BUSINESS IN BRIEF 17/7 Israel increases hi-tech agriculture cooperation with HCM City Ilan Fluss, Deputy Director of Israel’s Agency for International Development Cooperation under the Israeli Ministry of Foreign Affairs (MASHAV), said the agency considers HCM City as one of focuses in Israeli cooperation with Vietnam. Fluss made the remark in his meeting with Le Thanh Liem, Vice Chairman of the HCM City People’s Committee, on July 14 to review activities of the experimental demonstration project on raising dairy cows using high technology in the city. The project is part of the cooperation programme between MASHAV and the city’s Department of Agriculture and Rural Development with a total cost of VND70 billon (US$3.21 million), US$1 million  of which is non-refundable official development assistance. The project, which aims to cut costs, increase productivity, transfer technology and expand models, was initiated in 2011 and went into operation in August 2013 across an area of 9.8 hectares. HCM City is seeking international cooperation in hi-tech agriculture and has already heavily invested in its hi-tech agriculture park and bio-technology centre. Recovery in Vietnam's property market is real: official Vietnam's real estate market has been recovering thanks to effective government policies, an official said, dismissing concerns that the recent rapid increase in property transactions was caused by speculation. Minister of Construction Trinh Dinh Dung said in a TV interview on July 12 that the government has introduced various solutions to restructure the market, which started freezing in 2010. While he did not completely reject the possibility that speculation still existed, he said the market has been stabilized. "What matters is that we need to control the market so it will not become overheated, resulting in a bubble." The government will "strengthen control" over real estate projects, continue restructuring the market as well as housing projects and products so no sectors will see either redundancy or shortage, according to Dung. A report released by the construction ministry's Department for Housing and Property Market Management last month showed that Vietnam's real estate market has been recovering since the end of last year. Over the first half of this year, both Hanoi and Ho Chi Minh City saw a year-on-year double increase in property transactions, with 9,250 and 8,750 deals, respectively. Forestry sector restructuring to lift wood product exports Wood export firms have pegged their hopes on the outcome of the forestry restructuring plan to assure the recognition of a Vietnamese wood brand and to expand market share. While the sector's restructuring efforts started two years ago, Viet Nam is expected to become a wooden product exporter to the world of legal timber with the assistance of the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT), which is expected to be signed by the end of this year. According to the Viet Nam Administration of Forestry, the department would create programmes to encourage wood processing firms to co-operate with forest planters to develop stable raw material areas for processing and exporting. In addition, specialised wood processing zones would be developed, coupled with the setting up of databases of forestry exports. Wood as raw materials in Viet Nam has not met production demands, to date, but its prices were more stable in comparison with imports and their origins are clearly marked. Further, many processing firms increased their use of domestic wood as raw materials. Meanwhile, Duong Phu Minh Hoang, director of Cam Ha Company which exports 70 per cent of its wood products to the EU, said that the company purchases some 50 per cent of its timber from domestic sources each year. Huynh Trinh, director of Da Nang Forestry Export Product Company which had an annual export turnover of US$3 million, said the company only uses domestic wood with legal origins as raw materials. The Viet Nam Administration of Forestry has forecast that Viet Nam would have a total area of 16.5 million ha of forests by 2020, 50 per cent of which would be for production, becoming an important source of raw material for wood processing. The Viet Nam Wood and Forestry Product Association, the sector was expecting to expand exports to markets, including India, the Middle East and South America. Further, the industry expect to reach an export turnover of $7 billion this year. In the first half of this year, exports of wood products were reported at $3.13 billion, representing a rise of 8 per cent over the same period last year. Mergers could keep small banks afloat Small-sized banks with no specific business strategy are considering mergers, as recent consolidation in the banking sector has made it difficult for them to compete with larger banks. The recent mergers and acquisitions wave in the banking sector has created larger banks and reordered the banking system, posing difficulties for smaller banks in competing against many larger rivals. According to the director of a small bank, who declined to be named, it is now difficult for small banks to compete against larger banks in capital mobilisation due to their brand image. Most depositors think that small banks are weak, and therefore such banks face challenges in capital mobilisation. This has made many small banks, including ABBank, DongABank, NamABank and VietABank, draw up plans for a merger with another bank in the next few years, the Dien dan Dau tu (Investment Forum) newspaper reported. Financial experts say the trend of a small bank, especially one having no specific business strategy, merging with another to become bigger is picking up, the newspaper said. Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Programme in HCM City, said small banks had adopted the same business strategies as larger banks so that they were not at a disadvantage in competing against the latter. It is easier for small banks to find a partner for merger when no specific business strategy is involved, than find a partner with a specific business strategy, according to Thanh. This is the reason the banking sector has seen many small but good banks look for partners for merger. Echoing Thanh's views, banking expert Nguyen Tri Hieu said small banks which as of now have no specific business strategy would find it difficult to compete against larger banks. Most small banks were focusing on becoming leading retail banks with competitive interest rates, a strategy similar to that of large banks, Hieu said. "Such a strategy, however, is advantageous for large banks, not small ones," he said. "Therefore, small banks cannot survive unless they adopt specific business strategies or merge with another bank," Hieu said. VN growth could surpass target this year The Department of Analysis and Forecast under the National Centre for Socio – Economic Information and Forecast projected the nation's economic growth this year would reach 6.48 per cent. This projection was higher than the Government's target set at 6.2 per cent this year. The department said that the domestic economy was showing signs of recovery, along with the recovery of the world economy, adding that growth rates were forecast to rise higher than the previous year. Growth would be fuelled by low commodity prices, foreign direct investment and demands from abroad, the department said. The construction and industry sector, especially processing and manufacturing industries, would lead the nation's overall growth, while the service sector was forecast to post moderate growth. However, the department noted that agricultural, forestry and fishery sectors were anticipated to face many difficulties as growth rates slow. Meanwhile, the consumer price index was projected to increase 1.7 per cent this year, as crude oil prices were expected to recover in the world market. The centre forecast that Viet Nam would run a trade deficit of some US$8.77 billion this year, with an export turnover expected at $165 billion and import turnover at $174 billion. Further, credit growth in 2015 was forecast between 13 to 15 per cent, 1 percentage point higher than last year. However, difficulties would continue for businesses. Vinaplast to sell stakes in units The Viet Nam Plastic Corporation (Vinaplast) will sell its stakes in two of its subsidiaries, the Viet Phuoc Plastic Joint Stock Company and the Thang Long Plastic Joint Stock Company. According to the State Securities Commission, shares in these two companies will be sold through negotiations between Vinaplast and potential investors at prices not less than their current values. It said Vinaplast plans to sell 2.2 million shares in Viet Phuoc Plastic Joint Stock Company next year at a face value of VND10,000. It will also sell this year 188,662 shares with a face value of VND100,000 in the Thang Long Plastic Joint Stock Company. Vinaplast has authorised Director General Le Hoang and the Chairman of Viet Phuoc Plastic JSC's board of directors to seek investors and complete relevant procedures for the sale. HNX okays Green Hung Viet listing The Ha Noi Stock Exchange (HNX) has approved an application by the Hung Viet Green Agriculture Joint Stock Company's (Green Hung Viet) to list on the stock market in the capital city. Coded HVA, its listing volume will be five million shares. Green Hung Viet has a charter capital of VND50 billion ($2.3 million) and operates in the agriculture sector with a focus on investing and expanding cattle farms. The company was founded in 2010 and has five farms in Thanh Hoa, Nam Dinh and Ha Noi. TMT earns $6.62 million in H1 The TMT Auto Joint Stock Company (TMT) earned VND143 billion (US$6.62 million) in net profits in the first half of this year. The result was seven times the companies earnings in the same period last year, and very close to this year's annual target. TMT will pay its shareholders a dividend of VND119 billion ($5.5 million), 83.2 per cent of the first-half net profit, and payments are expected to be completed in August. The company planned to acquire Vinamotor this year, but the plan is now on hold because it has to meet some requirements set by the Ministry of Transport. Viet Nam, India work toward 2020 trade goal Viet Nam and India are working closely together to achieve their bilateral trade target of US$15 billion by 2020, a Viet Nam Chamber of Commerce and Industry bigwig has said. Speaking at a Viet Nam-India business meeting in HCM City yesterday, Vo Tan Thanh, director of the VCCI's HCM City office, said trade between the two countries had increased sharply in recent years, going up from $1 billion in 2006 to $8 billion last year. Viet Nam's key exports to India include mobile phones, rubber, cashew, porcelain, iron and steel, and wooden products, while it imports cars, drugs, garment and textile feedstock, chemicals, machinery, building materials, and others. India is now one of Viet Nam's top 10 trading partners while the latter ranks 28th for India. As of June India ranked 30th among 103 countries and territories investing in Viet Nam, with nearly $380 million in 100 projects. Vietnamese companies have invested around $26 million in India. Smita Pant, the Indian consulate general in HCM City, said there was great potential for co-operation in many sectors, including tourism, between the two countries. "There is an increasing interest in holiday tourism from India to Viet Nam and in medical and spiritual tourism from Viet Nam to India." A delegation representing more than 20 Indian companies seeking business opportunities in Viet Nam took part in the event held at the VCCI. They operate in the cement, property, power, infrastructure development, bio-technology, jewellery, agricultural machinery, tourism, and consultancy sectors. "When we think of Viet Nam we must look into a market of ASEAN economic community of over 600 million, TPP, FTA with number of countries and regions including EU and Custom Union. Therefore our advice is to move beyond trade and look into investment," Pant said. "Vietnamese also need to look at India's vast market," she said. At the event, the VCCI and a business group from an Indian state called the Andhra Chamber of Commerce signed a memorandum of understanding to enhance exchange of knowledge and information. V.L Indira Dutt, chairwoman of the ACC, said: "India now ranks among the most attractive investment destinations and the investment activity is grounded on stronger footing. "With such a positive prevailing economic environment, I am sure, investors from Viet Nam would be nothing but enthused to travel to India. There has been a boom in retail, e-commerce and a great advancement in technology." Viettel overwhelming success in Africa Viettel sees big opportunities in African markets and plans to continue expanding investment in the continent. Earlier this month, Viettel’s Burundi operation Lumitel registered 600,000 subscribers a single month after starting operations. Burundi is not the only African market where the company has seen good results. Nexttel, the company’s Cameroon operation, has celebrated its 2 millionth customer last month and became the third biggest mobile operator in the country after MTN Cameroon and Orange Cameroon. In Tanzania, the company is rolling out infrastructure and expects to launch services later this year. Meanwhile, under the name Movitel, Viettel is Mozambique’s largest mobile operator with four million subscribers, boasting an impressive 38 per cent market share. Movitel owns the most extensive telecom network in the country with 3,000 2G/3G base stations and 27,000 kilometres of optical fibre cable, connecting 80 per cent of the Mozambican population. “We believe that we can achieve success in the African markets,” said Tao Duc Thang, CEO of Viettel Global, the global investment arm of Viettel. As Thang explained, African countries have much potential for increasing the use of information technology and telecommunications. “The users’ density of telecommunications services, especially advanced services, is still low,” he said. “The application of ICT is also still low. And that presents a great opportunity for Viettel.” For example, Viettel’s analysis showed that before the company set foot in Burundi, only 10 per cent of the country’s population of 10 million had access to telecommunication services. “We decided to invest here to make the telecommunications market boom as we had done in Vietnam, Laos, Cambodia and Mozambique,” he said. One major advantage Viettel has when investing in African markets is the good political relationship between Vietnam and African countries. Viettel is warmly welcome wherever they go on the continent, according to Thang. “The majority of the people and governments support and respect Vietnamese people. We are known as brave men who defeated two powerful empires for liberty and independence,” Thang said. Viettel is currently present in 10 countries, four of which are in Africa. Besides the African continent, the company is also eyeing opportunities in other markets in order to implement its global growth strategy. Viettel aims to expand its market coverage to between 300 and 400 million people by 2017 and plans to invest a total VND47.5 trillion ($2.23 billion) in eight new foreign markets until then. Thanh Hoa edible oil project enters first stage North Continental Oils and Fats Vietnam Company Limited has kick-started the construction of its $71.5 million facility for producing edible oils and derivative products in the central province of Thanh Hoa. The company is a joint venture between Vietnam Vegetable Oil Industry Corporation and Singapore’s Musim Mas Vietnam Oils & Fats Pte. Ltd. With the total capacity of 1,500 tonnes a day, the facility will have its first stage completed and commissioned in December 2016. The new facility is aimed to manufacture and process edible oils including palm oil, soybean oil, rapeseed oil and fish oil and their derivative products, refined bleached deodorised stearin, specialty fats and by-products for sale and distribution in Vietnam. The refinery, which will employ 300 workers, will provide high quality products of world standard with ISO, HALAL, and HACCP certificates and ensure food safety in line with the regulations of the Ministry of Health. SUN Group urged to build resort in Laos Lao Prime Minister Thongsing Thammavong has urged the SUN Group to build a model tourist destination in Laos similar to its Ba Na Hills resort in central Da Nang City. Speaking during a visit to Da Nang on July 13, the Prime Minister appreciated the contribution made by private businesses to Viet Nam's economic development. He said he was impressed by the tourism business of the SUN Group in the Ba Na Hills resort and would introduce the resort to the Lao people. With altitude of 1,487 m above the sea, Ba Na Hills have cool climate around the year with the average temperature of 18 Degree Celsius. VNS Photo SUN Group CEO Dang Minh Truong said the Viet Nam National Administration of Tourism had recently named the resort one of the best tourist destinations in Viet Nam. The resort's cable car No. 3 has been listed by the British newspaper The Telegraph among the 11 most impressive cable cars in the world. In  March 2009, the cable car running in the Ba Na Hills is recognized by Guinness World Records as being both the highest and the longest non-stop cable car in the world. The record-breaking cable car runs from the Base of Ba Na Mountain to Vong Nguyet Mountain's Peak. VNS Photo Each year, the resort attracts some 1.5 million tourists, which makes a significant contribution to the development of Da Nang City. The Lao Prime Minister and his wife were on a visit to Viet Nam at the invitation of Prime Minister Nguyen Tan Dung. HCM City's Park Premier apartment begins sales Housing developer MIK Corporation late last week began selling the latest phase of its project Park Premier apartments in HCM City's District 7. From now until August 1 buyers can book an apartment by paying only 20 per cent of the cost when buying apartment in the project. MIK offers to lease out buyers' apartments leasing contract at the price of VND16 million (US$762) per month for five years.              The apartment is close to District 1 and the Phu My Hung urban Area as well as hospitals, supermarkets, and international schools. At MIK's first project, a bank will offer a guarantee to buyers in accordance with the recent amendments to the Housing Law. The project will be designed and built by Singapore's CPG, Italy's Lecade, and the local Hoa Binh Company and managed by Jones Lang LaSalle. It will have 296 apartments ranging from 58sq.m to 106sq.m when completed in the third quarter of next year. Tan Hoang Minh wins bid for $68m project Domestic developer Tan Hoang Minh has announced that it will be taking control of a more than 3,000 square metre site in Ho Chi Minh City’s Le Duan street. The company surpassed over 12 competitors to purchase this land, with a recorded value of VND1.43 trillion ($68 million). The land area is now currently the office of the Ho Chi Minh City Lottery Company. It was put into auction in the end of June, starting from VND558 billion ($26 million). Tan Hoang Minh, however, purchased the land for triple this price. The developer’s winning offer was VND2 billion ($95,200) higher than the nearest losing bid In a prime location with two facing streets of Le Duan and Nguyen Du, the land area was zoned to develop a trading centre and office buildings, with the maximum height of 100 metres. Tan Hoang Minh is a real estate developer with a range of luxury projects named D’ Palais de Louis, D’ Le Pont D’or and D’ Le Roi Soleil, and the trading complex D’ San Raffles, all located in Hanoi. The company is also the owner of two other promising areas on West Lake, named D’ El Dorado I and II, near the Nhat Tan Bridge in the capital. The company now has an office building on Nam Ky Khoi Nghia street in Ho Chi Minh City. The new project on Le Duan street will strategically expand its business to the southern economic hub. According to Tran Hong Son, deputy general director of Tan Hoang Minh, the documentation for starting D’ San Raffles on Hang Bai street in Hanoi’s Hoan Kiem district and D’ Le Roi de Solei on Dang Thai Mai street in Tay Ho district was finished in the second quarter of 2015. The delay of these projects has nothing to do with the financial capability of the developer. Instead, it has been caused by changes in Hanoi’s zoning, such as the revised the Hanoi Master Plan. Due to changes in terms of building heights, paperwork for the project was delayed. Real Estate Expo 2015 to showcase in Hanoi The Vietnam National Real Estate Association (VNREA) will hold its first specialised real estate expo, the “VNREA Expo 2015” during July 31-August 2 at the National Architecture and Planning and Construction Exhibition Centre, in Hanoi’s Nam Tu Liem district. Showcasing over 100 booths, VNREA Expo is expected to attract the participation of hundreds of enterprises, vying to introduce their property products, advertise their brands, promote their businesses and find cooperation opportunities. These enterprises will introduce products of the property as well as construction industries, such as social housing. villas, apartments, building materials and interior and exterior decoration. Tran Ngoc Quang, general secretary of VNREA, said that the organisation board was committed that customers would find the best products at good prices, which meet the demand as well as the payment capacity of customers. The customers will have complimentary access to advice on banks’ credit packages with soft interest rates to buy houses and opportunities to attend promotion program,es and receive gifts. Apart from the array of housing products and services, visitors will also have the opportunity to receive advice from representatives of professional property trading floors, such as G5 Real Estate Trading Floor, STDA Real Estate Project Supermarket System and Vicland Real Estate Trading Floor, among others. A representative from VNREA said that within the framework of the expo many workshops related to the Law on Housing, the Law on Real Estate Business, the Land Law and the Law on Investment would be held, with the attendance of many experts and leading policy makers. Suitable approach Non-life insurance companies and related government agencies are cooperating to create a supportive legal framework for the reform and development of the sector. The Insurance Supervisory Authority (ISA) at the Ministry of Finance (MoF) and insurance companies have recently put a great deal of effort into identifying the way the sector can develop in a sustainable and efficient manner. Many conferences have been held, where both life and non-life insurers were able to discuss policies that would help the sector reach its undoubted potential. At conferences for non-life insurance companies, representatives expressed their appreciation of the efforts made by related government agencies last year in issuing Circular No. 194/2014/TT-BTC, creating a legal framework to develop the insurance market by resolving difficulties, providing support, promoting effective business growth, enhancing corporate governance, and simplifying administrative procedures. For the non-life insurance sector the introduction of Circular No. 194 will truly have a positive effect in helping it minimize bad debts from unpaid premiums, which have become common over recent years and affected liquidity and operational efficiency. Moreover, the circular included specific support to agents and details on bonuses and rewards they may receive, which must not be more than 50 per cent of whatever commission they receive on an insurance policy. In order to secure the rights of customers and the reputation of the insurance company, the circular also indicates clearly how foreign insurance companies can issue certificates of authority to local agencies, which requires the name and issuance number of local agencies. The circular also states that leaders of insurance departments and companies having total equity equal to legal capital are allowed to do business in the country. This article will tighten management due to subordinates having to complete all requirements regarding capital, management, and facilities, etc. From June 1, 2016, non-life insurance agencies must separate their charter capital from premiums paid by customers. Circular No. 194 also has requirements on the use of insurance experts in determining provisions and the ability to cope with losses, which aim to create transparency and clarify the profit and losses of each business. Mr. Phung Ngoc Khanh, Director of ISA said the insurance sector must continue to record growth in a sustainable manner. In this regard, the ISA will firstly focus on research to complete the legal framework and policies that create favorable conditions for non-life insurance companies. Secondly, the ISA will try to simplify administrative procedures, strengthening risk management at insurance companies to create stable conditions for their operations and minimizing any unfair competition. It will also continue to issue regulations to encourage enterprises to develop new products and standardize certain insurance products to support welfare and social security efforts. Thirdly, the ISA will amend and supplement procedures to strengthen corporate governance, to ensure transparency and the financial security of non-life insurance companies. Mr. Khanh also said that, based on these three main issues, there have been seven key measures taken to amend and supplement Decree No. 45/2007/ND-CP and Decree No. 46/2007/ND-CP and nine key measures taken to amend and supplement Circular No. 124/2012/TT-BTC and Circular No. 125/2012/TT-BTC. MoF has also been working with insurers on amendments and supplements to Circular No. 124/2012/TT-BTC and Circular No. 125/2012/TT-BTC, with conferences held and public surveys posted on its website to collect suggestions. SSI seeks to lift foreign ownership With Prime Ministerial Decree No. 60, allowing foreign investors to increase their stakes in publicly-listed companies, having taken effect the Board of Management of Saigon Securities Inc. (SSI) has announced it will organize an extraordinary meeting to seek approval from shareholders for foreign investors to buy more stakes in the organization. Foreign investors already hold 43.83 per cent of SSI’s charter capital. On July 10 SSI also announced that it was unsuccessful in its bid to purchase 10 million treasury stocks as their registered price of VND22,000 ($1.01) was lower than the market price, which has recently been around VND23,000 ($1.05) per share. If shareholders agree to foreign investors buying more stocks SSI will become the first brokerage company to gain approval for such a move since Decree No. 60 was introduced. TPP a little bit closer Minister of Industry and Trade Vu Huy Hoang told local media that the recent visit to the US by Party General Secretary Nguyen Phu Trong cleared up a number of existing issues between the two countries. Issues agreed upon between Vietnam and the US during the visit to the latter by Party General Secretary Nguyen Phu Trong create the momentum needed for the two sides and other parties to quickly conclude negotiations over the Trans-Pacific Partnership (TPP), Minister of Industry and Trade Vu Huy Hoang told local media. Minister Hoang said that the TPP topped the agenda at the meeting between General Secretary Trong and President Barack Obama. Due to its significance, in the Shared Vision Statement the two leaders agreed to work closely together and with other parties to wrap up negotiations. The two sides will jointly implement reforms to meet the comprehensive requirements of the TPP, including necessary measures to meet commitments under the International Labor Organization Declaration 1998, with the aim of achieving a high quality agreement with balanced interests, bolstering economic relations and investment between the two countries while creating momentum to promote economic and trade cooperation and investment in the region. Expressing his expectations about economic cooperation and bilateral trade in the future, Minister Hoang said that after the historic visit by the Party General Secretary the economic relationship between Vietnam and the US is certain to reach a new stage of development. Trade between the two reached more than $36 billion in 2014. The US currently ranks seventh among countries and territories directly investing in Vietnam. The TPP and existing agreements between Vietnam and the US create the conditions needed for economic cooperation to become bigger and better.    The US also expects that, after the visit, Vietnam will adopt more measures to encourage and promote cooperation between the two sides. Vietnam requested that the US quickly remove trade barriers and create the conditions for Vietnamese exports to enter into the US market. FDI to agriculture in need of support Despite bringing in export turnover of about $30 billion each year, foreign direct investment (FDI) in the agriculture, forestry and fisheries sector remains too low, the Deputy Minister of Agriculture and Rural Development Le Quoc Doanh told a consultative meeting on July 13 regarding policies to encourage FDI into the sector. He said that on average over the last five years FDI in agriculture has only accounted for 0.5 per cent to 1 per cent of the total FDI in the whole country. Despite much effort being made by the State to attract investment, registered FDI capital in the agriculture sector since the beginning of the year accounts for just 1.4 per cent of the total, with an average of $7 million per project. This is absurd given that agriculture is a strength of Vietnam, Deputy Minister Doanh said. “FDI in agriculture still mainly comes from countries where the level of technology level is not so high, such as Taiwan and Thailand, while the presence of leading countries such as the US and Japan remains negligible,” he added. Questions were asked at the meeting as to why foreign investors are indifferent to the country’s agricultural sector.   For many experts, the main reason is that the scale of agricultural production in Vietnam is too small, infrastructure and related services are inadequate, and quality and labor productivity are low. The agricultural sector is also yet to adopt long-term strategies to attract FDI while the legal framework and policies aimed at foreign investors in agriculture lack transparency. According to Mr. Pham Manh Dung, a lawyer at Rajah & TannLCT Lawyers, who consulted the Ministry of Agriculture and Rural Development (MARD) on compiling a decree to attract FDI into agriculture, said that the government is still to introduce policies on developing infrastructure for agricultural projects and the Law on Investment only has policies for supporting infrastructure at industrial zones. There is also an absence of government policies on developing human resources for FDI projects. Therefore, he said, in the decree for agriculture that is being drafted, tax incentives for FDI enterprises in agriculture are to be increased, including exemptions for as long as the first four years and a 50 per cent reduction for the next nine years. Regarding infrastructure and training human resources, he said the State is to support 70 per cent of the human resources training costs incurred by agricultural FDI projects in Vietnam and they will also receive support in terms of infrastructure, as domestic firms do already. Many investors spoke at the meeting of their difficulties when investing in Vietnam’s agricultural sector, particularly regarding tax issues. A representative from the Japan International Cooperation Agency (JICA) said that Japanese enterprises investing in Vietnam must regularly invest in new technology but import taxes are quite high. This is a barrier for FDI companies when deciding to invest in Vietnam’s agriculture sector, he said, and he recommended that the State adopt a special mechanism on the issue. Many other representatives in attendance said that a more favorable investment environment is needed. Support from ministries and local authorities is required for foreign investors to invest in projects. Samsung most popular at FPT According to a report on the Top 10 phones sold at FPT shops, smartphones are still the most popular choice of users, with seven products on the list while feature phones only had three. In term of sales volume, in June the Oppo Neo 5 was the best selling phone, with a reasonable price of VND3.69 million ($171), followed by the Samsung E5. This was the second consecutive month the Oppo Neo 5 was the best seller. Despite being available for less than a month, the Sony M4 Aqua made it into the Top 5. Meanwhile, the iPhone 6 was the only representative of the line, with a price of over VND15 million ($697), in third place but down from second place in May, pushed out by the Samsung E5. The iPhone 6 Plus disappeared from the list this month. Samsung had four products on the list - the Samsung Galaxy A, Samsung Galaxy E, Samsung Core Prime, and Samsung Grand Prime, while Apple had three - the iPhone 6, iPhone 6 Plus, and iPhone 5s. The iPhone 6 and iPhone 6 Plus still led in sales revenue despite being available for only nine months. Samsung continued to be the best selling brand in the tablet segment, with the Samsung Tab 3V. Among the 10 best-sellers, five were Samsung Galaxy Tab products while three were in the iPad line and the other two were Asus Fonepad 7 and Masstel Tab 720i. FPT Shop recorded strong sales growth in tablets during the month, selling a wide range of product lines with good prices, such as Dell Venue 8 and Samsung Galaxy Tab A. IPO on horizon for Vinachimex The Vietnam Chemical Import & Export Company (Vinachimex) will conduct its initial public offering (IPO) on July 31. Shares offered at the IPO will account for 36.3 per cent its charter capital post-equitization. Some 186,000 shares will be sold to the company’s employees and 2.8 million shares to investors and strategic investors. State ownership was put at VND77.2 billion ($3.53 million) as at October 1, 2014. Assets include 54,300 sq m of land in seven areas in Hanoi and Hai Phong. Post-equitization company will use the funds raised to invest in a silicate factory, its chemicals and fertilizer business activities, and the building of office space for lease on its land plots. In the 2015-2017 period the company has targeted revenue of VND420 billion - VND540 billion ($19.25 million - $24.75 million) and profit after tax of VND2.4 billion - VND5 billion ($110,040 - $229,250). The dividend payout ratio is targeted at 3 - 5 per cent. KDC to sell majority of subsidiary KIDO Corporation (KDC), formerly known as Kinh Do Corporation, will soon complete the transfer of 80 per cent of the shares in its subsidiary the Kinh Do Binh Duong JSC (BKD) to Mondelēz International. According to a representative from KDC it is now urgently completing the transfer and after that will pay a 200 per cent dividend to shareholders. On June 26 KDC held its annual general meeting, where it presented its business results for 2014, its business plan and dividend policy for 2015, its plan to buy treasury shares and, especially, a change of name from the Kinh Do Joint Stock Company to the KIDO Corporation. In 2014, despite the economic difficulties, KDC still recorded stable growth, with revenue of over VND4 trillion ($184 million), up 8.6 per cent compared with 2013, and profit before tax of VND663 billion ($30.8 million), or 10 per cent higher than planned. This year, after diversifying its production of essential commodities, it targets revenue of VND3 trillion ($138 million). KDC has also signed a memorandum of cooperation with Dong A Bank and its Board is in the process of evaluating an investment in the bank. Convenience stores flourish in HCMC Unofficial statistics show that Ho Chi Minh City has nearly 800 convenience stores (c-stores) as of May with the increasing attendance of both local and foreign businesses. Of local firms, Saigon Union of Trading Cooperatives owns 89 c-stores and hundreds of other shops selling non-food products. Saigon Trading Group has developed 60 c-stores for the last four years. Vietnam Meat Industries Limited Company’s c-store number has exceeded 100. Saigon Agriculture Food Processing and Animal Breeding Company and Vietnam Dairy Products Joint Stock Company have opened a lot of c-stores introducing their products. Besides, the market has seen the appearance of outlets under VietGap quality standard. Foreign firms have also quickly developed their c-stores in HCMC. The two leading chains comprise Shop & Go with 100 stores and Circle K with the same number, followed by Family Mart and 7-Eleven. Recently, the health and beauty retail chain Guardian has been present in the city and become a rival of MediaCare. Japanese retailer Ministop belonging to Aeon Group has also established its c-store chain in Vietnam. According to businesses, c-stores are divided into two types in Vietnam comprising food and fast moving consumer goods. The number of c-stores is still few compared to the city’s population density, they added. HCMC population approximated eight million people last year. Thousands of tonnes of 'illegal' rice pile up at China border Thousands of tonnes of rice are piling up at border checkpoints between Vietnam and China in northern Lao Cai Province as traders on both sides try to get around export regulations to avoid tax and quota restrictions. Lam Anh Tuan, the director of Thinh Phat Food Co, said Chinese buyers do not want to pay tax on official exports and want to circumvent the Chinese government's lower rice import quotas from Vietnam. In April, China closed several border crossings with Vietnam to stop illegal rice imports. Tran Thanh Hai, from the Ministry of Industry and Trade, said China was tightening restrictions on cross-border trade to fight smuggling, and the rice trade was severely affected. Authorities of Lao Cai are trying to work with Chinese authorities to deal with the problem and clear the backlog. Some border crossings have re-opened, but seized rice stocks remain high. Lao Cai authorities urged the Ministry of Industry and Trade to sign a border trade pact with Chinese Ministry of Commerce to alleviate the problem. Large room for attracting foreign portfolio investment in Vietnam Vietnam is fully capable of utilising foreign portfolio investment (FPI), an important form of overseas investment in an economy, helping stimulate the financial market towards efficiency, transparency and expanded size, as well as helping improve corporate management quality and fostering economic relations. At the investment promotion conference themed 'My Vietnam - Your Investment Destination' held in New York on July 1, Vietnamese Minister of Finance Dinh Tien Dung talked about investment opportunities for foreign investors, saying that Vietnam is now emerging as a country with great potential for foreign investment as it boasts a favourable geographical location, political stability, and stable economic growth among others. He noted that Vietnam posted an average economic growth rate of 6.4% in the past ten years and was listed in the group of three countries with highest economic growth rate in Asia. The minister added that there was large room for FPI activities as Vietnam's market capitalisation was US$46 billion, equivalent to 25% of GDP. In addition, the recently expanded ownership limits and voting rights for foreign investors in listed enterprises on Vietnam's securities market are expected to open up new opportunities for foreign investors, he stated. Chairman of the State Securities Commission Vu Bang said that the scale of Vietnam's stock market will rise sharply in the 2015-2020 period following the government's effort in boosting the equitisation of State-owned enterprises aligned with getting companies listed on the stock exchanges. Along with the government's decision on raising foreign ownership limits for publicly-traded companies, the stock market will continue to be restructured by shortening the time to settle securities transactions, reducing registration procedures for foreign investors, and implementing a derivatives market among others, which will contribute to simulating Vietnam's stock market and capital market, Bang said. Bang noted that these moves demonstrate the government's determination to upgrade Vietnam's stock market status to emerging market in order to attract international investors. Founder and Chairman of WL Ross & Co. LLC Wilbur Louis Ross affirmed that Vietnam was an attractive destination for foreign investment, particularly investment in the stock market and equitised State-owned enterprises. He pointed out two factors for foreign investors to consider: the Vietnamese government's efforts to restructure the economy, particularly the restructuring of tax policy, and the increase of foreign ownership limits. He noted that the real estate sector and sectors with advantages for export would develop strongly in the future and would be worth investing in. Wilbur L.Ross added that it was obvious that Vietnam had taken impressive economic growth steps and in his opinion, Vietnam was the safest country for investment in the world. The view was shared by Philip Falcone from Harbinger Group, saying that he believed in the development of the economy with over 90 million people - the majority young people. After eight years, the multi-billion dollar project Ho Tram invested in by Harbinger Group in Vung Tau has proven its efficiency and would bring about benefits for parties involved, he said. Senior Vice-President of Government Relations at Manulife Financial Corporation, Peter Levitt Wilkinson said Manulife first became present in Vietnam 16 years ago when it recognised Vietnam’s business environment with many advantages and the government's positive support for enterprises. He affirmed that Manulife would increase its investment in Vietnam in the coming time. It can be seen that US FPI in Vietnam is currently too modest compared to the potential of US investors and compared to the capital absorption capacity of Vietnam market. The Vietnamese government has attempted to equitise State-owned enterprises and list them on the stock market and promoting the development of the private economic sector in a bid to attract FPI from the US and other countries. Finance Minister Dinh Tien Dung affirmed that the Vietnamese government hoped that foreign investors, including US investors, would eye investment opportunities in Vietnam, particularly opportunities raised from the equitisation process and from the stock market. He noted that the participation of foreign investors would create strong impacts on the Vietnam's stock market, making it more transparent, effective, and professional. Furthermore, foreign indirect investment would help domestic enterprises to grow and enhance their competitiveness. To absorb foreign portfolio inflows, domestic firms should make every effort to strengthen corporate governance and risk management as well as enhance transparency and the publicity of information. At the same time, management agencies must improve their management and supervision over the market to ensure market stability and attract more FPI while limiting disadvantages arising. Deputy General Director of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Pham Quang Tung said BIDV was always ready to welcome investment from US financial institutions. BIDV has built a plan to sell its shares to foreign investors with 10% of its chartered capital to be sold to a financial investor and 15%-20% of its chartered capital to be sold to a strategic investor, Tung stated. Through the sale of its shares to foreign investors, BIDV hoped to gradually reduce the proportion of ownership of State shareholders at BIDV to 65%. Tung added that BIDV looked forward to a foreign strategic investor to assist the bank in implementing a model of optimal governance, risk management, product and service development and human resource development among others. Similar to BIDV, a series of large State-owned enterprises attending the conference - Vietnam National Textile and Garment Group (Vinatex) and Vietnam National Coal and Mineral Industries Group (Vinacomin) and others - all wanted to seek foreign strategic investors and foreign indirect investment. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR