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BUSINESS IN BRIEF 14/7
A
seminar on sustainable sea economic development took place in Nha Trang city
in central Khanh Hoa province, gathering 100 experts and managers in
As heard
during the seminar, the total value of the maritime sector – generated
primarily through oil and gas, tourism, shipping and aquaculture – accounted
for up to 22% of the national GDP in
Nguyen
Chu Hoi, former General Director of the Vietnam Administration of Seas and
The
government ought to encourage international cooperation in the field,
especially in green technology transfer, Hoi clarified.
According
to Dr Tran Anh Tuan from the Ministry of Planning and Investment, marine
potential analysis and management reforms are necessary for the sector’s
long-term growth.
Participating
experts highlighted sustainable development and aquatic reproduction.
The Khanh
Hoa People’s Committee and the US Boston international forum co-organised the
seminar.
Vingroup breaks ground on eco-park
Vingroup
officially kicked off phase one of construction of an entertainment, housing
and eco-park on Vu Yen island in the
Construction
plans cover the entire Vu Yen island, which is spread over 872 hectares in
the districts of Thuy Nguyen and Hai An and crisscrossed by the Ruot Lon,
Bach Dang and Cam rivers.
Of note,
a 36-hole international golf course has been designed in the heart of the
island as the highlight of the complex, while the entertainment area will
include shopping malls, dining areas, an aquarium, and a water park. At the
same time, ecological villas will be built by the river in the north of the
island.
The
group has worked to preserve the island's natural beauty and biodiversity,
and an ecological park is also planned in a large area adjacent to the Bach
Dang river, where tourists can enjoy outdoor activities that allow them to
remain close to nature and green spaces. Further, a conservation area will be
built to improve the quality of the landscape and act to protect the
environment.
Additionally,
a 1.5 km cable car system has been built to connect the mainland and the
island.
Group
Vice President Nguyen Viet Quang said that Hai Phong had become one of the
key areas of the group's investment.
He added
that once it has been completed in 2020, the complex would become an
important economic centre, creating jobs and contributing to the
socio-economic development of not only Hai Phong city, but also the
surrounding areas.
Central
Highlands to replace 19,200 ha of coffee trees
The
Central Highlands provinces of Dak Lak, Lam Dong, Dak Nong and Gia Lai have
planned to replant additional 19,224 hectares of coffee trees to enhance the
quality and productivity of the sector during this year’s rainy season.
Since
2010, the region has replanted and transplanted coffee trees on over 61,000
hectares.
Apart
from applying farming techniques guided by the Ministry of Agriculture and
Rural Development, local farmers and businesses have been using high-yield
seedlings on a larger scale.
The
region is also calling for incentives for coffee tree replacement in terms of
financial and technical assistance and infrastructure facility improvement to
contribute to the sustainable development of the sector.
According
to the Central Highlands Steering Committee, about 140,000 - 160,000 hectares
of old coffee trees in the region need to be replaced with new seedlings in
the next five years.
The
Central Highlands is now home to more than 90 percent of
In 2014,
Farm
banks bridge food gaps between crops
The Dak
Ha district of the Central Highlands
The
“community bank” is similar a type of stockpile, where grains and other farm
produces are stored at the end of the harvest and lent out to needy people at
low interest rates. The bank collects interest “payments” every six months.
The
model was launched in 2011 to mitigate food shortages during the
inter-harvesting period where ethnic minority locals had previously been
forced to harvest premature crops or borrow money from loan sharks.
Since
then, the bank has lent out nearly 115 tonnes of paddy rice and over 67
tonnes of rice while some 900 million VND (41,275 USD) sourced from the
Vietnam Bank for Social Policies and 300 tonnes of fertilizers have also been
allocated in loans.
Dak La
commune in Dak Ha district alone has set up six community banks thus far
while hundreds of impoverished families in Ngok Reo commune have benefited
from eight of the banks.
The
“community bank” model has greatly contributed to local socio-economic
development and ensuring social security among ethnic minority communities,
said Party Committee Secretary of Ngok Reo commune Dinh Van Phat.
He added
that the programme has helped many impoverished households improve their
incomes and lifted themselves out of poverty.
Kien
Giang grants 30 new investment licences in H1
The
Mekong Delta
The
projects have a combined capital of 11.98 trillion VND (550 million USD) and
cover an area of 611 hectares.
The
committee said that the province has been working with relevant agencies to
implement major projects such as the Kien Giang Thermal Power Plant in the
Xeo Ro industrial zone or Petrovietnam projects to build a synthetic oil
service port system and a bonded fuel warehouse on
The
province also assisted with accelerating the implementation of projects in
the Thanh Loc industrial zone in Chau Thanh district.
The
Thanh Loc industrial zone has currently eight projects under construction and
another nine registered.
Other
industrial zones and the Ha Tien border gate economic zone have attracted 20
projects with a total investment capital of 4.17 trillion VND (191 million
USD).
Kien
Giang also revoked the licences of two projects due to their failure to
implement on schedule.
Local
firm among shortlisted honourees of Jewellery News Asia Awards
Jewellery
News Asia (JNA) Awards recently selected Phu Nhuan Jewellery JSC (PNJ) among
their finalists for three major categories honouring excellent businesses,
according to the Sai Gon Giai phong newspaper.
The
Vietnamese firm has high hopes of winning Employer of the Year, Outstanding
Enterprise of the Year – ASEAN Countries, and Retailer of the Year, the
newspaper said, quoting sources from the company.
Within
the first half of 2015, PNJ posted more than VND3.85 trillion (US$177.4
million) in revenue, a 6 percent annual climb, with pre-tax profits estimated
at VND228 billion (US$10.5 million). Gold jewellery retail made up 75% of the
total value earned.
The
company has opened 17 gold stores nationwide so far this year and plans to
establish another four in July.
Singapore
leads ASEAN in investment in Vietnam in Jan-Jun
Singaporean
investors topped those from other Southeast Asian countries in investing in
Singaporean-owned
projects accounted for 54.25% of the total number and 60.8% of the registered
capital when it comes to projects run by investors from
It was
followed by
As of June, investors from the Association of Southeast
Asian Nations (ASEAN) had 2,632 operational projects totaling US$54.6 billion
in
A
project financed by an investor from ASEAN countries was worth US$20.7
million, 48.9%, or around US$6.8 million, higher than the average of a
foreign-invested project.
The
ASEAN investment in
ASEAN
investors have invested in 55 out of 63 provinces and cities in
The
southern economic hub was followed by
The
regional group is currently transforming itself into a new stage of
development, aiming to form an EU-style ASEAN Economic Community by the end
of this year.
Vinamilk
holds investment meeting
Items on
the agenda included the possible divestment to be undertaken by the SCIC.
Vinamilk
held an investors meeting on the afternoon of July 7 to discuss how the
company is being divested and its business plans and merger and acquisition
(M&A) plan.
Chairman
Mai Kieu Lien said it’s not known whether the Government will allow the State
Capital Investment Corporation (SCIC) to divest from Vinamilk. The Government
encourages enterprises to equitize and the divestment will be decided by the
SCIC.
Regarding
investment of VND4 trillion ($183.40 million), Ms. Lien said it will go to
two main purposes: finding cheaper sources of raw materials and investing in
a milk company to produce finished goods that already have market share and
brand reputation.
She said
as the end of April 2014 the price of raw materials began to fall and is
expected to continue to fall until the end of third quarter. Vinamilk has prepared
its material supplies for 2015 so any change to the price will not affect its
business plan.
As for
foreign markets, Vinamilk has been exporting to Cambodia for about ten years.
This month it will introduce a new brand, Angkor Milk, and in October will
introduce condensed milk to the country.
Ms. Le
Quang Thanh Truc, Investment Director at Vinamilk, said that in the first
half of the year it reached 50 per cent of its annual plan, with revenue of
VND19.21 trillion ($88.07 million), and profit after tax of VND3.75 trillion
($17.19 million), accounting for 55 per cent of the plan.
Toyota
releases sales results
Toyota
Motor Vietnam (TMV) has announced is sales results for the first half and for
June.
By the
end of the first half sales had totaled 23,031 units, an increase of 38 per
cent (excluding Lexus) compared with the same period last year, in which the
passenger car segment reached 12,414 units (an increase of 59 per cent) and
the commercial vehicle segment 10,617 units (an increase of 20 per cent).
Its best
seller was the all-new Vios, launched in March 2014, with 6,233 units sold,
double the number sold in the same period last year. Following was the new
generation Corolla, launched in September 2014, with 3,280 sold units.
Sales of
Innova and Fortuner reached 4,406 and 4,629 units, respectively, increasing
22 per cent and 21 per cent compared with the same period last year.
Regarding
completely-built-units (CBU) distributed by TMV, in the first six month total
sales increased 72 per cent compared with the same period of 2014, to 2,782
units.
In June
2015 Toyota’s sales stood at 4,289 units, an increase of 25 per cent compared
with June 2014 and its highest sales volume this year.
Sales of
passenger cars reached 2,265 units, an increase of 26 per cent against June
last year. Commercial vehicles, meanwhile, recorded sales of 2,024 units, 25
per cent higher than in June 2014. The Innova and Fortuner maintained their
high sales rates, with 842 units, an increase 26 per cent against June 2014,
and 780 units, an increase of 20 per cent, respectively.
Among
CBU vehicles, the all-new Yaris 2014 held its leading position with sales in
June of 237 units, followed by the Hilux with 173, Prado 65, Land Cruiser 46,
and Hiace 40.
Vehicle
sales still on the rise
Sales in
June rise 4 per cent compared to May but 57 per cent compared June last year.
Motor
vehicle sales reached 18,686 units in June, an increase of 4 per cent
compared to May and 57 per cent compared to June last year, according to a
recent report from the Vietnam Automobile Manufacturers’ Association (VAMA).
Passenger
cars saw 9,769 units sold, for an increase of 9.2 per cent against May and 45
per cent against June 2014, while the number of commercial vehicles sold
reached 7,834, up 0.5 per cent and 75 per cent. Only special-purpose vehicles
saw a decline, of 8.1 per cent compared May, with 1,083 units sold, which was
still a significant increase of 136 per cent compared to June last year.
The
volume of completely-knocked-down (CKD) motor vehicles stood at 14,448, a
slight increase of 3 per cent compared to May and up 56 per cent against June
last year. The number of completely-built-up (CBU) units was 4,238 units, for
increases of 9 per cent and 64 per cent.
SBIC
& Vinalines moving ahead with restructuring
The
restructuring process of the Shipbuilding Industry Corporation (SBIC) and
Vinalines was announced in a report on the first half of the year released
recently by the Ministry of Transport (MoT).
SBIC,
formally known as Vinashin, has basically completed the financial
restructuring of its international bonds and debts. The report said it had
finished restructuring debts to international credit organizations in the
first stage and was waiting for approval from government to continue.
The
report also showed that the restructuring plans of 40 subsidiaries of
Vinashin had been approved, while the plans of 104 other companies were
waiting for approval.
Regarding
Vinalines, five subsidiaries were disbanded, two were declared bankrupt,
eleven were equitized, and one is to be merged.
MoT said
that the restructuring process would be accelerated for nine others
corporations under the approved plan. The five corporations receiving the
most focus were SBIC, Vinalines, Vietnam Railways, Vietnam Expressway
Corporation and Corporation for Investment, and Cuu Long Development and
Project Management of Transportation Infrastructure.
In the
first half of the year seven enterprises completed initial public offerings
(IPOs) and had organized the first general meeting as joint stock companies,
including Vietnam Airlines.
Deutsches
Haus takes possession of new BMW
Euro
Auto, the authorized BMW importer in Vietnam, handed over a premium Series 5
model to its partner, Deutsches Haus, in Ho Chi Minh City in early July.
“Deutsches
Haus Ho Chi Minh Stadt trusts and relies on premium German automobiles as
they reflect the same high quality aspects as the development of our
project,” said Mr. Elmar Dutt, Senior Director of Marketing &
Communications at Deutsches Haus. “Our partnership and cooperation with Euro
Auto creates perfect synergy for the future.”
Deutsches
Haus Ho Chi Minh Stadt is a pioneering premium grade office tower
strategically located on the corner of Le Duan Street and Le Van Huu Street
in the heart of Ho Chi Minh City. The 25-storey building, consisting of
approximately 30,000 sq m of prime office space, is expected to be completed
in the third quarter of 2017.
In the
first half of 2015 the 5 Series accounted for 30 per cent of BMW’s sales
volume nationwide. The luxurious Alpine white edition of the BMW Series 5
handed over to Deutsches Haus Ho Chi Minh Stadt is equipped with the latest
BMW navigation system and wireless internet connection. Passengers in the
back seat can now easily enjoy working with the convenient assistance of two
folding tables.
Online
FMCG sales heading upwards
The
latest report from Kantar Worldpanel released on July 8 shows that online
sales of fast-moving consumer goods (FMCG) increased in Vietnam.
Online’s
share of the grocery market in modern trade rose from 0.4 per cent in 2013 to
1.5 per cent in 2014, with such growth looking set to continue well into the
years to come.
“The
development of online sales in Vietnam will happen at a different pace by
sector, starting with more individual / premium markets, which is witnessed
by the dominance of personal care (which accounts for nearly 50 per cent
online), followed by milk powder, and after that we may see progression to
the other sectors,” said Mr. Davil Anjoubault, General Manager of Kantar Worldpanel
Vietnam. “Thanks to the prevalent speed and convenience trends among
Vietnamese consumers and high internet penetration, Vietnam is a promised
land yet to be discovered to the fullest, where retailers and brands need to
focus to develop the online market.”
Kantar
Worldpanel has noted the online practices of both local and international
players, including Unilever, P&G, Masan, among others, in recent years,
which reinforce the message of e-commerce helping their brands approach
shoppers from another direction.
Kantar
Worldpanel also forecasts global FMCG online sales to reach $130 billion by
2015.
Top
10 enterprises for positive media coverage
Based on
an analysis of media reports, the Top 10 enterprises that received the most
positive media exposure from July 2014 to June 2015 were announced on July 7
by Vietnam Report, an independent company ranking the services and quality of
companies in Vietnam.
The Top
10 includes Vinamilk (VNM), the Vietnam Insurance Company (BVH), the Bank for
Foreign Trade of Vietnam (VCB), the Hoa Sen Group (HSG), the Hoang Anh Gia
Lai JSC (HAG), the PetroVietnam Fertilizer and Chemicals Corporation (DPM),
the Hoa Phat Group (HPG), the Vingroup JSC (VIC), the Military Commercial
Joint Stock Bank (MBB), and FPT Telecom (FPT).
Vinamilk
has been the standout in the milk industry for years, Vietnam Report said,
with Ms. Mai Kieu Lien, its CEO, attracting much attention in both domestic
and overseas media. BVH ranked second, for its major contributions to the community
and in winning both domestic and foreign awards. VCB was third, receiving
much more positive media exposure than negative exposure.
Vietnam
Report also named enterprises with the most varied information appearing in
the media. VNM led the way, followed by VIC, HAG, DPM, VCB, BVH, HSG, HPG,
FPT and MBB.
There
was more positive media exposure for the Top 10 enterprises than negative
exposure. Vietnam Report explained that because they had high capitalization
ratios and liquidity in the stock market they had a great deal of positive
exposure. Secondly, with the stock market performing well, Vietnamese are in
a better to build a positive image.
The most
discussed topics in the media regarding enterprises were their stock price,
business performance, business strategies, products, and human resources.
Vietnam Report said that the positive exposure for enterprises was mainly
regarding their stock price, which attracts a lot of people’s attention.
Meanwhile, business performance influenced the ability of enterprises to make
a profit, which also attracts positive media exposure.
Leather
and footwear conference upcoming
The
Leather and Footwear Export Promotion Conference will be held in Ho Chi Minh
City on July 15 by the Vietnam Trade Promotion Agency and the Vietnam
Leather, Footwear and Handbag Association (Lefaso).
The
conference’s theme is “Business and Export Capacity Building for Leather and
Footwear Businesses”, centering on problems facing Vietnam’s footwear
industry, solutions to resolve internal difficulties, and how best to export
Vietnamese leather and footwear products.
More
than 200 enterprises from Vietnam, Italy, the US, Thailand, Taiwan, and Hong
Kong will attend the conference, discussing such matters as the export
potential of the leather, footwear and handbag industry, market demand,
advantages, difficulties and challenges in exports, barriers to international
trade, and improving competitiveness in the 2016-2020 period.
In
recent years the export potential of Vietnamese footwear has increased
rapidly due to rising foreign direct investment (FDI) in the industry. Total
export value reached $10.22 billion in 2014. Footwear enterprises with FDI
and joint ventures exported goods to many major markets around the world,
valued at $7.93 billion.
US
firms at the right time
More
investment opportunities will be available for American investors as Vietnam
has been working hard to improve the country’s business environment.
Minister
of Finance Dinh Tien Dung recently presided over a conference in New York to
demonstrate the wealth of investment opportunities in Vietnam. Nearly 170 US
investors, including large-scale organisations like JP Morgan Asset
Management, Goldman Sachs, and Morgan Stanley Investment Management, as well
as three US billionaires, were impressed by Vietnam’s rapid growth and
abundance of prospects in the local financial market.
The raft
of the US investors who attended the conference, according to AIA Vietnam
general director Wayne Besant, illustrated the great interest of US investors
in Vietnam.
In the
last decade, Vietnam’s economy has reached an average growth rate of 6.4 per
cent a year, putting it in the top three Asian countries in terms of growth.
Inflation has been kept under control, and Vietnam is expected to accomplish
a seven per cent growth rate once again.
What has
impressed the US investors and other foreign investors even more is a new
regulation that removes the cap on foreign ownership, allowing foreign
investors to liberally buy stakes at all listed companies in Vietnam, with
exceptions in some sectors restricting foreign investment.
Harbinger
Group founder Philip Falcone, who has been investing in the $4 million Ho
Tram project in Vung Tau province since 2007, said that despite his
investment facing many ups and downs in the last eight years, he still had
hope in the Vietnamese government’s efforts and believed that he chose the
right opportunity, in the right place, at the right time for his investment
here in Vietnam.
Marc
Mealy, vice president for policy at the US-ASEAN Business Council, cited the
Intel Corporation, which had invested in Vietnam and would invest more in the
coming time, as the group expected to become a crucial partner for Vietnam
through its global value-chain. Mealy said Intel proved that the country’s
business environment was safe, convenient, and prospective.
According
to Mealy, as a developing economy, Vietnam has opened up many opportunities
for major investors in energy, infrastructure, and manufacturing as well as
education and healthcare. Once the Tran-Pacific Partnership agreement is
concluded, the country will not only benefit through VN-US trade relations,
it will also become an important gateway for US investors to tap into the
ASEAN market.
Billionaire
Wilbur Ross, the 200th richest person in the US, stated his reasons why
companies and investors should consider investing in Vietnam by lauding the
country, in particular its stock market, as an attractive destination, thanks
to the government’s determination to speed up the process of state-owned
enterprise equitisation, the expansion in foreign ownership limit, and the
efforts made to reduce the administration procedures. Ross said that Vietnam
is at a turning point that has gradually improved the relationship between
the government and the private sector with regard to the ownership issue.
Agri
sector primed for investment
A wave
of local private investments worth billions of dollars is expected to help
change Vietnam’s poorly funded agricultural sector.
Senior
agricultural expert Pham Hoang Ngan told VIR that at least 30 large domestic
enterprises were planning to implement major agricultural projects in Vietnam
in the near future.
“They
are working with authorised agencies for support. A billion dollar wave of
private agricultural investments will hit Vietnam soon,” she said.
These 30
enterprises include big brand names like Vinaseed, TH Group, Trung Nguyen,
Vingroup, Viettel, and Minh Phu. For example, a TH Group source told VIR that
in addition to its $1.2 billion concentrated dairy cow and fresh milk
production project in the central province of Nghe An, the group planned to
invest over VND4 trillion ($187.8 million) into a 3,000 hectares project to
raise 20,000 dairy cows in the central province of Thanh Hoa. The group is
also planning to invest VND7.348 trillion ($345 million) into building a
3,171ha project to raise 20,000 dairy cows to produce fresh milk in the
Central Highlands’ province of Lam Dong. In addition, it would invest VND13
trillion ($610.32 million) into building a 12,000ha project to produce fresh
milk from 72,000 dairy cows in the Central Highlands’ province of Dak Lak.
The
group is also focusing on forestry projects. It is investing $500 million
into its May Forestry Joint Stock Company, with two projects in Nghe An, including
a $150 million wood bar plant, with the annual capacity of 8,800 cubic
metres, and a $350 million MDF wood plank plant, with the annual capacity of
400,000 cubic metres. TH has also invested $32 million in the production of
organic vegetables.
In addition
to TH, Minh Phu Seafood, which is Vietnam’s largest shrimp exporter, has
reported its plan to the Ministry of Agriculture and Rural Development (MARD)
for a VND10 trillion ($467.3 million) project to raise shrimp and African
carp nationwide. This project will be deployed in an integrated production
chain, which involves the participation of millions of farmers. The project
plans to produce 140,000 tonnes of shrimp and 50,000 tonnes of African carp
by 2020, when the total revenue is projected to hit $2.5 billion, and 200,000
tonnes of shrimp and 100,000 tonnes of African carp by 2025, when the total
revenue is expected to reach $3.5 billion. The project will include the
construction of sub-projects, including a research institute, a shrimp
breeding centre, animal feed and medicine factories, aquatic product
processing factories, a logistics and distribution company, and the expansion
of more export markets.
Nafoods
Group, which is the world’s biggest exporter of baby jackfruit and passion
fruit products, has also asked the MARD to support its VND2.05 trillion
($96.24 million) project to build more factories and rent more land. The
group currently has a 5ha factory on 900ha of land in Nghe An.
“We want
to expand the area to 5,000ha in Vietnam’s northern region,” said the group’s
chairman and general director Nguyen Manh Hung. “Some VND1.35 trillion
($63.38 million) will be for constructing infrastructure and the remaining
VND700 billion ($32.86 million) will be for cultivation.”
Nguyen
The Ha, investment consultant from Bui Van Ngo Co. Ltd, said his company
would invest VND1 trillion ($46.72 million) in expanding its existing VND1
trillion ($46.72 million) factory to make agricultural machines, starting in
2015. The company would also need more land.
Additionally,
this company would implement a $1 billion project to process high-quality
rice in the southern province of Long An. The project would include four
clusters of factories able to dry 4,000 tonnes of rice per day and husk 800,000
tonnes of rice per year.
Secondary
bond market sees second quarter trade flurry
In the
second quarter, the secondary market attracted investors and recorded a high
trading amount because of the inactivity of the primary bond market.
Investors
were attracted by a significant rise in bond yields and the huge gap between
yields in the primary and secondary markets. Bond yields in the secondary
market by the end of the second quarter had bounced back strongly from a
decline in the first quarter, as a result of strong credit growth, rising
inflation, and a depreciation of VND against USD. In the second half of this
year, it is expected that credit growth and inflation will increase further,
which will likely cause bond yields to continue their upward trend.
During
the first six months of 2015, total traded value of bonds and bills in the
secondary market via outright and repo transactions reached VND497.179
trillion ($21.9 billion), up 53 per cent compared to the same period last
year. As a result, the average value per month was recorded at VND82.863
trillion ($3.79 billion). This was due to an increase in trading value in the
second quarter, which reached VND260.552 trillion ($11.9 billion), up 10.1
per cent compared to the previous quarter and 45 per cent on-year.
Outright
transactions dominated the secondary market in most of the reviewed weeks.
For the first six months of 2015, total value of outright transactions was
twice that of repo transactions. There were VND340.089 trillion ($15.5
billion) of outright transactions, contributing 68.4 per cent of the total.
Repo transactions accounted for only 31.6 per cent, worth VND157.090 trillion
($7.19 billion).
By
tenor, the breakdown of outright transactions shows short-term bonds
overwhelmed the market. Bonds with short-term maturities usually have higher
liquidity and much less risk than long-term bonds, which attracts greater
investor attention. In addition, the supply of short-term bonds in the
primary market has been reduced by Decision No78/2014/QH3 allowing the
issuance of over-five-year bonds only. Investors therefore had to move to the
secondary market to purchase short-term bonds. One-to-three-year tenors
contributed 33.5 per cent of total outright transactions, while
three-to-five-year made up 22.4 per cent. Less-than-one-year tenors also
accounted for 17.9 per cent of the total. For long-term maturities,
five-to-seven-year and over-seven-year tenors contributed 17.2 per cent and
9.0 per cent of the total, respectively.
As of
June 2015, foreign investors net bought VND606 billion ($27.7 million) in the
secondary market through outright and repo transactions. However, in the
second quarter foreign buyers accounted for only 9 per cent of total trading
value, much lower than the contribution of 17 per cent in the first quarter.
According
to Bloomberg, bond yields over the second quarter of 2015 increased
dramatically at all tenors after a decline in the first quarter. One of the
main reasons was a rise in the CPI in the second quarter due to an increase
in oil and electric prices, which caused investors to demand higher bond
yields and lowered demand for bonds. The demand for bonds was reduced further
as banks tried to enhance their credit activities, which was reflected in
substantial credit growth in the second quarter.
Tenor
structure in the primary market also prevented banks from buying bonds, as
most of their need was for short-term bonds in line with the maturities of
their funds. In addition, fluctuations in the VND/USD exchange rate in
April–May motivated investors to move funds from the bond market to the
exchange market to speculate on the dollar. Low demand for bonds led to a
surge in bond yields.
Mid-term
(three to five year tenor) bond yields increased at a higher pace than short-
and long-term tenors. Compared to March 31, bond yields by the end of June
were listed as: one-year (5.10 per cent, +34bps), two-year (5.53 per cent,
+56bps), three-year (5.90 per cent, +79bps), five-year (6.41 per cent, +95
bps), seven-year (6.73 per cent, +58bps), ten-year (6.90 per cent, +39bps),
and fifteen-year (7.70 per cent, +42bps).
Developer
spat resolved
Malaysia’s
Gamuda Land has taken over a 40 per cent stake in the joint-venture
development of Celadon City, due to major differences among investors
regarding the project’s concept and direction.
The
negotiation to transfer the stake of the $1.1 billion Celadon City lasted for
three years and Gamuda Land took over the 40 per cent stake from three
Vietnamese partners - Saigon Thuong Tin Real Estate, Thanh Thanh Cong, and An
Phu Gia Joint Stock Company. Located on an area of 82 hectares, Celadon City
is in Son Ky ward, in Ho Chi Minh City’s Tan Phu district. The transfer value
was VND1.014 trillion ($48.2 million) by share and another VND386 billion
($18.3 million) by cash.
According
to Chow Chee Fan, general director of Celadon City, the reason for this
acquisition was differences in concept for developing the project.
“The
differences caused both sides to come to the conclusion that Gamuda should
take full control of this project,” Chow told VIR.
“With
our strong financial capacity and a wealth of experience in mix-used urban
development projects in Malaysia, we are able to sustain and financially
develop this project,” Chow confirmed.
Gamuda
Land wants to proceed with the project under an international concept, with a
large garden and high quality apartments, similar to its work in Malaysia.
The domestic partners, meanwhile, wanted to build and sell the apartments as
soon as possible in order to recover their capital investment.
All
payment, Chow said, was finished by the end of June.
With the
estimated original investment capital of VND24.8 trillion ($1.1 billion), the
project, which kicked off in 2010, includes a cultural and entertainment
centre, education, commercial and sports facilities. Currently, around 500
apartments in blocks A and B have been sold, and the foundation of blocks C,
D and E of Ruby precinct have been completed. Celadon City will provide more
than 7,300 apartments in total.
The
first thing Gamuda Land did after taking control of the project was the
launch of more than 370 apartments in Block C, with prices from $1,200 per
square metre.
In order
to keep its commitment to providing the local community with the best
facilities, the company will start the construction of a sport and recreation
club within the next three years, with the investment capital of $15 million.
Primary and secondary schools are slated to follow.
Gamuda
Land, a division of Malaysian property developer Gamuda Berhad, has other large-scale
projects in Hanoi, including the 500ha Gamuda City and the 323ha Yen So
project, with the total investment capital up to $5 billion.
Medical
equipment imports to be licensed online
On July
2 the Department of Equipment and Medical Facilities under the Ministry of
Health announced the introduction of online services for importing medical
equipment. Implementation will last from July 1 to September 30, then on
October 1 a National Customs Portal for online services in importing medical
equipment will be officially launched.
Enterprises
will only have to complete forms and send their dossier for an import license
over the internet rather it being done in person, as previously, saving time
and money.
Licensing
authorities, meanwhile, will have an easier time evaluating dossiers received
online. All will be managed together, making it accurate, secure and easy to
check. It is expected that licensing will only take one-third of the time
needed previously.
Medical
equipment is following in the footsteps of functional foods, pharmaceuticals,
and cosmetics in being able to access online services, according to Minister
of Health Nguyen Thi Kim Tien.
The
Department generally receives dossiers from over 700 enterprises a month. The
huge number along with complex criteria makes evaluation difficult.
Completing the process will take a big step forward with these new measures.
M&A
to rocket in Vietnam
In their
latest report Baker & McKenzie includes Vietnam within emerging markets
with highest transactional growth in merger and acquisition (M&A)
activities.
Stand-out
markets for predicted high transactional growth over next five years include
developed economies such as the Netherlands, the UK, Sweden, China, Hong Kong
(China) and India, and the emerging markets of Mexico, Egypt, and Vietnam.
Globally,
Baker McKenzie analysts predict M&A deals will rise to $2.7 trillion
worth this year before accelerating to $3 trillion in 2016 and $3.4 trillion
in 2017.
M&A
activity relating to emerging markets will grow dramatically, rising by 56
per cent to $678 billion by 2018, up from $435 billion in 2014.
The most
active sectors over the next five years are forecast to be healthcare,
telecommunications, and structural financials.
Consumer
goods and services, technology, and pharmaceuticals are also expected to
expand due primarily to cyclical trends.
FIE
financial statements to be reviewed
Deputy
Minister of Finance Tran Van Hieu has signed an official letter to city and
provincial people’s committees around the country on reviewing the financial
statements of foreign-invested enterprises (FIEs).
The task
will be performed in cooperation with local tax departments and aims at
implementing management, supervision and efficiency improvements in foreign
direct investment (FDI).
Departments
of Finance are responsible for completing an overall local report for
submission to the Ministry of Finance (MoF) before August 30.
MoF has
asked that information be provided on total exports and imports in 2014
(excluding crude oil) and the total number of employees working at FIEs in
each city or province as at December 31, 2014.
To
complete a comprehensive review of information on the operational situation
and contributions of FIEs to cities and province, MoF also asked local
Departments of Finance to cooperate with relevant agencies on supplemental
information in each report before submission to the MoF.
Two
foreign banks to increase capital
The
State Bank of Vietnam (SBV) has approved the Ho Chi Minh City branch of the
Far East National Bank (FEB) increasing its charter capital from $15 million
to $25.95 million and the city’s branch of the China Construction Bank
Corporation (CSBC) increasing its charter capital from $30 million to $60
million.
FEB has
been in Vietnam since 2004 and this is the first time it has sought to raise
its charter capital from the minimum requirement of $15 million.
CSBC,
meanwhile, has been in Vietnam since 2009. It reported first quarter pre-tax
profits of $173,748; significantly lower than the $1.42 million recorded in
the first quarter of 2014.
Both
banks must increase their charter capital with 12 months from July 6, when
the SBV gave its approval.
Vietcombank
Chairman warns of possible risks
At a
preliminary meeting to summarize its operations during the first half of the
year and to implement plans for the second half, Vietcombank Chairman Nghiem
Xuan Thanh warned the bank may face operational risks in the future,
primarily from credit growth and non-performing loans.
As at
June 30, Vietcombank’s credit growth was higher than the sector average,
after increasing 6.52 per cent since the end of 2014. The growth, however,
was mainly based on increases in foreign exchange activities and long-term
lending, which led to inefficient use of short-term capital, limiting banking
services and putting pressure on liquidity.
In
particular, medium to long-term credit growth rose from 36 per cent to over
40 per cent compared to the first half of 2014. Vietcombank also had the
largest amount of mobilized foreign exchange capital within the banking
system, as in the second quarter it completed $1 billion worth of
transactions to invest in government bonds.
Regarding
liquidity risk, the bank must continue maintaining a loan-to-deposit ratio
(LDR) of around 75 per cent, as its interest rates remain low compared with
other banks.
He also
spoke about credit quality and the process of collecting bad debts in
accordance with plans. “Credit quality is really at a level of concern and
the amount of bad debt provision is at its highest ever,” he told the
meeting.
A report
tabled at the meeting showed that bad debts fell in the second quarter
against the first (from 2.97 per cent to 2.43 per cent), but compared to 2014
some VND1 trillion ($45.85 million) had been incurred. In the first half
Vietcombank collected VND1.01 trillion ($46.30 million) in bad debts but bank
leaders consider this to be a modest result given it represented just 34 per
cent of the annual plan.
Vietcombank
is one of only a few banks to have set a high rate of provision by the end of
second quarter, so it has the capacity to actively deal with its bad debts.
However, the high level of provision affects its profit, with Vietcombank
recording lower profits than other banks with State ownership.
Specifically,
in the first six months the pre-provision profit of Vietcombank stood at
VND6.03 trillion ($276.47 million), an increase of 16.6 per cent over the
same period last year, but provisions of VND2.99 trillion ($137.09 million)
saw its profit come in at VND3.04 trillion ($139.38 million), an increase of
only 9.45 per cent against the same period of last year. The result was,
however, 50.7 per cent of the annual plan set at its annual general meeting.
HD
SAISON Finance offically introduced
HDBank
and Credit Saison (Japan) officially introduced HD SAISON Finance on July 4,
the new brand identity of HDFinance.
The
brand was initially Société Générale Vietnam Finance, before being acquired
in 2013 by HDBank and becoming HDFinance. In April this year the Credit
Saison became a strategic shareholder, with 49 per cent of capital, and
renamed the entity HD SAISON Finance.
HD
SAISON Finance has over 3,000 representative points throughout the country
and relations with over 2,000 partners to serve around 1 million customers
with loans for motorbikes, motor cars, mobile phones, and so on.
“There
have been more Japanese enterprises investing in Vietnam and more Japanese
tourist coming here as well, which indicate the extent of the links between
the two countries,” Mr. Takahashi Naoki, Chairman of HD SAISON Finance, told
the introduction ceremony. “In this context, in 2012 Credit Saison opened a
representative office in Hanoi, which was our first base in Southeast Asia,
to expand the consumer finance market. After the long process of analysis, we
are proud to have the opportunity to come together with HD Bank and
HDFinance.”
HoSE
announces Top 10 brokers for Q2
The Ho
Chi Minh City Stock Exchange (HoSE) has announced the leading stockbrokers in
terms of market share for the second quarter of 2015. Unlike the first
quarter, when the top four remained the same, the second quarter saw the
Saigon-Hanoi Securities Joint Stock Company (SHS) take over fourth place from
VNDirect Securities (VNDS).
SHS’s
market share reached 5.5 per cent, an increase of 0.06 per cent compared with
the first quarter, while VNDS’s was 5.57 per cent, a decline of 0.1 per cent.
Except
for the change in ranking between SHS and VNDS the other positions were the
same as in first quarter, with Saigon Securities Inc. (SSI) leading the
market again with a market share of 13.52 per cent, followed by the Ho Chi
Minh City Securities Corporation (HSC) with 11.24 per cent and Viet Capital
Securities (VCSC) with 7.99 per cent, for increases of 1.28 per cent, 0.2 per
cent, and 0.21 per cent, respectively.
In terms
of bonds in the second quarter, only five companies participated in the
market. SSI led with a market share of 85.01 per cent, followed by Bao Viet
Securities (BVSC) with 6.94 per cent and VNDS with 4.02 per cent. BVSC lost
first place in the quarter with a significant decline in market share, from
42.26 per cent in the first quarter to 6.94 per cent in the second.
Five
Star Garden to get underway
Five
Star Kim Giang Co., an affiliate of the GFS Group, and the Uy Nam Investment
Construction JSC (Unicons), under the Cotecons Group, have recently signed a
contract to develop the Five Star Garden housing project in Hanoi’s Thanh
Xuan district.
“Construction
of the Five Star Garden project is our top priority,” Mr. Nguyen Sy Cong, CEO
of Unicons, said at the signing ceremony. “We will ensure work progress and
quality.”
It is a
favorable time to begin construction as Unicons can mobilize full resources
in machinery, modern technology, high quality raw materials with competitive
prices, and skilled construction workers. “This will also help the project’s
owner ensure housing is handed over to customers on schedule, in early 2017.”
A
representative of Five Star Kim Giang, meanwhile, said the company has been
careful in the selection of the leading professional partners, including
Unicons, to develop the project. “We believe Five Star Garden will bring
absolute satisfaction to our customers when completed,” he said.
With
total investment of VND1.8 trillion ($82.5 million), the project covers an
area of 12,530 sq m in Kim Giang Ward in Thanh Xuan district. Sixty per cent
of the project’s area is for green space, with trees, playgrounds, footpaths
and ponds.
Five
Star Garden comprises two 33-storey buildings, including 1,200 apartments for
sale, office space for lease, shopping malls, and other facilities for
residents such as supermarkets, kindergartens, gyms, and spas.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Hai, 13 tháng 7, 2015
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