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BUSINESS IN BRIEF 26/11
UMA
nation's top furniture retailer
Home
decor brand UMA has opened a store in Ha Noi's Ba Dinh District to become the
largest furniture retail chain in the country.
There
are 10 UMA stores now, with an 11th set to open in the capital's in Dong Da
District next month.
UMA is a
50-50 joint venture between Vietnamese and Swedish partners.
The
Swedish ambassador to
Ambassador
Camilla Mellander said "UMA represents a successful cooperation model
between Swedish and Vietnamese businesses that is expected to further develop
in the future."
Five
VN firms in ASEAN 100 list
Five
Vietnamese companies have been listed in ASEAN's 100 most powerful and
influential by Japanese newswire Nikkei Asian Review.
ASEAN
100 features Viet Nam Dairy Products Joint Stock Co (Vinamilk), Vietcombank,
FPT, PVGas, and Vingroup.
The list
includes 25 companies each from
Vinamilk
is the
In ten
months of this year, Vinamilk's revenue was VND26.924 trillion ($1.28
billion).
While
FPT is
The
Government's plan to equitise 432 SOEs this year and next includes 31 in the
city, which have to be converted into shareholding companies, and the city
had planned to equitise 15 this year.
But a
recent People's Committee meeting on SOE restructuring heard that the city
would be unable to achieve its equitisation plan for this year. Of the 15
firms earmarked for equitisation, only three have so far made initial public
offerings (IPOs): Sai Gon Cultural Products Corporation, Tan Hoa Water Supply
Company, and Trung An Water Supply Company.
Of the
rest, 10 have had their equisation plans approved while one each is in the
process of valuation and having equitisation plans considered for approval.
Huynh
Trung Lam, deputy head of the HCM City Board of Management Renovation, told
Dau Tu Chung Khoan (Securities Investment) magazine that there are
indications the remaining IPOs would also be launched successfully.
Speaking
about the reasons for failing to achieve the SOE equitisation target, many
participants told the meeting that the biggest difficulty relates to SOEs'
investment in non-core sectors.
People's
Committee Chairman Le Hoang Quan said the restructuring process remains tardy
because there is little demand for the shares of equitised SOEs.
But he
underlined the city's determination to complete the equitisation as planned,
with all the SOEs converted into shareholding companies by 2017 at the
latest.
The city
has urged SOEs to sell off their investments in non-core sectors.
The
investments they have to pull out are estimated at VND4.82 trillion
(US$226.72 million) in the 2014-15 period, of which VND1.13 trillion is
planned for the fourth quarter of this year.
Investors
buy still-unfinished apartments
Domestic
investors have bravely purchased property projects facing financial
difficulties to ensure their completion, amid positive market signals for
medium-priced apartments since end-2013.
The
Nguoi lao dong (Labourer) newspaper quoted Nguyen Dinh Trung, general
director of Hung Thinh Real Estate Trading Joint Stock Company, as saying his
company had paid attention to the construction of medium- and high-priced
apartments because of the availability of funds and the willingness of banks
to disburse thousands of billions of dong to the company.
Nguyen
Thi Hoa, general director of the National House Organisation Joint Stock
Company (NHO), revealed that her company made partial purchases of the
projects and entered into deals with the original investors to continue their
development.
Next
year, the NHO plans to invest triple the amount it has invested in difficult
projects this year, Hoa added.
Financial
expert Nguyen Tri Hieu explained that, based on their financial status,
domestic real estate projects can be classified into three: those implemented
on schedule, those suspended for lack of funds and those used as collateral
for loans that became bad debts.
Both
investors and banks want immediate solutions to the second and third kinds of
real estate projects, Hieu added, and partly attributed the existence of such
projects to economic stagnation.
The
availability of loans from either foreign financial organisations or domestic
banks is advantageous to real property project investors and the domestic
real estate market.
Hau
Giang fair promotes products
A fair
on agro-industry, trade and tourism opened Saturday in the southern
Three
hundreds and fifty stands put their products on display for the fair, which
runs until Nov. 29. Of those, 92 stands will focus on the strengths, potential
and development of the economy, culture and tourism of southwestern
provinces, as well as the traditional culture of Khmer ethnic people.
The
event represents an opportunity for firms that make handicrafts and
agro-forestry-aquatic products to promote trade and investment, and enhance
their competitiveness.
The fair
is an important economic and cultural event for both the province and the Cuu
Long (
Forex
fluctuations normal: experts
Experts
predicted more fluctuations in foreign exchange rates from now till year-end
because of higher domestic demand and clarified that this was normal.
Banking
expert Nguyen Tri Hieu told the Tuoi tre (Youth) newspaper that the
fluctuation was normal and in accordance with the economic cycle.
Hieu
explained that domestic demand for the US dollar from the Government and
businesses, to be used for foreign loan payments, would often increase in the
last quarter of the year.
Besides,
rising import demand ahead of the country's largest festival in the New Year
would also push up demand for dollars.
A huge
gap between domestic and global gold prices had also sparked an increase in
gold smuggling that was in turn sparking higher dollar demand, he said.
The
foreign exchange rate in the last months of the year might reach the State
Bank of
The
Vietnamese dong-US dollar exchange rate of commercial banks cooled down in
the past week after the SBV affirmed that it would maintain the current
average interbank exchange rate till year-end. Banks last Friday quoted a
rate of VND21,335/21,385, a VND45 decrease from that of last Tuesday.
Previously,
commercial banks sharply increased the exchange rate in the wake of an
adjustment rumour. SBV deputy governor Nguyen Thi Hong attributed the
increase to psychological factors arising from the rumour that the central
bank may adjust the exchange rate upwards.
Hong
said the SBV would continue to closely watch the foreign exchange market to
ensure its stability as well as that of the monetary market.
If
necessary, the SBV would sell dollars to stabilise the market in the set
band, Hong added.
The SBV
said the country's dollar supply and demand sources remained stable, with a
surplus of roughly US$11 billion in the first nine months of the year.
CPI
falls on lower transport costs
This is
the second time the country's CPI has decreased since last March, when prices
fell by 0.44 per cent from February.
The CPI
increased in November by 2.6 per cent year-on-year, which was lower than the
3.23-per cent year-on-year increase last October but still the lowest CPI in
the past 10 years, the GSO noted.
Do Thi
Ngoc, deputy head of the GSO's CPI Department, attributed the decline to the
20-per cent fall in the retail prices of petrol, leading to a sharp reduction
in transport costs of up to 2.75 per cent month-on-month, thereby
contributing to a 0.24-per cent CPI decrease.
"Transport
costs will continue to fall in the future," Ngoc said, adding that gas
prices likewise posted a remarkable decrease. In addition, the prices of
building materials and housing fell by 0.74 per cent.
Notably,
the food and restaurant services groups, which account for the biggest
portion of the CPI basket of goods and services, decreased by 0.03 per cent
while the telecommunications group decreased by 0.01 per cent.
Seven of
11 goods in the basket saw a slight increase of 0.03 to 0.34 per cent. In
particular, shoes, garments and textiles increased by 0.34 per cent because
of a rise in demand for clothing during the cold season.
Entertainment
and tourism increased by 0.1 per cent while education increased by 0.03 per
cent and health care services, by 0.04 per cent.
Ngoc
observed that the CPI this month reached its lowest level since 2009. This is
abnormal because the index usually increases during the year-end months, she
added.
The
November CPI in the country's two big cities fell by 0.30 and 0.36 per cent.
Other localities such as
Vietnamese
Prime Minister Nguyen Tan Dung also said last week that
Economist
Ngo Tri Long agreed, saying the low CPI would have both positive and negative
effects on the economy.
Long
revealed that at the end of the third quarter, the country's GDP growth rate
reached 5.62 per cent, so the growth rate for the entire year was expected to
reach 5.8 per cent because of an expected increase in foreign direct
investments and overseas Vietnamese remittances in the year-end months.
A CPI at
4.5 to five per cent will have a positive impact while that at three per cent
will result in higher inventory, low purchasing power, decreasing investment
and slow consumption, he added.
However,
Long suggested that the Government refrain from increasing prices now, as
high inventory, lower demand and increasing bad debts were causing the drop
in the inflation rate.
If prices
are increased, purchasing power will fail to recover and consequently,
production will fail to improve, he warned.
Regional
experience shared in disease prevention in aquaculture
As many
as 200 veterinary specialists and aquaculture researchers and students from
more than 30 countries are gathering in
The
objective of the event, jointly organised by the Fish Health Section (FSH) of
the Asian Fisheries Society (AFS) and the Department of Animal Health under
the Ministry of Agriculture and Rural Development (MARD), is to share
experience in and scientific research on disease prevention.
Speaking
at the opening ceremony on November 24, Deputy MARD Minister Vu Van Tam
highlighted that the symposium provides opportunities for Vietnamese and
international businesses to seek partners and expand research cooperation,
seafood trade links, and aquatic veterinary medicine exchanges, with a view
to producing high-value added food, promoting sustainable development and
minimising pollution.
During
the five-day event, participants discussed a number of issues related to
aquatic animal health, such as the application of biological security,
epidemic prevention, and common parasites and diseases in tilapia, tra fish
and shrimp.
The
meeting also discusses the early mortality syndrome and acute
hepato-pancreatic necrosis disease in shrimp (EMS/AHPND), which is one of the
biggest challenges for the development of aquaculture in
Italian
firms seek investment opportunities in Vietnam
As many
as 100 Italian organisations and enterprises are taking part in a number of
trade promotion activities in
They
include official discussions, governmental-level bilateral meetings, and an
Italy-Vietnam economic forum.
A
meeting of the Vietnam-Italy joint committee for economic and trade
development will also be held on this occasion.
The
visit, led by Italian Deputy Minister for Foreign Affairs and International
Co-operation Benedetto Della Vedova, aims to strengthen relations between the
two countries in various fields including economy, trade, technology, health
care, energy, and infrastructure.
In addition,
both sides will discuss investment potential and cooperation opportunities
offered by 110 industrial areas throughout
Currently,
The
country also remains the third largest EU trade partner of
Trade
decline via Lao Cai border gate
Since
early this year, the quantity of
According
to the Plant Quarantine Sub-Department of Region VIII,
Imports
from
Among 14
temporary import and re-export products from Laos, South Africa, Iran and
Australia to China through Lao Cai border gate are Dalbergia cochinchinensis,
almond, walnuts, pistachio nut, dried figs, and rapeseed.
RoK
– top FDI investor in Vietnam
Since
early this year, 60 countries and territories have directly invested in
In the
11-month period, the newly registered and the extended FDI capital of Korean
businesses reached US$6,82 billion,
Foreign
businesses have invested in 50 provinces and cities nationwide. Thai Nguyen
province ranks first in attracting FDI capital, followed by
According
to the Ministry of Planning and Investment (MPI), in the reviewed period,
foreign investors have registered a total investment capitalization of
US$17.33 billion or 83.3% against the same period last year. It is
estimated that US$11.2 billion FDI capital has been disbursed, a year-on-year
increase of 6.2%.
The
manufacturing and processing sector attracted most of the FDI with 689 newly
registered projects. It is followed by the real estate sector with 32 new
projects and the construction sector.
Science,
technology, innovation to drive sustained growth in Vietnam
The
study, The OECD-World Bank Review of Science, Technology and Innovation in
Increased
competition in globalizing markets means that it is more important than ever
to invest early in advanced technological capabilities, said Victoria Kwakwa,
World Bank Country Director for
Despite
its historical record of scientific research,
The
World Bank-OECD joint review provides several recommendations for policy
makers to foster science, technology and innovation in
Italian,
German papers hail
Italian
and German newspapers have run stories praising
Its
comments came in anticipation with
Alessandro
Terzulli, economic analyst of SACE export credit agency, said
Italian
enterprises are increasingly interested in
"Furthermore,
the importance of
While
As many
as 750 representatives of the German business network attended the
recently-concluded 14 th Asia-Pacific Conference of German Business (APK) in
"
The
article mentioned foreign direct investment as a contributor of almost 20
percent to
It
quoted the World Bank report as saying that management and professional
training for workers need to be improved in order to attract more foreign
investors .
Nevertheless,
thorough preparation and professional advice for all businessmen who want to
be active in
"Whoever
wants to invest in
Can
Tho enjoys three-year record GDP growth
The
Mekong Delta city of
A
conference on November 24 to review the locality’s socio-economic development
in 2014 stated that the local industrial sector continued to undergo positive
developments, with the industrial production index predicted to grow by 8.4
percent compared to 2013.
Local
industrial parks attracted five new projects with a total registered capital
of 48 million USD, up 23 million USD compared to last year.
The
locality’s combined retail and service sectors generated revenue of more than
71.7 trillion VND (3.36 billion USD) this year, up 16.4 percent year-on-year.
The city welcomed over 1.3 million holiday-makers, raking in around 1.1
trillion VND (51.7 million USD), which accounts for 9 percent more tourists
and 20 percent more revenue than in the same period last year.
Throughout
the year, local farmers produced 1.4 million tonnes of rice, a 3.9 percent
increase compared to 2013. The large-scale paddy field model was expanded to
a total area of 39,000 ha, a 51 percent year-on-year increase.
At the
conference, the municipal Party Committee approved a resolution, setting a
target of 12-12.5 percent GDP growth in 2015 and GDP per capita of 79.3
million VND.
The
locality’s revenue from exports and services, and the total budget collection
are expected to reach 1.6 billion USD and 460 million USD, respectively.
In order
to achieve these objectives, the local authorities will focus on developing
industrial sectors that serve agricultural production, while promoting
services with potential for added value, such as finance, banking, insurance
and logistics, according to Tran Quoc Trung, the Deputy Secretary of the
Committee.
In
addition, the city will also pay heed to boosting trade and tourism with a
view to becoming a centre for services, trade and entertainment in the Mekong
Delta in the future, Trung said.
Dong
Nai’s FDI exceeds target by 600 million USD
By
mid-November, the southern
This
year, 73 new FDI projects were registered, valued at 587 million USD, while
over 977 million USD were added to the capital of 75 existing projects. Most
of the projects are in the high-tech and support industry sectors.
Dong Nai
has so far revoked the licences of 11 projects, worth nearly 95.5 million
USD.
Director
Thu said the results were attributable to the province’s sound investment
climate, effective long-term promotion programmes and improved administrative
procedures.
The
volume of foreign-funded investment is expected to hit 1.6 billion USD by the
end of 2014, a year-on-year increase of 23 percent.
The southern
provinces of Dong Nai and Binh Duong, together with
Chairman
of the VICOFA Luong Van Tu said Vietnamese coffee accounted for 20 percent of
the world’s total production volume. However, the country only generated 2
percent of the global coffee value, adding that each coffee producing
household earned around 2 USD from the sale of one kilogramme of coffee
beans.
According
to the master plan for coffee development by 2030, domestic and foreign
businesses will benefit from incentives to upgrade and build integrated
processing plants with a capacity of more than 135,000 tonnes per year,
including the production of 60,000 tonnes of instant coffee.
VICOFA
suggested the Ministry of Agriculture and Rural Development develop a
detailed plan with a focus on mechanisms and policies to develop the coffee
processing network in line with cultivation areas.
Lao
Cai aims to diversify industrial production activities
The
mountainous
The province’s
industrial sector has expanded its production activities to metallurgy,
fertilizer, chemicals, construction materials, hydroelectric power,
agricultural processing and support industries, added the Vietnam Economic
News.
The
mining sector has focused on exploiting copper, iron, gold, and kaolin to
serve for domestic production. In addition, metallurgy, fertilizer production
and chemicals have recorded strong growths.
The
province’s hydroelectric power has seen rapid growth, attracting investment capital
of tens of trillions of
According
to Lao Cai Department of Industry and Trade, in 2013, the proportion of
industrial production, trade and services accounted for 82 percent of the
province’s economic structure.
According
to Director of Lao Cai Department of Industry and Trade Do Truong Giang, the
establishment of industrial zones and clusters has created a breakthrough in
the province’s industrial development. For example, the Tang Loong Industrial
Zone with an industrial production area of about 650 hectares is given for
metallurgy, chemicals and fertilizer production.
Meanwhile
with advantages of location and good infrastructure service, Dong Pho Moi
Industrial Zone and Bac Duyen Hai Industrial Cluster are home to production
activities such as engineering, agricultural processing, construction
materials and consumer goods.
The
province aims to develop a complete production line for its mining sector by
providing both mining and smelting services.
According
to statistics, Lao Cai province ranked second in terms of iron reserves. To
date, iron has become a main material for the Lao Cai Iron and Steel Plant
with a capacity of one million tonnes per year at the initial stage.
Economic
cooperation a Vietnam-India strategic objective
The
Vietnamese and Indian leaders have agreed that economic cooperation between
both countries should be pursued as a strategic objective, said an Indian
expert.
Talking
to a Vietnam News Agency correspondent in
The two
countries have been cooperating extensively in the economic field and
It was
also noted that there has been strong growth in bilateral trade in recent
years, particularly after the India-ASEAN trade in Goods Agreement.
According
to the analyst, the recently-signed FTA between
Priority
areas for economic cooperation include hydrocarbons, power generation,
infrastructure, tourism, textiles, footwear, medical and pharmaceuticals,
information & communications technology (ICT), electronics, agriculture,
chemicals, machinery, and support industries.
The two
countries have set to raise their two-way trade to 15 billion USD in 2015
from the current 7 billion USD.
Vietnam’s
economic success grabs headlines in Latin America
Cuban
and Argentinean media recently ran stories with a focus on
In an
article on its website, the Cuban Journalists’ Association highlighted
The
article said
The
story cited published data that
With
incentives to agriculture, rice and coffee have become
Meanwhile,
It said
The
nation is switching from producing simple electronic products to more
advanced ones as a number of global electronic giants have invested here,
such as Intel beginning its production in Vietnam in 2010, the newspaper
said, adding that major Taiwanese, Korean and Japanese groups such as
Bridgestone and Panasonic also chose Vietnam as their investment destination.
La
Nación underlined the case of Samsung Electronics, which was recently
licensed to build a 3 billion USD mobile phone factory, bringing its total
investment in
The
Vietnam Chamber of Commerce and Industry (VCCI) and the Hong Kong-Vietnam
Chamber of Commerce on November 21 signed an agreement to further expand
investment and trade between their two business communities.
Addressing
the function, Executive Vice-President of VCCI Doan Duy Khuong said:
"The agreement will help both sides' enterprises strengthen business
exchange and increase investment in Vietnam and Hong Kong, and boost
Vietnam-China economic and commercial relations to an even a higher
level."
Jonathan
Choi, Chairman of the HKVCC, said: "Apart from the ASEAN +
Bilateral
and multilateral agreements combined with an in-depth integration of regional
economics will bring the East Asian region into a competitive and vibrant
economic region, said Choi, who is also Chairman of Sunwah Group.
Regarding
bilateral trade with
The
items traded include clothes, textiles, accessories, leather and shoes, metal
and steel, computers, electronics and accessories, machinery and tools,
parts, fishery, rice, wood and wooden products.
In the
field of investment, by October 20, Hong Kong had 853 projects with a
combined investment capital of 14.1 billion USD in
The
signing ceremony took place as part of the visit of Gregory So, the Secretary
for Commerce and Economic Development of the Hong Kong Special Administrative
Region.
The
total export import turnover gained US$257.85 billion, up 12.7 percent over
the same period last year.
In the
first half of November, most export items saw a turnover decrease. The most
reduction was dropped in the group of cell phone and components with US$240
million.
Garment
and textile turnover fell US$212 million, machines and accessories dropped
US$210 million and seafood declined US$129 million.
The
export value of foreign invested enterprises totaled US$81.03 billion, a year
on year increase of 15.1 percent, accounting for 62.3 percent of the
country’s export value.
The
import value amounted to US$71.69 billion, increasing 11.5 percent and
occupying 56.9 percent.
NA
query SOE sector involvement
A
regulation on the state investment scope in enterprises in the draft Law on
Management and Use of State Capital Invested in Production and Business has
come under fire from many National Assembly members.
Article
10 of the draft currently discussed by the National Assembly explains that
state capital shall be used for establishing enterprises providing essential
products and services, operating in industries in service of national defence
and security, operating in state monopolies, and enterprises with high
technology and large-scale investment that can serve as an impetus for other
sectors to develop.
However,
many National Assembly deputies have expressed doubts, saying the proposal
was so broad it would continue to allow the state and state-owned enterprises
(SOEs) to do business in a huge variety of sectors, particularly when many
SOEs were operating inefficiently.
Deputy
Tran Ngoc Vinh from
“No
government in the world like
“What
are essential products and services? I think it is necessary to have thorough
quantitative analysis about these sectors, so that the state will not be able
to use the term ‘essential’ as a pretext for all products and services, in
order to hold a monopoly,” echoed deputy Do Van Duong from
Currently
SOEs operate in almost all economic sectors and monopolise production of the
economy’s key products, with telecommunications (91 per cent), insurance (88
per cent), fertilizer (99 per cent), coal (97 per cent), gas and electricity
(94 per cent).
“The
state should focus its investment in national security and defence, not
necessarily in essential and high-technology sectors which are currently done
very well by local and foreign private enterprises,” said deputy Ha Sy Dong
from Quang Tri province.
The
regulation was actually discussed in May this year by the National Assembly,
but almost nothing has been revised since then. At that time, the National
Assembly’s Chairman Nguyen Sinh Hung stressed that the regulation would
continue discouraging private enterprises from engaging in sectors currently
dominated by the state and SOEs.
“Everything
can be defined as being essential to society, from clothes, machinery,
cement, steel, transport to education and health care. If this regulation is
applied, the state may continue controlling these sectors that private
enterprises want to engage in, and this is during a period when we are
boosting SOE equitisation,” he stressed. “I highly recommend that the
regulation be reconsidered.”
New
strategic partnership formed to tap renewable energy potential in Vietnam
HBRE
Wind Power Solution Limited and Huy Hoang Transportation & Logistics
Corporation (HTL) recently signed a framework agreement on comprehensive
strategic partnership with the aim of promoting investment efficiency of
renewable energy projects in
Under
the agreement, HTL will become the EPC contractor, performing the whole
process from design, material and equipment supply, to construction, testing
and hand-over to the project developer- HBRE.
Initially,
the two companies will cooperate in implementing phase I of Tay Nguyen
(Central Highlands) wind farm project in
HTL is
also an equity investor in the project through 25 per cent capital value
contribution, tantamount to VND150 billion ($7 million).
The Tay
Nguyen wind farm project is positioned in DakLak province’s EaH’Leo district
in the Central Highlands, one of the regions having the highest potential for
wind energy in
Licensed
by DakLak People’s Committee, HBRE Wind Power Solution envisages implementing
the project in three phases from present to 2020, with expected total
capacity reaching 120MW.
In
particular, phase I with capacity of 28MW and total investment of nearly
VND1,400 billion ($66.6 million), is expected to generate electricity in June
2016, producing more than 100,000,000kWh per year.
After
finishing all three phases, it is expected to become the largest-capacity
wind farm in
Tran
Viet Hung, deputy head of the Central Highlands Steering Committee
said, “HBRE is the first company to run wind power project in Tay
Nguyen area. Hopefully, the cooperation between HBRE and HTL in this project
will bring prosperous outcome that contributes to Tay Nguyen’s sustainable
development and general development of renewable energy in
Hung
said that Tay Nguyen was the region having a high potential for wind energy.
According to a recent research by the Ministry of Industry & Trade, wind
power capacity in Tay Nguyen accounts for 25 per cent of the country’s total
capacity, which concentrates in DakLak and Gia Lai province, reaching
capacity of 1,350MW.
Ho Ta
Tin, chairman of HBRE affirmed, "The cooperation with HTL in Tay Nguyen
wind farm project is a favorable starting point, initially strengthening
bilateral relationship between two parties based on long-term and sustainable
development. We are committed to cooperating effectively to further develop
clean energy which is environmentally friendly and economically efficient,
not only in Tay Nguyen but also in other areas in
“We are
delighted to work with HBRE and believe that the experiences and strengths of
both parties will bring success to the upcoming collaborative projects. As a
contractor of Bac Lieu wind power project, we are strengthening our position
and capabilities in the field of construction and installation of wind power
equipment in local market,” said Ho Xuan Hung, director of HTL.
“This
cooperation is also a great motivation for HTL to contribute more to the
development of potential wind power in
On
September 23, HBRE and General Electric (GE) signed a memorandum of
understanding for cooperation in developing the Tay Nguyen wind farm.
Last
October, HBRE chose GE as the provider of 14 turbines in phase I of the
project.
As an
Bad
debts set to surge as year draws to a close
The
year’s later months have proven a challenging time for banks, with bad debts
rising sharply.
According
to Nguyen Kim Xuyen, DongA Bank’s deputy general director, bad debts
made up 6.8 per cent of the bank’s total outstanding loans at the end of this
October against a rate of 4 per cent at the end of last year.
The bank
executive attributed rising bad debts to a domestic economy that is still
largely struggling, making it hard to recover outstanding loans.
The
application of new regulations on debt classification has resulted in rising
bad debt volumes across the whole banking sector.
Eximbank
also saw its bad debts sharply increase while the banking sector struggled to
boost lending.
Eximbank’s
credit actually contracted nearly 4 per cent in the first nine months of this
year, while its bad debts amounted to VND2.68 trillion ($128 million), up
62.8 per cent against the end of 2013.
Bad
debts account for 3.35 per cent of the bank’s total outstanding loans against
1.98 per cent rate early in the year.
In the
case of ABBank, credit growth actually contracted 1.4 per cent by the end of
the third quarter, meanwhile overdue debts reached VND3.73 trillion ($178
million), representing 16 per cent of total outstanding loans compared to
14.2 per cent at the end of last year.
PG Bank
saw its bad debts inch up from 2.92 per cent to 3.06 per cent in
January-September period.
In case
of state giant BIDV, by end of the third quarter, bad debts reached VND7.96
trillion ($379 million), equal to 1.93 per cent of its total outstanding
loans. Bad debts rose 7.3 per cent against the end of 2013.
At the
Military Bank, bad debts jumped 31.6 per cent during the period to VND2.82
trillion ($134.5 million), making up 3.09 per cent of the bank’s total
outstanding loans.
At
Vietcombank, by the end of September bad debts represented 2.54 per cent of
its total outstanding loans. However, Group 5 debts, which pose a real risk
of default, accounted for nearly half of the bank’s bad debts, and rose
approximately 70 per cent against the end of 2013.
Many
bank executives say bad debts are emanating from not only old loans but also
new credit contracts. However, debt classification requirements introduced
by the State Bank of Vietnam’s (SBV) Circular 09, which came into effext from
March 20 this year, have piled added pressure on banks in terms of risk
provisions.
In this
context, selling distressed assets remains a tough nut to crack for banks, since
75 per cent of their collateral is tied up in the real estate market, which
is still relatively weak.
“Bad
debts may even increase more sharply in the coming months after banks fully
apply stringent requirements on debt classification and risk provisions,”
said the director of a
Tran Du
Lich, a member of the National Financial and Monetary Advisory Council, said
“For the banking sector to reach its full-year credit growth target of 12-14
per cent this year, the economy would need to absorb an additional VND100
trillion ($4.7 billion) before the end of the year. This is far too large an
amount given the currently modest demand for capital.”
Car
market increase in year-end
Sales of
automotive industry in
Along
with the growth in sales, many types of imported and domestically assembled
cars are available for choosing in the yearend shopping season. Truong Hai
Auto Corporation (Thaco) launched four types of vehicles including Peugeot
208, 3008, 508 and RCZ at a cost of around VND1 billion (US$ 46,839). It also
introduced a fleet of middle-ranking cars including Kia Morning Si, Kia Rio
sedan and Kia Rondo.
LEXUS
Vietnam also introduced GX460 2015, the full-capability premium SUV with
Lexus amazing services, in
According
to representative from Lexus Vietnam, though car market in
Generally,
in the first ten months of the year, Vietnamese customers bought 121,648
vehicles. The figure showed an increase of 40 percent in comparison with the
same period last year. Thaco leaded the first with 32,883 vehicles, a surge
of 40 percent;
Jesus
Metelo N. Arias, president of the Viet Nam Automobile Manufacturers
Association (VAMA) said that the market shows every sign of making a strong
recovery. Only in October, 2014, nearly 15,000 vehicles were bought, an
increase of 45 percent in comparison the same period last year. It is
forecast that 150,000 vehicles would be sold, which manifested an increase of
36 percent compared last year.
According
to the figure reported by the General Customs Department, in ten past months,
the country imported 51,600 cars, posting an increase of 96.4 percent
compared to the same period last year. Most of imported cars are 9-seater
cars with 22,800 vehicles.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
|
Thứ Ba, 25 tháng 11, 2014
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