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BUSINESS IN BRIEF 23/6
Inter-bank
interest rates stay low
Inter-bank interest
rates for
The inter-bank
market has been most quiet since early this year owing to abundant supply and
slackened demand, said an analyst of BIDV.
The trading volume
in the market reached an estimated VND12 trillion a session last week, with
interest rates staying at 1-1.2% per annum for overnight to one-week terms,
2% annually for one-month term and 4.5% annually for three-month term.
The State Bank of
Vietnam (SBV) continued its net capital withdrawal via open market operations
(OMO) last week, mainly via gold auctions and foreign currency selling. The
monetary authority already made a net withdrawal of VND9 trillion via OMO,
Treasury notes, gold auctions and foreign currency purchase last week.
In the meantime,
deposit growth of the banking industry continued to rise. Credit growth was
recorded at 2.98% in January through April while deposit growth picked up
6.59% versus the end of last year, according to the latest figures of SBV.
Capital flows that
are seen stuck in the banking industry have led to huge supply. Coupons of
government bonds, meanwhile, have plunged by nearly 1.5 percentage points for
over one month.
With strong
liquidity, local banks have mainly invested in other assets, especially
government bonds. Several banks investing in bonds have benefited from the
big gap between bond yields and inter-bank interest rates although the volume
they are trading is small.
Monetary market
reports of commercial banks show credit activities are still choked off and
that credit growth sees no foundation to reach this year’s target of 12% as
the VND30-trillion supporting package for the housing market has barely been
disbursed.
Overall, there have
been no factors that can affect the
Customs
formality highly lamentable
Enterprises in the
field of technology have to spend much time, effort and money on completing
procedures for material imports and exports of high-tech products, and it was
reported on Wednesday that in one typical case, an enterprise has to
accomplish tons of paperwork.
Tran Tien Phat,
managing director of Datalogic Scanning Vietnam Company, showcased figures
stunning to all participants in a seminar on supporting high-tech product
exports in HCMC on Wednesday.
Phat said that it
takes the enterprise 18,000 sheets of A4 paper each month for completing
procedures related to clearance, which includes receiving, checking and
making tax exemption and tax rebate procedures. These procedures are made for
exports of the company’s bar code scanners and peripheral devices.
Phat said his
enterprise has met many annoying export procedures although Datalogic is a
high-tech company that enjoys many incentives.
Given the Circular
194/2010-TT-BTC, enterprises have to make clearance procedures within 45 days
after making export declaration papers. During this time length, Datalogic
has yet to get proof of payment because payment contract between the company
and its customer usually lasts 180 days.
As a result,
Datalogic has to supplement many papers to complete procedures. Besides, as
90% of its import declaration forms require many times of tax rebate, the
company has to make tax payment statements for each of these forms.
Phat said that each
month his has to make 200 sets of export declaration documents, 2,000 sets of
import declaration forms with five papers each, 1,500 tax payment lists and
other papers. In total, Datalogic spends an unimaginable 18,300 sheets of A4
paper a month for tax declaration procedures.
Other high-tech
firms in the Saigon Hi-tech Park (SHTP) such as Intel, Air Liquide, FPT
Software, Nanogen, Kyocera and Jabil also bemoaned complicated import and
export procedures.
If Intel Company
wants to buy chemical from a domestic firm, this local supplier has to ask
for a license to import chemical into a bonded warehouse. Then, Intel has to
get a license to buy chemical and carry out import procedures. This process
is time-consuming.
Le Bich Loan,
deputy head of SHTP management board, said that many enterprises in the
hi-tech park are facing difficulties in export and import procedures.
Nguyen Duc Nga, head
of management and supervision unit of the General Department of Customs, said
that the troublesome procedures will be eliminated in the future but did not
tell the exact time for this move.
HPT,
Microsoft clinch strategic deal
Local information
technology firm HPT on Tuesday cut a deal with Microsoft to become the sole
strategic partner of the giant software maker in the country in the areas of
software and IT services for enterprises.
As per the deal
known as National System Integrators agreement, Microsoft will serve as the
consultant and strategic technology partner for HPT in developing software
solutions and services for enterprises.
HPT will seek to
develop Microsoft technology-based solutions, such as Customer Relationship
Management, Unified Communications and Data Warehousing products for
corporate users.
Vu Minh Tri,
general director of Microsoft
Falling
demand forces Vinacomin to ease coal production
The Vietnam
National Coal and Mineral Industries Group (Vinacomin) plans to reduce coal
production and consumption from 43 million to 39 million tonnes this year,
says Nguyen Van Bien, Vinacomin’s deputy general director.
Bien said that the
cutback, which is roughly the same as last year, was due to a decrease in the
demand for coal on both the domestic and overseas markets.
He added that in
the first five months of this year, coal consumption was 17.7 million tonnes,
approximately 41 percent of the yearly target.
The turnover of
39.6 trillion VND (1.9 billion USD), represented a 5 percent reduction
compared to the same period last year.
Several industries
have reduced their coal consumption, except for the power sector which has
already used 7.08 million tones for generating electricity, an increase of
6.1 percent against the corresponding period last year.
The amount of coal
used by the cement sector was 2.14 million tones, a decrease of 16.6 percent
over the same period last year.
The group’s current
coal stockpiles have risen to 7.1 million tonnes due to the sharp decrease in
consumption.
The decrease is due
to the worldwide economic downturn as well as the emergence of new energy
sources, many of them renewable, being used by
In addition, many
countries that have their own coal reserves have increased production for
their own domestic markets. He said that coal prices in the global market had
dropped sharply, which has had adverse effect on the group’s exports.
In the first six
months of this year, the group suffered losses of 1.8 trillion VND (8.6
million USD) as the price of coal sold to the Electricity of Vietnam has only
covered 85-87 percent of production costs.
It has also been
seeking approval from the Government to apply different levels of tax to coal
exports instead of the current 10 percent.-
Fertiliser
exports to
With a vast acreage
of farmland and forest,
The figure is
expected to grow when the Myanmar Government is seeking to raise the
country’s agricultural output, he said, adding that
However, he noted,
exports to the market have been hindered by a range of problems relating to
international payments which have been conducted through Hong Kong or
According to Duong,
domestic fertiliser output is forecast to reach 2.3 million tonnes per year
while the yearly demand is only 300,000 tonnes.
Therefore, since
2012, DPM has carried out an array of activities to seek markets for
fertiliser and
He also revealed
that the Myanmar Ministry of National Planning and Economic Development’s
Business and Investment Management Department granted a licence to DPM to set
up its representative office in the country.
The office will
promote
In the first half
of this year, DPM produced about 438,000 tonnes of nitrogenous fertiliser,
ensuring stable supplies for this year’s winter-spring and summer-autumn
crops.-
Export
floor prices go against competition law
Setting export
floor prices for rice and other items is an anticompetitive practice, said
Nguyen Phuong
Due to not fully
comprehending domestic and international competition laws, a number of
industries in
Citing the export
floor prices for rice as an example, he deemed this as an anticompetitive
practice, leading to possible lawsuits against
Currently, the
Vietnam Food Association (VFA) determines and announces rice export floor
prices for each period. On this basis, rice traders sign export contracts and
register such contracts.
A number of State
agencies have recently provided enterprises with tax incentives and
guidelines. Foreign competition agencies have gathered information on the
incentives for local businesses, such as preferential interest rates and
natural resource tax exemptions, putting Vietnamese exporters at a
disadvantage.
Besides, for
limited knowledge of the competition law, the law on consumer protection and
trade remedies (anti-dumping, anti-subsidy, self-defense), there are cases in
which the plaintiffs eventually become the defendants.
Therefore,
The Vietnam
Competition Authority recently organized a workshop to publish a report on
competitiveness evaluation of ten sectors. Most of the participants in the
event were specialists and very few of them were entrepreneurs, he said.
Local food
and beverage exports to
The failure was
partly due to not understanding the Russian market, explained the Viet Nam
Trade Promotion Agency (Vietrade).
Vietrade held a
conference yesterday in Ha Noi to provide information and more details on
According to La Van
Chau, Viet Nam's former commercial attache to Russia, because the climate of
Russia is not suitable for growing many crops, the country with a population
of around 145 million, has a huge demand for imported fruit and vegetables as
well as beverages including coffee and tea.
Although
He pointed out that
seafood exports to Russia hit a record high of US$205 million in 2005 but
fell to about $100 million in 2011, fruit from $34 million in 2009 to $28
million in 2012 and rice from $37 million to only $7 million.
However, Viet Nam's
total export turnover to Russia has increased nearly four folds since 2009
but the export of agricultural, forestry and seafood products has only seen a
rise of 23 per cent, he said, adding that the export of these products has
fallen by more than 50 per cent compared to before 2009 and by 20 per cent
from 2012.
Chau said that
taking part in trade fairs and exhibitions in Moscow, which has accounted for
57.7 per cent of Russia's import volume, was one way for enterprises to
penetrate the market together with accessing retailers and supermarket giants
such as the X5 Retail Group, Auchan Group, Rollton Group, Metro Cash &
Carry Russia Ltd and the Perecrestok chain.
Once products have
reached
Chu Xuan Kien,
director of the Ha Noi Trade Corporation, says that businesses should pay
more attention to packaging their agricultural products to preserve product
quality when exporting to those markets, due to long transportation times,
which can be up to 75 days in wintertime.
According to Duong
Hoang Minh, Deputy Director for the European Market at the Ministry of
Industry and Trade, the free trade agreement (FTA) between the Customs Union
of Belarus,
Trade with
The department's
figures show that two-way trade between
Port
project all at sea: Vinalines to pull out
The unfinished Van
Phong International Port has suffered a major blow after the Van Phong
Economic Zone Management Board decided to block investment in the project
from Viet Nam National Shipping Lines (Vinalines).
Within the next six
to 12 months, Vinalines must end its involvement in the sluggish project,
Hoang Dinh Phi, deputy chief of the EZ management board has announced. He
added that the board was actively seeking other domestic and foreign
investors to step in and take over the project.
Work on the US$3.6
billion port began in late 2009 in
Vinalines hoped
that the port, which was slated for completion in 2020, would one day become
a trade hub of
However, with only
five months to go before the deadline for the first phase of construction,
which would enable the port to handle container ships of up to 9,000TEU, the
building site remains deserted.
Construction had
been suspended due to geological concerns, according to a representative from
Vinalines.
Other obstacles
include a difficulty for the State giant, which had to be bailed out in 2011
following years of financial mismanagement, to mobilise enough capital for
the huge project.
The Ministry of
Transport proposed that the company end its association with the port as far
back as September 2012, and although the Government approved this, it is only
now that their licence has been officially revoked.
Other projects to
lose their investment licences include an oil and gas services complex
developed by the Sao Mai – Ben Dinh Petroleum Investment Joint Stock Company,
Phi said.
Licenced in May
2011, the complex had a total registered capital of $1.35 billion and was
expected to be finished in 2017.
However, the
investor – a subsidiary of PetroVietnam – was yet to start any work on the
project due to its failure to mobilise the necessary capital.
Firms get
right to defer tax payments
Enterprises would
be allowed to pay their tax debts by installments from the beginning of next
month, under a new proviso intended to assist firms in weathering the
economic storm.
The concession is
set to be added to the amended law of tax management, due to come into force
on July 1.
Under the caveat,
deferred tax debts must be paid off within 12 months. Enterprises would then
have to pay late payment fines at 0.05 per cent of the debt per day.
Enterprises must
obtain a guarantee from credit institutions to qualify for the deferred
payment. Under the guarantee, credit institutions must confer with tax
agencies about the ability of firms to pay the taxes and fines for late
payment in case enterprises do not fulfil their obligations.
If enterprises
failed to pay tax debts according to the registered schedule, after five days
of the deadline passing, guarantee institutions would be responsible for
paying enterprises' tax debts and fines for late payment.
However, at a
conference held last week by the General Department of Taxation, enterprises
said the rate of 0.05 per cent per day for late payment, equivalent to 18 per
cent per year, was high in comparison with the current loan interest rate of
12-13 per cent per year.
Enterprises also
said that it would be difficult for them to gain such guarantees from credit
institutions for deferred payment.
The 15th Vietnam
Fisheries International Exhibition (Vietfish) will be held at the Saigon
Exhibition and Convention Centre (SECC) in
It is expected to
attract 163 domestic businesses and foreign partners, including those from
the Canadian Trade Office, the Swedish Trade Office, the Thai Frozen Food
Association (TFFA), Shanghai Seafood Show, Singaporean Food Industry
Magazine, Asian Aquaculture Network Magazine, Global GAP, the Global
Aquaculture Alliance (GAA) and CENTEC.
Vietfish is an
annual event, aimed at promoting
It will provide a
good chance for participants to share business experience and evaluate
consumer market trends.
During the event,
there will be exchanges between Vietnamese managers and businesspeople and
Japanese seafood importers, in addition to seminars and conferences on hot
issues related to development of the fisheries sectors in
Vietfish is
considered one of the leading fisheries fairs in the region and the world.
Local
beverage businesses gaining ground
The beverage
industry in
Major businesses
like Tan Hiep Phat, Pepsi and Coca-Cola claim to be expanding their market
share in spite of fierce competition.
The Vietnam
Beer-Alcohol-Beverage Association (VBA) estimates that each Vietnamese
consumes 23 litres per year, less than half compared to its neighbour the
Not many Vietnamese
consumers can understand Vedan’s decision to join the beverage market by
introducing its Thien Tra Vedan lemonade soft drink.
Although there are
similar products on sale, Vedan’s move indicates that the market segment for
soft drinks is still developing well.
The VBA says that
over the past decade, the soft drinks market in
As consumers are
interested in natural drinks, like green tea and herbal tea, Tan Hiep Phat
and other local investors have quickly gained the upper hand.
Tan Hiep Phat began
in 2001 as a small firm producing an energy drink called Number One, but is
able to compete fiercely against foreign producers.
The company has
recently built two new factories, one in the central province of Quang
Tan Hiep Phat CEO
and Chairman, Tran Qui Thanh, said by opening these factories the group could
save transport costs from Binh Duong to the central and northern regions,
reduce its retail prices and better serve its customers better.
Chairman of the
Hanoi Supermarket Association Vu Vinh Phu is optimistic about the successful
building of local product brands to compete with those of foreign producers.
Phu says Tan Hiep
Phat is a rare group in Vietnam, with a wide range of high-quality, healthful
products, including Dr. Thanh herbal tea, Tra Xanh Khong Do green tea and
Number One energy drink which are being sought after by consumers.
He insists that
businesses should apply cutting-edge technology in their production as more
than 52 percent of their machines and equipment are outdated.
As a paradoxical
fact, only 2 percent of beverage producers utilise high-tech methods, much lower
than those in
Tan Hiep Phat is
most credited as being in the vanguard of applying the most modern European
technology known as “aseptic technique’ to meet food safety standards and
maintain all vitamins and original taste of the products.
The company’s
newest health drink, Number One Vitamin, which provides vitamins B and C,
taurin and inositol, has proved an instant hit in the beverage market.
Foreign
companies join manufacturing trade show
More than 300
exhibitors from 21 countries and territories will showcase their latest
products and services at
The expo, held from
July 2 – 5 at the Sai Gon Exhibition&Convention Center, is organised by
Singapore Exhibition Services Pte Ltd and VCCI Exhibition Service Co Ltd.
Eleven countries
including
It will focus on
precision engineering, machine tools and metalworking, organisers said.
They said the
international component of MTA Viet Nam 2013 is very high at 81 per cent.
Major brand names in many areas will be present, they added.
For instance, the
world's top five machine tool exporting countries and regions –
William Lim,
Project Director for MTA Viet Nam 2013, said the increasing number of
international corporations that have set up manufacturing facilities in
As a reflection of
the growing presence of Japanese manufacturers in
The Japanese
pavilion this year comprises 22 companies that are mainly small to medium-sized
enterprises producing equipment like hand tools, electronic components,
gears, measuring instruments, and machine tools.
Kazuhiko Osato,
Director of JETRO (Japan External Trade Organization) HCM City office, said,
"This is the 7th time we are exhibiting at the MTA series in Viet Nam,
and it is our biggest group of exhibitors to date. The increase of Japanese
manufacturers in
MTA Viet Nam 2013
will also feature a series of exciting competitions and seminars, including
Viet Nam Welding Skills,
Banks must
do more to fight money laundering
Banks show little
interest in training their staff to deal with money laundering and should pay
more attention to combating the flow of dirty money, experts warn.
IT plays a
significant role in the task, but banks' technology staff are not properly
briefed on anti-money laundering and are thus confused about choosing the
right software for this, Nguyen Van Ngoc, head of the State Bank of
Speaking at a
seminar on money laundering held by the Viet Nam Banking Association and IT
consulting firm Komtek in
Fewer than 10 banks
in
Credit institutions
should not get mixed up about the purpose of their IT solutions, whether for
AML or credit ratings, he said.
Only IT solutions
can help screen, identify, and filter their numerous customers, recognizing
those with potential risk of AML and featured on black lists, including
large-value and suspicious transactions.
Saito Masaru of
Japanese IT solution provider TIS, spoke about the duties of financial
institutions in his country.
"They have to
verify customers' identity at the time of transaction, purpose of the
transaction, details of customers' occupation/business, beneficial owners,
assets/income," he said.
They then preserve
verification/transaction records and take measures to ensure the accuracy of
the verification at the time of transaction, he said.
Banks in
Shon Heung Woo of
South Korean IT solutions provider GTOne, said all banks and medium and large
insurance, securities, and credit card companies in S.Korea deploy AML
systems.
Identification and
AML systems are advertised aggressively to the public in banks.
In case of large
deposits or withdrawals, customers are required to explain the purpose of the
funds, he said.
Any refusal is reported
in suspicious transaction reports, he added.
Thaco to
produce truck engines
Truong Hai
Automobile company (Thaco) planned to produce 20,000 diesel engines for
trucks and buses from next year, the company's deputy general director Pham
Van Tai confirmed yesterday.
The engine
manufacturing plant, which began construction last year with an investment of
US$185.5 million, would provide engines meeting Euro 2, Euro 3 Emission
Standard.
Operation of the
plant and the use of 55 per cent of components from local sources would
reduce the sale price of trucks and buses in future, he added.
"We have sped
up the localisation ratio to produce good quality and competitive price
vehicles. Bus production comprises 55 per cent of locally made components
including windscreens, chassis, seats and wire wares," Tai said.
"The coach is
our best seller with 600 vehicles being bought last year, 95 per cent in the
domestic market."
The Quang Nam-based
automobile maker acquired a 51 per cent share in Korean Soosung Motor Technology
company with a $3.5 million deal last year.
The company had
previously exported components and spare parts for special purpose vehicle
production in Soosung company.
"We exported
locally made components worth only $500,000 last year. The share deal helps
us produce cranes, dumps, concrete mixer trucks and tankers," said
Thaco's mechanical engineering director Doan Dat Ninh.
Thaco has invested
VND9 trillion ($428.5 million) in manufacturing plants producing cars, trucks
and buses, as well as a sea port and a vocational college since 2003.
Last year, Thaco
produced 24,500 vehicles with a total revenue of VND12 trillion ($571.4
million), contributing VND2.8 trillion ($133.3 million) to the State budget.
The company expects
to provide 29,500 vehicles this year with a revenue of VND13 trillion ($619
million). Thaco, in partnership with French automaker Peugeot, will begin
manufacturing the Peugeot 408 model this year.
The largest
automobile maker in
Truong Hai
Corporation has asked the Government to extend the deadline for paying its
import tax bill of more than VND1.2 trillion (US$57 million) from July 1,
2013 to June 30, 2014.
The corporation, which
imports completely knocked down parts (CKDs), is being supported by
authorities in central
According to VnEconomy
online newspaper, Quang
It has been
reported that the corporation has an inventory worth more than VND3.3
trillion, while it owes about VND5.6 trillion to credit institutions.
Quang
Without investment,
the company may collapse, resulting in the loss of thousands of jobs, they
warned.
A Finance Ministry
leader said the ministry has approved the corporation's proposal and asked
the Government for permission to implement the postponement. The corporation
will now have to wait for the Prime Minister's approval.
Even with this
approval, the extension will only be granted if the corporation can provide a
guarantee of support from commercial banks and promises that it will continue
investing in automobile manufacturing.
The Quang Nam
People's Committee would be responsible for managing and ensuring the money
is used for the right purpose.
FTAs offer
business opportunities
Small- and
medium-sized enterprises should learn how to take advantage of new Free Trade
Agreements (FTAs) that will take effect within the near future, ministry
officials have urged.
Vuong Duc Anh, a
high-ranking official with the Ministry of Industry and Trade's Import-Export
Department, said that SMEs were often not aware of the benefits of trade
agreements with other countries.
Anh, along with
other leading officials, spoke at a seminar on Monday with representatives of
Japanese companies based in
The FTAs, once
signed, will lower tariffs on both sides, thus increasing both import and
export activities.
Although this will
result in an even more competitive trade environment, local companies taking
part in FTAs will have the opportunity to increase exports while enjoying
lower or zero tariffs.
Also speaking at
the seminar, Kurihara Yoshitaka, of the Japan External Trade Organization
(JETRO), urged
According to
Cao Thanh Diep,
head of the multi-trade policy department at the Ministry of Industry and
Trade, said that all companies, including SMEs, should take advantage of such
trade agreements.
She said that trade
agreements over the last two decades had attracted greater foreign investment
flows to
They also had the
effect of improving the country's economic restructuring and the
competitiveness of local enterprises, Diep added.
"At least, in
the short and medium term, we see benefits from signing free trade
agreements," she said.
As a result of such
agreements,
The manufacturing
sector's competitiveness had also improved, more jobs were created and the
poverty rate was lowered, she said.
However, she
pointed out that the country, although it had eliminated its trade deficit
last year, could face further economic challenges.
"There is not
much time for
With new trade
agreements on the horizon,
The industry's
export turnover in 2012 reached US$17.2 billion, and in the first quarter of
this year, turnover was US$4.2 billion, a 19 per cent increase over the same
period last year.
However, export
growth in textiles and garments to the EU has been lower than growth in the
With the TPP agreement
with
The TPP is also
expected to attract more foreign investment and add value to Vietnamese products.
Shrimp
exports fall due to shortage of material, skilled labor
Shrimp and
pangasius are two key exports from the country which are currently facing
many difficulties and challenges in meeting export targets.
Since 2012, export
of these two items has not reached targets, resulting in low turnover of
US$6.1 billion instead of $6.5 billion.
One of the main
reasons for this shortfall has been shortage of material for production.
Nguyen Hai Trieu,
director of Gio Moi Company, said before the company earned regular turnover
but in recent years shrimp material for export has been short and diseases
too have wretched crops.
These losses have
been huge for enterprises. Shrimp breeding areas have shrunk to 570 hectares,
only 2.4 percent against the same period last year.
Exporters also lack
personnel with high skills that can meet the present fierce competition
coming from the
Vietnamese
consumer turns back on Chinese produce
Vietnamese
consumers have of late turned their backs on Chinese commodities, especially
fresh foods, due to substandard quality.
Nguyen Thanh Ha,
deputy head of a management company in Thu Duc wholesale market, remembers
how in May around 1,300 tons of vegetables and fruits were brought into the
market. In Hoc Mon wholesale market, around 100 tons of vegetables and fruits
such as carrots, garlic and potatoes were brought in every night. All these
commodities were from
But the situation
has changed now. In Thu Duc market these days, some 1,600 tons of vegetables
and fruits enter the market but only around 150 tons are of Chinese origin.
Nguyen Dang Phu,
deputy director of the Management Company of Binh Dien wholesale market in
District 8, said very few items are now from
A trader couple
Binh-Thoa in Van Thanh Market said that for five years they have refused to
sell Chinese commodities because of high insecticides, even though they
earned lower income.
Traders also help
consumers distinguish between Vietnamese produce and Chinese commodities; for
instance, Chinese fruit looks bigger or ginger has bigger bulbs and shinier
skin than the Vietnamese produce. Nevertheless, its taste after cooking is
worse than Vietnamese produce.
Saigon Co.opMart
said its chain does not sell potatoes brought in from
All vegetables and
fruits in the market are from cooperatives in Da Lat such as Anh Dao, Phong
Phu and Thao Nguyen and all commodities meet VietGap standards. After the
supermarket announced a tie-up with cooperatives and farms in the country,
consumption increased drastically.
Black cloud
sits over property ambitions
The property market
in
Before 2011, land
plots in
Although the
inner-city housing segment has shown initial signs of rebound in transactions,
land plots outside ring road 3, still reported low liquidity.
According to a
recent study by Savills Vietnam- a leading property service provider, the
villa and terraced house market in
Accordingly, the
price of many land plots in areas outside ring road 3 was halved compared to
2011. At some projects, the price was slashed by some 60-70 per cent but
still reported no transactions.
For instance, at
Nguyen Trong Tan road block A under Geleximco project (Ha Dong town,
outskirts of
At this block, the
developer is scaling up efforts to complete the outer face and is in the
hand-over process.
At block C and D,
though the price is around VND20 million ($960) per square metre, there are
almost no transactions since only internal roads were completed.
At Kim Chung Di
Trach project in Hanoi’s suburban Hoai Duc district which used to be a
hotspot to property speculators, terraced houses facing project’s main road
fetch around VND20 million ($960) per square metre while houses facing
internal roads range from VND13-15 million ($625-$720) per square metre.
At Van Canh new
urban area (also in Hoai Duc district), the price ranges from VND32-34
million ($1,540-$1,635) per square metre though the housing blocks were
completed and handed over to customers for around two years.
The price of villas
in diverse urban areas nearing completion in the outskirts of
For instance,
villas under North National Highway 32 urban area project of developer Tu
Liem Housing JSC currently fetch VND40 million ($1,920) per square metre or
those at Duong Noi project’s block A of Nam Cuong Company Limited cost a bit
more than VND40 million per square metre.
One CBRE recent
survey shows that over 60 per cent out of 9,000 completed housing units under
survey could not find buyers.
CBRE is the world's
leading commercial property and real estate services adviser
FX waves
cause ripples
Experts are getting
their heads around recent exchange rate volatility.
Economic experts
assumed the fluctuating dong-US dollar exchange rate in the recent weeks was
just momentary and was not driven by the gold import move.
The buying price of
US dollars at commercial banks surged to VND21,035 per dollar later last
week, closing a week when the greenbacks hiked constantly in price. In the
‘black’ market, the dollars peaked at VND21,300. This was the third time the
exchange rate surpassed the VND21,000 per dollar benchmark in 2013.
In reality, slow
pace of economic rebound means the demand for dollars to import production
materials would not be big.
Some market players
attributed the move to the State Bank’s recent efforts to put a round sum of
dollars into gold import to help local banks close their gold position before
regulated deadline June 30, 2013.
A National
Financial and Monetary Policy Council member Dr. Cao Sy Kiem did not buy into
this idea.
He said recent
volatile exchange rate was due to ‘psychology’ factor since there was a
rumour about the likelihood for exchange rate revision after the State Bank
reportedly spent over $1 billion on importing gold.
Kiem said exchange
rate fluctuation only came when the dollar supply and demand underwent
changes. Currently, the demand is forecast not to go up sharply thanks to
economic rebound whereas the supply remains fruitful.
“In other words,
there is no need for exchange rate concerns at current point of time,” Kiem
added.
Senior financial
export Nguyen Tri Hieu agreed current ‘fever’ was only short-lived and would
be brought down when banks completed closing their gold position.
From the part of
industry players, deputy general director at Vietnam International Bank (VIB)
Le Quang Trung said dong-denominated loans’ lower rate has prompted firms to
buy dollars for repayment then convert into taking dong-denominated loans to
abate exchange rate associated risks.
The leader of
another Hanoi bank said strong exchange rate volatility in the coming months
would be unlikely since the banking system’s dollar volume liquidity was
generally good in parallel to fairly plentiful national foreign reserves.
“Some factors which
recently fueled the exchange rate were people converted into hoarding dollars
in the face of constantly falling dong deposit rates, falling export led to
banks’ lesser dollar buy-in amounts and some banks scaled up buying dollars
to enhance their dollar position,” the executive noted.
Equity firm
shuffles deck
Vietnam-focused
private equity firm Mekong Capital is planning to divest from five companies
this year and next year as part of its restructuring plan to prepare for
future growth.
Chris Freund,
managing partner of Mekong Capital, said the equity firm would reduce
investment from current 15 investees to about 10. “We are focusing on doing
exit and selling investments,” he said. Freund declines to reveal which
companies Mekong Capital will divest from.
Freund said that
was natural thing of a private equity firm because an investment fund usually
has ten-year life and specific investments are typically held for five to
seven years. “We need to sell investments and launch new fund to ensure
further growth of the company. That is good for us,” said Freund.
Mekong Capital has
three funds at present, including the $18-million The Mekong Enterprise Fund,
the $50-million The Mekong Enterprise Fund II and the $64-million Vietnam
Azalea Fund.
The Mekong
Enterprise Fund was established in 2002 and invested in 10 companies by the
end of 2005. At this time, the fund has fully divested from 8 companies in
its portfolio and will continue to exit investment from the remaining
companies, as it has already complete ten year life.
The Mekong
Enterprise Fund II was launched in 2006 and was mainly focused on consumer
driven industries like retailing, distribution and consumer products. This
fund also invests in 10 companies and Freund said the firm was working to
sell few of them.
The Vietnam Azalea
Fund was launched in 2007 and targets Vietnamese blue-chip companies, both
privately and formerly state-owned.
Freund said a new
fund would be launched shortly to replace funds that will be closed, and to
continue make new investment. Each fund will just invest in around 10
companies, that he thought an ideal level for the fund.
Unlike other fund
management firms such as VinaCapital, Dragon Capital or Indochina Capital
which launch different funds for different asset classes, Mekong Capital just
focuses on investments in private equity.
Among sectors,
Freund said Mekong Capital would mainly focus on consumer driven business as
a strategy of the firm. Its most successful investments to date have been
consumer-oriented companies such as Mobile World, Traphaco,
“Consumer product
business is growing very fast right now. If you look at other companies like
Vinamilk and Masan Consumer, they are still growing very well,” said Freund.
“Some people
believe as an investor, we need to be diversified. But we commit to bring
added values, we can only do that when we really understand the industry and
investees,” he said.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 23 tháng 6, 2013
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