BUSINESS IN BRIEF 3/2 NA Vice Chairwoman checks progress of projects in Vung Ang EZ Politburo member and Vice Chairwoman of the National Assembly Tong Thi Phong on February 1 visited and checked the progress of projects in the Vung Ang Economic Zone (EZ) in the central province of Ha Tinh. NA Vice Chairwoman Phong listened to a report by leaders of the Hung Nghiep Formosa Ha Tinh Steel Ltd. Company on the scale and implementation of various projects, including construction of the Formosa Ha Tinh Steel Plant, a thermal power plant, the Son Duong Deep-water Port and the EZ’s infrastructure. She spoke highly of investment contributed by the Formosa Group and the Hung Nghiep Formosa Ha Tinh Steel Ltd. Company boosting economic development of the northern central region and Ha Tinh province. Phong also praised Ha Tinh province’s efforts in conducting site-clearance and resettling residents who were affected by the projects. She urged the company to hasten the projects’ implementation and ensure quality and labour safety and sent best wishes to local and foreign officers and workers on the upcoming new lunar year. On the same day, the NA Vice Chairwoman paid tribute to General Vo Nguyen Giap at Vung Chua, Yen island in Quang Binh province. Domestic demand for U.S. apples drops Domestic demand for apples imported from the United States has fallen sharply due to news reports that apples and related products of some American companies are contaminated with the bacterium Listeria monocytogenes. Fruit importers and supermarkets in Vietnam have reported a decline in their sales of U.S. apples. Local consumers have stayed away from using U.S. apples even though the Plant Protection Department under the Ministry of Agriculture and Rural Development reassured on January 21 that 90% of the U.S. apples were imported into Vietnam from Washington, D.C. while the caramel apple products containing the bacterium were supplied by Bidart Bros in California only. A media executive of Co.opmart said this supermarket chain has told customers that it does not distribute the caramel apples imported from California and that U.S. apples for sale at Co.opmart stores are from Washington D.C. However, its stores have seen a sharp fall in sales of U.S. apples. Ho Quoc Nguyen, public relations director of Big C, said the supermarket chain has placed brochures providing information about the origin of U.S. apples it is selling at its service counters but sales have remained sluggish. “The consumption of U.S. apples has dropped over 30% in the past few days,” he said. The falling demand has affected not only distributors but suppliers as well. The owner of a company specializing in distributing imported fruits in HCMC told the Daily that the number of orders for U.S. apples at his company has plummeted 30-40%, especially those by supermarkets. The volume of U.S. apples imported into Vietnam for sale during the forthcoming Lunar New Year holiday, or Tet, would decrease or just equal to that of last Tet, he predicted. But he still expected that the demand for U.S. apples will recover after the origin of U.S. apples is clarified. Only sellers who have loyal consumers have been less affected by the apple scare. Au Thi Ngoc Hanh, a fruit trader at Pham Van Hai Market in HCMC’s Tan Binh District, said her customers have questioned the origin of U.S. apples she is selling but still bought these products after they are informed that the fruits were imported from safe areas. JICA provides additional JPY36.4 billion to improve power supply The Japan International Co-operation Agency (JICA) has inked an agreement with the Vietnamese Government on providing an additional JPY36.392 billion of official development assistance (ODA) to support a project on building the Thai Binh Power Plant and Transmission Line II. The project will construct a 600MW coal-fired thermal power plant using locally produced coal and a 220KV transmission line in the northern province of Thai Binh, in order to meet the power demand in the region. It will help reduce fuel costs and power loss because of long-distance power transmission, and increase the efficiency of the power supply, alleviating the strained power supply and demand balance, and promoting economic growth and the international competitiveness of the country. The project will also lower the high dependency on hydroelectric power, currently at 50.2%, providing power stability overall by avoiding the reduction in power supply in the dry season when less water is available for producing hydroelectric power. Together with JPY20.737 million for the project’s first phase in 2009, the loan will be used for engineering works, material and equipment procurement and consulting services, including the construction and supervision required for constructing the power station and setting up power transmission lines, and for constructing common facilities for the power station and adjacent power stations. JICA said that it will continue to provide active support to address Vietnam's development issues, while pursuing integrated implementation of a wide range of ODA assistance, such as ODA loans, technical co-operation and non-refundable aid. Export turnover hits nearly 13 bln USD in January Vietnam’s export turnover in January hit 12.9 billion USD, 0.2 percent higher than December and up 9.7 percent over the same month, 2014. According to the General Statistic Office, major commodities earning higher export turnover against December included telephones and   components, up 34.6 percent; pepper, up 20.2 percent, rice, up 13.3 percent, electronics, computer and spare parts, up 10.9 percent, cassava  and products from cassava, up 8.4 percent. However, there were several agro-products and materials that suffered a decline in value in the reviewed period, with vegetables experiencing  the highest drop of 31.9 percent, followed by coal (down 31.6 percent), crude oil (30 percent), aquatic products (20.8 percent), and chemicals  (19.8 percent). The country’s import value in January was valued at 13.4 billion USD, down 4.5 percent against the previous month and up 25.5 percent over the  same period last year. As a result, the country experienced a trade deficit of 500 million USD, equivalent to 3.9 percent of the export turnover, in the month. Vietnam trade deficit swells in January Vietnam racked up a US$500 million trade deficit in January on the back of a 91% on-year surge in steel imports for the month. According to Ministry of Industry and Trade, overall the nation’s imports spiked 35.5% on-year to US$13.4 billion in January topped off by a jump in steel exports to a record 1.1 million tonnes. Other key imports included automobiles, oil, fertilizer, electronics, computers and machinery and equipment. Meanwhile the nation's cumulative exports for the month jumped 9.7% on-year tallying in at US$12.9 billion, consisting principally of mobile phones and spare parts, pepper, rice, electronics and computers. 20,000 new apartments this year Viet Nam will see 20,000 new apartments becoming available on the market this year, together with around 2,000 units on sale since December last year. The capital has received more than 1,000 apartments from property projects in the North Tu Liem, Hai Ba Trung, Thanh Xuan and Ha Dong districts. These have been named Green Stars, Diamond Blue and Vinhomes Times City. In HCM City, the projects of the Him Lam Cho Lon and Giai Viet Apartment Building have also put over 2,000 apartments on sale. As of November 2014, the country had reported an inventory of 15,700 apartments and 13,000 low-storey houses. Work on Imperial Garden begins Construction work began early this week on the Imperial Garden office, housing and commercial complex in Nguyen Huy Tuong of Thanh Xuan District in the capital city. The project covers an area of 42,000 sq.m, has over 1,000 sq.m of green space and infrastructure facilities, including apartments, luxury villas, offices available for leasing and a trade centre. The project is slated to become operational by the end of 2017. Nguyen Hong Ngoc, the general director of the HBI company, which is the owner of the project, said the property market in general and in the capital city in particular, had undergone a drastic change. This presented an opportunity for property developers. Based on a long-term vision, Ngoc said he believed his company would be able to create a high-quality and civilised community for Hanoians. Ha Noi to have first rent-free mall Domestic businesses will be able to use permanent rent-free stalls at the V+ Shopping Mall and Supermarket in Viet Nam, which will officially open today. The V+ centre, located in the south of the city, is spread over 25,000 sq. metres on the No 505 Minh Khai Street, and in an unprecedented move, will offer rent-free space to local retailers, who want to sell Vietnamese products. Retailers selling imported products will not be allowed to trade in the centre. The centre is part of the Hoa Binh Green City resident zone, which has received investment from the Hoa Binh Group. Group Chairman Nguyen Huu Duong said V+ would act as a community marketplace that offers good quality, conventional and organic groceries and fresh produce from Viet Nam at prices that are lower than those charged by other big shopping malls and supermarkets. Dai Lai Resort fully operational The Nhat Hang Group has said its Paradise Dai Lai Resort in northern Vinh Phuc Province's Phuc Yen Town is now fully operational. Covering an area of 40 ha, the resort includes hotels, villas, entertainment areas and a golf course. In addition, the resort provides several other entertainment options, including outdoor activities, water music stage and parks. Located 38 kilometres from Ha Noi, the group's General Director said the resort would have 344 villas, spread over an area of 200 to 500 square metres, which have been granted land use certificates. NCB to use profits for restructuring The National Citizen Bank (NCB) posted profit of VND75 billion (US$3.5 million), while its assets rose 27 per cent to be worth nearly VND36.8 trillion ($1.7 billion). By the end of last year, the total mobilised and lending capital rose 30 per cent and 23 per cent respectively over the previous year. In particular, its bad debt rate fell by 58 per cent, accounting for 2.5 per cent of the total outstanding loans. NCB's General Director Tran Hai Anh said last year that the bank's business results had improved. The profits will be used for accelerating the restructuring process. NCB has also focused on strengthening and improving efficiency in the whole system, while developing strategic products in the retail banking sector. It will build special service packages for businesses and for enhancing debts. Equitisation of MobiFone by 2016 MobiFone's equitisation will be completed within 20 months, which will also include its restructuring, expected to conclude by mid-2016, the Minister of Information and Communications Nguyen Bac Son said. The Minister provided this information on the sidelines of a conference held in Ha Noi last week to discuss the implementation of the Vietnam Posts and Telecommunications Group's 2015 plan. The minister had recently taken a decision on the rules of the group's organisation and operations. The MobiFone Corporation is an official name used in the international markets. It is a 100 per cent state-owned enterprise, with a charter capital of VND15 trillion (US$714.2 million). The main businesses of MobiFone include investment, construction, operating mobile networks and providing telecom services, information technology, broadcasting and multimedia. It is also allowed to produce, assemble, import and export electronics, telecom and IT equipment. According to the decision, the company will have 21 dependent units. The enterprise holds more than half of the charter capital of MobiFone Global, MobiFone Plus and MobiFone Services. Besides, the group owns a stake in four firms including Technology and Media Investment-Development Joint Stock Company and the TienPhong Bank. Deputy Minister Le Nam Thang said that after the Prime Minister approves principles on which MobiFone's equitisation will be based, the ministry will build a specific plan that includes enterprise value assessment and selection of strategic investors. On December 1, 2014, Minister Son had signed a decision to transform MobiFone into a corporation. Vietnamese companies profit handsomely from Euro's slide The repeated drops in the value of the Euro in 2014 proved advantageous for companies that conduct a sizeable proportion of lending in the currency, thus boosting their profits. On the stock exchange, four companies, including PetroVietnam Power Nhon Trach 2 Co. (NT2), Vicem But Son Cement Co. (BTS), Ha Tien 1 Cement Co. (HT1) and Bim Son Cement Co. (BCC), reported big profits earned from foreign exchange fluctuations. The Euro has lost 18.5 per cent of its value, compared with the Vietnamese dong since March 2014, and the dong has traded around VND24,000 a Euro in recent days. The European Central Bank cut interest rates several times last year and launched stimulus packages in efforts to curb inflation and prop up weakening economic growth in the region that had driven down the Euro's value. The currency is expected to continue sliding this year after the launch of a new quantitative easing programme worth around 1.1 trillion Euros last week, which will become effective in March. In addition, an unstable outlook for Egypt, which is considering the possibility of leaving the European Union, will make development in the region more complicated. NT2 recorded the biggest Euro-nominated loans, worth more than VND3.4 trillion (133 million Euro) and the big slide in the Euro resulted in the company earning a profit of VND425 billion (nearly US$20 million). Its pre-tax profit thus soared to over VND933 billion ($43.6 million) for the whole year, an impressive figure if compared with the humble initial target of just VND7.67 billion ($358,400) set early last year. The company's share price also shot up from more than VND6,000 ($0.28) a share in January 2014 to around VND23,000 ($1.07) this week. NT2 is listed in the unlisted public company market (UPCoM) and plans to move to the HCM Stock Exchange this May. With a loan of over VND1.8 trillion (equivalent to 75.3 million Euro), cement maker Ha Tien 1 also earned a big profit of VND94 billion ($4.4 million) from the foreign exchange difference. This helped the company earn a sizeable before-tax profit of VND396 billion ($18.5 million) in 2014, as high as 19 times its annual target. Its share price on the HCM Stock Exchange was also 3.5 times the price it saw early last year, up from VND5,300 ($0.25) in January to VND18,600 ($0.87) a share yesterday. In a relative comparison, Vicem But Son Cement Co. was the biggest gainer, owing to the Euro's loss. Its profit of VND130 billion ($6 million), stemming from forex fluctuations, was even bigger than its annual profit of VND122 billion ($5.7 million) for the whole year. Bim Son Cement, with a total Euro loan of over VND1 trillion (43.4 million Euro) by the end of 2014 is yet to report its annual earnings, but its nine-month profit was pegged at VND66 billion ($3 million), of which the forex profits accounted for 80 per cent of the total profit, or VND53 billion ($2.5 million). Share prices of both Vicem But Son and Bim Son more than doubled last year. In January 2015, the value of the Euro slumped by another 9 per cent. Thus, businesses which had borrowed considerably in this currency are expected to continue benefiting from this slide. In addition, the six-month EURIBOR (the market benchmark for Euro interest rates) is unlikely to rise in the medium term, resulting in the continuation of the ongoing low lending rates. Makers of high-quality goods win prizes The Vietnamese High Quality Goods award will be conferred on 520 firms this year, 42 of them being first-time winners but an equal number winning it every year since its inception 19 years ago. At a ceremony in HCM City next Thursday, the awardees will also include 339 firms who are winning for a third straight year. The winners were selected from a list of 668 companies based on surveys of more than 20,000 households, individuals, and retailers at markets, supermarkets and shops around the country by the Business Association of High Quality Vietnamese Products, which gives the annual awards. Most of the winners were makers of sauces, spices, electrical and household machines or construction materials, Hoang Trong of the association said. They also had to meet certain criteria with regard to product quality and origin; comply with regulations on consumers and workers' rights, environmental protection and corporate social responsibility; and be innovative. The survey found that most producers made significant improvement in product quality, with household utensil producers topping the list followed by firms in the embroidery, footwear, helmet, and office supplies sectors, Trong said. It also found that Vietnamese goods had gradually won domestic consumers' trust, with 63 per cent of the surveyed people saying they "like" using Vietnamese goods compared to 11 per cent for Japanese goods, 6 per cent for US goods and 5 per cent for Thai goods. But when it came to actual buying based on product origin, 80 per cent chose to buy made-in-Viet Nam goods. The establishment of a single ASEAN market this year will mean both opportunities and challenges for Vietnamese firms, according to the association. To compete with products from other member countries, they have no choice but to invest more in production technologies to produce quality products at competitive prices, it said. Vu Kim Hanh, the association's chairwoman, said activities like trade fairs would be undertaken to support businesses, enabling them to develop both in the domestic and neighbouring markets and update their technologies and management. The association also plans to strengthen communication activities to boost consumption of Vietnamese goods in the domestic market. The awards ceremony will be held at the City Hall in District 3. HCM City promotes trade in key markets In its trade promotion activities for this year, the Investment and Trade Promotion Centre of HCM City will focus on key markets of Russia, Hong Kong, Cambodia, Myanmar, Indonesia and Laos via trade fairs and exhibitions to promote Vietnamese goods and overseas business trips. Pho Nam Phuong, ITPC's director, made the statement at a review meeting organised in HCM City on Thursday, adding that the move aims to support Vietnamese firms to expand market share and promote their brands on the world market. "Being the first southeast Asia country signing a free trade agreement with the Customs Union of Russia, Belarus and Kazakhstan, Viet Nam has advantages in penetrating the Russian market," she said. The centre would provide domestic exporters with updated information of these markets to enable the latter to map out appropriate export strategies and organise programmes to connect domestic exporters with potential business partners, she said. In addition, ITPC would organise trade fairs and exhibitions in target markets to help promote made-in-Viet Nam goods, and business trips would be organised this year to support domestic exporters to study overseas markets and seek business partners. Speaking about investment promotion, Phuong said ITPC would focus on attracting foreign investment in sectors such as hi-tech industry, support industry, hi-tech agriculture and others. The centre would co-operate with the Viet Nam Embassy in Japan, the Japanese Business Association of HCM City, the Japan External Trade Organisation and other organisations to organise a forum on attracting Japanese investment in the electronic sector, agricultural machines and agricultural and seafood processing, she said. Addressing the meeting, Nguyen Thi Hong, deputy chairwoman of the HCM City People's Committee, hailed the efforts made by the centre last year. She urged the centre to make more efforts to raise the efficiency of its investment and trade promotion activities. Besides focusing on promoting Vietnamese goods in overseas markets, she said ITPC should pay more attention to supporting local producers and their products in the lucrative domestic market. Last year, trade and investment promotion activities greatly contributed to increase the city's production and exports, with its export revenue topping US$32 billion, up 8.8 per cent over the preceding year. The city attracted $3.2 billion in foreign investment last year, a year-on-year increase of 91.6 per cent, ranking second in the country in terms of foreign investment attraction. Vietcombank Fund Management closes member fund Vietcombank Fund Management Co (VCBF) has completed the closure of its member fund, Vietcombank Securities Investment Fund No 1 (VPF1), the State Securities Commission has announced. VPF1, set up in 2005, has a charter capital of VND200 billion (US$9.3 million). This is the last of the three close-ended fund managed by Vietcombank Fund Management. VPF2 was closed in 2011 while VPF3 was liquefied in May 2014. VCBF is a joint venture between Vietcombank (VCB) and Franklin Templeton Investment Management Co. It manages two open-ended funds: VCBF Tactical Balanced Fund (VCBF-TBF), which manages assets of VND77 billion ($3.6 million); and VCBF Blue Chip Fund (VCBF-BCF) which has a management portfolio of VND72 billion ($3.4 million). Steelmaker to list on UPCoM after delisting from HCM Stock Exchange Steelmaker Huu Lien Asia Corp (HLA) has said it plans to list on the unlisted public company market (UPCoM) managed by the Ha Noi Stock Exchange, after delisting from the HCM Stock Exchange on February 12. According to the company, the new listing will help protect the interests of its shareholders. February 11 will be the last trading day of HLA on the southern exchange. The stock closed on Friday at just VND1,000 (5 US cents) a share. Saigon Securities divests from confectionery with sale of more than 3 million shares Saigon Securities Inc (SSI) has reported that its SSI Asset Management Ltd Co (SSIAM) has completed sale of over 3 million shares in confectionery firm Bibica Corp (BBC), accounting for nearly 20 per cent of BBC's charter capital. The buyer information has not been disclosed. After the deal, SSI's holding in Bibica decreased to a tiny 0.02 per cent, thus Bibica is no longer its affiliate. Korea's Lotte currently holds a 44-per-cent stake in Bibica. Bibica general director Truong Phu Chien said the withdrawal of SSI would not affect the company's future development plans. BBC stocks hit their ceiling price on Friday at VND57,500 (US$2.69) a share, while that of SSI declined 2.2 per cent to VND26,300 ($1.23). Asset management firm PXP set for merger of two funds PXP Vietnam Asset Management Ltd Co has announced the merger of two of its funds, PXP Vietnam Fund (PXPVF) and PXP Vietnam Emerging Equity Fund (PXP VEEF). The merger will take effect today, the company said. PXP VEEF is an open-ended fund with a total net asset value (NAV) of US$36.6 million as of December 31, 2014, while PXP is a close-ended fund that is listed on the LSE Main Market in London. The NAV growth of VEEF was 12.72 per cent last year, and that of PXPPVF, 8.07 per cent. On merging, one PXPVF fund certificate will swap with nearly 1.08 PXP VEEF certificates. After the move, the merged fund, PXP VEEF, will have a total NAV of around $115.4 million. PXP Vietnam Asset Management primarily invests in equities listed on the HCM Stock Exchange. The main shares in the PXP VEEF's portfolio after the merger include dairy giant Vinamilk (VNM), 18.7 per cent, steelmaker Hoa Phat Group (HPG), 10.3 per cent; and HCM Securities Co (HCM), 9.3 per cent. Domestic retail gas price surges The price of cooking gas n HCM City and neighbouring provinces rose by VND5,000 ( 25 US cents) from early this month, according to gas dealers in HCM City. The retail price of a 12-kilo gas canister now ranges between VND300,000-305,000 ($14-14.3) Do Trung Thanh, deputy head of Saigon Petro's Business Department, attributed the increase to the rising world price. The average world price is $465 per tonne in February, an increase of $17.50 per tonne. Hai Duong’s FDI hits 88 million USD in January The northern province of Hai Duong attracted 88.1 million USD in foreign direct investment (FDI) in January, a 20 percent increase from the same period last year. According to the provincial Department of Planning and Investment, the local authorities aim to lure a total of 200 million USD of investment capital in 2015. To realise these targets, the locality will intensify investment promotion campaigns targeting large and multinational groups as well as working closer with central ministries. Administrative reform, the simplification of investment procedures, and increased management will be carried out to create improved conditions for foreign investors to operate in the province. The locality will also focus on strengthening links with investors to increase confidence. Hai Duong is home to 292 foreign-invested projects from 24 countries and territories worth 6.5 billion USD, of which 2.9 billion USD has been disbursed. The projects have created over 140,000 jobs. Canadian-funded project supports SMEs in Tra Vinh A project aiming to develop small- and medium-sized enterprises (SMEs) was launched in the Mekong Delta province of Tra Vinh on January 30. The project will have an estimated investment of 10.2 million USD, 9.2 million of which has been funded by the Canadian Department of Foreign Affairs, Trade and Development. The six-year programme will contribute to designing the province’s five-year SMEs development plan, as well as improving local infrastructure and the ability of administrative systems to support SMEs. As many as 200 enterprises and more than 194,000 people in 20 rural communes of Tra Vinh will benefit from the project.- Banks report strong liquidity ahead of Tet Commercial banks said that 2015's Tet (Lunar New Year) festival has been the most easy so far, in terms of liquidity, and even though it is around the corner, according to Dau Tu Chung Khoan. Previously, banks had been concerned about liquidity during Tet, the country's largest holiday, which will be celebrated in the middle of next month, due to growing cash demand. However, the Deputy General Director of the Orient Commercial Joint Stock Bank Dinh Duc Quang said the situation had changed this year.   Liquidity at commercial banks was very stable and inter-bank rates during the past few days had been listed lower than the buying rates quoted by the central bank, Quang said. He added that all banks had to often remain cautious and be prepared during the festival, so that no factors causing market concern arose. The Vietnam Bank for Agriculture and Rural Development's General Director Tiet Van Thanh also said the Agribank's liquidity in Vietnamese dong was very good. Quang said banks often report concerns about liquidity, which forces them to increase liquidity reserves, especially when they see fluctuations in the forex market, a rising interest rate or high inflation. However, this year, everything had remained stable so banks are not that concerned about liquidity. Pledges and timely actions taken by the central bank and management agencies to ensure liquidity during the past had helped stabilise the psychology of the entire banking system and the market as well, Quang said. Vo Tan Hoang Van, general director of the Sai Gon Commercial Bank, also attributed the market stability to the central bank's success in managing interest rates, as well as forex and the gold markets. Besides, Quang said, unexpected cash demand arising around Tet this year was also lower than earlier years as firms were currently scrutinising the payment of salary and bonus for the occasion. The Deputy Governor of the central bank Dao Minh Tu affirmed that the central bank had so far implemented measures to supply enough cash to all of its branches and credit institutions nationwide to ensure that the rising demand of local people is met during the Tet festival. According to the latest survey on business trends at credit institutions and foreign banks' branches in the first quarter this year, liquidity in the banking system has continuously improved. Roughly 89 percent of surveyed credit institutions said their liquidity had improved from last year and is currently in a good condition. Strong liquidity will continue to be maintained this year too, they forecast. Under the survey, the institutions also anticipated that their deposits will rise by 4.5 percent on average during the first quarter this year and surge by 14.35 percent for the entire year. Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR