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BUSINESS IN BRIEF 3/8
Imported
vehicles pose road quality question
The
sharp increase in imported Chinese long and heavy vehicles has posed
questions over the country’s inadequate road infrastructure.
Vietnam
Register said the country had imported over 25,800 Chinese trucks in the
first half of this year, compared with over 35,100 locally made trucks during
the period.
Vietnam
Register’s Deputy Director Dang Viet Ha said the massive imports of Chinese
trucks were a result of low prices and good sales as well as the increase in
demand for such vehicles.
An
owner of a truck shop on
“The
recent tighter control over vehicle tonnage has proved effective.
You
could previously see trucks running at 300% and 400% over capacity, now they
have to carry in appropriate cargos, and this drive demand for more
vehicles,” Ha said.
“Several
types of vehicles also were phased out this year, forcing their owners to buy
new ones and this has also driven up demand,” he added.
According
to the Vietnam Register, most of imported Chinese vehicles were 28 to 20
tonne trucks and lorries.
However,
the vehicles, especially Howo-branded trucks were blamed for damaging roads.
Ha
said all imported and locally assembled vehicles have met current quality and
technical standards. But newly-available trucks were often unsuitable for
rougher roads or terrain.
In
order to prevent the possible illegal upgrading of vehicles to increase loading
capacity, vehicle importers were being required to remove all awaiting links
and any upgrading must be conducted at registration centres.
More
loans disbursed in lender-borrower matching program
Loans
disbursed in the bank-company matching program have increased sharply in the
first half of the year, said the central bank’s HCMC branch at a meeting in
HCMC last Friday.
To Duy
Lam, director of the central bank’s HCMC branch, said at a review meeting on
the program in the 2012-2015 period that local banks inked deals to provide
businesses with loans worth over VND77.6 trillion (US$3.5 billion) in
January-June this year, well above the VND67.5 trillion pledged in 2012-2014.
Nearly
6,300 clients have taken out loans totaling over VND145.1 trillion from 22
participating banks over the past three years. Meanwhile, lenders have
disbursed over 60% of the total pledged in the first six months of 2015.
All
the borrowers enjoy short-term lending rates of 6-7% per annum and medium-
and long-term rates of around 9% per annum. These short-term interest rates
are equivalent to those for five priority sectors: agriculture and rural
development, export goods production, SMEs, supporting industries and
high-tech enterprises.
From
now to the year-end, HCMC looks to 100% disbursements of the VND127.73
trillion pledged by 19 commercial banks for 2015. In addition, the city will
support the corporate sector to cope with difficulties by offering loans to
firms in the five priority sectors and through the lender-borrower matching
program, Lam said.
In
2016-2020, the program will focus on supporting industries, hi-tech farming
and human resource development.
Nguyen
Hoang Minh, deputy director the central bank’s HCMC branch, said some
problems have emerged in the implementation process of the program over the
past three years. He said some enterprises bemoaned that they had found it
hard to take out loans under the program and had paid higher interest rates.
A
number of firms had feasible production plans but failed to meet the requirements
for mortgage, so they could not receive loans.
Minh
said medium- and long-term interest rates should be kept stable in the
duration of the loan contracts. The current format is that banks apply a
fixed interest rate in the first year but will switch to a new rate based on
the average 12-month deposit rate plus two percentage points in the following
years, he said, and this is a source of concern for borrowers due to the
unpredictability of future rates.
As for
companies lacking assets for collateral, Minh suggested, banks may consider
offering unsecured loans to those clients.
Until
now, the program has not benefited any hi-tech farming projects in HCMC.
Tu
Minh Thien, deputy head of the HCMC Agricultural High-Tech Park (AHTP), said
at the meeting that 14 investors have set up shop at the park and the city
has rolled out a range of policies to support them, especially preferential
lending rates.
He
said businesses in this sector need much capital but they cannot use land use
rights as collateral to take out bank loans. Thien added the agriculture
sector is prone to risks as it depends on seasons, so farmers may miss
opportunities if they do not gain timely access to bank loans.
HCMC
vice chairwoman Nguyen Thi Hong said she wants banks to cut lending rates
further to help businesses expand operations.
Nguyen
Dong Tien, deputy governor of the central bank, said lending rates are
currently low thanks to macro-economic stability and low inflation. Deposit
rates stand at around 6% per annum and banks have tried to make lending rates
as low as possible.
Speaking
to the Daily, some businesses said they are satisfied with the short-term
rate of 6% per year at the moment but medium- and long-term rates of 9-10%
may hinder them from making new investments.
Amata
to build hi-tech industrial park in Dong Nai
Following
the success of its first industrial park project in
The
Dong Nai Industrial Zones Authority (DIZA) last week issued a decision
establishing Long Thanh Hi-tech Industrial Park and an investment certificate
for Amata Long Thanh Joint Stock Company to build infrastructure for the
park.
Amata
Long Thanh Joint Stock Company was established by Amata Vietnam Joint Stock
Company, Amata VN Public Company Limited and Mrs. Somhatai Panichewa from
Amata Group.
With a
total investment of over US$282 million, Amata Long Thanh will develop the
hi-tech industrial park on over 410 hectares in Long Thanh District.
This
is the first hi-tech park in
The
investor plans to implement the project in two phases from now towards 2020.
The
hi-tech industrial park is part of Amata’s expansion plan in Dong Nai.
The
first project of Amata covers around 753 hectares and is invested by Amata VN
Public Company Limited while the second occupies122.3 hectares and invested
by Amata Vietnam Joint Stock Company and Amata VN Public Company Limited.
As
reported by Thainews previously, Amata is cooperating with Tuan Chau Group to
develop a hi-tech industrial-urban complex in the
The
project called Amata City Halong is not just a city but also an industrial
complex and will go up in an area of 5,789 hectares. Seventy percent of the
project’s capital will be contributed by Amata while local partner Tuan Chau
Group will fund the remainder.
In
addition, Amata is planning to construct a large-scale complex in the
south-central
Major
projects expected to give Can Tho a new ambience
Can
Tho authorities are pinning their hopes on several major infrastructure
projects to give the city a new ambience and look, making it a worthy centre
of the Mekong Delta region.
Among
the major projects, the project upgrading urban Can Tho city, sponsored by
the World Bank (WB), was completed on schedule, bringing back odourless water
and green space to a canal once full of black and smelly water and shanties.
The
project also upgraded and removed flooding in main streets such as
The
second project, part of a bigger project to upgrade cities in the Mekong
Delta region, has been under implementation for two years with total capital
of 90.4 million USD.
The
project has now completed the bidding of 26 out of 30 construction packages
and is scheduled to complete all biddings by the end of this year. All
construction initiatives of the project are scheduled to be finished by 2017.
The
third project on developing Can Tho city and increasing the city’s adaptation
capacity has a total investment capital of 312.5 million USD, of which the WB
provided 250.3 million USD in loans.
The
project aims to help Can Tho city develop sustainably and mitigate adverse
impacts of climate change while improving transport links in the city and
between the city and other localities.
The
project will improve water drainage in Ninh Kieu and Binh Thuy downtown
districts and build and upgrade a number of bridges and roads in the city.
Dong
Nai attracts 3.42 bln USD from ASEAN countries
ASEAN
countries have so far poured over 3.42 billion USD into 129 projects in the
southern
Investments
from
Meanwhile,
the Thai-invested Amata Vietnam JSC, following the success of its first
industrial park project in the province, has decided to pour 282 million USD
into the Long Thanh Hi-tech Industrial Park, said General Director Somhatai
Panichewa.
According
to the provincial Department of Planning and Investment, ASEAN investors have
flocked to the province in recent years to grab investment opportunities to
be created by the ASEAN Economic Community which will be established by the
end of this year.
They
have chosen Dong Nai as the province with the greatest potential to develop
industry and service.
The
KinderWorld Education Group from
From
the outset of this year, Dong Nai licensed 57 new foreign direct investment
projects with registered capital of about 1.1 billion USD. The province is
currently home to a total of 1,506 projects worth 27.2 billion USD.
Vinh
Phuc: Electronic companies reap high revenues
Businesses
making spare electronic parts and components in the
According
to the provincial People’s Committee, all satellite companies of Samsung Group
from the
Since
the outset of 2015, Vinh Phuc has carried out a drive to seek investments and
develop the local industry.
A
report from the provincial Department of Planning and Investment showed that
Vinh Phuc licensed five foreign direct investment (FDI) projects with total
registered capital of over 48.37 million USD in the first three months of
2015.
The
province has also provided investment certificates for three domestic direct
investment (DDI) development projects with combined registered capital of
over 1.5 trillion VND (nearly 73 million USD).
By
March 2015, the province was home to 189 valid FDI projects with total registered
investment of over 3.1 billion USD and 578 valid DDI projects worth over 41
trillion VND (1.9 billion USD).
Chairman
of the municipal People’s Committee Le Hoang Quan made the statement while
speaking at a meeting in the city on July 27 to review the local
socio-economic situation from January-July.
Quan said
local leaders will help businesses to overcome difficulties related to
capital, premises and technology as well as improve administrative
formalities and develop the support industry.
Additionally,
the city is intensifying inspections on a number of investment projects to
weed out and handle violations of the construction law, he added.
The
official noted that in the first seven months of this year, the city
collected over 160 trillion VND (7.33 billion USD) for the local budget, an
annual rise of 3.8 percent.
The
local budget collection is expected to reach 265 trillion VND (11.48 billion
USD) in 2015 and 295 trillion VND (12.78 billion USD) in 2016.
Director
of the municipal Department of Planning and Investment Thai Van Re reported
the city’s total export turnover from January-July was estimated at 17.6
billion USD, down 4.6 percent against the previous year, mainly due to a
plunge in crude oil prices.
In
contrast, the total import turnover rose 13.2 percent to 19.1 billion USD
during the period, he cited.
Also
at the meeting, Chairman Le Hoang Quan requested the implementation of
measures to protect urban landscapes and the environment.
Agriculture
sector’s 7-month exports plunge
Export
turnover earned by the agro-forestry-fishery sector was estimated at 16.93
billion USD in the first seven months of 2015, an annual drop of 3.6 percent,
according to the Ministry of Agriculture and Rural Development.
Earnings
from the export of coffee saw the biggest drop (down 33.7 percent), followed
by aquatic products (down 17 percent), rubber (down 9.2 percent) and rice
(8.3 percent).
In the
reviewed period, a total of 792,000 tonnes of coffee products were exported
thus, gaining 1.63 billion USD but decreasing 33.9 percent in quantity and
33.7 percent in value compared to the same period last year.
The
rubber industry sold 519,000 tonnes of commodities overseas and earned 760
million USD, representing an annual increase of 13.9 percent in quantity but
a drop of 33.7 percent in value. Rubber prices were reported to climb only in
Exported
rice has undergone a similar downward trend with the quantity and value
reducing annually by 3.1 percent and 8.3, respectively.
On the
contrary, cashew nut and woodwork products have enjoyed a seven-month value
growth of 26.6 percent and 8.3 percent, respectively. Pepper exports also
followed the positive trend.
Gov't
debt trader to lift charter capital to US$273m
The
Debt and Asset Trading Corporation (DATC) will increase its charter capital
from current VND2.48 trillion (US$113.8 million) to VND6 trillion (US$273.2
million), as per the draft circular about the regulations governing the
company's organisation and operation.
This
circular is expected to replace Circular No 79/2011/TT-BTC dated June 8,
2011.
The
draft circular stipulates regulations on asset disposal. According to the
draft, asset evaluation to clarify the starting price for selling or for
negotiations on share contribution, joint ventures and conversion would be
done as per regulations for businesses in which the government holds 100 per
cent of charter capital.
The
draft states that DATC would be able to buy debts and assets which debt
owners want to sell, including land-use rights, bonds and debts.
It
also shows different rules for disposal of debts and assets.
Established
in 2004 with a charter capital of VND2 trillion ($94 million), funded by the
State budget, the DATC was recognised as a special State-run company. It aims
to deal with bad debts and unused assets of State-owned groups and
corporations to improve their financial condition, promote restructuring and
transform them into joint-stock companies.
The
DATC can settle debts by directly retrieving debts, resuming guaranteed
assets, selling debts and changing debts into capital contribution.
The
corporation would be able to review and settle debts by delineating and
extending debts or by adjusting the interest rate of the debt.
As for
purchased assets, DATC can sell the assets or use them to contribute capital
to joint ventures, lend or convert them, or repair or upgrade assets for
sale, lease or doing business.
Direct
asset sales would be implemented after auctions or offers for sale as per the
regulations.
In the
first half of the year, DATC had a total revenue of VND900 billion ($41.2
million) including revenue from debt trading of VND700 billion ($32.1
million), increasing 1.47 times in comparison with the same period last year.
The
corporation dissolved debt and assets at 33 enterprises with total revenue of
VND62.4 billion ($2.86 million), five times higher than the corresponding
period last year.
Last
year, it contributed VND68.3 billion ($3.13 million) to the State budget.
Cocoa
farmers say things could be better
Despite
some encouraging results,
Nguyen
Van Hoa, deputy head of the Crop Production Department, said in the past
years annual output had been 5,000-6,000 tonnes of cocoa beans.
Farming
models intercropping cocoa with coconut or cashew had offered high yields, he
said.
Companies
had done research to come up with cocoa-based products and use cocoa shells
to grow mushroom or turn them into fertiliser, he said.
But
generally the sector's development had not met expectations, he admitted.
A
Government plan for until 2020 targets having 35,000ha under cocoa by 2015
with an average output of 1 tonne per hectare and 50,000ha by 2020 with 1.19
tonnes.
But
Nguyen Nhu Hien of the department said the cocoa cultivation area had shrunk
dramatically to 11,698ha by the end of last month compared to the peak of
25,700ha in 2012.
Productivity
remained low at 0.8 tonnes of dry bean per hectare on average because of the
high density of plants, improper shade management and lack of investment in
fertilisers, pest control and others, he said.
Besides,
price volatility and the lack of linkage in the cocoa value chain had made
farmers feel unsecure about cocoa farming, he said.
Gricha
Safarian, managing director of Puratos Grand-Place Indochina, said
"unfair repartition" [of profits] between stakeholders in the
supply chain, lack of training to improve yield and quality, and competition
with other crops and pre-financing of fertilisers are among factors affecting
cocoa sustainability around the world, including Viet Nam.
Farmers
only got around 4 per cent of the profit while manufacturers and distributors
got 63 per cent, he said.
Phan
Huy Thong, director of the National Agriculture Extension Centre and head of
the Vietnamese Cocoa Committee, said cocoa had been considered a tree that
could help eliminate hunger and poverty and introduced to disadvantaged
households in difficult areas.
This
had yielded poor results, and this approach needed to be changed, he said.
He
concurred with Dinh Hai Lam, cocoa development manager at Mars Incorporated,
who said the sector needed the participation of businesses and investors
through the establishment of large-scale farming and for them to have closer
linkages with farmers.
In
this model, businesses would play a leading role in technology transfer and
provide inputs and ensure sales outlets for small households, the two agreed.
Thong
said global demand for cocoa was increasing, especially in
He
called on all stakeholders to join hands to develop the sector and ensure
fair distribution of profits among them.
The
sector should focus on improving quality of the bean by training farmers,
investing in infrastructure for purchasing and processing cocoa, and
improving irrigation, he said.
Dr
Truong Hong, deputy director of the Central Highlands Agriculture and
Forestry Science Institute, said creating new strains, especially those than
can adapt to climate change, was very important.
Besides,
firms should focus on further processing of the beans to serve both the
domestic and export markets, he said.
Thong
said his centre as well as the department would collect feedback from meeting
participants and send it to the Ministry of Agriculture and Rural Development
to tweak cocoa zoning plans and adopt appropriate measures to ensure
sustainable development of the sector.
Ministry
continues promoting Buy-Vietnam Goods campaign
The
Ministry of Industry and Trade (MOIT) will continue promoting its campaign,
Vietnamese people give priority to using Vietnamese products, so that more
and more local people begin using these indigenous products by this year end.
The
ministry planned to promote locally made industrial, semi-finished and
farming products, Ho Thi Kim Thoa, deputy minister of industry and trade,
said at a recent conference in
In
order to achieve the target, the ministry will strengthen business
connectivity between northern and southern regions, according to the plan.
The
ministry will enhance awareness about the campaign in the rural and remote
areas and also combine its efforts with those undertaken in cities and
provinces so that people are inspired to consume local industrial products.
"In
the rural areas, there was a huge potential for enhancing consumption of
Vietnamese products," Thoa said. "Therefore, apart from the state's
policies to develop the trade network in these areas, enterprises should pay
attention to price and quality of local products being sold in various
regions."
She
urged the sector to focus on developing the domestic market in tandem with
the implementation of the campaign so that domestic enterprises remain
competitive and consumption of domestic products can be enhanced.
In the
foreseeable future, the ministry will focus on cities and provinces,
especially large cities such as Ha Noi,
It
also called for government investment in promoting the campaign while
mobilising social resources for the drive.
Prime
Minister Nguyen Tan Dung has approved a project worth VND228.93 billion
(US$10.75 million) to increase the consumption of domestic goods in an effort
closely linked to the ongoing campaign. These initiatives are aimed at
increasing the market share of domestic products in
According
to the 2014 survey of Vietnamese people using Vietnamese products, some 63
per cent of Vietnamese people were choosing domestic products, twice the
percentage recorded before the campaign was launched six years ago, Thoa
said.
During
the conference, she reported that 92 per cent of the interviewees said they
were aware of the campaign, 54 per cent of whom were personally involved in
it.
The
deputy minister said the campaign had yielded positive changes, particularly
in domestic product quality and design. Le Viet Nga, Deputy Director of the
Ministry's Domestic Market Department, highlighted that made-in-Vietnam
products accounted for a major market share among products sold by domestic
and international distributors.
As
many as 50 promotion events, including trade fairs, have been organised to
introduce domestic products to residents in rural, remote and mountainous
areas across the country.
This
year, the ministry has invested in developing infrastructure facilities and
enhancing technology application in enterprises under its management to
improve their product quality and competitiveness.
Fruit
and veggie exports taking root in new markets
Vietnamese
companies are selling record amounts of fruit and vegetables with shipments
to overseas markets having soared by almost 36% in 2014 to an all-time high
of US$1.4 billion, according to official statistics.
In
addition, the General Department of Vietnam Customs reports that they are now
transported to 40 countries including many with strong agriculture industries
such as
Vietnamese
fruits and vegetables have become a stable at the dinner table in
Eggplant,
okra, peppers and corn for use in making fresh and frozen concentrated juices
have been among the biggest international sellers to
“It’s
testament to the can-do attitude of our Vietnamese farmers that they’re
selling fruits and vegetables to the likes of
In the
first half of 2015, the RoK and US were the third and fourth largest markets
for Vietnamese fruit and vegetables making up 4.62% and 3.71% of total market
share respectively.
The
demand for Vietnamese fruit and vegetables in the six- month period leading
up to July 2015 has soared by almost 28.41% compared to last year's same
period, tallying in at roughly US$878,964 million.
“This
dramatic rise in demand for
Dau
added that the obtaining of permits to sell red and white flesh dragon
fruits, lychee and longan in the
The
Ministry of Industry and Trade (MoIT) in turn has reported that it has
submitted a list of 11 different varieties of fruits to the US Animal and
Plant Health Inspection Service (APHIS) hoping to get sales permits.
“If
approved it would be an enormous boon for the nation’s fruit growers and
bring in growth to sales,” an MoIT spokesperson said.
The
spokesperson added that export sales worldwide are becoming increasingly
important to Vietnamese agriculture, driven by our signature high-quality
dragon fruit, watermelons, longans and bananas.
Nguyen
Xuan Hong, head of the Ministry of Agriculture and Rural Development (MARD)'s
Plant Protection Department, said if Vietnam farmers continue to apply Good
Agriculture Practices (GAP) fruit and vegetable sales will continue taking
root and flourish globally.
Retail
sales grow by 8.3%
According
to General Statistics Office (GSO) expert Vu Manh Ha, the country's total
retail sales stabilised in the first quarter this year.
The
increase was 8 per cent in the first four months and 8.2 per cent in the
first five months.
Ha
said the increase in total retail sales reflected the low increase in the
consumer price index (CPI).
In the
first seven months of this year, the private sector accounted for 85.6 per
cent of total retail sales, earning $73.4 billion or a year-on-year increase
of 9.5 per cent.
Japanese
promote Japonica
The
Seibu Nousan Company visited Ha Nam Province yesterday, seeking investment
opport-unities for planting, processing and exporting Japonica, a kind of
Japanese rice.
During
a working session, Ha Nam Party Committee Secretary Mai Tien Dung said
agriculture was one of the province's key economic development tasks.
In
addition to accelerating application of advanced technology in the sector,
the province had begun encouraging hi-tech farming investments by Japanese
investors, he said.
Dung
vowed that the province would offer all possible support to agriculture
investors, including assistance with electricity and water supply and
transport.
Director
of Seibu Nousan Viet
He
hoped that authorities could create the necessary conditions for a test run
of Japonica rice on a 20ha area, adding that the pilot would use hi-end
technology and a quality management system from
Currently,
potatoes, vegetables, soy beans and pumpkins grown in Ha
The
locality has already zoned off a 1,000ha riverside plot for more vegetable
and fruit cultivation, vietnamplus.vn reports.
Herbalife
opens new office in HCM City
Global
nutrition company, Herbalife, on Monday announced that it had opened a new
office at
At the
square of over 2,200 sq.m, the new office is 2.5 times larger than its
previous office in the city. It will serve as a multi-functional hub for
Herbalife in
In
addition to providing a more spacious and modernized workplace for the
company's employees, it will include a new distribution centre to provide a
seamless company experience. It will also be a hub for company members to
attend nutrition education and development programmes.
The
opening marks an important milestone for the company in
William
M Rahn, senior vice president and managing director of Herbalife Asia
Pacific, said the new office reflected the company's commitment to build a
lasting presence in the country and long-term relationships with their
members and customers.
The
opening marks an important milestone for the company in
Herbalife
opened its first office in
Experts
pick holes in new bank guarantee for apartment buyers
A
proposed decree to guide the recent amendments to the Law on Real Estate
Business that requires housing developers to get guarantees from banks before
they can sell or lease out units needs to be more specific to ensure safety,
a developer has warned.
"Now,
with the guarantee, all the risks pile on banks if a project gets into
trouble", Nguyen Van Duc, deputy director of Dat Lanh Real Estate
Company said. Photo dothi.net
Nguyen
Van Duc, deputy director of Dat Lanh Real Estate Company, told a seminar held
in HCM City to collect feedback on the draft decree that generally a developer
needs bank loans for land clearance and buying land use rights and then for
construction.
Now,
with the guarantee, all the risks pile on banks if a project gets into
trouble, he pointed out.
In
reply, Vu Van Phan, deputy head of the Ministry of Construction's Housing
Management and Real Estate Market, said the State Bank of
Phan
said the guarantee is to safeguard buyers' rights since many people who paid
to buy apartments have been unable to get back their money when projects
stalled.
Le
Hoang Chau, chairman of the HCM City Real Estate Association (HoREA), said
the government should allow insurance companies to join the business (provide
the guarantee) to offer developers a wider choice in sharing the risk.
Nguyen
Trong Ninh, standing deputy head of the Ministry of Construction's Housing
Management and Real Estate Market, said that even foreigners who are in the
country for just a day are allowed to buy houses.
He
also said that foreigners get ownership for 50 years and can apply for a
single extension of 50 years at most.
They
can resell their assets with the buyers getting the title for the remaining
duration, he said.
Participants
said the new owners should enjoy another 50 years.
The
amendments to the housing and real estate business laws took effect on July
1, but decrees guiding their implementation are yet to be issued.
Chau
said foreign institutions and individuals are allowed to own 30 per cent of
the total number of units in an apartment project but only 10 per cent of
houses if a development comprises both apartments and houses. He called for
greater flexibility in places like Ha Noi, Da Nang, Binh Duong, Dong Nai, and
HCM City, especially areas like Phu My Hung and Thao Dien in HCM City that
attract a large numbers of foreigners.
"Local
governments should be empowered to make decisions appropriate for their
situation."
Yoshida
Akio, chief representative of Japanese-owned Kitakei Co, which sells housing
materials and equipment and construction work systems, said the Japanese
community in Viet Nam wants to buy houses to live in the country for a long
term, adding the 30 percent rate should be increased to 40 or 50 per cent.
Exchange
rate predicted to rise
The
foreign exchange market is predicted to be stable in the third quarter then
fluctuate strongly in the fourth quarter, according to a report from BIDV on
the foreign exchange market. The rate will rise from VND21,800 to VND21,890
per US dollar, the report states.
The
average rate at banks is VND21,687, with most buying and selling at VND21,780
to VND21,840.
The
role of State regulation is a key factor in stabilizing the market. The State
Bank of Vietnam (SBV) often calls for stable foreign exchange rates and says
it is willing to intervene to balance supply and demand, as foreign reserves
have improved significantly in recent years. BIDV said that the SBV could
sell $5 to $6 billion, equal to the trade deficit, to offset any major
fluctuations.
The
BIDV report also noted some shocks that may influence the foreign exchange
rate. In the first scenario, economic recovery will be weaker due to
fluctuations in Asia and
If the
SBV does not extend Decree No. 43 on foreign exchange loans into 2016, it
would put pressure on demand for foreign currencies to pay outstanding loans,
which would affect exchange rates.
The
balance of payments, meanwhile, is forecast in the report to be in surplus in
the second half of the year, at $3 billion. The trade deficit, however, will
be maintained, coming in at between $3 billion and $4 billion. Foreign direct
investment, foreign indirect investment, and ODA are all predicted to be
healthy.
Outstanding
credit in HCMC up 7%
A
report from the Ho Chi Minh City People’s Committee showed that total
outstanding credit in the city for the first seven months stood at VND1,140
trillion ($52.24 billion), an increase of 7 per cent compared with the first
seven months of 2014.
Outstanding
credit in
Medium
and long-term outstanding credit rose 13 per cent since the end of 2014,
accounting for 54.5 per cent of the total, while short-term outstanding
credit increased 0.79 per cent since the end of 2014, accounting for 45.5 per
cent of the total.
Total
credit growth in the city was some 7 per cent, with an annual target in place
of 13-15 per cent.
Regarding
mobilized capital, at the end of July it is expected to be VND1,420 trillion
($65.07 billion), an increase of 6 per cent since the end of 2014.
Remittances
in the first seven months are estimated at $2.4 billion.
An
Cu picks up Hoa Binh International Tower
The An
Cu Co., a real estate management firm, won the recent public auction to
acquire Hoa Binh International Tower, for VND735 billion ($33.68 million),
Mr. Nguyen Huu Duong, Chairman of the Hoa Binh Group - the tower’s investor -
confirmed with VET.
There
were five companies in the auction, including the Hai Phat Investment JSC,
the An Quy Hung
Located
on
An Cu
Co. specializes in distributing and leasing high-end real estate products in
projects in
Sweet
potatoes for export in great abundance
Several
farmers in the Mekong Delta provinces of Vinh Long, Dong Thap, and Can Tho
City have suffered huge losses as export price of sweet potatoes had
continuously dropped in the past few months.
According
to Mr. Son Van Luan, chairman of Tan Thanh Sweet Potato Cooperative in
Mr.
Luan said that export of sweet potatoes mainly depends on Chinese market.
However, the export issue is extremely erratic in both price and volume. The
price always drops when sweet potatoes are ready for harvest.
Currently,
the area of sweet potatoes in provinces in the Mekong Delta is extremely
large. Meanwhile, farmers cultivate sweet potatoes for three crops per annum,
causing production to be excessive, soil to be exhausted, and more germs to
appear.
Mr.
Luan suggested that farmers should cooperate with cooperatives in cultivation
of sweet potatoes for export. They should rotate crops to lessen germs and
lower abundance of sweet potatoes so as to ensure their profits from growing
sweet potatoes. For instance, they should grow sweet potatoes for only one
crop in a year and grow rice or vegetables for the rest.
Real
estate chaos surrounds
While
real estate agents are trying to sell land lots around the newly-approved
Advertising
boards and flyers for real estate project or land lots can be found along
Highway 51 in
A real
estate agent in Loc An Commune said the government will build a new road that
will serve as the main road to the airport and his lot was located on this
proposed route.
Another
broker named Sinh said, "Two years ago, the average land lot would cost
around VND300m. But the prices have gone up to VND500 million just recently.
These prices will no doubt increase next month. You should buy now. If you
don't want to live here, you still can sell it later for a profit."
Loan,
a local at Loc An, however said, "My family and relatives living near
this area are miserable. My cousin wanted to sell his land but couldn't find
a buyer despite all the claims about hot demand for property. He put his land
up as collateral and only received a VND200 million loan from the bank for
it."
Long
Thanh District vice chairman Ngo The An said
"Buyers
should be careful when it comes to buying land now, as while they could pay 6
billion now, they might only get VND2bn in actual compensation when the
project gets started," he said.
Nielsen
survey: Vietnamese tops world for savings
Vietnamese
are spending less and saving more due to their worries about the economy. Up
to 73% of those interviewed said they would use their spare cash for savings,
topping the world, a survey by Nielsen said.
According
to Nielsen’s the global survey on Consumer Confidence Index (CCI) released on
July 27, 86% of Vietnamese interviewed said that they had spent less over the
past year to save more, causing the country’s CCI to drop to 104 points in
the second quarter of 2015, down 8 points against the first quarter of the
year.
The
fall, the biggest quarterly decline in Asia Pacific, is attributed to local
consumer concerns about the economy’s difficulties during the coming five
years.
The
Nielsen survey also reveals Southeast Asian consumers continue to be the most
penny pinching in the world, with 70% of interviewed people using their spare
cash for savings compared to just 48 percent globally. The ratio in
Around
60% of Vietnamese consumers have reduced their spending on new clothes and
cooking gas and electricity; while 57% have cut out-of-home entertainment and
48% have delayed upgrading gadgets and consumer goods. However, nearly half
of Vietnamese consumers are willing to spend more on holidays and new
technology.
Disbursed
foreign direct investment up 9% in seven months
Disbursement
of foreign direct investment (FDI) in the first seven months of 2015 rose 9%
from the same period last year, according to the Foreign Investment Agency.
In
July alone, more than US$1.1 billion was disbursed, bringing total FDI
disbursement to US$7.4 billion in the first seven months of 2015.
However,
FDI pledges during the same period dropped 7.6% from a year earlier to US$8.8
billion despite additional commitments of US$3.3 billion in July.
Manufacturing
and property trading were the most attractive sectors to foreign investors in
July, receiving US$1.95 billion and US$1.23 billion respectively, followed by
the retail sector which attracted US$18 million.
The
manufacturing sector saw a strong presence of investors from the
In the
January-July period,
Vinalines
still incurs losses
A
Vinalines report released on July 20 says that in the first half, the holding
corporation’s total revenue was estimated at about VND9.3 trillion,
representing 51% of the year’s target and falling 1% compared to the same
period in 2014.
A 7%
year-on-year rise (or 14.6 million tons) in cargo transport volume and an 11%
year-on-year surge (or 42 million tons) in cargo throughput at the
corporation’s ports in the country contributed to attaining such revenue.
Its
2014 revenue amounted to over VND19.8 trillion but its losses reached around
VND1.63 trillion. Despite its loss-making operations, Vinalines will still
proceed with an initial public offering in the third quarter this year.
Vinalines
said in quarter two this year the holding company settled VND1.43 trillion
debt, thus slashing its VND12 trillion debt by VND3.6 trillion since it began
restructuring. Vinalines primarily sold its debt to the Debt and Asset
Trading Corporation (DATC), a debt trading arm of the Ministry of Finance,
and withdrew capital from non-core business operations for debt settlement.
Currently, it is in negotiations over the settlement of debts owed to VietinBank,
ACB and VPBank, among others.
Vietnam
Development Bank (VDB), Vinalines’s largest creditor, has proposed the
Government allow it to restructure the firm’s debt by freezing or
rescheduling it and writing off the accrued interest as decided by the Government
in 2013.
According
to an evaluation approved by the Ministry of Transport in March and submitted
to the Government in preparation for the IPO, the actual value of the
corporation was VND21.29 trillion (around US$1 billion).
The
fund will use the amount to own a stake in An Gia Investment and invest in
housing projects to be developed in HCMC meeting Japanese quality standards.
Nguyen
Ba Sang, chairman and general director of An Gia Investment, was cited by
Vietnam News Agency as saying that the partnership with Creed Group would
provide an additional strong source of financing for the firm to implement
property projects.
An Gia
plans to build around 2,000 mid- and high-end homes for the local market
annually and spend US$1 billion constructing some 10,000 high-end apartment
units in HCMC towards 2020.
An Gia
is now carrying out four projects worth nearly VND3 trillion in total with
2,000 apartment units. Besides, the firm is negotiating to buy ten land lots
in districts 4, 2, 7 and Tan Binh for its future projects.
Toshihiko
Muneyoshi, president of Creed Group, said the fund decided to invest US$200
million in An Gia after one year of consideration as the local firm met its
business criteria for effective implementation of projects, quick sales, and
young and active staff.
“This
is just the first step of our partnership. If the Vietnamese property market
grows well, Creed Group will inject hundreds of millions of dollars more in
An Gia,” he said.
According
to
The
government of HCMC has told Saigon Industry Corporation (CNS) to reconsider
the effectiveness of an integrated circuit (IC) manufacturing project at
Saigon Hi-Tech Park (SHTP).
The
project has not been executed as planned due to concerns over a lack of manpower
able to operate the facility and of markets for its products.
Therefore,
HCMC vice chairman Tat Thanh Cang told representatives of the parties
concerned including the HCMC Department of Information and Communications and
SHTP to arrange monthly meetings to review the project and the city’s program
on IC industry development, and report results to the municipal government.
As
part of the 2013-2020 chip industry development program launched by the HCMC
government in mid-2012, the chip factory is expected to supply around 1.8
billion ICs worth a combined US$90 million a year.
CNS
said the first phase of the project worth about US$250 million was scheduled
for implementation in the 2016-2018 period. Once in place, the factory would
be able to produce 5-10 thousand wafers and products a month, including
electronic chips, RFID chips and power ICs.
The
city government has thrown support behind CNS to carry out the project given
large demand for ICs on the domestic market, particularly for chips used in
SIM cards, bank cards and automobile black boxes.
Last
May, Prime Minister Nguyen Tan Dung agreed on adding this chip production
project to the development plan for hi-tech industries towards 2020.
The
HCMC Department of Finance is completing procedures for issuing VND3 trillion
(US$137.4 million) worth of municipal bonds between August and October to
raise funds for development this year.
Speaking
at a review meeting on July 27 on the city’s socio-economic performance from
January to July, Dao Thi Huong Lan, director of the Finance Department, said
the August-October period is a favorable time for :municipal bond issuance but she did not go
into further details.
According
to HCMC chairman Le Hoang Quan, the city’s budget collections neared VND160.4
trillion in January-July, meeting more than 60% of this year’s target and
rising by 3.8% year-on-year. Revenues from domestic sources and from exports
and imports went up but shed nearly 23% from oil against the same period last
year.
In the
remaining months of 2015, the city will strive to meet this year’s budget
collection target of around VND265 trillion. Quan said budget collection
pressure would mount next year as the city targets a staggering VND295
trillion.
According
to a report of the HCMC government, the city got around US$17.6 billion from
exports in the first seven months, down 4.6% year-on-year. The slide was
attributable to a 47.4% slump in crude oil price on average.
Meanwhile,
imports of production materials such as dairy products, footwear and apparel
materials and pharmaceuticals remained stable, raising the total imports in
the seven-month period by 13.2% to US$19.1 billion.
Between
January and June, crude oil also dragged the city’s export value down 6.3% to
US$14.6 billion.
Of the
exported goods, the agro-aqua-forestry group, which accounts for nearly 20%
of the city’s total export value, experienced a 10% year-on-year drop in
export revenue. The main cause was that rice exports decreased 73% in volume
and 38% in value.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Hai, 3 tháng 8, 2015
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