BUSINESS IN BRIEF 7/3 HCMC banks pushing up deposit rates   A number of banks are in a race to hike deposit rates to attract capital and dodge forthcoming regulations on lending. The new interest rate spike started several weeks ago after many banks revised up borrowing costs late last year and early this year. BIDV has raised rates for deposits of 13 months to 18 months by 40 basis points to 6.5% per annum and revised up rates for 24-36-month deposits by 20 basis points to 6.5% per year. At Vietcombank, deposit rates have risen by 20-50 basis points for tenors of one month to six months, with the respective annual rates of one-month, two-month, three-month and six-month deposits climbing to 4.5%, 4.6%, 4.8% and 5.2%. Techcombank has spiked deposit rates four times in the year to date. On February 15 it added 10 basis points to the one-month tenor, taking to 4.7% per annum. Techcombank’s deposit rates for all tenors have gone up since the beginning of the year. On February 16, OCB adjusted up deposit rates of all tenors by 10-20 basis points. The interest rates of three-to-five-month deposits have shot up to the ceiling of 5.5% per year.      Meanwhile, 12-month, 18-month and 24-month rates have stood at 7.2% per annum, 7.4% per annum and 7.5% per annum respectively. A number of banks offer long-term deposit rates of 8% per year but depositors have to meet some strict requirements. For instance, Eximbank applies an annual rate of 8% for 36-month deposits but clients must place deposits of at least VND10 billion (US$446,430) and withdraw interest upon maturity. They must not withdraw money less than 90 days before maturity, and enjoy a rate of 7.8% per annum if they get interest monthly.    Tran Tan Loc, acting general director of Eximbank, said the bank offers a rate of 7% per annum for 13-month deposits but it is not high at present. The bank quotes the 36-month rate at 8% per year due to its business outlook for the next three years. Loc noted that few Vietnamese customers prefer long-term tenors, which is possibly due to the high level of interest rate volatility. In contrast, some banks have revised down deposit rates. Maritime Bank has cut the interest rates for one-month and two-month tenors from 4.9% to 4.5% per year, while raising rates for six to eight months by 10 basis points to 5.7% per annum. SCB has reduced deposit rates for all tenors slightly from February 25.   Nguyen Hoang Minh, deputy director of the central bank’s HCMC brand, said a couple of banks have hiked rates to attract capital for lending. By end-2015, one-month and two-month deposits had accounted for 70% of banks’ mobilized capital but outstanding loans of medium- and long-term tenors made up 57.6% of the total in the city.    According to the amended Circular 36, which has been passed around for comment by the central bank, the maximum ratio of short-term funds used for making medium and long-term loans will be adjusted down from 60% to 40%. Therefore, banks have raised long-term deposit rates to have funds for lending. Minh added that this year’s credit should grow 18-20% to fuel economic growth. The growth rate has averaged out at 10-15% per annum over the past years, which encourages banks to revise up interest rates to win depositors. Loc of Eximbank said deposit rate hikes are to compete with other lenders as liquidity in the banking system is good for now. The bank would adjust deposit rates in line with market movements. He said Eximbank had no plan for a lending rate hike. Meanwhile, the central bank wants interest rates to be stable and will likely take measures for this purpose. Lenders have hiked deposit rates but kept lending rates unchanged, which will affect their profit. Therefore, an expert told the Daily that deposit rate rises would likely happen in the short term. VN firms asked to prep for FTA with EU The ambassador and head of the EU Delegation to Vietnam has called on the Government and enterprises to prepare for the implementation of a bilateral free trade agreement (FTA) with the European Union (EU). The trade pact will go into force in 2018. But without careful preparations, the Government and enterprises might be shocked when the FTA takes effect, Bruno Angelet told a conference held in HCMC on March 3 on the Whitebook 2016 launch and the FTA prospects. The event was organized by the European Chamber of Commerce in Vietnam (EuroCham) in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI) and the EU Delegation to Vietnam. As for capable countries, market openness is no problem. However, countries with limited capabilities should prepare a to-do list. Vietnam is strong in export but this is not enough and preparations depend largely on the Government, Angelet said. He hoped the Government will continue reforms to enable the nation to benefit from the FTA. Angelet said the challenges Vietnam would likely face are how to maintain growth, make use of its young population and improve the performance of the manufacturing sector, as much of the nation’s export revenue is contributed by foreign direct investment (FDI) enterprises. With the gradual removal of tariffs as committed in the agreement, close to 99% of Vietnam’s goods exported to the EU will be tax-free. This, according to Angelet, is a big advantage for Vietnam. Angelet told reporters on the sidelines of the conference that to ensure the pact would produce as good results as expected, the Government would have to step up reforms while the corporate sector should make preparations.   Vietnam’s preparations help the EU know what the Southeast Asian nation needs in terms of technical and financial assistance in the next two years, he continued. As requested by the business community and EU member states, the EU will publish a handbook on the FTA in English, so that EU companies can understand implications and benefits of the agreement and have an overview before the FTA takes effect. The EU Delegation to Vietnam will also partner with VCCI to produce a similar handbook for Vietnamese enterprises. The handbook is expected to be launched this May to help local enterprises better understand the agreement. According to the Whitebook 2016, the EU’s Food and Feed Safety Alerts pointed out that between January and September 2015, more than 25 products of Vietnam were refused for import into the market while around 40 other products sought import licenses. Last year, up to 126 Vietnamese-made products failed to get quick import licenses from the EU market. Keppel Land buys into property firm Keppel Land Limited on March 2 entered into a conditional investment agreement to take a 40% equity interest in Empire City Limited Liability Company, the developer of the US$1.2 billion Empire City complex in the Thu Thiem New Urban Area in District 2, HCMC. The US$93.9 million deal made Keppel Land the biggest shareholder in the joint venture, which also involves two Vietnamese firms – Tien Phuoc Real Estate JSC and Tran Thai Real Estate Co Ltd – with a combined stake of 30%, and Hong Kong real estate private equity fund Gaw Capital Partners with a 30% stake. The transaction is expected to be completed by the second quarter of 2016 and is not expected to have any material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year. Keppel Land and its partners will jointly develop a 14.6-hectare prime waterfront site in the Thu Thiem New Urban Area. The planned development will comprise premium residential apartments, office and retail properties and an 86-storey mixed-use tower complex. Ang Wee Gee, chief executive officer (CEO) of Keppel Land, said in a statement that Vietnam, especially the fast-growing HCMC, is one of Keppel Land’s key growth markets. “We are very excited to participate in the growth of the up-and-coming Thu Thiem New Urban Area, which is poised to become the future central business district of HCMC. Our planned projects will bring the best in waterfront and urban lifestyles to HCMC, as well as augment Keppel Land’s quality portfolio of prime residential and commercial properties in the city,” Gee said. Tien Phuoc and Tran Thai are Keppel Land’s current partners in various projects in HCMC. Together with Tien Phuoc, Keppel Land had successfully completed and sold out the Estella residential project and is currently developing Estella Heights, which has seen a strong take-up since it was launched, with more than 670 units sold to date. Keppel Land, Tien Phuoc and Tran Thai are also developing the South Rach Chiec township which is slated to be launched later this year. Gaw Capital Partners is an international real estate private equity firm, with assets under management of over US$10 billion, invested in multiple asset classes in Asia, the U.S. and Europe. Keppel Land is working on phase two of the Saigon Centre in downtown HCMC, which will comprise 40,000 square meters of premium Grade A office space, 50,000 square meters of retail space and about 200 units of luxury serviced apartments when completed. In Vietnam, Keppel Land is one of the largest foreign real estate investors with a diverse portfolio of properties in Hanoi, HCMC, Dong Nai and Vung Tau including Grade A offices, residential properties, integrated townships and serviced apartments. It has 19 licensed projects across Vietnam and plans to develop about 22,000 homes in the nation. S Korea, VN ink trade and investment deal The Korea Trade-Investment Promotion Agency (KOTRA) yesterday signed a memorandum of understanding with the Investment and Trade Promotion Centre of HCM City (ITPC) to facilitate the exchange of investment and trade information between the two sides. The MoU also aims to boost import and export activities between the two countries. Pham Thiet Hoa, ITPC's director, said under the agreement, both sides would cooperate to disseminate information about the free trade agreement between Viet Nam and South Korea, and solve obstructions in investment and trade in each other's markets. KOTRA yesterday also signed an MOU with the Saigon High-Tech Park to promote investment of South Korea firms in the hi-tech sector in Viet Nam and boost co-operation between Vietnamese and South Korean businesses. Roh Inho, vice president of KOTRA in charge of ASEAN and Oceania, said the Viet Nam and South Korea FTA, which took effect last December, opened opportunities for Viet Nam's key export items, including farm produce, fisheries products, garment and textile and footwear to enter the South Korean market. South Korea has a high demand for tropical fruits like mango and pineapple, making it a promising market for Viet Nam, according to the KOTRA official. With lower tariff duties under the FTA, South Korean firms will have opportunities to boost exports of raw materials and accessories for the garment and textile sector, household equipment, cosmetics and others. In order to increase exports to South Korea, Vietnamese firms need to focus more on improving product quality, design and competitive prices. Speaking at the Korea-Viet Nam FTA in HCM City yesterday, Park Noh Wan, the South Korean Consul General in HCM City, said more than 2,500 South Korean firms were operating in HCM City and neighbouring localities. Besides investment in labour-intensive industries like garment and textile and footwear, many invested in hi-tech sectors like electricity and electronics, contributing to the development of Viet Nam's industrial sector, he said. Nguyen Thi Thu, deputy chairwoman of the HCM City People's Committee, said the city welcomed foreign companies, including those from South Korea, to research investment opportunities in the city. The city pledged to create the most favourable conditions for their operations, she said. Retailers gearing up for global competition Retail space for businesses and long-term capital to expand investment are both needed for domestic retailers to compete with their foreign counterparts in Viet Nam. "When Viet Nam deeply integrates globally, competition will be fierce, which will require domestic retail enterprises to have proper strategies," Nguyen Thanh Nhan, general director of Saigon Co.op Mart, was quoted as saying on a Government website. "We are not afraid to compete but we need more support from local authorities for better competitiveness," he added. Most goods displayed in supermarkets are Vietnamese. Despite fierce competition, Vietnamese commodities still dominate the market as they meet local residents' demand and clients will receive benefits from competition among domestic and foreign retail enterprises. "Opening the market will allow foreign commodities to easily enter the Vietnamese market, but in the near future, the proportion of Vietnamese goods will remain," Hong Won Sik, general director of Lotte Viet Nam, said. Sik spoke recently at a meeting of retail enterprises and HCM City's People Committee. He said that opening the market would force local manufacturers to produce higher quality products to compete with foreign ones. He also revealed that Lotte's development strategy calls for expansion of their co-operation with local manufacturers to bring Vietnamese goods to the Lotte supermarket system and exports. Last year, Lotte exported US$5 million Vietnamese products to South Korea, the figure will double this year. Aeon Viet Nam plans to co-operate with local manufacturers to produce its own brand names with high-quality products suited to locals' taste and financial capability. However, local manufacturers must increase their quality as well as change their packaging model to compete with imported products. "The city will create favourable conditions for retail enterprises in order to meet huge consumption demand of local residents as well as ensure stability of goods prices," Nguyen Thanh Phong, chairman of the municipal People's Committee, said. He suggested that a market development strategy of retail enterprises must consider HCM City as a regional commercial and shopping centre, serving local residents as well as tourists. "The city will connect with localities and create conditions for retail and manufacturing to meet," he said. Phong told the municipal Industry and Trade Department to complete the city's retail system master plan. Dong Nai licenses multi-million USD wood-making projects Investment certificates were granted to two Taiwanese-invested companies with wooden manufacturing projects worth 65 million USD in the southern province of Dong Nai on March 4. Accordingly, the Great Kingdom Giang Dien company, a subsidiary of the Great Veca company from Taiwan ( China ), will spend 50 million USD on a wood-making project in Giang Dien Industrial Park in Trang Bom district. The company’s representatives said that the project will become operational in April, 2018 with an annual capacity of 2.5 million products, employing about 4,000 workers. Meanwhile, the other license was given to the Great Kingdom International Corporation Bien Hoa company, in Bien Hoa 1 Industrial Park, to add an investment capital worth 15 million USD. Since the beginning of the year, Dong Nai has attracted 476 million USD in foreign direct investment, according to Chairman of the provincial People’s Committee Dinh Quoc Thai. Opportunities for domestic pharmaceutical industry Opportunities in the pharmaceutical industry in Vietnam are huge when 90 percent of pharmaceutical materials are being imported from foreign suppliers, such as the EU, India and China, according to experts. Dr. Ngo Quoc Anh from the Chemicals Institute under the Vietnam Academy of Science and Technology said based on the United Nations Industrial Development Organisation’s five development levels for the pharmaceutical industry, Vietnam is ranked at third level which means the majority of the industry’s end-products are domestically manufactured from imported materials. The expert said Vietnam’s pharmaceutical chemistry is under-developed due to a lack of planning, policy, and supporting industry. At present, the country has only one semi-synthetic antibiotic material manufacturer, producing about 200 tonnes of Amoxicillin and 100 tonnes of Ampicillin each year. He noted that the Government has issued several decisions to develop the country’s pharmaceutical chemistry industry such as Decision 61/2007/QD-TTg and 81/2009/QD-TTg, adding that several research centres in the field have been formed with well-trained researchers including the Vietnam Academy of Science and Technology, and the Vietnam Institute of Industrial Chemistry. However, technological processes are mostly at laboratory scale, and have not yet been applied for industrial production, while insufficient funding has hindered growth in the sector. Dr. Anh suggested that in order to develop, the industry should further intensify scientific research and expand technological application to pharmaceutical chemistry production. In his opinion, besides scientists, other social elements such as entrepreneurs, managers and international partners should be encouraged to take part in pharmaceutical chemistry projects, and in supporting handovers and technology transfer from foreign countries. Anh also called for mobilizing investment from various sources for developing infrastructure and manpower for research centres in the field as well as issuing incentives in terms of credit, tariff and land-use rights to investors in the sector. Retailers gearing up for global competition Retail space for businesses and long-term capital to expand investment are both needed for domestic retailers to compete with their foreign counterparts in Vietnam. "When Vietnam deeply integrates globally, competition will be fierce, which will require domestic retail enterprises to have proper strategies," Nguyen Thanh Nhan, General Director of Saigon Co.op Mart, was quoted as saying on a Government website. "We are not afraid to compete but we need more support from local authorities for better competitiveness," he added. Most goods displayed in supermarkets are Vietnamese. Despite fierce competition, Vietnamese commodities still dominate the market as they meet local residents' demand and clients will receive benefits from competition among domestic and foreign retail enterprises. "Opening the market will allow foreign commodities to easily enter the Vietnamese market, but in the near future, the proportion of Vietnamese goods will remain," Hong Won Sik, General Director of Lotte Vietnam, said. Sik spoke recently at a meeting of retail enterprises and HCM City's People Committee. He said that opening the market would force local manufacturers to produce higher quality products to compete with foreign ones. He also revealed that Lotte's development strategy calls for expansion of their cooperation with local manufacturers to bring Vietnamese goods to the Lotte supermarket system and exports. Last year, Lotte exported 5 million USD Vietnamese products to the Republic of Korea. The figure will double this year. Aeon Vietnam plans to cooperate with local manufacturers to produce its own brand names with high-quality products suited to locals' taste and financial capability. However, local manufacturers must increase their quality as well as change their packaging model to compete with imported products. "The city will create favourable conditions for retail enterprises in order to meet huge consumption demand of local residents as well as ensure stability of goods prices," Nguyen Thanh Phong, Chairman of the municipal People's Committee, said. He suggested that a market development strategy of retail enterprises must consider HCM City as a regional commercial and shopping centre, serving local residents as well as tourists. "The city will connect with localities and create conditions for retail and manufacturing to meet," he said. Phong told the municipal Industry and Trade Department to complete the city's retail system master plan. HCM City's agricultural restructuring a success The switch from traditional to urban farming in Ho Chi Minh City has yielded great success over the last five years, according to the city's Department of Agriculture and Rural Development. For the 2011-15 period, more than 3,700 farmer households and enterprises with feasible business plans received a loan interest subsidy from a city programme to implement their projects. Speaking at a meeting in HCM City on March 3, Tran Ngoc Ho, the department's deputy director, said the projects had created jobs for 45,097 labourers and helped raise the average per capita income in rural areas to 39.72 million VND (1,787 USD) per year, reducing the income gap between rural and urban areas. Earnings from agricultural production in places like Can Gio, Cu Chi, Binh Chanh, Nha Be, Thu Duc and Hoc Mon districts, and District 9 and 12 improved significantly, he said. As a leading district in agricultural restructuring, Can Gio district during the period achieved an average growth rate of 11.1 per cent a year in production value of agriculture, forestry and fisheries, said Tran Xuan Binh, head of the district's Economics Department. Earnings from agricultural production per hectare increased to 300 million VND last year, an increase of 13 percent over 2010, he said, adding that the programme had also helped to reduce the district's poverty rate to 15 percent. Based on these successes, the city passed a new provision to urbanise agriculture in the 2016-20 period, with adjustments to facilitate bank loan access of farmers and enterprises in the city in an effort to help them boost their production, Ho said. Under the programme, individuals and organisations investing in the agricultural sector and having feasible business plans will receive between 60-100 percent loan interest subsidy from the city, he said. The city expects to raise the average per capita income to 63 million VND (as well as earnings from agricultural production per hectare to over 800 million VND by 2020 under the new programme, he said. TPP agreement: from ratification to implementation A panorama on the new-generation Trans-Pacific Partnership (TPP) Agreement was spotlighted at a conference that opened in the northern province of Vinh Phuc on March 4. The two-day event, jointly held by the National Assembly’s Committee for External Relations and the US Agency for International Development, takes place after the deal was officially sealed by trade ministers of the 12 participating countries after years of negotiations. Addressing the event, NA Vice Chairwoman Tong Thi Phong underscored the opportunities afforded by the deal for Vietnam, including an expanded market, enhanced trade ties with the US and leading partners in the region, and the world, and increased foreign investments. However, a range of challenges are awaiting the country when joining regional and global supply chains, she said. Given this, Phong suggested the legislature speed up the research and issuance of legal documents to continue institutionalising the Party’s guidelines and policies in international integration and engagement in international treaties, particularly new-generation free trade agreements (FTAs). Along with ratifying international treaties, including the TPP, the NA will complete the legal framework and actualise Vietnam’s commitments to the pact while increasing the efficiency of the legislature’s supreme supervision over fulfilling the commitment. Minister of Industry and Trade Vu Huy Hoang said contents mentioned in the pact such as State-owned enterprises, pubic procurement and foreign investment attraction are in tune with Vietnam’s guidelines in building comprehensive market economic institutions. According to the official, the TPP is one of the first new-generation FTAs that aim to encourage the development of small-and medium-sized enterprises (SMEs) and provide technical support for developing nations. In recent years, Vietnam has focused on reforming the economy and the growth model, raising productivity and its competitive edge. Joining the TPP will be an opportunity for the country to complete its institutions, particularly those for the market economy – one of three strategic breakthroughs set by the Party, said the Minister. US Ambassador Ted Osius suggested Vietnam equip its labour force with new skills to make the best use of future economic opportunities, improve its infrastructure to facilitate larger-scale trade activities, and raise the competitiveness of SMEs. The country should strengthen its partnership with the private economic sector in order to build up a business climate and help Vietnamese businesses connect with the global value chain, he said. The diplomat pledged that the US will provide more assistance for Vietnam in studying and effectuating the agreement. The conference also looked into the deal’s impact on Vietnam in the spheres of trade union work, employment and agriculture, as well as social aspects, to name but a few. TPP brings together 12 countries - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Economic ministers from the 12 member nations, signed the TPP agreement in Auckland, New Zealand on February 4. Member states now have two years to complete domestic work for TPP ratification. The pact will take effect when ratified by parliaments of least six signatory countries, who comprise a minimum of 85 percent of all members’ overall GDP. This means that the two biggest economies – the US and Japan – must be among these six members. Approx. 700 mln USD in FDI lands in Binh Duong in first two months The People’s Committee of southern Binh Duong province on March 4 granted the first investment licenses of 2016 to 32 foreign direct investment (FDI) projects and one domestic investment project, worth a total of 695 million USD. Taiwan (China) led the way in registered capital with 205 million USD pumped into 4 projects, followed by Singapore (188.2 million USD), the Republic of Korea (64 million USD), and Japan (54.5 million USD). Chief among these projects are a 100-million-USD fabric manufacturing project by Taiwan-based De Licacy Industrial Co., Ltd; and an 88-million-USD instant coffee factory by Singapore’s Fovoline Global Trading PTE. Ltd. By the end of February, the province has had 2,623 operational projects with a combined investment of 24.1 billion USD. Some 1,560 of the projects are operating at local industrial parks, worth 15.75 billion USD or 65 percent of the locality’s total FDI. On the same day, the province launched the Binh Duong Foreign Service Centre at the provincial Department of Foreign Affairs to provide timely and effective support to overseas investors, so as to attract more foreign investment. It will assist investors in obtaining visas and investment licenses as well as provide them with all necessary information regarding the local business climate and investment incentive policies. During the opening ceremony, the centre signed deals to cooperate with business associations of Japan, the Republic of Korea and Taiwan. RoK firms interested in Vietnam’s garment market: KOTRA expert Free trade agreements (FTAs) help attract the investment of enterprises from the Republic of Korea (RoK) to Vietnam’s garment market, said Vice President of the Korea Trade-Investment Promotion Agency (KOTRA) Roh Inho. Speaking at a ceremony to launch the Korea-Vietnam FTA Support Centre in HCM City on March 4, Roh Inho said there is great potential for Vietnam to boost exports to the RoK, especially its key goods such as textiles, agricultural and aquatic products. He noted that his country has committed to opening its market to Vietnam’s tropical fruits and removing tariffs on apparel. Vice Chairwoman of the municipal People’s Committee Nguyen Thi Thu appreciated the RoK’s promotion agencies speeding up trade and investment links between the two countries’ firms, stressing that HCM City always willingly welcomes foreign investors. On the occasion at KOTRA’s office in HCM City, KOTRA and the HCM City High-Tech Zone, signed an agreement aiming to enhance information exchange to foster export-import activities. The FTA between Vietnam and the Republic of Korea (VKFTA) came into effect on December 20 last year. It covers matters from the reduction or elimination of customs duties, rules of origin, customs administration and trade facilitation; to sanitary and phytosanitary measures, technical barriers to trade, competition, intellectual property and transparency. The centre aims to provide enterprises with not only accurate information on the VKFTA but also support enterprises who face difficulties, particularly in terms of non-tariff trade barriers and granting of certificate’s of origin. According to economic experts, the enforcement of FTAs will help Vietnamese exporters to expand their business, as well as promote economic cooperation between Vietnamese and RoK firms. Bilateral trade between Vietnam and the RoK has increased significantly over the past few decades, from 500 million USD in 1992 to 28.8 billion USD in 2014. The RoK is now the largest among 62 foreign investors in Vietnam with about 3,000 enterprises in operation, creating jobs for more than 400,000 locals. According to Statistics from KOTRA in Hanoi, quoted by the Korean news agency Yonhap, the RoK’s total investment in Vietnam had reached 44.9 billion USD by the end of 2015. Work starts on Vinhomes Riverside Hai Phong Vingroup, a key player in the Vietnamese real estate market, broke ground on its Vinhomes Riverside Hai Phong on the morning of March 4. The project covers 78.5 hectares in Thuong Ly ward, Hong Bang district, northern Hai Phong city. It is a high-end urban complex, the first of its kind in Hai Phong, which will consist of apartments, villas, shopping malls, parks, schools and other entertainment facilities. The construction is scheduled to complete in 2020, marking the birth of a new economic hub in the locality. According to Vingroup Vice President Nguyen Viet Quang, Hai Phong is a prominent investment destination of Vingroup. The Vincom Plaza has recently become operational in the city, while the group’s Vinmec hospital and Vu Yen island project are underway. Wages of bank employees rise Commercial bank employees received an average monthly wage last year of VND13-23 million (USVND12,929,650-1,020), up VND1-4 million against 2014, thanks to better performance. According to the latest financial reports released recently by 11 banks, employees at Vietcombank got the highest monthly average wage of VND22.7 million, up VND4 million. The bank's 14,750 employees also achieved the highest productivity in the domestic banking system, with each employee generating VND36 million in profits. Techcombank also reported an average wage rise of VND2 million per month last year, helping more than 7,600 of its employees to receive VND21 million as monthly salary. Though it recruited an additional 3,400 employees last year, VP Bank's monthly average salary still rose by VND3.3 million to VND18.3 million, thanks to the bank's profits of VND2.395 trillion last year. The average salaries at BIDV, Vietinbank, VIB and MB also remained high between VND17million and VND 19 million per month. Though the business results were not as good as expected, the wages at Eximbank and ACB still rose by VND3 million and VND1 million to VND14.5 million and VND15 million, respectively. During the year, employees at Sacombank saw their wages fall by VND1.3 million to touch VND13 million due to the bank's merger with the ailing Southern Bank. A report recently released by Navigos Search showed finance and banking topped the list of 10 industries that offered the highest salaries to mid-level and senior managers in 2015. Though the finance and banking industry had been facing a slew of challenges, it gave monthly wages of VND100 million to VND200 million to mid-level and senior employees in northern Viet Nam last year, followed by the manufacturing and real estate sectors. Navigos Search also said finance banking would be also one of the four industries that would have the strongest recruitment demand this year. A survey, conducted by the State Bank of Viet Nam's (SBV) Department of Monetary Forecast and Statistics in Q4/2015, also shows that thanks to last year's growth, the labour demand of banks is also expected to increase this year. According to the SBV survey, 64.2 per cent of the institutions said they would recruit more people in 2016, with 50 per cent saying the recruitment would be made right in the first quarter to allow them to seize new opportunities. Ministry refines apartment regulations The construction ministry recently issued a circular on the management and use of apartment buildings, which is expected to improve the relationship between residents, investors and the building's management boards. As apartment buildings become popular in crowded cities along with the country's rapid urbanisation and growing population, the lack of clear regulations about the management and use of apartment buildings have resulted in conflicts between the relevant parties, affecting residents' life and undermining trust. Circular No 02/2016/TT-BXD, which will take effect on April 2, is expected to tackle the problems. The service operation fee, one of the greatest concerns of apartment residents, is calculated based on the area of the apartment, the circular says. The fees will be based on the negotiations with the building operators. The decree says the operation and maintenance fees must be used for the right purposes with transparency and in line with established regulations. The establishment of a building management board is compulsory for apartment buildings that have more than one owner. The building management board is a legal organisation that represents the voices of residents. The circular regulates the leasing or sale of parking space in apartment buildings for the first time. Accordingly, apartment owners can buy or rent parking lots within the limit set for each apartment. In case there is not enough parking space, the sale or leasing of parking space must be done following an agreement among buyers, the circular says. The ownership of parking lots can be transferred, but only to other apartment owners or investors. New housing projects published for first time Ha Noi Construction Department has announced upcoming real estate projects that have been approved for sale in the market and are being funded by 26 investors. This is the first time the department has published such a list. As the projects are completed, they will add 10,163 apartments and 585 low-rise buildings in the capital city, Deputy Head of the department's Housing Management and Real Estate Market Division Vu Ngoc Thanh said. The investors had previously informed the department of their upcoming projects to gain permission to sell the apartments or buildings to customers, Thanh told Tien Phong newspaper. But now, things have changed, Thanh said, adding that the investors' projects would be confirmed by the department based on whether conditions for sale in the market were appropriate. To qualify, the investors will have to present a land use right certificate, project documents, designs approved by an authorised agency and a construction licence. "The announcement aims to help buyers avoid risks and to constrain the investors' mobilisation of capital for the wrong purpose," Thanh said. Thus, it prevents investors from using the capital provided by the buyers for conducting other business activities, instead of using it for the building project. "It will also be a channel to cleanse the market. With the list, buyers will know which investors are qualified for sales. These announcements will be made regularly to protect the buyers' interests," Thanh said. The list of 26 projects includes real estate developer Nam Ha Noi Urban Development Joint Stock Company, which is undertaking two projects with a total of 2,368 apartments; Tasco JSC, with 258 low-rise buildings; UDIC Urban Infrastructure Development and Investment Corporation, with a project of 324 apartments; and Hai Dang Real Estate Investment JSC, with the Hai Dang City project of 896 apartments. Investors from other sectors are also included, such as Viet Nam National Packaging Production and Import Export Corp (Packexim), with a project of 222 apartments in Tay Ho District, and Vicem JSC, with 100 apartments in Thanh Xuan District. Chairman of Viet Nam Real Estate Association Nguyen Tran Nam said the mobilisation of capital and pay-in-advance purchase of houses always carried latent risks. He said the announcement of qualified investors would help protect the rights and interests of customers because those investors were being monitored to ensure they followed regulations. The qualified investors and their projects are listed on the construction department's website: soxaydung.hanoi.gov.vn. Less risks won't harm property market: SBV The amendments to Circular No 36 are meant to urge commercial banks to strengthen the risk management of lending activities, rather than tighten the credit sources for the real estate sector, said Pham Huyen Anh, Deputy Chief Inspector of the State Bank of Viet Nam He made the statement to reassure real estate insiders amidst fears that the new regulations would have negative impacts on the real estate market which has seen signs of recovery. In a draft document from the central bank circulated for public opinions, the risk index of receivable lending for real estate and securities would be raised from 150 per cent (the lowest level) as stipulated in Circular No 36 to 250 per cent. The maximum ratio of short- term funds used for medium and long term loans would be reduced from 60 per cent to 40 per cent. Chairman of the Viet Nam Real Estate Association Nguyen Tran Nam said that since Circular No 36 had come into effect a year ago, the number of transactions in the housing market increased, proving that there was considerable demand for houses. Outstanding loans in the housing sector were still under control, Nam added, and suggested that the circular be unchanged at the moment. Pham Duc Toan, general director of the EZ Viet Nam Real Estate Development and Investment Company, said that the amendments would make it difficult for property investors and traders to get loans, which could increase house prices. Contrary to the opinions of real estate developers, the amendments received praise from experts and commercial banks. Nguyen Thi Kim Thanh, member of the Board of Director of the Bank for Investment and Development of Viet Nam (BIDV) and former head of the SBV's Monetary Policy Department, said that the new policy was an indirect method that the SBV could apply to prevent a bubble in the real estate market. "I think that the market now is over supplied as too many projects are underway while people who have real demand for a house can not afford one due to their low income. "Housing enterprises must find ways to adapt themselves to new economic and policy conditions," Thanh said. HSBC Viet Nam General Director Pham Hong Hai said to Thoi bao Kinh te Viet Nam (Vietnam Economic Times) that this was a signal to housing enterprises that they should be more cautious. "The change in risk index of receivable lending for real estate (250 per cent) is suitable, because a large amount of capital has been poured in the real estate sector." Enterprises should look at both the supply and demand sides of the market to ensure efficient performance, Hai added. Chau Dinh Linh, a lecturer at the Banking University of HCM City, said that implementing the amendments would be a good decision. "The new regulations would help not only prevent risks from the property market but also redirect the capital flow in the financial market. We have relied too much on the monetary market as a capital supplying channel while the capital market including bonds and securities is underdeveloped. "The country's economic development does not depend only on the real estate sector, but on the real production and consumption," Linh said. "If real estate developers want to have sustainable businesses, they should not count on short-term capital sources to do medium- and long-term investment projects," he added. Anh said that the amendments were drafted to ensure the banking system's health. If the banking system was not exposed to excessive risks, then enterprises would find it easier to access loans, he explained. According to Anh, monetary policy was not the only way to boost the real estate market's development. He said that the market had got out of the worst situation and real estate companies should not count on bank capital. Banks have completed their role in "rekindling the fire" and it is necessary to have policies to lure capital from other sources such as foreign investment or remittances into this sector. A long-term and stable property market needed the consistent implementation of many policies such as fiscal, tax and land. The SBV official said that they had predicted the response of stakeholders when issuing the draft amendments. However, the SBV would do further research before a final decision and draw a roadmap for the market to have time to adapt, Anh stressed. BIM Group woos buyers for two flagship projects Syrena Viet Nam Investment and Development Jsc (Syrena Viet Nam), on March 13 will launch Green Bay Village and Lotus Residences in Ha Long City, northern Quang Ninh Province. Syrena Viet Nam is a member of the diversified BIM Group. Green Bay Village and Lotus Residences are two high-profile projects of BIM Group's 248 ha Halong Marina Urban Area which runs along 3.8 kilometres of beachfront in Ha Long City. Syrena Viet Nam said that for Green Bay Village, buyers would be provided loans at zero interest rates from Vietcombank and VP Bank. Or, buyers can choose a VND100 million (USVND99,466,920) package of installing two-way air conditioners for their homes. The developer will offer a discount of 5 per cent of the Lotus Residences townhouse's value (before tax) for any deposits for purchase made before the end of March. Other promotions are still applicable, including free services charge in two years and a 5-per-cent discount for payment of 95 per cent of the townhouse's value. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR