over the past year, PRUBF1 has reached the highest
price of VND10,400 versus the lowest level of VND6,000. However, the fund
unit stood at VND10,500 in the last two sessions last week.
According
to a report the fund has sent its investors, asset liquidation will last from
April 1 to October 4. If liquidity on the market falls short and odd fund
certificates accrue during liquidation, the process will extend to April 6,
2014.
In
case that asset liquidation is done on October 4, the fund will settle
financial obligations to the State, operation and dissolution fees from
October 7-15. Payment for investors will be on October 7-8.
Orders
in settlement have been regulated in charters of PRUBF1 with payments for
fund dissolution fees coming first, followed by accounts payable to fund
management firm and custodian bank, financial obligations to the State, and
other amounts following the laws and investors.
The
Hochiminh Stock Exchange (HOSE) last week announced that 50 million PRUBF1
fund units will be delisted from the exchange on September 4 as its operation
time will end October 4.
Phan
Thi Anh Minh, head of marketing and government relations of East Spring
Investments Fund Management Company, told the Daily that the company was
processing to launch a new open-ended mutual fund investing in diversified
financial products.
Financial
companies deteriorate
The
key financial indicators provided by the State Bank of Vietnam (SBV) reveal
that the situation at financial and finance leasing companies is
deteriorating.
The
return on assets (ROA) and the return on equity (ROE) of financial and
finance leasing companies as of June 30 had fallen by 0.19 and 4.22
respectively against the end of last year, according to data on SBV’s website
based on June account balance reports and the first-quarter financial
statements of credit institutions.
However,
other indicators unveil the health of this group of lenders is worsening and
this is the group faced with ‘the worst situation’.
Equity
capital of financial and finance leasing companies by the end of June had
sharply dropped 7.76%, or some VND9.93 billion, versus a decline of 3.3% as
of May 31.
Total
assets of these credit institutions had dwindled 0.75%, equivalent to
VND153.7 billion.
Capital
adequacy ratio (CAR) at the end of June was 8.41%, down from 8.76% at May 31
when the ratio was minus 1.23% (losing over VND152.9 billion against the end
of 2012).
The
ratio of credits to deposits between banks and individuals or organizations
was 164.33%, a further increase from 161.93% in the preceding month.
Meanwhile,
banks also saw their CAR shrinking. CAR of the whole system at the end of
June stood at 13.65%, down significantly from 14.25% at May 31.
CAR of
state-owned banks was 11.1% and of joint stock banks was 12.8%.
ROA
and ROE of the system at the end of June remained unchanged from May 31,
standing at 0.23% and 2.52% respectively.
Equity
capital of State-owned banks rose nearly VND153.14 billion, or 11.56%, while
that of private lenders went down 3.68%, equivalent to VND176.4 billion.
The
ratio of credits to deposits also dipped from 87.44% in May to 87.3%.
Total
assets of the credit system reached VND5,293,557 billion, an increase of
4.09% compared to the end of 2012.
Total
equity of the system picked up 2.89% from 2012.
Speaking
about bank restructuring, SBV Deputy Governor Dao Minh Tu in an interview on
the website of the central bank said foreign investment in the banking sector
of
“We
have 13 joint stock banks with participation of foreign investors and
generally they’re very efficient,” said Tu. “The central bank is studying and
will propose the Government adjust a number of limits in a bid to enable
foreign investors to contribute capital to or acquire stakes in local institutions,
firstly in the weak banks.”
Eight
of the nine weak banks have received approval for their restructuring
schemes. Restructuring is taking place at all banks, including those not
subject to restructuring, with mergers and acquisitions one of the forms.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Sáu, 16 tháng 8, 2013
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