BUSINESS IN BRIEF 8/4 First Vietnam Motorcycle Show kicks off in HCM City The first Vietnam Motorcycle Show with the message “Ride high! Together” kicked off in Ho Chi Minh City on April 7. The show is exhibiting over 170 motorbike models manufactured by Honda, Piaggio, Suzuki, SYM, Yamaha Benelli, Kawasaki, Ducati, along with hundreds of spare parts stalls. Yano Takeshi, General Director of Yamaha Motors Vietnam and President of the Vietnam Association of Motorcycle Manufacturers (VAMM), said the event serves as a leverage for the growth of Vietnam’s motorcycle industry. Those operating in the support industry manufacturing spare parts such as Total, Motul, NGK, Idemitsu, Pinaco and Osaki are also attending the event, along with representatives from insurance and banking. According to VAMM, Vietnam’s motorbike market is at a peak. Last year, it grew 4 percent year-on-year, with the total number of domestically-manufactured and imported motorcycle models available amounting to nearly fourty – mostly scooters, sport and high-powered vehicles. Vietnam, Cuba to boost economic, investment cooperation A delegation from the Ministry of Construction (MOC) led by its Deputy Minister Le Quang Hung paid a working visit to Cuba, from April 2 to 6, with the aim of promoting cooperation on economy, trade and investment between the two countries. During the visit, Deputy Minister Hung had a working session with Cuban Minister of Construction Rene Mesa Villafana to discuss the implementation of cooperation agreements signed between the two countries’ construction enterprises. On the occasion, the two officials also witnessed the signing of an agreement on establishing a joint venture between the Vietnamese Viglacera Corporation and the Cuban Geicon Group and an agreement on importing and exporting construction materials between Viglacera and Cuba’s IMECO company. The Vietnamese officials attended the 2016 International Construction Fair (FECONS). This was the first time the MOC participated in the fair with stands displaying products from Viglacera. The delegation held meetings with officials from the Cuban Ministry of Tourism, during which they discussed the demands in building and upgrading hotels in Cuba. They also reviewed the proposals on investment projects between Vietnamese Hanel JSC and its partner Cubanacan as well as a cooperation agreement between Viglacera Corporation and Gran Caribe group. The officials from the MOC also worked with the Cuban Ministry of Foreign Trade and Investment to review the implementation of agreements that were signed at the meeting of the 33rd Vietnam-Cuba Intergovernmental Committee. At the meeting, both sides agreed on the agenda to boost the Vietnamese investment projects in Cuba. Businesses play central role in sustainable development: forum How businesses benefit from the 2030 Agenda and their responsibility for sustainable development was highlighted at a forum in Hanoi on April 7. With 17 goals, the 2030 Agenda for Sustainable Development calls on businesses to drive the economy towards equality, sustainability and deeper integration, according to Vice Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Quang Vinh, who is also Representative of the Global Compact Network Vietnam (GCNV). He urged local enterprises to join the GCNV as this is a pragmatic access method, helping them turn sustainable development goals (SDGs) into reality. The VCCI and the Vietnam Business Council for Sustainable Development (VBCSD) will work as pioneers in realising such goals and provide Vietnam-based firms with guidelines, networks, knowledge and acknowledgement on their path towards sustainable development, Vinh promised. Established in 2010, the VBCSD now brings together 70 enterprises which have taken the lead in launching initiatives relating to sustainable development, he added. Besides this, the VCCI has partnered with a number of international partners in a project aimed at connecting small-sized producers and households in Vietnam with their foreign partners in the global value chain. Florian Beranek, Lead Expert on Social Responsibility at the UN Industrial Development Organisation (UNIDO), said businesses should be inspired to fulfill the SDGs. Pratibha Mehta, UN Resident Coordinator in Vietnam, said the UN sees businesses as key development partners as they play a central role in reaching the SDGs. However, she said, it is also the responsibility of all people to meet the objectives. Vietnamese businesses should directly take part in green growth in the context of climate change, particularly the ongoing severe drought and saltwater intrusion in the Mekong Delta, she said. The delegates also discussed initiatives, opportunities and challenges during the implementation of the SDGs. The 2030 Agenda for Sustainable Development, which is composed of 17 goals and 169 targets to wipe out poverty, fight inequality and tackle climate change over the next 15 years, was adopted by 193 members of the UN General Assembly on September 25, 2015. Binh Thuan studies climate scenarios for better water management Climate change scenarios and their effects were discussed at a seminar held in the central province of Binh Thuan on April 6, in a bid to improve local weather forecasting and water resources management. According to participating experts, climate change has become more complex in Vietnam, with more annual hot periods taking place. This has led to a rise in the number of serious droughts occurring across the nation. Torrential rain has reduced remarkably in the northeast region, while the opposite trend has been noticed in the southern part of the central region and in the Central Highlands. In Binh Thuan alone, prolonged drought, higher sea level and more severe erosion have taken their toll in recent years. Currently, locals are bearing the brunt of an acute drought caused by the El Nino phenomenon. It damaged over 1,400 hectares of plantations and left some 90,000 cows and 18,000 goats without grass or water. More than 96,000 residents are now lacking fresh water, with the dry season yet to reach its peak. Besides outlining possible climate change scenarios, participants also put forth countermeasures moving forward. The seminar is part of a Belgian-funded project on water management and urban development in the context of climate change. The project worth six million EUR is scheduled to run between 2013 and 2019. Its major tasks include studying typical weather patterns in Binh Thuan, thus providing forecast and meteorological data for local weather services. In response to climate change, Binh Thuan has planned 51 projects costing over 3.8 trillion VND (171 million USD) to be implemented from 2012 through to 2020. More ministries urged to connect to national single window The Ministry of Finance has petitioned the Government to order more ministries and agencies to connect to the Vietnam National Single Window website as just 30% of administrative procedures are processed via the site. The finance ministry said the Government had assigned it to manage the site since the end of 2014 and that it has taken steps to develop the site, but other ministries and agencies are reluctant to get connected to it. At present, all customs procedures are conducted online, except for special cases that account for less than 2% of total import-export shipments. Other administrative procedures like goods checks should be carried out by other ministries and agencies via the national single window. Regarding goods import, export and transit, among nine ministries pledging to connect to the site, only the Ministry of Agriculture and Rural Development processes eight procedures on the site, making up around 40% of the total this ministry has to link.   Meanwhile, the Ministry of Transport is offering services for sea transport enterprises at eight of 25 port authorities, and administrative procedures for Vietnamese ships to go through domestic ports have been done via the site since March 1. However, administrative procedures for vehicles and goods import, export and transit by road, train and air and procedures for vehicles to transit in Vietnam and neighboring nations having the same land border with Vietnam like Laos and Cambodia have yet to be conducted online as per an agreement between Vietnam and the countries. According to a scheme prepared by the finance ministry to develop the Vietnam National Single Window in the 2016-2020 period, all administrative procedures relating to import and export shall be done via the site at level 4, meaning businesses can pay fees and get results online. A number of enterprises told the Daily that though State agencies said their procedures have been conducted via the site, time and fee needed to carry out import-export procedures remain the same. The Vietnam National Single Window was launched to provide public services online to help businesses save time and cost for customs clearance. Enterprises can submit all relevant documents for goods import and export online instead of sending them to each ministry or agency. Ministries and agencies then will share information and give results to firms online. The General Department of Customs will make the final decision based on decisions of competent ministries and agencies. Property firms optimistic about market   All property enterprises participating in a recent survey of Vietnam Report have expressed optimism about market demand and expect that their sales will inch up in 2016. Some 83% of respondents expect their sales will grow strongly this year while the remaining 17% said their revenue will edge up slightly, according to the result of the survey released on March 22. The firms said that project progress, construction quality, experience, and financial capability are factored into their development strategies and help them earn a reputation. The firms proposed the Government focus on stabilizing the macro-economy and improving infrastructure and the legal system to support the healthy and sustainable development of the real estate market. Besides, it is important to establish a consistent real estate market information system for them to draw up development strategies. Property enterprises need specific regulations on the upgrade of old apartment buildings in cities and responsibilities of the parties concerned to help them avoid risks. Vietnam Report said private corporations make up a majority of real estate investors in Vietnam, and the top three are private groups headquartered in Hanoi. With revenue of VND33.83 trillion (US$1.5 billion) last year, Vingroup tops the list of the 10 most reputable property investors, followed by FLC, Hoa Phat, Viglacera, Novaland, Ha Do, Udic, Him Lam, Hoa Binh and Phu My Hung. HCMC has many reputable real estate consulting and brokerage firms. The top five list has four firms in HCMC including Dat Xanh and Sacomreal for the brokerage segment and CBRE and Savills for the consulting field. Hai Phat is the only Hanoi-based firm in the list. Deposit rates up at state-owned commercial banks Major State-owned commercial banks (SOCBs) have all raised their interest rates on VND deposits since early this week. Vietcombank increased its rate by 0.3-0.5 per cent per annum for short-term deposits of 24-60 months from the 6.2 per cent in place for one year. Rates listed at Vietcombank are now 6.5 per cent per annum for all deposit terms up to 60 months. At BIDV, last year’s maximum deposit interest rate of 6.8 per cent per annum has been increased to 7.2 per cent; much higher than at other SOCBs, where it stands at around 6.8 per cent. For three-month terms BIDV is offering 5.5 per cent per annum compared to 5 per cent and 5.3 per cent at Sacombank and Eximbank, respectively. Vietinbank’s rate for terms of between three and five months is 5.5 per cent, which is significantly higher than other SOCBs. Terms of 12-36 months now receive 6.8 per cent. The gap in deposit interest rates among SOCBs has closed to around 0.5 per cent per annum, lower than the 1-1.5 per cent seen a year ago. VNR plans to resume train services to Binh Duong The Vietnam Railways Corporation (VNR) has unveiled a plan to resume train services between Saigon Railway Station in HCMC and Song Than Railway Station in neighboring Binh Duong Province in the coming days to help passengers save time. The temporary schedule will apply until there is a new railway bridge spanning the Dong Nai River to connect HCMC and the north-south rail link, hopefully on July 15. Ghenh, the only rail bridge over the river, collapsed after it was struck by a barge transporting sand at noon on Sunday. No casualties were reported. VNR did not specify when the resumption would be effective but said passengers will be coached from Song Than to Bien Hoa in Dong Nai Province, where they can get on trains to travel to destinations in the central and northern regions. Currently, there are two pairs of train for the Hanoi-Nha Trang route (SE1/2 and SE7/8), five pairs for Hanoi-HCMC (TN1/2, SE3/4, SE5/6, SE21/22 and SE25/26) and three pairs for Vinh-HCMC, Quy Nhon-HCMC and Nha Trang-HCMC. However, passengers of the train services are transported by coach from Saigon Railway Station to Bien Hoa Railway Station to board trains to the central and northern stations. The corporation estimated it takes passengers over an hour to travel by coach from HCMC to Bien Hoa or longer if there are traffic jams along the way. Traveling by train is faster. VNR continues transporting cargo from northern stations to Binh Thuan Station and vice versa. Cargo in the south is unloaded at Long Khanh, Trang Bom and Ho Nai stations, which are all located in Dong Nai Province. Indonesian expert warns of low productivity in apparel sector The textile-garment sector in developing countries may easily fall into a low-productivity trap and be stuck there if appropriate strategies and policies are not adopted to help it to get out of the trap, Indonesian economist Gatot Arya Putra. Putra said at a conference in HCMC last week that many developing countries have competed with one another for the low value part of the global value chain for the textile-garment sector. As a result, laborers in the sector are offered low wages that are enough for their basic needs only, and cannot save money for career development. He told the conference on the impact of Vietnam’s international integration process on the apparel industry held by the Center of Business Studies and Assistance (BSA), the HCMC University of Social Sciences and Humanities and Friedrich-Ebert-Stiftung Institute that apparel is a key sector of Indonesia but it is now caught in a low productivity trap. Poor technology is also to blame as it causes productivity to stay low in Indonesia while enterprises in the sector lack supporting policies to invest in modern technology. Therefore, he said enterprises in the apparel sector should be offered favorable policies and financially aided to improve productivity.   The apparel industry in South Korea and Taiwan used to be caught in the low-productivity trap but they successfully averted the trap thanks to appropriate policies, and shifted to other industrial sectors that turn out products of higher values. Putra said the Vietnamese Government would need to take action right now if the nation wants to be as successful as South Korea and Taiwan.   Professor Mustafiz Rahman from the Centre for Policy Dialogue in Bangladesh suggested that countries should join forces to set the floor price for textile-garment products to share adequate benefits in the global value chain.   Le Tien Truong, general director of Vietnam National Textile and Garment Group (Vinatex), said Vietnam ranks third in terms of productivity for technicans. He said the problems in Vietnam are public governance and cooperation among domestic businesses. Truong said production and public governance expenses are factored into the total cost of products and that firms’ investment in technology can improve labor productivity but if public governance cost rises steadily, they cannot bring down the total cost.   Vietnamese enterprises lack cooperation, which is a big concern, Truong said. Regarding more foreign investors entering Vietnam’s apparel sector to capitalize on opportunities from the Trans-Pacific Partnership (TPP) trade agreement, Truong said Vietnamese firms should study the production technology they use and the products they have rather than worrying that they will seize all the opportunities.    Truong said if Vietnamese apparel enterprises can cooperate with one another, they can negotiate for the supply of input materials with reasonable prices. Erwin Schweisshelm, resident director of the Friedrich-Ebert-Stiftung in Vietnam, said apparel is a light industry which often moves to the places where labor cost is cheap. This industry appeared firstly in Western Europe, then expanded to Eastern Europe and shifted to China.      Schweisshelm said that a friend of his who is doing business in this sector set up shop in Ukraine, then moved to China and invested in Vietnam. He plans to move production facilities to Ethiopia in Africa in the future. Schweisshelm said countries should consider this factor when building policies to attract foreign investors. Budget plans based on oil price of US$45 per barrel Though the Government has set a high economic growth target for 2016 and the next five years, budget plans are based mostly on the oil price projection of US$45 per barrel. In the 2011-2015 period, the world price of crude oil was over US$100 per barrel but gross domestic product (GDP) growth never hit 7%. Though the price dropped to US$56.2 last year, GDP growth reached 6.68%. However, the Government has set an economic expansion target of 6.7% for this year and 6.5-7% for 2016-2020 though the world oil price is very low despite a slight rise from late last year. However, the 2016 and 2016-2020 budget plans still rely much on crude oil revenue while collections from this channel have dipped in recent years. Revenue from crude oil used to account for an average of 5.2% of GDP and 18.4% of total budget collections in the 2006-2010 period, but the respective ratios in 2015 were 1.6% and 6.8%. Nguyen Minh Tan, deputy head of the State Budget Department under the Ministry of Finance, said the oil price decline has posed a budget risk. According to the Government’s 2015 socio-economic performance report, the oil price was low and unpredictable. Late last year, Vietnam National Oil and Gas Group forecast the average oil price would stay at US$60 per barrel this year. According to the Ministry of Finance, crude oil extraction would total 62.3 million tons in the next five years, down by 1.73 million tons against the Ministry of Industry and Trade’s previous forecast and around 12 million tons against the volume of the 2011-2015 period. The ministry projected the average price between 2016 and 2020 at US$45 per barrel, with US$30-35 this year and US$55-60 in 2020. Such projections are based on the average contract price of this year hovering around US$30 per barrel. According to most forecasts by international financial institutions, the price will remain low this year. The International Monetary Fund (IMF) even estimated the average price at US$30 per barrel this year, US$35.8 in 2017 and smaller than US$39 throughout the five years. The country’s total budget revenue this year is put at over VND1,014 trillion while spending is projected at over VND1,273 trillion, resulting in a deficit of some VND254 trillion (4.95% of GDP). Jan-Feb trade surplus estimated at US$676 million Vietnam enjoyed a trade surplus of around US$676 million in the first two months of this year though imports exceeded exports by US$191 million in February, according to data of the General Department of Customs. In the year to February, Vietnam earned export revenue of nearly US$23.7 billion, up 3%, and spent US$23 billion on imports, down 5.7% from a year ago. Foreign trade in February alone fell 21.5% against January to US$20.39 billion due to the long Lunar New Year break (Tet). Of which, outbound sales made up US$10.1 billion, decreasing 24.4% month-on-month, and imports accounted for US$10.3 billion, down 18.3%. Again, the foreign trade figures released by the customs mismatched those of the General Statistics Office, which reported that Vietnam had a trade surplus of US$100 million in February, bringing the trade surplus in the first two months to US$865 million. Data of the customs showed the combined export revenue of foreign direct investment (FDI) firms in the two-month period rose by 7.2% year-on-year to US$16.6 billion, while domestic firms shipped abroad a total of US$7 billion worth of goods, falling 5.7%. Imports by FDI and domestic enterprises were US$13.77 billion and US$9.24 billion, down 6.4% and 4.6% respectively. The January-February period saw trade between Vietnam and other Asian countries nearing US$30 billion, declining 4.5% year-on-year. In terms of region, Asia accounted for 64.2% of Vietnam’s total exports and imports. America followed with turnover of US$8.17 billion, up 9.7% and making up 17.5% of the total, Europe with US$7 billion, sliding 0.5%, Oceania with US$922 million, up 12.1%, and Africa with US$641 million, down 10.2%. More Japan goods at Vietnam convenience stores Japanese-invested convenience stores in Vietnam will become a major channel to sell more products of small- and medium-sized enterprises (SMEs) in the Northeast Asian nation in the coming time.   Hirotaka Yasuzumi, chief representative of the Japan External Trade Organization (JETRO) in HCMC, told reporters about the plan to export more Japanese products to Vietnam while Hayashi Motoo, Japan’s Minister of Economy, Trade and Industry, was visiting Family Mart and Mini stop convenience stores in the city on Sunday. The minister was accompanied by representatives of four big retail corporations and 16 businesses in the sectors of household appliances, confectionery, farm produce, beef, seafood, stationery and cosmetics. The companies came to sound out opportunities to export their products in the future. The four retailers own convenience store chains Family Mart, Mini Stop, 7 Eleven and Lowson, which are now widely present in Japan and many other countries.   Yasuzumi said big Japanese producers have expanded to world markets by themselves but  SMEs need support from the Japanese government or trade promotion agencies like JETRO to enter foreign markets. A number of Japanese retailers have opened supermarkets and commercial centers in Vietnam, and Yasuzumi said convenience stores are considered pivotal channels to sell Japanese items. Therefore, JETRO coordinated with owners of the convenience store chains to evaluate the possibility of helping Japanese SMEs sell their products on the Vietnamese market. He noted convenience stores in Japan are different from those in Vietnam and other nations as the first also offers services like finance, e-payment and public services in addition to goods. Ishige Hiroyuki, chairman of JETRO, said owners of convenience store chains in Japan are experienced and some of them have convenience store chains in Vietnam. This is the groundwork for Japanese SMEs to step into the domestic market.   At present, many Family Mart and Mini Stop stores are operational in Vietnam, with around 200 shops expected until this November so that 50-60 Japanese product lines will be on sale there.   Yasuzumi said Vietnam is seen as the most potential retail market in the region. Therefore, JETRO has launched programs to support Japanese firms to export to this market. With the Trans-Pacific Partnership (TPP) trade pact to become effective in the coming time, Japanese goods will enjoy tax reductions or exemptions. At present, the number of Family Mart and Mini Stop stores totals around 130. Yasuzumi said the number would increase sharply in the coming time, with Mini Stop targeting 800 shops.    Meanwhile, international media said 7-Eleven has plans to open its first convenience store in Vietnam in 2017 and eyes 100 stores in the following three years. The owner of Lowson convenience store chain also eyes the domestic market. Lao province eyes VN trade Laos's newly established province of Xaysomboun wants to bolster trade and investment co-operation with Viet Nam, especially HCM City, a deputy secretary of its Party Committee told a conference in HCM City yesterday. Phoikham Houngbounyuang told the conference held to seek investment in his province, said 80 per cent of Xaysomboun's area of 8,500sq.km is covered by plateaus and mountains. Its climate and geography are suitable for agriculture and forestry, mining, and processing, and it has many rivers, which offer great potential for hydropower development, he said. With historical tourist attractions and beautiful landscapes, the province also has much tourism potential, according to the Lao official. The Lao Government and provincial administration are greatly focused on its socio-economic development, but a lack of resources domestically has held it back. Thus, the province wants to seek investment from Viet Nam, especially HCM City. Chanhthanom Vongsomchit, director of the Xaysomboun Province Department of Planning and Investment, said, "The province is seeking private investment locally and from abroad." He furnished a list of projects in which the province is seeking investment, including growing green vegetables and daisies, the 15MW Nam Pheng hydropower plant, tourism and services, housing, a cement factory and a supermarket. The province would offer graded incentives – from levels one to three — to investors, he said. Businesses listed as level 1 would get tax exemption for 10 years, while those in levels two and three would get it for six and four years, he said. Those investing in difficult areas like mountains would be entitled to the highest level of incentives, he said. Investors building hospitals, kindergartens, schools, vocational colleges, universities, research centres and some other public facilities would get free use of land for 15 years and tax waiver for an extra five years, he said. Le Van Khoa, deputy chairman of the HCM City People's Committee, said the establishment of the ASEAN Economic Community had opened up investment opportunities in the region, including between the two countries. He urged city agencies to work with their counterparts in Xaysomboun for investment and developing long-term co-operation for mutual benefit. Binh Dinh tourism to undergo facelift Delegates reached solutions to develop tourism in the central province of Binh Dinh at a seminar held late last week in Quy Nhon City. The provincial People's Committee, in association with the Bank for Investment and Development of Viet Nam (BIDV), organised the seminar. Delegates said the province should focus on developing high-end tourism and ecotourism and co-operate with neighbouring provinces. Tran Bac Ha, chairman of the bank BIDV, said the bank would call for investment in tourism as well as the economy and society in general. The bank has pledged to offer VND15.5 trillion (US$704.5 million) in mid- and long-term loans to the province's infrastructure projects in the 2016-2020 period. The province has also attracted several investment projects, including high-end villas, resorts and entertainment area in Nhon Ly and the Luxury Ecotourism Resort Eo Gio. At the seminar, local authorities of Binh Dinh, Phu Yen, Gia Lai and Dak Lak provinces signed a co-operation agreement on tourism development. Binh Dinh in the 2005-2015 period saw international visitors increase by 24.6 per cent. Last year, around 206,000 international tourists, mostly Chinese, South Korean, and Japanese, visited Binh Dinh, ranking 22nd nationwide in attracting international visitors. Russian visitors, who occupy one fourth of the total international visitor to the country, have yet to visit the province in high numbers. The province has also attracted several investment projects, including high-end villas, resorts and entertainment area in Nhon Ly and the Luxury Ecotourism Resort Eo Gio. However, development has not fulfilled the potential due to shortcomings such as the lack of interesting tourist products and inadequate human resources for the tourism sector. Food and beverage exhibition to display foreign brands The Vietnam International Exhibition of Food, Beverage, Food Processing, Packaging Technology 2016 will take place at the Saigon Exhibition and Convention Centre, HCM City, from August 10 to 13. The event, also known as Vietfood and Beverage – ProPack 2016, will showcase food and beverage products, raw materials, food additives and diet food, in addition to machinery and equipment for processing and packaging, refrigeration and air-conditioning technology, food packaging materials and operating materials, as well as environmental technology, biotechnology, restaurant and hotel and catering equipment, besides supplies and services. Exhibitors from South Korea, China, Singapore and Malaysia, besides Thailand, Indonesia and Viet Nam will participate in the event. Dong interest rates to rise 1% in 2016 Deposit interest rates in the Vietnamese dong this year are expected to rise 1 per cent against last year, according to a report from the National Financial Supervisory Commission (NFSC). According to the Government-run financial watchdog's latest report released this week, banks will see increasing capital needs after credit growth has accelerated and outstripped capital mobilisation. Besides, the hike in interest rates will be driven by higher inflation expectations and the revision of a central bank regulation that reduces the use of short-term capital for long-term lending, the commission noted. However, the commission anticipated that lending rates would remain under control to support economic growth. The commission reported that inter-bank interest rates also rose in the first quarter of this year, in comparison with a year earlier, particularly at longer-than-12-month terms. Last week, ANZ also noted assuming the central bank allows sufficient flexibility in the USD/VND rate, interest rates may rise as the đồng liquidity will likely remain adequate. "However, so long as the central bank keeps a cap on deposit rates in the hope of discouraging inefficient use of capital, the room to raise policy rates in limited," ANZ said. Under the NFSC report, the commission also said that the non-deliverable forward (NDF) for the USD/VND rate was flat in March and the country's credit default swap (CDS) was on the decline, indicating strengthened confidence of foreign investors in the đồng. Analysts at Maritime Bank this week also forecast that the USD/VND rate is forecast to remain steady in the second quarter of this year. Thanks to its success in reducing dollar hoarding and pressure on USD/VND rate after applying a daily reference rate, the State Bank of Viet Nam (SBV) will be capable of keeping the USD/VND rate stable in the second quarter of this year. "In Q2 2016, we expect the USD/VND rate to continue staying steady or declining slightly, enabling the SBV to buy in foreign currency, enrich forex reserves and improve VND liquidity," the Ha Noi-based bank's analysts said. The analysts said that the banking regulator has other measures on the cards to dampen speculation in foreign currency. Among them, the analysts said, the SBV could lower the interest rate on dollar deposits to below zero per cent or regulate different reserve ratios for banks that have different forex positions. Vietnamese firms to attend construction expo in Myanmar The third edition of BuildTech Yangon in Myanmar will be held from May 26 to 28 at the Myanmar Convention Centre. BuildTech Yangon 2016 has attracted 120 exhibitors from many countries and territories, including Austria, China, Indonesia, Korea, Thailand, Viet Nam, Singapore and Myanmar. In addition to staple exhibits from the construction machinery building materials and mechanical engineering segments, the expo will showcase equipment, machinery and solutions on facilities management, interior finishing and architectural solutions. This new focus is in line with recent developments in Myanmar's construction sector which is booming following the opening up of Myanmar's economy to the world. Meanwhile, increased awareness of construction and workplace safety has given rise to a greater focus on safety and disaster prevention in this year's BuildTech Yangon, according to the organisers. U Tha Htay, president of Myanmar Construction Entrepreneurs Association, said: "The infrastructure construction sector is the second largest market in the Myanmar construction industry that is worth an estimated US$765 million. "The government's focus on improving infrastructure in Myanmar will see the major development of new roads, buildings, pipelines and electrical grids. At the same time, a sharp rise in foreign direct investment has seen a big growth in demand for new office space as well as housing for expatriates." Organised by Sphere Exhibits, a subsidiary of Singapore Press Holdings, and co-organised by the Myanmar Construction Entrepreneurs Association, the show is expected to attract over 4,500 visitors. Nam A Bank projects 19% rise in profits Nam A Bank plans to report a pre-tax profit of VND300 billion ($13.3 million) this year, an increase of 19 per cent over last year. The bank announces these figures in a statement prepared for its shareholders' meeting, which will be held in HCM City on April 15. This year, deposits at Nam A are expected to grow by 17 per cent year-on-year to VND28.5 trillion, and its outstanding loans are expected to rise by 20 per cent year-on-year at VND25 trillion. The bank projects a total asset value of VND40 trillion for 2016, up 13 per cent over 2015, while it plans to increase its charter capital from VND3 trillion to VND4 trillion this year. Nam A says it will continue to maintain its bad debt ratio at below 3 per cent, a cap set by the State Bank of Việt Nam to ensure security of the domestic banking system. Last year, Nam A controlled this ratio at 0.91 per cent. Viet Tien garment firm adds $18.7 million to capital The Viet Tien Garment Joint Stock Corporation (VGG) has issued 14 million shares converting 1.4 million corporate bonds for VND100,000 each and added VND420 billion (US$18.7 million) to its capital. Viet Tien has to convert those bonds with a rate of 1:10, which means each bond is worth ten shares. Each bond is valued at around VND640,000 as the company's shares closed at VND64,500 each yesterday. The bonds which were issued for the company's shareholders at the end of 2012, had a maturity of three years for a yield rate of five per cent and must be converted by the end of February 2016. HNX offloads $1.5 billion in government bonds The Ha Noi Stock Exchange in March sold nearly VND34.3 trillion (US$1.5 billion) worth of government bonds issued by the State Treasury in 15 auctions. This marked an increase of 21.2 per cent from the previous month. The yield rates for government bonds were lower than those in February. The three-year-bond rate fell 0.2 per cent per year, the five-year-bond rate dropped 0.22 per cent, and other bond rates remained nearly flat. On the secondary government bond market, total trading volume of government bonds sold outright reached more than 713 million bonds, worth more than VND74.1 trillion, a monthly increase of 43.6 per cent. BIDV Securities aiming for higher capital in 2016 The BIDV Securities Company (BSC) will ask shareholders for approval to increase capital at the company's annual shareholder meeting, which will be held on April 23. The company expects to increase its capital from VND865 billion (US$38.4 million) to between VND1 trillion and VND1.5 trillion this year. BSC may raise its capital by issuing between 13.5 million shares and 63.5 million shares to one or three investors for at least VND10,000 per share. The company may also issue more than 4.3 million shares to make a dividend payment for shareholders. Those shares will not be restricted from being traded. Viet Nam's Dragon Capital to get $50m IFC debt to deepen corporate bond market The International Finance Corporation (IFC), the private lending vehicle of the World Bank Group, said it planned to extend a $50 million financing facility to Viet Nam-focused fund management firm Dragon Capital. Dragon Capital will use the funds to invest in bonds issued by medium to large Vietnamese firms. It will also target private, listed or unlisted fast growing companies who are in need of financing to expand their business. "The proposed project targets to expand the width and depth of the corporate bond markets in Vietnam, to broaden the investor base of the Vietnamese bond markets, and to support and provide Vietnamese private sector companies with better access to capital," the IFC said in its investment disclosure. The proposed investment aligns with IFC's commitment to focus on the financial sector in Viet Nam, while also marking its return to back Dragon Capital. IFC had initially invested $2 million and was an investor for 13 years in the Vietnamese fund manager. "They bring a lot of experience and have a broad mandate to help finance development. One of the ways they do that is by helping the development of financial institutions," Dominic Scriven, chairman of Dragon Capital, told DealStreetAsia in an earlier interview as he talked about the past investments of IFC and France's aid agency Proparco. Truong Hai auto sees revenue up 89 per cent in 2015 The Truong Hai Automobile Joint-Stock Company (Thaco) reported VND41.532 trillion (US$1.86 billion) in revenue in 2015, an increase of 89 per cent since 2014. The company's profit after tax reached more than VND7 trillion in 2015. On average, the company sold more than 220 vehicles a day, earning VND114 billion in revenue and VND19 billion in after-tax profit per day last year. The company's total assets at the end of last year were VND30.81 trillion, 63 per cent higher than the beginning of 2015. Thaco also invested more than VND300 billion in the stock market last year. According to a report from the Viet Nam Automobile Manufacturing Association (VAMA), Thaco took the lead in auto sales with more than 80,400 cars in 2015, a 90 per cent increase in comparison with 2014, occupying 38.6 per cent of the market share. Of this figure, Thaco sold 36,300 trucks, contributing 45 per cent to the company's total car consumption. It's followed by 21,300 units of Thaco Kia and 20,400 units of VinaMazda in 2015. Yamaha Viet Nam recalls more than 95,000 motorbikes Yamaha Motor Viet Nam is recalling 95,350 Nozza Grande motorbikes produced from August 2014 to March 18, 2016 to fix a problem in the fill hose unit. Yahama explained that the firm's supplier had used unsuitable materials to produce the fill hoses, which could then crack, and in some cases cause a rupture in the fuel tank vent pipe. The motorbike producer received approval from the Viet Nam Register to implement the recall. Yamaha will also maintain and replace the rear rubber buffers and clutches of the product. The recall and repairs began on March 30 at authorised dealers of Yamaha nation-wide. The replacements are free of charge. HCM City to host pharmaceutical expo The Vietnam International Medical and Pharmaceutical Exhibition, or Vietnam Medi-Pharm Expo 2016, will be held at the Saigon Exhibition and Convention Centre, HCM City, from August 11 to 13. The expo is an annual exhibition of Vietnamese healthcare industry, hosted by the ministries of health and industry and trade. The exhibition will have five events: Vietnam International Exhibition on Medical and Laboratory Equipments; Vietnam International Exhibition on Pharmaceutical Products and Processing, Packaging Machinery; Vietnam International Exhibition on Hospital and Equipments; and Vietnam International Exhibition on Ophthalmology; besides Vietnam International Exhibition on Dental Materials and Equipments. A conference will also introduce the Vietnamese medical and pharmaceutical market and trade policies when doing business in Viet Nam, which will be hosted by related departments and associations of the health ministry of Viet Nam. Vietnam textiles clearing the decks for FTAs Vietnamese textile companies are getting ready for the introduction of a wide array of Free Trade Agreements (FTAs), hoping they will usher in an age of unparalleled growth and prosperity. The Vietnam National Textile and Garment Group (Vinatex), the nation’s largest textile company, plans to invest US$91 million to construct a second plant on a 3.7-hectare site in the southern province of Kien Giang.   The plant, scheduled to open by the spring of 2017, will have 32 production lines and the capacity to produce 12 million items of clothing annually. It is expected to bolster revenues from exports by US$37 million. The company's first plant was erected in the same province in early 2015. With ready access the sea and a close proximity to Ho Chi Minh City, Kien Giang is rapidly transforming into a new thriving hub for the textile industry, thanks to FTAs. Trade pacts such as the Trans Pacific Partnership (TPP) when they come into force will eliminate tariffs in many areas but, in principle at least, will only benefit clothing manufacturers sourcing materials from within the 12-member TPP community, due to the mechanism called the ‘rules of origin’. Currently, most imports of sewing materials to Vietnam come from China, which did not take a seat at the TPP negotiating table. Anticipation is as a result, growing that the local demand for materials and intermediary goods will increase in Vietnam, hence the upfront investments in the textiles supply chain and related activities. An Phuoc, another textile company, is set to spend US$28.2 million (VND628 billion) to build a silk plant in Thanh Hoa Province in central Vietnam. Construction will start as early as April 2016 for a scheduled opening in February next year. Overseas players are also eager to invest early. US-based Kraig Biocraft Laboratories, which produces artificial fibres, said in March it will establish a subsidiary in Vietnam along with a research base and a facility to produce test products. It will also cooperate with the Vietnam government in studies pertaining to innovative, new material products and silkworm development. In June of 2015, Taiwan's Far Eastern group broke ground on a plant in Binh Duong Province in southern Vietnam that had a budgeted cost of US$274 million. It will be the company's third production base following Taiwan and China. The new plant will have a range of production lines capable of producing synthetic fibres, spinning and dyeing. Last year, the Republic of Korea’s Rio Industries launched a plant in the central province of Quang Nam that had an initial investment of US$6 million, capable of producing 4,400 metric tons of synthetic fibre annually. While the economic prospects for Vietnam look bright for foreign direct investment and the country's large textile companies, local small and midsized companies are not quite as enthusiastic about the FTAs. They account for roughly 80% of Vietnam's 3,000 or so textile market and related companies. Lacking the finances to increase capacity or build new facilities for materials production domestically, they stand to benefit marginally from the FTAs, and many could even suffer once they come into force. Lower expectations ahead of ‘Online Friday 2016’ Last year’s second edition of the e-commerce ‘Online Friday’ reported 300,000 orders – nearly double that of the prior year – 80% of which were for technology, fashion items or home appliances. The online shopping event attracted an estimated 2,271 retailers offering some 63,500 products for sale, said Tran Huu Linh, head of the Vietnam E-Commerce and Information Technology Agency at a press conference on April 5 in Hanoi.   However, for this year’s event, Mr Linh said the Agency is lowering expectations, planning at this time for only 50,000 products being offered for sale, which is a significant drop from last year. “We’re working on developing and redesigning a better user interface more compatible with a wider variety of personal computers, mobile devices and even mobile application platforms,” said Mr Linh. “We also will incorporate more features including advanced tools that allow for the creation of a personal account, the ability to compare products and prices, customer feedback and a customer rating system.” In addition, Mr Linh said the Agency is working with companies like Intel, Samsung, LG, Nguyen Kim, The Gioi Di Dong, FPTShop, and ViettelStore hoping to convince them to participate and offer discounts and special pricing on their products. Just as importantly, we are trying to work out a deal with VnPost or ViettelPost to improve transportation and reduce costs for participating companies and customers, said Mr Linh.   LG Displays to build OLED screens factory in Haiphong Haiphong City People’s Committee and the Korean LG Displays Group on April 5 signed a memorandum of understanding (MoU) on the implementation of a project to construct a US$1.5 billion factory in the city. The factory will produce new-generation OLED screens and create 6,000 jobs. It will be built on an area of more than 40ha at Trang Due Industrial Zone and construction will begin in early May. Addressing the signing ceremony, Le Van Thanh, Chairman of the City People’s Committee, said the project is very significant to the development of the city. “We pledged to create the best possible conditions for LG to implement the project,” Thanh promised. Cheoldong Jeong, LG Displays executive vice president , said this was the first OLED screen production project that LG Displays carried out and hoped it would become the leading model in Haiphong and Vietnam as well. Earlier, the US$1.5 billion LG Electronics Vietnam Haiphong project was put into operation in March 2014. Vietnam's PV Gas eyes overseas fields: report While many of its oil ventures have been affected by the global oil slump, state energy giant PetroVietnam's gas arm PV Gas is still looking to expand its business abroad, local media have reported. PV Gas has been working with foreign oil and gas companies to acquire their fields since last year, news website Saigon Times Online said on April 3, citing company chairman Le Nhu Linh. The company said it is ready to spend "hundreds of millions of dollars" investing in overseas gas fields over the next five years, and transport the outputs to Vietnam, according to the website. PV Gas expects the expansion to help double its assets in 2020 from an estimate of VND56.7 trillion (US$2.5 billion) at the end of last year, thus increasing its presence in Asia, CEO Duong Manh Son said in the website. Controlling around 70% of the domestic market of liquefied petroleum gas, PV Gas posted revenue of more than VND64.5 trillion (US$2.84 billion) last year, down 12.2% from 2014, according to the company's latest figures. PetroVietnam, which currently owns a stake of 96.7% in PV Gas, has been expected to reduce its ownership to 75%. No progress of the share sale plan has been reported since it became known in 2014. PV Gas raised about $97 million in an initial public offering in 2010, which was considered the biggest ever at the time. Perfect or nothing unseemly demands slow progress Vietnam may have such high ambitions with each of its IT projects that it may well delay the country’s realisation of its desired goals. According to FPT Information System’s general director Pham Minh Tuan, based on FPT’s practical experience in developing so-called smart cities, through the Internet of Things (IoT), the drawbacks in any given IT projects come down to the budget, executive determination, implementation methods, communications management, and human resources. The implementation method, in particular, is arresting the country’s IT development at present, said Tuan. “IT contractors around the world generally praise Vietnamese people for being clever. And yet because we are clever, we often come up with unusual ideas or requests, which can be complicated or rather different from the rest of the world, to actually put into practice,” said Tuan, during an interview following the conference on the Vietnam Digital Government 2016, organised by the Hanoi Department of Information and Communications and IDG Vietnam recently. “It could therefore take twice as long to implement an IT project in Vietnam than in other countries,” he stressed, citing that while it took FPT a total of eight years to implement a budget management system for the nation, it only took 16 months to put the exact same system into practice in Cambodia. “Also, it merely took a year for us to execute a tax system for Bangladesh.” Tuan said that these countries were willing to follow the world’s best practice, and they made no attempts to innovate, which cut short the implementation process. In addition, Vietnam is also acting as a perfectionist, in a sense that it always desires to perfectly downsize each IT project, which in turn leaves the country struggling to come up with ideal solutions. “What is actually needed the most is really putting each project into practice,” Tuan said. By developing digital government (eGov), for instance, enables the government to improve its management, administration, and services through the effective application of information technology. While IT applications can obviously do their job and meet perhaps 50-60 per cent of the government’s requirements at first, local authorities, on the other hand, expect the new system to work seamlessly at once. “And because the system cannot meet their full anticipation in one go, they will not even try to apply the technology,” he shared. “For any technology employed around the world, it normally takes four or five years to see tangible results or fine-tune it to fully meet the desired expectations. Vietnam should not rush the end results.” The development trail of IT applications in Vietnam’s e-government has in fact faced numerous challenges from an undeveloped IT infrastructure and implementation methods. In 2015, Vietnam was ranked as the 102nd in the ICT Development Index of International Telecommunications Union, falling behind its 94th spot attained in 2014. IT applications in the operation of local government organisations is urgent in the sense that Vietnam has started to integrate deeply into the global economy. The country, as such, must put up its eGov as quickly as possible. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR