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BUSINESS IN BRIEF 7/12
Housing
market recovery helps property firm shares
The revival
of the housing market has had a positive impact on the prices of shares of
property companies, according to the Vietinbank Securities Company.
Dang
Tran Hai Dang, the company's research and analysis deputy director, told a
seminar on an overview of the real estate market and investment opportunities
that most shares in the sector had outperformed the VN Index in the past
three months though they gave up some of the gains in November when the
market retreated.
In the
past six months, the property sector accounted for the highest trading value,
with 18.7 per cent of the total.
In terms
of market capitalisation, the sector accounted for 12 per cent, second only
to banking.
But Dang
pointed out that in the first nine months of the year almost 40 per cent of
the listed real estate companies saw profits fall while 22.4 per cent
suffered losses.
In the
short term investors should consider companies with projects at strategic
locations, like near the railway route in Ha Noi, the metro lines in
However,
they should be financially capable of ensuring the completion of their
projects.
In the
long term they should look for companies with lands in key areas and strong
financial capacity, among others, he said.
Le Hoang
Lan Nhu Ngoc, senior manager at property consultancy CBRE, said the lower
interest rates on mortgages and their longer tenures of up to 25 years and
higher household incomes were factors behind the market revival.
Improved
infrastructure and laws were also lending a helping hand, she said.
In
Resort
projects in coastal areas were attracting a lot of interest from buyers, she
said.
She
expects the recovery of the property market to continue next year thanks to
positive factors like
PM
gives go-ahead VINAPHARM equitisation plan
Prime
Minister Nguyen Tan Dung has approved the equitisation plan of the Vietnam
Pharmaceutical Corporation (Vinapharm) in the form of selling part of the
existing State shares.
The
corporation's registered capital is VND2.37 trillion (US$105.1 million),
equivalent to 237 million shares. Of these, the Ministry of Health will hold
65 per cent of the corporation shares and will represent the State shares.
Besides,
there will be 40.29 million shares, or 17 per cent of charter capital offered
to strategic investors, while 42.56 million shares, equivalent to 18 per
cent, will be sold on public auctions.
The
prime minister has authorised the health minister to decide a starting price
and directed the Vinapharm to conduct the sale of shares to the public.
The
corporation will be listed on a stock exchange as prescribed when it meets
the current requirements.
In the
first half of this year, Vinapharm revenue was VND16.597 trillion (US$736.33
million), a 9 per cent higher than last year's period. The company at the end
of 2014 invested VND319 billion (US$14.15 million) in its subsidiaries,
including Imexpharm, Mekophar, Vimedimex and Phytopharma.
Ceiling
interest rate of 20 per cent remains an open question
The
revised Civil Code adopted by the National Assembly on November 24 clearly
stated that negotiated interest rate must be controlled below 20 per cent a
year.
Delegates
at the recent 10th session of the 13th National Assembly (NA) voiced their
support for a fixed interest rate of 20 per cent a year at most, as
stipulated by the Civil Code.
Accordingly,
negotiated interest rate should not exceed 20 per cent a year, excluding
those loans stipulated in other laws or regulations.
Cao Sy
Kiem, former Governor of the State Bank of Vietnam (SBV) said that many NA
deputies voted for a fix interest rate of 20 per cent as it would help reduce
fraud on the black credit market that often involved high interest rates and
negative consequences for the society, Kiem noted.
The
former governor emphasised that the 20 per cent rate were applicable to all
loans, excluding those stipulated by relevant laws with different
regulations. This means credit institutions operating in accordance with the
Law on Credit Institutions and the Law on the State Bank of
Therefore,
he said credit institutions could set interest rates through negotiations
with partners and customers. However, in some special cases or in emergency,
the central bank can made immediate requests to control the market promptly
in line with the Law on the State Bank of
According
to Kiem, it is essential to put forth the ceiling interest rate of 20 per
cent, when banks operate well and businesses gain high confidence. Otherwise,
when the negotiated rate surpasses 20 per cent a year, due to certain factors
like inflation, natural disaster, epidemics, and war, it may lead to
unexpected high demand for loans.
Earlier
on in October, the NA deputies proposed a plan on ceiling interest rate but
did not mention any exceptional cases as stipulated in other relevant laws.
After that, they reached an agreement on adjustments to Article 468 of the
Civil Law, in line with practical conditions.
Economist
Nguyen Tri Hieu, meanwhile, suggested that the ceiling interest rate should
be controlled. The rate should be adjusted in line with market changes rather
than being fixed at 20 per cent a year. The rate should be adjusted in
accordance with real operations of credit institutions and deposit rates, as
well as interests on loan.
In
addition, the rate margin should be carefully calculated due to risks in
credit institutions’ operations. For example, when the deposit rate is around
11 per cent, lending interests are about 9, and risk management rate is at 2
per cent, while bank profit is at least 3 per cent, the real ceiling rate
must rise to over 20 per cent.
“When
the risk of credit institutions’ operations is high, the margin of interest
rate should be widened. In some cases, the margin of interest rate may reach
10 per cent or even higher,” said Hieu.
According
to Hieu, it is necessary to encourage the participation of all economic
sectors and banks to identifying the risks and thus set interest rates based
on lending interests. The fixed ceiling rate of 20 per cent a year may prevent
banks from launching credit packages with even more risks.
However,
Hieu also noted that all participants must follow the regulations. Relevant
agencies, such as the Ministry of Justice, the NA Office, the SBV, and the
court, should issue more specific documents and guidelines on the
implementation of the Civil Code in a transparent manner and in accordance
with market mechanism of credit institutions, thus stabilising the overall
interest rates and promoting the development of financial and banking system.
Hieu’s
view was shared by Truong Thanh Duc, chairman of the Vietnam Banking
Association, who stressed that the new adjustment to the fixed ceiling rate
of 20 per cent a year shows positive sign in ensuring transparency in the
local credit market.
Duc also
expressed his support for further raising the ceiling rate to above 20 per
cent a year, to 30-50 per cent in some special cases.
Start-ups
to receive strong IIP support from 2016
The IPP2
will also assist Vietnamese universities and education establishments to
develop training courses on innovation and start-ups.
The IPP2
will fund 70 per cent of the project's personnel expenses, worth total
€50,000. The projects with best results will receive additional funds from
the IPP2, up to €100,000, to boost their performances.
The
phase-two innovation programme will also organise a series of events based on
its activities, including four introductory meetings in early December and
two workshops in late December and early January of next year.
The
first two introductory meetings were held on December 1 in Ha Noi and on
December 2 in
These
activities aim to initiate projects for Vietnamese start-ups in order to help
them develop faster. The projects could be start-up incubators, start-up
acceleration centres, and other services for local start-ups and small
businesses.
The IPP2
also calls for registrations from those who are concerned about the start-up
ecosystem in
The
registrations should be written in English, and participants can find
detailed information on IPP's website at www.ipp.vn.
The
Innovation Partnership Programme (IPP) is an Official Development Assistance
(ODA) programme signed between the
The IPP
Phase Two (IPP2) was launched in 2014 and will last until 2018. Its main role
is to initiate, support and improve innovation and the start-up ecosystem in
The 14th
session of the Hanoi People`s Council (XIV Tenure) officially opened in Hanoi
on December 1 and will run to December 5, looking into the implementation of
socioeconomic and defense-security development plans and the State budget in
2015 and next year.
According
to Deputy Chairman Vu Hong Khanh, the city’s gross regional domestic product
(GRDP) is estimated to stand at about $27.6 billion, an increase of 9.24 per
cent compared to the previous year and 1.58 times higher than the country’s
average GDP, reaching its highest level for four years. Income per capita is
approximately $3,600, 1.8 times higher than in 2010.
Social
investment capital in the city in 2015 was estimated at VND353 trillion
($15.8 billion), up 12.6 per cent compared to 2014. The number of
newly-registered enterprises increased significantly, by 33.7 per cent.
Budget collections were estimated to total nearly VND147 trillion ($6.5
billion), 3.5 per cent higher than planned.
The
State collected about VND714.5 trillion ($32 billion) over the year, an
increase of 7.1 per cent. The city was successful in implementing price
stabilization, reducing interest rates and keeping inflation under control.
The consumer price index was estimated to have risen 1 per cent.
The city
still saw weaknesses, however, including ineffective and inattentive
management and administration at some levels, limitations in market
forecasts, poor business strategies, inadequate financial resources and
corporate governance, and low competitiveness.
In term
of directions and tasks for 2016, the city is aiming at GRDP growth of 8.5-9
per cent and GRDP per capita of between VND85-87 million ($3,740-$3,828).
To
successfully implement these goals Mr. Khanh said that
Chambers
raise matters at VBF
This is
a key moment for
Focus
for 2016
Moreover,
The TPP
is not yet a reality, she went on. “It covers many issues we have discussed
for years at the VBF,” she said. She offered a framework and focus for
efforts in 2016, such as regulatory coherence, transparency and meaningful
public comment (TPP Chapter 25), education, which is a key development driver
(Chapter 23), efficient customs administration and trade facilitation
(Chapter 5), and participation by Vietnamese enterprises in global supply
chains.
AmCham
concerns
Ms.
Boger also highlighted two matters. Firstly, Circular No. 23, issued on
November 13 and to come into effect on July 1, 2016 (replacing Circular No.
20), which is universally opposed by foreign direct investment (FDI) and
domestic business associations.
“It
would cause delays in customs processing, have a negative impact on
modernization and industrialization, especially of supplier industries,
discriminates against domestic industries, and is not in accordance with
Article 2.2 of the WTO Technical Barriers to Trade Agreement or the TPP
Chapter on Technical Barriers to Trade,” she said.
Secondly,
since the Immigration Law became effective on January 1, 2015, US citizens
can receive single entry Vietnamese visas that have a three-month validity,
while Vietnamese citizens can receive multiple-entry
EuroCham
suggestions
As
Vietnam continues on its path to further international integration and its
promotion of itself as an attractive FDI destination, EuroCham highlighted
five key issues that need to be resolved to substantially enhance Vietnam’s
competitiveness in global trade, which will also benefit the European business
community in Vietnam, Vice Chairman of the European Chamber of Commerce
(EuroCham), Mr. Tomaso Andreatta, told the Forum.
The five
key issues are the protection of the environment and energy, improving
logistics in a sustainable manner, improving the legal system by opening it
up to the external world and improving the way it now works, especially in
intellectual property and judicial recourse, protecting Vietnamese consumers
and offering more choice in food safety and pharmaceuticals, and coordinating
with provinces to ensure the uniform application of laws and policies.
In terms
of environmental issues, Mr. Andreatta urged
He also
urged
Regarding
food safety and pharmaceuticals, he said that with adequate disclosure of
product characteristics, consumers around the world can enjoy a variety of
choice in both food and pharmaceuticals, which is partially denied to
Vietnamese consumers, through tariff or non-tariff barriers.
On the
uniform application of laws and policies, he pointed out that many investors
in
“Within
their powers, provinces could be more open than FTAs require, for example in
opening up some important procurement to international bidders, thus securing
more quality and variety and potentially sources of funds for their
projects,” he said.
We
highly recommend that the loan term applicable to foreign individuals should
be based on their repayment capacity rather than their permitted period of
residence, as stated in the regulations. Accordingly, the loan term could be
extended until the expiry of the remaining term of residential housing (for
instance, 50 years) if they are provided as collateral. This regulation would
support the development of
In
Overtime
restrictions are often pointed out by foreign invested enterprises,
particularly in manufacturing and other labor intensive industries that take
advantage of cheap labor costs when investing into
Therefore,
we would highly appreciate if the Vietnamese Government would consider removing
the overtime restriction of 30 hours per month and adjust and apply overtime
work regulations more flexibly in the following measures. Firstly, during the
peak production season, enterprises should be able to flexibly extend the
overtime of employees to satisfy the due date set by a client/customer.
Secondly, during the off-season, the enterprise may flexibly reduce the
working hours and overtime of employees.
The
government’s recent decision to increase the number of countries on the list
of visa-exempt countries was very welcome.
First,
we strongly recommend promptly extending the list of visa waiver countries to
include
Secondly,
we recommend the exemptions be for 30 days not the current 15 days, with
returns allowed within 30 days, as a means of encouraging people to use
Legal
changes for December
The
following new laws and regulations are to take effect during December.
State-owned
enterprises (SOEs) not permitted to contribute capital to real estate,
banking and finance
Under
Regulation No. 91/2015, effective on December 1, regarding State capital in
enterprises and the management of enterprise’s capital and assets, SOEs are
not allowed to contribute capital or invest in real estate (except for those
where real estate is their main business line), banking, insurance firms,
securities firms, venture capital funds, securities investment funds, or
securities investment companies, except for special cases agreed to by the
Prime Minister.
Passport
renewals
Under
Decree No. 94/2015, amending and supplementing certain articles of Decree No.
136/2007 on the exit and entry of Vietnamese citizens, diplomatic passports
and official passports are valid for five years from the date of issue. Such
passports with a validity of less than one year can be extended once. Upon
expiration holders of such passports must complete procedures for the issue
of a new passport. Ordinary passports are valid for ten years from the date
of issue and cannot be extended. The Decree will take effect on December 1.
Directing
investors to hand over apartment maintenance fees
Under
Decree No. 99/2015, to take effect on December 10, where investors have not
handed over apartment management fees within the prescribed time, provincial
people’s committees will issue a decision to the investor and credit
institutions where investors hold accounts directing that such fees be handed
over to the apartment block’s board of management.
Borrowing
80 per cent of value when buying social housing
Under
Decree No. 100 on the development and management of social housing, in the
purchase or lease of social housing the maximum amount to be borrowed is 80
per cent of the contract value. In the repair or new construction of such
housing, the limit is 70 per cent of the capital required and this must not
exceed 70 per cent of the value of collateral put forward for the loan. The
Decree will take effect on December 10.
Better
distribution management for FMCGs
Vietnamese
businesses are oblivious to the pressure to come from the greater
competitiveness the TPP and the ASEAN Economic Community (AEC) will bring.
For enterprises in fast-moving consumer goods (FMCG), fierce competition is
found in each promotional campaign and each distribution channel, Mr. Peter
Pham, CEO of DMSpro, told the DMSpro Seminar 2015 - Innovation in
Distribution and Sales Management System - Ultimate Solution, Optimize
Performance held last week in Hanoi?.
Since
2000, 52 per cent of the names on the Fortune 500 list have been replaced, as
these companies have faced fierce competition from newcomers who have taken
advantage of technologies in business management and operations. “Technology,
systems, and processes are three key pillars to serve, win, and retain
customer in such a fiercely competitive context,” Mr. Pham said.
Enterprises,
especially those in FMCG, face many challenges in operating and managing
their distribution management system (DMS). According to Mr. Nguyen Khai
Tuyen, an expert at DMSpro who has been involved in and successfully finished
DMS projects for Unilever Vietnam, Vinamilk, Samsung, P&G, and others,
these concerns includes how to improve sales activities, how to check and manage
outlets and channels, how to establish the size of a distributor’s inventory,
how to handle advanced promotion items after finishing promotion campaigns,
how to ensure POSM (Point Of Sales Material) is deployed at the right time
and the right place, and how to reduce efforts made in reporting and
administrative tasks.
The DMS
provided by DMSPro can resolve all of these concerns, according to Mr. Tuyen.
FMCG manufactures would be able to improve the integrity and discipline of
sales activities, maximize sales effectiveness, gain full visibility, control
displays at outlets and stores anytime and everywhere, and get transparent
real-time data, from a system that is easy to maintain and upgrade.
According
to Ms. Nguyen Thi Thanh Huyen, National Sales Operations Director at TH Milk,
the company chose DMSpro’s solution after experiencing difficulties and
obstacles such as the language barrier and the high costs of cooperating with
foreign partners. “The solution has provided us with an effective and
comprehensive distribution management method,” Ms. Huyen said. “The data
provided is also closer to the actual situation.” It’s not easy to adapt the
new management solution, however. Enterprises may have to face the fact that
many employees will leave during the early stages of applying the new
solution.
Mr.
Nguyen Quang Phi Tin, National Sales Director at Nhat Nhat Pharma, said the
TPP has created pressure for local pharmaceutical manufacturers in general
and Nhat Nhat Pharma in particular, as tariffs on pharmaceuticals imported
into
Founded
in 2011 in
Opportunities
to invest in Timor Leste
During a
meeting with international media in Timor Leste, Mr. Rui Maria de Araújo,
Prime Minister of Timor Leste, told VET about the relationship between the
two countries and the investment opportunities on offer. “We import about 70
per cent of our basic needs from ASEAN countries, including
He hoped
that with the new MoU Timor Leste’s rice stock will be secured. In terms of
agricultural development, he suggested that
Mr.
Nguyen Canh Hoa, General Director of Viettel Timor Leste (Telemor) agreed
that coffee is a market of potential for Vietnamese enterprises. He also
suggested other agricultural products and the recycling of iron and steel, as
these are lacking in the country.
“As the
country is in a period of development it has many incentives for investment
from foreign countries, such as waived license fees and corporate income tax
exemptions from five to ten years, depending on the area,” Mr. Hoa said.
Timor Leste is a country greatly dependent upon imports, even fast-moving
consumer goods (FMCG), and is seeking investment in a range of fields. This
means new export and investment opportunities for
Timor
Leste celebrated 40 years since its declaration of independence on November
28, 500 years of contact between Timorese and Portuguese people, and the
affirmation of the Timorese Identity. The celebrations were attended by
officials from a range of countries and international media as well as
thousands of people, watching a march by the armed forces.
Real
estate shares hold promise
Vietcombank
Securities (VCBS), the Ho Chi Minh City Stock Exchange, the Dat Xanh Group
(DXG), and CBRE recently organized a conference on
Vietnam’s
real estate market is recovering with a range of supportive factors in place,
according to a representative from CBRE, such as interest rates falling and
credit terms extended to 25 years, a young population structure and a high
marriage rate creating strong demand for housing ownership, rising monthly
household incomes, a diversification in market supply, with the appearance of
more and more small houses and apartments that match financial capacity,
profit margins on luxury apartment leasing being attractive investors, and
infrastructure and the legal framework becoming more favorable for the
market.
The sale
of apartments has continued to rise, enhancing capital flows. In
In
evaluating the real estate market in 2016, the representative from CBRE said
that
Mr. Ha
Duc Hieu from DXG said the supply of new apartments in 2016 in
The
Deputy Director of the Research and Analysis Department at VietinBank, Mr.
Dang Tran Hai Dang, said that
Real
estate has accounted for a significant percentage of the trading volume in
stock markets over the last six months, at 18.7 per cent, which shows the
attractiveness of the sector to investors.
Stocks
investors may consider, he said, were VIC, DXG, KBC, CEO, ITA, KDH, and NLG.
He emphasized market segmentation, with investors needing to be careful about
available information and consider what they see as the important criteria
during each stage of buying and selling.
Citi
named Best Digital Bank in Asia
Citi has
been recognized as
“Technology
and digitization are transforming how we serve clients,” said Ms. Natasha
Ansell, Citi Vietnam Country Officer: “From credit cards to ATMs, Citi has a
long history of embracing new technologies to innovate financial tools,
making the banking experience more and more value added and efficient for our
clients.”
She
added that in Vietnam Citi has had good success with innovation, including
new hi-tech branches that have since been rolled out globally. “Our priority
is to be the leading digital bank in this market,” she said.
Global
Finance evaluates online and mobile banking applications, with winners
selected based on the strength of their strategy for attracting and servicing
online customers, success in getting clients to use web offerings, growth of
the online customer base, breadth of products offered, evidence of tangible
benefits gained from internet initiatives, and website design and
functionality.
Commenting
on winning Best Corporate/Institutional Digital Bank, Mr. Amol Gupte, Head of
Treasury and Trade Solutions Asia Pacific at Citi, said: “We are committed to
continuously harnessing innovation and digitization to help clients better
adapt their operating models to shifting market and business demands. Our
dedication to digital banking has helped deliver impactful results, making
our products simpler, more convenient, and flexible, and allowing companies
to have improved visibility over their treasury flows in ways that were not
previously possible.”
The
award is testimony to Citi’s drive to enhance the client experience through
digitization as well as its strong partnership with clients.
Citi has
been investing in digitizing its business in
The bank
is also actively searching out new solutions. This includes via the Citi
Mobile Challenge, to help develop the next generation of fin tech solutions
from the region.
VBSP
sells $43.32 million in goverment bonds
The
Vietnam Bank for Social Policies (VBSP) conducted an auction of government
bonds on November 30 at the Hanoi Stock Exchange, selling VND975 billion
($43.32 million) of the VND1.5 trillion ($66.66 million) on offer.
The
three-year bonds were fully sold, for VND500 billion ($22.22 million), VND400
billion ($17.77 million) in five-years bonds were sold out of the VND800
billion ($35.55 million) on offer, while VND75 billion ($3.33 million) worth
of 15-year bonds was sold out of the VND200 billion ($8.88 million)
available.
The
winning yields were 6.38 per cent, 7.3 per cent, and 8.1 per cent per annum,
respectively. Compared to the previous auction, the three-year bonds had the
same yield, the five-year bonds were 0.02 per cent higher, and the 15-year
bonds 0.05 per cent higher.
VBSP has
sold VND13.59 trillion ($603.93 million) worth of government bonds since the
beginning of the year.
CBRE to manage Phu My Hung's D.7 portfolio
The Phu
My Hung Development Corporation has appointed CBRE Vietnam to manage its
portfolio of commercial properties in the heart of Saigon South, in
CBRE
will manage seven properties in office, retail, and serviced residences, with
a total area of 160,000 sq m. The portfolio consists of the Lawrence S. Ting,
Broadway, and
“I have
a good feeling about this agreement,” Mr. Gary Tseng, President of Phu My
Hung, said after signing the agreement. “I believe it will be good for both
Phu My Hung and CBRE and lead to closer cooperation in the future.”
“It is a
huge pleasure to work with such a successful long-term investor in
CBRE has
broad experience in managing portfolios of premium commercial projects around
the world. “We give our firm commitment to work hard to help Phu My Hung
continue implementing their strategy of creating a world class environment
that enables investors, occupiers, and residents to take full advantage of
the District 7 lifestyle,” he added.
Phu My
Hung was the first planned new urban area in
The Phu
My Hung area radiates from Nguyen Van Linh Parkway and expands to Phu My
Bridge, where the key infrastructure to support trade from the city and
surrounding provinces is well-established, while future investment will deliver
more efficient interchange between Nguyen Van Linh and Nguyen Huu Tho, an
Express Busway and Metro Line No. 4, which will provide confidence and
support to long-term pricing in the area.
Banks
stop receiving corporate tax in cash
Instead
of paying corporate income tax in cash at bank counters, businesses have to
make it online beginning December 1, according to a new regulation by the
Ministry of Finance.
The
regulation is among efforts by the ministry to implement the Government’s
Resolution 19 to reform administrative procedures and reduce tax payment time
to 121.5 hours a year.
The
resolution sets a target to increase the number of businesses declaring tax
online to 95 percent and those making online payment to 90 percent.
The
General Department of Taxation said it has coordinated with 43 commercial
banks to implement online tax collection and the ratio of businesses
attending the program has neared 91 percent so far.
However,
the amount of tax paid online has still been low.
Different
from businesses, individuals can submit tax in cash at bank counters as
normal.
Fruit
value chain project launched in Mekong Delta
Loc Troi
Group and the Southern Fruit Research Institute (Sofri) have joined hands to
launch a project to develop a fruit value chain and support the sustainable
development of the sector in the Mekong Delta.
The
project will be implemented in two phases, with the first phase carried out
in the 2015-2016 period and the second phase scheduled for the 2017-2020
period, Le Quoc Dien, director of the horticulture technique transfer center
under Sofri, told a conference held in
The
project aims to build a concentrated zone for fruit production meeting safety
and hygiene requirements; transfer techniques for cultivation, disease
control, harvest, and product preservation to farmers; build brand for fruits
and find outlets for fruits at home and abroad. The project is expected to
help farmers earn higher and stable incomes.
Huynh
Van Thon, chairman and general director of Loc Troi Group, said in phase one,
a value chain will be developed for green pomelos and this tree will be grown
on a pilot basis on an area of 100-120 hectares in Tien Giang, Ben Tre and
Vinh Long provinces.
Explaining
the reason for choosing the green pomelo, Thon said the fruit tree has been
grown on vast areas in the Mekong Delta and its fruits have stable prices and
markets and can be kept in a long time.
Thon
said the group has gained much experience in building a value chain for rice
production and can apply it to the fruit value chain. However, there are
still differences between production of the two agricultural products, so the
group decided to start with the easy step.
In the
second phase, mango, thanh long (dragon fruit), longan and other key fruits
of the Mekong Delta will be added to the value chain. The project will later
be expanded to other localities in the region including Can Tho, Dong Thap
and Hau Giang.
Nguyen
Van Hoa, head of Sofri, said the Mekong Delta is the fruit hub of the
country. However, as the fruit production scale remains small and orchards
are scattered in the region, it is difficult to control the quality and
origin of products and preserve them.
Currently,
fruit growers earn low incomes as most of them sell fruits at their farms and
their products go through many intermediaries before reaching consumers.
“The
project will help solve those shortcomings and help bring more benefits to
farmers,” Hoa said.
Loc Troi
Group has succeeded in building a rice value chain in the Mekong Delta by
developing large-scale paddy fields. It helped coffee farmers in the Central
Highlands replace old coffee trees as the first step of a coffee value chain
for the region.
2015
veggie and fruit exports put at US$2 billion
The
Southern Fruit Research Institute (Sofri) has estimated vegetable and fruit
exports at US$2 billion this year, with fruits accounting for 70% of the
total revenue, according to deputy head of Sofri Vo Huu Thoai.
Fruit
exports have grown steadily at an average rate of 20% a year over the past
years. The outbound sales of fruits rose from US$631 million in 2011 to over
US$1 billion in 2013 and nearly US$1.5 billion last year.
In the
first ten months of this year, the country shipped abroad over US$1.5 billion
worth of vegetables and fruits, meeting 93.3% of the full-year year.
Agricultural
firms have hard access to bank loans
Only 21%
of agricultural businesses can take out bank loans for investment projects
using high technology even though many legal documents have been in place to
support firms in the sector to get loans without collateral.
The
situation was pointed out at a seminar on supporting policies for technology
applications and transfer in the agricultural sector in HCMC last week. The
Ministry of Agriculture and Rural Development held the seminar to collect
comments of businesses on their problems with access to loans, thus working
out suitable supporting measures.
According
to the Institute for Policy and Strategy of Agriculture and Rural Development
(IPSARD), supporting policies for enterprises in the agro-aqua-forestry
sector in technological applications and transfer are specified in seven
laws, 17 decrees of the Government, 14 decisions of the Prime Minister and
multiple circulars.
Most of
the policies stipulate tax and land rent reductions and exemptions and
interest subsidies, as well as allow businesses to take out loans equivalent
to 80% of a project’s cost without collateral.
However,
firms in the agro-aqua-forestry sector still see difficult access to loans as
shown in IPSARD’s recent survey of 200 enterprises. Only 21% of respondents
said they could get loans easily while the rest found this difficult and
impossible.
Only 3%
of the respondents could obtain financial support for buying machinery, 0.5%
for technological transfer from abroad and merely 1% for infrastructure
development.
Some
businesses bemoaned that investors of many agricultural projects are unable
to take out loans valued at up to 80% of the project’s total investment as
stipulated in a number of circulars and decisions if they do not have
collateral.
Even if
businesses have collateral for loans, the amount of money they can borrow is
much lower than needed and the value of their collateral, said Le Van Cuong,
director of Dalat Gap Co. in the Central Highlands province of Lam Dong.
For
example, an enterprise can borrow a bank loan of only VND3 billion if it uses
agricultural land worth over VND80 billion. Cuong said this has spelled
trouble for firms in expanding operation and carrying out new projects.
At the
seminar, many agricultural firms asked when they could access capital
resources easily. But the ministry pledged to ask the Government to take
necessary measures to help them.
VinaWealth,
Maritime Bank cooperate to attract clients
VinaWealth
Fund Management JSC, a member of VinaCapital, said that it had clinched a
cooperation agreement with Vietnam Maritime Bank (Maritime Bank) to introduce
its products to customers.
Staff of
Maritime Bank will introduce products of the open-ended fund to the bank’s
clients and VinaWealth will pay fees and commissions to the local bank.
Monthly
and quarterly programs will be launched to encourage employees of Maritime
Bank to persuade clients to invest in VinaWealth.
Nguyen
Thi Thai Thuan, chairwoman and general director of VinaWealth, said that in
some Asian markets, 60% of fund certificates sales of open-ended funds are
distributed via banks. In
Thuan
met many banks last year to find partners but banks did not want to cooperate
due to fear of competition since the two entities target similar customers
who have idle money but have no experience or no time to invest in the
property and stock markets.
Banks
now attend more to open-ended funds as they want to diversify banking and
personal financial management services instead of focusing on credit
services. In the next one to two years, many banks will collaborate with
open-ended funds, she said.
VinaWealth
has also joined forces with another bank and will announce the cooperation
agreement this month.
Manufacturing
business conditions decline in November
The
headline Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI) dipping
below the 50 no-change mark in November points out a decline in business
conditions at Vietnamese manufacturing firms.
The PMI
dropped to 49.4 points last month from 50.1 points in October, according to a
review report on the index released on December 1. The report said
deflationary pressures remained evident in the sector, with output prices
falling at a sharper pace.
New
orders decreased for the third month running in November, albeit slightly,
and panelists reported declining customer demand leading to lower new
business. This was also the case with regard to new export orders, which fell
for the sixth successive month.
Firms
left their output unchanged during the month, following a fractional increase
in October. While some panelists had raised production in response to new
order growth, others saw lower new orders leading to a decline in output.
The
investment goods sector remained an area of strength as output continued to
expand, but falls were recorded in the consumer and intermediate goods sectors.
Backlogs
of work were also unchanged in November, ending a five-month sequence of
falling outstanding business.
Reductions
in new orders resulted in a decline in employment, the first since March.
While investment goods firms continued to raise staffing levels, reductions
were seen in the consumer and intermediate goods sectors.
Commenting
on the Vietnamese Manufacturing PMI survey data, Andrew Harker at Markit,
which compiles the survey, said the Vietnamese manufacturing sector is going
through a period of stagnation at present, with new contracts difficult to
secure. The recent soft patch has now fed through to the labor market, with
employment falling for the first time in eight months during November.
With
global economic conditions remaining challenging, it appears that Vietnamese
firms will have to wait to see a return to the strong growth rates recorded
earlier in 2015. Meanwhile, reduced prices in global commodity markets
continued to impart deflationary pressures on the sector, with both input costs
and output prices falling solidly again, Harker said.
Input
prices continued to fall amid reports of lower costs for raw materials such
as oil and steel. Panelists mentioned that weaker demand in
Lower
input costs fed through to a further reduction in charges at manufacturing
firms, with the rate of deflation quicker than seen in October. Output prices
have now fallen in each of the past 14 months.
Purchasing
activity decreased for the third successive month, albeit only slightly. This
contributed to a reduction in stocks of purchases, while suppliers were able
to improve their delivery times amid lower workloads.
Finally,
stocks of finished goods were broadly unchanged during the month. Lower sales
had reportedly led to increases in post-production inventories at some firms.
US$3-bil.
bond sale undecided
The
Ministry of Finance has not picked a date for issuing US$3 billion worth of
sovereign bonds on international capital markets and a source from the
ministry said the plan may be executed next year.
Earlier,
the National Assembly (NA) allowed the Government to issue sovereign bonds to
raise capital for settling mature bonds on the domestic market in 2015-2016.
The plan is expected to be implemented soon due to the urgency of debt
settlement.
The
Government said now was a good time for G-bond sales as bond yields stayed
low on world markets when the bond issue plan went before the legislative
body for approval more than one month ago.
In
addition, over VND363.16-trillion bonds with high coupons will fall due soon
while the budget used to pay government debt is limited.
The
source told the Daily that the bond issue plan could be delayed until next
year as relevant agencies need time to weigh it due to fear of exchange rate
risk.
If the
U.S. dollar appreciates strongly against the
The
greenback has strengthened against other currencies given a possible rate
hike by the U.S. Federal Reserve this month. The U.S. Dollar Index, a measure
of greenback value against six foreign currencies including the European
euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss
franc, rose by 3.4% in November, the highest since January.
G-bond
sales on the domestic market have improved as the issuance of short-term
bonds has resumed. Three-year bonds worth VND45 trillion will be sold
together with longer-term bonds in the final quarter of this year to help
realize the G-bond sales target of VND250 trillion in 2015.
The
Government will consider market conditions and the need for capital to decide
whether to issue US$3-billion sovereign bonds in one or more phases in 2016.
Though
key economic indicators have turned positive this year, HCMC is still coping
with a host of problems and challenges, said Vo Van Thuong, permanent deputy
secretary of the city’s Party Committee.
Low
labor productivity, growth quality and competitiveness are among the
problems, Thuong told the second meeting of the tenth HCMC Party Committee on
December 1. He said urban problems like traffic congestion, flooding and
environmental pollution have remained as pressing as ever.
Thuong
noted that in addition to opportunities,
This
year, the city expects its gross domestic product (GDP) to grow 9.8% to
VND961.96 trillion (around US$42.76 billion), a three-year high. Its gross
regional domestic product (GRDP) growth is put at 7.72%.
The
respective GDP growth rates were 9.2% in 2012, 9.3% in 2013 and 9.6% last
year, according to the city’s report on socioeconomic performance in 2015.
Total
retail sales revenues from goods and services in the city this year are
forecast to pick up 11.4% to more than VND683 trillion. The city’s consumer
price index (CPI) would edge up about 1%, lower than the nation’s overall
figure of around 2%.
HCMC
would export nearly US$27 billion worth of merchandise this year, up 9.9%
against 2014, and spend US$32.77 billion on imports, rising by 6.2%
year-on-year.
This
year’s total outstanding loans in HCMC are estimated at over VND1,206
trillion, up 13% compared to late last year. Outstanding loans in
Remittances
to the city are projected to climb 10% to roughly US$5.5 billion in all of
this year.
Thuong
said the city targets higher economic growth and substantial improvements in
growth quality and competitiveness next year.
Therefore,
solutions must be put in place to spur productivity and investment
efficiency, and create a healthy, transparent business environment for
enterprises from all sectors.
Next
year, the city aims for GRDP growth of 8%, investments accounting for 30% of
GRDP, clean water supply for all households, treatment for all industrial
wastewater and hospital waste, and a spot in the top five in the Provincial
Governance and Public Administration Index (PAPI), the Provincial
Competitiveness Index (PCI) and the Public Administration Reform Index (PAR
Index).
Next
year the city will adopt measures to achieve export growth of 8%; better
control imports of luxury consumer goods, outdated technologies and products
which are produced domestically; and diversify export products and markets.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Hai, 7 tháng 12, 2015
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