Thứ Sáu, 27 tháng 3, 2015

BUSINESS IN BRIEF 27/3


Ninh Thuan eyes clean energy
Ninh Thuan has given priority to attracting investment in the energy sector in an aim to become Viet Nam's clean energy centre, the chairman of the province's People's Committee said at an investment conference held yesterday in HCM City.
Luu Xuan Vinh said the province had great potential in the energy sector, especially after being selected by the Government as the site to build the country's first two nuclear power plants with a capacity of 8,000 MW.
He said the province was seeking investors for wind-energy and solar-energy projects with an estimated capacity of 2,600 MW, as well as projects on auxiliary services for the nuclear and wind-energy industry.
As one of the country's sunniest, windiest and driest regions, the area developing solar- and wind-power plants.
Vinh said priorities had been given to other sectors such as tourism, agro-fisheries, forestry and aquatic-product production and processing.
Education and training will also be a top priority, as well as real estate, with a total of 72 investment projects scheduled for the next five to 15 years.
With approval from the Prime Minister, Ninh Thuan is the first province to hire foreign consultants, the US Monitor Corporation and UK Arup, to prepare a plan to make Ninh Thuan a destination with "quick and simple procedures, an area for safe business and effective investments and sustainable development".
Apart from new property and energy projects, the province is expected to benefit from the North-South expressway and railway connecting HCM City to Nha Trang through Ninh Thuan Province.
The highway will help create favourable conditions to promote economic and cultural exchanges with the key Southeast economic zone, Central Highlands' provinces, the south-central coast.
From 2011 to 2014, Ninh Thuan saw relatively stable growth with an average GDP growth rate of 11.5 per cent per year. Last year, although the global and domestic economy experienced difficulties, the province's GDP rose to 12.4 per cent.
Nguyen Duc Thanh, secretary of the province's Party Committee, said Ninh Thuan would continue to improve its business environment, reduce costs and simplify administrative procedures to improve the effectiveness of the Economic Development Office (EDO).
The EDO was established under a "one-stop-shop service" mode to help answer any queries from investors and support them to fulfill investment procedures promptly.
To create the most favourable investment environment, Ninh Thuan authorities also aim to have one of the country's highest Provincial Competitiveness Index.
In recent years, the province has improved infrastructure and sped up completion of a 116-km long coastal road, with the aim of appealing to investors in the tourism industry.
Ninh Thuan is a south-central coastal province with a tropical monsoon climate and a 150-km long beach with a series of beautiful bays and beaches, with opportunities to develop a marine economy and a luxury resort tourism sector.
Le Thanh Hai, Politburo member and Secretary of HCM City Party Committee, said the conference was the first meaningful step in the cooperation programme between Ninh Thuan Province and HCM City over the next five years.
HCM City enterprises have 56 investment projects worth more than VND16,000 billion in the province, accounting for 22 per cent of total investment projects.
Most of the HCM City investment is in tourism, energy, aquatic varieties, aquatic product processing, and mineral exploitation and processing.
The province has a total of 293 investment projects with total registered capital of more than VND95,000 billion ($4.52 billion).
Also, at the conference, an MoU was signed by TSV Joint Stock Co, Korea's Luxco and Singapore's Blue Circle to develop renewable-energy projects in Ninh Thuan.
During the conference, investment certificates were given to projects in wind energy, petrol, hydropower plant expansion and clean shrimp breeding. The Hon Co tourism area was also granted an investment certificate.
The conference was attended by representatives from international organisations, sponsors, the domestic and international enterprise community, and HCM City investors.
Electricity firms to raise competitiveness
The domestic market is expected to have five electricity corporations, which will directly buy and sell power to customers in the near future.
This was announced by Ministry of Industry and Trade (MoIT) officials at a conference in Ha Noi yesterday.
Experts said establishing multiple firms soon was necessary for ensuring the progress of the national roadmap, which had been adopted by Prime Minister Nguyen Tan Dung, and for developing a competitive wholesale electricity market by 2019.
More than two years after Viet Nam kickstarted a competitive power generation market, the national utility Electricity of Viet Nam (EVN) remains the single buyer in this market, resulting in "inflexible prices" of power.
Viet Nam Electricity Association Vice Chairman Tran Dinh Long said, currently only about half of the power plants, with a capacity of 30 megawatts or more, were taking part in the electricity generation market.
But once the competitive wholesale level is achieved, any power generation firms can directly join the market if they "guarantee enough good infrastructure conditions." These will include multi-targeted hydropower plants, build-operate-transfer (BOT) plants, and even small plants, which currently only opt for indirect routes.
Nguyen Anh Tuan, the director of MoIT's Electricity Regulatory Authority, said he was concerned about whether the country will have adequate technical infrastructure and human resources to operate the market at a higher level.
"The biggest challenge currently lies in the ability of executives [in the sector]," he said, adding that improving their capacity was important for ensuring market success.
Deputy Prime Minister Hoang Trung Hai has asked MoIT to complete a detailed plan for developing the competitive wholesale market and submitting it to the Government by June. This is needed for the country to begin piloting this scheme from early next year.
Tuan confirmed that the ministry had formulated the plan with the help of both domestic and foreign advisors, who were committed to finalising it in May.
Officials from MoIT and the Ministry of Finance agreed in an online conversation earlier this month that they needed to make more efforts to ensure that commodity prices were determined in keeping with market mechanisms and with greater transparency.
They expressed the point of view in the context that EVN was roundly criticised for opacity in its price calculations, and that the recent hike of 7.5 per cent in electricity prices had fuelled public concern about a domino effect on the prices of many other essential goods.
Viet Nam plans to have a competitive retail electricity market by 2023. Viet Nam News reported last year that the electricity industry's development required nearly US$50 billion for the 2011 to 2020 period, and $75 billion for 2021 to 2030 period.
Yesterday's meeting was organised by MoIT and EVN.
Local food industry inks promotion agreement
HCM City's Food and Foodstuff Association on Tuesday signed an agreement with exhibition organiser UBM Asia to promote its activities and help its member companies find partners.
Ly Kim Chi, chairwoman of the association, said the agreement was very important since food and foodstuff producers in Viet Nam found it difficult to source ingredients locally because of a dearth of producers, and UBM could put them on to foreign suppliers of new food spices and additives.
UBM was highly experienced in the industry and had links with many international food ingredient producers, she said.
From May 20 to 22 this year it will organise Food Ingredients (Fi) Viet Nam 2015 in HCM City with an estimated 150 local, regional and international ingredient suppliers and 4,000 food and beverage professionals attending.
One-fifth of VND30 trillion for home loans disbursed after two years
Local banks have disbursed more than VND6.18 trillion (US$286.3 million) out of the Government’s VND30-trillion home loan program since it debuted 20 months ago, according to the latest report by the Ministry of Construction.
As of February 25, participating banks had pledged to lend more than VND10.8 trillion to home buyers, and total outstanding loans from this credit package had reached over VND6.18 trillion, or 20.6% of the total.
Lenders had promised to offer loans worth a total of VND6.37 trillion for more than 14,000 household and individual borrowers.
Banks had also pledged to lend VND4.42 trillion to investors of 34 housing projects and disbursed VND1.76 trillion for 31 projects.
In the year to date, investors of 88 projects have registered to adjust the  sizes of apartments, up 14 projects against the end of last year, with more than 36,100 apartments divided into nearly 49,200 smaller units.
On the other hand, 62 commercial housing projects have been registered for change into social housing developments, up by two projects against the end of last year with nearly 42,000 apartment units.
The Government has recently told the central bank and the Construction Ministry to boost disbursements for the VND30-trillion package in line with the Government’s Resolutions 61/NQ-CP and 02/NQ-CP.
Disbursed foreign direct investment up 7% in first quarter
Foreign direct investment (FDI) disbursement in the first quarter of 2015 was estimated at US$3.05 billion, up 7% over the same period of last year, the Foreign Investment Agency (FIA) has reported.
As of March 20, investment licences were granted to 267 new FDI projects with pledges totalling US$1.21 billion, while foreign investors also committed to pour an additional US$621.12 million in 102 existing projects.
According to the FIA, export revenues by the foreign sector, including oil revenues, were estimated to reach US$25.08 billion in the three months leading up to March, up 12.9% year on year and making up 70% of Vietnam’s total export value.
The sector, meanwhile, imported goods worth US$23.09 billion, running a trade surplus of nearly US$2 billion.
The manufacturing industry remained the strongest magnet for foreign investment, attracting 76.6% of pledges in the January-March period, followed by property trading and retail sales sectors.
The first three months of 2015 saw the return of the Republic of Korea as the largest investor with more than a quarter of all FDI commitments to Vietnam. The second and third positions belong to the British Virgin Islands and Japan.
Ho Chi Minh City was the largest recipient of FDI in the quarter ending in March, with US$540.24 million, or nearly 29.4% of total FDI pledges. The port city of Hai Phong came second with US$235.21 million and Binh Duong province third with US$140 million.
Private sector crucial to unlocking Vietnam's economic growth potential - ADB
While Vietnam’s economic performance continues to improve, further structural reforms that allow greater participation of local firms in global value chains is needed to enable the economy to reach its full growth potential, the Asian Development Bank (ADB) said in a report released on Tuesday (March 24).
Asian Development Outlook 2015 forecasts Vietnam’s gross domestic product (GDP) growth to edge up to 6.1 percent in 2015 and 6.2 percent in 2016, assuming the Government maintains expansionary monetary and fiscal policies and continues to accelerate structural reforms. Annual inflation is projected at 2.5 percent in 2015, quickening to 4.0 percent in 2016 as domestic demand and global oil prices pick up.
“Better economic performance in the major industrial economies -- particularly the US, Vietnam’s biggest export market -- will help to spur export growth, although this positive effect will be partly offset by slowing growth in the PRC (Mainland China),” said Tomoyuki Kimura, ADB Country Director for Vietnam. “Vietnam is also expected to be a net beneficiary of lower global oil prices which will increase disposable incomes and lower business costs.”
The Outlook highlights that while Vietnam’s economic performance slowly improves, a number of structural factors continue to limit its ability to reach its full growth potential.
In the short term, priority should be placed on strengthening the banking system and outlining a clear strategy to resolve non-performing loans. Growth will also be supported by new laws to guide divestment of state-owned enterprises and accelerate their commercialization.
Lifting economic growth over the longer term, however, will rely on Vietnam’s ability to undertake deeper structural reform, in particular to support local firms’ integration into global value chains.
“To strengthen SME’s capacity to participate in global supply chains, efforts will be needed to strengthen inter-agency coordination, particularly in the formulation and implementation of SME policies," Kimura said. “Greater consultation with the private sector would also help to identify constraints that inhibit links with production networks. Industry-specific strategies that support industry clusters and economies of scale are also needed.”
Becamex Tokyu finishes first apartment buildings
Becamex Tokyu, a joint venture between Vietnam-based Becamex IDC and Japan’s Tokyu Corporation, on March 24 announced the completion of the first two apartment buildings as part of the Tokyu Binh Duong Garden City project worth US$1.2 billion.
Sora Gardens I has two towers of 24 stories with 406 units. Modern facilities such as swimming pools, gyms and parks are available for residents there.
Convenience stores, laundry shops, banks and Japanese-style KAZE Shuttle bus stations near the buildings will be commissioned in the second quarter this year.  
The investors said they had applied Tokyu’s advanced technologies and experiences to offer high quality products and ensure a comfortable living environment. Prices of these apartments hover in the range of VND1.38 billion and VND2.33 billion per unit.
Tokyu Binh Duong Garden City covers an area of 110 hectares and consists of around 7,500 apartments and houses, together with trade centers, office buildings and entertainment facilities in Binh Duong New City.
Tokyu Corporation is among the leading corporations in Japan and active in multiple sectors such as transport, construction, retail and hospitality.
Becamex IDC Corporation is active in fields such as infrastructure, information technology, health, education, banking and securities.
Nhan Co alumina plant in test operation
Nhan Co alumina plant in Dak Nong Province will start test production some time next month so that it can turn out its first products by year-end, said Le Minh Chuan, chairman of Vietnam National Coal and Mineral Industries Holding Corporation (Vinacomin).
Meanwhile, Tan Rai alumina facility in Lam Dong Province has churned out a total of 700,000 tons of alumina with 99.5% of it meeting quality standards. The facility is running at 75% capacity with annual output of 540,000 tons.
All its output has found buyers so far. Therefore, it plans to operate at full capacity at year-end, according to Vinacomin.    
Apart from Tan Rai bauxite-alumina plant, Vinacomin is working on a plan to attract domestic and foreign investments into an aluminum electrolysis complex in the coming time.  
Previously, the Government gave the green light to alumina manufacturing facilities to go public.  
During his visit to Tan Rai last month, Prime Minister Nguyen Tan Dung said the Government would support Vinacomin to equitize Lam Dong Aluminum Company to raise funds for manufacture of aluminum and aluminum-related products.
Vinacomin is speeding up the issuance of an operation license for Nhan Co bauxite mine and the procedure of removing 404.4 hectares of land from an area where mineral mining is prohibited.
In his recent trips to Australia and New Zealand, PM Dung called for foreign firms to invest in Vietnam’s mining sector.
However, domestic scientists worry about the economic efficiency and the environmental impact of bauxite mining projects in the Central Highlands.
NA deputy urges SOE management improvement in city
HCMC needs to adopt a mechanism and a model to efficiently manage State-owned enterprises (SOEs), said Tran Du Lich, deputy head of the HCMC delegation of National Assembly deputies.
He noted SOEs often look to the city government for instructions, so they may miss business opportunities if the city government makes late decisions.
At a meeting on the restructuring of SOEs in the city Monday, Lich said the law on management and use of State capital in production and trade operations did not specify a management model for SOEs.
Therefore, the city should work out a model to manage SOEs.
“If SOEs need instructions from the city government, they might wait a long time as city leaders must turn to relevant agencies for advice. Businesses should make timely decisions; otherwise, they will miss opportunities,” he said.
Lich asked whether the city should follow the old SOE management model or find a new one to help enterprises operate more efficiently.
Regarding investment sectors for SOEs in the future, Lich said the city should focus on public services like public works, parks, trees, and water supply and drainage, and those sectors supporting economic growth such as hi-tech, software and agricultural parks and hi-tech medical centers.
The State should own 100% of businesses active in these two groups of sectors in the short run.
To this end, HCMC should review 17 corporations, holding companies and subsidiaries to assist them to improve their use of capital.
HCMC vice chairman Le Manh Ha said the city would sell State shares at SOEs in the coming time to lower State ownership to 50-65%. “The city will retain a few SOEs and make them operate efficiently.”
In 2012-2015, the city plans to finish the equitization of 31 SOEs.
According to a report by the committee for SOE reform and management, 10 corporations withdrew VND578 billion (some US$27 million) from 43 entities in non-core business sectors last year. SOEs will continue divestment from non-core operations to get back around VND3.6 trillion this year.
Exchange rate close to upper limit
Local banks on March 24 continued devaluing the Vietnam dong currency against the greenback, leading the exchange rate to get closer to the ceiling set by the central bank and sparking hearsay of a possible exchange rate adjustment.
Vietcombank on March 24 quoted the dollar selling price at VND21,575, up VND25 against Monday. Meanwhile, Techcombank set the highest price at VND21,590, almost reaching the upper limit of VND21,672.
Experts have pointed out the factors that are piling pressure on the exchange rate. Aside from the rising dollar demand of foreign-invested firms to repatriate profit overseas at the end of the first quarter, consumers also want to hold on to dollar funds for fear of a further dong devaluation.
In addition, the greenback has appreciated against other currencies such as the euro and Japanese yen while some Asian nations have devalued their currencies. As a result, Vietnamese exporters have seen the competitiveness of their goods falling as the central bank keeps the stable exchange rate policy in place.
According to the General Department of Customs, Vietnam’s trade deficit hit over US$1.26 billion by mid-March.
Viet Dragon Securities Company (VDSC) said in a report on Monday that concerns about a further dong devaluation and news about Indonesia’s currency volatility are causing psychological impact on foreign investors.
In theory, in a market with huge pressure on a domestic currency devaluation, the common foreign reaction is to sell their portfolios quickly to take back U.S. dollars or to delay disbursements. This might partly explain the recent strong foreign net selling on the local stock market, VDSC said.
Some experts have threw support behind a dong currency devaluation of no higher than 2% this year while others have urged due consideration of such a move.
Economist Vu Dinh Anh said how to manage the exchange rate is complicated. At present, the Government should closely monitor developments on the market.
Up to now, the central bank has remained silent over the exchange rate movements though the dong has steadily weakened against the dollar since early this month.
Earlier, experts from foreign banks such as HSBC and Standard Chartered predicted a dong fall of 2% this year as targeted by the central bank.
Eddie Cheung, a foreign exchange strategist at Standard Chartered, said the local economy has seen obvious signs of recovery and foreign reserves have been improving. Therefore, if a further exchange rate adjustment occurs from now to the end of this year, the dong would depreciate by only 1%.
However, ANZ Bank said the dong would decline 3% against the dollar this year, from VND21,388 by the end of 2014 to VND22,050 at the end of this year. If the exchange rate increases by another 1% as announced by the central bank, it would be VND21,888 per dollar.
Vietnamese firms advised to rescue themselves as soaring dollar hurts export
With the U.S. dollar strengthening on the world market, many Vietnamese exporters have no choice but to slash prices for importers in countries whose currencies are now much weaker than the greenback.
The U.S. dollar value has soared against the euro, yen, British pound, as well as Australian and Singaporean dollars, sending importers in these countries to either cut orders or ask for lower prices, according to Vietnamese exporters.
“Prices of exports to the EU have declined 5 to 10 percent compared to last year and businesses could only find buyers if they agree to reduce quotes,” said Duong Ngoc Minh, general director of Hung Vuong JSC, a major catfish exporter.
Seafood shipments dropped up to 30 percent in the first two months of this year from a year earlier, Minh said, adding “the situation will remain like this for a long time.”
Nguyen Van Kich, general director of Kafatex JSC, another seafood exporter based in the southern province of Hau Giang, said he has to constantly update price information from the U.S. market to adjust the company’s business plan and price quotations accordingly.
Kafatex mainly ships products to Japan and the EU, and all payments are made in U.S. dollars.
“Customers in the EU now have to pay nearly EUR1 million for a $1 million order instead of EUR900,000 as before,” he said.
The depreciation of the euro against the dollar has increased the prices of imported seafood in the EU, but the importers there could not hike selling prices to make up for the disparity as it will dismay local consumers, Kich said.
“The importers thus reduced orders, asked for lower prices, or stopped buying from Vietnamese firms to look for cheaper sources,” he added.
“We have to accept their price cut requests otherwise we don’t know what to do with the products.”
Many Vietnamese cashew businesses also have had to cut export prices to maintain orders.
“Prices of shipments to the EU have been slashed by two percent, while the cut for exports to Singapore and Australia is five percent compared to earlier this year,” said Nguyen Duc Thanh, general director of Tanimex Long An.
The U.S. is the only market where the company’s export remains stable, Thanh added.
The exchange rate between the Vietnamese dong and U.S. dollar remains stable, surging slightly by only 0.5-0.6 percent compared to late last week, as quoted by many state-run and joint-stock commercial banks on Monday.
The price of the greenback quoted at state-run Vietcombank, often considered the benchmark for other joint-stock commercial banks, rose VND125 per dollar to VND21,450-21,510 for bid and ask, respectively.
The dong was devalued by one percent to VND21,458 to the dollar on January 7.
Although the soaring dollar is causing difficulties for the export activities of Vietnamese businesses, Minh from the Hung Vuong JSC said the firms have to find a solution on their own instead of waiting for a government policy.
“Other competitors of Vietnam such as Thailand, India, Indonesia, and Ecuador are exporting at lower prices, so Vietnamese firms have to try to cut production costs and input expenses to increase competitiveness,” he said.
Nguyen Chi Trung, director of Gia Dinh Co. Ltd., a shoemaker in Ho Chi Minh City, also said the foreign exchange rate is not the only factor that matters in competition among exporters.
“Such issues as increasing labor productivity or ensuring timely delivery seem more important than the [exchange] rate,” he said.
Tran Ngoc Tho, dean of finance at Can Tho University, said businesses should focus on “things within their control” to enhance their performance and production, instead of “issues they cannot control such as the foreign exchange rate.”
“Businesses are advised to keep all their focus on improving production, product quality, and marketing campaigns at this time,” he said.
“Besides waiting for the State Bank of Vietnam to resolve the foreign exchange issue, no one but the businesses themselves can solve their own problems to increase their competitiveness.”
VinGroup starts $33 million project in Hue
Real-estate developer, VinGroup, has started the construction of a trade centre complex and a five-star hotel in the central Hue city, with a total investment of VND700 billion (US$33.3 million).
The Vice Chairman of Vingroup, Le Khac Hiep, said the project would include the Vincom Hung Vuong trade centre and the Vinpearl Hue 16-storey hotel and would be the first buildings of VinGroup in the north-central region to boost tourism and trade.
The project, which is spread over 4,500 square metres in the city's downtown, is scheduled to become operational next March.
Hotel Royal Hoi An joins the Mgallery Collection
Hotel Royal Hoi An, a member of the MGallery Collection, has opened as Accor’s first upscale property in the ancient port city of Hoi An, celebrating a romantic journey at a crossroads of cultures.
Hotel Royal Hoi An is the latest addition to the MGallery Collection in Vietnam. Standing majestically on the banks of the picturesque Thu Bon River, the upscale property has taken pride of place in the Unesco World Heritage town of Hoi An in Central Vietnam.
The hotel’s 119 guestrooms induce total relaxation as a serene haven of peace and tranquillity, each exhibiting an antiquated yet romantic touch. The rooms are adorned with dark wood and handcrafted furnishings and fixtures that bring the city’s storied past back to life.
On the balcony, guests will be captivated by a magnificent view of the river that meanders leisurely and the age-old communities that thrive along its banks. Room types are named as follows: Sotaro Suites on the top floor facing east to Japan, Anio Suites on the top floor facing west to Vietnam, and two Deluxe Suites, Yasu and Tau. “Yasu” is Sotaro and Ani-o’s daughter while “Tau” means “a boat” in Vietnamese.
Hotel Royal Hoi An celebrates decadent dining through its several top-notch food and beverage venues, including Faifo Café treated to a full breakfast buffet and delectable a la carte dishes of Asian, American and European cuisine for lunch and dinner. The chef at its Japanese-food outlet Wa Ka Ku exhibits his prowess in the fine art of sushi and yakitori with sumptuous dishes using the finest local ingredients. Classic cocktails, chic design and a relaxed vibe are the order of the day at the poolside River Bar with cool lounge sounds filling the air. 
Hotel Royal Hoi An’s opulent Thu Bon Ballroom is the perfect meeting and events venue that can ensconce medium to large groups of up to 250 guests. The Royal Spa provides a superb royal spa experience to rejuvenate and revitalise body and mind while the Royal Fitness is equipped with state-of-the-art fitness equipment complete with the marvellous views of the Thu Bon River.
Especially, to celebrate its grand opening, the hotel offers a special launch promotion with rates starting from just VND2,600,000++ per Deluxe room/ night, including daily breakfast for two and free wifi internet access. This special promotion is valid until September 2015.
Property start-ups soar as capital deadline looms
There has been a wave of new property business start-ups since the beginning of the year, as the minimum legal capital requirement of VND6 billion (US$284,000) is still effective.
Terraced houses in the Xuan Phuong Urban Area in Ha Noi's Hoai Duc Districts. VNA/VNS Photo Tuan Anh
From July 1, that level will be raised to VND20 billion ($945,000).
According to the General Statistics Office, the number of property firms established in the first two months of this year rose by 89 per cent over the same period last year, or 223 firms per day.
Deputy Chairman of the Viet Nam Federation of Civil Engineering Association Pham Si Liem said this somehow reflected optimism about the recovery of the property market, and firms saw opportunities to invest in it.
However, most of these start-ups were small with modest registered capital.
Deputy President of HCM City Real Estate Association Nguyen Van Duc said firms must be very cautious in doing business as lower average registered capital meant that several small and medium-sized firms were at higher risk when upheavals occurred.
"If firms want to exist and develop in a harsh property market, they must be professional and stand on solid resources," Duc said.
Another reason for the wave of property business start-ups was the amended Law on Real Estate Business, which required a minimum legal capital of VND20 billion ($945,000) from July 1, up from the current VND6 billion ($284,000).
As a result, there was a rush to establish firms before the end of June.
Under the draft decree prepared by the construction ministry on the basis of the law, a minimum legal capital requirement of VND50 billion ($2.64 million) might be applied on those investing in property projects that were awaiting approval of State investment agencies. Others would be required to have a minimum legal capital of VND20 billion.
The construction ministry said raising legal capital limits aimed to prevent the establishment of firms en masse, which occurred during the past few years, leading to unfinished projects and losses to buyers.
This drew mixed opinions from experts. At a conference last week held by the Viet Nam Chamber of Commerce and Industry, most experts said the VND50-billion minimum legal capital rule was unreasonable and inconsistent with the Law on Real Estate Business.
Some said the regulation was not tight enough to deal with the mass establishment of property firms, while others said raising legal capital limits would narrow down doors for small businesses.
According to Phan Hai Anh from Vingroup, different levels of minimum legal capitals might cause confusion. She added as the Law on Land regulated that an investor must have equity capital equal to 15 per cent or 20 per cent of the total investment of the property project, there was no need to have two different levels of minimum legal capital. The VND20-billion minimum legal capital rule sounded reasonable, Anh said.
Director of Basico Law Firm Truong Thanh Duc proposed to put the draft regulation for reconsideration, as it might be inconsistent with the established law, adding that only one minimum legal capital level should be applied.
Chairman of the Viet Nam International Arbitration Centre Tran Huu Huynh said he was worried about the retroactive effect of the law, adding that firms established before the amended law came into effect should be allowed to keep a minimum legal capital of VND6 billion.
Huynh said the draft regulation about adjusting the minimum legal capital level following macro-economic improvement was not reasonable, as it might narrow down opportunities for small businesses to join the market.
S.Korean firm to build HCM City urban complex
HCM City People's Committee Chairman Le Hoang Quan has asked relevant agencies to establish a working group responsible for the implementation of an urban project in District 1.
Vessels are anchored at the Ba Son Shipyard in HCM City. A South Korean company is expected to build a $5 billion urban complex near this area. VNA/VNS Photo Hoang Hai
The committee made the announcement on March 19, saying that the US$5 billion complex will be built by a South Korean firm on land near the Ba Son Shipyard. South Korea's EUNSAN & OUE Group is expected to begin construction of the project on National Day or September 2.
Quan said this was one of the key projects that would help develop the city in line with an adopted master plan. The urban areas and trade centres of the complex will be synchronised with the surrounding infrastructure, such as the Thu Thiem 2 bridge and the metro line No 1.   
He noted that as the location was special in terms of national defence, the Government and the Ministry of Defence would decide on further procedures before the project is executed.
The municipal Department of Planning and Investment has been tasked with guiding the South Korean firm for establishing a legal entity in the city in accordance with current regulations.
Ca Mau Fertilizer stock to trade from March 31
Shares of PetroVietnam Ca Mau Fertilizer Co. Ltd. (code DCM) will start trading on the HCM City Stock Exchange (Hose) from March 31.
Shares of PetroVietnam Ca Mau Fertilizer Co. Ltd will start trading on the HCM City Stock Exchange (Hose) from March 31. Photo dantri.com
Based in the southern Ca Mau Province, the company is one of the leading fertilizer producers in Viet Nam and was approved for listing on the exchange last Friday.
When it starts officially trading on the exchange, the reference price will be set at VND14,500 (US$0.68) each, with a margin of 20 per cent.
The exchange said DCM was registered with a charter capital of VND5.294 trillion (US$74 million), equivalent to 529.4 million shares.
In December 2014, DCM had successfully sold about 129 million shares during its IPO at an average price of VND12,251 per share, earning VND1.58 trillion ($74 million). The shares' value, based on the IPO, accounted for 24.36 per cent of the company's capital.
The Viet Nam Oil and Gas Group PetroVietnam PVN currently holds a 75.56 per cent DCM's capital. As planned, PVN will reduce its ownership to 51 per cent by selling 24.36 per cent to a strategic partner. Japanese investor Mitsui & Co. Ltd., has been asked to be that strategic partner.
DCM produced 807,000 tonnes of urea fertiliser, achieving a turnover of VND6.246 trillion ($293 billion) in 2014.
VeriSign releases fourth-quarter 2014 Domain Name Industry Brief
VeriSign Inc., a global leader in domain names and Internet security, recently announced four million domain names were added to the Internet in the fourth quarter of 2014, bringing the total number of registered domain names to 288 million worldwide across all top-level domains (TLDs) as of December 31, 2014, according to its latest Domain Name Industry Brief.
The increase of four million domain names globally equates to a growth rate of 1.3 per cent over the third quarter of 2014. Worldwide registrations have grown by 16.9 million, or 6.2 per cent, year over year.
The .com and .net TLDs experienced aggregate growth in the fourth quarter of 2014, reaching a combined total of approximately 130.6 million domain names in the domain name base for .com and .net.
This represents a 2.7 per cent increase year over year. As of December 31, 2014, the base of registered names in .com equaled 115.6 million names, while .net equaled 15.0 million names.
New .com and .net registrations totalled 8.2 million during the fourth quarter of 2014.  In the fourth quarter of 2013, new .com and .net registrations totalled 8.2 million.
During the fourth quarter of 2014, VeriSign's average daily Domain Name System (DNS) query load was 110 billion across all TLDs operated by VeriSign, with a peak of 146 billion.
Compared to the previous quarter, the daily average decreased 3.7 per cent and the peak decreased 54 per cent. Year over year, the daily average query load increased 33.5 per cent and the peak query load increased 47.1 per cent.
The DNS is a critical component of the Internet; however, its security is often overlooked. Implementing DNS Security Extensions (DNSSEC) into the DNS can help minimise attack surfaces and enhance security postures.
VeriSign publishes the Domain Name Industry Brief to provide Internet users throughout the world with statistical and analytical research and data on the domain name industry. Copies of the 2014 fourth quarter Domain Name Industry Brief, as well as previous reports, can be obtained at VerisignInc.com/DNIB.
Bitexco owes land clearance compensation in The One project
Bitexco Group started work long ago on The One Hochiminh City, a major office-commercial-hotel project opposite the landmark Ben Thanh market in downtown HCMC, but has yet to pay VND16.1 billion (US$750,200 ) in site clearance compensation.
The People's Committee of District 1 where the project is situated has written to Bitexco requesting it to pay land clearance compensation.
In the document sent on March 16 to Bitexco, the district authority told the property developer to transfer compensation money to the district’s board for site clearance and compensation no later than March 31. If Bitexco fails to do it, the district will report to the city government and the Department of Finance.  
Site clearance was finished over three years ago but Bitexco has yet to make full payments although the district has reminded the firm several times. Bitexco did send a document to the district’s government in September last year pledging to fulfill the obligation.       
Speaking to the Daily last weekend, Vu Quang Bao, general director of Bitexco, attributed the delay in payment to procedures and a four-month suspension of construction work last year following the collapse of a huge crane at the construction site.
Bao said Bitexco was working with banks to complete money transfer at the end of this month. The company is also boosting construction to put the project into service on June 30, 2017.
Work started on the project in December 2012 and the project is planned for completion this year.
The One Hochiminh City project has investment capital of around US$500 million and consists of two towers with one having 55 stories and the other 48. The project covers 8,600 square meters and is surrounded by Calmette, Le Thi Hong Gam, Pho Duc Chinh and Pham Ngu Lao streets.     
When in place, the project will provide over 31,800 square meters of retail, 17,300 square meters of grade A+ office space, 350 serviced apartments and the five-star Ritz Carlton Hotel with 250 rooms.
Bitexco is also the owner of the Bitexco Financial Tower on Hai Trieu Street, District 1, which was inaugurated at the end of 2010.
Offshore investment rules to be relaxed
Local enterprises directly making offshore investments can transfer foreign currency overseas to cover costs there before they obtain investment certificates, according to the Ministry of Planning and Investment’s draft decree on direct overseas investment.
If the draft decree is approved, it would encourage Vietnamese investors to explore investment opportunities in foreign countries.
The draft decree specifies foreign currency could be transferred abroad to cover expenses for starting an investment project, such as surveying markets, hiring consultants, setting up and maintaining representative offices, joining international tenders and making deposits.
Money needed to negotiate contracts and buy and hire properties in preparation for investment projects could also be sent overseas before the Ministry of Planning and Investment awards investment certificates.
The draft decree says initial expenses could be included in a project’s investment cost when investors register for offshore investments.
Compared to Decree 78/2006/ND-CP on offshore investments, the latest draft decree facilitates overseas money transfers.
Though Decree 78/2006/ND-CP also permits overseas money transfers before enterprises receive investment certificates, it is not easy for them to transfer money in reality.
According to enterprises, the Ministry of Planning and Investment licenses overseas investment projects but the central bank approves money transfer requests.
Many enterprises complain that even though they have investment certificates, they have found it hard to transfer foreign currency and thus missed a lot of investment opportunities.
According to the ministry’s statistics, as of the end of last year, Vietnam had had 930 overseas projects with total capital of US$19.78 billion. Many Vietnamese firms, especially those in the private sector, are exploring foreign markets to do business.
FTAs help avoid overdependence on single market
Vietnam has shown a strong determination to pursue free trade agreements (FTAs), especially the Trans-Pacific Partnership (TPP), to reduce its overdependence on a single export market, said Deputy Minister of Industry and Trade Tran Quoc Khanh.
Speaking at a dialogue organized by the Government portal (chinhphu.vn) last Friday, Khanh said FTAs would help Vietnam restructure exports and imports and avoid heavy dependence on a single market.
At present, East Asia accounts for 70% of Vietnam’s imports and 50% of its exports. Notably, exports to China make up 26% of Vietnam’s total while imports account for 29% of its total.
As the leader of many FTA negotiation teams, Khanh said Vietnam would take an enormous hit if those markets turned volatile.
Tran Dinh Thien, director of the Vietnam Institute of Economics, said signing numerous FTAs could help local exporters reduce trade risks. FTAs will make it possible for Vietnam to change its trade structure, he noted.
Vietnam so far has signed eight FTAs and is in negotiations over seven others, including that with the European Union (EU) and the TPP.
Regarding concerns over Vietnam’s participation in many FTAs in a short time, Thien said this is a consistent principle of the Party and the State. This policy has been in place for years.
The new FTAs will also pave the way for Vietnam to perfect its market economy mechanisms, Thien added.
Khanh said FTA members would have to remove import tariffs, offering Vietnamese greater chance of boosting exports to more foreign markets.
Multinationals such as Samsung, Microsoft, LG and Fuji Xerox have recently announced to turn Vietnam into their production bases, proving that they are keen to tap into the opportunities which will be brought by the FTAs.
ABBank, IFC support local SMEs
ABBank and International Finance Corporation (IFC) clinched a cooperation deal last Friday to execute a project designed to improve the competitiveness of local small and medium-sized enterprises (SMEs).
The project will be implemented in 18 months, focusing on launching policies, credit products and services for SMEs and helping ABBank staff approach potential borrowers. Both sides will help SMEs control credit risks and boost business activities.
Nguyen Thi Ngoc Mai, deputy general director of ABBank, said in a statement that this is one of the key projects of the bank to develop customer services and strengthen staff capability as well as provide specific financial packages for each customer segment.
SMEs currently account for 95% of corporate clients at ABBank.
Most CBU autos imported from India in Jan-Feb
Statistics on January-February imports showed most of the completely built-up (CBU) autos imported into Vietnam originated in India.
According to the General Department of Customs, CBU auto imports in the year’s first two months amounted to nearly 15,100 units worth around US$320 million in total, up 146% in volume and 173% in value compared to last year’s same period. Of the import volume, under-nine-seat cars, trucks and other vehicles totaled over 8,000, 4,110 and 2,980 units respectively.
The customs report shows that India was the biggest supplier of CBU vehicles for Vietnam in January-February, with autos of under nine seats making up a substantial proportion, at 4,350 units, five times higher than a year ago. Meanwhile, South Korea exported almost 3,400 vehicles to Vietnam (up 53%).
Auto imports from these two markets do not enjoy preferential import tariffs like those from ASEAN countries. Besides, India is not the major auto supplier.
However, some auto trading firms said such results were not surprising as South Korean-made autos are favored in Vietnam as their prices are lower those of Japanese and U.S. automakers and their designs are eye-catching.
In addition to importing CBU cars from South Korea, Hyundai Thanh Cong, the importer and distributor of South Korean compact cars, imports cars from the Hyundai factory in India.
Besides, last November Suzuki Vietnam unveiled the seven-seat multi-purpose vehicle Ertiga imported from India. The emergence of Ertiga with the retail price of VND599 million per unit, the lowest in the seven-seat segment, has drawn much consumer attention in the domestic market.
According to the customs, imports of CBU vehicles from China were also high in the January-February period with 2,880 units. However, according to trading firms, vehicles imported from China were mainly trucks.
Meanwhile, 2,070 autos were imported from Thailand which is forecast to become  a major supplier of autos for Vietnam when the import tax falls to 0% in 2018 in the ASEAN Free Trade Area’s tax reduction road map.
Besides, Japan exported 1,100 CBU vehicles to Vietnam in the period.
Though India was the biggest auto exporter to Vietnam, its export value was still lower than other countries, at US$25 million compared to US$67 million from South Korea, US$114 million from China and US$32 million from Thailand.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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