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BUSINESS
IN BRIEF 5/10
Hai Duong
seeks approval to build admin complex
The provincial
government of Hai Duong is seeking approval from the Prime Minister to
develop a new complex of administrative buildings covering an area of 19.15
hectares east of
The new complex,
including five functional zones, will be the working place of some 19
administrative agencies such as the provincial People’s Council, the People’s
Committee and local departments. The building to house local departments will
be the highest but not exceeding 20 floors, said the provincial government.
The total
investment capital is estimated at VND2.06 trillion, with the provincial
budget covering a half and the balance to be raised from sales and transfers
of land and facilities of old departments.
The provincial
government stressed the need to develop the new administrative complex as
current facilities manned by top administrative agencies there have been
deteriorating.
Previously, many
provinces and cities nationwide such as Binh Duong, Ba Ria-Vung Tau and
Danang have also spent trillions of dong each developing their concentrated
administrative towers.
Metro Line
2 cost seen shooting up to US$2.1 billion
Total capital
required for Metro Line 2 in HCMC from District 1’s Ben Thanh Market to
District 12’s Tham Luong will be revised up to US$2.1 billion from the
original cost of US$1.3 billion due to inflation and design revision.
The city
authorities said in a report submitted to the Ministry of Transport on the
construction pace of metro projects in the city that the second metro line is
expected to be two years behind schedule.
The adjustment of
the design has affected bidding, site clearance and resettlement.
The cost is
estimated to jump by more than 60%, equivalent to US$784 million, due to the
slow construction pace, inflation and an increase of the project’s
components.
However, this
amount is an estimate by the investor and its consultant. The city government
has asked the investor to review the extra cost of each item.
In the original
plan, the Ben Thanh-Tham Luong metro line in the first phase has a total
length of 11 kilometers worth over VND26.1 trillion, or US$1.3 billion, with
US$540 million in official development assistance (ODA) loans from the Asian
Development Bank with, US$313 million from the German Development Bank (KfW)
and US$195 million from the European Investment Bank.
The remaining
US$326.5 million will come from the city’s budget.
The design and
construction work was originally planned to last from 2014 to 2019, and the
investor expected to test-run the line in 2020.
The cost of Metro
Line 1 from Ben Thanh Market to
HCMC authorities
will pilot ad placement on commuter buses operating on 10 bus routes for a
six-month period before making it available on buses plying other routes.
According to the
revised pilot scheme sent to the city government by the Department of Transport,
ads should cover less than 50% of the exterior surface of buses.
Only locally-made
goods, especially high-quality ones, will be featured on such ads, with their
slogans printed in Vietnamese. Colors of the ads must be also aesthetically
attractive and should not resemble those of traffic signs.
Advertising prices
will be auctioned with the floor price set by the Department of Finance.
Some advertising
firms said the fact that only Vietnamese products, especially high-quality
ones, are allowed for advertising on buses could pose a big hindrance to
them.
In addition, it
will be difficult to lure clients due to the restriction on ad spaces on
buses.
In terms of colors,
advertising agencies proposed that all colors can be used including red as
long as advertising contents are consistent with Vietnamese culture.
Earlier, the
transport department had prepared a pilot scheme to put ads on buses on 10
routes in the city to subsidize the commuter service. However, the city government
ordered a review of the scheme due to a number of shortcomings.
SOE reforms
go slow, says expert
The restructuring
of State-owned enterprises (SOEs), one of the three pillars of economic
restructuring, has not met expectations in recent years, heard the Autumn
Economic Forum 2014 held in
According to Nguyen
Dinh Cung, director of the Central Institute for Economic Management, the
equitization of SOEs has been slow, with only 16 SOEs undergoing equitization
in 2011, 13 in 2012, 74 in 2013 and 64 in this year’s January-September.
State corporations’
divestments from non-core operations are also moving slowly with nearly VND3
trillion withdrawn in the seven-month period.
Cung said most
divestments are just capital transfers within the State economic sector and
among SOEs.
According to Sanjay
Kalra, resident representative of the International Monetary Fund in
SBV
governor puts bad debt at VND500 trillion
Governor of the
State Bank of Vietnam (SBV) Nguyen Van Binh, speaking at a
question-and-answer session of the National Assembly (NA) Standing Committee
in Hanoi on September 29, put bad debt in the banking system at VND500
trillion.
Binh made no
mention of when the bad debt figure was calculated but said VND240 trillion
out of the VND500 trillion had been settled.
Regarding the
remaining amount, Binh said banks had set up risk provisions amounting to
VND78 trillion as of the end of July. Mortgaged assets also have value
doubling the loans.
However, Binh
admitted that Vietnam Asset Management Company’s (VAMC) capability is
limited. The firm has bought a slight VND86 trillion worth of bad debt.
Though the Government
has approved an extra injection of VND2 trillion into VAMC’s capital, it is
still a small figure compared to VND200 trillion of bad debt which it will
have to deal with next year.
At the Autumn
Economic Forum in
Fielding the
question, Binh said it is difficult to cut interest rates further to as low
as 5% as inflation remains high, and it is not certain to tell that inflation
can be put under control in future.
Policy change will
lead to uncertainties and erode the confidence of citizens, Binh said.
Bad debt remains a
bottleneck in the economy as many enterprises have bemoaned difficult access
to bank loans.
Governor:
Foreign reserves rise to record high
According to the
report, the central bank has deployed a host of solutions to manage monetary
markets and bank operations in order to achieve the targets of inflation
control and monetary and foreign exchange market stability. This has helped
the country post higher economic growth this year than the same period last
year and increase foreign reserves.
The central bank
has taken the initiative in maintaining an appropriate level of money supply
in the economy. It has purchased foreign currencies to improve foreign
reserves while withdrawing money via treasury bill issues.
As of August 29,
the total balance of payments had grown 9.09% against late 2013. Capital
mobilization rose 8.52%, and deposits in
Interest rates have
gone down by 0.5 to 1.5 percentage points a year, with deposit rates losing
0.5 to one percentage point and lending rates falling by 1-1.5 percentage
points.
At present,
customers in priority sectors are subject to lending rates of 7-8% per annum.
Meanwhile, normal borrowers can take out loans at short-term lending rates of
9-10% per annum and medium to long-term rates of 10.5-12% per annum. However,
enterprises with healthy financial situations and feasible projects can enjoy
lending rates of 6-7% per annum.
Credit institutions
have also cut lending rates for old loans. Ending August, dong loans with
lending rates of 15% per annum or higher accounted for 4.3% of total
outstanding loans, down from the 6.3% recorded at the end of 2013. Those with
lending rates from 13% made up 12.3% versus the 19.72% late last year.
Credit had grown
6.21% by August 29 compared to late last year and 12.35% year-on-year. Credit
growth in the banking system is expected at 10% at the end of this year.
At the end of
August, government bond purchases by credit institutions had surged 21.56%
against late last year.
The inter-bank rate
had hovered around VND21,200 per U.S. dollar as of September 15. The market
has seen strong foreign currency liquidity while legitimate foreign currency
demands of enterprises and individuals have been met.
Regarding bad debt
settlement, reports of credit institutions showed that bad debt had totaled
VND162.2 trillion as of the end of July, or 4.11% of total outstanding loans.
The ratio was 3.61% by end-2013.
Between January and
July, credit institutions settled VND40.8 trillion worth of bad debt,
including VND14.3 trillion paid by customers, VND1.56 trillion from
collateral sales, nearly VND14.5 trillion sold to organizations and
individuals and VND8.3 trillion by using risk provisions.
Expert
suggests three pillars to boost economic growth
Vietnam needs to
develop a modern model of market economy based on the three pillars involving
the roles of the market, the State and the society as one of the key factors
to help the nation overcome the current socio-economic challenges, said
former Minister of Trade Truong Dinh Tuyen.
The three pillars
are an important impetus for economic restructuring, Tuyen told the Autumn
Economic Forum in the
Tuyen pointed out
major challenges of the local economy such as prolonged macro uncertainties,
high inflation, low gross domestic product (GDP) growth, rising business
suspensions and public debt rise from 36.2% of GDP in 2008 to 56% of GDP last
year.
According to the
global public debt clock published by The Economist on August 20, each
Vietnamese now has to shoulder US$99 worth of public debt.
The current
situation is the consequence of an outdated economic structure, with the
industrial sector still heavily reliant on outsourcing while agriculture
which is important to the country’s economy remains underdeveloped.
Besides, the
private sector has failed to make the most of potential while the State-run
sector still plays a dominant role in the economy. This has resulted in
expanding monopolies of State-owned enterprises (SOEs).
Though the number
of SOEs has slumped from 12,000 in 1990s to around over 1,000 at the moment,
affiliates of State-run groups and corporations have mushroomed, resulting in
a high proportion of SOEs in the nation’s GDP at 32%. Notably, SOEs have
reported a high bad debt ratio.
Therefore, Tuyen
stressed the importance of speeding up SOE restructuring, selling all state
stakes in the sectors the State does not need to retain, and enhancing
governance at the enterprises where the State still holds majority stakes.
The nation also
needs to boost agricultural restructuring and rural development.
A report by the
International Labor Organization (ILO) showed that the productivity of
Vietnamese workers is equal to only one-fourth of that in
To fuel the
nation’s economic growth, Tuyen proposed a number of solutions such as
stepping up administrative reform and improving the investment environment.
The Government has told relevant agencies to adopt drastic measures to
realize these goals.
Tuyen said it is
crucial to sell bad debt at commercial banks, restructure the banking network
and make the state of bad debt transparent.
The Government
should divest State stakes from SOEs held by State Capital Investment
Corporation (SCIC) to have more finances to address basic construction and
SOE debts, and take appropriate measures to tackle SOE leaders who have
caused bad debt. This will help ease the burden of credit institutions.
Tuyen called for
the Government to consider devaluating
The HCMC economy is
showing signs of steady growth and is expected to attain growth of over 9.5%
this year, said Le Hoang Quan, chairman of the municipal government.
The city’s gross
domestic product (GDP) growth has been accelerating since early this year,
expanding 7.7% in quarter one, 8.7% in quarter two, 10.3% in quarter three
and an estimated 10.7% in quarter four.
Therefore, it is
likely that the city’s GDP growth target of 9.5% for this year will be
realized compared to last year’s growth rate of 9.3%, Quan told a meeting of
the HCMC Party Committee on September 29.
An economic
recovery is in sight, the city leader said.
Production at
enterprises has turned busy again, while sales of goods and services as well
as exports in the January-September period are higher than the figures
recorded in last year’s same period.
Total sales of
goods and services have picked up 12.5% in the nine-month period totaling
VND476.14 trillion while export turnover has reached US$23.8 billion, up 3.5%
year-on-year.
Credit institutions
in the city have mobilized VND1.226 trillion in the three quarters, rising by
4.71%.
According to Quan,
this year the city focuses on helping enterprises, especially small and
medium ones, to access bank loans. Banks have lent around VND22 trillion to
enterprises to help them expand business and the total amount of credits is
expected to reach VND30 trillion this year, up 50% against the initial plan.
HCMC was assigned
to collect VND228 trillion in taxes this year and VND169.5 trillion, equivalent
to 64%, has been collected so far, and it is expected that the year’s budget
revenue in the city may exceed the target by 5%.
Regarding foreign
investment attraction, the city has issued certificates to investment
projects worth US$1.45 billion in January-September, up 6.9% against the same
period a year earlier. What is more, according to Quan, most foreign
investments have been poured into hi-tech projects.
HCMC looks set to
realize 24 out of 26 socioeconomic targets for this year, with running-water
supply and treatment of pollution being the only two targets unlikely to be
met, Quan said.
Talking about this,
chairwoman of the HCMC People’s Council Nguyen Thi Quyet Tam said failures in
these two areas will leave a huge impact on residents, especially those
living on the outskirts.
A report of the
city government showed 96% of rural households in HCMC have access to clean
water.
Beer,
spirit SCT hike triggers concern
Beer production and
consumption in the domestic market may fall sharply following a proposed tax
policy slated to take effect in the second half of next year.
In the amended
Special Consumption Tax (SCT) Law, the tax levied on beer would increase from
the current 50 per cent to 55 per cent starting from July 2015, and then rise
further to 60 per cent from 2017 and 65 per cent from 2018.
Similarly, the rate
applied to alcohol with a proof content from 20 degrees will increase from 50
per cent to 65 per cent and for alcohol below 20 degrees from 25 to 35 per
cent.
Director of the Ministry
of Industry and Trade’s Industrial Policy and Strategy Institute (IPSI) Duong
Dinh Giam said the beer sector has been largely affected by a number of legal
documents and policies, such as the Investment Law, the Law on Enterprises,
and particularly the SCT Law.
Giam argued that
the tax increase on beer from 45 to 50 per cent in January 2013 had a
significant impact on beer production and consumption.
Accordingly, beer
consumption and production sank 8.2 per cent and 7.5 per cent on-year,
respectively, in the first quarter of 2014. Meanwhile, while the beer sector
provides jobs to 3 per cent of the workforce, it has created 7 per cent added
value in the food processing industry thanks to higher productivity compared
to other sectors.
The beer sector’s net
revenue reportedly makes up nearly 60 per cent of the beverage sector’s net
revenue.
A report on the
role of the beer sector in Vietnam’s socio-economic development, conducted by
IPSI in co-operation with policy research firm Regioplan (RP) and audit and
advisory firm Ernst&Young (EY), showed that in 2013 the beer sector
generated VND30 trillion ($1.4 billion) in added value and paid VND21
trillion ($1 billion) to the state coffers, accounting for 4.5 per cent of
total budget collections from production and business.
The report also
stated that the higher tax on beer products from the outset of 2013 had hurt
the labour situation and budget collections when comparing figures from the
first quarter of 2013 against the first quarter of 2014.
Tran Thuan An, head
of Market Department at the Hanoi Beer, Alcohol and Beverage Joint Stock
Corporation (Habeco) said the company would find it hard its financial goals
if the SCT on beer goes up.
Stephane Gripon,
CEO of Diageo Vietnam Limited, which distributes spirits in
“If the government
is of the view that they need to increase the SCT, implementation should be
no earlier than January 1, 2016, and phase over the next three to four years,
rather than a one-off change,” he stressed.
Thai firms’
visit anticipates giant refinery start
Two Thai firms are
searching for opportunities to support a $22 billion oil refinery project in
south-central coastal
The refinery has a
planned output capacity of 400,000 barrels per day (bpd), less than the
originally announced $28.7 billion that would have generated 660,000 bpd per
day when the project was first proposed in November 2012. It is being
invested in by state-owned Thai oil and gas company PTT Limited.
The complex is also
expected to pave the way for a number of satellite projects and has a huge
demand for electricity, water and waste systems.
Binh Dinh
Provincial People’s Committee Chairman Le Huu Loc said the province has
completed basic land acquisition and is ready to deliver the developer ‘clear
space’. The committee also has requested that the Ministry of Industry and
Trade (MoIT) add the project to
Meanwhile, On
October 1 the MoIT and other authorities held a meeting about the refinery’s
plan in preparation of submitting it to the prime minister.
FDI
attraction beyond expectations in Southern Key EZ
Foreign Direct
Investment (FDI) attraction has fulfilled and exceeded 2014 plans in Ho Chi
Minh City and the neighboring provinces of Binh Duong and Dong Nai, where are
located in the Southern Key Economic Zone.
According to Binh
Duong People’s Committee, the province attracted US$1.4 billion by mid September,
accounting for 140 percent of its plan in 2014 and up 26 percent over the
same period last year.
Specifically, 113
new projects were licensed and 99 projects were adjusted investment capital.
Among the new ones are a US$38 million project by Uchiyama Company and a
US$120 million project by Nam Phuong Textile Company.
Those damaged in
anti-China protests in May have also broadened production such as Esquel
Garment Manufacturing that registered an additional capital of US$35 million.
The People’s
Committee Chairman Le Thanh Cung said that Binh Duong has not only improved
traffic, electricity and water infrastructures but also created clearer
investment environment by administrative reform. Besides, businesses have
been helped solve difficulties especially the protest damaged enterprises.
In
The City Export
Processing and Industrial Zone Authority (HEPZA) reported that FDI attraction
has exceeded its yearly plan since August. HEPZA will focus on attracting
small and medium enterprises from the support industry to invest in the
HCMC People’s
Committee said that the city will continue improving investment environment
and prepare land fund for foreign enterprises to invest in the support
industry.
In Dong Nai, FDI
capital approximated US$923 million by the end of August, a year on year
increase of 17.4 percent.
According to the
Economist, as of October 1,
With a population
of 90.96 million, each Vietnamese citizen would have to bear USD930.43 in
public debt, were it to divided evenly.
Speaking at the
government’s regular meeting on the afternoon of September 30, Chairman of
the Government Office Nguyen Van Nen said the prime minister recently asked
the Ministry of Finance to review the country’s public debt along with a few
other economic indicators.
Nen said that there
is still a lack of consistency in the current methods of calculating public
debt in
Currently, the
ministry is providing information about public debt by bulletin, but these
are not always up to date. The second bulletin was released last October.
According to the
latest bulletin, the ministry claimed that
However, according
to estimates by Dr. Pham The Anh, Vietnam’s public debt accounts for as much
as 98.2% of its GDP when taking into account debts held by state-owned
companies that are not guaranteed by the government and accumulated debts for
construction of infrastructure.
Long Thanh
Airport plan to be submitted to National Assembly
The construction
plan for
At the regular
government meeting on September 30, Minister and Chief of the Government
Office Nguyen Van Nen said that the government and the State Appraisal
Council approved the project proposed by the Ministry of Transport.
Prime Minister
Nguyen Tan Dung has authorised the Ministry of Transport to submit the plan
to the National Assembly. The Ministry of Transport must explain to the NA
the benefits of building a new airport instead of expanding Tan Son Nhat or
Bien Hoa airports.
The document sent to
the NA should indicate the size, efficiency and cost of the project and an
estimate of how much it would add to public debt.
Deputy Minister of
Transport Nguyen Hong Truong said that the project will be divided into two
phases. The first phase will cost USD6 billion and will be carried out
between 2020 and 2025. Phase one is designed to serve 20-25 million
passengers per year. The second stage is scheduled for after 2030, and will
increase capacity to 60-80 million passengers annually.
In the past, some experts
said that the feasibility study for
Prime Minister
Nguyen Tan Dung said that it is preferable to build a new international
airport, as an upgrade to
According to the
PM, the southern economic zone is
Que Huong-Liberty
Company has denied rumors that it plans to sell the
Do Hoang Trang,
general director of Que Huong Liberty Joint Stock Company, said leaders of
the firm were struck when some news websites reported
He told the Daily
via telephone that “the news is untrue. We have no plans to sell Binh Minh
International Hotel Co. Ltd., the investor of
Earlier, media
reported that the
The news stemmed
from an assumption on the website adalidda.com. This online page reported
that a five-star hotel in HCMC with 300 rooms and managed by the
international hotel operator Accor was ready for transfer.
Trang said the room
occupancy and business are growing well although the hotel has just been put
into operation lately. Currently, his firm is calculating the impact of the
false information on its activities and seeking to handle it.
“Information
relating to our company worries shareholders. We have not yet located the
source of this information, and are still evaluating its impacts,” said
Trang.
In September 2010,
Que Huong-Liberty Joint Stock Company dismantled the Metropole Hotel to make
room for a new five-star hotel. The new 30-storey hotel with 306 rooms called
Pullman Saigon Centre was invested by Saigontourist Holding Company, Que
Huong-Liberty Joint Stock Company and Saigon Que Huong Joint Stock Company,
and managed by Accor.
The hotel opening
took place on January 8 after a soft opening period.
Business as
usual at HSBC and Standard Chartered
Two major foreign
banks, HSBC and Standard Chartered, on September 30 confirmed their normal
As explained in
their statements released on September 30, the two banks said they are
completing legal documents to close branches of their parent banks in
Earlier, quoting a
report the central bank sent to the National Assembly Standing Committee
before the question-and-answer session by governor Nguyen Van Binh on Monday,
some websites reported that the central bank was making procedures to close
two HCMC bank branches with one of HSBC and the other of Standard Chartered.
According to HSBC’s
statement, on January 1, 2009, with the approval of the State Bank of
HSBC Bank (
In the first half
of 2014, HSBC Bank (
“We are still
working with the State Bank of
Standard Chartered
also confirmed that it would focus on development of its 100% foreign-owned
bank in
On August 28, the
central bank gave the nod to the transfer of all assets and loans from the
HCMC branch to Standard Chartered Bank (
The new bank got all
the legal rights and obligations from the HCMC branch of the
Business is as
usual at all offices and branches of Standard Chartered Bank (
Preparing
for investment wave from Japan
HCMC Development
Joint Stock Bank (HDBank) in coordination with
The Japan Desk is a
specialized division of HDBank with specialists fluent in the Japanese
language to provide a wide range of banking services for Japanese
enterprises. The Japan Desk, designed in the Japanese style with elegant and
modern details, is located at
Clients who are
Japanese investors will be supplied with banking products and services
necessary for their business operations like account service, liquidity
management, loan arrangement, e-banking, financial and investment
consultation. These services will help increase convenience for HDBank’s
clients.
With attempts to
improve the investment environment over the past years,
According to Ueda
Tsuyoshi, president of Hyakugo Bank, Ltd, the Japanese bank has launched
activities to assist Japanese enterprises with investments in
With total assets
of nearly VND90 trillion and charter capital of VND8.1 trillion, HDBank is
listed in the top ten banks in Vietnam with a large network, high annual
growth, organization meeting international standards and global expansion.
HDBank has established correspondent relations with over 300 banks in more
than 150 countries and territories and is preparing to open its first
overseas branch in
In recent years,
HDBank has restructured itself by merging with DaiABank and buying Société
Générale Viet Finance (SGVF), the latter being then renamed HDFinance.
Therefore, Tsuyoshi
Ueda believes the launch of the Japan Desk at HDBank will help bolster
effective support for Japanese businesses in their investment and business
operations in
Tsuyoshi Ueda
expects Japanese enterprises will be well provided with financial and banking
services from a reputable unit like HDBank. “In the near term, there will be
more and more Japanese enterprises making investments and doing business in
At the grand
opening ceremony of the Japan Desk, Yakabe Yoshinori, deputy consul general
of
According to Le Thi
Bang Tam, board chairwoman of HDBank, the investment wave of Japanese
enterprises in
Early this year, in
a
Hyakugo is a
reputable bank in
“With a strong
financial capability and diverse services, HDBank is stepping up restructuring,
and enhancing product and service quality to better serve its clients. In the
past time, HDBank has run many programs to expand business abroad, and the
launch of the Japan Desk is part of such a goal,” Tam shares.
Travel
firms benefit from new expressway
Hanoi-Lao Cai
Expressway is believed to bring favorable conditions for local travel firms
to launch new tours to
Doan Thi Thanh Tra,
director of marketing and communications of Saigontourist Travel Service
Company, said travelers spend three and a half hours to go to Lao Cai from
Saigontourist has
launched a four-day tour to Hanoi-Lao Cai-Sapa costing VND4.6 million via the
expressway, and recently won a contract to arrange this tour for 400
customers. The new tour departs weekly on Friday and provides travelers with
high quality services in
Similarly,
Fiditourist Tan Dinh Travel Joint Stock Company (Fiditour) has introduced a
six-day tour to northwestern provinces via the expressway, which costs nearly
VND8.7 million and departs from HCMC.
Meanwhile, Binh Minh
International Travel Co. Ltd. has opened a caravan tour to Sapa in Lao Cai,
and travelers can drive to this famous destination by themselves on weekends.
3Q recovery
for Ha Noi housing
The capital city's
property market, including the condominium market, recovered slightly in the
third quarter of 2014 because of positive economic factors.
According to its
report on the capital city's property market for the third quarter which it
released here yesterday, CBRE Viet Nam Company Ltd., a foreign property service
provider, said the country's gross domestic product (GDP) grew by 5.62 per
cent in the first nine months of 2014.
GDP growth, coupled
with accelerating foreign investment, helped to boost manufacturing and
exports and helped the country to counter low credit growth, the report
added.
It quoted the State
Bank of
It also cited the
ANZ-Roy Morgan consumer survey, which showed that domestic consumer
confidence closely followed domestic stock market trends, with both increasing
since January.
According to the
survey, nearly 60 per cent of respondents expect economic conditions in
Apart from the
recovery in domestic consumer confidence, manufacturing supported the
country's overall positive economic performance and remained the most
significant sector for foreign direct investments (FDI), accounting for
nearly 70 per cent of total FDI. The country's real estate sector ranked
second with $1.2 billion, or 11 per cent of total FDI.
"The positive
economic factors in the third quarter of this year have promoted recovery of
the capital city's property market, including the market of condominiums for
sale," said Nguyen Hoai An, senior manager of CBRE Viet Nam's Ha Noi
branch.
In the third
quarter, the condominium market continued to witness active property launches
and re-launches even during the so-called "ghost" month which, in
the traditional Eastern mindset, is a time for refraining from business
activities, the company said.
A total of 2,202
condominium units from six projects were added to the supply, and most of them
were from the low-end segment. This pushed the total new supply of
condominiums for the first nine months of this year to 6,829 units,
surpassing the 6,745 units launched in the entire 2013.
Meanwhile,
medium-end projects were actively re-launched, with massive promotion
programmes that included interior design packages, car plans and deferred
payment schemes, as most of these projects were already completed and buyers
could move in immediately.
Sales momentum
still remained strong despite the ghost month tradition. An estimated 2,550
units were sold in the quarter, a slight increase of approximately two per
cent compared with that of the last quarter.
Sales for
medium-end projects improved by 30 per cent while those for low-end projects
declined as buyers moved up the price brackets and favoured completed
projects. The total number of units sold for the first nine months reached
6,550, a 66-per cent year-on-year increase.
"Transactions
for medium-end projects increased because of the high demand in this segment,
and the supply of the medium-end projects has always accounted for a large
volume of the market," An said.
In terms of primary
pricing, a slight two- to five-per cent year-on-year increase in indicated
tag prices were seen in the new launches of some medium- and low-end
projects, especially the completed ones, An noted.
"Although
promotions of higher value are on offer, the increase in tag prices shows
that developers were more confident in the market and in the positioning of
their projects," she added.
The prices of
apartments for re-sale likewise witnessed a slight one-per cent
quarter-on-quarter increase. Re-sale prices improved in most segments, with
the strongest seen in medium-end apartments with a 1.8-per cent
quarter-on-quarter surge. In the first and second quarters, an increase in
re-sale price was stronger in the luxury and high-end segments.
Review
support industry aid: experts
State assistance
for the development of
The call was made
in response to the draft decree on the development of supporting industries
that the Ministry of Industry and Trade recently formulated.
Under this decree,
individual and corporate producers and distributors of products and services
for supporting industries will be allowed to borrow low-interest credit from
a VND30-trillion (US$1.4-billion) support industries fund.
The fund will be
sourced from the State budget, official development assistance (ODA) loans
and other investment funds, including an initial aid of VND2 trillion that
will act as catalyst for the first three years.
Dao Phan Long, vice
chairman of the Viet Nam Mechanical Engineering Association, said the most
important task following the establishment of the fund would to determine
which companies deserved to receive the aid, to avoid rampant and ineffective
investment. Detailed policies should also regulate the use of the fund, Long
added.
He suggested that
business associations act as advisors while central agencies manage, instead
of allocate, the funds to municipal and provincial agencies to further ensure
effective implementation.
Besides the aid,
the crafting of appropriate policies for support industries are more urgent,
said industry insiders.
Tran Tuan Anh,
director of the 19-8 Mechanical Joint Stock Company, revealed that
enterprises in the support industries sector were interested in policies that
would make their products more attractive to Viet Nam-based foreign
companies.
The Government should
regulate which Vietnamese-made products foreign companies in
Long said it would
be difficult for Vietnamese support industry enterprises to take part in
foreign companies' supply chains because the latter often brought in their
foreign support industry partners to Viet Nam when setting up establishments
in the country.
Inadequate supply
of components and accessories from domestic support industries has forced
manufacturers to look for foreign suppliers, leading to the country's
prolonged trade deficit in industrial production in previous years.
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Thứ Bảy, 4 tháng 10, 2014
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