BUSINESS IN BRIEF 30/11 Cashew firms urged to add value to products The Vietnam Cashew Association (Vinacas) has called on local enterprises to add more value to their cashew products to help Vietnam stay on as the world’s biggest cashew nut exporter. Vietnam has been the world’s No. 1 cashew nut exporter over the past 10 years but 90% of domestically-processed products are packaged nuts, Vinacas said at an international conference on cashew business in HCMC on Monday. At the conference, representatives of cashew enterprises painted a bleak picture for cashew exporters, saying that if cashew products are not added with more value, export growth would be affected. Vinacas said a number of local firms have invested in modern technology and machines to make more value-added cashew products for export and domestic consumption. The change was seen through cashew products on show on the sidelines of the conference. Unlike in previous years in which companies mainly made salty and honey cashew nuts, the exhibits this year included wasabi- and chocolate-coated cashew nuts; cashew nut cakes, pizzas, banh tet (Vietnam’s cylindrical glutinous rice cake filled with green bean paste and pork) and other foods with cashew nuts. Vinacas chairman Nguyen Duc Thanh called for cashew businesses to pay due attention to packaging and marketing if they want to attract more consumers on the domestic market. Over the years, enterprises in the sector have centered more on export of packaged cashew nuts than domestic marketing. Therefore, they should draw up marketing and promotion strategies if they want to ramp up domestic sales. A long return on investment is one of the hindrances to cashew enterprises that turn out value-added products for sale at local supermarkets and convenience stores. To cope with this, a number of producers have managed to boost exports to have funds for expanding domestic market share. The Ministry of Agriculture and Rural Development expects value-added products will make up 20% of total processed cashew nuts, according to a master zoning development plan for the sector until 2020 with a vision towards 2030, approved by the ministry in February this year. The aim for 2030 will be 40-50%. Vietnam earned US$1.97 billion from shipping abroad 272,000 tons of cashew nuts in the first 10 months this year, up 6% in volume and more than 18% in value, according to the ministry. Dang Hoang Giang, vice chairman of Vinacas, said Vietnam’s cashew nut revenue is forecast to reach a record high of US$2.5 billion this year. Vietnam has exported cashew nuts to 50 markets, according to Vinacas. GE’s Power Services business said on Monday that it will upgrade four GT13E2 gas turbines at the Phu My power complex of EVN Power Generation Corporation 3 (EVNGENCO3) in Ba Ria-Vung Tau Province. The project in the southern province is the first GT13E2 MXL2 gas turbine upgrade order in Asia of the company after it acquired Alstom’s Power & Grid businesses. As part of GE’s recent acquisition of Alstom’s Power & Grid businesses, GE’s Power Services integrated a number of Alstom generating technologies into its portfolio, including the GT13E2 turbine, as well as the MXL2 upgrade package. GE also assumed responsibility for a portfolio of Alstom power plant services contracts, including a long-term service agreement for the Phu My power complex Dinh Quoc Lam, president and CEO of EVNGENCO3, said in a statement that the corporation values the proven performance of utilizing the GT13E2 gas turbine technology and is cooperating with GE on MXL2 service upgrade solutions to achieve its operational goals. The upgrades are expected to deliver a combined-cycle efficiency increase of 1%, resulting in fuel saving of almost 2% and reduced CO2 emissions. Power output will rise by 50 megawatts (MW) and gas turbine inspection intervals will extend to 48,000 equivalent operating hours to reduce maintenance and repair expenses, reducing plant costs and improving profitability. Paul McElhinney, president and CEO of GE’s Power Services business, said in the statement that with the acquisition of Alstom’s power generation technology and services capabilities, the business is now able to provide power plant operators with an even greater range of hardware and software solutions to reduce their fuel and equipment lifecycle costs and strengthen their competitiveness. “With Vietnam’s energy demand rising by more than 10% annually, the additional 50 MW this project brings will help ease national power shortages, particularly for the southern part of Vietnam,” McElhinney said. The GT13E2 MXL2 upgrade uses Alstom’s F-class turbine blading technology to increase efficiency and extend turbine lifetime. Improved turbine sealing minimizes losses, while advanced cooling technologies enable extension of the service interval. The Phu My upgrade project also supports GE’s focus on Vietnam’s energy sector as part of its Asia Pacific growth strategy. In September this year, GE announced that it will provide two high-efficiency, supercritical steam turbines and generators for PetroVietnam’s Long Phu 1 coal-fired power plant. Viet Nam could meet agriculture export targets in 2015: ministry Viet Nam could well meet the target of US$30 billion in agro, forestry and fishery exports for 2015 as total exports in 11 months ending in November reached $27.41 billion. The Ministry of Agriculture and Rural Development said that export value of farming, forestry and fishery products from January to November had a year-on-year reduction of 1.9 per cent to US$27.4 billion, including $2.57 billion in November. The reduction rate in the first 11 months was lower than the plunge rate of 3.8 per cent in the first ten months, said the ministry. So, it expected the total national export value of farming, forestry and fishery products to gain the target for this whole year. During the first 11 months, the export value fell by 4 per cent to $12.74 billion for major farming products, and 16.4 per cent to $6.01 billion for seafood product. But it increased by 8.2 per cent to $6.4 billion for forestry products. Most of the farming products saw a fall in the export value, especially key export farming products such as rice, seafood and coffee, the ministry said. The strongest reduction in the first 11 months was coffee exports with 27.7 per cent in volume and 30.2 per cent in value against the same period of last year. The coffee exports reached 1.13 million tonnes in volume and $3.3 billion in value, of which 85,000 tonnes in November, earning $162 million. Rice exports also posted a 4.9 per cent drop in value to $2.65 billion despite a 3.6 per cent increase in quantity to 6.24 million tonnes in the first 11 months. Meanwhile, an upward trend was recorded in the export of pepper, cashew nut, cassava and cassava-based commodities, with revenues rising from between 2.9 per cent and 19 per cent. Significant fall of seafood product exports to the United States of over 25 per cent, Japan of 13 per cent, and South Korea of 14 per cent, resulted in the decline of 16.4 per cent in total aquaculture export value in the reviewed period. In the near future, the ministry would organise more trade promotion activities in some foreign markets, aiming to sell dragon fruits to the Japanese market and chicken to Russia while expanding its foothold in potential markets. The ministry would also keep production at certain levels to increase quality and competitive ability for advantageous products of Viet Nam such as rice, coffee, rubber, and fish, in addition to pepper and cashew. Hai Phong seeks investment Northern Hai Phong Port City affirmed its strategic location to both domestic and foreign investors, by focussing on several key infrastructure projects and taking measures to improve the investment environment. Le Thanh Son, vice chairman of the municipal People's Committee, said this at a conference on Investment Opportunities in Oman and Viet Nam held earlier this week in Mumbai, India. The conference was one of the activities in the five-day visit of the People's Committee and Dinh Vu Industrial Zone Joint Stock Company to Mumbai and Ahmedabad with an aim to seek for investment and co-operation opportunities with India. The event attracted 234 participants from Indian promotion agencies, businesses and associations in chemical, pharmaceutical, garment and textile sectors. Of which, 11 enterprises registered for site visits in the near future to Viet Nam. "In the context of having golden opportunities from the signing of the Trans-Pacific Partnership (TPP), Viet Nam in general and Hai Phong City in particular, will become attractive destinations for investors both inside and outside the country," Son said. He also confirmed the city's commitment to continue supporting businesses. Vu Son Thuy, consulate general of Viet Nam to India also provided information on the Viet Nam-India relationship, strengthening the economic co-operation between the two countries as well as Vietnamese investment environment and policies. Attendees were also given updated information on key and important infrastructure projects including Lach Huyen Port, Ha Noi-Hai Phong Highway, Cat Bi International Airport expansion and Dinh Vu-Cat Hai Economic Zone. The city has attracted more than 450 foreign direct investments from 25 countries and territories with total capital of US$10.6 billion so far. Indronil Sengupta, director of Tata Sons Viet Nam Company of Indian Tata Group said they were committed to invest $2 billion in Viet Nam in several sectors of energy, steel, titanium distribution, and automobiles. The Dinh Vu Industrial Zone (DVIZ) in the city also provided investment orientation and potential in the north of Viet Nam. The DVIZ/Deep C has direct connection to the above mentioned infrastructure projects, becoming an ideal investment location for Indian investors. Sub-standard steel floods market Low-cost and sub-standard iron sheets and steel, particularly from China, are flooding the market, causing many problems for legitimate producers. Vu Van Thanh, Deputy General Director of the Hoa Sen Steel Sheet Corporation, made this declaration at a seminar on trade fraud in Viet Nam's steel sheet market held yesterday in Ha Noi. The Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times), Viet Nam Steel Association (VSA) and the Viet Nam Standards and Consumers Association (VINASTAS) organised the seminar. Thanh said counterfeit steel sheets were widely produced, spreading from the northern cities and provinces, including Ha Noi, Hai Phong and Thai Nguyen to central provinces of Thanh Hoa, Nghe An, Ha Tinh and Khanh Hoa and Da Nang City and also some southern provinces of Binh Duong, Dong Nai, Ben Tre, Long An, Kien Giang, Soc Trang. The import of cheap and poor-quality steel sheet products had surged in recent years, 90 per cent of which were of Chinese origin, seriously threatening domestic production, Thanh said. Nguyen Van Sua, VSA deputy chairman, said domestic traders often printed well-known steel manufacturers trademarks on counterfeit and sub-standard products to deceive customers. Sua said in September alone, domestic steel sheet producers sold 2,268 thousand tonnes of steel while the amount of imported steel consumed in the local market was 1,078 thousand tonnes, accounting for 32 per cent of the market. The steel sheets imported from China account for a large quantity of the steel bought from overseas markets, which are poor quality and sold at low prices, causing serious damage to legitimate producers in the country, Sua added. VINASTAS deputy chairman Nguyen Manh Hung said only specialised equipment could identify the quality of the sheets. Therefore, it was not easy for consumers to distinguish genuine steel products from fake ones. In 2014 alone, market watch forces examined 1,900 steel businesses, of which hundreds of companies' products fail to meet quality standards. They were fined a total of more than VND3 billion (US$133,440) for their violation. According to Thanh, to protect consumers and domestic manufacturing, Viet Nam needs to devise a set of national standards to better manage imported iron sheets and steel. Sua said government agencies needed to strengthen the inspection of steel sheet products. Sua added steel producers should raise their vigilance and protect their brand names. In addition, businesses should improve their steel quality and bring down prices to combat fakes and enhance their competitiveness in the domestic market and internationally. Hung said VINASTAS was willing to co-ordinate with other agencies and businesses in spreading information so that consumers can distinguish genuine products from fakes. CII leads as top earning building firm The nine-month business results of construction companies saw substantial improvement over the same period of last year with more than 83 per cent of these firms posting profits. As of November 26, 106 of the total 107 listed construction companies have reported the third-quarter earnings, of which only 17 businesses incurred losses, according to the data available on the financial website vietstock.vn. Total revenues of the reported companies touched nearly VND62.45 trillion (US$2.8 billion) in the first nine months of this year, up 17 per cent year-on-year. Meanwhile, their combined profits also increased 63 per cent during the same period to reach VND3 trillion ($134 million). Fifty-one companies witnessed higher profits while 29 firms saw lower earnings. Top 10 earning businesses continued to be the largest companies by market capitalisation including HCM City Infrastructure Development Co (CII), Refrigeration Electrical Engineering Corp (REE), Cotec Construction Co (CTD), Vietnam Construction and Import Export Co (VCG), Petroleum Equipment Assembly & Metal Structure Co (PXS) and Vietnam Electricity Construction Co (VNE). HCM City Infrastructure Development Co defeated Refrigeration Electrical Engineering Corp to become the biggest earning construction company this year, for which REE has claimed for the past four years. HCM City Infrastructure Development reported a total profit of over VND691 billion ($30.8 million) in the first nine months, a rise of 280 per cent over the same period of last year and surpassing its yearly target of 50 per cent for the whole year. Meanwhile, Refrigeration Electrical Engineering saw its earnings down 13.2 per cent during the period, touching nearly VND591 billion ($26.4 million). The company attributed such a decline to higher interest expenses which increased 83 per cent year-on-year and reduced profits that it earned from affiliated companies like Pha Lai Thermal Power Co and Ba Ha River Hydropower Co. However, REE will likely reclaim its biggest earning business by the end of this year since CII on November 16 said that it could incur a loss in the last quarter after having to set aside a financial provision of about VND110 billion ($4.9 million) due to changes in the construction schedule and toll policy of some government's infrastructure projects it is building and delays of bond conversion worth $25 million held by Goldman Sachs. Cotec Construction Co claimed the third position with a profit of nearly VND414 billion ($18.5 million), up 77 per cent year-on-year. Another business that also had nine-month earnings of over VND100 billion was Vietnam Construction and Import Export Co (VCG) with a profit of over VND264 billion ($11.8 million), a yearly increase of 10.4 per cent. On the dark side, six companies posted losses of over VND10 billion ($446,400), of which Construction Co No 5 (VC5) is leading with a loss of over VND50 billion ($2.2 million). SCICInvest buys stake in VNM The State Capital Investment Corporation Investment (SCICInvest) announced the purchase of 300,000 shares of the Viet Nam Dairy Products Joint Stock Company (VNM) on Thursday. The transaction was carried out by order and is expected to be completed between December 1 and December 30. Following the transaction, SCICInvest will own a total of 300,011 VNM shares, or a 0.025 per cent stake in VNM. On November 27, two funds from Dragon Capital also subscribed to 600,000 shares of VNM, where DC Public Strategies Developing Markets Limited bought 100,000 shares and Norges Bank registered to buy 500,000 shares. So far, in two days, three organisations have subscribed to 900,000 shares of VNM. VNM shares have dropped some 15 per cent since November 16-25. Each VNM share yesterday gained VND1,000 to close at a total of VND124,000 in the HCM City Stock Exchange. According to the Vietcombank Securities Company, the decline in the giant's shares was due to SCICInvest's divestment plan to sell its shares in major corporations, including the Viet Nam Dairy Products Joint Stock Company, or Vinamilk, in October. However, the timetable for the divestment has not yet been fixed. Based on market value, Vinamilk is considered SCICInvest's most valuable investment, holding a 45.1 per cent stake in the company, worth almost US$2.5 billion. Vinamilk is the largest listed company in Viet Nam, with a market value of VND148.8 trillion ($6.6 billion), as of November 27. On November 14, VNM was recognised as a publicly listed company with the best corporate governance in Viet Nam at the first ASEAN Corporate Governance Conference and Awards ceremony in Manila, Philippines. Ministry of Finance's e-portal upgraded The Ministry of Finance (MoF) launched its electronic portal's new interface in a ceremony on Thursday in Ha Noi. The ministry's new e-portal can be found at http://mof.gov.vn. The e-portal of the Viet Nam State Treasury under the MoF was also launched during the ceremony, and can be found at http://vst.mof.gov.vn. Speaking at the event, Deputy Minister of Finance Vu Thi Mai said the MoF's e-portal was upgraded based on modern technology. Mai said the e-portal's new interface, which had a simple but attractive and user-friendly design, would improve the ministry's online public services and contribute significantly to the reform of administrative procedures. The MoF's new e-portal includes two specialised pages, which are the Finance News Page providing important news and events of the financial sector and the Administrative Procedures and Public Services Page providing all the information about user guidelines, direct links to access online public services and status of online transactions. Intel software to support retailers Intel Viet Nam has co-operated with Kiot Viet and Masscom to officially implement a technology transfer project to retailers starting from Wednesday. The project aims to industrialise traditional management to help retail stores improve sales and management to achieve better business results, according to Tran Duc Trung, general director of Intel Viet Nam. The project is on target to transfer 5,000 sets of technology products to retailers across the country. Accordingly, retailers in some cities, districts and communes will be supported with advanced technology products including Laptop 3G Masstel Tab W101, Intel Compute Stick and Intel NUC. Intel Viet Nam and its partners will organise seminars in order to equip retailers with knowledge and modern business experience with the training of leading retail experts. HCM City reports robust growth The HCM City economy has maintained an increasingly positive trend and a stable economic growth in the first 11 months of the year, creating favourable conditions to achieve the year's socio-economic targets, according to a report from the HCM City Institute for Research and Development. The report, released at a meeting of the People's Committee on Thursday (26 Nov), said industrial production rose by 7.7 per cent. Industrial production has been restructured with a focus on increasing manufacturing and reducing mining. The city's four major industries (mechanics/manufacturing, chemicals/rubber/plastics, electronics, and food processing) are estimated to grow at 8.1 per cent, higher than last year and also higher than the sector average. Foreign direct investment is on the rise. As of 20 November city authorities licensed 517 new foreign projects and permitted 141 existing projects to increase their capital, with US$3.2 billion to be invested, up 1.7 per cent year-on-year. Besides, nearly 28,750 new domestic companies were licensed. According to the HCM City Statistics Bureau, good market management and the price stabilisation programme have helped keep prices in check, with the consumer price index in November rising by 0.1 per cent compared with the previous month. Total retail sales and services were worth nearly VND61.1 trillion, a year-on-year increase of 8.9 per cent. Le Hoang Quan, Chairman of the city People's Committee, said economic growth is expected to be 9.8 per cent this year. To achieve this target and at the same time to create favourable conditions for 2016, city authorities and the business sector must prepare well to source inputs needed for manufacturing to meet demand, especially during Tet (the Lunar New Year), he said. Quan also instructed authorities to help businesses in preparing for integration into the ASEAN Economic Community by the end of the year, especially with financial, taxation, educational, health, commercial, and employment issues. The People's Committee listed eight major tasks for next month, including stepping up the fight against tax losses, investment and business promotions with other localities in the country to create more business opportunities, and removing difficulties faced by city businesses. The banking industry was urged to continue providing funds for businesses, keep credit conditions flexible, provide sufficient resources for the city's economy, and effectively manage the foreign currency market to keep exchange rates stable, improve balance of payments and sustain foreign currency reserves. Bac Giang province keen to draw investment The northern province of Bac Giang will devise comprehensive measures to promote investment in infrastructure development and new industrial parks, said Chairman of the provincial People’s Committee Nguyen Van Linh. During the November 26 meeting reviewing the 2015 task implementation and initiating new ones for investment support and enterprises development, he urged local authorities and sectors to provide incentives to achieve a breakthrough in investment attraction. The province aims to offer equal incentives for all investors and enterprises while revoking investment licenses from inefficient projects, the local leader said. The Chairman also called on the electricity sector to improve the power network infrastructure in industrial parks and complexes to ensure sufficient supply for their operation. Detailed incentives are needed to lure investment in waste treatment and the environment, Linh underscored. The province has offered incentives in terms of land, infrastructure to draw investment in local industrial parks. The province is now home to 161 projects, including 46 foreign investment projects with a combined capital of 211.5 million USD and 115 domestic ones with a total registered capital exceeding 5.6 trillion VND (250 million USD). This year, 564 new enterprises have been established, worth more than 2 trillion VND (91.5 million USD), up 28.5 percent from the same period last year. The figure raised the total local enterprises to 4,782, capitalising at 20.74 trillion VND (926 million USD), 53 percent of which are foreign investment companies. Together, the enterprises contributed some 440 billion VND (19.36 million USD) to the State budget, an year-on-year increase of 16.9 percent, and created jobs for more than 75,000 labourers with an average monthly payment of 5 million VND (223 USD). Nippon Thermostat factory opens in Ha Nam The Nippon Thermostat Vietnam Company opened its factory in the Dong Van II Industrial Park in the northern province of Ha Nam on November 27. The 5.5 million USD factory, 100 percent Japanese capital, specialises in manufacturing and assembling thermal relays used in automobiles and motorbikes. It is the Nippon Thermostat Company’s third factory overseas, after one in India and another in the United States. It has an annual output of one million products. Speaking at the opening ceremony, Yoshiyuki Onishi, General Director of the Nippon Thermostat Company, promised the factory would take care of environmental issues during its operation and contribute to local development. Mai Tien Dung, Secretary of Ha Nam provincial Party Committee, affirmed that the province always welcomes and gives priority to Japanese investors, especially small- and medium-size enterprises. Viettel successful in Timor Leste market Telemor, Viettel’s subsidiary in Timor Leste, has expanded quickly after its entry in 2013 and now has 470,000 users among the country’s population of 1.2 million. The company has built an infrastructure network across 95 percent of Timor-Leste’s area, and opened over 3,000 points of transactions. In October 2015 the company won the “Fastest Growing Company of the Year in Asia, Australia and New Zealand” category of the International Business Awards 2015 (IBA)- the Stevie Awards. Former Prime Minister of Timor Leste Xanana Gusmao has hailed Telemor as a symbol of the cooperation and friendship between the country and Vietnam. General Director of Telemor, Nguyen Canh Hoa said the high quality and low cost of services as well as support of local people who have special sentiment for Vietnam has helped the company to have such significant growth. The military-run telecom group Viettel has been operating in nine markets across Asia, Africa and America, where it has helped build infrastructure and provided telecommunications services to a total customer reach of more than 175 million.  In some of the markets, such as Cambodia (through Metfone) and Mozambique (through Movitel), the company is a market leader in terms of subscribers, revenue and infrastructure. Shoemaker Pou Chen expands production in Vietnam Pou Chen Corp., the world’s leading contract shoemaker for Nike, Adidas and other major footwear brands, is shifting a large portion of its operations from China to Vietnam to bank on lower labor costs and more favorable tariffs. According to Nikkei Asian Review, Pou Chen had produced 42% of its total shoes in Vietnam as of the end of September this year, up from 39% in 2014 and 34% in 2013. The Taiwanese company now ships more than 300 million pairs of shoes a year and sees footwear and apparel accounting for 75% of its total revenue. Pou Chen’s spokesman Amos Ho was quoted by Nikkei as saying that the company has been gradually relocating its manufacturing facilities to Vietnam since 2012, due to higher wages and employee benefits in China. Pou Chen is not the only foreign company expanding production in Vietnam. Its Taiwanese rival, Feng Tay Enterprise, is looking to benefit more from Vietnam as this Southeast Asian country is a member of the Trans-Pacific Partnership (TPP), an agreement that aims to create the world’s largest free trade bloc. Experts said as member states of the TPP are expected to export goods to the U.S. with favorable duties, international brands like Nike and Adidas will buy more made-in-Vietnam products. That is why footwear suppliers are relocating their operations from southern China to Vietnam. More foreign textile and garment enterprises have invested in large-scale factories in Vietnam to make the most of opportunities from the TPP before Vietnam and 11 other Pacific Rim countries concluded negotiations in Atlanta in the United States. Data of the General Department of Customs showed Vietnam posted footwear export revenue of US$9.7 billion in the first 10 months of this year, US$1.41 billion higher than in the same period last year. Of the figure, shipments to the U.S. reached US$3.34 billion, up 24.8% and accounting for 34.4% of total footwear export turnover. Experts warn of apartment oversupply in city Though the number of apartments sold in HCMC this year has surged, experts have warned of a housing oversupply in the city due to a race among property firms to invest in new projects. The property market here in the city has seen many property projects launching new products in November alone. In the middle of this month, Gia Hoa Co. Ltd. started selling apartments of Block Picasso at The Art apartment project in District 9. The project consists of ten blocks of 18 floors. Thanh Yen Land has launched model apartments of Depot Metro Tower-Tham Luong invested by Minh Nguyen Long Co. in District 12. This project is part of the Metro apartment chain and comprises two 15-floor blocks with units of 57-70 square meters. Hung Thinh Corp.’s Lavita Garden project in Thu Duc District and near the Ben Thanh-Suoi Tien metro line has also been introduced to customers. Two 20-floor blocks of Lavita Garden will supply the market with 648 units measuring 50.37 to 71.68 square meters. Saigon Thuong Tin Real Estate Co. has unveiled thousands of apartments at many projects like the Jamona urban area in District 7, Charmington high-end apartments in District 10 and Carillon mid-end apartments in Tan Binh and Tan Phu districts. Property enterprises have launched more products to cash in on the recovery of the real estate market. A large number of property products were marketed in September and October in the city. At a seminar held by Forbes Vietnam magazine in HCMC on Tuesday, experts forecast the property market would grow strongly this year. Data of CBRE Vietnam showed around 24,000 apartments in HCMC were sold in January-September, well above 17,000 units last year. In addition to good liquidity, this year has seen busy transactions in all segments and different localities including projects far from the downtown area. According to experts, the recovery of the property market has been supported by marco-economic stability, ongoing construction of metro lines and upgraded transport infrastructure. Homebuyers have found cheaper loans with longer terms. In addition, regulations on property trading and ownership have been relaxed. However, experts have warned that an oversupply is looming. According to a survey of Savills Vietnam, supply of housing products in HCMC late this year and early next year will reach some 57,500 units. CBRE Vietnam said HCMC’s absorption rate declined to 35% in quarter three when 10,000 apartments were offered for sale. Le Anh Tuan, head of research at Dragon Capital, said the property market has entered a new, better cycle of development. However, next year’s scenario for the market might not be as good as expected due to an abundant supply. If the absorption rate keeps falling, an oversupply will be inevitable in the coming years. Vietnam seen among Visa’s fastest growing markets Vietnam is one of its fastest growing markets of global payments technology company Visa in the world, according to Sean Preston, Visa country manager for Vietnam, Cambodia and Laos. Speaking at a press conference held in HCMC on November 26 on the occasion of Visa’s 20 years of operation in Vietnam, Preston said the company has made some remarkable progress in growing electronic payments in this market over the past two decades. This year, Visa has seen strong growth in Vietnam. Total payment volume spent on Visa cards in Vietnam has grown by 44% over the past year, while the total number of Visa transactions has risen by 41%. Online shopping using Visa cards is also experiencing significant growth of 49% as many consumers, particularly young Vietnamese, are enjoying the convenience, competitive prices and more products available online. According to a report from the Vietnam e-Commerce and Information Technology Agency, 39% of Vietnam’s population has access to the Internet and 58% of them shop online. This means there is still a great opportunity for more Vietnamese to experience the benefits of shopping online. Visa cards carried by tourists were first accepted by retailers in Vietnam back in 1995 but it wasn’t until 1997 that the first Visa credit card was launched in this country in conjunction with Asia Commercial Bank. In 2005, Visa opened an office in HCMC and had the first Visa Debit card issued in cooperation with EximBank. So far, Visa Debit has made up more than half of the five million Visa cards issued in the country. “We look forward to working with our clients and the Government in the 20 years ahead to continue to grow electronic payments across Vietnam,” Preston said in a statement. Preston said Vietnam is heavily reliant on cash but there are some positive signs of non- increasing cash payments made via debit and credit cards and a rise in e-commerce. Young people find it hard to buy homes Youth, newlyweds and migrant workers have high demand for homes in HCMC but they normally find it hard to buy, heard a recent conference on Wednesday. Figures released at the conference on opportunities for youth to buy houses revealed more than 50,000 couples get married a year, so housing demand of newlyweds is huge. However, just 10-15% of them can afford to purchase homes and the remainder have to live with family or in rented houses. Newlyweds have accumulative savings of VND200-300 million each, which are not enough to buy a home in a major city like HCMC. When the property market got stagnant years ago, realty developers launched low-cost apartment projects to woo homebuyers. They included 8X Dam Sen of Hung Thinh Real Estate Co., 8X Thai An of Dat Lanh Real Estate Co. and EHome of Nam Long Group. Budget apartments cover 40-60 square meters and cost VND600-800 million each. Therefore, young couples could buy these homes by seeking financial support from banks. However, such cheap apartments are getting scarce and just a small volume is available on the secondary market. Meanwhile, apartments for medium-income buyers are sold at around VND1.2 billion each. Realty developers said young people can make a down payment of VND200-300 million for such units and pay the remainder by installment through banks’ home loan programs. But the monthly installment is as high as VND10 million, thus discouraging youths from owning homes. The property market in HCMC has an abundant supply of high-end apartments but lacks products for medium- and low-income buyers. Therefore, experts at the conference called on realty developers to offer affordable apartments and improve sale policies so that young people can buy. According to a report by the HCMC Real Estate Association (HoREA) sent to the HCMC government, the city’s population is growing fast, boosting demand for homes, and it is a big challenge to meet this demand. HoREA said more migrants from other parts of the nation have come to HCMC for work, putting pressure on housing development. With little money, migrants often choose to live in rented homes or makeshift houses along the canals. Le Hoang Chau, chairman of HoREA, proposed the HCMC government adjust population sizes of districts to enable local authorities to implement plans for sustainable urban and housing development. The Government should support property enterprises in terms of site clearance and medium- and long-term lending to help them build more affordable housing for the market. HCM City wants toll hike for Hanoi Highway station The HCMC government has proposed the municipal People’s Council allow HCMC Infrastructure Investment Co. (CII) to raise tolls at the Hanoi Highway station to recover investment capital for the new Rach Chiec Bridge on the same road. In a document sent to the council last week, the city government said CII should be allowed to increase tolls from vehicles of less than 12 seats and trucks of below 10 tons using the road connecting HCMC to other parts of the southeastern region. The proposed toll for under-12-seat vehicles, trucks of less than two tons and buses is VND20,000 per trip, VND5,000 higher than the current level. The monthly toll is VND600,000, up VND150,000, and the quarterly toll is VND1.62 million, up VND420,000.       The tolls for vehicles of 12-30 seats and trucks of 2-4 tons would rise by 50% if the council approves the proposal. As suggested, tolls would stand at VND30,000 per trip (up VND10,000), VND900,000 per month (up VND300,000) and VND2.4 million per quarter (up VND800,000).   Vehicles of 31 seats and more and trucks of 4-10 tons would be subject to a toll increase by VND15,000 to VND40,000 per trip, VND1.2 million per month (up VND450,000) and VND3.2 million per quarter (up VND1.2 million).   Tolls applied to other vehicles would be unchanged. Trucks of 10-18 tons and 20-foot semi-trailers pay VND40,000 per trip, VND1.2 million per month and VND3.2 million per quarter.   Trucks of 18 tons and heavier and 40-foot semi-trailers pay VND80,000 per trip, VND2.4 million per month and VND6.5 million per quarter.     If the HCMC People’s Council approves the proposal, the new tolls would take effect on January 1, 2016. This will be the third toll spike at the tollgate on Hanoi Highway. According to CII’s report, the toll increase early next year will push toll revenue up 15% as vehicles subject to sharp toll rises account for a small proportion, at a mere 4-5% of total toll revenue at the station. Six toll stations have gone up in HCMC, namely Hanoi Highway, Binh Trieu Bridge, An Suong-An Lac, Phu My Bridge, Nguyen Van Linh Boulevard and Saigon River Tunnel. However, the tollgate near the tunnel linking the city’s downtown area and District 2 has not been put into operation. In 2016-2025, four more toll stations will be up and running to help investors recover investment capital for a number of build-operate-transfer (BOT) road projects in the city. Transport firms said the Ministry of Finance sets a distance of 70 kilometers between two BOT tollgates but a number of toll stations have violated this rule. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR