BUSINESS IN BRIEF 11/11
Binh
Duong popular with German businesses
German
businesses eye
Walde
made the statement on November 6 at a meeting with Tran Thanh Liem, vice
chairman of the Binh Duong People’s Committee.
Walde
spoke highly of the investment environment and incentive policies of
At the
meeting, Liem talked about the investment policies of the province and
praised the German business community for their contributions to the
locality, especially singling out
So far
this year, Binh Duong has attracted US$1,478 billion in foreign direct
investment, bringing the total number of foreign invested projects to 2,344
with registered capital of US$20.2 billion.
Binh
Duong is one of the four provinces and cities in the country which has
attracted cumulatively more than US$20 billion of foreign direct investment.
Liem
expressed hope that the German Industry and Commerce in
VASEP
proposes 0% import tariff on salmon
The
Vietnam Association of Seafood Exporters and Producers (VASEP) has sent a proposal
to the Finance Ministry for the adjustment of import tariffs on a number of
products following WTO commitments in 2015.
The
proposal said tax rate would reduce to 0% for frozen imported salmon in order
to diversify the sources of imported fish.
According
to VASEP, frozen imported salmon, which is listed among tax preferential
items, had been projected to face a tariff rate of 18%.
Frozen
imported salmon is mainly used for local consumption and export processing
purposes, the Association said.
VASEP
also asked the Finance Ministry to impose a zero tariff rate on a number of
imported seafood products, such as shrimp, tuna fish and octopus, with a view
to help local seafood exporters achieve their set targets following the Prime
Minister’s approved strategy.
Danang
seeks to attract more FDI sources
The
central city of Danang has attracted foreign direct investment (FDI) worth
US$153 million so far this year, only 52.7% of last year’s FDI.
During the
10-month period, 24 new projects worth US$124 million were registered, while
an additional US$28.8 million was invested in the 14 existing projects.
Chairman
of the municipal People’s Committee Van Huu Chien said the local authorities
would focus on attracting investments in the fields of service, advanced
technologies, the support industries and information technology in the near
future.
At the
same time, relevant sectors will concentrate on promoting foreign affairs and
investment, and implementing preferential policies to support FDI
enterprises.
According
to Nguyen Van Ly, Vice Chairman of the city’s Association of Small and Medium
Sized Enterprises, it is essential to develop policies that prioritise
important projects in order to attract investors and generate jobs for local
labourers.
In
addition, the city will continue to promote itself as a top investment
destination on key markets such as
It will
also work to accelerate administrative reform, simplify investment procedures
and improve professional skills for people working in international business.
At
present, as many as 304 projects worth US$3.37 billion from 36 countries and
territories are operating in Danang.
By the
end of September, FDI enterprises had contributed US$70 million to the local
budget.
Mekong
Delta Economic Cooperation Forum issues Joint Statement
The
Steering Committee and Organising Board of the 2014 Mekong Delta Economic
Cooperation Forum (MDEC) held a meeting in Soc Trang province on November 7
to review and issue the forum’s joint statement.
Running
from November 5-7, the eighth MDEC focussed on restructuring agriculture and
modernising rural areas in the delta.
A number
of activities were held as part of the forum, such as Ok Om Bok, a moon
worshipping ritual performed by the ethnic Khmer; and trade promotion
workshops on agriculture and rural areas.
A
600-booth fair showcasing the delta’s key products, such as rice, seafood,
and fruit, attracted over 350,000 local residents.
During
the meeting, delegates agreed on regional and international cooperation
programmes for 2015 and decided not to hold the MDEC next year, which will be
eventful enough, since localities need to focus on preparing for the 12 th
National Party’s Congress.
The MDEC
Steering Committee will instead hold review conferences to improve the
organisation of the forum in the following years.
According
to the Deputy Head of the Steering Committee for the south-western region
Nguyen Phong Quang, the committee will coordinate with ministries, sectors
and localities in order to organise the Mekong Delta Green Tourism week in
Can Tho city next May.
The
Mekong Delta, comprising
Scenarios
for crude oil exports
Economists
have slashed the forecast for oil revenues in the period 2014-2015 as global
oil prices in recent months have plummeted and may continue to fall in the
coming time.
On
November 7, the Ministry of Finance and the Ministry of Industry and Trade
decided to drastically reduce gasoline prices amid the gloomy context of the
world oil prices. The petrol price reduction is good news for consumers but
declining global crude oil prices have negatively impacted the nation’s
budget revenues.
On the
sidelines of the ongoing eighth National Assembly (NA) session, Minister of
Industry and Trade Vu Huy Hoang told a VOV reporter that the sharp fall in
global crude oil prices would affect
"Crude
oil prices have dropped steadily even to a low record in recent years.
Recently, the shrinking world oil prices have forced the price of petroleum
products down. In return, it is conducive to
Regarding
current oil production costs in
“Vietnam
needs to increase crude oil reserves in a bid to face a continued further
drop in gasoline prices in the time ahead , ensure energy security and cope
with disadvantages in domestic oil exploration and production.” the Minister
noted.
To deal
with falling oil prices, according to Minister Hoang, it is imperative to
intensify market research and forecast to adjust exploitation plans in line
with the actual needs.
Economic
experts have predicted that a continued fall in oil prices in the next three
months would greatly affect budget revenues, requiring adjustments in
reducing revenue targets for 2014-2015. However, Minister Hoang said the
adjustments have not yet been scrutinized while the NA is considering the
approval of resolutions on socio-economic development and State budget
performance for 2015.
According
to an analysis by the Minister, the current global oil market is becoming
unpredictable and complex in the wake of political unrest between oil
exploiting and importing nations and territorial disputes. All these factors
are related to fluctuations in oil prices.
How
current political conflicts between countries in different regions would be,
cannot be predicted, resulting in inaccurate forecasts of trends in the
global oil exploitation and consumption.
“What
we can do now is to further step up communications, grasp the situation and
paint some scenarios to cope with negative events to ensure the most
effective oil exploitation. This is a question raised to the Vietnam National
Oil and Gas Group (PetroVietnam) and relevant ministries including the
Ministry of Industry and Trade.” Hoang stressed.
The
scenarios put forth by the Ministry of Industry and Trade include: Oil prices
could continue to fall as currently; oil prices could surge gradually and
then likely see abrupt increases.
In terms
of gasoline price management, Minister Hoang said adjustments in petrol
prices under Decree No 83 became effective as of November 1, 2014. All
related to the adjustment must be considered by the Ministry of Finance and
the Ministry of Industry and Trade.
Since
early this year, fuel prices have been adjusted 8 times. Total money from
discounted amount was higher than that of price increases. It is too early to
give proper assessment of the pros and cons of Decree No 83 which just
recently took effect.
Some new
features in the Decree would create more opportunities for oil and gas
enterprises to compete more promptly thus delivering benefit to consumers.
More companies engaging in the petrol retail market would force businesses to
improve customer care services and promote technological advances in the
distribution and sales system thereby providing leverage for the stronger
growth of the petrol market, Hoang said.
A group
of representatives from the Vietnamese garment and textile sector will visit
The
group announced plans to attend the 2014 Myanmar International Textile &
Garment Industry Exhibition (MTG 2014) – the first international specialised
event to be held in
The
Association of Garment Textile Embroidery – Knitting (Agtex) in turn unveiled
plans of the group to visit with a number of garment manufacturers and
wholesale centres while on their visit.
The
event should provide Vietnamese exporters with valuable insight into trade
and investment opportunities and a more in-depth understanding of opportunities.
According
to statistics from the Vietnam Textile and Apparrel Association (Vitas), in
the first 10 months of this year, the two-way trade turnover with
Exports
to
Consumer
goods supply to rise over 20 percent over Tet
The
supply of consumer goods in
The
Hanoi Department of Industry and Trade will coordinate with retail branches
and enterprises to ensure the supply of consumer goods meets the demand, as
well as guaranteeing a stable market during the 2015 Lunar New Year.
The
department will organise over 200 shipments of basic consumer goods to rural
areas, industrial zones and processing zones to serve of farmers and workers
in these regions, all the while ensuring stable prices.
Enterprises
in the locality have developed plans to increase their stocks by 10-15
percent. Supermarket chains like Metro, Big C, Coopmart and Oceanmart are
stocking up on consumer goods, costing more than VND2.3 trillion (US$109.5
million) so far.
Craft
villages in the city have devised plans to produce clothes, confectionary
items, sausages and other commodities worth VND150 billion (US$7.1 million).
The
department will closely monitor the demand and supply of goods and services
in the locality and take necessary measures to ensure market stability. The
authority calls upon enterprises to participate in the price stabilisation
programme and carefully prepare their retail outlets to ensure supply and
demand.
Waste
treatment firm works on modern Green Technology Park
Viet Nam
Waste Solutions (VWS) broke ground for construction of a bridge near the
Green Technology Park (GTP) in Long An Province's Thu Thua District
yesterday.
Located
on 1,760ha, the GTP project aims to provide long-term and comprehensive waste
management for
It will
use global waste management technologies including waste-to-energy,
gasification, and transformation processes.
"The
project development is designed to be flexible and scalable to meet the
region's future changing waste management needs," said David Duong,
Chairman and CEO of California Waste Solutions, Inc., the parent company of
VWS.
Duong
said
"As
the
The GTP
site will consist of facilities such as a waterfront shipping and receiving
station for the unloading of waste, recyclables, and construction materials
and a hi-tech landfill disposal area.
A
segregated portion of the disposal area will be prepared for medical wastes;
waste-to-energy residues or ash; other non-classified wastes;
compositing-processing facilities and hi-tech landfill support facilities;
facilities for municipal water treatment plant sludge; and water treatment
facilities for treating hi-tech landfill waste water.
It also
will include a multi-functional recycling processing and separation facility;
an education and communication centre for citizens and school children;
employee housing campus; e-waste and household hazardous wastes collection
areas; landfill gas recovery facilities to capture and destroy greenhouse
gases; and others.
The
Lotus Environmental Technologies Campus of the GTP, which is located on
450ha, will include a park-like buffer (or green) zone with electrical power
generated from the landfill gas.
Traffic
congestion will be reduced by eliminating at least 50 per cent of the old
waste packer trucks. The replacement of old waste packer trucks with sealed
transfer containers will reduce leachate leakage from waste hauling trucks.
Duong
said employment growth would occur through jobs created at the GTP site and
jobs to support the waste transportation network.
Do Huu
Lam, Chairman of the Long An People's Committee, noted that GTP was a
regional co-operation project between Long An Province and
"It
took a long time for VWS to reach agreements and gain approval for site
access. Currently the investor has basically got all the paper work needed to
implement the project," he said.
Deputy
Minister for Construction, Cao Lai Quang, said: "GTP will contribute to
successful waste management in Long An and
"It
will help achieve targets set under the National Strategy on Solid Waste
Management approved by the Prime Minister in December 2009."
With an
initial investment of over $500 million in the first 25 years (phase 1), GTP
is the second project invested in and developed by VWS in
The
first VWS project, the Da Phuoc Integrated Waste Management Facility, is now
in its seventh year of operation. It operates under a 50-year contract signed
between
With
current investment of over $140 million, the facility is designed to manage
up to 10,000 tonnes of waste per day. When fully developed, investment in
this facility will exceed $400 million.
SMEs
key to sustainable growth
Developing
the growth and capabilities of small- and medium-sized enterprises, which
make up most of the business sector, is crucial for the country to create
sustainable economic growth, experts said at a conference held in HCM City
last Friday.
Pham
Hoang Tien, director of the Viet Nam Chamber of Commerce and Industry's Small
and Medium-sized Enterprises Support Centre, said the proportion of small and
micro businesses in the country had increased significantly.
Of the
more than 347,000 enterprises in the country, medium-size and large firms
accounted for only 1.96 per cent and 2.25 per cent, respectively, he said.
The
remaining 95-96 per cent include micro and small enterprises.
The
country lacks leading enterprises and a sufficient number of medium-sized
firms, who are capable of using new technology and becoming partners of
transnational corporations.
SMEs are
generally at a disadvantage in production networks compared to large firms,
Tien said.
In
addition, the growth quality of the private sector has not been sustainable,
and productivity and cost-effectiveness has not been high.
He
attributed the problems to ineffective support policies for the private
sector, unequal access to land and credit, and poor development of support
industries.
Major
international manufacturing firms assemble and produce relatively advanced
products for the international market, but most local firms remain oriented
towards the domestic market only, or export commodities with little added
value.
The
domestic private sector, mainly SMEs, account for the majority of firms and
employment in the country, but their participation in global production
networks through linkages with multinationals and direct exports has been
limited, according to Dominic Mellor of the Asian Development Bank.
The
percentage of Vietnamese enterprises in the global value chain production
networks is relatively low compared to other similar sized ASEAN economies,
he said.
He said
that greater participation of
Tien
said the country should restructure institutions to be transparent, as well
as develop a policy framework to help SMEs access land, credit and markets.
It is
also necessary to develop a policy on support industry development that
creates favourable conditions for the private sector to enable SMEs to be
involved in that industry.
Many of
the conference delegates said the Government should consider providing
long-term loans to enterprises and build training centre to train managers
and workers.
Dang Duc
Thanh, deputy chairman of the HCM City Union of Business Associations, said
private companies should devise appropriate business strategies based on
market research and upgrade their production technology.
They
should also develop an advanced corporate managerial force as well as skilful
human resources.
The
private sector will continue to be the major driver behind
VN,
Tran Bac
Ha, chairman of the Association of Vietnamese Investors in Laos (AVIL) and
concurrent chairman of the Bank for Investment and Development of Viet Nam
(BIDV), made this statement at a seminar held in Binh Dinh Province recently
on economic co-operation between the south central and central highlands
provinces of Viet Nam and the central and southern provinces of Laos, according
to Dau tu (Vietnam Investment Review) newspaper.
Ha said
Vietnamese
investors have disbursed $1.5 billion of total investment capital to projects
in
He noted
that bilateral trade value between
The
association expects total registered investment capital of Viet Nam in Laos
to reach $5.8 billion next year and total trade value between the two
countries to reach $2 billion in 2015, according to the Thoi bao Kinh te Viet
Nam (Vietnam Economic Times) newspaper.
To
achieve these targets, "the governments of
"The
two countries should sign the bilateral trade agreement of
The
association also suggested that Laos increase the percentage of foreign
workers in
He
suggested that the governments of the two countries unify procedures in
granting licences, statistics and management of
The two
countries should also promote investment to build infrastructure for trade
activities via border gates such as transit warehouses, Ha said.
Nguyen
Chi Dung, deputy minister of planning and investment, agreed with Ha about
difficulties resulting from policies that Vietnamese investors have faced.
Dung
said the two countries should sign the bilateral trade agreement as soon as
possible to solve difficulties in hiring workers, granting investment
licences and implementing customs procedures.
The two
countries should also have specific co-operation programmes to take full
advantage of cordial relations between the two countries, he added.
Dung
also suggested that the Lao government offer incentives to attract Vietnamese
investment in difficult regions and in large-scale projects.
Ha said
the governments of the two countries need to review Vietnamese-invested
projects in
He
suggested that the enterprises of the two countries implement projects along
their borders, For projects that were implemented too slowly,
State
to sharpen agriculture focus
The
Government needs to make amends for its rather dismal performance to date in
facilitating investment in agriculture despite the sector's key importance in
the nation's growth, experts said at a conference yesterday.
The
conference brought leading economists and policy think-tanks together to
discuss the role of the State in agriculture restructuring, ways to involve
enterprises in the restructuring process and how to make investment structure
or the sector more effective.
Tran
Dinh Thien, director of the Viet Nam Institute of Economics, said that
agriculture restructuring needed to follow three main orientations.
The
first was development of products utilizing technology, economies of scale
and production zones. The second focus must be on establishing a production
chain that would render the agriculture sector "safe," he said
explaining that currently, the input chain was dominated by foreign
enterprises and domestic processing enterprises were still limited in their
scope of action.
The
third orientation, Thin said, was to ensure that enterprises are in the
vanguard of rural development and market development, ahead of other
stakeholders including the State, scientists and farmers.
Meanwhile,
Nguyen Tien Phong, a programme officer in poverty reduction and social
development with the United Nations Development Programme, said that
investment in agriculture had been decreasing of late, and it was important
that more resources are mobilised for agriculture and farmers.
"Agricultural
productivity in
He added
that it was necessary to enhance farmers' capacity so that they can organise
production to boost productivity and product quality.
He
stressed the role of the State in making this happen, noting that it was the
State that sets standards and regulations, and in a position to instruct
farmers on which products had good export potential.
"The
State has not well performed its role in managing the imbalance in
investments into agriculture," he said, "It has not played its role
well in setting standards, quality or food safety."
Phong
said the State should also support enterprises to invest in agriculture.
"The
role of the State in agriculture restructuring needs to be researched more
carefully and in more detail," he said.
Nguyen
Thi Lan Huong from the Food and Agriculture Organisation (FAO) said that to
define the role of the State in agriculture restructuring, relevant
authorities should review all policies and documents related to quality
management.
"In
the context of international integration, it is necessary to link small
agricultural households to the global supply chain and promote all advantages
of Vietnamese agriculture," she said.
"From
that, we can define the role of the State and the State's management to find
out which State services need to be extended, which can be prioritised, and
which can be conducted under public-private partnership (PPP)," she
said.
Minister
for Agriculture and Rural Development Cao Duc Phat stressed that the aim of
agriculture restructuring was not merely to develop a strong sector and
produce more products. Its bigger target was to raise the income and living
standards of farmers.
So the
first task is to change the awareness of and attitude towards the market,
boost the market to work effectively in all agricultural areas and to ensure
better State performance, he said.
The
conference was held by the
Thanh
Hoa aims to be a stable business partner
The
northern central
Officials
said the province's natural resources, good economy and airport and road
infrastructure would attract more investors in the near future.
The
area's Tho Xuan Airport,
The
chairman of Thanh Hoa, Trinh Van Chien, said the province had a skillful
labour force of 2.1 million. Every year, the province supplies 2,000
technicians and economic graduates as well as 14,000 trained workers.
Moreover,
the province had favourable conditions for developing high-tech agriculture
and aquaculture, he said.
All of
the province's economic and industrial zones including Nghi Son, Lam Son Sao
Vang, Hoang Long and Bim Son were ready to welcome domestic and foreign
investors.
The
province also announced that it was calling for investors in 15 projects,
mostly in tourism and infrastructure.
Chien
said that, as of September, the province had attracted 50
foreign-direct-investment projects with a total capital of over US$16
billion. It is ranked eighth out of 63 provinces in FDI.
Tourism
is expected to become a key economic sector by 2020, according to Chien.
In
another development, the province has announced that it will strengthen
co-operation with
Nguyen
Thi Hong, deputy chairwoman of
Can
Tho zones lure $1.92 billion
Export
processing zones (EPZs) and industrial zones (IZs) in this Cuu Long (
Baodautu.vn
quoted the latest figures of the Can Tho EPZs and IZs Authority and revealed
that projects worth $853 million or 45 per cent of total capital registered
in the city to date have so far been implemented.
Included
are 23 foreign-invested projects worth $204 million with a disbursed capital
of more than $171 million. The remainder, worth about $1.72 billion, were
from domestic investors, and 39.7 per cent of the capital has so far been
implemented.
According
to the Authority, from 2001 to 2009, the EPZs and IZs had witnessed a
stronger influx of investment compared with previous periods at $320 million,
$689 million and $268 million, respectively. The encouraging results were
attributed to intensified efforts to speed up administrative reforms for
investors.
However,
investment capital in these zones seemed to have slowed down in recent years
because of global and domestic economic difficulties. This year, the zones
were forecast to attract a total capital of $54.8 million or only 78.3 per
cent of the annual target.
Experts
said that with its geographical advantage as the centre of the Mekong Delta
region and a base of the country's key projects such as Can Tho International
Airport, Can Tho Port and O Mon Thermal Power Plant, the city remained an
attractive destination for investors.
To
attract more investments, local authorities said, the city was accelerating
infrastructure construction at its IZs, developing raw material supply areas
and improving the quality of human resources.
Vo Thanh
Hung, head of the Authority, said Can Tho planned to expand and upgrade a
number of IZs in line with a master plan aimed at increasing the locality's
total industrial area to 2.267ha and paving the way for the city to become an
industrial hub in the Cuu Long Delta region by 2025.
Margin
lending reaches $806 million in 10 months
Margin
lending reached more than VND17 trillion (US$805.7 million) in the first 10
months of 2014, an increase of about 13 per cent over the nine-month figure.
Pham
Hong Son, head of the State Securities Commission (SSC)'s Securities Business
Management Department, told local online VnEconomy that the figures were
based on reports that securities companies sent to the SSC.
This is
one of the few times the SSC has published margin lending figures. Previous
estimates were informal and often based on financial statements of securities
companies which have different margin lending data. The official publication
of this data is expected to help reduce the impact of inflated information on
the market.
Son said
the size of current margin lending was not risky for the market if compared
with the total capital of all securities companies, estimated to be about
VND36 trillion ($1.7 billion).
He added
that financial leverage had grown by an average of 10 per cent since July.
According
to the SSC's regulation, the lending margin of a securities company cannot
exceed 200 per cent of its equity capital. Current margin loans accounted for
only 47.2 per cent of their total equity.
However,
market insiders say this is the "facade" figure shown on companies'
financial statements, and the real number could be bigger. Margin lending can
also come from banks, where investors have collateral.
It is
estimated that the figure on current margin loans is only eight per cent of
total lending by securities companies.
The
current margin size is not big, but according to some analysts, the fact that
margin loans have focused on several large-cap shares could still make it a
volatile factor in case securities companies make margin calls when the
market tumbles too deeply.
There
are nearly 700 stocks trading on the stock market, but the number of codes
eligible for margin lending is about 150. These stocks are also the darling
of foreign investors, thus erratic performance of these stocks will likely
make the market volatile.
Margin
trading is expected to increase towards the end of this year with the
forecast of a positive market outlook.
Binh
Duong firm opens new showroom in Ha Noi
The Binh
Duong-based company Minh Long 1 is scheduled to open its first Ha Noi showroom
at No
The
4,500 sq.m showroom will include over 15,000 bowls, dishes, cups, flower
vases, souvenirs, decorations, ceramic jewellery and bowls and plates used in
hotels and restaurants.
Ly Ngoc
Minh, general director of Minh Long 1, said: "With the new showroom,
Minh Long 1 aims to expand its distribution networks to the
Minh
Long 1 products are used to serve business passengers on domestic and
international flights operated by the national air carrier Vietnam Airlines,
according to the company.
Military
Bank receives labour order first class
The
Military Bank (MB) received a first-class labour order at its 20th
anniversary ceremony last week.
Defence
Minister General Phung Quang Thanh said despite economic difficulties and
fierce competitiveness, the bank had been dynamic in renovating management,
participating in the State Bank of Viet Nam's monetary policies and strictly
following State law, army discipline and tax duties.
The bank
plans to raise its charter capital from VND11.25 trillion (US$535.71 million)
to VND15.50 trillion ($738.10 million) this year, according to a resolution
of its shareholder meeting in April.
High-end
properties attract buyers
After
focusing on low-end projects in previous years, the property market has
witnessed the return of high-end projects with high rates of sales from the
third quarter of 2014.
At the
opening of Vinhomes, a high-end apartment project on Nguyen Chi Thanh Street
here at the beginning of this month, more than 250 units or 70 per cent of
the total number were successfully sold at prices reportedly ranging from
VND3 billion (US$141,500) to VND10 billion ($471,500) per unit.
Units of
Little Viet Nam, a project replicating the old architectural features of Ha
Noi and Hoi An in
Syrena
Viet
Other
property projects likewise reported successful sales in the third quarter of
this year such as Starcity,
Previously,
property expert Dang Hung Vo said there were still opportunities in the
high-end segment of
He
revealed that it was important that investors knew how to make their projects
attractive to buyers and stressed the importance of profits, living
environment and conveniences.
Amid
worries over the return of a property fever similar to that of 2009, an
expert said this was a good time to put property projects on sale because
property was becoming an attractive investment channel amid the decline of
world gold prices to a four-year low and the reduction by the State Bank of
Vietnam of deposit interest rates.
Quarterly
market reports of several property companies noted that many buyers have
returned to the real estate market as investors or speculators. The
participation of speculators and end-users have so far helped the property
market see improvements in the third quarter.
Vietnamnet
online newspaper quoted Vu Cuong Quyet, general director of the Greenland
Service and Real Estate Joint Stock Company, as saying that the market,
boosted by rising demand, would remain on a positive trend in the last
quarter of this year.
In the
long-term, he added, property market recovery would depend on macro-economic
recovery. At a recent seminar on the property market, Quyet said the
macro-economic situation had witnessed improvements, with falling bad debts
and stable stock and financial markets.
Consumer
price index to increase in November
According
to the Ministry of Industry and Trade's Domestic Market Department, the
demand for products such as fertilizers and construction materials, as well
as garments, textiles and shoes, will increased in year-end months because of
seasonal factors.
But
department officials gave assurances that prices would remain stable because
of sufficient supply.
Figures
from the General Statistics Office revealed that the CPI last month increased
by 0.11 per cent over that of September. The price of school commodities and
services reported the highest increase, at 1.31 per cent, in the wake of the
Government decision to increase school fees in several cities and provinces.
The
prices of pharmaceutical and health care services increased by 0.53 per cent
because of the increase in service fees of some localities.
The
prices for housing, construction materials and transport, which form part of
the 11-commodity basket used to calculate the CPI, decreased after petrol
prices were cut three times since late September. Other products in the
basket increased slightly by 0.01 to 0.22 per cent.
The CPI
in the first 10 months of the year increased by only 2.36 per cent compared
with the entire 2013, representing the lowest level of CPI increase in the
past decade.
Banks
willing to give home loans: BIDV head
Banks
are ready to give loans to property projects, said Can Van Luc, deputy
general director of the Bank for Development and Investment of Viet Nam
(BIDV).
He added
that giving loans to real estate and the security sector was more risky than
consumption or production loans. The indicators in the first two sectors were
extremely sensitive to the economy, with frequent changes taking place. The
State Bank of
"However,
risks are often linked to high profits, making banks interested in such
loans," he clarified.
Luc said
that the rate of loans in the property sector was more than eight per cent,
and the figure had fallen over the previous years.
The rate
is expected to increase in the near future, as banks have clarified that the loans
for house repair and leasing account for 40 per cent of their total debt
balance in the real-estate sector, according to Luc.
In
addition, the market is considered to influence other sectors. That's why
banks will continue to pour money into the industry, as only a push from
banks will improve the real estate sector.
Statistics
from the central bank showed that by the end of 2013, the total debt balance
in the property market was VND262 trillion (US$12.4 billion), accounting for
eight per cent of the total debt balance.
By the
end of September, the debt balance in the country's real-estate sector rose
11.5 per cent over the end of last year. Of this, loans for buying houses or
for house repair work comprised the highest component with 26 per cent, followed
by investment in the property sector with 17 per cent.
In the
first nine months of the year, the apartment segment saw the best sales.
About 6,800 apartments were sold in Ha Noi in the nine-month period, higher
than the whole of last year. In
He added
that the market had seen positive signs because of the improved economy and
the VND30-trillion ($1.4 billion) credit package.
In
addition, both investors and home buyers thought that it was the right time
to buy a house. Some investors reduced the selling prices by 30 to 40 per
cent with marketing strategies and by reducing the scale of the apartments.
Le Xuan
Nghia, member of the National Advisory Council for Monetary Policy, said that
property had been a potential sector for banks to promote their credit
growth.
Credit
inflows into the sector will be higher, especially in lending for apartment
building projects, ongoing construction projects and houses in the capital's
interior districts.
Real
estate sector draws foreign investors
The
domestic property market continues to lure foreign investors even though it
has yet to fully recover, experts say.
According
to the Ministry of Planning and Investment's Foreign Investment Agency (FIA),
in the first 10 months of 2014, the real estate sector attracted foreign
direct investments (FDI) worth US$1.22 billion or 8.9 per cent of the total
amount of FDI in
The
sector has the second largest FDI volume in the first 10 months after the
processing and manufacturing industry, the agency revealed.
In fact,
many existing FDI golf resorts and large urban regional projects that were
granted licences with large capital in previous years have yet to be built or
have cancelled construction because of numerous difficulties in disbursing
investment capital, reported the Sai Gon Dau Tu TaiChinh newspaper.
FDI had
yet to be channelled to affordable social housing projects that have high
demand in the domestic market. Meanwhile, agriculture, a key economic sector,
accounted for 0.5 per cent of total national FDI capital in the past three
years, the agency noted.
Phan Huu
Thang, former FIA director, said the domestic property market had yet to
recover, but foreign investors had found opportunities during difficult times
because the property market continued to develop.
Foreign
investors placed their money in the domestic property market in preparation
for its future recovery, Thang observed.
Pham Sy
Liem, deputy chairman of the Viet Nam Federation of Civil Engineering
Association, said the state should have a mechanism for granting and revoking
investment licenses to ensure efficient property project management.
The
State should craft and implement policies urging FDI to co-ordinate whenever
investing in capital in sectors, he added.
Hoang
Xuan Hoa of the Party Central Committee's Economic Commission said the State
should improve FDI quality by refusing to grant investment licenses to
projects using old technology and with a negative environmental impact.
For the
property sector, the State should encourage investment in projects on urban
development, technological infrastructure, social housing development and
apartments for low-income citizens, Hoa added.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 10 tháng 11, 2014
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