BUSINESS IN BRIEF 26/5 MoU to support Vietnamese garment businesses signed   The Ho Chi Minh City Association of Garment Textile Embroidery and Knitting (Agtex) and the TUV SUD Vietnam company, on May 25, signed a Memorandum of Understanding (MoU) on helping Vietnamese garment exporters enter the global market. Under the MoU, Vietnamese businesses will receive assistance from the TUV SUD in product testing and management system certification. Agtex Chairman Pham Xuan Hong said that the MoU will create favourable conditions for businesses operating in the field, especially in the context that international standards for product safety and quality vary widely. Sathish Kumar Somuraj, General Director of TUV SUD Vietnam, said that Vietnam has signed a number of free trade agreements (FTAs) with major markets such as the US, the EU, Japan and the Republic of Korea. Those FTAs not only bring opportunities for Vietnamese exporters but also require domestic manufacturers to meet standards in product quality and safety. TUV SUD is an internationally recognised testing and certification body, with over 40 years of experience providing testing, management systems assessment and certification services. Its branch in Vietnam was set up in September 2006. BRG named among top 10 developers in Vietnam On May 20, Vietnamese developer BRG received the BCI Asia Top 10 Developers Awards for 2016 with its 5-star hotel, trade centre, and luxury condo project at 14 Tran Quang Khai Street in the northern city of Haiphong. The project, located on a 8,300 square metre land plot, includes two buildings, namely the 5-star Hilton Hai Phong Hotel & Residences and the trade centre and luxury condo, representing a combined investment of VND2.2 trillion ($100 million). The project is expected to become operational in 2018.   Other companies receiving the award included HBCI, MIK Group Vietnam Corporation Company Limited, Novaland Investment Group Corporation, Phuc Khang Corporation, SonKim Land, Sun Group, Tan Hoang Minh Group, TNR Holdings Vietnam, and Vingroup JSC. BRG provides services in many areas, including real estate, hospitality, entertainment, golf courses, trade, retail, production, and construction. In real estate, BRG has developed projects in most major cities in Vietnam, with a focus on commercial buildings with the BRG Commercial brand, apartments with BRG Homes, apartments for rent with BRG Suites, and hotels and resorts with the BRG Hospitality brand. In addition to the Haiphong complex, BRG has a range of projects for sale, including the AquaSpring project at 282 Nguyen Huy Tuong street, Thanh Xuan district, Hanoi, high-end apartment project Oriental Westlake at 174 Lac Long Quan, in Tay Ho district in Hanoi, and resort villa project BRG Coastal City in Do Son, Haiphong. BCI Asia Top Ten Awards recognises the ten leading design and development enterprises that have made the greatest contribution to the built environment over the prior year. The awards are bestowed on the architectural and development firms with the greatest aggregate value of projects during the last full calendar year. These metrics are then weighed by the extent of their sustainability as established by BCI Asia’s comprehensive criteria and confirmed green building ratings awarded through WGBC- accredited certifications. The award is handed out in seven different Asian territories, including Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Second Eximbank AGM inconclusive The second annual general meeting of Eximbank has ended up in chaos on May 24, as the lender’s board of directors and shareholders have once again failed to find a common ground on the election of additional board members. Since the number of Eximbank shareholders registered to attend the first annual general meeting (AGM) was less than minimum requirement of 65 per cent of voting shares stated in the bank’s charter, the Ho Chi Minh City-based bank could not successfully hold the meeting programmed on April 29, and consequently rearranged it to  May 24. 618 shareholders, representing 93.8 per cent of the total voting shares, were recorded attending the second AGM. The meeting, however, could not kick off smoothly when 28.03 per cent of the shareholders disagreed to carry out the AGM, saying that regulations would not allow as many as five people to chair the meeting. The impasse was broken by Tran Le Quyet, head of Supervisory Board, and Naoki Nishizawa, representative of Sumitomo Mitsui Banking Corporation, the Japanese strategic shareholder of Eximbank, who stepped down from their seats to allow the AGM to continue. Nishizawa is also currently a member of Eximbank’s Board of Directors (BOD). The election of two additional BOD members was brought to the table once more, picking up from where it was left off at the first AGM. The BOD, however, noted that it was not the right time to elect new members at this stage but, with all respect to shareholders, it agreed to include recommendations to elect additional BOD members in the AGM agenda for further discussion.   Prior to the first AGM held on April 29, the bank’s BOD received letters from representatives of two domestic shareholder groups, one owning 11.82 per cent and represented by Nguyen Thi Xuan Loan, and the other holding 10.42 per cent of the voting shares, represented by Pham Huu Phuong. Both groups requested Eximbank to elect two additional board members to make up the 11 members agreed upon during the bank’s unusual AGM held in mid-December 2015. As the second AGM could not be concluded at the end, as the venue was booked for another function from noon onward, Eximbank said that it will be holding an extraordinary AGM, scheduled on August 4, to carry on with the selection of additional members of the BOD, in accordance with current regulations. Eximbank shareholders can submit nominations of BOD members from June 17 through to June 30. Fed raising interest rate to have negligible effect on USD/VND exchange rate: experts The Federal Reserve’s possible raising of the interest rate in June may not cause the USD/VND exchange rate to fluctuate too much, according to some experts. The reason is that the new foreign exchange rate management mechanism put in place by the State Bank of Vietnam (SBV) has effectively prevented speculation on the US dollar. According to the Fed’s most recent bulletin, most officials thought “it likely would be appropriate” to raise rates in June.   In Vietnam, experts are of the opinion that, given the Fed’s cautiousness, it would only raise the rate by 0.25 per cent in June, if at all. This raise, according to Can Van Luc, director of BIDV Training School, is surely going to affect Vietnam, but not too greatly. Nguyen Van Dung, chairman of Tan Viet Securities, said the 0.25 per cent rate is not too big. “Besides, the new exchange rate control mechanism, namely the central exchange rate, makes speculation harder so it is not likely that there is going to be big fluctuations in the foreign exchange market,” Dung said. Other experts also said that if the Fed increases the interest rate, the USD/VND exchange rate is going to change, but only gradually: no steep rise is on the horizon like it was the case at previous raises. “In the previous times when the exchange rate rose sharply and the market showed signs of a shortage of the USD, it was all because of big commercial banks holding vast volumes of USD for speculation. However, with the current control mechanism that the SBV put in place, the exchange rate changes by the day and is difficult to guess, so speculation becomes harder. Moreover, the SBV can see how much USD commercial banks have and know what they are doing, which will likely discourage them from speculation,” another expert said. The biggest worry is China letting the Yuan fall. According to economist Vo Tri Thanh, if the Fed raises the interest rate even by 0.25 per cent, the USD is going to be stronger. Meanwhile, the Yuan is continuously getting weaker. “If China lets the Yuan fall, the Vietnamese economy is going to suffer,” he said. “Recently the Fed has been hesitant to raise interest rates and the Yuan has not been falling as much as expected, so the foreign exchange market in Vietnam has been quite stable. However, with the Fed possibly raising the interest rate once more and with the very likely possibility of China letting the Yuan fall, as well as other currencies’ possible devaluation, the market is under a lot of pressure,” Thanh said. Though the exchange rate has not seen big increases since the beginning of the year, the pressure still exists. Remittances and foreign direct investment are both increasing, but Nguyen Duc Thanh, director of Vietnam Institute for Economic and Policy Research, said that the country’s foreign reserves are decreasing, all the while Vietnam still maintains a trade deficit. Though the SBV has recently managed to stabilise the exchange rate, experts said that by the end of this year it will have to raise the USD/VND exchange rate by about 2-3 per cent, compared to the end of last year. When the exchange rate rises, the biggest difficulty for the government and the SBV will be to cut or at least keep down interest rates. The government and the SBV hoped to decrease the annual lending interest rate by between 0.5 and 1 percentage point, but an exchange rate rise might put that goal out of reach. US Secretary of State believes in Ho Chi Minh City’s vision, ambitions United States Secretary of State John Kerry has expressed his belief in the vision and ambitions of Ho Chi Minh City development during a talk with the city’s Party chief. The U.S. official joined Secretary of the Ho Chi Minh City Party Committee Dinh La Thang for a meeting at 7:45 pm on Tuesday at the Bitexco Financial Tower in District 1, discussing the Vietnam-U.S. relationship and the development of the southern metropolis. The two greeted each other with warm embraces and smiles on their faces before sitting down for a friendly conversation without any advanced schedule or specific topic. They started off recalling memories and stories that represented the tight relationship between the two nations. According to Secretary Kerry, sitting on the 48th floor of the building reminded him of 20 years ago, when he was enjoying a cup of coffee at one of the high spots in the southern metropolis and thinking about the bright future for ties between the U.S. and Vietnam. The visit of President Barack Obama has proved that such a future is happening, as evidenced by the hearty welcome of tens of thousands of Vietnamese citizens and by the people in Ho Chi Minh City in particular, the U.S. official stated. Vietnam probably had the largest number of people to welcome the U.S. president on the streets, Kerry added. He assessed that Ho Chi Minh City had been developing at a fast pace in recent years, before expressing his belief in the vision and ambitions the southern metropolis is striving for. Secretary Thang replied by extending his gratitude for all the efforts that the U.S. Secretary of State has made in cementing cooperation between the two nations over the past 20 years. The Ho Chi Minh City Party chief praised the Fulbright University project in Vietnam, considering the facility a great place to nurture Vietnam’s human resource, which he hoped would contribute to national development as well as the Vietnam-U.S. relationship. The institution is expected to be a university of the Vietnamese people, for the Vietnamese people, and home to an excellent Vietnamese labor force. The two officials later came to the helipad situated on top of the Bitexco Financial Tower to enjoy an entire view of Ho Chi Minh City. Mitsubishi Vietnam recalls over 2,500 Zinger GLSs Vietnam Registry has given approval to Mitsubishi Vietnam recalling its Zinger GLS model. It is to recall 2,581 Zinger GLS vehicles produced from April 9, 2008 to October 17, 2012, to address problems relating to the airbags. Mitsubishi Vietnam did not reveal the name of the airbag supplier. The recall program will start from June 1 and finish on May 31, 2017. Airbags will be inspected and problems parts replaced. Inspections should take about 30 minutes each. Vinamilk releases 2016 business targets Vinamilk’s recent annual general meeting passed its business plans for 2016, including plans for broadening foreign ownership, a dividend payment for stage 2 in 2015, plans to issue bonus shares to raise capital, and an employee stock ownership plan (ESOP). Targets for 2016 include revenue to reach $2 billion, an increase of 11 per cent against 2015, and pre-tax and after-tax profit of $450 million and $371 million, respectively, increases of 6 per cent against 2015. Dividends in 2016 will continue to be paid at a minimum rate of 50 per cent of after-tax profit, in two stages: August 2016 and May 2017. Vinamilk expects to issue more bonus shares this year to increase share capital out of ownership capital to 20 per cent (equivalent to an issuance rate of 5:1). The final registration date is to be in the third quarter of this year and charter capital post-issuance will rise by some $108 million. Shareholders also approved plans for issuing nearly 9.44 million shares under an ESOP. It will sell 533,795 shares of treasury stock (collected from ESOPs in 2007 and 2011) and issue more than 8.9 million new shares, equal to 0.74 per cent of all issued shares. On broadening foreign ownership, many shareholders are concerned that Vinamilk will be acquired by foreign investors. Company leaders told the meeting that they have no idea why the State Capital Investment Corporation (SCIC) withdrew its capital and they are also concerned about broadening foreign ownership. Vinamilk’s shares will not be listed on a foreign stock exchange because ownership of foreign investors has reached 49 per cent already. The question of broadening foreign ownership therefore needs further consideration. $89.4 million credit for Vung Ang 1 thermal power plant PVcomBank signed a contract on May 23 in Hanoi to provide credit of VND2 trillion ($89.4 million) for the operations of the Vung Ang 1 thermal power plant. The project is part of the national energy development strategy to 2020 and vision to 2050. Three key groups are involved: Electricity of Vietnam (EVN), PetroVietnam (PVN), and Vietnam National Coal and Mineral Industries Holding Corporation Limited (Vinacomin). PVN has made plans to generate energy to 2025 and targets to become the second-largest electricity producer after EVN and the largest gas-powered electricity provider. PV Power, the only subsidiary of PVN in the electricity industry, has responsibility for meeting targets. To arrange capital for managing and operating the project and its construction, on April 14 PV Power selected banks to provide capital, agreeing to allow PVcomBank to arrange VND2 trillion ($89.4 million) and Vietcombank another VND2 trillion ($89.4 million). PVcomBank has consulted and arranged capital on many large PVN projects, including electricity projects of PV Power, with capital totaling $2.7 billion. PV Power was established in May 2007. By the end of 2015 its total equity was $974.16 million with 26 subsidiaries and associated companies. By May 17, 2016 it had provided 117.3 billion kilowatts to the national grid and earned total revenue of VND125.35 trillion ($5.6 billion). Jetstar Pacific celebrates 8th birthday Jetstar Pacific is offering free return legs on round trip tickets for 26 domestic routes and four international routes as part of celebrations for its eighth birthday. From 11am on May 23 to midnight on May 24 passengers buying round-trip tickets will receive the return leg free. Tickets are selling from VND340,000 ($15.20) to VND360,000 ($16.10). From May 23 to June 23 passengers also have the chance to receive free tickets by checking the promotions at www.facebook.com/jetstarvn. Every week Jetstar Pacific will give out eight round-trip tickets to lucky passengers. Jetstar Pacific was the first low-cost airline in Vietnam and now connects most cities and tourist destinations in the country and flies from Ho Chi Minh City to Singapore and Bangkok and from Hanoi to Bangkok and Hong Kong. It has recently cooperated with Big C and C Express Vietnam to provide more benefits to passengers. After paying their airfare passengers receive a bonus score for shopping vouchers at Big C and C Express Vietnam supermarkets. There are four airlines operating in Vietnam: Vietnam Airlines, Jetstar Pacific Airlines, SkyViet (Vasco), and Vietjet Air. Automobile import from Thailand strongly grows The Ministry of Industry and Trade reported that Vietnam imported 29,054 automobiles worth US$732.64 million in the first four months this year. The number includes 10,155 CBU (completely built unit) ones from Thailand, making it the leading exporter of this item to Vietnam. Explaining the surging import from Thailand, the ministry said import tariff has been cut to 40 percent from 50 percent for CBU automobiles from ASEAN creating conditions for Thai automakers to lower their prices. The import tariff will continue sliding to 30 percent early next year and 0 percent in the following year. In addition, special consumption tax on automobiles will also reduce by 5 percent to 40 percent in July for those with cylinder capacity from 1.5-2 liters. Hence Thai CBU automakers will have more advantages to continue decreasing prices in Vietnam. Eximbank fails to reach debt settlement deal Eximbank’s board of directors at the second general meeting in HCMC on May 24 failed to get approval from shareholders for measures to deal with huge debts which could lead it to move out of the Hochiminh Stock Exchange. According to a document presented by Eximbank’s board, the bank will adopt a slew of measures to settle all losses and keep its profit last year. Eximbank will seek guidance from tax authorities to deduct taxes and recoup after-tax profit after setting aside risk provisions. Eximbank’s undistributed profit had amounted to minus VND817.47 billion by end-2015, according to inspection results of the State Bank of Vietnam in October last year. Eximbank sold properties to Eximland and lent to the latter to fund its acquisitions of those properties, which sent Eximbank’s income up to over VND1.1 trillion as of December 31, 2013. The bank used the proceeds to set up a fund and pay taxes and dividends in 2010-2013. A representative of Eximbank told the meeting on May 24 that the bank has to retain its profit until all accumulated losses have been settled, so it will not pay a 2015 dividend for shareholders. The bank expects to earn VND720 billion in pre-tax profit and VND580 billion in after-tax profit this year, which will be used to cover losses.     In early April, the HCMC exchange issued a warning against Eximbank (EIB) with effect from April 8 as the bank racked up losses in 2014 and 2015. According to the regulations, a warning will be lifted when a firm returns to positive earnings in the following years. If an enterprise reports losses in three consecutive years, it must leave the bourse.      At the general meeting on May 24, shareholders disagreed over the number of board members. Eximbank’s board wanted to maintain the number at nine while a couple of shareholders called for a rise to 11 in line with a resolution of the extraordinary general meeting at the end of last year. At the end of the meeting on May 24, Eximbank shareholders did not reach any agreement on a number of issues such as the bank’s holding of 2015 and 2016 undistributed profit and the number of board members. Techmart 2016 takes place in HCMC The Vietnam Technology and Equipment Market 2016 (techmart 2016) will take place at 79 Truong Dinh, Technology, Science Information Center. The Techmart 2016 attracts over 30 enterprises with 100 equipments, technology meeting investors' demand and the city and Southern region's innovation technology. This is chance to researchers and enterprises to link in innovation activities, technology transfer, helping enterprises integrate into modern technology to enhance the competitive capacity. It also aims to set up and develop technology market, promoting technology transfer in manufacturing and food processing sectors. The techmart 2016 has 8 conferences introducing new technology and environmental solutions. On the sidelines of the event, many experts in processing industry and food security will share experiences and consult in technology transfer. The event will last from May 26 to 27. Many parts of HCMC to face water supply disruption Saigon Water Corporation (Sawaco) announced on May 24 that Tan Hiep water treatment plant would suspend water supply for 11 districts for six straight hours starting 10 p.m. on May 28 till 4:00 a.m. the following day. The corporation ascribed the interruption to Cu Chi Power Company’s installation of 22kV electricity cables in the districts and the water treatment plant’s periodical technical maintenance. The temporary water cut will affect a number of wards in districts 6, 8, 10, 11, Tan Binh and Go Vap. Meanwhile, the impact on districts 12, Tan Phu, Binh Tan, Binh Chanh and Hoc Mon will be milder. Sawaco pledged to resume water supply as planned and called for businesses, schools, hospitals, other utilities and residents to store water for use during the water supply suspension. Since the beginning of this year, a number of water treatment plants in the city have suspended taking crude water from the Saigon and Dong Nai Rivers due to high levels of saline water as a result of prolonged drought. The two rivers are the main sources of crude water for water treatment plants, which have a combined processing capacity of nearly three million cubic meters a day. According to Sawaco, severe drought and salination caused by El Nino have caused an tremendous impact on water resources and affected the water supply capacity of water plants in the city. Sawaco said water levels of upstream reservoirs would fall this year. The Dau Tieng reservoir upstream the Saigon River is 76% full, 928 million cubic meters, and the percentage is 80% for Tri An reservoir upstream the Dong Nai River. May CPI edges up on fuel price hikes Vietnam’s Consumer Price Index (CPI) has edged up 0.54% in May compared to April, the highest rise in months, due partly to an increase in transport fees triggered by higher fuel prices, according to statistics from the General Statistics Office (GSO). The transport group has soared 2.39% in price this month over last month as fuel prices were adjusted up late last month and early this month. The price of food and catering services, which are the most-weighted group in the basket of commodities used for CPI calculation, has picked up 0.36% month-on-month. Of which, food and foodstuff have edged up 0.68% and 0.38% respectively while eating-out services have gone up 0.16%. Food prices have risen by 3.19% over December last year. The higher price in the past months has been attributable to an increase in the export price of rice as paddy output in the Mekong Delta, the country’s key rice producing region, has fallen due to the severe impact of protracted drought and salination. Similarly, prices of many foodstuff items have spiked in many provinces as supplies have fallen short and the fact that China earlier stepped up pig imports from Vietnam. The past five months have seen prices of foodstuffs up 2.19%. The remaining groups with price increases include housing-electricity-building materials rising by 0.88%, culture-entertainment-tourism by 0.34%, beverages-tobacco by 0.11%, household appliances by 0.09%, medicines and healthcare services by 0.05%, telecommunications services by 0.03%, and education by 0.02%. Overall, this month’s CPI has inched up 1.38% over December last year and 2.28% year-on-year. CPI in the first five months has expanded 1.59% compared to the same period last year. Core inflation based on the CPI excluding food and foodstuff, energy and commodities managed by the State including healthcare services and education has grown 0.25% this month against April and 1.87% year-on-year. Core inflation in the first five months has gone up 1.78% over the same period last year. CPI has risen in all provinces and cities this month, with HCMC reporting a pickup of 0.82%, Thai Nguyen 0.76%, Vinh Long 0.84%, and Can Tho 1.07%. Joint force required to battle new counterfeiting The joint force among the Government management agencies, enterprises and consumers must be enhanced in the fight against alarmingly rampant smuggling and counterfeiting. "Efforts have been made, but not enough," Deputy Minister of Industry and Trade Do Thang Hai said at a conference held by the Market Surveillance Agency yesterday. The fight against smuggling and counterfeiting must target the roots of the problem, Hai said. Hai said that tight coordination between management agencies and local authorities in market watching was critical to boost efficiency. Enterprises must play their part in the battle also, he said, urging them to work closely with management agencies, especially in how to differentiate authentic and counterfeit products. Experts at the conference agreed that smuggling and counterfeiting were becoming more "sophisticated" in a variety of sectors including food and beverage, cosmetics and electronics. Meanwhile, the lack of co-ordination, overlap in management, inactiveness of businesses and poor awareness of consumers coupled with light punishments for violations were major reasons why the efficiency of the fight against smuggling and counterfeiting remained below expectation. Le The Bao, president of the Viet Nam Association for Anti-counterfeiting and Trademark Protection, said that enterprises and business associations played important roles in the battle against counterfeiting. However, it would be very difficult for businesses to do it alone, Nguyen Anh Ngoc, from intellectual property service firm Investip said. Ngoc said that to wipe out counterfeit products efficiently, it was important to handle producers and importers of counterfeit products, for which enterprises needed the support of management agencies. Ngoc said that a national steering committee on IP protection and anti-counterfeiting should be founded. Nguyen Duc Hiep from the Viet Nam Steel Corporation said that stronger punishments on violations must be put in place as a deterrent force, adding that counterfeiting was undermining market shares, and prestige of businesses while eroding the business climate and harming consumers. Vietnam's foreign investment surges to over US$10 billion in Jan-May Vietnam has been promised US$10.15 billion of foreign direct investment in the first five months this year, up a staggering 136% from a year ago, according to new data. A statement from the Ministry of Investment and Planning said Vietnam licensed 907 new foreign projects worth US$7.56 billion. Another US$2.59 billion was registered for existing projects. The Republic of Korea remained the top investor among 60 countries and territories by committing another US$3.42 billion, or nearly 34% of the pledges. Luxembourg came second with nearly US$1.25 billion, followed by Singapore with US$907 million. Manufacturing and processing sectors continued to be the top sector, accounting for 65% of the registered funds, followed by information and communication with nearly 13% and real estate, 5.3%. Investment worth US$5.8 billion was disbursed during the period, which was a 17.2% increase from last year. The FDI sector has been enjoying good business in Vietnam this year. It reported a trade surplus of US$9.1 billion in the first five months. Dollar deposit rate of above 0% proposed The central bank should evaluate the possibility of raising the interest rate on US dollar deposits instead of keeping it at zero per cent as it currently is to avoid side effects. This advice was suggested by industry experts according to Pháp luật thành phố HCM (HCM City Law) newspaper. The central bank had cut rates for dollar deposits to zero per cent in December last year, aiming to prevent the hoarding of foreign currency in the country. For the past five months, the policy has proven to be an effective measure, helping the country stabilise the foreign exchange and monetary markets. However, experts said the zero-rate policy should only be a temporary measure and should not be maintained for too long as it could have side effects. The administrative control measure has achieved its goal and should be changed in light of current domestic and international changes, they said. Economist Nguyễn Minh Phong said local people are not familiar with programmes to deposit their dollar savings with no interest, but they do not like to convert these savings into Vietnamese đồng. The dollar holders, therefore, have withdrawn their dollar savings from banks to invest in other channels. In addition, a dollar interest rate hike is indispensable to avoid the outflow of foreign currencies to organisations overseas, especially when the Fed increases its interest rate, Phong said. Another expert, who declined to be named, said foreign currencies have always played an important role in the local economy. Local dollar holders still consider savings an investment channel, so they do not want to deposit their money in banks when the zero rate policy is in effect. Meanwhile, firms still need dollar-based loans to make payments. This is why some banks have managed to offer dollar deposit rates above zero to raise funds for the loans. As a number of banks have not obeyed the zero rate rule, the central bank on May 6 had to order banks not to offer higher-than-permitted interest rates for dollar deposits, warning that banks found breaking the rule would be banned from opening new branches, transaction offices and automatic teller machines and from running certain operations. Economist Đinh Thế Hiển said when banks see a demand for dollar-based loans of firms that have no deposit source, some of them will try to find loopholes in the rule. This causes the market to lack transparency, Hiển said. Hiển said the authorities should adjust the foreign currency policy flexibly in accordance with the market economy and the current situation. Experts said the central bank should set the rate to at least 0.5-1 per cent per year to encourage dollar savings in commercial banks. They said the dollar source could help cut the interest rate in the đồng and create favourable conditions for firms to cut costs. Hiển suggested the central bank should first apply the rate of 1-1.5 per cent per year for dollar deposits in 6- or 12-month terms. He expected the new rate to encourage local dollar holders to keep their savings in banks for long periods. This could also help local banks attract sources of funding from overseas Vietnamese, especially when Việt Nam needs capital for development, he said, adding it was regrettable that a significant amount of money in dollars accumulated by locals had not been invested to meet the country’s economic, social and development needs. A commercial bank representative, who requested to be anonymous, said when the zero rate policy went into effect, some dollar holders continued making deposits at the bank but chose a demand deposit instead of the 6 or 12 month terms they had previously chosen. This action causes banks to face foreign currency liquidity risks, besides not being able to become a foreign currency source for loans, the representative said. The representative added that the zero rate policy could cause a reduction in remittance sources that flow into Việt Nam with the intention of making a profit on the difference in interest rates. Exporting produce to Korea A seminar and business meeting themed “Korean food market access”, supporting Vietnamese businesses boost farm product exports to the South Korean market, was held in Hà Nội on May 24, 2016. Attending the seminar were 12 South Korean food importers, along with Vietnamese businesses and associations. Tạ Hoàng Linh, deputy director of the Việt Nam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said that South Korea was the third largest trade partner and the fourth biggest export market for Việt Nam. The free trade agreement between Việt Nam and the Republic of Korea (VKFTA) took effect at the end of last year, committing to cut more than 90 per cent of tariffs in order to boost opportunities for Vietnamese exports to the country, he said. The free trade agreement would create new export opportunities for more than 500 Vietnamese products, especially agro-forestry and aquatic products like shrimp, crab and fish. Tropical fruits, garments and textiles, wood and mechanic products would also benefit from the relaxation of tariffs. Speaking at the seminar, a representative of the Korean Embassy in Việt Nam said that the Korean market had a population of nearly 50 million people and a high food consumption. Food trade between Việt Nam and South Korea reached US$12 million in 2015. The two countries are also planning to increase trade value in the sector to $20 million by 2020. Kim Nam Hyong, a representative from Amoje Corporation, said at the seminar that the current trend in the South Korean food market is that of packed food products, which were quick and convenient for consumers to use. The target market for these products was not only housewives but also restaurants as they could facilitate many dishes quickly with low numbers of staff, which saves on labour cost, he added. Kim also advised Vietnamese businesses to research the changing tastes of South Korean thoroughly to avoid guarantee successful market penetration. The representative also emphasised food safety as a top priority, to match the country’s high standard of imports, equivalent to that of the US and Japan. Packaging would also need to be attractive, conveying enough information about the product to customers. Talking about the consumption trends in Korea, Woo Deok Kwan from CJ Foods said that Korean customers cared about healthy products, therefore choosing packed food, which could be cooked at home. Simplification in cooking was a current trend in Korea, and Vietnamese businesses should understand this when thinking about exporting their own products, Woo advised. Korea has a variety of pre-packaged products, however there are limited numbers of products containing fruit and vegetables, he said, therefore the country expects to import frozen fruit from Việt Nam. These were products which are available in abundance in Việt Nam, making it an attractive prospect for Korean businesses. Ra Joohee, from Pulmuone Co., Ltd advised Vietnamese businesses to focus on tropical fruits when exporting to Korea. “We expect to import more pineapple and mango from Việt Nam as these products have higher competitive advantages compared to these of other countries”, she said. We also wanted to import frozen rambutan, passion fruit and selected dried fruit from Việt Nam, she said. Việt Nam needed to diversify its products, as well as paying more attention to a product’s appearance and packaging, she suggested. A representative from a Vietnamese food exporter shared with media that the Korean standard was rather strict towards farm products as it was a country producing for its citizen. “This is a compulsory barrier that Vietnamese exporters have to overcome if they want to access the Korean food market”. Japanese investor plans restaurant centre in Da Nang Chedi Trading Company from Japan plans to invest in an international restaurant centre project and an organic vegetable farm in the central city's Cam Le district. The company's board chairman, Junji Tabira, said in a meeting with the central city on May 23. Junji said it would be the first-ever international standard cuisine centre designed as a bungalow on a vegetable farm. He said the cuisine centre would introduce Japanese foods, Asia and European cooking style for tourists and gastronomes in central Viet Nam, while introducing organic farming onsite as a tourism destination. He also said local farmers would join the project as food suppliers or employees. As scheduled, the city has allocated a 6ha farm for the company to develop the project later this year. The city plans to develop a clean vegetable farm spread over 344ha in the district for providing safe food for the city. Da Nang has developed 50 farms to provide 10 per cent of the city's consumer demand for vegetables and farm produce. The project is aimed at increasing investment flows and tourists from Japan to Da Nang city as the number of Japanese tourists trebled as compared to previous years (66,000 tourists in 2015). The city is home to 160 Japanese investors and 37 representatives with a total investment of US$500 million. Route Inn Group from Japan is also developing a coastal resort, the first of its kind in Viet Nam, with total investment of $18 million. The city has already launched a direct air route connecting Da Nang to Narita, Japan in 2014 with seven flights a week, and a direct Da Nang-Osaka route is expected to be put into operation from this August with four flights a week. PVcomBank finances power project The Viet Nam Public Bank (PVcomBank) will lend the PetroVietnam Power Corporation (PVPower) VND2 trillion (US$88.9 million) to develop a power project. The two affiliates of the Viet Nam Oil and Gas Group (PetroVietnam) signed the credit contract in Ha Noi on Monday. The Government has designated PetroVietnam, along with Electricity of Viet Nam (EVN) and Viet Nam National Coal–Mineral Industries Holding Corporation, as the key electricity producers of the country. This is in accordance with a national power development strategy until 2020, with vision until 2050. As of mid-May, PVPower supplied the nation with 117.3 billion kWh of electricity, gaining nearly VND125.4 trillion in total turnover and roughly VND4.8 trillion in pre-tax profits. It contributed about VND7.1 trillion to the State budget. PVPower is a single unit of PetroVietnam that operates in the electric power industry, while PetroVietnam plans to become the second largest electricity producer in the country after EVN, by 2025. PVPower was established in 2007 with a charter capital of VND7.6 trillion, and its equity reached nearly VND21.8 trillion at the end of last year. PVcomBank has VND100 trillion in total assets and VND9 trillion in equity. It has provided financial services to PetroVietnam and its subsidiaries with a committed amount of up to $2.7 billion. The bank also underwrites activities related to payment, tender and contract performance, as well as bond issuance and capital borrowing of other units in the oil and gas sector. Vietnam to consider removal of ceiling milk price Minister of Finance Dinh Tien Dung said Vietnam would consider the removal of the ceiling price for dairy products for children aged under six from July, 2016. Dung said during his meeting in Hanoi on May 24 with Michael Froman, the US Trade Representative, who showed interest in how the implementation of special consumption tax impacts Vietnam’s commitments to the World Trade Organisation, as well as its control over dairy products. He added that the move must ensure competiveness and harmony between enterprises, the State and consumers. Enterprises also have to ensure transparency. Previously, in Resolution No 33/NQ-CP issued on April 30, 2015, the Government agreed with the continuance of managing a ceiling price for powered milk products for children aged under six from June 1, 2015 to December 31, 2016. In the process of implementation, if factors affecting the announced and applied milk prices emerge, the management agency will review and re-establish suitable prices. Enterprises will have to register prices with the Ministry of Finance. Vietnam and the US traded 41.43 billion USD in 2015, which reflected an expansion of 187 times from 20 years ago.-VNA HCM City lead in finswimming comp CM City won seven more gold medals on day two of the National Age Groups Finswimming Tournament held in Phú Thọ Swimming Club in HCM City yesterday. With this result, the team replaced Hà Nội to temporarily take the lead in the medal tally with 11 golds, nine silvers and five bronzes. With nine golds, seven silvers and two bronzes, Hà Nội went to second. While Đà Nẵng finished third with three golds, two silvers and 10 bronzes. The three-day tournament has attracted the participation of 12 teams nationwide competing in Group A for finswimmers aged 16-17 years and Group B for the U15. Athletes are competing for 15 events in boys and girls’ surface (diving with a snorkel) and immersion (diving with an air tank). Pepper futures trading will benefit farmers, says association The Viet Nam Pepper Association's proposal for a pepper futures trading centre was welcomed by farmers who hoped that such trading would give them an upper hand while deciding prices. The association said that the proposal had been already submitted to the Ministry of Agriculture and Rural Development. Do Ha Nam, president of the pepper association, said that starting pepper futures trading was necessary for Viet Nam and would help extend its reach in the global pepper business as the world's biggest pepper producer. Viet Nam currently accounted for 50 per cent of the global total pepper output. Hoang Phuoc Binh, deputy president of Chu Se Pepper Association in Gia Lai Province, said that the international pepper community forecast that Viet Nam would continue to take the lead in pepper exports in the next eight years and the foundation of the pepper exchange would be taken up on an urgent footing. Binh said farmers would certainly benefit from pepper futures trading. Currently, farmers sold their pepper directly to traders and prices often fluctuated significantly depending on the demand. With futures trading, farmers could avoid dependence on traders. Tran Huu Thang, a farmer with 3.2 hectare pepper farm in Dong Nai Province's Xuan Loc District, said to Dan Viet newspaper that he expected futures trading to start soon and help farmers reduce the dependence on traders. Dang Van Chinh, a pepper grower in Binh Phuoc Province said that it was good that futures trading would help keep prices stable. However, he was afraid that the requirement on the output for futures trading could cause difficulties to farmers. Transport fees and procedures were also a matter of concern for farmers, Chinh said. Late last year, a memorandum of understanding was signed between the Viet Nam Pepper Association and the Indian Spice Board, the Indian government's regulatory and promotion agency, for starting futures trading for pepper in Viet Nam. Futures trading for agricultural commodities was not a new idea. In fact, Viet Nam had Buon Ma Thuat Coffee and Commodity Exchange, a pilot cashew exchange in Binh Phuoc Province and the Viet Nam Commodity Exchange. However, those models failed to attract a large number of farmers as they found it inconvenient to bring their products to one exchange. Viet Nam is the world's largest pepper producer and exporter with an annual output of 150,000 tonnes. In the first four months of this year, Viet Nam shipped more than 69,000 tonnes of pepper abroad, worth US$561.86 million. ANZ named Vietnam's best trade finance bank ANZ has been named the best trade finance bank in Viet Nam in The Asset, a financial magazine for Asia's decision makers. The bank announced on Monday that it had also won "Best trade finance client solution in Viet Nam" in the magazine's Triple A treasury, trade and risk management awards 2016. The awards celebrate Asian corporations and banking institutions that have executed the most effective and innovative treasury, cash management, capital and trade finance, and risk management solutions in the region. The results are based on responses of over 700 chief financial officers and treasurers. "Our connectivity and commitment to Asia, including Viet Nam, is a key competitive advantage and makes us relevant to clients driven by regional trade and capital flows," Dennis Hussey, the chief executive officer of ANZ Viet Nam, said. Soft skills contest for students begins in HCM City Samsung Vina Electronics Company and the General Sciences Library of HCM City launched a competition called "Level up – Soft skill opening the future" to help students develop their soft skills. Starting late last week, it tests four skills — brainstorming, teamwork, leadership, and presentation — considered important for young people to work well at a time when the country is rapidly integrating. Tran Anh Tuan, deputy director of HCM City's Human Resource Forecast and Information Centre, said 70 per cent of graduate students lacked foreign language and soft skills. Many people graduate with good scores but are not competent at work whereas someone could have got poor scores but are successful thanks to soft skills, said Tuan. According to organisers, the competition offers contestants a chance to learn from teachers with rich experience. It will go on until the end of July. The first round is available online at http://www.s-hub.vn. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR