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BUSINESS
IN BRIEF 3/3
Corporate
law focuses on SOEs
The draft amendment
to the Viet Nam Law on Enterprises 2005 focuses on the practices of
State-owned enterprises (SOEs) together with the rights, obligations of
ownership and managerial process.
The draft reflects
the growing pressure to restructure this driver of the economy. According to
the new chapter proposed by the Ministry of Planning and Investment (MPI),
the amended law would identify the roles and missions of all SOEs and also
each SOE in particular.
The proposal
legalises principles to secure and develop State capital in commercial
operations.
In terms of
ownership rights and obligation implementation, the draft proposes to
separate the practice of ownership rights from other practices.
Every enterprise
must have a representative body which takes responsibility before the
Government and the National Assembly for State ownership practices in the
enterprises. However, the body would not directly issue administrative orders
or interrupt the enterprise's commercial operations.
The draft also
regulates disclosure of periodic reports and requested information from SOEs.
Moreover, the Law
on Enterprises 2005 has a lot of inadequacies, especially in business line
registration and business establishment registration that confuse the
administrative and practical processes, said Mai Dinh Manh, general secretary
of the Viet Nam Electro-technical Industry Association (Velina).
Nguyen Dinh Cung,
acting director of the Central Institute for Economic Management (CIEM),
cited by Securities Investment, said that in the draft to amend the Law on
Enterprises, enterprises would not have to register business activities in
the Business Register Certificate.
Under the current
law, enterprises must register business activities and would be violating the
Law on Enterprises if they carry out business activities not mentioned in the
Business Register Certificate.
Experts said that
enterprise registration is a formality required to start an enterprise. But
how the enterprise operates or invests is the part of the process of
developing that idea.
"The change
would help implement a principle mentioned in the Constitution, that is,
people are allowed to do business which the law does not ban," said
Cung.
The draft also makes
clear about the business registration procedure and certificates for
conditional business status.
When entrepreneurs
want to set up a business in any field, they will apply for the Business
Register Certificate at a competent business registration agency. Afterward,
if their businesses are assigned conditional business status, they must
satisfy the requirements of specialised management agencies.
Mining
exhibition to highlight VN potential
The second
international mining and minerals recovery exhibition and conference, Mining
Viet Nam 2014, will be held from March 11-13 at the International Centre for
Exhibition (ICE) in Ha Noi.
The event this year
will include more group and country pavilions as well as technology displays,
consolidating its position as a dedicated mining-technology marketplace for
industry stakeholders in
"Whilst
This year, the
exhibition continues to receive support from the ministries, local industry
associations and trade promotion boards.
"We believe
that with the expansion of our outreach programmes across
The first Mining
Viet Nam was organised in 2012 with 3,290 industry attendees from 26
countries.
Brand name
development needed for tourism boost
Building and
developing a brand name for the Vietnamese tourism market is a key solution
to help the sector reach this year's target of welcoming 8 million foreign
and 40 million domestic tourists, and earning VND220 trillion (US$10.34
billion), a domestic tourism manager has said.
According to Deputy
General Director of the Viet Nam National Administration of Tourism (VNAT)
Nguyen Manh Cuong, attention should be paid to improving tourism
infrastructure and developing the tourism workforce and brand name, in order
to boost the growth of
Although Viet Nam
possesses a large number of tourism and heritage sites recognised by UNESCO,
levels of foreign tourists coming to Viet Nam have only risen modestly in
recent years, which was attributed to the nation's poor transport facilities,
added Cuong.
As many as 80 per
cent of foreign travellers arrive in
EVN to
ensure stable power supply
Electricity of Viet
Nam (EVN) plans to operate more hydropower plants during the dry season to
prevent further power cuts, according to a company report.
Last month, the
country's total power demand was 9.2 billion kWh, a rise of 1.5 per cent over
the same period in 2012.
Demand is expected
to reach 9.75 billion kWh this month as many companies resume operations
after the Tet (Lunar New Year) holiday.
To ensure stable
electricity supply, EVN plans this month to commission turbines 1 and 2 of
Song Giang 2 hydropower plant; turbine 2 of Dak Ring plant; and turbines 1
and 2 of Dong Nai 2 plant.
All the turbines
will have a combined capacity of around 170MW.
Last month, the
first turbine of Vinh Tan 2 thermal power plant in the central
With a capacity of 622MW,
the plant is expected to help reduce power transmission from the north to the
south.
On Saturday, the
EVN began construction on the Thai Binh thermal power plant with a combined
design capacity of 600MW and an annual electricity of production of 3.6
billion kWh in the
Covering an area of
115ha, the $1.27-billion project consists of two turbines. The first turbine
is scheduled to begin generating power in 2017, and the second in 2018,
according to EVN.
The Ministry of Industry
and Trade said that EVN would begin construction on four other large power
plants with a combined capacity of more than 2,500MW, including Vinh Tan 4
and Da Nhim. The Duyen Hai and
Checks on
cattle imports tighten
The Vietnam Customs
has ordered local offices to strengthen the management of imported live
cattle.
It said that all
live cattle arriving in the country must be checked to ensure they carried
the correct paperwork, including quarantine papers.
Customs offices and
teams in provinces were told to make sure that there were no cattle smuggled
in from neighbouring
Customs offices
were also told to join hand with border guards, police, cattle quarantine
offices and local authorities to achieve better results.
Dang Cong Hoan,
chief of Nghe An Customs' secretariat, said that so far no provinces and
cities had reported any cattle epidemics thanks to strict checks.
In some provinces,
such as Nghe An and Ha Tinh in the central region, vaccinations against
cattle diseases were slowly implemented due to a shortage of veterinarians,
said Hoan.
Most districts
arranged only one injection a year, but regulations called for two.-
Plan hoped
to boost Central Highlands’ development
The
The target was
included in a plan issued by the Prime Minister on February 24, aiming to
continue realising the Politburo’s resolution on the socio-economic
development of the region in the 2011-2020 period.
According to the
plan, the per capita GDP in the region will reach about 24 million VND (1,128
USD) by 2015 and 46 million VND (2,162 USD) by 2020.
Agriculture will
account for 43.6 percent of the economic structure by 2015, falling to 34.7
percent by 2020. Industry and services will make up 29.2 percent and 27.2
percent by 2015, and up to 35 percent and 30.3 percent respectively by 2020.
The region is set
to record an annual export growth rate of 17 percent in the 2011-2015 period
and 15.5 percent in the 2016-2020 period, according to the plan.
The yearly
population rise is expected to drop by about 1.5 percent by 2015 and 1.4
percent by 2020, so that the region’s total population will be 5.8 million in
2015 and about 6.4 million people in 2020, the plan points out.
The Central
Highlands is aiming to decrease the level of malnutrition in children under
the age of five to below 16 percent, while expanding the universalisation of
secondary school education for children in about 50-60 percent of communes.
The unemployment
rate in urban areas is expected to stand below 3 percent, while the number of
trained workers is hoped to account for 50-55 percent of the region’s labour
force, it says.
The plan also aims
to raise forest coverage to about 59 percent.
The region will
make full use of its advantages and strengths, boosting international
integration, especially in the Vietnam-Laos-Cambodia development triangle,
and strengthening the connectivity among regional localities and the rest of
the country.
It will mobilise
all resources for rapid and sustainable development, narrowing its
socio-economic growth gap with other regions, says the plan.
In addition,
regional localities will focus on developing key industries, especially
agricultural and forestry product processing.
A number of rubber
and coffee processing factories will be built to regional and international
scale, it adds.
The plan also
targets stability in political security and defence, social order and safety
as well as firm solidarity among ethnic groups and the maintenance of their
cultural identities.
The
Trans-Pacific
Partnership in the eyes of domestic insiders
Trade ministers of
countries involved in the Trans-Pacific Strategic Economic Partnership (TPP)
Agreement are gathering in
The TPP agreement,
a free trade pact with high standards, is considered a model deal in the 21st
century with the participation of Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.
The TPP has
concluded 19 rounds of official negotiations and begun vital negotiations on
opening the goods markets, rules of origin, government purchasing,
state-owned enterprises, and e-commerce.
Joining the TPP
will help
“The TPP will
impact
Tran Quoc Khanh,
Deputy Minister of Industry and Trade and head of the Government’s negotiation
delegation on international economics and trade, said a visible opportunity
for
“Our biggest
opportunity is to restructure our import and export markets," Khanh
said. "We can open new foreign markets if the tax rate is zero percent.
It will be a strong driving force for Vietnamese exports in some markets and
we can get involved in regional and international production chains. TPP
accession will create favorable conditions for economic and growth model
reform.”
Besides positive
factors, the TPP will also create pressures on market openings and the
competitiveness of Vietnamese enterprises. Some agricultural, industrial, and
service sectors have not caught up with development demand. There are
requirements of legal revisions and human resources.
For example, the
garment and textile sector will have opportunities from other TPP member
countries including the
Le Tien Truong,
Deputy General Director of the Vietnam Garment and Textile Group, said the
biggest obstacles are to meet the rules of origin and deal with the
imbalanced development of the garment support industry.
"This is an
opportunity to expand markets with better conditions. There are challenges
including how to meet the requirements of the agreement, markets, quality,
quantity, and other non-tariff issues," he said.
According to Khanh,
pressure from competition is unavoidable, but
Later this year,
negotiations are scheduled to finish and the TPP will come into effect. TPP
member countries will comprise one of the world’s biggest trade areas, making
up 40 percent of the world’s gross domestic product (GDP) and one-third of
the global trade revenue.-
Transport
sector focuses on BOT, BT, PPP investment
The transport
sector has mobilised resources to invest in Build-Operate-Transfer (BOT),
Build-Transfer (BT) and Public Private Partnership (PPP) projects in various
fields.
According to Le Anh
Tuan, head of the TPP Department under the Ministry of Transport (MOT), the
ministry has so far managed 56 projects of these kinds with a total
investment of 165 trillion VND (nearly 7.82 billion USD).
Of those, 14 have
been put into use, 34 others are underway and the remaining will be soon
implemented, he said.
PPP invested
highway projects such as Dau Giay-Phan Thiet, Ninh Binh-Thanh Hoa-Bai Vot (Ha
Tinh province) and Trung Luong-My Thuan highways are facing difficulties in
mobilising funds due to high costs and the need for government contributions.
Meanwhile, the air,
rail and river transport sectors have yet to mobilise capital for
infrastructure construction as well as have payback policies and methods.
To solve these
problems, Tuan said the MOT has focused on promoting key BOT projects on the
national highways 1 and 14 by accelerating the completion of procedures
related to investment licence and signing of project and credit contracts.
The PPP projects
will be divided into phases with the first one prioritised while BT
infrastructure projects will be refunded by using land or operating other
projects in combination with the local economic development, he noted.
The ministry has
directed its agencies to further promote investment and provide adequate and
prompt information on BOT, BT and PPP projects. The State will continue
collecting road fees or selling this right to get money to refund loans.-
Association
aids Vietnam-Russia business linkups
The Vietnam
Business Association (VBA) has put forth a number of suggestions for
Vietnamese companies operating in
At the February 22
conference reviewing the VBA’s 2013 performance and outlining this year’s
tasks, the association discussed challenges facing Vietnamese enterprises in
the nation this year. High on the agenda is
Delegates also
mentioned the depreciation of the rouble, which will potentially damage
Vietnamese businesses in
Speaking at the
event, Vietnamese Ambassador to Russia Pham Xuan Son praised the effective
connection between the association’s chapters last year.
Thanks to its close
collaboration with the Vietnamese Embassy, the VBA protected the legal rights
of the Vietnamese business community in the country in the face of economic
difficulties in 2013, he said.
The VBA serves as a
bridge for economic, trade, tourism and investment activities between
VN veggie
growers go hi-tech to resume exports to EU
After the door to
penetrate the EU market was closed to them in 2012, some vegetable growers
and exporters adapted hi-tech cultivation methods to find their way back to
the lucrative market, a challenge they eventually defeated more than a year
later.
In early 2012, five
types of Vietnamese-grown vegetables, including basil, sweet pepper, celery,
bitter gourd, and coriander failed to meet EU food hygiene and safety
regulations.
The EU side
announced that they would stop importing Vietnamese produce if five more
batches of exports were found violating regulations.
The Plant
Protection Department thus decided to temporarily suspend issuing quarantine
certificates for other exports of such produce, in order to avoid having
other fruit, such as blue dragon or grapefruit, added to the EU’s blacklist.
Following the
suspension, the plant protection department and businesses have rushed to
find a solution to resume exports as soon as possible.
Applying technology
and adapting new cultivation methods was the final resolution, and the Center
for Post-Entry Plant Quarantine together with two vegetable growers in
One of the selected
businesses, Rong Do Co Ltd, stopped growing its produce in outdoor fields,
but set up a greenhouse and equipped it with an automated drip irrigation
system. It also reviewed all procedures, from selecting seeds and fertilizer
to harvesting.
Company director
Mai Xuan Thin admitted that the new method required its employees to work
much harder compared to the traditional one.
But the result was
rewarding. In mid-2013, the company exported its first batch of sweet pepper
back to an EU country and passed all requirements regarding quarantine and
pesticide residues.
Meanwhile, Thinh
Cat Co Ltd, which used to export green produce to the EU and many other
strict markets, opted for quite a different approach to return to the EU.
After consulting
the Center for Post-Entry Plant Quarantine, the company invested in a
one-hectare farm in the outskirt district of Cu Chi and made it into a
“non-epidemic zone,” said director Dong Dang Huan.
“This was to make
sure that no pests or diseases could enter our farm,” Huan said.
In mid-2013, Thinh
Cat exported 300kg of basil to the EU, and received positive responses from
its European partners.
Six months later,
the company continued to ship its coriander, grown under the same method at
its non-epidemic zone, to the EU.
The company has
also managed to sign contracts on stable shipments for their European
customers. It is exporting 500kg of basil, 150kg of coriander, and 50kg of
sweet pepper to the EU on a weekly basis.
Business licensing faces reform
Proposed changes in
enterprise registration certification could help improve
Minister of
Planning and Investment Bui Quang Vinh said under the latest draft revised
Law on Enterprises, which will replace the existing legislation issued in
2005, the freedom for firms to do business would be maximised, in line with
the country’s new Constitution which states that all people are entitled to
freely engage in business in sectors and professions that are not banned
according to the law.
Specifically, according
to the draft compiled by the Ministry of Planning and Investment (MPI), the
existing enterprise registration certificate would be changed to allow wider
freedom for firms to pursue business opportunities.
Under the first
proposal, names of business sectors and professions would no longer be
included in the certificate and enterprise registration dossier.
In another
proposal, the certificate would only include a list of business sectors and
professions subject to conditions. The founders of the firm would have to
write the sectors and professions in their enterprise registration dossier if
they wanted to engage in such sectors and professions.
Currently,
enterprises have to register which business sectors and professions they want
to operate in. However, if they engage in other sectors and professions not
banned by law without adjusting the certificate, the firm would be defined as
acting illegally. Meanwhile, the constitution states that all people are
entitled to freely engage in any business activity that has been legally
prescribed.
“The MPI proposes
that the second scheme be selected, because it is a big breakthrough in
realising the right to do business as outlined in the constitution,” Minister
Vinh said. “If firms want to do business in sectors and professions subject
to conditions, they will have to meet certain criteria.”
Local economist
Huynh Buu Son said it would be very good news for enterprises if the
registration of business sectors and professions was removed. “Enterprises
should be allowed to do any business not banned by the law. If this
regulation comes true, enterprises would face fewer administrative
procedures, which could save time and cash,” he said.
The Central
Institute for Economic Management’s head Nguyen Dinh Cung, also chief author
of the draft, said “Due to the current regulation, many enterprises have
missed out on business opportunities because if they want to do more
business, they have to have their business registration certificate amended,
and this can be a long and arduous process,” .
However, Viet Steel
Company’s general director Do Duy Thai said the government would need to do
more to remove the burdens facing enterprises.
“Besides the
removal of registration of business sectors and professions, the government
needs to pursue administrative reforms and remove many other types of
sub-licenses,” he said.
Bond issues
to follow interest rate dip
A slew of major
firms are contemplating large scale corporate bond issues in the first half
of this year thanks to lower interest rates.
Vinacomin, the
country’s largest mining group, plans to raise VND3 trillion ($142.8 million)
via corporate bonds, a source close the deal told VIR.
Following a
Ministry of Industry and Trade agreement in principle, the group is working
with its advisors and awaiting its financial statement to be published to
prepare for the issue.
The sale is
expected to help the group partly lessen its debt repayments of VND35
trillion ($1.66 billion) which were due on June 30 last year.
“The market would
welcome major corporate bond issues. I think that there will be a rash of
bond issues late in the first quarter or early second quarter of this year,”
said Pham Xuan Anh, head of Investment Banking Department at BIDV Securities
Company (BSC).
Many firms are
looking to take advantage of interest rates which are at a 3-4 year record
low. Specifically, the lending rate is now at only 11.5-13 per cent for the
long and medium term, a significant fall on the 15-18 per cent or even higher
two to three years ago.
Thanks to lower
lending rates, enterprises also saw a reduction in their coupon rates. The
coupon rate for Vinacomin’s bonds decreased from 14.5 per cent in late 2012
to 11 per cent per annum in the third quarter of 2013 and the margin rate
also reduced slightly from 3.5-3.6 per cent to 3.3 per cent per annum.
The source close to
the Masan deal also expected that if the group issued corporate bonds at this
time, the coupon rate was likely to fall below the 11.5 per cent level
registered in its previous issuance of VND2.2 trillion ($104 million) in the
third quarter of 2013.
Many market
observers predicted lending rates may fall further in the first half of this
year, after the news that the inflation rate stayed at only 0.69 per cent in
January, much lower than the level of 1.32 per cent during the same period
last year.
“Corporate bond
supply will be plentiful due to high demand for long and medium term capital
among firms. This will especially be the case as interest rates are expected
to stay low in the first half of 2014, we think many enterprises will seize
the opportunity to borrow capital at low costs,” said Vietcombank Securities
in its report.
The Finance -
Banking Department under the Ministry of Finance (MoF) forecasts there will
be VND30-35 trillion ($1.4-1.67 billion) in corporate bonds to be issued to
the market in 2014. However, the actual figure will depend on the needs of
businesses and their ability to raise capital through other channels,
including shares and bank credit.
Last year, the
corporate bond market boomed with VND33.6 trillion ($1.6 billion) of corporate
bonds issued, VND33 trillion ($1.5 billion) more than the 2006-2010 period.
The ratio of outstanding corporate bonds per GDP in 2013 hit 5.5 per cent,
dramatically up on the meagre 2012 and 2011 levels of 1.95 per cent and 3.31
per cent, respectively.
Motorcycle
makers fear anti-congestion rumours
Masayuki Igarashi,
general director of Honda Vietnam, has expressed concern over the potential
for government policy limiting motorcycles in
According to the
prime ministerial Decision 356/2013/QD-TTg issued last February, the
government predicted the number of motorcycles in the country would reach 36
million units by 2020. However, latest statistics from the Ministry of
Transport show that the number of registered motorcycles has already
surpassed 38 million units, yet many more remain unregistered.
“We wonder whether
the Vietnamese government will limit the number of motorcycles in any way,
and how such a limitation could be implemented,” said a representative of
Piaggio
Tran Quoc Khanh,
Vice Minister of Industry and Trade, at the Vietnam Business Forum (VBF) held
in
“If the local
authorities limit motorcycles in big cities to ease congestion, we will have
to focus on rural markets. This means pulling back on state-of-the-art
products with advanced technology,” said Igarashi.
In reality, even
without government policy limiting the manufacture or purchase of motorbikes
in the country, the market has been in decline for the last three years.
Statistics from the
five biggest manufacturers including Honda, Yamaha, Suzuki, Piaggio and VMEP
Vietnam show their sales declined from 3.4 million units in 2011 to 3.11
million in 2012 and 2.79 million last year.
The downward trend
of the market forced Honda, the market leader, to delay the inauguration of
its third factory in the
Wang Chinh Tung,
general director of VMEP Vietnam, confirmed that 2014 remained a tough year
for the motorcycle market and was pessimistic about sales this year.
Just last week, the
five biggest motorcycle manufacturers formed the Vietnam Association of
Motorcycle Manufacturers in an effort to help them influence government
policy. The association expects to be able to communicate directly with
Vietnamese government bodies to discuss policies related to the motorcycle
market.
More access of micro credit for Vietnamese lower income people
The experts
The microfinance
sector in
According to
Sebastian Dinjens, director of INFI, an exchange network or microfinance
professional across the
“But to be able to
do that, they need to professionalize more on Social Performance Management,
and design their products to fit specifically with the needs of marginalized
people,” said Dinjens.
Dinjens was
speaking at the conference “Balance in microfinance - seeking harmony between
social and financial performance” held on February 24 in
The Social Performance
Management Standards respond to an industry concern that institutions have
lost focus on their clients.
Most institutions
claim to improve client welfare, but for the last two decades many
institutions have focused more on financial sustainability than on the needs
of clients. Many of these institutions are driven by financial outcomes
because they only manage financial performance.
Institutions with a
social purpose must also manage their social performance. By defining and
promoting strong SPM, these Standards contribute to refocusing institutions
on the client.
Therefore, the
introduction and applying of SPM is a solution for these issues.
INFI is an exchange
network for microfinance professionals across
There is a lot of
experience in
Many of the
organisations in
These groups often
live in rural areas where agriculture is the main market. Increasing trade
with other countries is creating many opportunities, but these people lack
the capital to produce on a scale that can serve the market.
Dinjens explains
that what he often sees is that these people are very able to manage their
finances on a small scale.
“They spend,
produce and save money just like anybody, and often can create a regular
income to help them survive. But what they are able to save is often not
enough to invest in their own business. This is where microfinance services
can help. By giving these people a loan for their business, they can invest
to grow their business without too much risk. But it requires microfinance
organizations to be knowledgeable about the needs of their clients, and
willing to invest in the small businesses of rural Vietnamese,” he said.
The country’s
economic picture could turn rosy this year or next if the Government
continued its efforts to stabilize the macro economy and deal with structural
weaknesses.
This view was
shared by National Assembly deputies and economic experts at a seminar on
issues and solutions for the nation’s economy in 2014, which was held in HCMC
last Friday.
Tran Du Lich,
deputy head of HCMC’s National Assembly deputies delegation, said, “There are
factors making us believe that the economy could regain high growth, market
confidence could improve and businesses could grow in a more sustainable
way.”
High inflation has
persistently dogged the economy over the past 5-6 years but it is now under
control, he said, and the banking sector is still facing challenges but risk
of a couple of poor-performing banks collapsing is almost over.
The World Bank
chief economist in Vietnam, Sandeep Mahajan, said Vietnam’s medium-term
economic prospects are good despite risks. The country would be able to
achieve GDP growth of 5.5% next year provided the Government continues its
prudent macroeconomic policy, tapers its fiscal stimulus and focuses more on
economic reforms, he said.
Foreign investors’
business confidence remains stable as proven by a rise in incoming
remittances from overseas Vietnamese, a steady improvement in foreign direct
investment and a stable exchange rate, Lich said.
He noted fiscal
policy, monetary policy and spikes in prices of public services and essential
goods should be coordinated in a way that wards off inflation risk.
The deputy head of
the Vietnam Institute for Economic Management, Vo Tri Thanh, said it was hard
to lower interest rates further since expectational inflation still hovers
around 7%, the Government will increase bond selling, and huge bad debt
remains to be settled.
Thanh noted a spike
in budget overspending and additional bond issues designed for raising funds
for investment would help economic and export growth. “However, associated
risks such as higher inflation and trade deficit are high.”
Economic expert Le
Xuan Nghia informed the seminar that the central bank had settled around
one-third of bad debt in the banking system and that the Government was
centering on bad debt settlements in a bid to revive credit for the economy.
Net credit growth
is much lower than the 12% plus which the central bank reported late last
year, Nghia said.
Thanh of the Vietnam
Institute for Economic Management said Vietnam could pin high hopes on the
Trans-Pacific Partnership agreement between 12 countries in the Pacific Rim,
the ASEAN+6 Free Trade Area agreement between the 10 Asean members and
their FTA partners, namely Australia, China, India, Japan, New Zealand and
South Korea, and the FTA agreement between Vietnam and the EU.
But the Government
should be consistent in policy making to stabilize the macro economy, proceed
with institutional reforms and restructure the economy, he said.
New
administrative center boost to Binh Duong property market
Property firms in
the southern province of Binh Duong can now expect an improvement in the
property market there as the provincial government has successfully relocated
its administrative center to Binh Duong New City.
The 1,000-hectare
Binh Duong New City is an economic, political and social center of Binh Duong
Province with facilities and services serving around 125,000 residents and
400,000 migrant workers.
Hoang Anh Tuan,
general director of Tac Dat Tac Vang Joint Stock Company, expects the new
city to give a much-needed boost to Binh Duong’s lackluster property market.
The new city will
be busier as more people will come to the administrative center for business,
Tuan said. Stores and services facilities will be going up to meet demand of
people there.
Property firms must
be pinning high hopes on those projects located near the city center.
According to Tuan,
the number of customers calling his company to ask for information about real
estate projects in Binh Duong has surged over the past few days. His company
on Sunday took customers to some projects in Binh Duong New City.
Tac Dat Tac Vang is
offering townhouses in the Prince Town project near the city center. The
project consists of some 130 houses having an area of around 100 square
meters each and priced at VND4-5 billion per unit.
The firm is also
distributing land lots of the ijc@vsip invested by Becamex and VSIP in Binh
Duong New City. Land lots for townhouses in this 128-hectare project cost
VND3.5 million per square meter. The company sold around 300 land lots in the
last three months of last year.
Just in the city’s
central area, the Tokyu Binh Duong Garden City project involving Tokyu of
Japan and Vietnam’s Becamex IDC is under construction.
Tokyu Binh Duong
Garden City covers around 110 hectares and needs a total investment of some
VND25 trillion, or US$1.2 billion. Upon completion, the project will supply
over 7,500 apartment units in addition to commercial center and office space
for lease.
The first component
of this huge project is the Sora Gardens apartment block with 404 units of
67-103 square meters each and the retail section for lease. Sora Gardens
apartments are quoted at some VND21 million per square meter, or VND1.5
billion per unit.
Tokyu said it would
coordinate with the provincial authorities to open a couple of bus routes
connecting Binh Duong New City and neighboring areas.
Dang Thi Kim Oanh,
general director of Kim Oanh Real Estate Joint Stock Company, said
constructing a central administrative center in Binh Duong New City was a
strategic step for the province’s socioeconomic development in the future and
opened a new window of opportunity to add value to land.
At this point of
time, the traffic network in Binh Duong Province is almost complete, enabling
it to connect to neighboring areas like HCMC and Dong Nai Province. This
helps the province attract local and foreign investments as well as residents
from other places to live and work.
Compared to other
provinces and cities, land prices in Binh Duong Province are quite low, with
a townhouse lot costing VND200-400 million. Therefore, investors consider the
province a potential market.
According to Oanh,
there are more customers buying land in Binh Duong Province. The company is
recruiting an additional 200 employees, taking its total to 700, to cope with
a pickup in business.
Kim Oanh Real
Estate has launched a sale of 100 lots in the Spring City project’s first
phase in Ben Cat Town at a price starting from VND1.3 million per square
meter. Besides, 100 lots of the StarLight City project, also in Ben Cat, will
be offered for sale next week at a minimum of VND1.7 million.
Property firms in
Binh Duong Province hope that in addition to the operation of the new
administrative center, a new regulation that allows land owners to build
their own houses in projects with sufficient infrastructure will help drive
up the property market in the coming time.
Central bank
admits higher bad debt ratio
After Moody’s
recently issued a report on Vietnam’s banking sector prospects for this year,
the central bank has released a new bad debt ratio which is four percentage
points higher than what was announced earlier.
Last Tuesday,
Moody’s put the ratio of bad debt in the banking sector at 15%. Three days
later, the central bank rejected this figure in a post on its website at
www.sbv.gov.vn, saying that according to banks’ reports, bad debt accounted
for only 4.73% of total outstanding loans by October last year and this ratio
dropped to 3.63% by the end of last year.
However, the
central bank said in the same post on the web that even if those loans
rescheduled in line with the central bank’s Decision 780 on debt classification
were taken into account, the bad debt ratio could rise to just 9%.
Decision 780, which
came into force in April 2012, specifies local banks and foreign bank
branches do not have to put into the bad debt category those loans already
rescheduled or extended given borrowers’ proven ability to repay.
Explaining this
about-face, the central bank said, “Due to the lack of consistent standards
for debt classification, different agencies and organizations can produce
different bad debt figures for a single entity. This is normal.”
The general
director of a joint stock bank, who requested anonymity, said the central
bank’s latest move could rattle the banking market as no one could comprehend
why the ratio shot up while there were no clear grounds for calculation or
assessment.
“This is clear
proof that we don’t know an exact ratio of bad debt. What percentage should
we cope with, 9%, 4% or 3%? If we did not diagnose an illness accurately, we
could not treat it no matter how hard we tried,” he said.
A deputy general
director of a seafood processing firm in the Mekong Delta said his company
did not rely much on lender banks under the current circumstances. In the
good old days, he noted, his enterprise had business links with nine banks
but the current number is only two.
HCMC leader
pledges support for businesses
Chairman of the
HCMC People’s Committee Le Hoang Quan has reaffirmed the city’s commitment to
lending a helping hand to businesses, particularly foreign-invested
enterprises, to ensure the efficiency and profitability of their operations.
This was one of the
top priorities Quan mentioned at a meeting with representatives of foreign
and domestic enterprises organized by the European Chamber of Commerce in
Vietnam (EuroCham) in HCMC last Friday.
“HCMC will make
every effort to help enterprises of all economic sectors operate efficiently
so that they will contribute to the city’s development and state budget,”
Quan said at the meeting with more than 70 representatives of domestic and
foreign companies.
By December last
year, the number of active foreign-invested projects in the city had reached
over 4,920 with total registered capital of US$35.5 billion.
At the meeting held
by EuroCham, Quan stressed a win-win situation for HCMC and investors. “We
have responsibilities for creating favorable conditions for each other,” Quan
said.
He reiterated that
regulations, policies and procedures regarding investment would be
implemented transparently and responsibly.
Preben Hjortlund,
chairman of EuroCham, told the Daily after the meeting that a level-playing
field was one of the concerns for European companies currently operating in
Vietnam in addition to the issue on work permits.
EuroCham’s Business
Climate Index for the fourth quarter of 2013 showed that business confidence
and outlook among European businesses in Vietnam stagnated at 50 of the 100
point scale, the same as in the second and third quarters of last year.
European members
that participated in the survey remained worried about the impact of future
legal changes. However, investment plans and business orders were expected to
increase, which in turn positively impacted recruitment plans.
Another positive
development was an expectation of less impact of inflation on business,
according to the survey.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 2 tháng 3, 2014
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