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BUSINESS IN BRIEF 18/11
Banks
based in HCMC were estimated to offer foreign-currency credits with the total
value equivalent to VND152 trillion as of the end of October, a 19.3%
contraction compared to the end of 2012.
Meanwhile,
foreign-currency mobilization of local banks dropped just a slight 0.39% to
over VND176 trillion, according to a report of the central bank’s HCMC
branch.
Due to
the strong decline of foreign-currency credits, the city reported low credit
growth rate during the period. Total outstanding loan was expected at
VND902.5 trillion, rising 5.5% against late December, while the nation’s
credit growth rate stood at 6.82% as of the end of September.
Nguyen
Hoang Minh, deputy director of the central bank’s HCMC branch, predicted the
city’s credit growth rate at only 10% this year versus the target of 12%
established by the central bank.
Under
Circular 37/2012/TT-NHNN that began effective early this year, credit
institutions only provide short-term forex loans to companies having foreign
currency incomes, except for importers in the oil and gas sector. The
borrowers must have sufficient foreign currency from export to repay loans.
Meanwhile,
importers, who have strong demands for forex loans, have to take out credits
in dong and then buy foreign currencies to repay loans.
Local
banks are offering U.S. dollar lending rates from 5-7% per annum. However,
some banks have launched preferential programs to offer short-term dollar
lending rates under 5% per annum.
HDBank
has made US$30 million worth of loans available with terms from one to six
months. The bank applies the lending rate of 3% per annum for terms from one
to two months, 3.5% per annum for three months and 4.25% per annum for six
months.
VietinBank
is also giving short-term dollar lending rates from 3.5-5% per annum while
lending rates at Eximbank, ACB and Sacombank are some 4-5.5% annually.
However, to enjoy these rates, enterprises must use banking services of the
lenders.
Meanwhile,
foreign banks have offered enterprises dollar loans at the rates from 3-4%
per annum without the need to use their services. These lenders have cheap
foreign-currency supplies from their parent banks.
Enterprises
now can take out short-term loans in dong at lending rates from 5-6% per
annum but have to use the banks’ services.
In
addition, as the Prime Minister during his trip to the
Vietnam
eyes labour cooperation with Middle East, North Africa
The
assessment was given during talks on labour cooperation between
According
to the Department of Overseas Labour Management under the Ministry of Labour,
Invalids and Social Affairs,
About
30,000 Vietnamese employees are working in countries in the regions,
especially in
With
the economic recovery, some countries are resuming their demands for imported
labour, the department added.
The
major difficulties facing Vietnamese labourers in the host countries are
cultural shock and a language barrier, as well as competition from other
markets such as
Palestine
Ambassador to Vietnam Saadi Salama said although Vietnamese workers are
hardworking and skilled, a contingent workforce has yet to meet the
increasing requirements of the potential markets in the Middle East and North
Africa.
He
suggested that
Sharing
Salama’s opinion, Vietnamese Ambassador to Saudi Arabia Tran Nguyen Tuyen
said it is crucial to outline a long-term cooperation strategy with the
The
event was organised alongside the first economic cooperation forum between
BIDV
receives
The
Joint Stock Commercial Bank for Investment and Development of Vietnam ( BIDV)
has recently been hounoured with the House of the Year award presented by the
Hong Kong-based Asia Risk Magazine.
The
bank won the prize in two straight years for its provision of derivative
products and risk administration in
Launching
a package of derivative products in 2006, the BIDV holds a big share in the
domestic derivative product market and has become the first Vietnamese bank
supplying them to help customers prevent risks due to changes in foreign
exchange rates, interest rates and commodity prices that may affect their
business activities.
House
of the Year is an annual Asia Risk award hounouring the most prominent
financial institutions in the Asia-Pacific region for their successful
operations in the fields of risk management and trading in derivative
products.-
First
tea area meets VietGAP standard in Lao Cai
The
The
project, implemented in several local communes of Muong Khuong district such
as Lung Vai, Ban Lau, Ban Xen and Thanh Binh, will be the basis for expanding
the project across the province.
Presently,
Lao Cai has over 4,000 ha of tea bushes, including 1,400 ha and 2,000 ha in
Muong Khuong and Bao Thang districts, respectively.
The
tea project has involved nearly 2,000 local households that have been trained
to look after the tea according to VietGAP standards, as well as increasing
farmer’s awareness of environmental protection and public health.
According
to the tea growers, production under the VietGAP standard will increase
productivity by 5-10 percent, equivalent to 2-2.5 tonnes of tea leaves a
hectare per year, as well as increasing the price of tea leaves and raising
growers’ incomes.
Furthermore,
the VietGAP process also reduces the use of chemical pesticides as all local
growers registered to use biological pesticides.
Quy
Nhon port’s new wharf put into use
The
Quy Nhon New Port Joint Stock Company has put into operation a 220-metre
wharf, which can handle 37,500-tonne container ships.
The
new facility, which was built next to the main wharf with a cost of 200
billion VND ($9.4 million), aims to ease the overloaded Quy Nhon port, said
General Director of the Quy Nhon port Nguyen Huu Phuc on November 5.
The
Quy Nhon port has received over 1,000 ships so far this year, including 529
from abroad with customs clearance for more than 5.7 million tonnes of goods,
a year-on-year increase of 16.6 percent. It is expected to pass 6.3 million
tonnes of cargo through customs at the end of this year .
Thanks
to its geographical advantages, the Quy Nhon port complex is home to three
seaports, including two trade ports, namely
These
ports serve as a gateway connecting the
As a
result, the demand for goods via the port complex is expected to surge in the
coming years, and Quy Nhon will be a key entrepôt in the region in the
foreseeable future.-
Southern
companies suggest tax, customs overhaul
Over
500 firms in the southern region gathered at a dialogue in
A
majority of them shared the view that tax refunds remain slow while guiding
documents still contain misleading details.
They
also dug into how property developers pay for land use and corporate income
tax is cut at appropriate rates.
Chairman
of the HCM City Real Estate Association Le Hoang Chau called on the Ministry
of Finance (MoF) to make the 30 trillion VND (1.4 billion USD) support
package available to more home buyers as scheduled because numerous property
developers are on the brink of bankruptcy.
According
to him, the property market is closely linked to other economic sectors and
its recovery will be helpful for them.
Referring
to customs, representatives from over 1,000 enterprises in industry lauded
the launch of e-customs that have helped facilitate exports-imports. However,
they noted that it is necessary to upgrade the system so that more data will
be processed.
Deputy
Finance Minister Do Hoang Anh Tuan and tax and customs officials cleared up a
number of queries. They also vowed to consider feasible suggestions for
supplements to taxation policies in the future.
The
event was a joint collaboration between the MoF and the Vietnam Chamber of
Commerce and Industry
Seafood
exports create big profits for Bac Lieu
The
southern
Over
38,200 tonnes of seafood were processed for the province’s exports in the
reviewed period, a year-on-year increase of 33 percent.
Shrimp
is still a key export product in the list, fetching more than 286 million USD
from the export of 37,000 tonnes, up 17 percent from the same period last
year.
In the
January-November period, the province’s shrimp production achieved 65,100
tonnes, up 29 percent from last year’s figure.
The
hike results from Bac Lieu’s flexible management and farmers’ efforts to
overcome difficulties.
The
provincial authorities worked out technical measures to help shrimp breeders
treat polluted water in shrimp hatching areas and cope with aquatic diseases.
Information
related to changes in the market was also regularly conveyed to 33 seafood
processing facilities in the province, helping them take the initiative in
their production.
The
Mekong Delta will hold an economic cooperation forum from November 25-28,
which will focus on green economy.
The
information was released during a November 5 meeting between leaders of the
steering committee and the organisation board of the event.
The
Mekong Delta Economic Cooperation Forum (MDEC-Vinh Long 2013), the seventh of
its kind, is a joint effort between the Steering Committee for the
Southwestern Region, ministries, localities and sectors.
A
series of activities will be organised during the event, including a trade
fair and an investment promotion conference chaired by Deputy Prime Minister
Vu Van Ninh. Investment licences will be granted to a number of investors on
the occasion of the forum.
The
highlight of the event is an exhibition themed “Green environment week –
Green technology – Sustainable economic development of green economy” with
over 500 booths.
According
to Nguyen Phong Quang, deputy head of the MDEC-Vinh Long 2013’s steering
committee, the Mekong Delta is a promising region with many advantages in
socio-economic development and strengths in food, fruit and seafood
production.
The
event, which will see the participation of nine regional cities and
provinces, is a chance for the region to introduce its potential and
strengths, increasing connectivity among regional localities and between them
and
It
will create an opportunity for them to speak on policies and initiatives for
the making full use of the region’s advantages, he added.
Preparations
for the event have been chiefly completed. Investors have registered to fund
159 projects in the region with a total capital of 4 trillion VND (188
million USD), while capital raised for social welfare activities in the
Mekong Delta region has hit nearly 600 billion VND (28.2 million USD).
Mekong
economic hub set to contribute 13.3 percent to GDP
The
Mekong Delta key economic zone will focus on industrial, trade and
agricultural development with priority given to the industrial sector in a
bid to fulfil the set target of contributing 13.3 percent to the country’s
gross domestic product (GDP) by 2020.
To
realise its industrial development programme, the zone - including An Giang,
Kien Giang and Ca Mau provinces and Can Tho city - has rearranged State-owned
businesses operating in the field of aquatic product processing towards
equitisation.
The
businesses have also received support to upgrade their equipment and
technologies, raise processing capacity and expand operations.
The
zone’s fishery exports have expanded further to such markets as Asia, Europe
and
Apart
from building canned food factories, the zone has also upgraded and built
more rice processing facilities and warehouses in An Giang, Kien Giang and
Can Tho.
On the
plane of commercial development, the zone has extracted its advantages and
joined hands with other regions across the country to raise its annual trade
growth by 17.1 percent.
Thanks
to investment in infrastructure, the zone now boasts 23 wholesale markets, 21
border markets, 37 commercial centres, 52 supermarkets, four exhibition
centres and four logistics centres.
Rice
and aquatic products have been identified as strategic with annual outputs
reaching eight million tonnes and four million tonnes respectively.
Accordingly,
high-tech application areas have been built in Can Tho city in a bid to raise
the zone’s annual agricultural growth rate to 5.2 percent.
The
zone has also set up large-scale paddy fields in Kien Giang and An Giang
provinces and developed the fishery sector as a spearhead industry.
Under
a project ratified by the Government in 2009, the Mekong Delta key economic
zone’s annual GDP growth rate is set to increase 1.25 times in comparison
with the national figure during the 2011-2020 period.
Piaggio’s
new model hoped to stun Vietnamese bikers
A new
model of the Italian Piaggio motorbike, launched in
Vespa
Primavera (Spring)’s vintage design is loved by Vespa fans around the world
for its moderate size and suitability for couples.
Piaggio
General Director in Vietnam Costantino Sambuy said that
Vespa
motorbikes are not only revered for their fashionable style but have long
been a ‘cultural ambassador’ linking
In the
first nine months of 2013, Piaggio sold 146,000 vehicles across the world, up
21.3 percent over the same period last year.
The
company penetrated Southeast Asia by setting up its first factory in the
The
move demonstrates the growing demand of Vietnamese customers for the high and
medium level motorbikes.
Sales
from the Asian market are expected to account for half of Piaggio’s global
turnover of 2 billion USD.
Foreign-funded
projects carried out in Thua Thien-Hue
The
Nordic Assistance to
The
project is carried out until the end of 2013 in Nam Dong and Phong Dien
districts and
The
project includes training courses on mitigating climate change risks and
raising public awareness of renewable energy and building 20 biogas systems
to local people in coastal communes and providing solar water heating systems
for five kindergartens.
Additionally,
the project also helps them develop a model on organic fertilizer production,
while providing training to improve community capacity on dealing with
livelihood-related risks caused by climate change and assisting them in
building climate change resilience models which are based on the
beneficiaries’ proposals.
Besides,
the locality has also received 550 million VND (25,850 USD) from the Bridge
Asia Japan (BAJ) to carry out a project on community-based development in
Thuy Xuan ward,
The
project aims to improve income of local people by developing available
tourism products in the locality, thus contributing to restoring and
preserving traditional cultural values in
Pursuing
financial arrangements for power grid projects
According
to the electricity master plan for the 2011-2020 period, 130 500kV power grid
projects and 551 220kV ones will be upgraded and built with a total
investment capital of more than 210 trillion VND (10 billion USD). Report by
the
In 2013
alone, 50 new projects will be launched with a total investment capital of
more than 12 trillion VND. This is considered a necessary solution to ensure
sufficient electricity supplies for
Chairman
of Vietnam National Power Transmission Corporation (EVN NPT) Dang Phan Tuong
said among power grid projects to be carried out in 2013, many projects have
special importance in ensuring the sufficient electricity supplies for the
southern region such as the 220kV Dak Nong - Phuoc Long - Binh Long; 500kV
Pleiku - My Phuoc - Cau Bong; Song May - Tan Dinh, Vinh Tan - Song May and
Phu My - Song May transmission lines.
By the
end of 2013, EVN NPT will start the construction of the 500kV Duyen Hai - Tra
Vinh project and the 500kV transformer station of Long Phu Thermal Power
Plant and Thien Luong Thermal Complex approved in the master plan.
More
than half of the planned projects are funded by international organisations
like Asian Development Bank (ADB), the KfW Banking Group, NEXI and domestic
commercial banks.
However,
accessing capital has faced difficulties due to the too high capital demands
and the too low power transmission costs (accounting for only 6-7 percent of
the electricity prices). For this reason, revenue could only offset
production costs.
In
addition, EVN NPT’s debt-equity capital ratio has increased by 4.4 times,
resulting in more difficulties in financial arrangements. This is also a big
problem mentioned by Deputy Prime Minister Hoang Trung Hai when he instructed
solutions to remove difficulties and accelerate power projects in the coming
time. He assigned the domestic commercial banks make financial arrangements
guaranteed by the government.
In
Announcement 344/TB-VPCP, Deputy PM Hai also assigned the Ministry of
Industry and Trade to review and adjust the 2013 electricity transmission
costs and work out a roadmap to increase these costs by 2015 and in the
2016-2020 period.
The
rise in electricity transmission costs must suit the roadmap to increase
electricity retail prices which could ensure the corporation’s finances so
that it could arrange capital resources to accelerate the construction of
power transmission networks, meeting the n-1 standard.
Tuong
of the EVN NPT also said the corporation has also been simultaneously
implementing many power projects in 2013 worth over VND12 trillion and in
2014, 2015 of 17 trillion VND per year.
At
present, EVN NPT has signed credit contracts to make financial arrangements
for 42 out of the 50 projects launched in 2013 and eight remaining projects
are expected to be arranged by the end of this year. It has also planned to
raise long-term capital resources for those projects approved in the master
plan and strive to diversify sources of capital.
“To
ensure sufficient financial arrangements for investment in power projects,
EVN NPT is intending to speed up progress of the projects, seek for solutions
to reduce costs, and diversify and take full advantage of the preferential sources
of capital,” Tuong said.
How
tax policies help attract more investment to Vietnam
Up to
now, there have been 15,100 FDI projects in
At the
annual meeting of the Asia-Oceania Tax Consultants' Association taking place
on October 17-18, 2013 in
"The
favourable tax regime applied in recent years has turned
"In
recent years,
Specifically,
Vietnam's National Assembly has passed a law amending and supplementing a
number of articles of the Law on Corporate Tax (in effect from January 1,
2014), of which more regulations are proposed to attract and encourage
investment.
Accordingly,
the corporate tax will be reduced; the ordinary tax rate will be 22 percent
from January 1, 2014 and 20 percent from January 1, 2016.
Besides,
there is extension of tax incentives and adjustment of the level of tax
reduction and tax incentives, especially for agriculture, farming, rural
development, socialisation, non-profit purposes, the areas with tough
socio-economy and the areas with priorities for investment. The new
regulations also provide tax incentives for investment expansion and
industrial zones. The amendment of the tax policies will target different
groups to meet the actual demands and be consistent with the Investment Law.
Besides,
the Government approved a strategy to reform the tax system in the 2011-2020
with the aims of simplifying the tax administrative procedures, facilitating
the taxpayer, standardising the tax administration on the basis of the
application of information technology to ensure the consistency, making
punishment against the acts of transfer pricing, tax fraud and encouraging the
use of the tax services through tax agents.
One of
the conference topics raising a lot of concerns is the transfer pricing and
the mechanism for the advance pricing agreement (APA).
According
to Nguyen Thi Minh, Deputy Minister of Finance, the application of the APA is
beneficial for businesses, tax authorities and the country.
In
regards to the application of the APA, at the meeting, international and
domestic speakers also shared that because of the differences on the
conditions of each country and territory, investment policies, different tax
policies, the application of the APA needs the consensus.
According
to Marcellus Wong, Senior Adviser of PricewaterhouseCoopers in Hong Kong,
China, the application of the APA is very complicated and controversial,
which requires a large team of consultants and takes 1-3 years or even 5
years to help the countries to reach the agreement of implementing the APA.
Some basic forms of the APA agreements have been undertaken among the
taxpayers, the local tax collection offices (the unilateral APA) and the tax
authorities in other countries (bilateral agreements and multilateral APA).
To apply the APA, each country should build their own system based on its
legal system, geography, politics and economics. However, the system should
comply with the principles of Organization for Economic Co-operation and
Development (OECD) and the recommendations of other countries.
Mie
Seyama, on behalf of the Japan International Cooperation Agency (JICA),
shared that
According
to Huong Vu, representative from the Vietnam Tax Consultants’ Association,
The
APA is expectedly applied on 3 levels. The simplified APA includes least
procedures, which is least time consuming and expensive to the taxpayers.
Second, the standard APA is aimed at the entities with least complicated
transactions. Third, the APA is offered for more complex transactions,
linking to the international transactions.
Manufacturing
maintains growth momentum
HSBC
Vietnam said om Monday the country’s Purchasing Managers’ Index (PMI) in
October remained at 51.5, which is unchanged compared to September and a
signal showing that manufacturing is maintaining its growth momentum.
“The
continued expansion signaled by the PMI shows that activity is indeed
stabilizing in the country. We expect economic activity to continue to be
bolstered by strong performance of exports, supported by steady FDI inflows,”
said Trinh Nguyen, Asia Economist at HSBC.
She
added that this would help
According
to HSBC, the manufacturing industry’s production growth bounced back in October
with a high number of new orders resulting from an increasing demand. The
number of laborers of surveyed manufacturing enterprises continued to rise
but at a slower rate.
Overall
operating conditions in October were improved after four months of deterioration.
Although growth was modest, this is still the first growth recorded since
April.
Production
inched up following an increase in the number of new orders. Latest data
showed that the volume of new orders rose for the second month in a row with
the fastest growth rate in the survey history.
Besides,
faced with a continuous increase in input costs, Vietnamese manufacturers
have raised their own charges for the first time since March.
HSBC
expects low inflation at year-end
SBC,
in its
The
bank said that one of the risks to inflation in the coming months will likely
come from rising food prices, which saw a sharp uptick in October to 4.1%
year-on-year versus 3.5% in September. “We expect a gradual rise in food
inflation, especially towards year-end and the Tet festival,” it said.
“However,
inflationary pressures will likely be contained, thanks to low global
commodity prices. Our base line scenario is for crude prices to stay flat and
only accelerate towards the end of the first quarter of 2014,” the bank
predicted.
According
to the report, the sluggish domestic demand also keeps inflationary pressures
in check. While the export sector is feeling a boost from external demand,
the domestic sector is still affected by a frozen banking system, which
dampens appetite for consumption.
Since
the start of the year, credit growth has expanded at a mere 6.6%
year-on-year, which suggests that Vietnam’s non-performing loan problem
remains largely unresolved despite efforts by the Vietnam Asset Management
Company to purchase bad debts from banks. This in turn has kept lending weak
and dampened private sector sentiment.
Despite
the large drag from the deleveraging process, the economy is performing
relatively well. The macroeconomic situation is largely more stable, with the
currency, inflation and external balances more sustainable.
The
country’s strong foreign direct investment inflows provide a sticky capital
base, giving the Government time to press forward with strategies to resolve
the build-up of bad debts.
However,
HSBC said that the Government will also need to work on key issues such as
the role of State-owned enterprises in the economy, as well as soft and hard
infrastructure. Promoting linkages of domestic firms to foreign enterprises
is also important, as labor competitiveness does not last forever and wanes
as wages rise.
Presenting
the Government’s socioeconomic report at the National Assembly session on
October 21, Prime Minister Nguyen Tan Dung said that consumer price index
(CPI) dropped from 18.13% in 2011 to 6.81% in 2012 and 4.63% between January
and September this year. The nation’s CPI is expected at around 7% this year.
Enterprises
reserved about business prospects
Around
half of 122 enterprises surveyed by the credit rating firm World Vest Base
Vietnam (WVB) are still reserved about the business prospects, although
business conditions have improved compared to one year ago.
The
survey conducted between late September and mid-October is meant to build the
Business Confidence Index for the third quarter, and findings were released
in
Half
of the respondents said the overall business environment improved compared to
one year ago, while 35% said it was unchanged, and 15% said conditions
worsened.
Some
63% of the respondents predicted the business outlook would be better, while
only 2% were concerned about the future. Some 57% of polled enterprises said
they would maintain their current workforce, while 36% said they would
recruit more, and 7% said they would lay off workers in the next 12 months.
Meanwhile,
regarding fixed assets, 56% said they would stay put, while 38% planned to
acquire more assets, and 6% they would cut costs in the next one year.
The
WVB report indicates that enterprises still find access to bank loans
restricted due to the lack of assets for collateral though interest rates
have been slashed. In addition, difficulties in finding outlet for products
coupled with concern over the return of high inflation have deterred
enterprises from expanding operations.
That
is the reason why up to 50% of surveyed enterprises do not want to recruit more
laborers or expand production, while 7% planned to lay off workers and 6%
would scale down production to cut costs.
Despite
concerns about uncertainties, 54% of the enterprises estimated higher
revenues, while 39% expected revenues to be unchanged, and only 7% worried
that revenues would fall in the next 12 months.
Similarly,
some 55% of the respondents were confident that profits would increase in the
next 12 months, some 38% expected profits to stay unchanged, and only 7%
worried about falling profits.
Explaining
on the high ratio of nearly half of the respondents lacking confidence in
higher revenues and profits in the next one year, WVB pointed to weak
domestic demand, low credit absorption in the economy, and the slow
efficiency of macroeconomic policies.
On
account of data collected from the survey, WVB gives the Business Confidence
Index for the third quarter at 116 points, a mild decrease from the second
quarter’s index of 118 points.
Wood
exporters to face stricter requirements in EU, U.S.
Firms
exporting woodwork products to the European Union (EU) and the
Tim
Dawson, the European Forest Institute’s FLEGT Facilitator in
Based
on such information, authorities of importing countries will analyze and
evaluate risks to ensure imported wood has legal origins.
According
to Chen Hin Keong, Global Forest Trade Program Leader at TRAFFIC, if
enterprises have forest certifications but fail to clarify origins of
exported wood, the legality of wood is not ensured.
It is
highly likely that cheap wood materials are illegal. If committing
violations, enterprises may receive maximum fines of US$250,000 or
US$500,000, he noted.
Nguyen
Ton Quyen, general secretary of the Vietnam Timber and Forest Product
Association, said that enterprises should keep in mind regulations of the
The
According
to the Ministry of Agriculture and Rural Development, the total export
turnover of wood and wood products amounted to over US$4.35 billion in the
January-October period, up 14.8% year-on-year. Meanwhile, the import turnover
increased by 4.8% to US$1.21 billion, with the volumes imported from
Condo
division not a wise solution: experts
Some
experts have cast doubt on the success of real estate enterprises’ reduction
of condo sizes to clear stockpiles, saying that the solution may only help
reduce financial burden of homebuyers while it still fails to drag down house
prices.
The
current Housing Law requires commercial apartments to be at least 45 square
meters each. However, given the amended Housing Law the Ministry of
Construction is fielding suggestions for, housing developers in
Some
have raised concerns over huge supply of small-sized condos in the future
given large apartment stockpiles in the country. According to the ministry,
the nation saw a condo stockpile of around 27,800 units as of June, including
nearly 6,200 units in
Phan
Thanh Mai, general secretary of the Vietnam Real Estate Association, said
that apartments around the world are usually measured at 30 to 50 square
meters each while a commercial condo in
“In my
opinion, investors should be allowed to choose condo sizes following market
demands,” Mai said.
Pham
Trung Ha, general director of Hoa Phat Land, said that if investors can
decide condo sizes, the real estate market will see positive impacts.
This
solution will help enterprises speed up sales and improve market liquidity.
Hoa Phat Land also has plans to convert some projects into small-sized condos
to reduce investment expenses.
According
to the Ministry of Construction, investors registered to convert over 50
commercial projects into budget home projects as of August 31. Enterprises
also sought approval to revise sizes of 6,000 commercial condos of 22
projects to turn out over 8,300 apartments.
However,
many experts said that division of condos into smaller units will not help
reduce prices. In contrast, condo prices may increase given this solution.
Tran
Minh Tri, deputy director of Thu Do Trade and Investment Joint Stock Company,
said that this solution will only support homebuyers. Meanwhile, enterprises
cannot cut investment costs and have to spend more on re-building condo
projects. Only firms building new projects can save construction expenses.
Some
even said that this solution actually cannot help reduce sales prices per
square meter although the total value of a condo has been lowered.
Nguyen
Quoc Hung, director of a real estate trading center in Hanoi City’s My Dinh
District, said building smaller apartment units would lead prices per unit to
slide but the cost of each square meter built is not lower, or even higher
than medium-sized apartments.
For
instance, a condo measured at 53 square meters in Xa La is offered at around
VND20-22 million per square meter, much higher than the per square meter
price of a 70-square-meter unit.
Time-consuming
procedure for getting social housing status
It has
taken HCMC-based real estate firm Hoang Quan around eight months to complete
the procedure for converting a commercial apartment project into a low-cost
one to enjoy policy incentives.
With a
decision of approval issued by the city government, Hoang Quan can now
redesign the 1,060 apartment units in CC1 project in Binh Chanh District into
1,735 smaller units. The name of the project has been changed into HQC Plaza.
Half
of the apartments will be sold to staff of the Ministry of Public Security
and the remainder to those city dwellers eligible for buying social housing,
according to Hoang Quan.
Hoang
Quan is one of the first real estate firms which the Bank for Investment and
Development of Vietnam (BIDV) has provided loans for under the Government’s
VND30-trillion credit program designed to prop up the lackluster real estate
sector.
BIDV
has approved a VND540-billion loan for Hoang Quan to implement this project,
on which work will start this November. The apartments are expected to be
ready in the fourth quarter of 2015.
Hoang
Quan sent the Ministry of Construction an application for seeking a social
housing status for HQC Plaza on February 27 and after the ministry approved
of this, the HCMC government issued a license for the firm on October 26 to
go ahead with the revised project.
Also
having the social housing status are Company 584’s project to build 418 units
and the Hung Dien commercial and residential project in District 8 with 1,056
units to be converted into 3,916 smaller units. The two projects are forecast
to be finished in the next two or three years.
The
city is concerned that if more apartments are developed in inner-city areas,
the effort to move people to outlying areas will fail and social and
technical infrastructure will become insufficient to meet a spike in local
population density. This explains why the city government is careful about
it.
Techcombank
wins Best Retail Bank Award
Techcombank
will be honored with the Best Retail Bank Award at the ASEAN Banker Forum
2013, which will take place in HCMC on November 19.
Other
lenders such as VietinBank, HDBank, Ocean Bank, TienPhong Bank and Citibank
will also receive various awards at the event organized by the Vietnam Banks
Association and International Data Group (IDG).
These
banks have been recognized to apply technologies in competitiveness
improvement and customer service. They have also obtained high ratios of
successful payments, ensure information security and reported positive safety
ratios.
The
ASEAN Banker Forum 2013 will discuss development of the retail banking sector
in 2013 and 2014. The organizing board expects to lure 450 bankers and
specialists from Vietnam and ASEAN countries to the event this year.
Overseas
remittance to HCMC keeps rising
Overseas
remittance via HCMC-based banks was expected at US$3.7 billion between
January and October, or over 90% of that in the entire 2012, said Nguyen
Hoang Minh, deputy director of the central bank’s HCMC branch.
In the
Jan-Sep period, the city’s remittance hit nearly US$3.5 billion, much higher
than earlier estimation of US$2.9 billion or 84% of the entire 2012’s figure.
This
year’s remittance inflow will be higher than last year’s as remittance
usually surges in the fourth quarter, when overseas Vietnamese send money to
their relatives in the homeland before the Lunar New Year holiday. This
channel makes up a high ratio while remittance generated by the labor export
sector accounts for only 20%, Minh said.
Trinh
Hoai Nam, deputy director of Dong A Remittance Company, said that remittance
via the enterprise remained positive despite economic woes of many countries
in the 10 months. The enterprise’s remittance increased 15% year-on-year and
met 95% of this year’s target.
Therefore,
Dong A may surpass this year’s target by 30% because remittance often jumps
by 30-35% in final months of the year, Nam said.
Notably,
this year’s overseas remittance has seen positive growth. Vietnamese
communities in the U.S., Australia and Canada have obtained stable incomes,
an important factor for remittance to flow strongly into Vietnam in final
months of 2013 and early 2014, Nam added.
Sacombank
Remittance Company said that remittance via the enterprise hit around US$1.2
billion between January and September, the biggest revenue among banks and
firms providing remittance service.
According
to an official of the Ministry of Labor, Invalids and Social Welfares, the
ministry has no specific statistics on remittance sent from Vietnamese
guest-workers overseas. However, reports from localities showed that the
figure was around US$1.8-2 billion.
However,
the official said that the real remittance inflow may be much higher as
overseas Vietnamese still send money via unofficial channels or bring money
home on their own.
This
year, remittance sent from overseas workers may be equal to that in previous
years.
Viet
Capital Bank joins Visa
Vietnam’s
Viet Capital Bank has become an official member of the Visa International
Service Association, the local bank said in a statement.
To
gain membership of Visa, Viet Capital Bank has to meet Visa’s requirements
for legal and financial capacity, and the high standards for technology and
security in providing modern banking services of international levels.
The
Visa-Viet Capital Bank licensing ceremony was held at the local bank’s head
office in HCMC last Friday.
Lorijon
Bacchi, Visa country manager for Vietnam, Cambodia and Laos, said in the
statement: “We are happy to welcome Viet Capital Bank join Visa. With Visa
international payment network, fast transaction time processing and advanced
security system, we want to cooperate with Viet Capital Bank to offer a real
global service for the bank’s customers.”
With
Visa membership, Viet Capital Bank can make use of Visa’s worldwide POS
network to better service for its customers through international cards such
as debit, prepaid and credit cards.
HCM
City to listen to taxpayers
The
HCMC Tax Department will organize a week of activities with the main aim to
get feedback from taxpayers from November 11-17.
According
to the HCMC Tax Department, tax offices of every district will have direct
talks with taxpayers to listen to and respond to their tax-related problems.
If questions are not answered during the week due to limited time, taxpayers
will receive responses in document form one week after the event finishes.
In
addition, opinions and questions of taxpayers can be sent to the HCMC Tax
Department’s website with replies within 48 hours.
Taxpayers
can also voice their opinions to newspapers like Sai Gon Giai Phong and Thanh
Nien which will be dealt with by tax officers.
Besides,
the HCMC Tax Department will have direct dialogue with readers of Tuoi Tre
and Thanh Nien with detailed schedules to be announced soon. There will be at
least three talks to popularize the ins and outs of personal income tax to
students at HCMC’s universities of pedagogy, social sciences and humanities
and economics.
In
March, a similar event was held to handle taxpayers’ problems concerning
personal income taxes.
Experts
stress reasonable, not reckless, credit growth
Credit
growth was low in the first ten months of the year and experts are warining
that pushing it up only to accomplish the year end target is risky and
imprudent.
According
to a government press release, as of October 23, Vietnam’s credit growth
stood at 6.48 per cent, far below the 12 per cent annual target set by the
State Bank (SBV) under Direction 08 on July 18.
The
entire banking sector would have to surge forward to gain the 5.5 per cent
needed to meet the goal.
“Credit
growth should not be a target, a number to be achieved at year end,” said
Alan Pham, chief economist at VinaCapital.
Credit
should grow according to the real capital needs of an economy. It is contingent
on economic forces such as business conditions, consumer demand, and
absorbtion capacity, he added.
Experts
say low credit growth is resulting from lack of demand. Enterprises aren’t
borrowing as they are producing less goods because consumers aren’t buying.
Economist
Tran Du Lich said many enterprises were floundering because of weak
purchasing power, surplus inventories, and mounting bad debts.
Also,
the poor liquidity of the falling real estate market has made it difficult
for banks to recoup bad debts.
Commercial
banks need healthier enterprises to boost capital demand and help them meet
their credit sales targets.
But
Pham said that any attempt to bolster bank lending in the last two months to
hit the annual target would do more damage than good due to policy lag time –
it takes about 6 months to see the effects.
He
said that economic growth and GDP performance was already pretty much
determined for the year.
“Any
attempt to increase credit now is already too late to affect growth this year
and it may have inflationary consequences further down the road in 2-14,”
Pham explained.
Economist
Nguyen Tri Hieu also agreed it was not necessary to reach the 12 per cent
credit growth target.
According
to Pham, credit growth of 9-10 per cent this year is achievable and is on par
with last year.Vietnam’s economy has entered a period of sub-par growth
(5-5.5 per cent) due to inefficiencies such as slow banking, SOE and public
investment reforms. The best solution to achive growth is pushing these
reforms forward, he said.
HSBC
economist Trinh Nguyen has forecast appropriate credit growth of 8 per cent
for this year.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 17 tháng 11, 2013
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