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BUSINESS IN BRIEF 16/6
Revitalising
the property market
Local and foreign
experts discussed prospects for revitalizing the suffering property market at
a seminar in
Deputy Minister of
Planning and Investment Dang Huy Dong reiterated the government’s policy of
developing the real estate market as part and parcel of the country’s market
economy and an important investment channel.
To meet its
socio-economic development goals for 2013, the government has introduced a
number of solutions to stabilise the real estate market and secure its
future.
Despite the
efforts, the property market remains in a tight spot, Dong admitted.
Dau Tu (Vietnam
Investment Review) Editor-in-Chief Dr Nguyen Anh Tuan highlighted a range of
recent introduced policies designed to alleviate some of the difficulties
besetting the VND135,000 billion market.
Professor Nguyen
Mai, former deputy chairman of the State Committee for Cooperation and
Investment (SCCI), analysed the real estate market’s prospects in a report
from a macro-economic standpoint.
Cushman &
Wakefield General Manager Chris Brown also presented an overview of the
potential for market revival while Nguyen Viet Manh, head of the State Bank
of
Former Deputy
Minister of Natural Resources and Environment Dr Dang Hung Vo pointed out
some of the real estate market’s most troubling issues, including
surprisingly large inventories combined with bad commercial bank debts. He
said the demand for housing from low-income earners remains high but
availability is limited.
He also highlighted
the government’s recent VND30 trillion bailout package targeting real estate
businesses’ financial problems and helping low-income earners become house
owners while simultaneously relieving some of the market’s oversupply.
Construction
exhibition promotes brands
Vietbuild 2013, an
international exhibition on construction, building materials, real estate,
and interior and exterior design, officially opened at
The five-day event
was co-organised by the Ministry of Construction and the Vietbuild
Construction International Exhibition Organisation Corporation.
As many as 800
domestic and international enterprises from the
On display are a
wide range of construction materials, interior design models, smart home
systems, electronic equipment, sanitation solutions, and glass products.
The Viglacera
Corporation, Lotus Group, Hung Phu Thanh Aluminum Technology Co. Ltd, Phuc
Khang Construction and Investment Corporation, and Eurowindow Joint Stock
Company all number among the exhibition’s participants.
A series of
seminars relating to the building sector will also be held within the
framework of the exhibition.
Auto sales
up 42% in May
The Vietnam
Automobile Manufacturers’ Association (VAMA) has reported the domestic auto
industry sold nearly 9,731 units in May, up 11% on April and 42 percent more
than the same month in 2012.
The VAMA said the
registration fee reduction that entered into effect on April 1—cutting prices
from 15–20% of value to 10–15%—has stimulated sales.
The association
predicts that if authorities routinely apply the minimal 10% registration
fee, car sales this year could total 108,000, or 8,000 more than its previous
estimates.
More than 40,145
units were sold over the entire four-month period, a 10% increase on the same
period last year.
May’s auto sales
revealed a significant difference between Completely Knocked Down (CKD) units
and Completely Built Up (CBU) units.
CBU vehicle sales
saw a sharp 61% increase in May amounting to 2,253 units, while CKD vehicles
edged up only 1% to 7,478 units.
Some manufactures
are preparing to release their newest models at
Forum
boosts Vietnam-Indonesia trade links
He said both
business communities need to diversify trade and investment promotions and
expand cooperation in other areas out of their traditional ones, such as oil
and gas, mining, food processing and agriculture.
Indonesian
Ambassador to Vietnam Mayerfas noted this year’s forum, the second of its
kind, demonstrates both nations’ commitment to bolstering their ever
developing ties.
The two-day forum
attracted large numbers of businesses from both countries operating in
cement, pharmaceuticals, food, electronics, consumer products, agricultural
machinery, garments, tourism, and oil and gas.
It is a valuable
opportunity for participants to ensure they possess the most up-to-date and
accurate information on the business and investment environment in
As of May 2013,
Indonesian
investment focuses on the processing and manufacturing industries, hotel and
accommodation, health care, and social support services.
Foreign
investors keen on Vietnamese market
Many foreign
investors regard
Businesses from the
Prime Minister
Nguyen Tan Dung has encouraged foreign investment in long-term domestic
projects. His recent speech at the 2013 Shangri-La Dialogue in
PM Nguyen Tan Dung
addresses at Shangri-La Dialogue in
In an article on
June 7, the Korea Herald praised PM Dung as one of
A number of
international scholars also appreciated his efforts to build strategic trust
as a key to maintaining peace and promoting development in the region.
Dung took office in
the midst of the global economic crisis but managed well to maintain
The International
Monetary Fund’s (IMF) latest report on macroeconomic performance and policy
governance shows
According to the
IMF,
With the steady
flow of FDI capital into
After its recent
successful operation of a US$1.5 billion smartphone project in Bac Ninh
province, Samsung is investing an additional US$2 billion in a
smartphone and high-tech manufacturing complex in Thai Nguyen province.
LG Electronics is
also going ahead with a US$300 million electrical appliance and electronics
project in
Heasung Vina, a
camera producer for Samsung smartphones, is committed to spending US$36
billion on raising its annual capacity to 25 million units.
Doosun Industries is
expected to take part in Samsung’s support industry project soon after
receiving an investment license for a US$14 million high-tech printing plant
in
The Korean
Chamber of Commerce (Korcham) Chairman is confident more companies are eyeing
future Vietnam-based investment as Samsung’s and LG’s support industries
continue to develop.
Australia
to appoint agricultural advisor to Vietnam
Ludwig expressed
hope that Australian food producers and exporters will benefit from the
presence of agricultural experts in
He affirmed the
Australian government’s commitment to creating new opportunities for local
food producers and exporters to bring agricultural products to new market.
According to
Australia’s National Food Plan, about 5.6 million AUD (roughly US$6 million)
has been allocated for Australian agricultural experts in 15 countries,
including the US, Japan, Thailand, India and Indonesia.
Citing
delays, Kumho seeks tax refund
Kumho Asian Plaza
Saigon is demanding a refund of import tax paid for equipment imported to
serve its projects.
Kumho Asiana Plaza
Saigon, which is the owner of a high-end complex in Ho Chi Minh City, with an
InterContinental Hotel, an office building and a serviced apartment building,
has just sent document to the Ho Chi Minh City Department of Customs
proposing a refund of VND14.3 billion ($687,500) it paid for the goods.
“We see that
imported goods to serve our project qualify with import tax refund under
regulation of Article 113, Circular 194/2010/TT-BTC,” said the report.
Accordingly, pursuant to Clause 12, Article 113 under the circular, cases
eligible for tax refund consideration includes exports and imports for which
duty has been paid but are later eligible for tax exemption or refund under
decisions of competent state agencies may enjoy tax refund.
The proposal came
after the local department of customs’ conclusion that the company would no
longer enjoy investment incentives in line with its initial investment
certificate due to its changes in process of implementing the investment
project. According to the first investment certificate No.1601/GP issued in
1996, the company was exempted import tax for machines, equipments and
materials imported to serve its projects.
However, due to
negative impacts of the Asian economic crisis in 1998, the project had been
delayed, which was also reported to competent agencies.
In late 2006, the
investor continued carrying out the project. The Ho Chi Minh City People’s
Committee granted the investment certificate No.41104300338 to the company
which replaced its previous investment licences. The investor also increased
the investment capital up to $255 million in October 2007.
With a series of
changes in the process of implementing work, the project was extended. But,
customs agencies decided the firm would no longer benefit from incentives.
According to the local department of customs, when the investment certificate
was changed in 2006, the company did not carry out the project in accordance
with its investment licence’s process and also did not ask for an extension
of the free list and no longer merited the tax exemption.
After the customs
agency’s conclusion, the company frequently disputed the claim to the relevant
authority. But, while waiting for the Vietnamese authority to reconsider, the
company had to import goods to serve projects without import tax exemption
with worth of VND14.3 billion ($687,500).
However, the
company said according to the Ministry of Finance’s Document 10755/BTC-CST
dated July 28, 2009 and the State Audit’s Document 1041/KTNN-TH dated July
19, 2012, if the tax incentives under the investment certificate No.1601 was
higher than the level in the Ho Chi Minh City People’s Committee investment
certificate No.41104300338, the company would be allowed to continue enjoying
incentives in the first one.
Party General
Secretary Nguyen Phu Trong yesterday said that provinces along the
Chinese-Vietnamese border could be used to great economic advantage.
Trong said he hoped
the two sides would improve co-operation in all fields and build up a border
line of peace, friendship and development.
The Party leader
said this while receiving Peng Qinghua, a member of Central Committee of the
Communist Party of China (CPC), who is on an official visit to
Peng, who is also
secretary of the Guangxi Zhuang Autonomous Region's CPC Committee, said
Guangxi attached importance to developing the traditional and friendly
relations with
On the same day,
Prime Minister Nguyen Tan Dung met Peng. Dung said
He also suggested
that
He hoped Guangxi
would tightly co-ordinate with
Dung also said he
hoped
He said his trip
aimed at enhancing co-operative relations between Guangxi and
Dung highly
appreciated the working results between Peng and leaders of northern border
provinces of Lang Son and Quang Ninh.
About 300 business
people yesterday attended the Viet Nam-Guangxi Economic and Trade Cooperation
Conference in the capital.
Peng Qinghua, Party
Secretary of the Guangxi Zhuang Autonomous Region, spoke highly on the
bilateral economic relationship between
He emphasised the
importance of creating projects in the framework of "two corridors, one
economic belt" , especially infrastructure connectivity and co-operation
in industry, trade, finance and logistics.
(The two corridors
refer to the two strips of land on either side of the border and the one belt
of economic ties between peoples living there.)
She described
yesterday's event as a good chance for businesses to seek out new
opportunities for the further development of the co-operation between Guangxi
and
During the forum,
enterprises from
The eighth Guangxi
trade fair in
The four-day expo
showcases the socio-economic achievements and special products of Guangxi
Province, such as automobiles, machinery, electronic products, household
appliances, garment and textile products, pottery and porcelain, chemical
products and agricultural products.
Almost 110
well-known Guangxi and Vietnamese businesses have joined the event.
Lower steel
prices cut into earnings
Domestic steel
producers are rushing to slash prices, even cutting them lower than
production costs in a desperate bid to stimulate consumption. However, the
unhealthy competition has made them suffer losses.
Steel inventories
have been piling up, forcing steel makers to scale down production. Last month,
inventory grew from 320,000 tonnes to 350,000 tonnes, according to the Viet
Nam Steel Association (VSA).
Nguyen Tien Nghi,
VSA vice chairman, said the inventory growth was due to the frozen real
estate market. The lack of sales forced steel companies to reduce selling
prices to retain their market share, he said, but demand was nevertheless
continuing to shrink as people waited for a deeper price decrease.
Last year,
businesses reduced steel pipe prices by VND300,000-500,000 (US$14.30-23.80)
per tonne.
According to the
General Department of Customs, steel selling prices saw the highest decrease
in March.
The association
said input costs for steel production had not decreased while prices of other
goods were on the rise, pushing up production costs.
Therefore, steel
makers should not continue to lower their prices, it advised. Rather, they
should reduce costs as much as they could and bring down inventories to
ensure sustainable production and employment for workers.
Ishisaki Yoshitomo,
founder of Takako
If the stamping and
casting industry was developed successfully,
Yoshitomo added
that
Vinh said building
IZs would be simple, but attracting investment and maintaining operations
would be difficult.
The Vietnamese
Government always supported investors with infrastructure and legal
frameworks. Building supporting industrial zones, particularly stamping and
casting zones, had received special attention, he said.
For locations, he
suggested Thai Nguyen, Quang
Ministry
proposes loans for coffee producers
The Ministry of
Agriculture and Rural Development (MARD) is considering extending loans to
coffee exporters as the businesses battle losses brought about by a slump in
export prices.
The ministry said
both domestic and export coffee selling prices had fallen sharply in the last
three months, causing headaches for coffee firms which bought their coffee at
the previously higher prices.
Statistics from the
ministry showed the coffee price had fallen from VND46 million (US$2,190) to
around VND40 million ($1,905) per tonne in Tay Nguyen (
MARD said the
country exported only 109,000 tonnes last month, earning $226 million.
Total coffee
exports in the first five months of the year stood at 697,000 tonnes with a
turnover of $1.49 billion. This represented a 23.2 per cent decrease in
quantity and 21.7 per cent fall in value over the same period last year.
The ministry added
that farmers and coffee agencies in the country had temporarily limited
exports because of the low prices.
The Government
issued Resolution 02/2013/NQ-CP to provide solutions that would untie
businesses' difficulties in production, market and bad debts.
The resolution
extends terms from 12 to 36 months for export loans, however it only applies
to vegetable and seafood products, not coffee.
Nguyen Nam Hai,
general secretary of the Viet Nam Coffee Exporters Club said rumours had
circulated that financial investors had withdrawn from the world's three
biggest floors including Arabica Ice
Hai said this was
the reason coffee prices had continued to fall in recent months.
He added that
several companies which bought coffee at high prices had suffered losses
because of the current low export prices.
Truong Ngan Company
in southern Binh Duong Province's Di An Town was yet to repay debts totalling
roughly VND600 billion ($28.85 million) to banks, including Military Bank,
VIB, Oricombank, Agribank, Maritime Bank, Vietinbank and Techcombank.
Nguyen Xuan Binh,
the company's director said his company had operated as a coffee exporter
since 2005, exporting between 30,000 and 70,000 tonnes of coffee per year.
The company was
once prosperous and enjoyed good credit relations with the aforementioned
banks. However, in recent years, lagging coffee prices and high interest
lending rates had seriously affected the company's operating results and
driven it into insolvency, he added.
Central Highland
Dak Lak Province's Department of Industry and Trade said the locality had
seen 43 coffee businesses and agencies fall into bankruptcy with debts
totalling VND300 billion.
Dong Nai
favours high-tech FDI projects
Southern
The province has
also stopped granting licences to projects suspected of causing water pollution.
The revised
strategy comes after the provincial Department of Planning and Investment
released figures showing
According to the
department, 15 of the 34 new projects in the province are backed by Japanese
investment, with combined registered capital of $162 million, accounting for
60 per cent of the total registered capital.
In light of the
tough economic climate, the province is paying special attention to
administrative reforms and training to improve the quality of its labour
force. In addition, it is investing in infrastructure and services to serve
both workers and investors.
The province also
organises regular meetings between businesses and managing agencies to tackle
difficulties as quickly as possible.
The leading foreign
investors in the province include the
Local
seafood exporters see brighter signs in Q2
Domestic seafood
exporters expected to achieve good business results in the second quarter of
this year, according to experts.
Seafood exports in
the second quarter have seen signs of a recovery thanks to high demand for
shrimp and tra fish.
Duong Ngoc Minh,
chairman of Hung Vuong Joint Stock Company, said demand for seafood products
would increase in the second quarter and export prices were expected to
increase from the first quarter.
Agifish, a subsidiary
of Hung Vuong Co, was scheduled to ship 10,000 tonnes of tra fillets worth
US$36 million to the
Tran Van Hung,
chairman and general director of Hung Ca Limited Company, said export prices
of tra fillet had increased by 3-5 US cent per kilo. The company had signed
contracts to export tra fillets at $2.5-3.6 over the next three years.
Tran Van Pham,
general director of Soc Trang Seafood Joint Stock Company, said production
and exports had increased since mid-April against the same period last year,
and his company had signed new contracts with $1-1.5 per kilo of shrimp.
The Viet Nam
Association of Seafood Exporters and Producers (VASEP) said the recovery of
seafood exports was due to high appreciation for the quality of Vietnamese
seafood exports from major markets, including the EU, the US, Japan, South
Korea and Russia.
However, many local
experts said the domestic market continued to experience difficulties from a
lack of supply as well as technical barriers and export tariffs.
Seafood exports
were expected to reach $6.5 billion this year, 5 per cent higher than 2012,
said VASEP.
Shrimp exports were
likely to reach $2.2 billion, equal to that of last year, while tra fish
exports were predicted to bring in $1.9 billion, up 5.5 per cent.
Exports of other
seafood products were expected to rise by 10 per cent to $2.4 billion.
The association
said that exports of seafood to major markets were expected to recover in the
second quarter of this year after a drop of 8 per cent in turnover in the
first three months.
Ratio of
VietGap vegetables increase in Co.opMart
The Department of
Industry and Trade in
Initially, Saigon
Co.opMart has signed contracts with 16 companies, of which nine are in
Nguyen Thi Hanh,
CEO of Saigon Co.opMart, shared that currently Co.opMart supermarkets
consumed 120 tons of vegetables a day. In the near future, vegetables under
VietGap standards will account for 60 percent of the total amount of
vegetables sold via the network. Meanwhile, at Co.opMart supermarkets in the
City, VietGap vegetables now account for more than 90 percent.
VietGap vegetables
sold by Saigon Co.opMart will be priced 10-15 percent lower than in markets as
the company buys vegetables sans middle men and is part of the price
subsidized program.
The Department of
Industry and Trade said that it will continue to view other supermarket
networks to carry out their commitment to support and encourage firms to concentrate
on producing safe vegetables for consumer demand in the City. In addition,
the City will also introduce via pilot schemes a food-safety market model at
Ben Thanh and Hoc Mon wholesale markets.
Prices fall
in peak fruit season in Mekong Delta
Local farmers in
the Mekong Delta are in despair as price of fruits is falling drastically
even as they are entering peak harvest season.
Fruit prices have
tumbled during peak harvest season in the Mekong Delta (Photo: SGGP)
Doan Ngo Festival,
on the fifth day of the fifth lunar month, is also peak fruit harvest time in
the Mekong Delta. However, fruit prices have tumbled in several provinces
like Ben Tre, Vinh Long, Tien Giang, Hau Giang, Can Tho, Soc Trang.
Cat
According to Tran
Van Nam, a trader in South Can Tho Market, the price was VND23,000-30,000 a
kilogram in early March.
Huynh Van Tan, a
farmer from Tinh Thoi Commune in Cao Lanh City of Dong Thap Province, said
that several farmers have lost interest in harvesting their fully ripe
mangoes from the trees, choosing to let the fruit rot in the orchard.
Nam Roi grapefruits
are also getting similar treatment in Vinh Long and
Nguyen Van Khanh, a
farmer in Phu Huu Commune of Chau Thanh District in
Mangosteen price
has reduced by VND8,000-10,000 to fetch only VND20,000-25,000 a kilogram in
Chau Thanh District in
Durian price has
fallen by an average of VND3,000-5,000 a kilogram compared to the beginning
of June.
Retail price of
rambutan is only VND5,000-7,000 a kilogram now, VND10,000-13,000 lower than
in the beginning of May in
Blue dragon fruits
lie in huge piles and priced at VND3,000-4,000 a kilogram alongside roads
leading to Can Tho City.
Low prices and
unstable demand has also put orchards under the Global Good Agricultural
Practice (Global Gap) Standards at risk of bankruptcy.
Careful
deliberation of hydropower projects in Dong Nai province
The Department of
Industry and Trade in
In a report sent to
the Chairman of the City People’s Committee, the Department also suggested
that the HCMC Union of Science and Technology Association work with
scientists to survey, collect data, and give expert and objective opinion on
the two projects.
The report also
summed up opinions of various departments, organizations and scientists about
Dong Nai 6 and 6A Hydropower Projects on
The two plants will
supply annually about 929 million kWh of electricity, however the outcome of
this benefit may turn out to have other negative impacts.
The reservoir capacity
of the two plants is more than 200 million cubic meters, which will not help
much in coping with drought and prevention of flooding in the lower reaches
of the
Construction of
these two plants might affect the ecosystem of the
Scientists are of
the view that the two plants will also greatly affect the ecosystem of
Because of all such
contradictory and controversial opinions on the two projects, the impact of
the plants should be seen and assessed more accurately, objectively and based
on scientific evidence.
Bank staff
turn to lecturing
More banking staff
are turning to work as lecturers at colleges and universities.
A staff member from
a HCM City-based university said, “The number of applicants for lecturing has
considerably increased over the past two years. Last year, a candidate had to
compete with up to 10 people, compared to just 2-3 people previously. The
number has doubled this year, particularly in banking and finance.”
The number of
candidates who has applied for other universities has also on the rise. The
Administration Faculty of the
Minh Hong, a
finance master degree holder said as banks were facing difficulties she had
turned to academia. “I followed some of my friends to apply as a teacher.
But, it is quite difficult to be chosen because of the high competition. I
have applied to several colleges and universities, but have not yet been
selected.”
Thanh Lam, a
probationary lecturer at a university said, “After completing a masters in
finance, I worked at a bank for 4-5 years, but now, due to the economic
difficulties, we have been assigned to fulfil revenue targets, while our
incomes decreased. Therefore, as soon as I finished the masters, I decided to
turn to work as a teacher.”
Thuy, an accountant
at a telecommunications firm turned to lecturing at a college in
Local
seafood exporters see brighter signs in Q2
Domestic seafood
exporters expected to achieve good business results in the second quarter of
this year, according to experts.
Workers process tra
fish for export at Go Dang Seafood JSC in southern
Seafood exports in
the second quarter have seen signs of a recovery thanks to high demand for
shrimp and tra fish.
Duong Ngoc Minh,
chairman of Hung Vuong Joint Stock Company, said demand for seafood products
would increase in the second quarter and export prices were expected to
increase from the first quarter.
Agifish, a
subsidiary of Hung Vuong Co, was scheduled to ship 10,000 tonnes of tra
fillets worth US$36 million to the
Tran Van Hung,
chairman and general director of Hung Ca Limited Company, said export prices
of tra fillet had increased by 3-5 US cent per kilo. The company had signed
contracts to export tra fillets at $2.5-3.6 over the next three years.
Tran Van Pham,
general director of Soc Trang Seafood Joint Stock Company, said production
and exports had increased since mid-April against the same period last year,
and his company had signed new contracts with $1-1.5 per kilo of shrimp.
The Vietnam
Association of Seafood Exporters and Producers (VASEP) said the recovery of
seafood exports was due to high appreciation for the quality of Vietnamese
seafood exports from major markets, including the EU, the US, Japan, South
Korea and Russia.
However, many local
experts said the domestic market continued to experience difficulties from a
lack of supply as well as technical barriers and export tariffs.
Seafood exports
were expected to reach $6.5 billion this year, 5 per cent higher than 2012,
said VASEP.
Shrimp exports were
likely to reach $2.2 billion, equal to that of last year, while tra fish
exports were predicted to bring in $1.9 billion, up 5.5 per cent.
Exports of other
seafood products were expected to rise by 10 per cent to $2.4 billion.
The association
said that exports of seafood to major markets were expected to recover in the
second quarter of this year after a drop of 8 per cent in turnover in the
first three months.
Ho Tram
Strip to open in July
Ho Tram Project
Company (HTP), an affiliate of Asian Coast Development (
The first part of
the first phase of The Grand-Ho Tram Strip includes 541 five-star rooms,
gaming facilities, meeting and convention space, ten bars and restaurants, a
spa, children’s areas, three swimming pools and luxury retail shops.
The property, which
also includes extensive entertainment space and one of the largest function
centers in
In October, 2012,
HTP broke ground on the second part of the first phase of The Grand-Ho Tram
Strip, which will include a second tower of 559 rooms and additional leisure
facilities. The Bluffs, a golf course designed by Greg Norman, is also under
construction as part of the Ho Tram Strip.
The project earlier
was only allowed to run a casino with 90 gambling tables and 1,000 slot
machines when the entire section A is completed. The remaining 90 gambling
tables and 1,000 slot machines will be placed at its section B.
However, ACDL in
April obtained the amended investment certificate to operate casinos, even
when only a half of works of the section A had been completed.
Speaking to the
Daily via e-mails at that time, an ACDL leader said that the amended certificate
includes a gaming entitlement of 180 live tables and 2,000 electronic gaming
machines split equally between the two first integrated resorts.
ACDL is an
international development company specializing in integrated resort
destinations. Through its wholly-owned subsidiary HTP, ACDL is the developer
of the Ho Tram Strip, a group of integrated resorts to be located on more
than 164 hectares of land and two kilometers of pristine beach in Ho Tram.
The project has a registered capital of US$4.2 billion.
The first phase
will include a 1,100-room five-star hotel, a world-class entertainment
facility, restaurants, high-tech meeting space, an exclusive VIP area, a
championship golf course, as well as a variety of beach-front recreation
activities. The phase scheduled to open in 2013 will be the initial component
of the largest integrated resort complex in
TPP to
expose nation to new challenges
The Trans-Pacific
Strategic Economic Partnership Agreement (TPP) will bring about
opportunities for
Speaking at the TPP
seminar organized by the Can Tho branch of the Vietnam Chamber of Commerce
and Industry (VCCI) last Friday, Thoi Ngoc Doan Thuy from Ba Ria-Vung Tau
Province’s Department of Industry and Trade said TPP rules prohibit export
subsidy and re-subsidy under any form.
Therefore, compared
to regulations of the World Trade Organization (WTO), TPP rules will put
trade ties between
Secondly,
Concerning ISDS,
Pham Duy Nghia, head of the faculty of law of the HCMC University of
Economics, took an example of an enterprise from a TPP member country in the
Mekong Delta city of
Nghia told the
Daily on the sidelines of the seminar that TPP would bring about lower
tariffs and more goods export opportunities, create jobs and raise employees’
incomes. However, export markets will also set up strict requirements while
To help local firms
cope with TPP challenges, Nghia said enterprises should monitor TPP
negotiations and be aware of their future impacts on the local market.
Enterprises must
identify export markets, standards they have to meet and consider using
product components imported from TPP countries to enjoy the 0% tax rate,
Nghia said.
Other experts at
the seminar also said that local enterprises may find it hard to benefit from
this 0% tariff as they have to meet high requirements for origins of goods,
meaning materials must be imported from TPP member countries only.
However, the nation
now relies heavily on materials imported from non-TPP countries. For example,
garment and textile firms primarily import materials from
There have been 17
rounds of TPP negotiations with the participation of 11 nations:
Flashes of
action in a slow market
Local investors are
venturing into real estate project acquisition despite a moribund
economy.
The biggest-ever
deal in the real estate market was announced last week, with the transfer of
Ho Chi Minh City’s Vincom A Centre from Vingroup to Vietnam Infrastructure
and Property Development Group (VIPD) for VND9,823 billion ($470 million).
Vingroup claimed it
reaped an estimated profit of VND4,300 billion ($205 million) from the
transfer.
The deal was
carried out in the form that Vingroup transferred its entire stake in Future
Investment and Trading Company, a Vingroup member.
Vincom Centre A Ho
Chi Minh City represents the most luxurious, high-end class of properties in
a prime location in District 1, featuring a 16,000 square metres of shopping
centre and a 300-room hotel.
Another concluded
deal is the local firm Hanel taking over a 70 per cent stake in the five-star
hotel, office and serviced apartment complex in
Hanel had beaten
another Korean cheabol, Lotte, to win this deal.
Many other deals
have been transacted in recent years that show the strength of domestic
investors in real estate industry.
Outstanding
transactions include the domestic BRG acquiring the Hilton Hanoi Opera - one
of the most famous five-star hotels in Hanoi, Sovico Holding buying Furama
Resort Danang from a Hong Kong group Lai Sun and Thien Minh Tourism Company
buying the Victoria chain of resorts and hotels.
The mergers and
acquisitions (M&A) in the real estate market have been increasing,
especially with many companies narrowing their portfolios by selling non-core
projects, to concentrate on core and important projects.
According to
investment consulting company Stoxplus, real estate was among the hottest
fields in M&A last year, with 29 deals in total of $400 million.
Aside from the
Vingroup case, Dat Xanh Group had six M&A cases in which it took over
other projects at total value of $65 million.
Meanwhile,
VinaCapital is offering the sale of its 50 per cent stake in the 365-room
Sofitel Legend Metropole Hanoi and Vinaconex is finding partners to sell its
50 per cent stake in the An Khanh joint venture which is developing Splendora
urban project in
Neil MacGregor,
managing director of Savills
“There are a number
of options open to developers requiring capital to move their projects
forward, none of which necessarily require financing from banks, if the right
partner can be found,” MacGregor said.
Although facing a
number of challenges such as an immature legal framework, low market
transparency, complicated licencing procedures and differences in price
expectations, MacGregor believed that the next few years would see the
conclusion of a rising number of M&A deals.
“Whilst the lack of
bank finance is troublesome for many in the real estate industry, it also
creates an unprecedented period of opportunity for others, particularly those
with cash,” he added.
Tools to
recalibrate economy
Work is underway to
lift the bad debt cloud from the economy.
The Vietnam Asset
Management Company (VAMC), the main weapon to attack debts, is in place with
VND500 billion ($23.8 million) in chartered capital at its disposal, the VAMC
envisages tackling nearly VND100 trillion ($4.7 billion) in bad debts.
Through issuing bonds for debt purchases, the VAMC seeks to address bad debt
dilemma without using the state budget.
Senior financial
expert Dr. Nguyen Tri Hieu, however, warned that to tackle such a huge bad
debt amount, the VAMC would need to use big financial leveraging which was
risky.
“Assuming that the
VAMC bought VND50 trillion ($2.38 billion) worth of bad debts, it would need
to pay commercial banks special bonds of the same value. Banks then take
these bonds to the State Bank asking for refinancing with 50 per cent
discount of the bond value to get back VND25 trillion ($1.2 billion). This
means the VAMC could have around $1.2 billion in total asset value versus
$23.8 million in chartered capital. VAMC’s financial leverage rate by that
time will be 50/1, too perilous for a financial institution,” Hieu said.
In this case,
VAMC’s chartered capital would even be contracted if one commercial bank
dropped in its debt payment obligation.
In this respect, a
commercial bank executive assumed VAMC going bankrupt was unlikely, but this
would make banks think twice before ‘selling’ their bad debts for bonds.
At the Vietnam
Business Forum in early June 2013, VBF co-chair Alain Cany said VAMC’s setup
was a positive signal, but settling banks’ bad debts could not only resort to
a single solution.
Economic experts
claimed the VAMC could only tackle one-third of the total bad debts, while
the government was set to fully deal with current bad debts by 2015.
Under the
premier-approved project on tackling bad debts, not only banks, all
ministries and government agencies must get involved in the push. The premier
also required credit entities to collaborate with VAMC in addressing bad
debts.
In addition, credit
organisations and borrowers should incur major responsibilities for the
arising bad debts and sharing losses in dealing with bad debts.
Meanwhile, state
budget shall be on the hook for bad debts stemming from lending to priority
subjects or to those under government assignments.
The government
reportedly would resort to using debt instruments in dealing with bad debts.
The prime minister has assigned the Ministry of Finance to map out plans on
debt instrument issuances to help the government effectively tackle various
debt issues.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 15 tháng 6, 2013
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