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BUSINESS IN BRIEF 11/10
New decree to
prop up supporting industries
A new decree on supporting industries development about to come out will not include a VND30-trillion investment fund as previously planned but will provide plenty of policies to back enterprises in these industries. A source from the Ministry of Industry and Trade told the Daily on October 6 that Government members were commenting on the draft decree and that it would be issued late this month or early next month. When the draft was tabled for discussion late last year, it mentioned a fund designed to support manufacturing and services projects in supporting industries. Of the VND30 trillion planned for the fund, VND2 trillion would be sourced from the State budget in the initial time. The technology investment fund is not included in the latest draft that the ministry has presented to the Government for consideration. However, it offers a lot of incentives in terms of capital, technology transfer, research and development, and establishment of industrial parks. There are nearly 1,400 local producers of components for supporting industries nationwide, not to mention more than 600 producers of materials for the textile-garment sector. Investments in supporting industries are risky and require a long period of time for capital recovery, thus discouraging investors. Moreover, the capacity of domestic enterprises in supporting industries remains limited. Therefore, producers in Domestic enterprises are awaiting more supporting measures to improve their performance and invest more in material production, particularly for supporting industries to bank on the opportunities from the Trans-Pacific Partnership (TPP) agreement. On Monday, Pacific trade ministers reached a deal on the TPP in a generation that will cut trade barriers for the 12 member states. Truong Thi Chi Binh, director of the Center for Development of Enterprises in Supporting Industries, said textile and garment enterprises would benefit a lot from the TPP when it takes effect. More foreign enterprises will invest in apparel factories in According to the draft decree, a national program for supporting industries and incentive policies would come out. Development centers in support of these industries will be set up in localities and enterprises would be aided in building industrial parks for supporting industries. Investors of industrial parks for supporting industries would get a land rent exemption for 11 years and a 50% rent cut in the nine following years. Besides, projects in supporting industries would be provided with preferential loans from the investment-development fund or commercial banks. Experts: Special mechanism needed for HCMC property market Experts said at a seminar last week that HCMC needs a special mechanism to support the sustainable development of the real estate market and meet high housing demand. Nguyen Thanh Tai, former vice chairman of the city, told the seminar that the city is an economic and financial hub of To ensure the sustainable development of the local real estate market, Tai said the city is in need of a special mechanism to solve urban and housing issues and at the same time develop satellite towns not only for the city but also the southern region. Tai proposed the city government boost cooperation with neighboring provinces in urban and housing management as well as infrastructure development to meet higher housing demand of both citizens and migrants. Tai also emphasized the need to review and change poor regulations for the property market. One of the regulations requires enterprises to use 20% of the total area for commercial housing projects for building social houses but Tai said customers of the two groups of housing projects are different in terms of incomes and living standards. HCMC’s real estate market has many advantages and much potential for development in the future, Dr. Pham Thai Son from Son said much more foreign direct investment is flowing into the real estate market of HCMC and improved incomes of local people have resulted in a strong increase in housing demand. However, Son is concerned about a host of challenges the city property market faces, including faster population growth than infrastructure development. Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), pointed out many shortcomings in policies related to site clearance and compensation for affected households at housing projects and land use fee collections as major barriers to the development of the real estate market. Chau said more than 600 housing projects in HCMC have been on hold as investors cannot afford to compensate affected households with prices in accordance with market levels. Chau expected that regulations for the real estate market should be made transparent and feasible to support healthy competition and sustainable development of the market. Dak Nong seeks Gov’t nod for solar power project In a recent document sent to the Government, the province did not name the investor but said the investor wants to build the solar power plant with a capacity of one megawatt (MW) in Duc An Town in Dak Song District and sell electricity at 16.8-18 U.S. cents per kWh in the pre-feasibility study of the project. This price is two times higher than the average electricity price of Vietnam Electricity Group (EVN) at present. Therefore, The ministries of industry-trade and finance are weighing the proposal and will submit their comments on the project to the Government this month. According to the Dak Nong government, electricity demand in the province has surged, especially after the existence of two Nhan Co Alumina plants with a combined capacity of 650,000 tons per year and Tran Hong Quan Company’s aluminum electrolysis plant with a capacity of 450,000 tons per year. Therefore, the solar power plant will help ease power shortages in the province. Incentives for investors of inland waterway projects The Government has issued fresh incentives for private enterprises involved in inland waterway transport projects, including ship registration fee exemption, loan interest and fare subsidies for shipbuilding and passenger transport by waterway. In particular, registration fees have been exempted for new high-speed passenger and container ships. Besides, local governments are expected to cover loan interest for investors of 1500-DWT tow and pull ships or bigger, 800-DWT cargo vessels or bigger and passenger ships running on the rivers in regions with difficult economic conditions. Local authorities will subsidize or partly cover the operation cost of public waterway passenger transport services. The State will cover the whole funding for training drivers of boats in communes with special difficulties and border communes. To enjoy the incentives, investors of inland waterway transport projects must complete licensing procedures and meet safety requirements for their transport services. According to the Ministry of Transport, there are 126 ports, 4,809 cargo handling piers and 2,348 berths for passenger boats along 6,500 kilometers of river in the country. Inland waterway transport is forecast to grow strongly in the coming years. Last year, the ministry launched sea routes to ease traffic density on roads and reduce overloaded vehicles. In HCMC, the city government approved two river routes for passenger transport in July and these routes are expected to be put into service next year. VSA wants 27 steel projects cancelled The Vietnam Steel Association (VSA) has proposed relevant ministries and agencies scrap a total of 27 steel projects which are deemed as inefficient and harmful to the environment. Eleven of these projects have not got off the ground and the remaining 16 are either infeasible or unable to meet technology requirements so as to ward off unnecessary competition stoked by a domestic oversupply. VSA vice chairman Do Duy Thai told the Daily over the weekend that the annual construction steel capacity in “It is okay if steel supply surpasses demand by a maximum of 30% but supply is two times higher than demand on the domestic market. Other countries allow steel supply to be 20-30% higher than demand,” Thai said. According to VSA, up to 28 out of 42 projects registered for implementation in the 2013-2025 period cannot meet all requirements set in the zoning plan for the steel industry and investment licensing. Rampant investments in steel projects have triggered fierce competition in the industry in recent years, as supplies of steel ingots, construction steel, cold-rolled steel sheets, steel pipes, galvanized steel and color-coated steel products are 1.5-2 times higher than needed. Local demand for construction steel this year is estimated at six million tons but the combined capacity of steel mills nationwide could amount to 11 million tons. Speaking to the Daily recently, VSA former chairman Pham Chi Cuong said oversupply resulted from the fact that many provinces rushed to issue investment certificates for steel projects without following the zoning plan for the steel sector in previous years. Cuong said VSA used to call for relevant ministries and local authorities to tighten controls on new steel projects to avoid an oversupply and inefficient investment in the sector. Oversupply-triggered competition has forced many firms with weak financial positions and out-of-date technologies to withdraw from steel projects as their products have not been able to compete, according to VSA. A number of producers have reported losses and closed their mills, especially in the north, and only big companies able to invest in advanced technologies and turn out quality products for domestic consumption and export can survive. Last year, VSA wrote to the Ministry of Industry and Trade asking for a review of steel projects. Bad debt settlement remains tough The average bad debt ratio in the bank system is projected to fall to below 3% by the end of this year after three years of restructuring but experts describe bad debt settlement as tough. Nguyen Kim Anh, deputy governor of the State Bank of Vietnam (SBV), told a conference in The scheme, which was prepared by the central bank and approved by the Prime Minister in Decision No. 254/QD-TT dated March 1, 2012, aims to improve the financial capability and operations of credit institutions. Anh said from 2012 to end-August 2015, a combined VND424.14 trillion (US$18.8 billion) in bad debt at credit institutions was settled, equivalent to 91.2% of the total as of September 2012. Of which, Vietnam Asset Management Company (VAMC) handled 41.3% and credit institutions the remainder. The bad debt ratio has fallen to 3.21% in August and is expected to drop to less than 3% by the year-end. Experts said the bad debt ratio of lower than 3% was achievable but this did not mean bad debt settlement was effective, as bad debts have moved from credit institutions to VAMC. Economic expert Le Xuan Nghia said the existing regulations hindered bad debt settlement. An advisory group for the Prime Minister has asked him to seek National Assembly approval to adjust some regulations related to bad debt settlement at VAMC and commercial banks for a certain period, but nothing has come true. Nghia said that if bad debt was not settled efficiently, another banking sector restructuring scheme must be carried out in the future and that the financial burden would be heavier. Finance-banking expert Nguyen Tri Hieu said it was good news that VAMC had settled some VND200 trillion in bad debt but this is just the beginning of a long process. Hieu suggested DHL braces for
DHL
Global Forwarding has upgraded and extended its network and services to
better cash in on
Senior
executives of the global provider of air, sea and road freight services
unveiled the network and service improvements during their business trip to
Kelvin
Leung, chief executive officer of DHL Global Forwarding for Asia Pacific,
told local reporters that intra trade within the European Union (EU) boomed
after the bloc was set up and the company sees that trend in ASEAN.
Thomas
Tieber, CEO of DHL Global Forwarding in ASEAN and South Asia, clarified that
the company has upgraded and extended the road freight network and services
in
Earlier,
DHL Global Forwarding launched an integrated road freight network linking
five key Asian locations -
The
DHL AsiaConnect service was launched in 2011 to connect
Currently,
intra trade accounts for around 30% of total trade in ASEAN. Tieber said
trade within the EU used to be at the same level before the bloc came into
existence but has amounted to around 70% now.
“We
see a huge boom in trade in the AEC in the coming years and that is why we have
upgraded services and extended network in ASEAN,” Tieber said. He noted that
the position of
Leung
noticed the opportunities from the effective free trade agreements between
ASEAN and
Moreover,
many manufacturers have relocated part of their production from
“For
the trucking network, nowadays a lot of our customers are requiring
additional options that are quicker than sea freight but cheaper than air
freight,” Leung said.
Tieber
said
Tieber
said infrastructure has not been perfect in all countries but DHL has seen a
significant improvement in infrastructure in
Criteria
evaluating SOEs’ performance regulated
The Government's Decree No.87/2015/ND-CP has regulated criteria to evaluate State-owned enterprise (SOE) performance. The criteria include: 1-revenue; 2-net profit after tax and after-tax profit margin on equity; 3-overdue debts and capacity to pay due debts; 4-observance of laws on investment, liability management and use, taxes and other contributions to the State budget, as well as regulations on financial and financial oversight reports; and 5- provision of public services and products. The criteria are identified and counted from data in yearly financial reports of independent limited liability companies and parent companies, which are audited periodically as regulated. When measuring criteria 1, 2, 4 and 5, objective effects (natural disasters, fires, epidemics, wars and other force majeure), planned business expansion affecting revenue in the first two years after SOEs are formally operated, as well as the State’s price adjustments on State-priced products will be considered. For SOEs established and operated stably in providing public products and services, the evaluation will be based on criteria 1, 3, 4 and 5. Basing on the criteria, SOEs’ representative owners should assign appropriate tasks to the enterprises in documents prior to April 30 of the plan year without any adjustments during the assigned duration for realizing the assignment, excerpt from force majeure. SOEs’ annual financial and business plans should be devised on the basis of their strategic plans, development trends of their sector, legal changes, the previous year’s performance, assigned tasks in the plan year, as well as the SOEs’ internal and external conditions. The yearly plans should comprise of specific expenses. SOE performance is categorized into A, B and C descending levels. Quang Ninh calls for investments in Mong Cai EZ The Speaking at an investment promotion conference on October 8, Secretary of Mong Cai city’s Party Committee Nguyen Xuan Ky said that owning both border lines on sea and land, the Mong Cai EZ has a strategic geopolitical and geo-economic position, and acts as one of the important bridges boosting cooperation between It also holds great potential in developing production, tourism, trade and transportation service, he added. When investing in the EZ, enterprises will enjoy incentives applied for extremely difficult socio-economic areas such as land rent land and costs for wastewater treatment facility construction. They will also receive assistance in technology transfer and product advertisement in the province’s websites. Deputy Minister of Science and Technology Tran Viet Thanh had a working session with General Director of the World Intellectual Property Organisation (WIPO) Francis Gurry on October 7 in During the meeting, Francis Gurry shared his joy at increasingly fruitful cooperation between WIPO and For his part, Thanh, who is also Director of the National Office of Intellectual Property of Vietnam, thanked WIPO for its contributions to the development of He asked WIPO to support Talking to Geneva-based Vietnam News Agency correspondents, Deputy Minister Thanh said WIPO has invited around 650 Vietnamese officials to attend international training courses, conferences and workshops on IP and joined WIPO has also granted scholarships to Vietnamese staff to join its annual training courses. The country is also considering joining other international treaties such as WIPO is the global forum for the promotion of IP policies, services, information and cooperation. As a specialised agency of the UN, the organisation assists its 188 member states in developing a balanced international IP legal framework to meet society’s evolving needs. HCM City greets 3.2 million foreign visitors in 9 months Vietnam’s business and economic hub, Ho Chi Minh City, welcomed more than 3.2 million foreign visitors, up 5 percent annually, raking in more than 69.1 trillion VND (3.14 billion USD), a 6 percent rise, according to the municipal People’s Committee. Between now and the year’s end, the city will fine-tune the cooperation mechanism between its tourism and public security sectors and promptly establish a tourist support centre, ensuring safety for visitors. A tourism stimulation programme will continue with a focus on inbound travel and services improvement. The hotel occupancy in the southern metropolis averaged 62 percent in the third quarter, down 2 percentage points quarterly but up 5 percentage points yearly, reported Savills In its quarterly hotel market update, Savills Vietnam said the average room rent rate dropped 4 percent quarterly and 7 percent annually to 1.6 million VND (75 USD)/room/night due to the low season. As of this September, the city’s 112 hotels offered around 14,400 rooms, up 4 percent quarterly and 14 percent annually. The figure included 480 new rooms from six new projects, 240 of which were in the three-and five-star category, in the third quarter. The country has won a contract to sell 1 million tonnes of rice to According to Lam Anh Tuan, a representative of Vietnam Food Association, 750,000 tonnes out of 1 million tonnes exported to Tuan stated that the selling price is rather good, while saying it is not lower than that of a recent contract signed with the Exporters must hand over about 240,000 tonnes per month to Fruit and vegetable exports are forecast to climb to a record high US$2 billion by the end of the year, a leading economist at the Vietnam Fruit and Vegetable Association (Vinafruit) announced at a recent conference. On the back of more and more foreign markets opening up their doors, sales have catapulted over three-fold from just US$460 million in 2010 to US$1.47 billion in 2014, he said. Vinafruit figures show the upward trajectory has continued during the nine months January-September of this year with overseas consignments having already climbed 13.5% on-year to an estimated US$1.3 billion. PhD Nguyen Huu Dat from the Ministry of Agriculture and Rural Development (MARD) in turn revealed that Dragon fruit was by far the largest seller out of the mix accounting for 62% of total sales by volume followed by watermelon, longan, litchi and rambutan in descending order. Most notably, in 2014 the In addition, this year For his part, General Director Huynh Quang Dau of the An Giang Fruit-Vegetables and Foodstuff Joint Stock Company said its fruit and vegetable exports have experienced on-year growth rates ranging from 15-20%. “Shipments to “Prices have also been upbeat this year with dragon fruit hovering around US$1.32 per kilo,” Dau said, adding that in September the sales price of rambutan surged 30% compared to August. However, to develop a sustainable export market, businesses in the industry in convert with the government should develop a new export strategy with a particular focus on reducing post-harvest losses, he said. In addition, their needs to be more aggressive programs put in place to expand new long-term export contracts, he underscored. Professor Nguyen Quoc Vong of But to capitalize on these opportunities, companies must ensure their products comply with the highest of food safety and quality standards along with food labelling requirements, he concluded. HCM City to open job transaction floor for FDI enterprises The second job transaction floor for foreign direct investment (FDI) enterprises is set to get underway in Ho Chi Minh City’s Binh Thanh district on October 13 aiming to create a linkage between workers and FDI enterprises. The first floor of its kind was held in 2014 with a view to finding workers for Japanese enterprises in Roughly 35 FDI enterprises have to date registered to attend the event. They hope to recruit 950 workers in different positions, such as sales personnel, technicians, mechanicians and translators. The job transaction floor is co-organized by the Ho Chi Minh City Employment Service Centre and Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA). Remittances won't be reduced The central bank's recent dollar deposit reduction would not have a negative effect on Vietnamese remittances from overseas because an insignificant amount of the remittances went into savings. After the central bank's decision to cut the interest rate cap on dollar deposits as of September 29, some were concerned that the move would cause a reduction in remittances sent home by Viet kieu (overseas Vietnamese). Under the decision, the interest rate cap on dollar deposits offered by commercial banks to organisations and companies was cut from 0.25 % to zero % per year, while the rate for individuals was be reduced from 0.75 % to 0.25 % per year However, Nguyen Hoang Minh, deputy director of the State Bank of Vietnam (SBV)'s HCM City branch, said there would be no effect, while explaining that statistics showed remittances flowing into production and business accounting for more than 70.6 % of the country's total remittances. Another 20.7 % went into real estate investment and 6 % to 7 % were for Viet kieu's relatives for consumer purposes such as medical treatment or tourism. Besides, Minh is also optimistic about the inward remittances to the country next time to invest in the warming real estate market as the government has so far allowed foreigners to own houses in Overseas Vietnamese remittances to The amount is expected to hit US$5.5 billion this year thanks to the recent favourable adjustment of exchange rate, the recovery of local businesses and the warming real estate market. Tran Van Trung, director of Dong A Bank's Remittance Co, said his company targeted a remittance growth rate of 15 % to 20 % this year. Last year, remittances to the company reached US$1.6 billion, up 10 % against the previous year. Besides the traditional markets of the Sacombank, meanwhile, targeted a remittance of US$1.9 billion this year, equal to that of last year. According to Vo Tri Thanh, deputy director of the Central Institute for Economic Management, remittances play an important role in the nation's economic development and macro-economic stability. Vietnamese living abroad remitted more than US$5 billion to Between 1993 and 2014, Remittances into Farm exports may miss mark During the ministry's regular press conference on reviewing the sector's first nine-month business results, Pham Cong Dung, head of the ministry's Department of Processing and Trade of Agricultural, Forestry, and Fishery Products and Salt Production, said the agricultural sector set a target of US$32 billion in export value this year. During the ministry's regular press conference on reviewing the sector's first nine-month business results, Pham Cong Dung, head of the ministry's Department of Processing and Trade of Agricultural, Forestry, and Fishery Products and Salt Production, said the agricultural sector set a target of USUS$32 billion in export value this year. However, an increase in the price of the US dollar, changes in the foreign exchange rates of several strong currencies – particularly Euros – which detrimentally affected export businesses and high inventory of agricultural products of Vietnam's key importers all posed difficulties for the country's exports. In the first nine months of this year, the total export turnover of farming, forestry and fishery products was estimated at nearly US$21.7 billion, down 5 % from the same period last year. Of which, exports of major agricultural and seafood products were valued at US$10.3 billion and US$4.7 billion, down 7.2 % and 17.8 %, respectively, while the export value of wood and forest products reached US$5.03 billion, a year-on-year rise of 6.6 %. By the end of this year, the ministry will also organise more trade promotion activities and continue negotiations towards market openings for several agricultural products, such as dragon fruit to It will review traditional export markets to promote exports to those, according to the ministry. It will also reduce fees and charges of the agricultural sectors to solve difficulties in administrative procedures for export activities. Meanwhile, Dung hoped that the completion of negotiations and the signing of free trade agreements and the Trans-Pacific Partnership would help increase the national agro, forestry and fishery exports in the near future. Also at the press conference, MARD Deputy Minister Ha Cong Tuan said that the trade deal, once effective, will help The TPP will enable Seafood and wood products will gain a lot of competitive advantages as taxes imposed on all agricultural products will be eliminated shortly after the deal comes into effect, he said. With tax incentives stipulated in the pact, However, the agricultural sector is forecast to face a spectrum of challenges, especially in consumption of farming products, as it is mainly driven by household-based businesses with out-of-date technologies, Tuan said. The official suggested the sector revamp its apparatus, and called for joint efforts from managers, farmers and businesses. The domestic agricultural sector has a low yield, leading to low competitiveness, Nguyen Duc Thanh, director of the Vietnam Centre for Economic and Policy Research (VEPR) said. Therefore, He said technology with regard to agricultural production should be improved because the TPP includes environment commitments and Vietnamese farmers must change their habits in agricultural production to reach international environment standards, reported zing.vn. Sea transport sector still weak Vietnamese shipping companies are losing in their own homeland as domestic producers continue to choose foreign shippers for their imports and exports. More than 80 % of Vietnamese imports and exports are transported by foreign shipping firms, said Do Xuan Quang, chairman of the Vietnam Logistics Association (VLA). There are only 40 foreign shipping companies in Meanwhile, more than 600 Vietnamese shipping companies handle mostly domestic and Southeast Asian markets. According to experts in maritime transport, domestic ships take only 10-12 % of market share in There are no direct routes between Statistics show that there were 1,840 marine transport vessels as of July this year with a total capacity of 7.3 million dead weight tonnage (DWT). Of these, there were 1200 bulk carriers and smaller ships, about 500 vessels running on international routes - but only 32 container ships. Furthermore, the average age of the Vietnamese vessels is high, currently about 17.7 years old, while the average age of foreign fleets is about 10 years. Shipping experts blame low-quality service by Vietnamese ships on backward fleets and weak business capacity by local transport companies. Vietnamese ships are mostly small, expensive, of poor quality and old, which leads to high operating costs. Many Vietnamese ship owners also run transport companies. Tran Binh Phu, general director of the Transport and Chartering Corporation (Vietfracht), said no Vietnamese companies in sea transport were strong enough to develop fleets even at regional level. In addition, the main weakness of the shipping industry was in management and connections between carriers and shippers. According to Bui Thien Thu, deputy director of Vietnam Maritime Administration, modernising the fleet was necessary to developing the maritime transport sector. At least US$2 billion was needed to enhance the country's share of import and export transport, Thu added. Mong Cai seeks FDI for projects The economic zone at the Mong Cai border gate with Another 40 projects are seeking investment. They involve transportation, infrastructure, culture, trade, services, health, education, electricity, the environment, agriculture and industry. Yesterday, the People's Committee of Mong Cai City and Hai Ha District in the The Mong Cai border gate economic zone was set up in 2012. It covers 121,197 hectares, more than 11 per cent of the province's total area. The zone is considered an important link with ASEAN and Northeast Asian countries - and southern Nguyen Xuan Ky, secretary of Mong Cai city's Party Committee, said the zone was a driving force for provincial growth. The northeast At the conference, advantages, potential and investment opportunities in Among the projects are a waste water treatment plant in Uong Bi city as well as a high-class resort, a tourism ship terminal and a hi-tech seafood processing line on Co To Island. Truong Manh Hung, Deputy Head of Quang Ninh's Investment Promotion Agency, affirmed enterprises would be eligible for incentives when investing in infrastructure, health, education, manufacturing and services with a substantial workforce. Le Huong Giang, Deputy Director of the Ministry of Planning and Investment (MPI)'s South Centre for Investment Promotion, said Quang Ninh is one of the provinces with bold, creative and breakthrough changes in administrative reforms, reorganising growth models, improving business investment environments and enhancing tourism and transport infrastructure investments. Quang Ninh's Provincial Competitiveness Index (PCI) was in the top five in 2013 and 2014, meaning that more and more companies consider Quang Ninh an attractive investment destination, said Giang. As of September 2015, the province had attracted foreign investors from 17 countries and territories with a combined registered capital of $5.1 billion. Domestic investment capital from 2012 to 2014 reached VND68 trillion ($3.3 billion). In the first nine months of 2015, domestic private investment capital worth nearly VND30 trillion ($1.4 billion) flowed into Quang Ninh with projects from big companies such as Vingroup, Sungroup and BIM Group This is the first time Quang Ninh has coordinated with the MPI's South Centre for Investment Promotion and the Association of HCM City Enterprises to organise a such conference. Gov't adopts State bond issuance with all terms The Government has adopted the Ministry of Finance's suggestion to issue State bonds with all terms, it said in a Government's resolution released on Wednesday. This means that the bonds can be issued with one-year, two-year and three-year terms again, besides the terms of five years or longer. Prime Minister Nguyen Tan Dung authorised Minister of Finance Dinh Tien Dung to present the issue at the upcoming National Assembly (NA) session, expected on October 20, for permission to implement it from next month. The law on public debt management, and Decree No 01/2011/ND-CP issued in January 2011, enabled State bond issuances under any terms. However, the NA resolved in November last year that the ministry's State treasury would only be allowed to issue bonds with terms of five years or more, as a measure to ease pressure related to public debt burdens. This decision came at a time when the use of short-term loans for long-term investments was apparently risky, as the shorter terms meant the more hastened debt payment responsibility. During the Government's regular meeting last September, ministry officials proposed the re-issuance of State bonds with terms of less than five years, arguing that the more diversified types of bonds would accelerate market development. The National Financial Supervisory Commission (NFSC) said it would be difficult for the State bond issuance quota to be achieved this year, since State bond sales had been sluggish for the last few months. According to the Ha Noi Stock Exchange, five-year bonds worth VND2 trillion (US$88.89 million) sold out during an auction here on Wednesday, with a winning interest rate of 6.65 per cent per year. But only VND12.8 billion out of VND1 trillion ($44.445 million) worth of 10-year bonds, were sold on the same day, with a winning rate of 6.90 per cent per year. Last week, the ministry reported that the treasury had sold bonds worth about VND127.43 trillion ($5.66 billion) during the first nine months, representing only half of this year's target and 60 per cent of the figure recorded in the same period last year. The amount had already included the $1 billion that the treasury mobilised from Bank for Foreign Trade of Viet Nam, or Vietcombank, in April. The ministry said sluggish bond sales were due to disadvantages in the financial and monetary markets during the third quarter, which resulted from the depreciation of the Chinese yuan and other currencies in the region. "Developments in the foreign currency market have strongly impacted investors' psychology in the bond market, leading to sharp decline in the demand for Government bonds," the report said. This year, the ministry is targeting a total State bond issuance value of VND250 trillion ($11.11 billion), with VND180 trillion ($8 billion) in five-year bonds and VND50 trillion ($22.22 billion) in 10-year bonds, along with VND20 trillion ($888.89 million) in 15-year bonds. According to the NFSC, except for 15-year bond issuances that has exceeded this year's quota by some 34 per cent, five-year bond issuances had only reached nearly 20 per cent of the annual goal, and 10-year bond issuances, less than 13 per cent of the annual plan.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Chủ Nhật, 11 tháng 10, 2015
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