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BUSINESS IN BRIEF 10/7
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electronics exports expand
The
country has leapfrogged the
The
electronics cluster has grown rapidly in recent years. Electronics exports
have expanded by 78 per cent per year for the past four years, reaching US$35
billion in 2014. Electronics accounted for 23 per cent of all exports in
2014, up from a mere 5 per cent in 2010. Electronics are now a key driver of
the economy, accounting for 23.4 per cent of GDP last year, up from just 5.2
per cent in 2010.
In
addition, competition was intensifying, making the need to restructure the
supply chain even more compelling.
Its
electronics cluster largely benefited from the structural shift in the
regional electronics supply chain, as the influx of foreign electronics
manufacturers enabled the transfer of technology and skills. So much so that
it has now captured market shares from many of its regional peers.
The rise
of
For
example, after year of rapid growth, wages in
Beyond
the cost advantage, geography plays a role.
FDI into
Intel,
LG, Panasonic and Microsoft are among the global tech giants to have expanded
in the country in recent years, making a shift away from
In the
longer term, the Government expects electronics exports to reach US$40
billion by 2017. Growth of a seemingly modest five per cent a year would
achieve that target.
Nonetheless,
the longer-term sustainability of the industry will depend on whether
Otherwise,
electronics will only migrate to cheaper locations once wages start to rise.
Indeed,
Speculating
on the stock market a risky business
Speculating
on rumours in the stock market can earn you quite a fortune, but it can also
drive you to bankruptcy.
Shares
of Japan Vietnam Medical Instrument Co (JVC) were traded at the floor price
for most of June's trades, on the gossip that its former chairman cum CEO Le
Van Huong was arrested for deceiving customers.
JVC's
price nosedived from around VND22,000 per share in early June to just
VND7,600 on July 1 among shareholders' bewilderment. JVC recovered and hit
the ceiling in the last three sessions on Monday, although its shares were
put on warning status by the HCM Stock Exchange from July 3.
The
company released information to investors three times in June. On June 12, it
refuted rumors surrounding a project in
However,
both foreign and domestic investors were unsure about what had happened.
"We
do not know the specific reason why Huong was arrested, and we have heard
many different rumors, including that he changed the stamps on medical
devices," a representative of major shareholder DI Asian Industrial
Fund, which holds almost 20 per cent of JVC's stakes, said at the company's
unusual shareholders' meeting on Monday.
New Chairman
Hosono Kyohei, also an equity representative from DI Asian Industrial Fund,
apologised to investors for the fallout from the prosecution of Huong. He
also said the company could not answer investors' questions related to its
financial problems at the present time.
JVC is
an example of a rumour that turned out to be true, but there have been a lot
of ungrounded rumors in the past, which are often related to big companies
with high liquidity in the market.
One
"well-known" rumor that caused serious damage on the stock market
was the arrest of the chairman of Bank for Investment and Development of Viet
Nam (BID), one of the biggest banks in Viet Nam, Tran Bac Ha in February
2013. The stock market lost VND29 trillion ($1.33 billion) in the day after
the news. Two investors were fined later for spreading false rumours online.
Several
years ago, some leaders of big businesses were favourite subjects of
misleading arrest rumors, including the chairman of Masan Group (MSN) and the
CEO of Saigon Securities Inc (SSI).
Shares
of the companies related to litigation or bankruptcy rumours also fall
quickly. Examples from the past two months include Dat Xanh Real Estate
Service & Construction Corp (DXG) and Hoang Anh Gia Lai Co (HAG).
According
to Alan Phan, former president of Hong Kong-based Viasa Fund, creating a
rumour is easy in underdeveloped markets, due to the lack of transparency.
Investor sentiment here is often fragile and they trade on herd mentality.
Securities
firms can apply for FOL increase
Local
securities enterprises can now submit foreign ownership limit (FOL) increase
applications to the State Securities Commission (SSC) after the Government
signed Decree 60 approving the removal of the FOL on most listed companies.
Speaking
to the Daily, SSC vice chairman Nguyen Thanh Long said a higher FOL would
apply to securities firms from September 1 when Decree 60 takes effect.
Given
the new rule, brokerages can register at the SSC to raise their foreign
ownership cap to over 49% or even 100%. They are able to sell shares to
foreign investors after they get approval from the agency rather than having
to wait for a guidance circular.
Long
said the objective is to help struggling enterprises seek new sources of
capital and boost restructuring plans. This is also in line with
The new
decree stipulates that foreigners can own up to 100% shares at a securities
enterprise or establish a 100% foreign-owned securities firm in the country.
It
replaces Decree 58, which allows foreigners to either own a 49% stake at a
Vietnamese brokerage or set up a 100% foreign-owned company. The old decree
prevents foreigners from holding a stake of over 49% at local securities
enterprises.
According
to a representative of a 49% foreign-owned brokerage, the firm is facing
difficulties but the parent firm in
Therefore,
the new rule will enable the enterprise to revise its foreign ownership cap,
the representative said.
A leader
of a HCMC-based securities firm told the Daily that the company would
consider selling stakes to foreigners. Earlier, a foreign company offered to
buy a majority stake of over 49% at the stock brokering house but both sides
failed to conclude the deal due to the old rule.
Having
negotiated with the partner, the enterprise will seek approval from
shareholders to raise the FOL to over 49%, the leader said.
As
enterprises need time to seek partners, negotiate and prepare procedures, it
is difficult for them to finish FOL increase applications by early September.
There
are around 90 active securities companies, including 40 foreign-invested
firms, over 10 of them with foreign holdings of 49% and one 100%
foreign-owned company (Maybank Kim Eng Securities Co.).
Property
developers, brokers mislead buyers to push up sales
Real
estate developers and brokers in
Home
buyers in
Le Huu
Nghia, the director of Le Thanh Commercial Construction Co, said many
investors and brokers claim there more demand than exists for apartments to
pressure investors to buy quickly or risk losing out, even though occupancy
rates of many property developments are low.
"They
may increase an apartment's price the next day to try to fool customers into
believing that they are being sold fast. Such marketing tricks aren't
banned," he said.
Real
estate inventory is still high due to recession, while new projects continue
roll out. There are about 1,400 projects in the city worth about VND12.5trn.
Even though the number of transaction in the first six months reached 8,750,
doubled than the same period last year, many developments remain unsold.
The
Ministry of Construction is planning to set up a Vietnam Real Estate Broker
Association to improve market transparency.
Vu Dinh
Trung, the director of Viethome Co, urged the authorities to set up a real
estate information centre for customers.
Nissan
recalls vehicles over faulty airbags
Japanese
carmaker Nissan is recalling 166 vehicles in
Here is
an image of a X-Trail SUV car. The vehicle's faulty airbag will be checked
and repaired from August 17, 2015, to January 18, 2016. Photo vneconomy.vn
The
recalled vehicles include Sunny sedans, the X-Trail SUV, the Patrol SUV and
the Navara pick-up. The vehicles were produced between February 2, 2005, and
March 9, 2007.
The
campaign to check for and repair the faults will run from August 17, 2015, to
January 18, 2016.
US-based
Avery Dennison, a global labelling and packaging materials and solutions
firm, on July 2 opened its first distribution centre in
The
first distribution centre set up in
"We
place a high emphasis on the ASEAN region, especially the rapidly growing
"Our
new distribution centre in
The
5,600sq.m centre, which cost almost US$700,000 to set up, features high-speed
slitting machines that are capable of finishing high-quality paper and filmic
pressure-sensitive materials.
Development
of Vietnamese cashew industry faces difficulties
While
other farm produce and seafood products saw a decline in both export value
and volume, cashew nuts continue to help
According
to Mr. Nguyen Duc Thanh, chairman of the Vietnam Cashew Association, figures
showed at a recent international conference on nuts said that
Mr.
Thanh said that in the first half of this year, businesses exported 150,000
tons of cashew nuts, bringing in US$1.1 billion. At this rate, the country
will possibly export 300,000 tons of cashew nuts this year, earning $2.2
billion, equal to that in the previous year. If including products made from
cashew nuts, export turnover by cashew industry might reach $2.5 billion.
Exports of cashew nuts have been better than other products because current
export prices are higher than they were last year. Experts said that drought
has caused the prices of all kinds of nuts, including cashew nut, to climb.
However,
cashew industry is still facing many challenges. Food safety is a hot issue
as several containers of cashew nuts have been returned because they are
contaminated with Salmonella or E. coli bacteria, of which there are cases of
cross-contamination after cashew nuts had been sterilized.
Currently,
the US Food and Drug Administration is checking food safety at cashew nut
processing plants. Preliminary figures show that 15 out of 32 businesses
failed to meet food safety standards.
Products
in a same plant were not of equal quality because input materials were from
different origins. Customers prefer Vietnamese cashew nuts because of their
better aroma and taste. However, Vietnamese cashew nuts were mixed with raw
cashew nuts imported from other countries, especially from Africa, during
processing process. This will lose prestige of Vietnamese cashew nuts and
affect the building of Vietnamese cashew nut brand name. According to Mr.
Thanh, processed Vietnamese cashew nuts are sold 30 cent higher than African
ones.
In
addition, Vietnamese businesses compete with each other by offering lower
prices in order to promote export whereas Brazilian and especially Indian
companies do otherwise.
The fact
that there are too many cashew nut exporters in Vietnam with 345 companies in
2014, of which the number of companies whose export turnover was below $5
million per annum accounts for 73 percent has created unfair competition and
unequal quality, affecting the country’s cashew industry. In 2014, 119 out of
265 facilities inspected did not meet food safety standards, accounting for
44.9 percent. In order to maintain prestige of Vietnamese cashew nuts and
create fairness among cashew companies, authorities should slap strict
penalty on those companies.
The
biggest drawback of cashew industry is that despite the fact that cashew nut
exports keep increasing, the area of cashew trees and production continually
drop, causing the industry to depend on imported raw material whose quality
is not as good as domestic one.
In 2007,
the area of cashew trees was 444,000 hectares across the country. However,
because of poor care, average productivity dropped to 0.8 tons per hectare
from 1.1 tons per hectare. To 2014, there was around 294,000 hectares of
cashew trees. From a country that mainly uses domestic material for
processing, it has become the second largest cashew nut importer with
imported volume of cashew nuts nearly equal to that of India, and ten times
higher than that of Brazil, the third largest cashew nut importer.
Considering
cashew tree as a cultivar that brings advantage to Vietnam, since 2013, the
Ministry of Agriculture and Rural Development has taken many measures to help
farmers to increase productivity. In 2014, productivity of cashew trees rose
by 10 kilogram per hectare compared to the highest yield in the past years.
The area of cashew trees has also risen by nearly 4,000 hectares in the past
two years.
Mr. Pham
Van Nguyen, a cashew expert, said that the current demand for cashew sapling
is very high as replantation and improvement of 60,000 hectares of cashew
trees from now to 2020 will require millions of cashew saplings every year.
The quality of cashew saplings is very important so authorities should keep
close watch on multiplication of cashew trees so as to prevent sapling
providers from producing poor saplings.
Currently,
average productivity of cashew trees is around 1.2 tons per hectare. Some
farmers even have seen a productivity of 4.5 tons per hectare.
Workshop
highlights trade deal between Vietnam and EAEU
The
commitments of the free trade agreement (FTA) between Vietnam and the
Eurasian Economic Union (EAEU) and their impacts on domestic enterprises was
the focus of discussions among experts at a workshop held in Hanoi on July 7.
The
workshop was held jointly by the Vietnam Chamber of Commerce and Industry
(VCCI), the Ministry of Industry and Trade, and the Ministry of Finance.
Participants
at the workshop highlighted the huge potential for domestic enterprises to
access the 175 million-people market. They also pointed out the impact of the
FTA on a number of domestic sectors, saying that FTA commitments will include
cutting 82% of tax lines on the garment-textile sector, and 77% for the
leather, footwear and handbag sector.
Domestic
businesses should enhance their understanding of the FTA to overcome
difficulties, raise product competitiveness and improve product quality to
meet the strict requirements of these markets.
The free
trade agreement between Vietnam and the Eurasia Economic Union (EAEU)
(grouping Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) was signed on
May 29 after more than two years of negotiations, opening up a new chapter in
the partnership between Vietnam and the union as well as each EAEU member
nation in particular.
The
inked FTA covers programmes across goods trading, origin principles,
investment, intellectual property, legality and institutions, among others.
Labor
exports in H1 achieves 60% of year’s plan
Taiwan
(China) remains the largest recipient of Vietnamese guest workers, recruiting
7,505 in June this year, according to the Department of Overseas Labor
Management, under the Ministry of Labor, Invalids and Social Affairs
(MOLISA).
Viet Nam
sent 56,173 workers abroad in the first half of the year, achieving 59.13% of
the year’s plan and equal to 101.75% of the same period last year.
The
number included 11,777 in June only, including 7,505 in Taiwan (China), 2,324
in Japan, 654 in the Republic of Korea, 582 in Malaysia, 377 in Saudi
Arabia and 112 in Qatar.
Over the
first six months of the year, the MOLISA inked and launched the Memorandum of
Understanding and bilateral agreements with other nations.
The
Department of Overseas Labor Management directed and supported businesses in
realizing contracts to send more workers to Saudi Arabia and Qatar and
appetencies to Japan.
Viet Nam
and Germany on July 3 signed a Letter of Intent (LOI) on Vietnamese citizens
working in Germany as caregivers.
It is
the first such document on labor export that has officially been signed
between the two countries.
Under
the LOI, 200 people who will be sent to Germany as the first batch of caregivers
will attend a German language course starting in August for a B2-level
certificate at the Goethe Institute (of Germany) in Ha Noi.
More
challenges for construction firms ahead
Local
construction enterprises will have to face a slew of challenges in the
country’s regional and global economic integration process.
Construction
experts and contractors voiced concerns over a possible rise in competition
at a conference on opportunities and challenges from the ASEAN Economic
Community (AEC), which was held by the Vietnam Chamber of Commerce and
Industry (VCCI) and the Vietnam Association of Construction Contractors
(VACC) in HCMC last week.
Pham Van
Chat, a member of the Vietnam International Arbitration Center (VIAC) and a
Ministry of Industry and Trade rapporteur for international economic
integration, said life for domestic construction firms would be tougher when
the AEC takes shape late this year.
Chat
said import tariff reductions would pile pressure on domestic companies. In
the construction sector, Vietnamese producers of building materials will face
fierce competition from rivals in Europe, Japan, the U.S., South Korea and
China.
Large
volumes of construction materials, interior decoration items and machines of
ASEAN nations like Thailand, Malaysia and Singapore have been exported to
Vietnam. Therefore, many domestic firms may be forced out of business due to
ample imports.
Labor-intensive
construction businesses will see huge challenges ahead.
Other
problems are that marketing and production capabilities of local firms remain
weak and their labor productivity is low.
Nguyen
Ba Duong, chairman of Cotec Construction JSC (COTECCONS), said Vietnam lacks
skilled labor and its labor productivity is two to three times lower than
that of China. To deal with this, COTECCONS must set up a department to train
its employees.
However,
Duong said a number of private construction enterprises in Vietnam have grown
strongly and have applied modern technologies. Therefore, they can compete
with Japanese and Korean firms in terms of quality and prices.
Le Viet
Hai, chairman of Hoa Binh Corporation, shared Duong’s view but stressed that
just some big enterprises are able to compete with foreign rivals in terms of
cost.
He said
construction costs have been sharply cut. It cost US$2,000-3,000 to build one
square meter of buildings in the luxury segment 10 to 15 years ago, but the
rising participation of domestic constructors has sent the price down to
US$1,000.
Hai said
Vietnamese construction firms should learn from developed countries in terms
of technology and governance to fare better and prepare to deal with
challenges from Vietnam’s increased international integration.
“In
Malaysia, some 30 people manage the construction site of a building with 1,000
apartments and constructors use less labor than in Vietnam,” Hai said.
Duong of
COTECCONS suggested big construction enterprises gauge opportunities and
expand operations in foreign markets like Laos and Cambodia as one of the
measures to cope with rising competition on the domestic market.
HD
Saison Finance makes debut
HCMC
Development Bank (HDBank) and Japan’s finance corporation Credit Saison held
an inaugural function for HD Saison Finance in the city over the weekend,
VietnamPlus reports.
HD Saison
Finance Co. Ltd. was renamed from HDFinance after Credit Saison contributed
capital to HDFinance in April and became the strategic investor of the
latter.
The two
big financial institutions in Vietnam and Japan joined forces to tap into
each other’s strengths, experiences, human resources and technologies to
expand operations and offer more products to local customers.
HD
Saison Finance has cooperated with over 2,000 partners and agents to serve
nearly one million clients in need of loans for consumption purposes via its
3,000 transaction points in 63 provinces and cities. Its financial products
include consumer loans for vehicle, electronic device, home appliance and
mobile phone purchases and travel packages.
HD
Saison Finance plans to launch more financial products and services such as
credit cards and repaid cards to make the most of Credit Saison’s experience
and HDBank’s local market knowledge and wide network. It aims to become a
leading retail finance company in Vietnam.
HDBank
and Credit Saison plan to branch out to other ASEAN nations like Myanmar and
Cambodia.
Takahashi
Naoki, a board member at Credit Saison, said in 2012 Credit Saison set up its
first representative office in ASEAN in Hanoi City to explore opportunities
to cooperate with domestic partners and enter the consumption finance market.
France’s
second cheese factory commences in Binh Duong
Bel
Vietnam, a subsidiary of France’s Bel Group, broke ground on its second
cheese factory in southern Binh Duong province on July 8.
The
US$17-million- facility, which will cover 17,000 square metres in the Song
Than (Tsunami) 3 Industrial Zone, has an annual capacity of 15,000 tonnes of
cheese to supply domestic and regional markets.
At the
ground-breaking ceremony, General Director of Bel Vietnam Chafip Hammadi said
the project is buoyed by the success of its first factory in Vietnam.
He also
underlined the favourable conditions facilitating the project, including
skilled labour forces, location and incentives.
Vietnam
is the first Asian nation where Bel Group has built its factories, Chafip
said, adding that the company plans to build a Centre for Research and
Development (R&D) in the province.
Addressing
the event, Vice Chairman of the provincial People’s Committee Tran Thanh Liem
said the project is in line with local policies calling for investment in
developing industrial zones.
The
factory is scheduled to be completed and put into operation in the third
quarter of 2016.
Hanoi
sees highest first-half growth rate in four years
Hanoi
recorded an economic growth rate of 7.8% in the first half of 2015 – the
fastest pace in the same period of the last four years, revealed the 13th
sitting of the 14th municipal People’s Council.
At the
three-day meeting, Chairman of the municipal People’s Committee Nguyen The
Thao reported that local inflation was curbed and budget revenue exceeded 50%
of estimates in the first two quarters.
A number
of key infrastructure facilities were put into use, such as the Nhat Tan and
Dong Tru bridges and the expanded section of National Road 5, helping foster
the capital city’s growth, he added.
Concluding
the sitting on July 8, Chairwoman of the Hanoi People’s Council Nguyen Thi
Bich Ngoc said Council Members reviewed the implementation of the council’s
Resolution on socio-economic affairs, security-defence and budget collection
and spending between January and June. They also set orientations for the
remaining months of the year.
The
People’s Council adopted a Resolution on policies for carrying out the
hi-tech agriculture development programme from 2016 to 2020. It also
questioned officials of the municipal People’s Committee and departments
about pressing issues of public concern, including urban planning and
management, agriculture and rural areas and education-training, she noted.
All
Council Members agreed on the establishment of the Department of Tourism
separate from the current Department of the Culture, Sports and Tourism and
passed a resolution naming 19 new streets, Ngoc added.
Vietnam
– EAEU trade pact to mutually benefit
The free
trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU)
represents a turning point and huge mutual benefit, said Nguyen Thi Thu
Trang, Director of the World Trade Organisation Centre under the Vietnam
Chamber of Commerce and Industry (VCCI).
She made
the statement during a workshop held in Hanoi on July 7 to present and
discuss the FTA signed on May 29 after more than two years of negotiations.
The two
economies complement each other and Vietnam is currently the only EAEU trade
partner, Trang went on to clarify.
The EAEU
encompasses Russia, Belarus, Kazakhstan, and Armenia. Kyrgyzstan is waiting
for the union’s approval to become an official member.
With a
total current population of 182 million people, the community posted a
combined gross domestic product worth more than US$2.2 trillion in 2014. It
boasts rich mineral resources of oil, coal and iron ore.
The
market major imports phones, electronic devices, apparel, footwear and
agricultural produce from Vietnam while its main exports to the country are
oil and gas, iron and steel, fertilisers and machinery .
Dao Thu
Huong from the Ministry of Finance's Department of International Cooperation
noted there is no direct competition in the Vietnam- EAEU import-export
structure, adding that some 53% of current tariffs will be zero percent once
the pact takes effect.
According
to Huong, the volume of iron and steel products, fertilizers and machinery
account for 12%, 25%, and 9% of Vietnam’s total good import from the EAEU,
respectively. Those commodities are scheduled to have reduced tariffs.
Vietnam,
Thailand step up trade cooperation
Representatives
of 300 Thai and Vietnamese entities from the public and private sectors
gathered at a forum in Ho Chi Minh City on July 8 seeking ways to enhance
trade and investment ties between the two nations.
The
event was organized by the Embassy of Thailand in collaboration with the Thai
Chamber of Commerce and Industry (CCI).
Thailand
businesses have cumulative foreign direct investment (FDI) of US$6.6 billion
in Vietnam, ranking tenth among all foreign investors, speakers at the event
announced.
According
to Nguyen The Hung, deputy general director of the Vietnam Chamber of
Commerce and Industry (VCCI), Vietnam has been an attractive destination for
Thai businesses thanks to its rapid economic growth and low labour costs.
To
increase exports to Thailand, Hung said domestic companies need to enhance
their competitiveness through innovation and improve the quality of products.
US$1.73
billion spent on livestock feed and material imports
Vietnam
splashed out US$1.73 billion on livestock feed and material imports in the
first two quarters of the year, a year-on-year increase of 7.8%, according to
Ministry of Agriculture and Rural Development (MARD).
Most of
the products were imported from Argentina (36.6%), the US (19.2%) and China
(7.4%), the Hanoi Moi newspaper reported.
In the
period, US$329 million was spent on importing 1.28 million tonnes of wheat,
rising 5.1% in value and 31% in quantity from the same period last year.
Australia
and Brazil became Vietnam’s key wheat exporters with a market share of 53.8%
and 28.5%, respectively.
The
country also bought 948,000 tonnes of soybeans for US$438 million, up 5.8% in
quantity but down 17.1% in value against the first six months in
2014.
Chan May
Port upgrades to be completed by August
The
central province of Thua Thien-Hue is striving to complete upgrades to the
Chan May Port before August 9.
The
province is currently investing 310 billion VND (14.2 million USD) in
upgrading the Chan May Port’s infrastructure system to enable it to receive
large vessels carrying up to 4,000-5,000 passengers each. The Royal Caribbean
International Group contributed 5 million USD to the upgrades.
Once the
project is completed, the port will be able to accommodate Quantum- or
Oasis-class super-large ships.
In
January, Thua Thien Hue welcomed the first cruise liner, the Celebrity
Century, carrying 2,500 tourists to the ancient imperial city of Hue.
The
central province has set its sights on drawing 60,000 tourists through the
Chan May Port this year.
Wave
of Thai investments into Vietnam: forum
Major
and small- and medium-sized enterprises from Thailand have expanded operations
in Vietnam in recent years, helping create an inflow of Thai investments,
experts said at a business forum in Ho Chi Minh City on July 8.
Vietnam
and Thailand are close partners in all fields and especially in education and
tourism. The AEAN Economic Community (AEC), scheduled to be formed in late
2015, will be a platform for the two countries to further share experience
and resources, expand markets, and tap into the bloc’s potential, said Malinee
Harnboonsong – Director of the Commercial Office at the Thai Consulate
General in HCM City.
According
to Tharabodee Serng-Adichaiwit, General Manager of the Bangkok Bank’s HCM
City branch, Vietnam’s political stability, growing economy and improving
legal system create a favourable investment and business climate for domestic
and foreign firms. The country is also a large market in ASEAN with a
population of over 90 million, increasingly skilled workforce, low production
costs and clear regulations on personal and enterprise taxes.
He
suggested Thai companies boost their activities through forming joint
ventures and building factories in industrial parks.
The
forum, held by the Ministry of Industry and Trade’s Trade Promotion Agency
and the Thai Commercial Office, revealed that Thailand is currently the
biggest Southeast Asian trade partner of Vietnam with trade reaching 10.6
billion USD in 2014 and approximately 4.4 billion USD in the first five
months of this year. They aim to reach 15 billion USD in trade revenue by
2020.
Nguyen
The Hung, Deputy Director of the HCM City branch of the Vietnam Chamber of
Commerce and Industry, said Vietnam still recorded a trade deficit with
Thailand and is striving to ensure balance.
Since
the AEC will bring about dramatic shifts in trade, services and capital
flows, Vietnamese and Thai businesses need to gear up to optimise
opportunities, ultimately bolstering bilateral commerce, he noted.
Among
ASEAN business circles, Thai enterprises are considered dynamic and active in
preparing for AEC integration, Hung said, asking Vietnamese firms to join
trade and investment promotion delegations to promote their capacity of
entering Thai markets and those in ASEAN in general.
Steel
imports surge in first six months
Vietnam’s
total steel import turnover surged to seven billion USD in the first six
months of this year, according to the Ministry of Industry and Trade.
Statistics
from the ministry show that in the reviewed period, steel import increased
over 36 percent in volume and 10 percent in value.
China
remained Vietnamese biggest steel exporter.
In June,
steel imports jumped 205.3 percent in volume and 94.4 percent in value.
Experts
have warned that rising demand for steel imports will not only impact
domestic manufacturing businesses but is also an indication of a “bubble”
phenomenon in the domestic real estate market which the country has
previously experienced.
Dong
Nai seeks socio-economic breakthroughs
The
southern province of Dong Nai will make maximum efforts to see socio-economic
breakthroughs, said Tran Minh Phuc, Vice Chairman of the provincial People’s
Committee.
The
locality aims to boost the modernisation of logistic services and information
and technology application, particularly in building and operating the Long Thanh
international airport.
The
province will also continue investing in building high calibre human
resources and developing comprehensive and green industrial zones, centres
for bio-technology application and hi-tech agricultural projects.
The
province also aims to develop three key economic axis, namely the Bien
Hoa-Long Thanh- Nhon Trach (along the national road 51 and 25B); the Bien Hoa
– Trang Bom – Long Khanh – Xuan Loc (along the national road 1A); and the
Thong Nhat- Dinh Quan – Tan Phu – Long Khanh – Cam My (along the national
roads 20 and 56).
Under
the plan, Dong Nai t argets an average annual gross regional domestic product
(GRDP) growth of 8-9 percent between 2020 and 2025 and 8.5-9.5 percent
between 2020 and 2025.
The
province’s annual per capita income is expected to reach between 5,300 and
5,800 USD by 2020 and 9,000-10,000 USD by 2025.
The
share of industry and construction is targeted to reach 55 percent with
services at 39.5-40.5 percent. Export value is also expected to increase 8-10
percent annually in the period.
Controlled
inflation should ensure economic growth: paper
The
year's target of a 5 percent increase in the consumer price index (CPI) is
feasible amid encouraging results for inflation and price controls in the
first six months of 2015, Nhan Dan (People) online newspaper reported, adding
that the CPI and inflation control should create momentum for GDP growth.
The CPI,
an indicator of inflation, increased by 0.55 percent in June compared to
December 2014, and 1 percent over the same period in 2014, according to the
General Statistics Office (GSO).
But the
figures marked the lowest June CPI since 2001, said Deputy Director of the
Academy of Finance’s Institute of Economics and Finance Nguyen Duc Do. He
noted that the rate of inflation in the past year has slowed noticeably and
the economy is now relatively close to an inflation rate of 0 percent - far
from the target of 5 percent.
Do said
concerns about a low rate of inflation were raised in 2014 when inflation in
December 2014 decreased by 1.84 percent over the same period in 2013,
attributed to the sharp decline of petrol prices. However, in the past six
months, inflation has been mainly driven by the higher prices of electricity,
the exchange rate and health services, but not petrol prices.
According
to the GSO, a 2 percent VND/USD exchange rate adjustment led to a CPI
increase of 0.6 percent, and a 8.47 percent rise in electricity prices led to
a 0.22 percent increase in the CPI. Do added that the six-month inflation
rise was mainly fuelled by costs, but the low inflation pace in the past year
was due to lower aggregate demand than aggregate supply.
He noted
that since 2008, economic growth has always been lower than the potential of
6.5 percent, which means the increase in aggregate demand was lower than that
of aggregate supply, pulling down inflation. The downward trend of inflation
will stop when the economic growth rate increases to 6.5 percent or above.
Economist
Ngo Tri Long said inflation over the past six months posted a 0.55 percent
increase compared to December 2014, equivalent to nearly a tenth of the
year's target - the lowest figure in the past 14 years. Thus, the year's
target of less than a 5 percent increase in the CPI is achievable.
Long emphasised
that low inflation will create positive impacts on socio-economic
development, making investors and enterprises feel secure, creating
favourable conditions for policy makers and managers to put forth and
implement measures to remove barriers to production and business activities.
But effective control of inflation must create a driving force for GDP
growth, he added.
Long
said GDP increased by 6.28 percent in the first six months of this year - a
relatively high level for recent years - indicated economic recovery. It is
expected that the GDP growth rate for the entire year will reach 6.2 percent.
Despite the high growth rate, a number of economic factors have yet to be
improved, requiring greater efforts from the Government including a high trade
deficit, and a large number of bankrupt enterprises among others.
The
Government set a target of reaching an annual GDP growth rate of 6.5
percent-7 percent in the 2016-2020 period to avoid deflation - but attaining
this growth is a significant challenge. Do said the reduction of interest
rates, particularly the lending rate, is one of the prerequisites for
achieving this target.
In the
2012-2014 period, the State Bank was successful in lowering interest rates,
reducing inflation and stabilising the exchange rate and the gold market,
which was attributed to the flow of cash into the bonds market. Do noted that
when the money flows into bonds, the pressure on the exchange rate will
decrease, creating good opportunities for lowering interest rates and issuing
government bonds, as well as increasing credit growth and allowing the easier
settlement of non-performing loans. Thus, it is advisable to put money in
bonds in the current context, Do said.
Meanwhile,
Head of the State Bank of Vietnam's Banking Strategy Institute, Nguyen Thi
Kim Thanh said monetary control should be at the top of the list, along with
a balance between the supply and demand for goods, to maintain stable
inflation. The facts show that the prices of commodities in the past six
months were mainly driven by supply and demand.
In the
remaining months of this year, credit growth will continue to increase along
with expanded ownership limits and voting rights for foreign investors in
listed enterprises, posing a challenge to the State Bank in controlling cash
inflow and the exchange rate to curb inflation. Thanh also suggested
strengthening the fight against goods smuggling and improving distribution
channels of goods which otherwise may create negative impacts on price
management policies.
Vietnamese
phone maker faces fine for repeated delays of Bphone delivery
Bkav, an
Internet security firm turned phone maker, apparently got off on the wrong
foot in its bid to make “the world’s best smartphone,” as the company is now
facing a fine for the tardy delivery of its flagship device.
More
than a month after the lavish launch of the Bphone on May 26, no buyers have
been able to actually own and experience the handset, while the Hanoi-based
phone maker has been crippled by scandal after scandal.
Those
who placed orders for the Bphone on its first day of sales on June 2 have yet
to receive the devices, with Bkav so far breaking its promise on delivery
three times in a row.
The
company, known for the Bkav antivirus software, first announced that the
Bphone would be delivered to customers’ door on June 9, before delaying the
date to June 18, and then June 29.
While
some customers reportedly received the smartphones on June 29, Bkav announced
shortly after that it would recall the first batch of products for upgrades,
and made yet another promise that delivery would come on July 3.
And then
the company broke their word for the third consecutive time, forcing buyers
of what Bkav CEO Nguyen Tu Quang dubbed “the world’s best smartphone” to
express their anger and disappointment on social networks and local tech
forums.
Do Thu
Hang, director of public relations with Bkav, told Tuoi Tre(Youth) newspaper
on Monday that most customers in Hanoi had received the devices on Friday and
Saturday last week.
“Those
in Ho Chi Minh City and other provinces and cities would receive the products
on Sunday or Monday,” she said yesterday.
Hang
attributed the late delivery to “the very big number of orders” the company
received. Bkav has said it received 11,822 orders on the first day of sales
of the Bphone.
However,
many customers in Ho Chi Minh City told Tuoi Tre late Monday their Bphone has
yet to arrive. Bkav, in the meantime, has not apologized to customers for
constantly breaking its promises.
Many
buyers have complained that Bkav is going against the commitment to serve
customers its executives pledged during the launch ceremony, adding they feel
disrespected by the phone maker.
Many
local consumers have said they would buy the Bphone to support a Vietnamese
firm, but most are now losing faith in the promise breaker.
Lawyer
Nguyen Van Hau, deputy chairman of the Ho Chi Minh City Lawyers Association,
said Bkav is facing a fine for violating the law on protecting customers’
rights and interests.
If Bkav
does not publicize the reasons as to why it keeps delaying delivery of the
Bphone, it can be considered as concealing information, or providing
insufficient information about its production and business ability.
“This
breaches the law on the protection of customers’ rights and interests, and
shall be subject to fines of VND20-40 million [US$920-1,840],” Hau told Tuoi
Tre.
“The
company can also have its license suspended for up to six months, or be
suspended from operations for one to six months over repeated violations.”
Those
who placed orders for the Bphone, meanwhile, can ask to terminate the
purchase contracts and request compensation from Bkav, according to the
lawyer.
Hau said
the order customers placed online is a contract which stipulates that the
manufacturer delivers the product on time as agreed upon by both parties.
“The
seller is only allowed to deliver the product prior to or after the agreed
time with the consent of the buyer,” he said.
“So by
repeatedly failing to deliver the smartphone on time, Bkav has violated the
contract's terms and the customers have the right to terminate [the contract]
and ask for compensation.”
Temasek
closes its fiscal year with upbeat results
Temasek
Holdings Pte, a Singapore-based investment company, yesterday released a
media statement demonstrating its solid fiscal year ended March 31, 2015.
Accordingly,
the company saw its net portfolio value rose 19.2 per cent to S$266 billion
($193.3 billion), more than double the portfolio value of S$103 billion 10
years ago.
The
company also announced a one-year return to shareholders of 19.2 per cent,
underpinned by strong performance of Singapore and China portfolios.
Its
three-year total shareholder return (TSR) was set at 9.62 per cent, longer
term 10-year and 20-year TSRs were 9 per cent and 7 per cent, respectively.
Temasek
ended the year in a net cash position.
In its
fiscal year, the company registered new investments reaching S$30 billion,
almost half flowing in growing Asia, followed by recovering North America and
Europe. It also saw record divestments of S$19 billion, capitalising on
liquidity-driven market rallies.
“This
was the most active year for us since the global financial crisis,” Temasek
chairman Lim Boon Heng commented.
Besides
to business activities, the company has made contributions to community
development.
To date,
it has made 16 endowments, including Temasek Emergency Preparedness Endowment
Fund which was launched last year as part of Temasek’s 40th anniversary
commemoration.
In
total, the company’s non-profit philanthropic organisations have touched the
lives of over 240,000 people in Singapore and Asia.
For
example, over 13,000 disadvantaged and vulnerable children in Singapore were
provided with standard masks and micro ventilators under a Temasek Cares Stay
Prepared initiative in April 2015. This followed Temasek Cares’ initiative to
distribute quality masks to all households in Singapore a year ago.
In line
with efforts to build resilience and prepare for emergencies and recovery,
Temasek
Cares also initiated a programme in 2014 to train counsellors in Singapore to
support children who have experienced trauma.
Commenting
on future economic outlook, Ravi Lambah, senior managing director,
Investment, noted, “We are cautiously optimistic for the next few years. The
US economic recovery, while uneven at times, remains on track. In
China, growth is taking place at a more sustainable rate.”
“At
Temasek, we embrace the future and all that it brings,” Temasek chairman Lim
Boon Heng concluded, “we continue to look to tomorrow, as we have always
done, working together to turn bold dreams into enduring reality.”
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 9 tháng 7, 2015
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