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BUSINESS IN BRIEF 18/5
Mortgage
loan for social housing touches 6%
The State Bank of
Under Circular 11,
which guilds the implementation of Government Resolution 02 on solutions to
remove difficulties against production and business, support the market and
deal with non-performing loans, social house buyers’ financing will have a
maturity of ten years.
The central bank
will use VND 30,000 billion (US$1.5 billion) to support the five commercial
banks which were selected to undertake the loans in 36 months since Circular
11 takes effect on June 1, 2013.
The Circular
stipulates that the State Bank of
The move aims to
support those who want to buy and hire social houses with an area of under 70
square meters and at a cost of less than VND15 million per square meter.
The five eligible
commercial banks include the Viet Nam Bank for Agriculture and Rural
Development (Agribank); the Stock Commercial Bank for Investment and
Development of Viet Nam (BIDV); the Viet Nam Joint Stock Commercial Bank for
Industry and Trade (Viettinbank), the Joint stock commercial Bank for Foreign
Trade of Viet Nam (Vietcombank) and the Mekong Housing Bank.
The same day, the
Ministry of Construction also released Circular 07 specifying those who are
eligible for borrowing loans for social housing./.
VDB
mobilises 4.45 trillion VND from guaranteed bonds
The Vietnam
Development Bank (VDB) mobilised 4.45 trillion VND from its
Government-guaranteed bonds at a tender organised by the Hanoi Stock Exchange
(HNX) on May 15.
VDB put out its
Government-guaranteed bonds totalling 5 trillion VND at the tender.
The mobilised money
included 2.5 trillion VND in two-year bonds with an annual interest rate of
8.6 percent, 1.45 trillion VND in three-year bonds with an annual interest
rate of 8.7 percent, and 500 billion VND in five-year bonds with an annual
interest rate of 9.25 percent.
The bank has so far
this year mobilised nearly 20 trillion VND from its Government-guaranteed
bonds via tenders.-
Ship yards
go on with new orders
The Ha Long
Shipbuilding Co., Ltd under the Vietnam Shipbuilding Industry Group
(Vinashin) on May 15 started work on the building of four tugs for Damen
Shipyards Group of
Each ATD 2412 tug
measures 24.74 metres long, 12.63 metres wide and 4.6 metres high with a
capacity of 298 tonnes.
The ships will be
handed over to Damen Group within 14 months.
The same day,
Vinashin’s Nam Trieu Shipbuilding Industry Corporation transferred a 56,200
tonne ship named Vosco Sunrise to Vietnam Ocean Shipping JSC.
This is the largest
ever cargo ship Nam Trieu has built for a domestic partner.
The 190m long ship
is designed by IHI-MU of
Later on the day,
Vosco Sunrise sailed to
The Thua Thien -
Total investment
for the project is VND17 billion ($83,000), which is sourced from both the
State and local budget.
The project includes
a Thua Thien –
The project aims to
help science and technology to create breakthroughs in province’s economy in
2020.
Quoc Oai to
become an economic region in the Western Capital
Hanoi City People’s
Committee has recently approved the master planning of socio-economic
development of Quoc Oai district to 2020 and vision to 2030.
Accordingly, until
2020, Quoc Oai will become a rather developed economic district in the
suburb. Until 2030, Quoc Oai is targeted to become an active developed
economic region with sustainable developed ecological environment.
The district will
make the best effort to realize the speed of its production value of 15%-17%
in revenue a year to 2020 and 14% in revenue a year in the 2012 - 2030
period, respectively. Of which, until 2020, the economic structure will be
industry- construction (58%), services (35%), agriculture- forestry (7%); and
such figures until will be 60%, 37%, and 3%, respectively, until 2030. The
income per capita will be some VND52 million and VND196 million person per
year in 2020 and 2030, respectively, as targeted.
Until 2020, at
least 75% of communes will complete basically the new rural construction; by
2030, 100% of communes will realize new rural criteria.
Regarding social
aspects, the district will make its effort to decrease gradually natural
population; this figure is targeted as 1.05% in 2020; the rate 1% will be
remained in the 2021- 2030 period; rate of malnutrition under-five-year-old
children will be under 7%.
Until 2020, the
number of national standardized schools in all levels will be 65% - 70%; this
figure will be 75% - 80% in 2030. Besides, rate of trained labors in the
district will be 50% - 60% in 2020; and 60% - 75% in the 2021 - 2030 period.
The rate of poor
households (according to new criteria) will be reduced to 5% in 2020 and 2%
in 2030, respectively. The district will be green belt of Hanoi Capital.
Woes hit
agriculture insurance
A two-year-old
pilot programme for agricultural insurance designed to stabilise the
livelihood of farmers has revealed difficulties that have produced losses for
the insurance firms.
The pilot programme
on agricultural insurance, running from March 2011 to June 30, 2014, has been
carried out in 20 provinces and cities according to Decision 315/QD-TTg. This
policy aims to stabilise production and income of farm communities and
support implementation of social welfare policies. Around 200,000 farming
households have joined this programme so far with the total premium of over VND220
billion ($10.5 million).
“In the process of
implementation, insurance companies had to bear a big financial burden
because the large number of contracts and big damage lead to high
compensation for these companies,” said Trinh Thanh Hoan, director of Insurance
Supervisory Authority under the Ministry of Finance (MoF).
The insurance firms
chosen to pilot the programme by the MoF are Bao Viet Insurance Corporation,
Bao Minh Joint Stock Corporation and Viet Nam Reinsurance Corporation. All
have shown a big financial loss after two years.
Specifically, in
the first four months of this year, Bao Viet Insurance saw premium revenue of
only VND13.6 billion ($653,850), much lower than compensation of VND300
billion ($14.4 million). In 2012, the figures were respectively VND172
billion ($8.3 million) and VND62.6 billion ($3 million).
Bao Minh faces the
same situation. Its compensation for the first four months of 2013 reached
VND69.6 billion ($3.34 million), higher than premium revenue of VND58.9
billion ($2.8 million). In 2012, the figures were VND34.4 billion ($1.65
million) and VND58.7 billion ($2.8 million).
Meanwhile, Vinare
reported it suffered a loss of VND300 billion (($14.4 million), with the
revenue of VND204 billion (($9.8 million) while the total of compensation
commission up to VND534 billion ($25.7 million).
Aquaculture
insurance, which is considered “the most difficult kind of agricultural
insurance”, according to Deputy Minister of Finance Tran Xuan Ha, is one of
the main reasons for big compensation for insurance firms in the past time.
A representative of
Bao Minh said there remained many legal loopholes for seafood insurance which
made it difficult for insurers in compensation
“Due to specific
characteristics of aquaculture which is flat damage in the wide area, it is
hard for insurers to check and appraise the damage exactly. Besides, it
appeared insurance frauds happened which made the compensation value
increase,” said the representative.
In addition, he
added, in fact, in the process of implementation programme, the farming
households holding insurance policies did not reached the anticipated number
which impacted on premium revenue of insurance companies.
Bao Minh report’s
also showed that total premium of this firm revenue was only one tenth of the
initial expectation.
“In 2012, the
business result of agricultural insurance in the pilot programme is really
bad. 2013’s plan still see a big proportion for insurance of seafood
products,” said a representative of Vinare.
Banking
sector focuses on innovation, digitalization
Banks have to speed
up the application of modern technology to improve services, or they will
lose out to rivals on home turf.
Domestic and
international bankers shared the view at the two-day Banking Vietnam 2013
conference which opened in
They said fierce
competition requires banks to better their services through using modern and
convenient technologies, aiming to woo more clients.
Electronic payments
and modern banking services such as mobile banking and data archives are no
longer new to Vietnamese people, but not all users have benefited from these
services.
Digitalising
services is considered an effective tool for domestic banks to keep up with
international trends, experts said.
On May 15, experts
also suggested solutions for resolving bad debts - a thorny problem of the
banking sector - and accelerating the restructuring of the sector in order to
improve its risk management capacity and modernize its technology.
In another
round-table on fueling innovation in banking services, delegates examined
ways to transform delivery channels for the financial sector and the rapidly
evolving trends in mobile payments, which create both challenges and
opportunities for financial institutions.
Banking Vietnam
2013 is jointly organised by the State Bank of Vietnam (SBV) Information
Technology Department and the International Data Group (IDG)
Featuring the theme
“Leveraging new technological trends to build governance capacity,
operational excellence and service innovation”, the conference will touch
upon the impact of information and communication technology (ICT) in
enhancing competition, growth and performance of the banking sector.
In addition to the
conference, Banking Vietnam 2013 also launched an exhibition on non-cash
payments and a demonstration of modern banking technology.
Vietnamese banking
system has to cope with the highest non-performing loan (NPL) ratio in the
region, accounting for 8.82 percent of total loans, according to an SBV
report in June 2012.
2013 is considered
to be an important milestone for
FDI
high-tech businesses receive a boost
The Vietnamese
Government pays attention to developing policies and incentives for FDI
businesses, especially those operating in the field of high technology.
Deputy Minister of
Science and Technology Tran Viet Thanh made the statement at a workshop in
He said the
government encourages domestic and foreign businesses to invest in research
and development of technology to produce products of higher value.
High-tech
businesses will enjoy preferential fees and best tax incentives under law, he
stressed.
Ha Chan Ho, the
He described
Delegates were
provided with information on mechanisms, policies and procedures for
registering high-technology enterprises. They examined the Vietnamese
Government’s policies to encourage FDI businesses to develop high technology.
Experiences of
high-tech businesses that have been granted certificates to operate in
The event,
organized by the Ministry of Science and Technology and the Korean Business
Association, attracted managers, researchers and leaders of Korean businesses
in Vietnam.
Cooperation between
Nearly 1,500 Korean
enterprises have invested in
Savills
triumph at Asia Pacific Property Awards
Savills
The four awards
include the Best Real Estate Agency Vietnam, the Best Property Consultancy
Neil MacGregor,
Managing Director of Savills
President of the
International Property Awards Stuart Shield said the awards testify to the
recipients’ profession and capacity in the field.
The Asia Pacific
Property Awards is part of the International Property Awards. The award
winners’ logo is recognised as the symbol of excellence throughout the global
industry.
Japan Group
to invest more in Vietnam
The Group Chairman
Toshimasa Iue was speaking during his recent visit to the province to seek
investment opportunities in the locality.
Its original
factory with initial invested capital of US$16.5 million was put into
operation in 1997 and capable of producing 400,000 units of products
annually.
In 2011, American
Standard decided to double its production capacity and it now plans to raise
its productivity to meet the increasing consumer demand.
Chairman of the
Binh Duong Provincial People’s Committee Le Thanh Cung praised American
Standard’s operational efficiency and pledged to support its expansion and
investment strategy in the locality.
Along with American
Standard, Lixil also owns the Inax brand in
Last November, the
group launched the US$441 million factory producing building materials in
Long Duc Industrial Zone in the southern
Lixil now has 11
factories in
High-quality
Thai goods showcased in
More than 100
leading Thai businesses are displaying branded products at a trade fair which
opened in
As many as 126
stands feature favourite Thai products such as food and foodstuffs,
beverages, fruits, household utensils, garments, jewellery, electronic
appliances, cosmetics, bike and automobile equipment, decorations, and
souvenirs.
Busaba Butrat,
trade counsellor of the Thai embassy in
She said over the
past five years the fair has gained a market niche in
The fair lasts
through to May 19.
Vietnam-Mexico
trade on the rise
Two-way trade
between
Of the figure,
Vietnamese exports earned US$173 million, equal to 2012’s first quarter, and
its imports were valued at US$26 million, up 8.33 percent.
Vehicles and spare
parts have emerged as one of
Last year,
bilateral trade totalled US$795 million, including US$683 million from
Vietnamese exports.
Key export items
were footwear, seafood, garments, electronics and coffee, which had
corresponding values of US$212 million, US$110 million, US$82 million, US$60
million and US$86 million.
Bilateral trade
ties are expected to grow and flourish in the near future when
Representatives of
the Vietnamese Ministry of Industry and Trade and leading Vietnamese
businesses made a fact-finding tour of
Rice
exports need to be streamlined
Deputy Minister of
Finance Hoang Anh Tuan has asked relevant agencies to speed up a draft decree
on rice exports so that suggestions from relevant ministries can be submitted
to the Government for approval.
One of the key
tenets of this draft decree is to re-organise rice exporting activities, so
that market competitiveness can be assured.
To deal with
difficulties in rice exports, Tuan urged the Import-Export Department of the
Ministry of Industry and Trade and Viet Nam Food Association (VFA) to focus
on assessing and analysing market issues, according to the news website
Chinhphu.vn.
According to VFA,
in April alone, the country's rice exports are estimated to reach 807,000
tonnes, worth approximately US$340 million. In the first four months of this
year, rice exports were estimated to have reached 2.38 million tonnes (an
increase of 7.6 per cent) with an export turnover of more than $1 billion.
Many rice export contracts were signed in the first four months of 2013, but
the export value had remained low.
During the first
four months, rice exporters were contracted to ship 4,231 million tonnes of
rice, an increase of 9.92 per cent over the same period last year, but they
failed to deliver on time.
Director of the
Import-Export Department Phan Van Chinh said the rice export price fell for
most countries due to excess global supply, as
Chinh pointed out
that Vietnamese rice export prices had never been higher than Thai rice.
Furthermore, Vietnamese rice was less competitive in Africa compared to
He added that
weaker Vietnamese rice exporters often offered low rice prices for export to
quickly return their capital and being hit by high lending rates. Meanwhile,
the winter-spring crop this year is expected to harvest between 3.7 million
to 3.8 million tonnes of rice.
To handle
difficulties for farm produce and seafood products in Cuu Long (
Lai Chau
hydro power contract signed
A contract for the
main work on the Lai Chau hydro-power plant was signed yesterday for VND11.17
trillion (US$532 million). Work will be carried out by the Song Da
Corporation.
The plant is on the
Da River in Muong Te District in northern
Electricity of
Director of the Son
La and Lai Chau hydro-power management board Nguyen Hong Ha said offices plus
accommodation for workers had been completed.
Builders have
already finished removing 15 million cubic metres of soil and stone for the
foundations.
"The first
turbine of the plant is expected to be operational early in 2016," he
added.
According to Prime
Minister Decision 819/QD-TTg, more than 1,330 households in eight of the
province's communes and one town will be relocated to new areas.
The plant is
expected to provide an average 4,670 million kWh of electricity annually.
Large
stocks help steady rice prices
This meets
Government requirement to help stabilise rice prices and assist farmers, said
Deputy Minister of Agriculture and Rural Development Vu Van Tam.
The reserve helps
generate profits by taking the initiative in selling rice to stop declining
prices, said Tam at a seminar held by the Ministry of Agriculture and Rural
Development (MARD) yesterday in Ha Noi.
The Ministry
reports that agencies and the Viet Nam Food Association have conducted
drastic measures to implement the Government's rice policy.
To build up
reserves, commercial banks have disbursed VND7.6 trillion (US$362 million),
achieving 95 per cent of the targeted plan.
According to the
food association, from February 20 until the end of March, domestic rice
businesses completed buying 1 million tonnes of rice at an average price of
between VND5,200-5,400 per kilo.
Paddy price is sold
at between VND5,200-5,400 per kilo in the southern
Tam noted that the
difference in buying price is attributed to the different conditions in
provinces. Not every province managed a profit of 30 per cent.
Some provinces
report that the Government policy was not strong enough to lift the buying
price.
Mai Anh Tuyet,
director of the Department for Industry and Trade in Mekong Delta's An Giang
Province said that although rice businesses had completed their quota to buy
rice for reserve, there was a large volume still held by farmers.
An
Lam Anh Tuan,
director of Thinh Phat Company Ltd, said most rice businesses faced
difficulties in buying rice due to a drop in rice export prices and a huge
stockpile of the grain.
He said many
businesses asked to purchase rice for reserve but they then refused despite
the fact that the selling price was subsidised by the Government.
Many said to avoid
this situation, further co-operation was needed between the Viet Nam Food
Association and People's Committee in provinces.
In addition, to
provide more profit for farmers, rice for exports had to be improved to
further enhance prices.
Tam said the
Ministry of Agriculture and Rural Development would ask the Government to
focus on how to bring more benefit to farmers and create incentives for rice
export and rice consumption.
Help to
lift competitiveness, education system
The State Bank of
The funds will also
go to support the implementation of the Higher Education reform agenda, and
to raise school readiness for 5-year-old children.
The first Economic
Management and Competitiveness Credit for
It will also cover
public investment management, efficiency of the business environment, and
equity and transparency of the business environment.
The funds will also
go to support the implementation of the Higher Education reform agenda, and
to raise school readiness for 5-year-old children.
The credit package
will also help monitor macroeconomic policies that support the stabilisation
efforts of the government.
Public Investment
Management, SOEs and banking sector reforms are prominent themes in line with
the government's priorities for structural reforms.
"I want to
congratulate the Government on its stabilisation efforts over the past 18
months," said Victoria Kwakwa, the World Bank's country director for
"It is
necessary to continue these efforts, and at the same time accelerate the pace
of implementation of structural reforms in the restructuring of state-owned
enterprises, public investment and banking sector."
The second credit
worth $50 million supports the implementation of reform policies designed to
strengthen governance, financing and quality of higher education.
The goals are to
improve research studies and fiscal transparency as well as sustainability
and effectiveness of the higher education sector.
The third project,
the School Readiness Promotion Project, will raise school readiness for
children entering primary education, in particular for those most vulnerable.
It will support
elements of
The project
supports efforts to expand full-day pre-school enrollments, improve capacity
for preschool quality assurance and strengthen professional expertise of
teachers and principals.
"To help
prepare
New
guidance on goods trading by foreign-invested enterprises
On April 22, the
Ministry of Industry and Trade issued Circular 08/2013/TT-BCT.
Accordingly,
foreign-invested enterprises are only allowed in accordance with Investment
Certificate, Business License, Retail Outlet Establishment Permit of such
enterprises and relevant regulations.
In particular,
foreign-invested enterprises are allowed to carry out goods trading
activities such as: Implementation of the rights of export, import,
distribution; implementation of goods trading and directly related activities
with export processing enterprises; establishment of retail outlets, branch
for implementation of the goods trading and directly related activities; the
foreign investors' contribution of capital to, and purchase of shares from,
Vietnamese enterprises for implementation of the goods trading and directly
related activities.
However, to
implement such activities, the enterprises must comply with the conditions as
specified in this Circular.
In addition,
Circular 08 also provides that foreign-invested enterprises engaged in goods
trading and directly related activities shall implement periodic and
extraordinary reporting regimes in accordance with Vietnamese law and this
Circular.
Circular 08 shall
take effect on June 7, 2013. and replaces Circular 09/2007/TT-BTM and
Circular 05/2008/TT-BCT.
Value of
transactions must be reported to the State Bank
On April 18, the
Prime Minister issued Decision 20/2013/QD-TTg on high value transactions
subject to report ("Decision 20").
Decision 20
provides that financial institutions and organisations/individuals doing
business in non-financial sectors shall report to the State Bank of Viet Nam
on the transactions valued at VND300 million or more compared to the
previously regulated VND 200 million under Decree 74/2005/ND-CP.
The relevant
non-financial sectors include gambling and casino business; real estate
management, real estate brokers and real estate trading floor business,
precious metals and gems business; notary and accounting services, legal
services; investment trust, corporate establishment and management service;
and director and chief secretary subleasing service.
Decision 20 shall
take effect on June 10.-
The
The country's
Bureau of Fisheries and Aquatic Resources fears that Vietnamese shrimp could
infect native shrimp with early mortality syndrome (
The ban applies
only to live shrimp, VASEP said, so Philippine importers are still allowed to
buy frozen processed shrimp from
In the first
quarter this year, the
Earlier, in
mid-April,
Airlines,
travel firms tout discounts
Local tour and
airline companies are offering discounts on domestic tours for the upcoming
summer holiday.
National carrier
Viet Nam Airlines and travel companies like Fiditour and Vietravel have
teamed up for the promotion.
Viet Nam Airlines
is offering discounts of 38-58 per cent on economy class tickets for domestic
flights to 11 tour companies in
Fiditour has cut
the prices of its tours to well known resort localities like Nha Trang, Con
Dao and provinces in Central and Northern regions by VND500,000 to VND4
million (US$24-191).
Vietravel has
reduced by up to VND3.5 million ($167) the prices of its tours to famous
destinations in
Vinamilk
named as
Vinamilk, the
leading local dairy company, is the most popular fast-moving consumer goods
(FMCG) brand in
Up to 94 per cent
of the country's households purchased Vinamilk products, with an average
frequency of 27 times per year, according to the Kantar Worldpanel Brand
Footprint Ranking issued last week.
Vinamilk products
were chosen 57 million times per year for household consumption in four major
cities: Ha Noi,
Other products in
the top ten included Chin-Su sauce, Hao Hao instant noodles, Dutch Lady milk
and Tuong An cooking oil.
The study showed
that consumers in emerging markets like
In the global
market, Coca Cola topped the Brand Footprint Ranking with 5.3 billion
purchases. Coca Cola products reached 44 per cent of world households and
were bought 15 times per year.
Fabrice Carrasco,
managing director of Kantar Worldpanel Viet
Consumer Reach
Points were used to measure the percentage of households buying a brand and
how frequently the products were chosen.
Pepper
producers must spice up products
For six years,
Vietnamese pepper has held about 50 per cent of global market share, but
pepper products still fail to meet their potential, said Do Ha
Actually, 95 per
cent of unprocessed exported pepper is exported through three major importers
-
He said the
First, the
difference in price between white and black pepper has reached 70 per cent,
therefore, local pepper farmers should shift to white pepper to enhance
profits.
Secondly, pepper
exporters needed to produce pepper under ASTA (American Spice Trade
Association).
Lastly, domestic
producers needed to spur exports of pepper powder. Local producers claim they
lack export partners.
In addition, the
Ministry of Agriculture and Rural Development should to develop a map of
zoning area for pepper plantation. The Ministry should soon outline pepper
cultivation process to grow pepper tree under VietGAP standards.
The major pepper
growing regions, Binh Phuoc, Dong Nai, Ba Ria- Vung Tau , Dak Nong and Gia
Lai, do not have a trademark for pepper products, apart from the Chu Se
trademark in
As a result,
domestic pepper products always suffer in comparison to other pepper
exporting countries.
According to the
Ministry of Agriculture and Rural Development, from the beginning of this
year, local pepper producers exported 56,000 tonnes of pepper, earning an
export turnover of US$370 million.
The volume rose
14.7 per cent in volume and 17 per cent in value over the same period last
year, achieving the highest record.
Black pepper for
export sells for $6,621 per tonne or a decrease of 3.4 per cent over the same
period last year.
According to the
VPA's statistics, last year, the price of Vietnamese black pepper was $295
per tonne lower than the global price. But it was $389 per tonne lower in the
first three months.
The price of white
pepper was $8,750 per tonne in 2012. Over the first three months, white
pepper fetched an average price of between $8,742-$8,874 per tonne or it is
between $450-500 lower than the world pepper price.
Do Ha
In addition, pepper
exporters also strongly increased the volume of pepper for export, thus
lowering export pepper prices.
VPA predicts that
pepper exports this year will fall 21 per cent compared to 2012.
Banned
vegetables resume export to EU market
Certain Vietnamese
vegetables have once again returned to the EU market, after a break of one
year, said Nguyen Xuan Hong, head of Plant Protection Department under the
Ministry of Agriculture and Rural Development.
According to Mr.
Hong, the department had instructed businesses to stop export of five
vegetables to the EU market, namely, basil, sweet pepper, celery, bitter
gourd and coriander, at the beginning of last year.
This move was made
after EU warned of total and permanent ban of the five above mentioned
vegetables if they failed to meet with international food safety standards.
Previously, EU
quarantine officials had uncovered three consignments that had violated these
standards.
As a result, the
Plant Protection Department had instructed businesses to temporarily stop
export of the five vegetables to the EU market till such time there was
better quality control.
The city’s per
capita income is expected to reach USD4,800 by 2015 and between 8,430 and
USD8,822 by the end of 2020 and climb to USD14,000 by 2025.
However, Vice
Chairman of the HCM City People’s Committee Hua Ngoc Thuan said, “HCM City’s
per capita income of USD4,800 was still much lower than that of many other
cities in Asia in 2010. The USD8,500 per capita income targeted by 2020 would
only be higher than the level of metropolitan
The 2025 target
would only be marginally higher than the 2010 figures for
The council
approved the income growth targets of 10-10.5% for the 2011- 2015 period set
in the master plan. The rate will be 9.5 – 10% per year in the 2016-2020
period and 8.5% - 9% per year in the 2021 – 2025.
The council urged
the municipal People’s Committee to give priority to improving the
administrative work, carrying out re-settlement projects, relocating people
living along rivers and canals, renovating run-down tenements, and providing
housing for the poor.
Land
grabbing accusations cause huge losses for rubber tycoon
Shares of Hoang Anh
Gia Lai Group (HAGL) dropped sharply May 14 after an NGO accused the firm of
land grabbing of in
The fall in share
prices, which also caused VND436.25 billion (USD20.83 million) in losses for
the company's chairman, Doan Nguyen Duc, was a result of a report published
by Global Witness on May 13. The report was entitled, "Rubber Barons:
How Vietnamese companies and international financiers are driving a land
grabbing crisis in
According to the
report, privately-owned HAGL Group and state-owned Vietnam Rubber Group (VRG)
acquired more than 200,000 hectares of land through a series of deals with
the Lao and Cambodian governments that lacked transparency. The report also
said that the deal was backed by several international financiers, resulting
in widespread devastation to the environment and livelihoods of locals.
Land was often sold
without residents' consent or even their knowledge and without compensation.
Families were forced off their land or expected to work for the rubber
plantation, although jobs were few and far between, the report alleged.
After news of the
accusation spread in
Global Witness has
even proposed that the Lao and Cambodian governments to stop HAGL’s
activities in their countries, hold investigations and prosecute any illegal
activities.
HAGL has turned to
rubber, hydropower and sugarcane projects after withdrawing investment from
real estate.
HAGL has released
an announcement to refute Global Witness’s accusations.
“This may be an
attempt by Global Witness to promote themselves and attract donations by
aiming their attacks at HAGL. A number of other countries are also investing
in this area, but they have picked us because we have done the best,"
Duc stated.
"The biggest
disadvantage for us is the misleading of our big shareholders. We are ready
to cooperate but Global Witness did not provide specific evidence for us to
respond to," Duc added.
Listed
firms switch to personal sources of capital
Despite lower
interest rates, many enterprises are still finding it hard to access bank
loans and are turning to personal channels to source capital to main their
business.
A report by Ninh
Van Bay Travel Real Estate Joint Stock Company showed that the company
borrowed over VND60 billion (USD2.86 million) as short-term loans from the
chairman of the company’s Board of Directors Le Xuan Hai and his family
during the first quarter of this year.
Even though the interest
rates have yet to be made public, the company’s financial expenses during the
quarter sharply fell to VND1.2 billion (USD57,292), compared to nearly VND12
billion (USD572,929) of the same period last year.
NVT’s business has
improved as it made a pre-tax profit of over VND10 billion (USD477,440) after
incurring losses for two consecutive years.
An audited report
by Hoang Quan Consulting Trading Service Real Estate Corporation in 2012
showed that the company borrowed approximately VND130 billion (USD6.2
million) from some members of the board of directors by the end of last year.
The company
explained that due to funding shortfall, the company borrowed VND77.8 billion
(USD3.71 million) from Truong Anh Tuan, the board’s chairman and VND49
billion (USD2.33 million) from Nguyen Thi Dieu Phuong, a member of the board.
The same situation
is recorded at several other listed companies such as THV, BAS and TAS.
Many other
companies have focused on raising capital from their staff, shareholders and
strategic investors instead of depending on bank loans in order to maintain
their operations.
This situation is a
result of a fact that amid economic difficulties and high rates of bad debts,
banks have become more hesitant in lending to enterprises.
While the deposit interest
rates have been rapidly cut to 7% per year, the process of lowering lending
interest rates seems to be rather slow as the cut depends of the capacity of
the banking sector.
Many said that it
would take a considerable time to see lending rates to fall from 10%-12% per
year.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Sáu, 17 tháng 5, 2013
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