Thứ Năm, 24 tháng 9, 2015

BUSINESS IN BRIEF 24/9


VMI to issue $1.3b of bonds
Visaco Mineral and Investment Joint Stock Company (VMI) will issue VND30 billion ($1.3 million) of convertible bonds with a maturity of 24 months.
The interest rate for the bonds is 11 per cent for the first year and will be adjusted within four per cent compared to the bank's interest rate in the second year.
Bondholders may convert these bonds into company's shares or receive cash on two occasions: 50 per cent of the bond yield after the first year or 100 per cent of the bond yield on the maturity date.
If bondholders decide to convert all the issued bonds, VMI will have to issue three million shares at the price of VND10,000 per share for bondholders.
VMI now has VND86 billion ($3.82 million) in the company's charter capital after issuing an additional 2.7 million to the market.
VMI yesterday rose 8.6 per cent to close at VND23,900 per share.
BIDV Securities lowers foreign stake
The BIDV Securities Corporation (BIC) has reduced the foreign ownership limit in the company's capital from 49 per cent to 21.5 per cent.
The decision aims to ensure that foreign investment in the company will not exceed 49 per cent of the capital after the Ministry of Finance asked BIC to issue additional 41 million shares – equal to 35 per cent of the company's capital - for Hong Kong-based Fairfax Asia Limited.
The share issuance was made in order to raise the company's chartered capital from VND762.2 billion (US$33.8 million) to VND1.17 trillion ($51.9 million) and the foreign investor will be able to join the company's board of directors.
Fairfax Asia Limited is an insurance firm founded in 2002 in Hong Kong as a member of Canada-based Fairfax Financial Holdings Limited.
BIC rose 0.4 per cent to close at VND23,600 at the end of yesterday trading session.
Investment opportunities in Vietnam discussed in Belgium
A workshop on Vietnam’s demand and investment opportunities was held in Brussels, Belgium, on September 22.
Vietnamese Ambassador to Belgium Vuong Thua Phong presented the country’s socio-economic situation and business policies while underscoring potential boasted by the upcoming signing of the EU-Vietnam free trade agreement (EVFTA).
Phong said he hopes for a greater flow of Belgian and European investors to Vietnam in the near future.
Francois De Maeyer, Head of the Belgium-Vietnam Chamber of Commerce and Industry (CCIBV) , lauded contributions made by Belgian enterprises in stimulating economic cooperation with Vietnam and expressed his belief in the bright outlook of the EVFTA for both sides.
CCIBV Deputy Head and General Director of the Menart company Berengere Menart told Vietnam News Agency correspondents that all four waste treatment projects that her company has carried out in Vietnam receive assistance from local authorities and relevant State agencies.
The EU is one of the large import markets for Vietnamese commodities, particularly footwear, garments, farm produce and aquaculture. After signing the trade deal, 90 percent of Vietnamese goods being exported to European markets will go enjoy tariff of zero percent.
Belgium is Vietnam’s sixth largest trade partner in the EU with two-way trade hitting 2 billion EUR (2.29 billion USD) a year. It has invested 281.34 million USD in 53 projects in Vietnam.
In 2014, trade between the two countries experienced a year-on-year growth of 27.4 percent to reach over 2.3 billion USD.
Hanoi boosts trade, tourism promotion in Moscow
Opportunities to support and speed up bilateral investment, trade and tourism between Hanoi and Moscow were featured at a promotion workshop held in Moscow on September 22.
The event, jointly held by the Hanoi People’s Committee and the Vietnamese Embassy in Russia, is part of the “Hanoi Days in Moscow” programme which is underway in Russia.
Participants were briefed socio-economic development of Hanoi and Moscow in the past few years as well as the two cities’ investment climate and policies. The Hanoi-Moscow cultural and commercial centre and its business policies were also introduced at the workshop.
On the same day, the Hanoi delegation to the programme and the Hanoi Department of Natural Resources and Environment met with the Committee for Architecture and Urban Planning of Moscow to learn experience in urban planning and transport development.
Earlier, a Hanoi photo exhibition showcasing the city’s images and introducing installation art was organised.
Construction of work park starts
The FLC Group started the construction of the FLC Hoang Long Industrial Park (IP) in the central Thanh Hoa province on September 22, earlier than scheduled.
The FLC Hoang Long IP is located in the communes of Hoang Anh, Hoang Long and Hoang Quang of Thanh Hoa city and Hoang Minh, Hoang Thinh and Hoang Dong of Hoang Hoa district.
Covering an area of about 300ha, the 2.3-trillion VND (102.9 million USD) project is expected to be completed and handed over to several businesses this year. As planned, the IP will be one of the province's multi-sector industrial parks. Once it becomes operational, it is expected to attract domestic and international investors, especially enterprises from Taiwan, the Republic of Korea, Japan and the United States, besides Europe, thanks to the location of nearby Nghi Son Industrial Zone. The Hoang Long IP would appeal to investors of non-air polluting industries, towards a sustainable development of both the economy and the environment.
Speaking at the groundbreaking ceremony, FLC Chairman Trinh Van Quyet said the development of IPs had helped localities to attract foreign direct investment, thus promoting socio-economic growth.
"We aim to complete the IP's phase 1 target by 2017," he said.
Nguyen Dinh Xung, Chairman of the provincial People's Committee, said the IP would be the model for future IPs in the province that meet international standards.
Besides its prime location, FLC Hoang Long also benefits from the large populations of Hoang Hoa district and Thanh Hoa city. The industrial park will create jobs for 60,000 to 80,000 people.
At the ceremony, the FLC Group and Taiwan's Hong Fu Footwears Vietnam Company signed a cooperation agreement, according to which the company would invest in 20ha in the IP for its footwear project.
It has invested about 200 million USD in Vietnam, with eight projects in Thanh Hoa province, creating jobs for 20,000 labourers.
The province is seen as an attractive investment destination, with diversified technical and social infrastructure. In the provincial competitiveness index (PCI), the province is in the second best group. Thanks to incentives, Thanh Hoa has become an attractive investment destination, with several billion dongs being invested by large groups such as FLC and Vingroup.
FLC is the largest domestic investor in the locality, with a total investment of 15 trillion VND (666.7 million USD). The group's projects include FLC Samson Golf and Beach Resort, FLC Complex, FLC Hoang Long IZ and Lam Son hi-tech agricultural area.
"Thanh Hoa has taken drastic measures to take advantage of its favourable location, natural resources and business environment to attract investment," Deputy Prime Minister Nguyen Xuan Phuc said.
Phuc said the province should also call for investment from multi-national groups as well as new industries, especially hi-tech sectors.
The province aims to achieve an average per capita income of 3,650 USD by 2020.
Regulation, market research key to export to Australia
Participants at a workshop held in Sydney on September 21 advised Vietnamese companies to study the local market and export regulations to successfully penetrate the Australian market.
The event was held by the Vietnam Sydney Business Association in collaboration with the Vietnam Trade Representative Office in Australia and was attended by more than 20 companies from Vietnam and enterprises run by Vietnamese-Australians and Australian experts in insurance, real estate and finance.
According to Hoang Vi Cao, owner of an export company in Sydney, Vietnamese companies need to carefully study Australia’s export regulations for each product and thoroughly understand the Australian market to export products.
Nguyen Hoang Thuy, Vietnam’s Chief Trade Representative in Australia, said the local trade and tax policy is relatively transparent but non-tax barriers such as regulations on quality and sanitation pose challenges.
Vietnam’s exports to Australia face difficulties in quarantine and market penetration, said Thuy.
Despite the challenges, Australia is a big market for Vietnamese products and Vietnamese companies need to conduct market research and offer tax incentives for export goods under the ASEAN – Australia/New Zealand free trade agreement (AANZFTA), according to Thuy.
They also need to build long-term business strategies focusing on building consumer confidence in Vietnamese products, creating brands and diversifying and improving product quality, she added.
Toyo Ink Group prepares for Song Hau 2 thermal power project
Malaysia’s Toyo Ink Group has been finalising its last four agreements for the commencement of the Song Hau 2 thermal power plant project in Vietnam’s Mekong Delta province of Hau Giang.
According to the firm’s managing director Song Kok Cheong, Toyo Ink has nearly concluded its deals in land rent, coal supply, BOT (build-operate-transfer) and power plant.
The firm has diversified its business portfolio for eight years by investing in the power sector and seeking opportunities in Vietnam, he said.
In 2012, the group was allowed to invest in the 2,00MW plant in the form of BOT for 25 years starting from 2021.
Song said that he hopes his company will receive an investment licence in three months so a joint venture will be set up to gather investments as the firm can afford only 20 percent of total capital.
According to the group’s calculation, the 3.5 billion USD project will generate a revenue of about 970 million USD when it becomes operational in 2021.
Int’l experience related to venture investment funds shared
The Ministry of Science and Technology in collaboration with the Vietnam-Finland Innovation Partnership Programme (IPP) held a workshop in Hanoi on September 22 to share international experience in designing policies to encourage the private sector to establish or coordinate with the State to set up venture investment funds.
Deputy Minister Tran Quoc Khanh said that the issue is new and complicated in Vietnam as there are still many different opinions on using State budgets for venture investment funds as well as policies to encourage the private sector to set up the funds to development new and advanced technologies.
Ta Doan Trinh, Head of the National Institute for Science and Technology Policy and Strategy Studies, delivered a report on his research results which clarified shortcomings and challenges facing Vietnam in encouraging the private sector to develop venture investment funds.
Mikko Seppala, an expert from Finland, shared experience in this issue from Israel, China, India and Finland, focusing on who should participate in the funds and how to manage and generate capital for them.
He stressed the need to pay attention to innovative ideas during the policy design process as innovative ideas will decide the efficiency of venture investment funds.
Collective economy needs more momentum: official
Politburo member and permanent member of the Party Central Committee’s Secretariat Le Hong Anh has highlighted the need to roll out incentives for collective economic organisations and cooperatives to consolidate their operations.
Anh was speaking at a conference to review the three-year implementation of the Political Bureau’s Conclusion No. 56-KL/TW on accelerating the actualisation of the Resolution of the ninth Party Central Committee’s fifth plenum on the collective economy in Hanoi on September 22.
He urged improved State management capacity over the collective economy, thus creating consensus from central to grassroots levels.
The Vietnam Cooperative Alliance was asked to well execute its role as a representative body of cooperatives while fulfilling tasks stipulated in the 2012 Cooperative Law.
Apart from joining hands with research institutes and schools in personnel training, the alliance should take the initiative to boost international affiliations to promote the economic model, said the Politburo member.
He called on the Vietnam Fatherland Front (VFF); associations of farmers, women, youths and war veterans; and other organisations to take a more active role in collective economic development.
Cooperatives need to renovate themselves, improve their management capacity and revamp their operations, thus turning the collective economy into an important economic sector, he noted.
At the meeting, President of the VFF Central Committee Nguyen Thien Nhan delivered a speech on new-style agricultural cooperative development, which he considered a breakthrough in restructuring agriculture and raising farmers’ sustainable income.
While pointing to lingering bottlenecks hindering the country’s agricultural development, Nhan emphasised the need for the Fatherland Front, its member organisations and all-level authorities to coordinate with each other in establishing cooperatives in communes and districts.
Event participants agreed on missions and solutions to continue fostering the development of the collective economy and cooperatives moving forward.
A report presented at the meeting showed that after the three-year implementation of Conclusion No. 56, the collective economic sector has seen positive changes.
By the end of 2014, the country had 143,000 cooperative groups with nearly 1.5 million members and nearly 19,000 cooperatives with a 7-million-strong staff.
The sector’s growth rate ranged from 3.3 to 3.5 percent last year, contributing some 5.15 percent to the nation’s GDP.
The agricultural restructuring process has given birth to new-style cooperatives that are connected with businesses and scientists to carry out modern farming methods, improve product competitiveness and create production chains in association with processing and consumption.
The collective economy, which covers various fields such as industry, agriculture, service, transport and banking, has contributed markedly to the country’s socio-economic development, the report said.
Ho Chi Minh City’s September CPI drops 0.47 percent
Ho Chi Minh City’s consumer price index (CPI) in September decreased slightly by 0.47 percent from August and 0.99 percent against the same month last year, the municipal Statistics Office announced on September 22.
Among the 11 main goods and service categories, six reported price falls with the sharpest decrease seen in the transport sector (3.48 percent), attributed to a drop in petrol prices during the month.
The others included housing, electricity, water, fuel and construction materials (0.83 percent); restaurant and catering services (0.25 percent); post and telecommunications (0.25 percent); culture and entertainment (0.07 percent); and garments, footwear and hats (0.01 percent).
On the contrary, the prices of other commodities and services, education, beverages and tobacco, and home appliances rose by 0.34 percent, 0.25 percent, 0.09 percent, and 0.02 percent month-on-month, respectively.
The medicine and health service category was the only one to report stable prices.
Gold and US dollar prices in September increased 3.68 percent and 3.12 percent, respectively, compared to those in August.
The September Hanoi index fell 0.1 percent against the previous month but was up 0.34 percent from the same period last year.
Vietnamese rice to have a national trademark
An established national trademark is needed for Vietnamese rice products to build their image and gain shares on the global market.
Deputy Minister of Science and Technology Tran Viet Thanh made the statement during a workshop held in Hanoi on September 22, saying the trademark will reflect State policies devised based on comprehensive approaches to rice production and processing.
Currently, Vietnam boasts 4.1 million hectares of rice paddies, 53 percent of which are concentrated across the Mekong Delta. In 2014, the country exported 6.3 million tonnes of the 45 million tonnes of rice yields, becoming the world’s third largest rice exporter after India and Thailand.
However, according to the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, Vietnam mainly exports rice to medium and low-end markets as local produce does not have similar qualities or high standards.
There are 200 medium- and large-seized Vietnamese enterprises engaging in rice transactions but their trademarks have received limited promotion.
Sharing experience in building the national trademark for Indian Basmati rice, Director of the Basmati Export Development Foundation AK Gupta underscored quality control and consumer demand as the foundation of a strong name.
Vu Trong Binh from the Party Central Committee Commission for Economic Affairs said it is necessary to build relevant policy frameworks and a detailed coordination mechanism for the building of the national trademark for rice.-
Taiwanese firm to build smart phone plant in Vinh Phuc
The Compal Vietnam Co., Ltd (Compal), a Taiwanese electronics manufacturer, has announced its plan to re-invest in the northern province of Vinh Phuc years after receiving an investment certificate.
During his recent working session with representatives from the provincial People’s Committee, Deputy General Director of Compal Vincent Lee said his firm is preparing infrastructure facilities for its upcoming project in the locality.
He urged local authorities to continue assisting the firm to implement its project successfully.
The provincial People’s Committee granted an investment certificate to Compal eight years ago to build a plant for manufacturing laptop and computer parts and peripherals and other electronics with a total investment of 500 million USD.
However, the project, which was expected to generate jobs for 35,000 employees, was not implemented on schedule because of economic downturns and a shrinking PC market.
Vice Chairman of the provincial People’s Committee Nguyen Van Chuc said the local authorities have enacted policies for the investor.
He affirmed that the locality is willing to support the business to swiftly implement its project, which will now focus on manufacturing smart phones.
Workshop discusses ways to help enterprises approach capital
Many mechanisms and solutions to help enterprises gain access to capital were put forwards at a workshop held in Hanoi on September 22.
The event was organised by the Vietnam Chamber of Commerce and Industry (VCCI) and was attended by leaders from relevant ministries, sectors and banks.
Despite being one of 30 countries with the best capital accessibility in the World Bank’s ranking, Chairman of the VCCI Vu Tien Loc said enterprises still face difficulties in acquiring capital.
One of the pressing requirements at the moment, according to Loc, is to turn macro policies into actions within commercial banks.
Nguyen Thi Hong, Deputy Governor of the State Bank of Vietnam, said the plunge in oil prices and the devaluation of China’s yuan and other currencies have brought both advantages and disadvantages to enterprises’ business activities.
Hong said that the government implemented many measures to resolve difficulties for enterprises such as carrying out monetary and exchange rate policy flexibly to stabilise the value of VND, control inflation and promote economic growth.
In addition, measures were implemented to help enterprises access capital by reducing interest rates, rescheduling debt-payment deadlines and increasing loans without required collateral.
The Deputy Governor urged ministries to establish a more open and transparent investment environment and business community to improve their production capability, competitiveness and market expansion.
A nationwide programme connecting banks with enterprises was implemented with 458 trillion VND (20.8 billion USD) pledged as of the end of August.
According to Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management (CIEM), signs of recovery were seen in exports and foreign direct investment flow but enterprises remain weak.
Keeping the interest rate stable is a success of the SBV in the context of the rising USD value, bank interest rate reduction and growing USD speculation.
Fung Kai Jin, Deputy Director of the VP Bank, said the government has been assisting small- and medium-sized enterprises with trust-based lending policies without collateral.
Loan procedures have been simplified and applied across sectors.
Trademark development centre established
The Vietnam Association for Anti-counterfeiting and Trademark Protection (VATAP) announced the establishment of a consultancy centre for business support and trademark development on September 22.
Besides advising enterprises on business laws and regulations, the centre will serve as bridge between consumers and producers, according to Director Tran Mai Khanh.
The centre will actively support businesses in building, developing and protecting their trademarks and intellectual property, helping avoid brand name repetition and counterfeit products.
The centre has designed two websites, hanghoavacongluan.com.vn and sieuthihangthat.vn, to help enterprises introduce their products.
According to Chairman of the association Le The Bao, counterfeit goods are exceedingly common in the local market and threaten businesses’ development .
The centre is expected to intensify the fight against counterfeit goods and intellectual property infringement, he added.
Hanoi: September’s CPI sees slight drop
Hanoi’s consumer price index (CPI) fell 0.1 percent in September compared to the previous month and up 0.34 percent from the same period last year.
Among the 11 groups of products and services in the CPI bracket, the highest increases were seen in education (1.39 percent), culture and entertainment (0.69 percent) and home appliances (0.22 percent).
Restaurants and catering services, beverages and tobacco, textiles and footwear, medicine and health services, and other commodities and services rose by 0.13 percent, 0.11 percent, 0.09 percent, 0.08 percent and 0.06 percent, respectively.
Meanwhile, housing, electricity, water and construction materials dropped 0.7 percent due to price cuts of gas and kerosene.
Transportation tumbled by 3.28 percent as a result of adjustments to petrol prices twice during the month.
Gold and US dollar prices in September increased 3.36 percent and 2.77 percent, respectively, compared to those in August.
Vinalines to slash stakes in two major ports
The Prime Minister has given the green light to the Vietnam National Shipping Lines, or Vinalines, to withdraw its capital from the Hai Phong and Saigon seaports.
As such, Vinalines’ stakes in Saigon Port Company Limited and Hai Phong Port Company Limited will be slashed to 20 percent.
Previously, the Prime Minister agreed to let Vinalines hold 50-65 percent of the Sai Gon Port's charter capital and 65-75 percent of the Hai Phong Port's, but this has made the two less attractive to investors hence the further reductions.
Currently, Saigon Port accounts for 10.5 percent of the overall throughput in the south while Hai Phong Port occupies 28.7 percent of northern figure.-VNA
Construction begins on Vung Ang port No 3
Construction began on the over 999-trillion-VND (45.4 billion USD) Vung Ang port No 3 in the central province of Ha Tinh on September 22.
The port, invested by the Vietnam–Laos Vung Ang Port Joint Stock Company, is designed to accommodate ships of up to 45,000 DWT (deadweight tonnage).
When operational, the port together with existing ports No 1 and No 2 will serve import-export activities, ensure water transport and marine security as well as facilitate cargo transport both at home and with other regional countries including Laos and Thailand.
Addressing the ceremony, Deputy Chairman of the provincial People’s Committee Dang Quoc Khanh highlighted the significance of the port’s construction as helping spur economic development of Ha Tinh and northern central provinces.
Port No 3 covers 4.39 hectares with a 225m long pier and a 250m long dock. The port also has 9,000 square metres of storage, an internal road system, a technical system and auxiliary facilities.
Ministry says costs prevent milk prices from dropping
The prices of milk products for children under six cannot be reduced because of increase in salaries, electricity prices and the exchange rate, the Ministry of Finance said on Monday.
According to the ministry's price management department, the domestic market has milk products for children under six, which are made in Viet Nam and imported from other countries.
The prices of domestic milk products have suffered the impact of world prices of milk and input costs, including fuel, sales and labour, while the price of imported milk products includes import price and distribution costs.
The department said the selling price of finished milk products for children under six was stable because, according to the General Department of Customs, import prices of those products to Viet Nam have been stable from June 2014 till now.
Regarding domestic milk production, offer prices for some varieties of raw material for milk in Western European and Australian markets had reduced from April after an increase in the first three months of this year, according to the Ministry of Industry and Trade.
The material is imported to produce finished-milk products for people, including children under six, and also to process confectionary products.
On the local market, the selling price of domestically-made milk products for children under six includes price of material, salary, and advertising cost, apart from electricity prices and distribution cost.
Minimum salaries, according to region, increased 14 per cent and electricity prices surged 7.5 per cent from March. The ceiling cost of advertising had been abolished and the trading band for the inter-bank exchange rate was expanded by 5 per cent since June 2014.
Due to these factors, the selling prices could not be reduced, the department said.
In addition, the prices of milk products for children under six had fallen between 0.1 per cent and 34 per cent since June 2014 after the state implemented solutions to stabilise prices.
The prices are expected to remain stable till 2016 if the market does not experience unexpected changes, according to the department.
Now, the Ministry of Finance is following closely any changes in prices of raw materials required for milk production in the world markets and the list of selling prices from dairy firms.
The ministry has asked firms to make reasonable calculations for the selling price of their milk products.
Enterprises urged to get creative
Besides the important role of the government in creating a favorable, transparent business environment, local enterprises should become more active and creative in preparing for more intensive global integration.
During a recent conference held in HCM City on business competitiveness and free trade agreements, Dr. Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said that most small- and medium-sized enterprises in Viet Nam had not considered wider global integration in their business strategies.
Most foreign-invested companies in Viet Nam, however, have developed strategies to prepare for the ASEAN Economic Community which takes effect by year-end.
"The benefit of integration is finding out actual success or failure, and the capacity, of enterprises. Things that develop due to special protection or priority will not exist. The areas in which we have an advantage include agriculture, aquaculture, garments and textiles, footwear, furniture, and others," Thanh said.
The logistics sector has a great deal of potential for the future. In Hai Phong, for example, thousands of enterprises have been established in this sector recently.
The service sector also has potential, as the Samsung factory alone, for example, needs 2,000 security guards, Thanh said.
Regarding the role of creativity and technology in enhancing competitiveness, he said that simple low-tech equipment and solutions still held possibilities, such as a wastebasket opened with feet, scissors for left-handed people, or paper used to wrap toothpaste tubes (instead of plastic) in hotels.
Thanh said that after the US and Viet Nam established diplomatic relations in 1995, many business people feared they would not be successful in exporting to the big market.
But one year later, the US became Viet Nam's biggest export market. Fifteen years later, Viet Nam's export turnover to the US had risen 30-fold.
"There is still a lot of room for Vietnamese enterprises to export to the market as Vietnamese goods contribute only one percent of the US imports," he said.
Local companies must make adjustments and examine their strategies carefully in order to survive, he said.
As for the upcoming Trans Pacific Partnership (TPP), local enterprises should be more active in seeking information about the FTA as the negotiating countries have been reluctant to disclose details about the ongoing negotiations.
Economic expert Bui Van said he had tried to asked governments of some countries for information but had been turned down as the countries had committed to not revealing negotiation details.
"However, enterprises have a right to guess with the assistance of consulting organisations. We are able to make guesses about TPP according to the ‘rule' of the US, which is leading the TPP," Van said.
Thanh said that Viet Nam had participated in negotiating or signing 15 free trade agreements, but most enterprises know only 14 agreements.
Many enterprises still do not know much about the FTA between ASEAN and Hong Kong now under negotiation.
Dang Duc Thanh, chairman of the Vietnamese Economist Club, said after studying 30 successful enterprises in Viet Nam, he found they had developed good business strategies after studying the market carefully, and mobilised funds from shareholders instead of taking out loans.
He said Vinamilk was equitised in 2004 with total investment fund of VND1.5 trillion. Now, the State-owned capital at the company totals US$2 billion (VND40 trillion).
Kinh Do Company was founded in 1993 with VND1.4 billion. Recently, a part of the company was sold to an American investor for US$270 million, Thanh said.
Experts eye sliding tax scale for power
Experts in pricing and economics said yesterday that they preferred pricing for power to be based on a sliding system of tariffs as at present rather than a flat rate proposed by Electricity Viet Nam (EVN). At present, rates are based on six levels of consumption.
This was revealed at a conference held in Ha Noi yesterday by EVN to consider a Ministry of Trade and Industry order to seek new ways of fixing prices.
Last week, EVN announced three different ways to calculate power consumption.
The first option is to keep the current six tariff-level scheme, in which tariffs vary between VND1,484 and VND2,587 (6-11 cents) per kWh.
Consumers who use more than 400 kWh per month would pay nearly VND 2,600 (11 cents) for a KWh, about VND1,100 (4 cents) more than for the first 50 kWh used.
However, this scheme is said to be too complicated and is blamed for doubling and tripling power bills of thousands households in May and June. This upset many consumers.
The second plan is to apply a flat rate to the pricing, with a suggested charge of VND1,747 (7 cents) per kWh, which is the average of the six level electricity price in the current pricing scheme.
The third plan is to keep a level pricing mechanism, but with fewer levels.
The flat rate of VND1,747 (7 cents) per kWh would upset consumers who use less than 240 kWh a month as they would no longer be able to enjoy the low prices of VND1,484 and VND1,533 (roughly 6 cents) a kWh.
Such pricing would benefit large power consumers, but cost more for 80 per cent of consumers who are low-income earners and use less than 200kWh per month.
For the third proposed pricing scheme, there would be either three or four levels for electricity prices, and EVN has five different scenarios for this mechanism.
One of the five is that the first level would be VND1,501 (6 cents) per kWh for consumption of less than 100 kWh a month, while the second and third levels would be VND1,907 (7 cents) per kWh (less than 200 kWh a month) and VND2,557 (10 cents) per kWh (less than 300kWh a month).
Nguyen Tien Thoa, a representative of Viet Nam Development and Management Consultation Ltd Company, which EVN hired to design its new power pricing scheme, said that consumers would find it easy to calculate the sums they had to pay for power, but poor, low-income earners or small consumers would pay more than currently.
The three-or-four- tariff scheme would have minimal impacts on consumers while still encouraging them to use power economically, Thoa said. Thoa is former head of the Pricing Management Department under the Ministry of Finance, which is in charge of proposals.
Director of the Viet Nam Economics Institute, Tran Dinh Thien, said that fewer tariff schemes were better and that the first tariff should be extended to 100 or 150 kWh instead of 50 kWh as currently. Vice chairman of National Assembly's Economic Committee, Nguyen Duc Kien, said that every option should be for the benefit of the majority. Consumers who used over 400 kWh per month account for less than five per cent of total consumer number while those who use less than 100 kW are usually low-income earners.
Vice president of Electricity Association, Tran Dinh Long said that it was right to impose higher rates on this group.
EVN Deputy General Director Dinh Quang Tri said the tariff-based scheme was good as it was based on the principle "use more, pay more" and encouraged energy saving.
Kenda to invest US$160 million in Dong Nai tyre factory
Taiwan-based Kenda Rubber Industrial Co. Ltd plans to invest around US$160 million in building a factory at Giang Dien Industrial Zone (IZ) in Trang Bom district, Dong Nai province.
The Dong Nai IZ management board on September 22 handed over an investment licence to Kenda Vietnam to build a factory to produce car, motorbike and bike rubber tyres.
After it is put into operation, the factory is expected to generate 4,000-5,000 jobs and earn an annual export revenue of US$200-300 million.
It will use rubber materials from Dong Nai and other areas in Vietnam to produce tyres.
Ha Noi's Transport Hospital to launch IPO
Ha Noi's Transport Hospital, the first medical facility to be equitised in Viet Nam, will launch its initial public offering (IPO) on October 21, the Hanoi Stock Exchange said.
HNX said the hospital would sell 4.952 million shares in the IPO, with a starting price of VND10,000 (US$0.43) each.
The 21,200sq.m general hospital, located in Chua Lang Street in Dong Da District, recently opened a healthcare building built with a total investment of US$15 million.
The seven-storey building, built on nearly 17,000sq.m, has advanced healthcare facilities and 200 beds. It was built with capital sourced from the OPEC Fund for International Development's official development assistance.
After its equitisation, the hospital is expected to have a charter capital of VND168 billion ($7.8 million), equivalent to 16.8 million shares.
Under the pilot plan for equitisation, the state will hold 5.04 million shares or 30 per cent of the charter capital, the hospital workers will own 1.768 million shares or 10.52 per cent of the charter capital, while 4.952 million shares or 29.48 per cent will be sold at the IPO.
Earlier this month, more than 5.04 million remaining shares or a 30 per cent stake, were sold only to strategic investors of the T&T Group JSC.
HNX also said securities firms that wanted to be agents of the IPO should register before 4pm on September 22.
Moody’s rates VIB outlook “positive”
As of September 18, 2015, Moody's has changed the credit rating outlook of Vietnam International Bank’s (VIB) long-term bank deposits and issuer ratings to “positive”.
Earlier in June this year, Moody’s assigned VIB the “stable” outlook in the Counterparty Risk Assessments Report covering nine Vietnamese banks. The change is said to have been driven by improvements in the bank's standalone credit profile.
Specifically, the bank's asset quality metrics have improved, and it has demonstrated a conservative growth appetite underpinned by aprudent capitalisation strategy.
VIB's nonperforming loans ratio has decreased to 3.77 per cent of total gross loans as of June 2015, from 4.14 per cent in December 2014. The proportion of other problematic assets also decreased to 1.6 per cent from 2.2 per cent on-year.
According to Moody’s, these improvements, to some extent, were driven by VIB’s sale of loans to the Vietnam Asset Management Company (VAMC) against special VAMC bonds. Such VAMC transactions have improved the transparency of its asset quality metrics, and forced banks to create 20 per cent provisions per year.
Also, the bank continued to channel a large, 50 per cent part of its pre-provision income into loan loss reserves, scoring further positive remarks in the report.
The bank's credit growth appetite remains conservative. VIB reported an 8 per cent increase in gross loans in the first half of this year, which falls largely  in line with the banking system average.
VIB's equity to assets ratio has improved to 10.8 per cent as of June 2015, from 10.5 per cent in December 2014, providing it with the highest capital buffer among the nine Vietnamese banks rated by Moody's.
HCMC proposes PM help to project land buyers
The Ho Chi Minh City People’s Committee has proposed the Prime Minister to assign the Ministry of Justice and the State Bank of Vietnam to work with related agencies and find a solution for customers of land and housing projects, which investors have mortgaged ‘red books’ or land use right certificates to banks.
Thousands of people have purchased land lots from projects, built houses and lived there for many years but the properties are still in names of investors, who have mortgaged red books to the bank for capital to implement the projects.
Recently, tens of households in Le Minh residential area in Tan Thoi Nhat ward, District 12 has suddenly seen tens of people who are representatives from banks, courts and law enforcement bodies come to work with them about a compulsory sale of their properties.
Ms. Nguyen Thi Nga said that she purchased a parcel of land from Le Minh Company under a financial contribution contract, in which the company hands over land to customers to build houses and will do procedures for them to get land use right certificates after house construction is completed.
Although Ms. Nga has built her house for many years, the land use right certificate is still in the company's name.
The company has failed to keep its words to do construction completion procedures and make a land sale contract, and moved its headquarters to unclear places, she added. It has been impossible to contact the company’s leaders by phone too.
According to documents collected by Sai Gon Giai Phong, Le Minh Company has authorized some individuals to mortgage tens of land lots of the above project to a branch of the Bank for Agriculture and Rural Development in HCMC.
Of these, some credit contracts have been outstanding but the borrowers have failed to pay up the loans and interest. Therefore, the bank has filed a lawsuit at the People’s Court of District 12, where the jury has pronounced compulsory sale of the mortgaged properties.
Similarly at many other projects, customers have fulfilled their obligations to investors and received properties like apartments, houses or land lots but can not take their property ownership right certificates, which investors have mortgaged to banks.   
In a report the Prime Minister, the HCMC People’s Committee said that both investors and banks must take responsibilities for that.
Right after singing contracts with customers, the investors must take the initiative to contact banks and do necessary formalities to withdraw collaterals. The banks must be responsible for supervising the investors and prompting them to abide by regulations.
Customers have been at a disadvantage for signing financial contribution or investment contracts to receive land lots and apartments. These transactions have not been legally recognized.
HCMC authorities have organized a lot of meetings to solve this issue without results.
Representative of the State Bank in HCMC said that it must be considered specifically for each project and each investor. If investors have other properties to guarantee loan payment, they might be discharged from the obligatory sale of collaterals.
If the investors have a single project which has been mortgaged, foreclose will be unavoidable unless bank officials who have approved loans will face criminal charge for irrevocable debts, it added.
Mr. Pham Ngoc Lien, director of the Land Use Right Registration Office in HCMC, said that the Civil Law does not recognize the sale or mortgage of collaterals.
Therefore, it is necessary to make clear if investors mortgage the land lots first or sell to customers first to tackle the issue. If they mortgage after selling the property, the case must be transferred to authorized agencies to consider whether the investors have defrauded customers or abused their position to appropriate the property or not.
Experts said that it necessary to solve the triangle relation between banks, investors and residents and local authorities could not help being involved in this case because they had licensed the projects.
Those investors breaching regulations must face heavy sanctions, they said.
Euromoney returns to Vietnam
Euromoney will officially return to Vietnam after an absence of many years, organizing the Vietnam Global Investment Forum in Hanoi on September 30.
The Forum will feature a range of sessions: general economic outlook, attracting foreign investment, reforming the banking system and capital markets, equitization of State-owned enterprises, development of the real estate market, and development of the agricultural sector.
Hundreds of entrepreneurs and leading economic experts will be in attendance, as will leaders from the government, the Ministry of Planning and Investment (MPI), and other agencies.
Established in 1969 and headquartered in the UK, Euromoney regularly organizes conferences and major economic forums around the world, through Euromoney Conferences.
For a decade it coordinated with MPI to hold many important conferences in Vietnam before it was supposedly requested postpone the Vietnam Investment Forum, which was scheduled to be held from March 11 to 12, 2008.
The Vietnamese Government, however, said that no such request had been made.
The only Euromoney conference in Vietnam since was in 2012, when in organized a forum on banking and finance in central Da Nang city.
Minister of Planning and Investment Bui Quang Vinh met with Mr. Tony Shale, Chief Executive Officer, Asia, of Euromoney Institutional Investor in May, where he expressed his appreciation of a Euromoney idea to hold a workshop on calling for investment in Vietnam attended by major corporations from around the world.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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