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BUSINESS IN BRIEF 12/1
Viglacera
construction materials firm to go public
The
State-owned Viglacera glass and construction pottery corporation will launch
307 million shares worth 10,000 VND (4.7 USD) each to its initial public
offering (IPO), as part of its equitisation plan to become the top Vietnamese
construction materials producer.
Viglacera
said on January 8 that it will sell over 76.9 million shares, or 25.07
percent of its chartered capital by auction, with an asking price of 10,300
VND (4.9 USD) each.
It
contributes over 23 million USD in annual exports to the construction sector
with products available in 40 countries and territories worldwide.
The
group also focuses on the construction of industrial parks, urban and
commercial areas and housing.
Along
with equitisation, it will also reshuffle its operation by divesting its
capital from unpromising projects.-
Leading
cement corp. targets 30 trillion VND in revenue
The
Vietnam Cement Industry Corporation (VICEM) hopes to earn more than 30
trillion VND (1.41 billion USD) from selling nearly 21,000 tones of cement
products in 2014.
To
meet the target, the corporation will work to minimize production, management
and selling expenditure, while diversifying production and stepping up
mechanism restructuring.
It
will also improve business management and renew production methods, successfully
undertaking the role to lead
In
defiance of the economic downturn, in 2013 VICEM still witnessed a
significant growth, with clinker and cement output increasing 8.8 percent
against the previous year.
The
firm also accounted for over 16 million tons out of the almost 46 million
tonnes of cement the country produced in 2013.
It
raked in 30.5 trillion VND (1.43 billion USD), with pretax income of 528
billion VND (24.8 million USD) and contributed over 1 trillion VND (47
million USD) to the State budget.
Buyers
more confident in made-in-Vietnam goods
A
remarkable 71 percent of people surveyed are now satisfied with high-quality
made-in-Vietnam goods that make up almost 90 percent of the market share at
supermarkets, an official from the Ministry of Industry and Trade has
announced.
Deputy
Minister Ho Thi Kim Thoa revealed the information with some fanfare on
January 8 during a meeting between her ministry and the National Steering
Committee for the campaign “Vietnamese prioritize using Vietnamese goods”
She
said after four years of the campaign, a number of positive outcomes have
been seen, creating a foundation to work on in the following years.
According
to a recent survey by the agency, the ratio of using domestic input materials
as well as machines in production has seen an increase of 25 percent. People
at rural areas are getting used and beginning to favor commodities produced
at home.
However,
the ministry pointed out several limitations facing the work, including the
unsustainable distribution of goods in rural areas and some enterprises
making use of promotions to consume inventories and out-of-date goods as well
as lack of sanctions.
Addressing
the meeting, President of the Vietnam Fatherland Front’s Central Committee
Nguyen Thien Nhan, who led the Steering Committee to the event, asked the
ministry in collaboration with the Ministry of Science and Technology to
support businesses in building trademarks, provide regular supply to
disadvantaged areas and honor organizations and individuals who have shown
good performance in the campaign.
The
nationwide initiative has been benefiting domestic enterprises and
manufacturers, said a representative from the National Textile and Garment
Group.
Nevertheless,
the firms involved are burdened with the huge costs of transport, sale and
management. To address the issue, the formation of distribution centers at
major economic hubs and cities are required.
Binh
Dinh targets 8,500 ha of forests
The
central
According
to Director of the provincial Department of Agriculture and Rural Development
Phan Trong Ho, the area includes 7,600 ha of forests serving economic
purposes and 900 ha of protective forests.
About
800 hectares of forest will be planted under a project funded by the Japan
International Cooperation Agency, he said.
Last
year, the province reforested over 9,500 hectares, up nearly 1,080 from 2012,
bringing the local forest coverage to 48.7 percent.
The
provincial forestry sector’s production value reached over 310 billion VND
(14.6 million USD) in 2013, a year-on-year increase of 10.5 percent.
The
sector has helped residents in rural areas with high income, from 260-300
million VND (12,220-14,100 USD) per hectare per year, according to the
municipal Department of Agriculture and Rural Development.
High-quality
flowers such as roses and orchids bring in much higher income for local
cultivators than other types – as much as 1.2 billion VND (56,400 USD) per
hectare on an annual basis.
Agriculture
experts said the city has many advantages to develop the industry, including
the abundance of experienced flower manufacturers and support from flower
research agencies.
Exchanges
between domestic and foreign businesses in the field also help create new
varieties of flowers that fetch high economic value on the market, they said.
Contract
signed to broaden highway in HCM City
The
State-owned Ho Chi Minh City Financial and Investment JSC and the Hanoi
Highway Construction and Investment JSC on January 8 signed a credit contract
for the second phase of a project to broaden the
The
project has a total investment of 518.2 billion VND (24.355 million USD),
over half of which comes in the form of a 14-year loan from the Vietnam-Local
Infrastructure Development Fund of the World Bank.
It
aims to widen main segments of the
The
road will be broadened to 113.5 meters with 10 meter-wide pavements, allowing
vehicles to travel at a maximum 80 kilometers per hour.
The
project, expected to finish by 2015, will also construct parallel roads on
both sides of the highway from
Addressing
the signing ceremony, Vice Chairman of the Ho Chi Minh City People’s
Committee Nguyen Thi Hong said the project is important as the city is facing
transport infrastructure problems from population pressure.
The highway,
linking
Solutions to
harmful effect of electronics manufacturing shared
Domestic
and international experts shared solutions on reducing the adverse impacts
that
The
industry contributes greatly to generating jobs for rural laborers, speeding
up national economic growth, and reducing poverty, striving for 40 billion
USD in export turnover by 2017.
Thousands
of types of chemicals used in electronics manufacturing have resulted in
hazardous influence on labourers’ health and environment, as warned by the
Ngo
Van Hoai, leader of the Centre for Development and Integration ( CDI )
research team , said her centre and the Oxfam Solidarity Belgium ( OSB )
jointly carried out research activities to initially evaluate how working
condition impacts on workers at electronics assembling and producing
factories, in a bid to conduct an overall research on the industry’s labor
safety and hygiene.
The
research’s outcomes showed 200,000 workers of the industry, mainly women, are
suffering from hazardous working conditions.
By
December 31, 2012, around 28,000 laborers caught occupational diseases while
the chemical-related illness accounted for 10 percent of the total, according
to the Ministry of Health.
Up to
90,000 tones of electronic waste, harmful to public health and the
environment, are skipped annually in
In
order to develop a safe and sustainable electronics industry, it is vital to
check and perfect legal frameworks related to labor safety standards and
electronic waste management, participants suggested.
Firms
operating in the field must announce types of chemicals used in their
production, with the aim of enabling their workers to access information on
the chemicals, they added.
Together
with attaching importance to warnings released by the Ministry of Labor,
Invalids and Social Affairs, an (International Labor Organization)
ILO-OSH-2001 occupational safety and health management system should be
established, said experts.-
Residences
for sale in
The
number of residences for sale in
The
survey was conducted by CBRE Vietnam, an affiliate of US-based real estate
service and consulting firm CBRE Group.
In the
fourth quarter alone, there were 2,702 residential units for sale, surging
70.5 percent quarter on quarter and 203.6 percent year on year.
The
increase indicates that investors have gained their confidence in the market
recovery, yet it will also mount up the unsold inventory (17,214 units at
present) as supply has surpassed demand, the survey read.
Meanwhile,
the amount of transactions in the primary market rose 40.4 percent from Q3 to
over 2,000 units, and up to 49 percent of successful deals were of the
affordable segment.
The
economic improvement, attractive sale programmes and reasonable prices are
reported to have fuelled the growth.
Property
prices in Q4 almost stayed still, ranging from 630 to 2,800 USD per square
metre. Notably, prices of the affordable segment declined to 630 USD per
square metre, down 1.4 percent from the previous quarter.
Duong
Thuy Dung, Associate Director of the Research and Consulting Department of
CBRE Vietnam, said this was the first time the affordable segment witnessed a
considerable decrease since several residential projects benefited from the
Government’s 30 trillion VND (1.4 billion USD) aid package.
Additionally,
some investors wanted to have quick consumption at lower prices rather than
poor consumption at high prices, she added.-
VN,
The
Central Highlands
An
agreement to this effect was inked in Buon Ma Thuot City, Dak Lak province,
on January 8, under which the two sides will also join hands in a broad range
of areas such as economics, investment, education and healthcare.
They
agreed to work together in protecting forests, collecting forest resources
suitably and effectively combating diseases among cattle and humans.
The
two sides will conduct border demarcation work, encourage residents to
protect border markers and manage the shared borderline in accordance with
reached agreements, responding prompltly to any arising issues.
They
will also make greater efforts in searching and repatriating Vietnamese volunteer
soldiers who laid down their lives in
Dak
Lak and Mondulkiri have signed 11 agreements in the past, mostly focusing on
building border gates and economic development.
Mondulkiri
has created many conditions allowing for Dak Lak businesses to invest in
agricultural production, hydroelectric projects and tourism in the locality.
As
part of a 10 million USD project, the Dak Lak Rubber Limited Company has
planted more than 1,600 hectares of rubber trees in the Cambodian province, generating
jobs for over 160 local people.
Fruitful
cooperation between the two localities has also been seen in industry,
healthcare, education and social security.
Deputy
Prime Minister Vu Van Ninh has welcomed US-based Kraig Biocraft Laboratories
(KBL)’s intention to develop a new technology-used silk production project in
Receiving
KBL’s Chairman Kim Thompson in
He
expressed his hope that the KBL’s application of high technology in the
sector will help it further develop.
Ninh
assured that the Vietnamese government will study the project carefully and
create favourable conditions for it once operational.
The
deputy PM expressed his pleasure at the developments of Vietnam-US relations,
noting that the
KBL’s
Chairman Kim Thompson informed his host that after making fact-finding tours
in
He
said he believes that the project will help intensify
Two-way
trade turnover between
The
figure was announced at the Vietnam-UK Joint Economic and Trade Commission
(JETCO)’s seventh session in
At the
session,
Meanwhile,
the
They
also voiced their support to
The UK
Minister without Portfolio Grant Shapps and Vietnamese Deputy Minister of
Culture, Sport and Tourism Ho Tuan Anh also signed a memorandum of
understanding on the preparations for the 2019 Asian Games to be held in Vietnam
on the same day.-
Firms
eye budding green tech deals
Water-absorbing
sandbag maker Sansei, is among several Japanese enterprises keen to bring
environmental protection and climate change responses to
The
company’s director Kazumi Sato told VIR that Sansei would open a
representative office in
“
Sansei
representatives intend to visit
“We’ve
selected
Japanese
firm HBC International’s president and CEO Masami Nakashima also told VIR
that lower labour costs were one of the main reasons, combined with strong
local demand for environmental protection, prompting the company to bring its
international standard water treatment products into
“
The
company has already found some local enterprises to produce the products.
“We’ll do more research before thinking about the possibility of establishing
a factory in
Hitachi
Asia Vietnam’s general director Nobuyuki Nakamura said that his company would
engage in
According
to Pham Vu Hai, director of Northern Investment Promotion Centre under the
Ministry of Planning and Investment’s
He
said foreign investors paid special attention to local legal documents and
regulations that could directly affect their performance in
“We
want to work with the government, state-owned and private companies in
incinerators,
static or mobile medical waste disposal and energy recovery systems,” said
Mark Comerford, international business development manager of the
The
group’s technologies can provide environmentally secure incineration systems
with smoke, gas and odour emissions virtually eliminated.
“It is
costly to produce environmental protection technology, so investors would
need special incentives from the government,” he stressed.
Recently,
Commercial
banks to find forex profit routes
Despite
commercial banks having faced difficulties in profiteering from forex trading
activities in recent years due to the State Bank of
According
to State Bank Governor Nguyen Van Binh the country will manage the foreign
exchange rate within a 2 per cent trading bracket.
This
has reiterated the State Bank of
Commercial
banks may feel disappointed by the decision which will mean there will be
narrow opportunity to play the forex markets as an investment channel. Last
year the
SBV
adjusted the exchange rate by some 1 per cent, causing difficulties for banks
in earning from forex speculation.
According
to Dinh Duc Quang, head of currency trading at HSBC Vietnam, the economy was
not experiencing a shortage of foreign currency and the balance of trade was
stable. While other sources including foreign investment and remittances also
contributed to the surplus of foreign currency. In addition, the SBV had used
forex reserves to intervene in the market.
Quang
pleaded for greater flexibility in SBV management, “the State Bank shouldn’t
close all the doors for banks to profit from forex trading. The SBV itself
also understands that banks must prosper, so that we have capital to lend,” said
Quang
But
VIB deputy general director Le Quang Trung said that bank profits from forex
trading were still good, although smaller than previous years and that to
make profits in this context, banks needed specific strategies.
He
claimed a route to profitable foreign currency trading relied on providing
new products or investment options and that demand still existed for such
investment options. But he added that the issue was whether banks were aware
of these opportunities.
Looking
at
Quang
said that commercial banks were not facing liquidity shortages. Based on the
State Bank’s requirement to maintain the gap on foreign currency positions at
20 per cent, banks would still make big profits from the exchange rate
adjustment band of 2 per cent. Specifically, when they had a surplus of
foreign currency, they could convert it to VND and invest in bonds, then they
could earn from the interest rate gap.
“This
is a very good business opportunity, but of course it requires banks to have
effective tools to control potential risks, which always exist in the
business based on the difference between the interest rates, between
maturities”, Quang said.
According
to experts, the opportunity for banks to gain profit from monetary trading
remains viable, and is not simply based on speculation on foreign exchange
rate fluctuations, currency devaluations set by the central bank or the
ambiguity of dubious transactions.
Foreign-backed
projects in
Despite
the global crisis and domestic downturn, a range of foreign-backed real
estate projects moved ahead last year.
Limitless,
a
The
participation of Sovico in this project could provide a brighter future for
the ill-fated project which has been delayed for more than five years.
According
to Ali Rashid Lootah, chairman of Nakheel and Limitless, work will restart on
the $550 million five star hotel, villa, townhouse, apartment and shopping
centre complex in the first quarter of this year.
Malaysian-backed
ParkCity Hanoi also showed positive signs in 2013 when Perdana ParkCity
bought out local partner Vinaconex-Hoang Thanh’s stake in the joint venture.
Perdana
ParkCity’s subsidiary, Vietnam International Township Development JSC (VIDC),
has been speeding up construction to deliver their first homes by mid-2014.
VIDC
CEO Lawrence Peh said that the company had decided to make adjustments to the
master plan to accommodate a new 20-ha mixed-use component, diversifying the
project’s housing focus.
Also
in
This
allocation will be used to develop the first phase of StarLake, which is 100
per cent invested in by Daewoo E&C.
According
to the developer, the KDB loan would enable Daewoo E&C to continue its
project for the next two years and implement infrastructure systems as soon
as it receives cleared land from the Hanoi People’s Committee.
This
allocation will also help to start the first villa and housing complex at the
start of this year.
Long-term
developers are also more upbeat.
CapitaLand,
a Singaporean housing developer which has more than 20 years of experience in
Debt
owed to contractors in state-funded projects declines
Debt
owed to contractors participating in state-funded basic construction projects
has plummeted drastically, said Minister of Planning and Investment Bui Quang
Vinh.
Vinh
told the Daily that such debt had tumbled to VND28 trillion from over VND40
trillion in October last year, VND85 trillion in late 2012 and VND100
trillion in mid-2012.
However,
this is the debt owed by the central Government only.
Explaining
the debt fall, Vinh said the Government had asked local authorities to use
the central state budget to pay for the unpaid projects, half-done projects
and others in that order of priority.
“I’m
going to sign the 2014 budget in that spirit,” Vinh said. The Government has
stopped funding some ministries and local authorities as their capital
allocations failed to meet the requirement.
The
Prime Minister issued Directive 1792/CT-TTg in October 2011 has resulted in
an improvement in the settlement of debt in basic construction projects. The
directive requires ministries and local authorities to bear responsibility
for any public investment projects that are approved without proper prior
funding arrangements.
By
2015, public spending can be basically put under control, Vinh added.
However,
he said his ministry has yet to control debt owed by local governments as it
is not involved in the decision-making process in cities and provinces.
A
local leader told the Daily that there had emerged complicated lawsuits over
debt involving contractors and local governments.
Last
year, the ministry refused to settle around VND80 billion of the VND223.5
trillion of investment capital as investors requested higher payments than
the winning bids or those expenses not included in the signed contracts.
State
Audit of Vietnam (SAV) in a recent report said that local authorities still
made non-core investments in public projects, resulting in a shortage of
capital. As of the end
of
2011, local authorities had given the green light to over 7,300 projects with
combined capital of over VND273 trillion but had not been able to arrange
finances for these projects.
Some
localities might spend many years finishing their public investment projects
as the state budget and government bonds are targeted as main funding
sources. For instance,
Agriculture
competitiveness is still low
Despite
a number of positive results in 2013, local agriculture has yet to improve
many weak points from the past few years, with poor cooperation and the low
yield and quality eroding the industry’s competitiveness.
At an
online conference on reviewing the agricultural industry’s performance in
2013 and deploying its development plan in 2014 on Tuesday, Minister of
Agriculture and
Rural
Development Cao Duc Phat reported the industry’s growth at 2.67% in 2013,
equivalent to that in 2012.
The husbandry
industry has experienced the biggest difficulties as the selling prices of
products have constantly fallen while the feed prices have risen sharply,
which has driven many companies and farmers to huge losses.
Regarding
farm produce sale, the minister said that 2013 was not favorable for the
consumption of local farm produce inside and outside the country.
Regardless
of the aforesaid difficulties, the industry brought home an estimated US$27.5
billion from exports, a slight rise of 0.7% year-on-year. The good
performance is attributed to the strong growth of seafood items holding an
export growth rate of more than 10% year-on-year to US$6.7 billion.
Low
producer price index reveals hardship
The
slowing producer price index (PPI) in 2013 reveals great hardships for both
domestic industrial manufacturers and farmers, according to the General
Statistics Office (GSO).
Ngo
Thi Anh Duong, deputy head of the Pricing Statistics Department under GSO,
said that the low PPI in 2013 delivered hard blows to local producers,
especially farmers.
The
PPI for agriculture, forestry and fishery sector inched up a mere 0.57%
compared to the inflation rate of 6.04% last year, meaning farmers’ income
has shrunk considerably.
While
lower prices may benefit many consumers, such a situation is a dilemma for
farmers as most input costs increased, she said.
“It
causes adverse impacts on over 60% of the population living on farming in
rural areas as their income tumble,” she stated in a study.
According
to the study, the PPI for industrial manufacturers rose 5.25% year on year in
2013.
However,
it is major State-owned manufacturers that benefited the most, as their
prices increased according to roadmaps approved by the State, while private
enterprises suffered losses.
The
mining products, for instance, rose 6.68% in PPI last year, while electricity
generation and distribution enjoyed a PPI of 9.2%, and water supply and waste
treatment had a PPI of 7.23%.
Private
manufacturers as a whole, meanwhile, saw a PPI of 3.4% only.
By the
year’s end, the industrial inventory index was 10.2% compared to 20.1% in the
year-earlier period, but that did not indicate better sales, according to the
study.
Rather,
the low index resulted from most manufacturers scaling down production.
The
U.S.-dollar-based export price index for 2013, equivalent to 99.59% of the
2012 figure, also translated difficulties for domestic production, especially
farm produce.
The
average rubber price, for example, crashed by 18.96% compared to 2012, while
the cashew nut price tumbled by 10%, and coffee, rice and fishery fell by
some 5%, placing further pressure on farmers.
Meanwhile,
prices of certain services stayed put or increased last year, making life
harder for local producers. The transport freight and warehousing charges as
whole, for example, rose by 6.48% against 2012.
Expert:
Be ready for TPP
Enterprises
should be ready to grasp opportunities and overcome challenges brought by the
Trans-Pacific Partnership (TPP) agreement, said Vo Tri Thanh, deputy director
of the Central Institute for Economic Management (CIEM).
Local
enterprises have gained experiences after
For
TPP, enterprises need to prepare a lot of things such as knowledge about
policies, laws and commitments so as they can cope with lawsuits and disputes
when the agreement is signed, he added.
There
have been 19 TPP negotiation rounds with 12 member countries trying to settle
disagreements to sign the agreement in 2014.
Unlike
WTO, under which Vietnam just lowered tariffs at a certain level, TPP member
countries will pledge to remove 100% of tariffs, of which 90% must be lifted
right after the agreement takes effect, according to Tran Quoc Khanh, head of
Vietnam’s TPP negotiation delegation.
After
TPP signing, both sides will have from 10 to 12 months to adjust policies to
suit TPP regulations, Khanh said at a TPP conference in HCMC recently.
At
present, many issues such as export taxes, used goods import taxes and TPP
enterprises’ lawsuit rights are still under discussion.
TPP
includes not only international issues but also internal reforms and policy
improvements of the Government. Therefore, enterprises must be knowledgeable
of commitments and policy adjustments of the Government to deal with possible
problems, Thanh said.
According
to export and import data, up to 60-70% of Vietnamese goods is exported to
East Asian nations. Joining the TPP and free trade agreements with the
European
Union
(UN) and the Customs Union of Belarus,
In
addition, Khanh said that TPP will bring about opportunities for Vietnamese
firms to join regional and international production chains, facilitating
This
year’s seafood export is US$200 million higher than that of last year with an
estimate of US$6.7 billion, but there are still many chances for the sector
to grow, according to the Vietnam Association of Seafood Exporters and
Producers (VASEP).
Truong
Dinh Hoe, general secretary of VASEP, told the Daily that Vietnam still had
many chances to boost seafood exports next year as well as in the coming
years by focusing on producing products with high added values for big
exporting markets like Japan, the U.S. and Europe.
In
addition, seafood processing and exporting enterprises still can increase
their market share in markets with high growth rates such as
According
to Hoe, if enterprises have good and long-term strategies, they can achieve
significant growth in the Chinese and ASEAN markets.
Besides,
consumers in these countries tend to prefer fish and shrimp to meat. For
instance, many seafood products that
This
is an opportunity for
Reasonable
prices will attract more consumers. Hoe said that
However,
the major difficulty enterprises encounter when exporting to
In
addition, exports via unofficial channels always carry high risks of payment.
Meanwhile, regarding the ASEAN market,
Developers
offer special plan for homebuyers
A
number of commercial-housing developers that want to be eligible for the
Government’s VND30-trillion low-cost home loan program have introduced a
special plan in which buyers will pay for 70 square meters of floor space
even though their apartments are a dozen meters larger.
To
join the incentive loan program, developers of apartment projects must design
their units no bigger than 70 square meters each. In reality, there are some
finished projects where the area of apartments is bigger than the prescribed
size.
To
prop up apartment sales, certain project developers are weighing allowing
homebuyers to pay for 70 square meters and get the surplus space for free.
Le
Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), said Tan
Hung Real Estate Joint Stock Company has floated this idea.
The
company has completed the Tan Kien apartment project in HCMC’s outlying
district of Binh Chanh with 653 units measuring 84 square meters each and
selling for VND14 million per square meter.
To
meet the requirement for access to preferential home loans, the developer is
willing to give 14 square meters of floor space to homebuyers.
For
the apartments measuring over 70 square meters a unit, Chau said, the city
has approved a tolerance of plus 5%, which means an apartment subject to the
preferential lending program might be 73.5 square meters.
At a
meeting between the city’s government, the central bank governor, Nguyen Van
Binh, and related agencies last Friday, the proposal was considered as this
is a special case that benefits homebuyers, according to Chau.
This
is one of 13 issues petitioned by HoREA in order to carry out more
effectively the Government’s Resolution 02 on handling inventories, removing
difficulties for businesses, boosting business and production and tackling
bad debt.
To
simplify the case, HoREA suggested the city issue a list of areas that are
disallowed to convert commercial housing projects into low-cost homes or
divide apartments into smaller units such as the central city area. Projects
out of these areas might be converted into low-cost homes or divided into
smaller condos and companies will have their own orientation to adjust the
development of housing schemes in a suitable way, HoREA explained.
The
association urged the city to soon consider dealing with commercial housing
schemes seeking approval for being converted into budget homes and those for
restructuring their small- and medium-sized condos to support enterprises in
the context of current tough business conditions.
The
meeting in principle agreed to lower the balance capital ratio to 10% instead
of the current level of 20% to make it more suitable with the financial
capability of homebuyers, meaning homebuyers applying for loans from the
VND30-trillion dong package can take loans worth up to 90% of the apartment’s
value, Chau added.
FOL
increase left undecided
The
Government is now considering increase of foreign limit ownership (FLO) in
listed enterprises, so the draft will not be released within the next few
days as expected, said a leader of the State Securities Commission (SSC).
On
Tuesday, Reuters reported that Prime Minister Nguyen Tan Dung would give
approval for foreigners to own up to 60% in some listed enterprises in the
following days.
SSC
said that the draft was submitted to the Government a few months ago but
recently, SSC was told to adjust some points in the draft. Therefore, the
draft has just been submitted to the Government again.
In
addition, the Government may have to field suggestions from other ministries
as well. The draft will be approved later than expected, the leader said.
According
to Reuters, FOL and foreign voting rights will be increased from 49% to 60%
but only in some certain sectors and enterprises. Foreigners’ voting rights
will also increase to 49%, going in line with the current FOL of 49%.
Commenting
on the stock market in 2014, director of a foreign investment fund said that
foreign capital will keep flowing into the market. However, the capital will
not expand without the FOL increase draft.
There
are around 700 enterprises listed on the local market but large investment
funds just focus on stocks in the VN30 and HNX30 baskets that group tickers
with highest capitalization and liquidity on both bourses, and some leading
stocks in pharmaceutical, healthcare and consumer goods sectors. Of which,
many stocks have seen their foreign room filled up.
Foreign
investors cannot decide which stocks to invest in. Small stocks usually
report low liquidity while the investors cannot raise ownership in
large-caps. Therefore, capital mobilization will heavily depend on the FOL draft,
the director said.
Fourteen
banks based in HCMC were estimated to realize just 50-70% of profit targets
set for 2013, according to a report of the central bank’s HCMC branch.
As of
December 25, local credit institutions estimated to obtain over VND5.4
trillion in profits, a strong decline compared to over VND6.6 trillion in
2012. Last year, 80 out of 378 bank branches in the city reported losses.
Among
the 14 local banks, 10 had a healthy financial situation and two weak banks
needed to be restructured. The central bank’s governor approved restructuring
plans of eight banks aside from similar plans for two banks approved before
2013.
The
results were in line with the overview picture of the local banking industry.
Speaking
at the summarizing conference in
Banks
posted up total profits of VND29.5 trillion in the Jan-Nov period in 2013, up
3.2% against late 2012 but falling sharply compared to 2010 and 2011. Among
100 credit institutions posting gains, over 50% saw profits plunging by half
compared to 2012.
More
credit institutions reported losses given impacts of bad debts in 2013. The
problem would influence financial capability, competitiveness and development
of banks in the coming time, said the report.
Speaking
at the conference setting out targets for banks in HCMC last Friday, the
central bank’s governor Nguyen Van Binh said that banks did not gain high
profits or offer big dividends last year.
“This
year, some banks may even fail to pay dividends for shareholders as they have
to deduct profits to set up provisions for risks. The central bank has also
encouraged this plan as banks only expect strong profits given safe
operations,” Binh said.
Banks
are an intermediary business channel, so they cannot gain high profits,
especially when the gap between mobilization and lending rates has narrowed
down, he added.
At
year-end 2013, banks in the city estimated to see mobilization capital
increase by 11% against the previous year. Credit growth rate stood at 9% and
bad debt ratio was 5.49%.
In
2013, local banks handled nearly VND115 trillion worth of bad debts, of which
they transferred nearly VND5.2 trillion to Vietnam Asset Management Company.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 11 tháng 1, 2014
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