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BUSINESS
IN BRIEF 16/3
Authorities
checking milk prices
The Ministry of
Finance’s Price Management Department has asked the provincial market
monitoring authorities for coordination to inspect prices of dairy products
for children aged under six.
Inspections will
mainly focus on prices of products of four leading firms – Mead Johnson
Nutrition (
Mead Johnson
Nutrition (Vietnam), Vinamilk and Nestle Vietnam have already adjusted up their
prices while FrieslandCampina Vietnam has not yet applied new prices though
the date for price revisions which it registered with authorities was on
Tuesday.
As specified in a
statement sent by the Price Management Department to provincial market monitoring
agencies, Mead Johnson Nutrition (
from December 12,
2013; Vinamilk raised prices of 22 items on February 10; and Nestle
A source from
FrieslandCampina
Underground
commercial center awaits investors
No Japanese firms
have expressed interest in a major project to develop an underground
commercial center at the future central metro station in downtown HCMC,
according to the Japan International Cooperation Agency (JICA).
JICA president
Tanaka Akihiko told HCMC chairman Le Hoang Quan on Tuesday that his agency
had yet to find any Japanese companies ready to get involved in this
commercial center project.
Akihiko said JICA
had provided the city with US$2 million to do a feasibility study for the
central urban railway station, including design and construction of an
underground commercial facility under a public-private partnership (PPP)
model.
However, the
central station cannot be up and running in late 2017 or early 2018, he said.
Regarding the
rehabilitation projects for Tan Hoa-Lo Gom, Doi and Te canals, Akihiko said
the possibility of increasing ODA loans for such projects would be affected
if the city did not accelerate the pace of disbursement.
Government-backed
loans still rise despite restrictions
The total value of
government-backed foreign loans still rose in 2013 though the Government has
urged restrictions by approving a debt management program in the 2013-2015
period with an aim to cut guarantees for foreign loans.
The Ministry of
Finance underwrote 11 borrowing programs and projects, and domestic and
international bond issues with the total value of nearly US$4.2 billion in
2013. This amount included investment projects funded by local credit
institutions and domestic bond issues with the total value of US$1.3 billion,
and seven projects funded by foreign banks and international bond issues
worth nearly US$3.9 billion.
The ministry did
not announce how much the figure had increased against the previous year.
However, it confirmed a rise, explaining that the restructuring of domestic
and foreign debts owed by groups and corporations and bond issues of the
local policy banks were the cause of the rise.
In 2013, for
example, the Government had to back Debt and Asset Trading Company (DATC)
under the Finance Ministry in issuing bonds for restructuring two debts of
Vinashin, including VND11 trillion it borrowed from local banks and US$600
million from foreign creditors.
The situation has
gone against the Government’s debt management scheme in medium term. Given
the program, the Government aims to guarantee only those loans taken for
urgent projects and those of national importance.
According to the
Debt Management Bureau under the Finance Ministry, the Government had backed
foreign loans and bond issues with the total value of over US$15.3 billion as
of October 31, 2013. Of which, 80 projects are in the process of repaying
debts while 20 others have finished debt payment.
Guarantees for
Vinashin’s bond issue accounted for around 4% of the total debt value. The
remainder was used to cover seven projects in the aviation sector, 17 in the
cement sector, 49 in the power industry and seven in the oil and gas sector.
For foreign loans,
the ministry has advanced capital for servicing debts of nine projects,
accounting for 8.9% of total number of projects guaranteed. Cement projects
have faced most difficulties in debt repayment and the ministry has advanced
US$251 million to support the projects.
European
companies upbeat on business environment
Business confidence
and outlook among European businesses in
This quarter the
BCI has for the first time since 2012 gone above the midpoint - from 50 to 59
points. This is an important increase, which further demonstrates the strong
belief of European companies in the Vietnamese market.
“The rise is likely
to be linked to the upswing of sales and general business optimism around the
Tet period, as we have experienced in previous years,” said EuroCham in the
report. However, an increase of 9 percentage points seems to suggest that
other factors than just Tet optimism are at play.
Other factors such
as the decreased fear of inflation, confidence in the macroeconomic outlook
and the hope of the conclusion of a much-expected TPP agreement later in the
year, are also likely to have had an impact.
Just under half of
the businesses that participated in the survey are active in the services
industry, a quarter in manufacturing, one fifth in trading and around 10% are
engaged in other activities.
Compared to the
results of last quarter’s BCI, the number of respondents assessing their
current business situation as positive has jumped from 38% to a very strong
45% - an increase of seven percentage points. This finding is supported by
how respondents assess their sales and level of business activity in the last
12 months compared to previous years, with 42% finding the past year to have
been more profitable –explaining the jump from last year’s BCI at 48 to this
year’s 59.
However, a
considerable 32% of respondents found the past 12 months to have been less
profitable.
Looking to the
future, the business outlook for respondents has equally experienced a
considerable improvement with members having positive expectations rising to
49% compared to the last quarter’s 44% and significantly higher than last
year’s 30%.
In line with this
development, reported investment plans have remained positive, with 78% of
respondents intending to keep or increase their investment.
EuroCham Executive
Director Csaba Bundik said in the report, “The BCI having gone above the midpoint
is indeed great news and the first time we see this since the second quarter
of 2012. This is a very healthy sign, as it demonstrates that European
companies are regaining trust in the Vietnamese market.”
Pigs
transported to south for consumption
Provinces with big
herds of pigs like Dong Nai normally transport pigs to
This has helped
stabilize the pig price in southern provinces though the bird flu is
spreading.
According to a
member of the Dong Nai Livestock Association, southern provinces currently
have a huge number of pigs transported from the north, which is contrary to
what normally happened in previous years.
“In the past few
years, live pigs in the south were always priced at VND2,000-3,000 per
kilogram higher than those in the north. With such a differential, plus
transport costs, traders will suffer losses if transporting pigs to the
south. However, as the current price differential is VND5,000-7,000 and even
VND8,000 some time, pigs are being transported southward,” he said.
The tendency of
transporting pigs from the north began with a company having a large
distribution system in the southern region a couple of weeks ago. Some other
traders have followed suit.
Nguyen Xuan Duong,
deputy director of the Animal Husbandry Department, said that supply from a
region with a low price to another with a higher price would help market
stability.
Nguyen Xuan Thoi, a
farmer in
However, this time
the pig price has declined by around VND2,000 per kilogram compared to last
week while the chicken price has stay put at around VND44,000-45,000 per
kilogram, Thoi added.
Pork prices at
supermarkets and traditional markets have been stable over the past few
weeks.
According to the
HCMC Department of Agriculture and Rural Development, the city consumes
around 9,000 pigs a day, mainly supplied by neighboring provinces like Binh
Duong, Long An, Tien Giang, Ba Ria-Vung Tau and especially Dong Nai.
His comment came
after three provinces and cities in the central region – Quang
The MoU sets out a
programme initiated and sponsored by the European Union under which the three
localities will jointly develop attractive products, train human resources
and implement tourism promotion programmes. To oversee these tasks, they will
form a steering board and a standing committee.
"The
localities are key tourism destinations.
The three-in-one
model will be a good example for other localities to work together for
effective, sustainable tourism development," said Nguyen Van Tuan,
director of the Viet Nam National Administration of Tourism (VNAT).
He noted that while
Quang
Quang
The ancient capital
city of
Sandwiched between
the two,
The MoU aims to
enable the three localities to use each other's strengths towards making
their tourism destinations more appealing.
In related news,
Tuan also said that the goal of attracting a million Japanese visitors by
2015 can be achieved if the domestic hospitality sector further improves the
quality of its travel products and services, and present a clean environment.
He also emphasised
the importance of developing new products and services that can be offered to
Japanese tourists, saying they were very demanding.
Vietnamese
companies should participate in international tourism and travel fairs held
in
Takahiko Ohata,
Chairman of the Overseas Tour Operators Association of Japan (OTOA), agreed
that
According to the
VNAT,
Last month, 50,500
Japanese tourists visited
Industry insiders
say Viet Nam offers significant advantages that should attract Japanese
tourists, including political stability, waiver of the 15-day visa, the short
travelling time (five-hour direct flight), and many cultural similarities.
Good diplomatic
relations and several tourism attractions that meet Japanese tastes are other
positive factors, they add.
The General
Statistics Office has reported that tourist arrivals from several major
markets have increased sharply this year.
In the first two
months, arrivals from Germany rose year-on-year by 262 per cent, from Hong
Kong by 222 per cent, Russia by 70 per cent, China by 50 per cent, Cambodia
by 40 per cent, Philippines by 27.5 per cent, and Italy by 26.5 per cent.
The number of
domestic tourists reached 9.5 million, up 22 per cent year-on-year.
Tourism revenues
during this period have reached VND47 trillion (US$2.2 billion), up 34.3 per
cent year-on-year.
Total international
arrivals in the first two months of this year reached 1,618,200, up 33.4 per
cent year-on-year.
SOE
equitisation to quicken
The completion of
legal institutions and mechanisms is one of the critical tasks to speed the
equitisation of State-owed enterprises (SOEs).
According to Pham
Viet Muon, deputy head of the Steering Committee for Business Renovation and
Development, Government Decree No 99/2012/ND-CP clarified the rights,
responsibilities and obligations of the Government, ministries, agencies,
local governments and member councils of State-owned economic groups and corporations.
Under the decree,
ministries are responsible for exercising the obligations of the State as the
owner of SOEs, particularly State-owned groups and corporations, which
includes inspecting and evaluating the efficiency of business operations.
Reports show that
the implementation of State ownership management has been improved following
the issuance of the decree, towards ending State agencies' administrative
interference in SOEs' operations.
The management
method of State capital in SOEs is also gradually shifting from
administrative to business styles.
Between 2011 and
2013, the country equitised 180 SOEs, reducing the number of wholly
State-owned businesses to 949. Of these, 19 were State-owned corporations and
21 had State capital of over VND100 billion (US$4.7 million).
Among those that
were equitised were the Bank for Foreign Trade of Viet Nam (Vietcombank), the
Bank for Investment and Development of Viet Nam (BIDV), Petrolimex, Viet Nam
Steel Corporation and Viglacera.
According to the
steering committee, after equitisation the businesses have enjoyed
considerable growth and performed their tasks more effectively. Also, the
appearance of joint stock companies has increased the economy's
competitiveness and accelerated the restructuring of the stock market.
Further, the
equitised corporations have reorganised business and production activities
and reshuffled member companies, while merging those that overlap.
Implementing
financial restructuring, a number of businesses have increased their charter
capital and withdrawn capital from non-core areas.
Despite numerous
difficulties in 2013, 18 State-owned groups and corporations recorded total
revenues of VND1.18 trillion ($56.38 billion) and contributed VND191 trillion
($9.1 billion) to the State budget.
Under the 2011-15
SOEs restructuring plan, the country will have to complete the equitisation
of 531 SOEs by 2015.
To have the
remaining 432 businesses equitised between now and 2015, the Ministry of
Planning and Investment stressed the need for a determination and unity from
central to local levels to ensure the progress of the restructuring of SOEs.
Authorities
attempt to lift property market
The city has
proposed that the government reduce the annual interest rate to three percent
from the current five percent for sales or rental of social housing or
residential apartments priced below VND15 million per sq m with 15-year term
loans, according to documents submitted to the Central Steering Committee on
Housing Policy and the Real Estate Market.
Another city
proposal would reduce the Value-Added Tax for buyers of their first house.
City officials have
also asked the government to establish a housing savings bank to create
favourable conditions for individuals in
The city has also
requested that the Government readjust its policy to allow investors to
reduce the number of apartments and convert commercial housing to social
housing.
They have also
asked the government to extend the timeline of its VND3 trillion property
package from 36 to 60 months.
In recent years,
the city and central government have launched stimulus packages to kickstart
the property market, but results have been uneven.
Companies in
In another matter,
the HCM City People's Committee plans to buy 1,050 unsold apartments in Binh
Thanh District to resettle people who had to give up their land for the
project to build
The apartments will
be handed over to resettled residents in two phases in June and September.
At least 498
public-works projects now under construction in the city will affect 120,000
households who will have to resettle to other locations, according to a
Land prices
in suburbs expected to rise
Land in suburban
areas in the capital's communes, such as Co Nhue and Phu Dien in Tu Liem
District, Thach Ban in Long Bien District, have shown positive signs and
remain attractive.
"Land prices
in the areas have not fallen much, as people were waiting for a price
hike," said Pham Thanh Hung, deputy general director of CEN group.
Hung added that
land prices in the suburbs were not significantly higher than social housing
projects. Therefore, home buyers would opt for purchasing land.
Surveys showed that
land prices in suburban areas were slightly reduced, compared to the
"hot" development period in the property market. For example, land
prices in North Tu Liem had been selling for VND25-28 million per square
metre, while one year ago it was VND30 million.
Prices in Co Nhue
and Phu Dien have been selling at VND25-30 million per sq.m. However, the
number of transactions remains limited.
Nguyen Thi Tam in
Long Bien District's Thach Ban Commune offered her 90sq.m land for sale one
year ago.
Tam said she has
not sold the land yet, though she had to lower the selling price from VND27
million to VND16 million per sq.m.
Meanwhile, a report
from Savills Viet Nam indicated that in the third quarter last year, selling
prices in suburban areas were still at their highest level, at VND48 million
per sq.m, in Ha Dong District.
Also, the market
remained quiet in the last quarter of 2013. However, selling prices were
reduced one per cent against the previous quarter.
Hung expected that
the recently enacted policies would open up sales in the land segment.
According to Decree
11/2013/ND-CP and joint circular No 20 between the Construction Ministry and
Ministry of Justice, property investors will be allowed to sell land without
houses provided as infrastructure beginning January 5, 2014.
Home buyers are
expected to seek such land, as they might save up to 30 per cent of building
costs if they build their own homes.
In addition, they
would have the opportunity to design their own houses.
Several urban
housing projects have asked to be allowed to offer this new form of selling,
since home buyers have been seeking land, instead of less expensive
apartments.’
Shipbuilding
industry sees 25-30 pct growth annually
Deputy Director of
the Vietnam Maritime Administration Do Duc Tien made the statement at the
seminar ‘Vietnam Shipbuilding Industry – New Stage of Development’ held in
To realise the
target, related legal documents will be amended to help shipbuilding and
logistics businesses overcome difficulties, maintain production and improve
their market shares while the businesses are encouraged to expand local and
international links and set up joint ventures.
In addition, all
economic sectors and foreign organisations will be encouraged to invest in
developing the country’s fleet. A plan on developing the fleet will be
devised to support its restructure, development and modernisation.
According a
representative from the Broker Company, the logistics market has seen signs
of recovery since early this year as shipbuilding and logistics prices rose,
offering opportunities for the country’s shipbuilding industry to explore.
The Southwest
Region Steering Committee has drawn up a plan to develop an additional
10,000ha of high-quality fruits in the Cuu Long (
Tran Huu Hiep, head
of the committee's Economic Division, said the fruit areas would be located
in the provinces of Vinh Long, Tien Giang, Ben Tre, Dong Thap, Soc Trang, Tra
Vinh and Hau Giang, and Can Tho City.
The areas will grow
the delta's specialty fruits such as green-peel and pink-flesh grapefruit, Nam
Roi grapefruit, king orange, Hoa Loc mango, Chin Hoa durian, and Lo Ren milk
apple, he said.
Each province will
choose to plant one to three specialty fruits.
About 90 per cent
of fruits in the delta, the country's largest fruit cultivation area, are sold
domestically, according to the Southern Fruit Research Institute.
Hundreds of
establishments that produce plant seedlings in Ben Tre, Vinh Long, Tien Giang
and Can Tho have been producing disease-free fruit seedlings to reduce the
prolonged shortage of quality seedlings in the Delta, according to the
Southwest Region Steering Committee.
In recent years,
the delta's provinces have also encouraged farmers to set up co-operatives to
grow fruit to reduce small-scale cultivation, improve quality and reduce production
costs.
In Ben Tre, Tien
Giang and Vinh Long provinces, hundreds of farmers have co-operated to grow
green-peel and pink-flesh grapefruits, Hoa Loc mango and king orange.
Local agriculture
officials have provided training courses on integrated pest-management
programmes on citrus fruits for thousands of farmers in the zoned areas for
fruit cultivation.
Farmers have also
been instructed to grow fruits in accordance with global and Vietnamese good
agricultural practises.
The delta has more
than 300,000ha of fruits, according to the Southern Fruit Research Institute.
Of the figure, more than 60,000ha is planted with speciality fruit.
According to the
Ministry of Agriculture and Rural Development's plan of developing fruits in
the southern region in the 2013-2020 period, the delta will have a total of
185,100ha devoted for growing 12 speciality fruits by 2020.
The 12 fruits are
dragonfruit, mango, rambutan, durian, milk apple, grapefruit, longan, banana,
pine apple, orange, sour sop and mandarin.
Of the 185,100ha,
Besides developing
large areas specialised for fruit cultivation, Tien Giang has also provided
advanced farming techniques for more farmers and improved the quality of
fruit seedlings to increase income for farmers.
The province's
fruit farmers earn an income of VND100-200 million (US$4,700 – 9,500) per ha
a year.
TPP impacts
on livestock breeding sector from expert view
The Trans-Pacific
Partnership Agreement (TPP) which currently involves 12 countries is expected
to assist local livestock breeding sector with luring more foreign
investment, but it appears hard to make this come true in the context foreign
imported food flowing into Vietnamese market.
Figures from
Ministry of Planning and Investment’s Foreign Investment Agency show that as
of December 15, 2013 there were a total 501 foreign direct investment (FDI)
projects in agro-forestry-fisheries worth $3.35 billion in total committed
capital but representing only 1.5 per cent of the country’s total FDI
capital.
Of this $3.3
billion, investments into animal feed accounted for a lion’s share of more
than 94 per cent while over 4 per cent of the capital was in breeds and merely
1 per cent was in animal husbandry, according to Ministry of Agriculture and
Rural Development (MARD) statistics.
While livestock
breeding is less charming to foreign investors, foreign stock has flowed into
Vietnamese market.
Last year,
At present, cattle
imported into
With the
ratification of the TPP hopefully within this year the tariff will fall to
zero per cent, facilitating the presence of more foreign stock and food in
the Vietnamese market.
“The livestock
breeding sector would be at disadvantages following ratification of the TPP.
For example, after TPP ratification made-in-Thailand chickens would be
shipped to
Animal Husbandry
Department deputy head Tong Xuan Chinh added that besides TPP, Vietnam is
about to sign a string of free trade agreements (FTA) under which many
made-in-Vietnam items will more easily enter relevant foreign markets.
In return, some
foreign food will have more chance to ramp up presence in
“To survive
competition right in the home ground, the [animal husbandry] sector needs to
restructure, focusing on some key products only,” said Chinh.
“It is enough time
for us to change if we start right from now. We shall only develop
advantageous products like pork and poultry. Besides, a shift from individual
fragmented farming into farm-based and enclosed model and lower feed cost is
a must,” Chinh noted.
Economic experts
were concerned
From other angle,
chairman of Vietnam National Animal Husbandry Association Nguyen Dang Vang
said international integration would entail opportunities for the sector to
lure more foreign investment.
The four areas the
animal husbandry sector urgently sources investment are processing industry,
cow raising, breed production and equipment manufacture serving farm-based
breeding of cattle and poultry, Vang noted.
From the part of
firms, they said doing business in this field is two risky though there is
still room for development.
Besides, it is not
easy to benefit from investment incentives.
Accordingly, in
2010 the government enacted Decree 61/2010/ND-CP providing incentives to
stimulate businesses to invest in agriculture and rural development.
However, until
present agricultural sector projects enjoying the incentives have only
accounted for less than 1 per cent of total project numbers.
“That was because
the procedures to enjoy these incentives remain complex. Lack of state budget
to execute incentive policies is another issue,” Chinh said.
In late 2013, the
government enacted Decree 210/2013/ND-CP amending Decree 61/2010/ND-CP with
more preferences to agricultural sector investors.
The decree was
hoped to fuel investment into agriculture, particularly livestock breeding in
the upcoming period.
Japanese
firms remain optimistic about
One of every three
Japanese companies operating in
In a report
released in Hanoi on Monday, JETRO said 25.6 per cent of Japanese firms
operating in Vietnam saw losses last year, a 6.1 per cent increase compared
to the previous year with 19.5 per cent. Around 60 per cent of respondents
reported profits.
“This means that
one in three Japanese companies operating in Vietnam are reporting losses,”
said Atsusuke Kawada, head of Hanoi’s JETRO office.
Regional countries
see similar results with 60-70 per cent of Japanese firms reporting profits.
Thailand holds 72.4 per cent, Indonesia 64.8 per cent, and China 60.7 per
cent. These results are considered solid amid a difficult global economy.
According to
Kawada, the report showed export processing enterprises outperformed others
with only 19.4 per cent reporting losses while the rate for enterprises in
other sectors was 32.8 per cent.
“The reason for
greater inefficiencies in enterprises not operating in export processing
zones are likely to be focused on the domestic market as Vietnam’s economy
faced low consumption troubles in 2013,” Kawada explained.
In fact, not only
Japanese but also Vietnamese and other foreign invested enterprises (FIEs)
operating with export advantages have greater returns. Vietnam’s economic
growth reached 5.42 per cent last year, partly due to high export growth and
a total value of $132 billion. Among FIEs operating in Vietnam, Japanese
firms contributed up to 60 per cent of the total export turnover for the
foreign invested sector.
Kawada said that in
the coming time Japanese firms would continue to emphasise export processing.
“For Japanese
enterprises, Vietnam’s advantages are not only cheap labour but also its
export strengths compared to other ASEAN nations,” he added.
The JETRO report
also showed that up to 33.9 per cent of Japanese respondents considered
export processing the main business activity in Vietnam. This rate is
significantly higher than Thailand’s 3.8 per cent, Indonesia’s 8.8 per cent,
China’s 7.8 per cent and Malaysia’s 12.3 per cent. This also means that not many
Japanese firms focus on the domestic market.
According to JETRO,
Japan is the single largest foreign investor in Vietnam with over 2,000
projects valued at $34.6 billion. Last year alone, Japanese investors pledged
$5.7 billion to the country.
A recent survey
revealed that up to 70 per cent of Japanese investors planned to expand their
operations. If this comes to pass, Vietnam would overtake regional rivals
such as Indonesia, Thailand and the Philippines in the race to lure Japanese
investments.
Most of the
Japanese respondents placed a high value on Vietnam’s growth potential,
social and political stability and inexpensive workforce. Many companies plan
to build more factories in Vietnam and expand operations outside major
industrial parks.
HCMC
launches business registration at home, electronic ISO system
Authorities in Ho
Chi Minh City officially inaugurated services for business registration at
home and an electronic ISO management system on February 28.
The city’s
Department of Planning and Investment (DPI) started the registration services
on January 2, and 319 domestic enterprises had been registered by that way
till February 19, DPI deputy director Tran Thi Binh Minh said.
She added the
service helped lessen paperwork, save time and cost for enterprises and the
regulator, and make life easier for entrepreneurs, and the agency expected it
to be able to serve foreign-invested companies soon.
DPI also expects to
see 10 per cent of the new enterprises making registration at home this year
and a double of that in 2015.
As for the city’s
electronic ISO management system launched on February 28 for all 24
districts, the metropolitan administration considers it a major improvement
in organisational efficiency as it helps manage all of the documents.
The system will
provide city dwellers with online public services such as applying for
construction licences, home repair licences, and filing dossiers. Residents
can also know the status of their dossiers via email or SMS, and know a new
day of completion if the progress is behind schedule.
Minor coups
noted in insurance sector
The latest data on
the life insurance market showed a modest shift in the market shares of top
players in the sector.
According to the
latest report from the Ministry of Finance’s Insurance Supervisory Authority
Department, newcomer PVI Sun Life advanced to the third position, ahead of
Manulife, AIA and Dai-ichi, in terms of new premiums in 2013. Its performance
has made a significant contribution to the total sale value of the life
insurance sector.
Top market players
include Prudential with an estimated market share of 23.1 per cent, Vietnam
Life Insurance with 21.1 per cent, PVI Sunlife with 13 per cent, Manulife
with 11 per cent, AIA and Dai-ichi with 8.3 per cent, ACE with 6.4 per cent and
Prevoir with 5.4 per cent. Other smaller businesses include Hanwalife with
1.1 per cent and Cathay with 0.5 per cent.
In terms of
executed contract numbers, apart from PVI Sun Life, other newcomers such as
Generali, Vietinbank Aviva and VCLI also marked high growth rates. It is
estimated they collectively signed 5.2 million contracts, up 9.2 per cent
on-year.
In terms of premium
income however, there was no significant change in market share. Prudential
remained the market leader with 33.1 per cent, Bao Viet Life Insurance came
next with 28.7 per cent, then Manulife with 10.1 per cent, AIA with 7.6 per
cent, and Dai-ichi with 7.3 per cent, stated the report. In 2012, Dai-ichi
was ahead of AIA’s 7.6 per cent market share with 8.04 per cent.
Other players with
notable market share include PVI Sunlife, ACE, Prevoir and Hanwha Life.
According to the
Insurance Supervisory Authority Department, despite economic difficulties the
life insurance market continues to grow healthily with premium income
reaching VND22.6 trillion ($1 billion).
HSBC system
to facilitate US visa fees
HSBC Vietnam has
just become the exclusive facilitator of US non-immigrant visa fees
throughout Vietnam.
The bank has
established a payment system available at all of its branches and transaction
outlets for any non-US citizen applying for a visa via the US Embassy in
Hanoi or Consulate General in Ho Chi Minh City.
Also, applicants
can make payments anytime, anywhere via Vietnam Post Corporation outlets
nationwide thanks to HSBC Vietnam’s strategic partnership with State-owned
post and telecommunications group – an alliance that bolsters HSBC’s Global
Payments and Cash Management network by over 2,000 outlets.
HSBC Vietnam
currently operates 18 branches and transaction outlets in Hanoi, Danang, Ho
Chi Minh City, Can Tho, Dong Nai and Binh Duong, as well as two
representative offices in Haiphong and Ba Ria-Vung Tau.
HSBC has also been
appointed as the bank responsible for collecting US visa fees in neighbouring
territories such as Macau and Hong Kong.
New
regulation defuses “useable area” disputes
The definition of
apartment space will now exclude heavy duty supporting columns and utilities
boxes.
Circular
03/2014/TT-BXD of the Ministry of Construction, which will come into force on
April 8, stated that the value of apartments would be calculated based on the
net useable area of an apartment.
This circulation
should at a stroke resolve conflicts between apartment buyers and project
developers.
Circular 16 issued
in 2010 by the Ministry of Construction said contracts for the purchase of
apartments needed to specify the area under common ownership, the area under
the private ownership of the apartment owners and apartment floor area either
determined by the net floor area measurement or gross internal area
measurement.
“This only
suggested how to calculate the floor area of an apartment in the purchasing
contract without identifying common ownership and private ownership of such
space,” said a real estate expert.
In addition it doesn’t
explicitly state what to include in the net floor area or gross internal area
measurement which again led to arguments, he said.
“We suggested that
using a basis of measurement that measures only the usable area of a property
will avoid any complications and will ensure fairness. These figures must be
explicitly stated in any contracts and must be checked by both parties,” he
added.
The previous ways
of calculation saw developers take advantage of the vagueness to charge for
space that was effectively unable to be used by the apartment buyer.
Investors claimed
that space devoted to unmoveable fixtures was an integral part of an
apartment’s structure and therefore should be included in contracts. Buyers
obviously objected to paying for space that they could not use, particularly
in smaller apartments, which were affected disproportionately.
The Circular 3
however also states that buyers who bought their apartment before the
application of the circular would not benefit from the new ruling.
In a related move,
the National Assembly’s Legal Committee last week questioned the Ministry of
Construction for having come up with such badly worded original rulings which
had caused innumerable problems to apartment buyers.
However deputy
minister of Construction Nguyen Tran Nam refuted the accusation that his
ministry had acted in the best interest of property developers and bizarrely
claimed the two calculations for the area of an apartment were identical.
Vegetables
rot as prices stay low
A pile of
vegetables is left on the ground in the garden of Nguyen Van Huan, a resident
of Chua Village in Ha Noi's Me Linh District. Although fresh, they will not
be sold at market.
As Huan examines
German turnips in the garden, he said he would lose even if he sold all his
produce.
"Vegetable
prices have gone down dramatically since Tet holidays. They're so cheap that
I don't even want to harvest them. I'll just dig them up and leave them,
because I need the area for another crop that may do better," Huan said.
He said the prices
of vegetables in his garden were now half what they were at the same time
last year.
Nguyen Thi Chau,
who has a garden nearby, said she experienced a huge loss this year.
She invested about
VND1.5 million (US$70) for 360 square metres of German turnips, but got back
about only half that amount.
Tran Xuan Dinh,
vice-head of the Cultivation Department, said that good harvests had led to a
drastic dip in prices of vegetables throughout Viet Nam.
"A good
monsoon enabled farmers to have a good harvest," he said.
"Everything grows well."
While suffering
losses, farmers have no choice but to continue their efforts in the hope that
prices will get better.
"What else can
we do? When you are in the agriculture sector, you have to accept that you
win this time and lose the next because of the weather," Nguyen Thi Chau
said.
Similar losses are
being felt in the poultry industry due to outbreaks of avian flu.
Nguyen Thi Binh, a
resident of Soc Son District in Ha Noi, said poultry prices went down about
50 per cent after Tet holidays. However, she said input costs, such as
foodstuffs and medicines were on the rise.
Binh said she might
have to stop raising poultry next year and find other ways to earn a living.
The price of eggs
has also dropped dramatically. Nguyen Van Long from Thach That District in Ha
Noi, who harvests about 9,000 eggs a day, said he was losing about VND1
million (US$47) every day because supply was stronger than demand.
Tong Xuan Chinh,
deputy director of the Livestock Production Department, said in recent years,
demand for meat products had decreased partly due to the economic downturn,
while the livestock sector produced a similar amount of meat.
"We will have
to carry out an overhaul with our livestock before signing important trade
agreements such as the Trans-Pacific Partnership agreement and a free-trade
agreement with Australia," Chinh said.
Businesses
miss Tra fish export opportunity
While the import of
Tra fish into the US and the EU markets is booming, many Vietnamese businesses
are sitting on the sidelines due to lack of planning and inventory
management.
The Vietnam
Association of Seafood Exporters and Producers (VASEP) said a number of
processing plants in the Mekong Delta region have cut back on production, by
as much as half, due to material shortages.
Only proactive
businesses with good inventory models in place can keep production at full
steam, the VASEP said.
VASEP Vice Chairman
Duong Ngoc Minh said tra fish material costs currently stand at a reasonable
VND24,000 per kilogram but there is no available material for processing
businesses and the shortage is forecast to last through the remainder of
the year.
Another
contributing factor is that farmers let cultivation slide by 60% compared to
last year. Production of tra fish in March was 60,000 tonnes, much lower than
the 150,000 tonnes recorded in March 2013.
In addition, the
recent prolonged cold weather has affected the reproductive ability ot Tra
fish, resulting in a sharp reduction of fry.
Top 10
export commodities to West Asia
Mobile phone
handsets topped the list of 10 leading Vietnamese exports to the United Arab
Emirates (UAE) in 2013, earning US$3.42 billion, according to Ministry of
Industry and Trade.
The ministry quoted
the United Nations Commodity Trade Statistics Database (COMTRADE) statistics,
as saying the UAE’s telephone import turnover hit a record high of US$6.8
billion in 2012, accounting for 22% of its total import value, and Vietnamese
phones were getting the lion’s share in this market.
The top 10 key
exports to West Asia are mobile phone handsets and components, fibers,
computers - electronics and spare part, machinery and equipment, seafood,
milk and dairy products, textiles, footwear, clothing, and pepper.
Vietnam’s fiber
exports to Turkey darted to US$276.2 million in 2011 and US$339.5 million in
2012. Export turnover to Turkey saw only a slight decrease in 2013 due
to the imposition of anti-dumping duties on synthetic and artificial fiber.
Phones, computers,
electronics and spare parts are mainly exported to the UAE, Turkey, Israel,
Syria, Saudi Arabia and Lebanol.
Agriculture
priority for credit growth
The banking sector
will increase agriculture sector and rural lending in 2014.
State Bank Governor
Nguyen Van Binh said credit would go towards improving technology and science
in food production as part of the government’s hi-tech agricultural push.
Bank loans for
agricultural development doubled over the last 5 years, representing 22 per
cent of all total outstanding credit currently in the economy. This number
equals that of the agriculture sector’s total GDP contribution.
The banking
sector’s policy is to continue pushing up credit in agriculture, said Binh.
Deputy director of
the Ho Chi Minh City branch of the central bank Nguyen Hoang Minh said local
banks would expand lending to agriculture, particularly aiming loans at
agri-businesses using hi-tech to promote the quality and competitiveness of
products.
“It is expected
that outstanding credit for agriculture in the city will rise by 70-85 per
cent against last year which would bring the total to VND35-37 trillion
($1.67 billion) this year, compared to VND20 trillion ($952 million) in
2013,” said Minh.
Currently the
interest rate on agriculture loans is around 9 per cent. Binh has encouraged
local banks to lower it 7-8 per cent for short-term loans and 8-9 per cent
for long and medium-term loans.
The State Bank has
noted that lending to agriculture faces many difficulties this year such as
limited capital sources and difficulty mobilising capital in rural areas.
Binh said the State
Bank has proposed a programme to the government that could help facilitate
the cause.
The lending rate in
Vietnam has been stable recently but has room to fluctuate 1-2 per cent
depending on market movements. The banking system is aimed at 12-14 per cent
credit growth in 2014.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 15 tháng 3, 2014
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