BUSINESS IN BRIEF 23/5 Proper roadmap backed for tightening property loans   The HCMC branch of the State Bank of Vietnam (SBV) said the draft amendments to Circular 36 on credit tightening in the property sector needs a proper implementation roadmap to minimize risks, especially in the banking sector. The agency underlined the point in a written reply to queries from the HCMC Real Estate Association (HoREA) about problems arising from the draft revisions. It said the SBV had prepared the draft in a way that would tighten credit for the real estate sector to ensure safety for banks and ward off excessive credit growth in a high-risk sector like real estate. The draft aims to support the sector to develop in a sustainable manner. Besides, excessive credit growth in the property market in previous years should not be underestimated as it caused bad debt to swell. Bad debt in the banking system is still a major concern. The draft requires the risk weight of loans for the real estate and securities sectors to increase to 250% from the current 150%. The highest ratio of short-term funds used for making medium- and long-term loans would be cut from 60% to 40% for commercial banks, foreign bank branches and cooperative banks, and from 200% to 80% for non-banking financial institutions. The agency said the draft adjustments are in line with international practices. The current ratios of 60% and 150% are just suitable for the time when the market was in distress to prop up credit growth and recovery of enterprises. As the market has recovered, the adjustments are needed to ensure healthy growth in the banking sector and macroeconomic stability in the coming years. However, the agency stressed a roadmap lasting one to two years would be needed to implement the adjustments to avoid leaving negative impacts on the banking sector. Earlier, HoREA proposed the SBV amend Circular 36 in a way that would reduce the maximum ratio of short-term funds used for providing medium- and long-term loans to 50% and keep the risk weight of loans unchanged at 150%. HoREA suggested 2017 be picked as the starting year for the changes to give property enterprises and banks more time to adjust. In its market report for quarter one, HoREA said the real estate market in HCMC was still mired in uncertainties due to an imbalance of supply and demand, a suspension of dozens of projects, and high land use fees. The association said there was an oversupply of high-end apartments while there was a lack of affordable homes for low-income people and migrant workers in HCMC, which is the largest property market in Vietnam. HoREA chairman Le Hoang Chau said the supply of apartments for rent and sale at around VND1 billion (US$45,000) per unit was limited. Meanwhile, the high-end housing segment showed signs of excessively growing, with the  number of people who bough houses for resale to earn quick profit tripled and accounted about 15% of transactions in the segment. Prices of luxury homes at many projects have edged up 5-15% over 2014. Despite falling inventories in the period, the number of suspended housing projects increased, with 137 projects put on hold or having licenses withdrawn. Many firms still need support to overcome difficulties. Universum names Vietnam’s most attractive employers Sweden’s Universum Co has announced a list of the most attractive employers in Vietnam this year, with Samsung taking the lead in the engineering sector. Universum’s survey of 100 big domestic and foreign-invested corporations in Vietnam showed Samsung moved up to the top spot in the engineering sector from the third last year, followed by PetroVietnam, FPT, Viettel, and Vinamilk. In the past years, Samsung Electronics Vietnam has carried out many programs for trainees and fresh graduates to attract high-quality personnel. The company recruits thousands of fresh graduates a year to support its production and business expansion plans. Currently, around 110,000 employees are working at Samsung’s electronics complexes in the northern provinces of Bac Ninh and Thai Nguyen. The number of Samsung employees will rise as the company is opening more facilities. Vinamilk, the nation’s leading dairy firm, comes first in the natural science sector, followed by Unilever, Coca Cola, Nestle, and Google. Unilever takes the lead in business/commerce, followed by Google and Vinamilk. The survey also showed the number of young people wishing to work for Japanese employers has increased. This is why Japan’s AEON Group has moved up to 7th this year from 23rd in commerce last year. AEON is expanding its retail business in many provinces and cities in Vietnam by buying shares of domestic retailers. The 2016 survey about the employers’ recruitment trends and career goals of young people was conducted online with 21,062 students from 30 universities. The objective is to assist Vietnamese students in seeking jobs after graduation and employers in getting an insight into job demand trends of students. Public-private partnership, priority in developing transport infrastructure The public-private partnership (PPP) model should be defined as a priority in developing transport infrastructure, Deputy Prime Minister Trinh Dinh Dung said at a working session with the Ministry of Transport in Hanoi on May 19. The Deputy PM also asked the Ministry of Transport to accelerate the disbursement for transport projects and call on all resources both at home and abroad to invest in developing transport infrastructure under the PPP model. Reviewing the operations of the ministry over the past five years, Deputy PM Dung praised the ministry for its achievements, particularly in investing in and completing large transport infrastructure projects, contributing significantly to the national socio-economic development. The Global Competitiveness Index’s Transport Infrastructure Sub-index ranked Vietnam 67th out of a total 140 countries in 2015, 36 levels higher than in 2011, according to a report by the World Economic Forum in late 2015. In the next five years, the transport sector will need over VND995 trillion (US$44.6 billion) to invest in national transport infrastructure which will be raised from the State budget, ODA, sponsors and other resources. The ministry also plans to build additional 1,500km of expressway and upgrade 3,600km of national highway, as well as upgrading the north-south railway and international airports including Noi Bai, Tan Son Nhat, Da Nang, Can Tho and Cam Ranh. Deputy PM Dung emphasised that the transport sector should pay special attention to completing mechanism and policies to attract more resources for transport infrastructure projects. He told the transport sector to ease the traffic congestion in large cities, particularly in Hanoi and Ho Chi Minh City while reducing the rate of traffic accidents and traffic-related deaths by 5-10% per year. The Deputy PM also mentioned many urgent issues needing to be addressed including the restructuring of public investment in transport projects, revising the tolls and fees collected at BOT transport projects, boosting administrative reforms, and encouraging public transport, among others. Steel imports continue to rise high Vietnam imported 7.5 million tons of steel in the first four months of this year, up 48% against the corresponding period last year, according to the Vietnam Steel Association (VSA). VSA Vice President Nguyen Van Sua said a huge volume of steel ingots and finished steel products has been imported into Vietnam in spite of temporary safeguard duties of 23.3% imposed on steel ingots and 14.2% on long steel products on March 22 in the form of additional import duty. This was attributable to a high demand of the steel industry for semi-finished steel products, including hot-rolled steel, which Vietnam has not been able to produce yet. As a result, the country has to buy around 8-9 million tons of hot-rolled steel annually. While this challenge would cause pressure on domestic producers, it also encouraged them to improve technological qualifications and management capacity and build brand names, Mr Sua noted. Siam Commercial Bank opens branch in HCM City Thailand's Siam Commercial Bank (SCB) recently celebrated the opening of its new branch in HCM City at the Kumho Asiana Plaza Building in the heart of HCM City's business district. The branch provides a full range of international financial services for both Thai customers and Vietnamese businesses, and supports trade and investment between CLMV countries and ASEAN. The opening ceremony was officiated by Anand Panyarachun, SCB Chairman of the Board of Directors, and Vichit Suraphongchai, SCB Chairman of the Executive Committee. Manopchai Wongpakdee, Thailand's Ambassador to Viet Nam, attended the ceremony, as well as Tongurai Limpiti, Deputy Governor for Financial Institutions Stability at the Bank of Thailand, and Nguyen Hoang Minh, Deputy Director for the State Bank of Vietnam's HCM City branch. Nominees announced for 2016 Vietnam Property Awards Nominees for the 2016 Vietnam Property Awards, the most prestigious industry honours, have been announced. Presented by Hansgrohe, the second annual Vietnam Property Awards will celebrate the achievements of the country's established and emerging developers with a total of 22 award categories, including prizes for best green development, best affordable condo, best high-end condo, best housing development, best villa development, best commercial development, best hotel architectural design, best condo landscape architectural design, best residential interior design, and others. Thien Duong, chairman of the jury and managing director of Transform Architecture, said the awards offers a much-needed boost for developers in this exciting cycle of the local property sector. "The shortlisted companies can be proud that they have made benchmark contributions to the environment while providing high value for money to their customers and investors." "This is an opportunity for businesses in Viet Nam to strive not just for profit, but to create brands that have long-term credibility in the market. Well-designed projects help to elevate the level of standard for properties in Viet Nam." All the nominees and winners will be revealed at a dinner at the InterContinental Asiana Saigon in HCM City on June 10. Before the event, the editors of Asia's leading luxury real estate, architecture and design publication, Property Report, will reveal the winner of the 2016 Real Estate Personality of the Year award. The only accolade not chosen by the independent panel of judges, it is given to an individual who has had great success in the local property sector in the past year. Top winners will compete at the 2016 South East Asia Property Awards in Singapore in November, representing Viet Nam in the grand finals. Terry Blackburn, founder and managing director of the Asia Property Awards, said: "These are world-class developments that have chosen to be judged by an independent panel of judges. The official shortlist gives us a clear picture that developers in Viet Nam are committed to produce the finest real estate the country has seen to date. "With outstanding nominees coming from Ha Noi, HCM City, Da Nang, Phu Quoc and Nha Trang, the gala dinner will once again be an electrifying evening where the country's best of the best in real estate are assembled." Bao Viet announces US$1 billion target revenue this year, up 6.2% Insurance and finance conglomerate Bao Viet Holdings (Bao Viet) has set a target of VND22.5 trillion (US$1 billion) in revenue and VND1.19 trillion ($53 million) in after-tax profit this year, according to the company's general shareholder meeting on Wednesday. The figures are 6.2 per cent and 1.3 per cent higher than last year's numbers, respectively. In 2015, the company recorded total revenue of nearly VND20.8 trillion and an after-tax profit of VND1.17 trillion. Bao Viet also plans to pay a dividend of 8 per cent, or VND800 per share, to shareholders for last year and this year's performances. Total dividend for last year's business result is worth more than VND544 billion. "Bao Viet aims to remain the top insurance and finance business in Viet Nam, become more competitive on the global market, and achieve efficient and sustainable business growth," said Dao Dinh Thi, the company's chairman. By 2020, the company will hold the top position in the life insurance and non-life insurance segments, and become the top provider of financial services for the domestic market, Thi said. During the past three months, Bao Viet earned VND5.5 trillion in revenue and an after-tax profit of VND387 billion, which is equal to one-third of this year's target. The life insurance business remains the key sector for the company, accounting for 79 per cent of the company's first-quarter total revenue, while financial services brought 19 per cent of the company revenue during the same period. Bao Viet also plans to sell more than 34 million shares to its employees for at least VND10,000 per share under the employee stock ownership plan (ESOP) so that the company will be able to increase its capital this year to serve business activities in 2016 and 2017. The issuance of shares to employees came after the company had been unable to find a strategic investor, who is able to provide additional capital for the company by purchasing 40 million to 61.5 million shares. The company's management board is now developing better plans to improve its financial capability in order to prepare for new business activities as Viet Nam has been integrating into global markets, bringing both challenges and opportunities for Vietnamese companies. Government lays groundwork for start-up ecosystem The Prime Minister has approved a project to develop the national ecosystem for start-ups by 2025 in an effort to fuel a start-up boom. This was part of initial efforts by the government to boost the development of the start-up community as the country was seeking to become a start-up nation amidst its rapid integration into the global economy. A start-up is a type of enterprise that can scale quickly, based on intellectual property, technology and an innovative business model. Developing a supportive ecosystem is critical for the growth of start-up firms, the Ministry of Science and Technology had said previously. Under the project to develop a start-up ecosystem, the government plans to complete the legal system for start-ups and develop a national e-portal by 2020. In addition, support will be provided for 800 projects and another 200 start-up firms, 50 of which are expected to raise seed funding from venture-capital investors or get involved in merger and acquisition (M&A) deals, worth an estimated VND1 trillion (US$44.6 million). By 2025, the project aims to aid 2,000 start-up projects and another 600 start-up firms, 100 of which are expected to receive venture capital or get involved in M&A deals, worth VND2 trillion. Subjects earmarked to receive support include individuals or groups with start-up projects or firms with a high possibility of growing quickly, having been in operation for less than five years from the date of the business registry certificate, and organisations that provide incubation services to start-ups. Three major goals of the project involve developing start-up incubation zones, enhancing the capacity of start-ups and developing the technical infrastructure for start-ups. In addition, a national e-portal for start-ups will be built to provide information on technologies, inventions, standards, intellectual property rights and new business models, as well as policies, investments, incubation services and support systems. Further, incubation activities will be promoted at ministries, in sectors and in localities with potential for the development of start-ups through the establishment of zones with free Internet and a supportive IT infrastructure. Work on the Viet Nam Silicon Valley project, launched in 2013 and sponsored by the Ministry of Science and Technology, will continue as part of Viet Nam's commitment to building a dynamic, advanced start-up ecosystem. Support for training will also be provided to enhance the capacity of start-ups, while completing the technical infrastructure and adding incentives for loan interest rates and tax and investment policies. A circular on venture capital funding is also being drafted by the Ministry of Planning and Investment to improve the legal framework for promoting start-ups and to make Viet Nam a start-up nation. At a dialogue between the prime minister and the business community at the end of April, the Association of Small and Medium Enterprises proposed the establishment of a national steering committee for start-ups. A survey by the Amway Corporation in collaboration with German university Technische Universitat Munchen (TUM) and market research company Gesellschaft fuer Konsumforschung (GfK) last year also found that Viet Nam had a high entrepreneurial spirit, ranking 7th among the 44 surveyed countries. However, the percentage of the population who started businesses was low, with only 2.4 per cent compared to the world average of 12 per cent, Nguyen Dac Vinh, Politburo member, First Secretary of Ho Chi Minh Communist Youth Union, said while answering questions from Vietnamese youth in an online dialogue in March. HCM City to host int'l exhibition on machine tools, metalworking solutions Metalex Vietnam, an international exhibition on machine tools and metalworking solutions for production, will return to HCM City this October, offering opportunities for manufacturers to update new technology, expand business networks and exchange experiences with experts at seminars. Organised at the Saigon Exhibition and Convention Centre in HCM City from October 6-8, the exhibition will feature the widest range of latest technology and know-how provided by 500 brands from 25 countries and is expected to attract 10,000 industry professionals. Kasinee Phantteeranurak, Project Manager of Reed Tradex Co., Ltd, the exhibition's organiser, said: "Total foreign investment in Viet Nam was just US$3 billion in 2006. It shot up to more than $12.5 billion in 2015 and most of the total foreign investment has been in the manufacturing sector. "Fast forward to 2015 and Viet Nam has become one of the most attractive destinations in the world for multinationals to set up a global manufacturing base." Multinationals that have invested in factories expect to have more local parts suppliers to reduce transport costs and risks. "Manufacturers will need to adapt and develop new skills, know-how, and technologies to be able to respond to the need for quality parts. This means there are a wealth of opportunities for technology providers to tap the market," said Pham Van Truong, Vice Manager of Z751 Co., Ltd. Online retail to soar Vietnam’s online retail market is expected to soar by 2020 as a result of the large number of young people and internet users accounting for 45 per cent of the population, the Vietnam E-Commerce and Information Technology Agency (VECITA) under the Ministry of Industry and Trade reported at the “Vietnam’s Retail Market: Opportunities and Challenges” forum held on May 18. In 2015, on average, each person spent $160 on online purchases and Business-to-Consumer (B2C) revenue was estimated at $4.07 billion, nearly double the figure in 2013 and accounting for 2.8 per cent of total retail and consumer service revenue in the country. Three main groups of goods and services purchased online were clothing, footwear, and cosmetics (64 per cent), technological gadgets and electronics (56 per cent), and household appliances and equipment (49 per cent). Seventy-six per cent of online buyers did so via websites. Sales on social networks also developed, from 53 per cent in 2014 to 68 per cent in 2015. “With more than 127 million mobile users, Vietnam is moving towards doing business on mobile devices,” the forum heard. “Up to 85 per cent of people access the internet via mobile devices and 74 per cent of mobile device users search for information prior to shopping. This trend is anticipated to remain strong in the immediate future.” “Vietnam is integrating into the global economy, helping businesses, foreign investors and enterprises more easily access international customers,” said Ms. Nguyen Thu Ha, an expert from VECITA. “E-commerce has become a bridge for enterprises and will play an important role in boosting economic development in the years to come.” Residential price index up in HCMC but down in Hanoi The latest report from Savills on the Property Price Index shows that while increasing in Ho Chi Minh City the residential price index decreased in Hanoi during the first quarter of the year. The residential index for Ho Chi Minh City rose 1 point quarter-on-quarter and 2 points year-on-year, to 91.3. There were approximately 6,400 sales, a fall of 18 per cent quarter-on-quarter but an increase of 49 per cent year-on-year. The overall absorption rate was 17 per cent, down 4 percentage points (ppts) both quarter-on-quarter and year-on-year due to abundant new supply. Grade C transactions increased 7 per cent quarter-on-quarter. Although Grade A and B sales fell 34 per cent and 32 per cent quarter-on-quarter, respectively, there was an increase of 83 per cent year-on-year in Grade A transactions and 68 per cent in Grade B. Many factors contributed to the high sales and price movement in the first quarter, including seasonal factors, better construction progress, diversified product types, and flexible and extended payments offered by developers, many of whom adopted aggressive marketing campaigns. In Hanoi, meanwhile, the residential index was 107.5, a fall of less than 1 point quarter-on-quarter but an increase of 0.2 points year-on-year. The overall absorption rate was 34 per cent, falling 6 ppts quarter-on-quarter and 9 ppts year-on-year due to the usual effects of the Tet holiday. After high primary sales in the second half of 2015, sales in the quarter declined sharply to 5,600, or 13 per cent less quarter-on-quarter but unchanged year-on-year. Grade B saw the best performance, representing 66 per cent of sales with absorption of 37 per cent, a decline of 4 ppts quarter-on-quarter. Grade A and C sales fell dramatically, by 61 per cent and 17 per cent, respectively, quarter-on-quarter. The draft revision of Circular No. 36, if applied, could significantly impact on access to real estate credit. In general, though, Hanoi’s residential market will continue to stabilize in 2016. New General Manager for Pullman Saigon Centre Pullman Saigon Centre, a chic design-led property under the world’s leading hotel group Accor, recently announced the appointment of Mr. Tony Chisholm as its new General Manager and Area General Manager for South Vietnam. “Defined by cutting-edge design and a creative ambience, Pullman Saigon Centre is more than a place to stay,” he said. “It’s a lifestyle destination where guests can enjoy in-vogue gourmet dining experiences, sophisticated soirees and events, all complemented by gracious Vietnam hospitality.” He has been with Accor for 12 years and held General Manager positions with Sofitel and Pullman in Australia, Singapore, and Bangkok, and also managed Accor properties in Ho Chi Minh City and Da Lat in Vietnam. He also continues to give back to the hospitality community through teaching, advising, and training at the Auckland Institute of Studies, where he has been an educator and Advisory Board Member since 2013. This is the second time he has worked in Ho Chi Minh City and he is eager to embrace new experiences in discovering the new Vietnamese generation. He looks forward to the challenge of his new post and contributing to the further success of Pullman Saigon Centre. Korean industrial park to be built in Quang Nam Korean Dae Young E&C Co., Ltd. has expressed its interest in developing Dai Tan Industrial Park (IP) in Dai Loc district of the central province of Quang Nam. The information was published by the Investment Promotion and Business Support Board of Quang Nam. In the framework of a working session with leaders of the Quang Nam People’s Committee, the company presented plans to implement the project. Accordingly, it proposed to spend $25 million developing the first phase on an area of 200 hectares, constructing factories and other infrastructure aiming to attract investors operating in the mechanical engineering, electronic and electricity, garment and textile, home appliance manufacturing, agricultural product, and pharmaceuticals and cosmetics sectors, as well as supporting industries. According to Le Tri Thanh, Vice Chairman of the Quang Nam People’s Committee, once the project comes into operation, it will contribute to the province’s socio-economic development. Thanh added that the province would support the company to complete the procedures for the investment certificate as well as provide administrative consultation and backup to make sure the project can be implemented on schedule. Thanh requested Dae Young E&C to concentrate on environmental protection, building adequate accommodations as well as vocational training facilities for workers. The company committed to submitting the dossiers for the investment certificate soon and completing the project’s construction by the end of 2016. The IP is expected to welcome investors in early 2017. Kien Luong 1 power plant face licence revocation The Kien Giang People’s Committee resolutely proposed the government to issue a licence revocation on Tan Tao Investment and Industry Corporation (ITACO)’s long-delayed $6.7 billion Kien Luong 1 power plant project. According to Huynh Van Ganh, director of the Kien Giang Department of Industry and Trade, the project is not included in the government’s adjusted master plan on electricity development in the 2011-2020 period with orientations to 2030. Besides, using coal material for its operation will cause environmental pollution, hampering the development of tourism in the province. In addition, the residents heavily protested handing over agricultural fields to the investor, and hoped that they will be provided with jobs once the plant comes into operation. However the project is yet to be implemented, leaving locals hanging. Licensed in January 2008, ITACO planned to develop the Kien Luong power and port complex under the build-own-operate (BOO) form on an area of 555.9 hectares. The project included an industrial park, an urban area, a deep seaport, and a power plant with a total generation capacity of up to 4,400 megawatts. According to plans, the construction of ITACO’s Kien Luong complex was expected to start in 2009, and be completed in 2018. However, ITACO could not keep the plan on track for its commercial operation deadline of 2018 due to the group’s troubles in mobilising funds for the project. In 2013, to address the investor’s problem and get the project back up and running again, the Vietnamese government allowed ITACO to modify its investment model from BOO to build-operate-transfer (BOT), so that it could receive government guarantees to realise the project. In 2014, ITACO sought partners to establish a consortium to implement the project. Leading French energy company EDF, and Korean Samsung and Hyundai groups have expressed interest in the project. Previously, the Kien Luong 1 thermal power project was also considered by UK investor Graham Bell & Associates Limited. However, Tan Tao declined to disclose the official partner. It was until December 2015 that the spell of silence was finally broken, when Tan Tao and the Ministry of Industry and Trade signed a memorandum of understanding on developing the BOT project, paving the way for the beleaguered project’s resurgence, following six years of financing trouble. Under the latest MoU, Kien Luong 1 is scheduled to start generating power by February 2025. The plant will have two generators with the combined capacity of 1,200 MW, representing a total investment capital of more than $2.4 billion. However, as of now, the project has yet to take a single step forward. Vietnam’s largest HDPE pipe production line put into operation A giant HDPE pipe production line was put into service by Tien Phong (Pioneers) Plastic JSC in the northern port city of Hai Phong on May 19 to celebrate the 56th anniversary of the company’s establishment. The production line, the largest of its kind in Vietnam and Asia, is capable of manufacturing HDPE plastic pipes with diameters of up to 2 metres. The pipes are in great demand for use in key water supply and drainage projects in both domestic and international markets. The event marks a step forward in the constant innovation of Tien Phong company to develop a strong brand and contribute to Hai Phong and the nation’s development. Chairman of Tien Phong’s board of management Tran Ba Phuc said that the business has invested in advanced technologies and equipment to develop new products in line with Tien Phong’s strengths and meeting market demand. On the occasion, a seminar was held in Hai Phong to introduce the HDPE DN 2000 pipe along with Tien Phong’s other products. Jan-Apr trade surplus reaches US$1.76 billion Vietnam had a trade surplus of more than US$277 million last month and US$1.76 billion in the January-February period, according to statistics of the General Department of Customs. Last month saw exports dropping 5.1% to US$14.35 billion while imports declined 2.9% to US$14.07 billion compared to March. Overall, the country had got total export revenue of US$53.1 billion in the year to April, up 6.5% year-on-year, and spent US$51.34 billion on imports, down 1.3%. Again, foreign direct investment (FDI) enterprises contributed to the surplus in the January-April period while domestic firms ran a trade deficit. In the four-month period, the FDI sector posted a trade surplus of US$6.68 billion as it shipped abroad goods worth US$37.23 billion, up 10.3% against the year-earlier period, and spent US$30.55 billion on imports. Meanwhile, the domestic sector registered a trade deficit of US$4.91 billion as it obtained export revenue of only US$15.88 billion, a year-on-year decrease of 1.5%, due partly to a sharp drop of 51.7% in crude oil exports. Earlier, the General Statistics Office (GSO) estimated the country’s trade surplus at US$100 million in April and US$1.46 billion in the first four months. Domestic enterprises caused a trade deficit of US$5.6 billion while FDI firms posted a trade surplus of US$7.06 billion. Jan-Apr sees 16,600 cars imported into HCMC There were 16,635 completely-built-up (CBU) cars worth a combined US$240 million imported into HCMC in the first four months of this year, making up 57% of the nation’s total, according to the HCMC Department of Customs. Nearly 17,940 autos worth US$221 million were imported into HCMC in the same period last year. In January-April, import of under-nine-seat autos amounted to 5,249 units with a total value of US$108 million, up from 4,306 units worth US$71.4 million in the same period last year. The average price of under-nine-seat cars neared US$20,600 per unit, well above US$16,600 in 2015.The customs said the number of autos worth over VND2 billion (US$89,680) accounted for a big proportion of the vehicles imported in the period and is on the rise. In April alone, HCMC’s CBU car imports reached 6,438 units, up from 5,000 units in March. The department predicted car imports in May and June would surge because importers want to avoid special consumption tax increases from July 1. Car imports contributed significantly to the tax amount of VND29.45 trillion (US$1.32 billion) collected by the HCMC Department of Customs in the first four months. The figure accounted for 28.7% of the full-year target of VND102.5 trillion (US$4.6 billion). According to the General Department of Customs, Vietnam imported more than 29,000 CBU cars worth US$733 million in the January-April period, down 16.7% and 16.4% year-on-year respectively. Of the total, 10,200 units came from Thailand, which surpassed China and South Korea to become the largest CBU auto exporter of Vietnam. Sing Viet to spend VND1 trillion on resettlement project Sing Viet City Limited Company will inject more than VND1 trillion into infrastructure development for a resettlement area in Le Minh Xuan Commune in HCMC’s Binh Chanh District. The 64-hectare area will comprise water supply and drainage systems, school, medical clinic, park and shops. It will be home to residents affected by the Sing Viet urban area developed by the company and other key projects in the outlying district of Binh Chanh. Under a decision of the HCMC government, the resettlement area will have facilities able to supply 180 liters of water to a person a day and 2,000 kWh to a person a year, as well as drainage systems, and other auxiliary works. Infrastructure development in the resettlement site is scheduled for completion over two years. Licensed by the city government in 2008, Sing Viet City had undergone its sixth business license adjustment as of October, 2014, when its equity stood at VND682.4 billion (US$30.59 million). The decision also requires Sing Viet City to finish technical infrastructure development, construction of the park, and maintenance preparations for the project before it is handed over to a government agency. The company is told to arrange resettlement for households affected by the Sing Viet urban area and other key projects after it completes technical infrastructure. First shipment to Peru by Doosan Vina Peru has been the latest in a growing list of countries now equipped with high-tech “Made in Vietnam” products from Korea-backed industrial equipment manufacturer Doosan Vina. With the addition of Peru there are now 28 countries around the world which receive products made by skilled Vietnamese craftsmen at Doosan Vina. On May 19, Doosan Vina’s Chemical Processing Equipment (CPE) shop made the first shipment of high-tech chemical processing equipment that weighed 1,232 tonnes to this South America country. The project was signed on December 30, 2014 for manufacturing a total five high-tech pressure vessels and eight towers. The largest was seven metres in diameter, thirty-one metres long and thirty-six millimetres thick.   It took ten months for CPE shop to complete the design, engineering and fabrication of the equipment. This equipment will be shipped from Doosan Vina’s dedicated port and it will take a month and a half at sea to reach its destination in Peru. Since opening in 2009, Doosan Vina’s CPE shop has made 150 shipments of top quality chemical processing equipment to refineries and other customers around the world. This growing client list confirms the reputation of Vietnam and Doosan Vina as a leader in the high-tech field of chemical processing equipment. Doosan Vina CPE is part of a high-tech industrial complex in the Dung Quat Economic Zone of Central Vietnam and produces a range of industrial components including boilers for thermal power plants, heat recovery steam generators, desalination plants, material handling systems and chemical processing equipment. The firm is part of South Korean conglomerate the Doosan Group. Tilapia breeding area to cover 33,000 hectares in 2020 Total tilapia fish farming area nationwide is set to span 33,000 hectares with the volume of breeding cages reaching 1,500,000 cubic metres by 2020. By 2030, the figures are expected to stand at 40,000 hectares and 1,800,000 cubic metres, according to a plan recently approved by the Ministry of Agriculture and Rural Development. Under the plan, tilapia will be reared in areas in the northern midland and mountainous region, the Red River Delta, the north and south central regions, the Central Highlands, and the west and east southern regions. Vietnam currently boasts 600 aquatic product processing facilities with total yearly capacity of 2.8 million tonnes. Vietnam is eyeing 60 countries and territories for export with an estimated volume in excess of 32 million USD, including major markets of the US, Spain and Colombia. Tilapias for export are processed into skin-on fillets, skinless fillets and frozen whole fish.- Viet Nam urged to tighten resource consumption tax  It was critical for Viet Nam to tighten natural resources consumption tax policies to improve budget collection from exploitation activities, while a number of resources were facing exhaustion, experts said. At a conference held by PanNature at the end of last month, experts said that budget collections from mineral mining activities were not proportional to the exploitation scales. Statistics of the Ministry of Finance revealed that natural resources exploitation (excluding oil) contributed merely between 0.9 per cent and 1.1 per cent to the State budget from 2011 to 2015. Viet Nam began to collect natural resources consumption tax in 1991, in accordance to the Ordinance on Natural Resource Tax 1990 which was amended twice in 1998 and 2008, and was replaced by the Law on Natural Resources Tax in 2009. "There existed loopholes in the resource consumption tax policies which mining companies could take advantage of to avoid and evade taxes," Le Xuan Truong, professor from the Academy of Finance, said. Currently, the resource consumption tax calculation was based on output and prices, Truong said, and added that the output was declared by firms while the prices were set by the provincial authorities and were varied between different localities. However, the management towards exploitation output was weak, coupled with inefficient co-ordination between tax and natural resource authorities, which was causing losses to the budget, Truong said. Emanuel Bria, from the Natural Resource Governance Institute, was quoted by Cong Thuong (Industry and Trade) newspaper as saying that Viet Nam could lose up to US$1 billion in budget collection due to gaps in resource consumption tax policies and a weak management. While Viet Nam still struggled to balance the budget, Emanuel said that amendments to the Law on Natural Resource Tax towards transparency and appropriateness was necessary to improve collection, he said. Tran Thanh Thuy, from Viet Nam Mining Coalition, urged Viet Nam to apply the Extractive Industries Transparency Initiative (EITI), a global voluntary standard to ensure transparency of payments from natural resources. Thuy said that the EITI, applied in 49 countries around the world, had helped them to collect taxes efficiently. Hoang Ngoc Thao from Apatit Viet Nam said that tax policies should encourage firms to process ores. At the conference, Trinh Le Nguyen, director of PanNature warned about the anticipated exhaustion of many types of minerals in the near future, such as oil in 56 years, barite in 21 years, bronze in 19 years and gold in 21 years. Irrecoverable debts remain high  Though non-performing loans (NPLs) at commercial banks are being kept under control at below 3 per cent, their potentially irrecoverable debts remain high, Dau tu chung khoan (Securities Investment) newspaper has reported. In Viet Nam, debts are classified into five groups based on the degree of risk. These are standard debts, debts needing special attention, subprime debts and doubtful debts, in addition to potentially irrecoverable debts. The last three are NPLs. Though the NPL ratio at Vietinbank by the end of March was only 0.96 per cent of its total outstanding loans or VND5.3 trillion (US$235.5 million), more than half of the bank's NPLs were potentially irrecoverable debts. BIDV's NPLs by the end of Q1 inched up from 1.67 per cent at the end of last year to 1.8 per cent, or VND10.8 trillion, of which potentially irrecoverable debts increased by VND460 billion to VND5.199 trillion. The rise in potentially irrecoverable debts caused BIDV's provision to increase in Q1 to nearly VND2 trillion. The bank reported a net pre-provision profit of more than VND4 trillion in Q1, up more than 25 per cent against the same period last year. However, due to a double provision, the bank's pre-tax profits declined 10 per cent year-on-year to a little more than VND2 trillion. The potentially irrecoverable debts at Vietcombank also remained high by the end of Q1. Though the bank successfully managed to control its NPLs at 1.84 per cent of total outstanding loans or VND7.6 trillion, VND5.88 trillion were potentially irrecoverable debts. Sacombank's potentially irrecoverable debts also accounted for up to 70 per cent of its total NPLs. The bank's potentially irrecoverable debts surged by VND200 billion by the end of last year to VND1.315 trillion. Techcombank's NPLs also surged 24 per cent in Q1 to VND2.321 trillion, representing 2.03 per cent of the bank's total outstanding loans. The bank, therefore, had to spend VND1.5 trillion for provision, up 15.2 per cent. It is estimated that commercial banks had to set aside nearly VND8 trillion for provision, equal to nearly half their net profits in Q1 this year. Explaining the recent sharp increase in irrecoverable debts, Nguyen Van Thuan, the head of the Banking and Finance Faculty at HCM City Open University said that although the bad debt ratio is controlled to below 3 per cent, which is considered an achievement of banks from the sale of bad debts to the Viet Nam Asset Management Company (VAMC), the bad debt settlement process remains very slow. According to current regulations, though they have sold the bad debts to VAMC, banks are still required to establish yearly provisional funds amounting to 20 per cent of the value of the sold debts. The recent recovery of the real estate market is seen as a positive factor influencing the bad debt settlement of banks. However, the increase of irrecoverable debts is unavoidable because the volume of bad debts that VAMC purchased from commercial banks is huge at roughly VND250 trillion. National Financial and Monetary Policy Advisory Council member Tran Du Lich said that the settlement of bad debts this year entirely depends on how the VAMC handles the purchased NPLs. Property price indices improve in 2 major cities: Savills Consulting firm Savills Việt Nam's property price indices for real estate in two major cities of the country improved in the first quarter of this year, compared to the same period last year. The company said in a Thursday report that the residential index for HCM City increased one point quarter-on-quarter (QoQ) in Q1/2016, and two points year-on-year (YoY) to 91.3. There were appoximately 6,400 sales, a decrease of 18 per cent QoQ, but an increase of 49 per cent YoY. The overall absorption rate was 17 per cent, down four percentage points both QoQ and YoY, due to abundant new supply. Grade C transaction volume increased by seven per cent QoQ. Although Grade A and B sales decreased by 34 per cent and 32 per cent QoQ respectively, there was an increase of 83 per cent YoY for Grade A transaction volume and 68 per cent YoY for Grade B. Many factors contributed to high sales and price movement in Q1/2016, including seasonal variability, better construction progress, diversified product types, and flexible and prolonged payments offered by developers. The office index for HCM City was 83.6 in Q1/2016, up two points QoQ and seven points YoY. The improvements were a result of increased occupancy at one percentage point QoQ and five percentage points YoY, and increased rent at one per cent QoQ and four per cent YoY. The average occupancy reached an eight year high at 96 percent. Newly-launched Grade A and B in the central business district (CBD) performed well this quarter, leading to a yearly increase in both occupancy, at three percentage points, and rent, at four per cent. As a result, the CBD index rose one point QoQ and six points YoY. Meanwhile, a three percentage points QoQ and seven percentage points YoY increase in occupancy was the main reason for a surge in the office index in the non-CBD by three points QoQ and nine points YoY. In Q1/2016, total take-up of office space was approximately 26,400 sq.m, decreasing 54 per cent QoQ but increasing 176 per cent YoY. With growing demand, Grade A and B office rent is expected to increase in coming years. Savills expects the rent to rise about four per cent per annum over the next three years. For Ha Noi, the residential index was 107.5, decreasing by less than one point QoQ, but increasing 0.2 point YoY. The overall absorption rate was 34 per cent, decreasing six percentage points QoQ and nine percentage points YoY, due to the usual effect of Lunar New Year holidays. After high primary sales in the second half of last year, Q1/2016 declined sharply to 5,600 sales or 13 per cent QoQ, but unchanged YoY. Grade B had the best performance at 66 per cent of sales with absorption of 37 per cent, a decrease of four percentage points QoQ. Grade A and C sales dramatically decreased by 61 per cent and 17 per cent QoQ respectively. Savills forecasts that the Ha Noi residential market will continue to stabilise in 2016. In Q1/2016, the office index for the capital was 57.8 points, increasing 0.7 point QoQ and 1.8 points YoY. The increased rent across all grades was the main reason for the upward index adjustment. The CBD index improved 2.6 points QoQ and 2.9 points YoY. Grade A recovered in both rent and occupancy as a result of limited vacancy in the CBD. In the non-CBD, stable occupancy and rent increases of one per cent QoQ led the index in the non-CBD to increase 0.7 point QoQ and 2.2 points YoY. In 2016, the CBD will continue to perform well, with average rent forecast to increase seven per cent. The non-CBD is expected to face supply pressure, due to new projects and existing vacancies in the recently opened projects. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR