BUSINESS IN BRIEF 19/6 Organic farm produce firm attracts investors A number of investors have expressed interest in Vien Phu Organic & Healthy Food Joint Stock Company (JSC) since the owner of HoasuaFoods organic rice brand announced a plan to seek partners. Vo Minh Khai, director of Vien Phu, told the Daily that the company has attracted investment funds, including those from Japan and Singapore, as well as domestic corporate and individual investors after the company announced that it is seeking partners. “We are looking for a partner who can help Vien Phu expand operation and HoasuaFoods brand develop for the benefit of the community,” Khai said. Khai added that Vien Phu is in talks with partners to select the most suitable one for the company’s development strategy.    Khai said the partner could invest or even acquire Vien Phu if it has a strong financial position and a long-term development vision to support HoasuaFoods brand to grow stronger. Vien Phu turns out organic products, including black, white and red rice, basil, cilantro and fish. The company sells these products via an extensive distribution network covering most provinces and cities in the south. Inter-bank rate remains low due to strong liquidity The inter-bank rate has been stable at a low level of roughly 2 per cent per year for the past month as a result of the banking system's liquidity. According to reports from the State Bank of Viet Nam, the average overnight rate last week stood at 1.65 per cent per year. The rates for one week and two week tenures were 1.9 per cent and 2.32 per cent, respectively.     The inter-bank rate in the week ending May 27 even dropped sharply to 0.66 per cent per year, the lowest level for the past several years. While the rate sometimes dropped sharply over the past three years, it fluctuated around 1 per cent. The Bao Viet Securities Company (BVSC) attributed the drop to the significant improvement in the banking system's liquidity. According to BVSC analysts, the central bank bought roughly US$8 billion in the past three months to increase its foreign reserves. Thus, roughly VND178 trillion was pumped into the market, strengthening the liquidity of the banking system. Although the inter-bank rate inched up again in the first week of June, BVSC forecast the liquidity would remain positive. Institutional changes help boost economic growth, said experts Slow institutional change is seen as a ‘bottle neck' in boosting Viet Nam's economy and growth in the context of world development during the next two decades, according to Nguyen Van Vinh. Vinh, Vice director of Strategy Institute under the Ministry of Planning and Investment, made his remarks during a workshop entitled Viet Nam 2035 Aspirations: Development of Dynamic Private Sector and Need for Institutional Modernisation in the central city yesterday. Vinh emphasised that institutional reform in Viet Nam has yet to catch up with rapid changes in the world economy and trade, and the country can sometimes appear backwards, in comparison to other nations. Vinh, who is a member of the compilation council for Viet Nam's Report 2035 by the World Bank, said Viet Nam remains behind other countries in the region and world in economic development. "Viet Nam is a success story, following a 30-year renewal process, but we lag behind other countries economically due to different reasons, including the small scale economy, low income, poor productivity, serious environmental degradation and ineffective state owned sector investment," Vinh said, as the main speaker at the workshop. "Reform is always urgent and it's a key for Viet Nam's aspirations in 2035, in moving towards prosperity, creativity, equality and democracy," he said. Vinh stressed that the private sector and market economy will play a key role and focus in Viet Nam's economy in the future. Meanwhile, senior economic advisor Pham Chi Lan said per capita income in Viet Nam in 2013 remains less than 40 per cent of the world average, in terms of PPP (Purchasing Power Parity), and 20 per cent in terms of market prices. She pointed out that serious existing problems in the economy include low and decreasing productivity, weak innovation systems, and ineffective urbanisation related to growth, as well as ‘grey' growth and climate change. "Viet Nam has been seen as having the quickest growth and a stable economy, as well as the successful alleviation of poverty. However, total factor productivity (TFP) was seen as very poor, falling from 5.5 per cent per year to 3.4 per cent in early 2000," Lan said. She blamed ineffective investment in the public sector and state-owned enterprises, noting that this was one of the major reasons for ‘brown' growth in Viet Nam. Lan also said the Foreign Direct Investment sector, which contributed 70 per cent of the country's exports and 50 per cent of manufactured industry, has no link with domestic enterprises, since the FDI sector only uses 26 per cent of domestically produced materials. Meanwhile, the private sector – one of three major economic elements in Viet Nam – is operating with largely small and medium sized investments, noted Lan. She said the scale of investment in the private sector fell 50 per cent, in comparison to 2002, and the number of enterprises with over 300 labourers is rare. Lan added that the country issued many laws, but the enforcement of these laws is seen as being very poor. Tran Thi Lan Huong, from the World Bank, said institutional changes are a key for the country's growth in 2035. "Drastic institutional reforms would clear the way for Viet Nam's aspirations in 2035, along with more transparency and publicity. People and businesses have more rights to approach information from the Government in policy, planning and others," Huong said. She said corruption is still a challenge for Viet Nam's economic redevelopment. "A survey from the World Bank revealed that 91 per cent of businesses said they had to pay informal charges to access information regarding legal documents and investments from local administrations, while they still receive information about the Government's projects or plans through personal relations." Huong said appointments still depend on relations, and not only the capacity of proposed officials. The General Secretary of the Viet Nam Chamber of Commerce and Industry (VCCI), Pham Thi Thu Hang, said Viet Nam needs to build new and flexible institutions to determine how to boost private sector and labour productivity. She said the development of domestic businesses must be linked to FDI and global supply chains, as well an enlarged investment scale. Hang said Viet Nam has 500,000 enterprises and 4.5 million household businesses, but the number of labourers in businesses has fallen from 49 to 25, on average. She also said Da Nang has been seen as a dynamic development city in Viet Nam, leading in the Provincial Competitive Index (PCI) for many years. According to the city's investment promotion centre, it takes investors only five days to obtain business licences in Da Nang. Of note, in 2013 the Viet Nam Tokai company's automobile and spare parts and accessories plant received a business licence in just one hour – being the quickest example in Da Nang. Banks required to report monthly interest rates State Bank of Viet Nam has ordered credit institutions and branches of foreign banks to report their lending, capital mobilisation and interest rates in Vietnamese dong every month going forward. The reports must be submitted to the central bank's Monetary Policy Department on the 20th of every month, starting from June and lasting until the end of this year. The move is aimed at cutting lending rates to support domestic businesses and production. Many banks, such as ACB, Sacombank, VP Bank and Eximbank, have also lowered their deposit rates by roughly 0.1-0.2 per cent per year for the first time this year since the end of May. This deposit interest rate reduction is expected to help banks further cut lending rates. State Bank of Viet Nam Governor Le Minh Hung recently pledged that the banking system would try to cut the lending rate by roughly 1 per cent this year. The central bank also affirmed it would regulate the inter-bank rates in accordance with the market interest rate. First phase of Hanoi water plant to kick off shortly The first phase of the Duong River Surface Water Treatment Plant will be finished by 2020, according to the Vietnam - Oman Investment Company (VOI). The project is a key national project in Hanoi’s 2030 water plan and vision to 2050 and is being developed by VOI, the New Technology Application and Tourism One Member Company Limited (NEWTACO), VietinBank Capital, and the Hanoi Water Limited Company (Hawaco). Construction is to begin this year or next at the latest. “The Duong River Surface Water Treatment Plant is one three major plants in the master plan of the government to provide a clean and reliable source of water to northern and southern parts of Hanoi, with a capacity of 300,000 cu m per day in the first phase and 600,000 cu m per day in the future,” said Sheikh Sultan Saif Hilal Al-Mahrouqi, Ambassador of the Kingdom of Oman to Vietnam, when the project was licensed on June 3. Diplomatic relations between Vietnam and Oman were established in 1992 but only recently have trade and investment cooperation deepened, including the setting up of the VOI joint venture between the two sovereign wealth funds of Oman and Vietnam - the State General Reserve Fund (SGRF) and the State Capital Investment Corporation (SCIC). “The joint venture has invested throughout Vietnam with a strategy of focusing on sectors that are essential to long term economic development and to the benefit of the local population, such as infrastructure, healthcare, and consumer goods,” the Ambassador added. “This water treatment plant is in line with that investment philosophy.” Founded in 2009, VOI has bolstered its investment in Vietnam over recent times. It mainly focuses on long term and valuable investments in growth sectors such as power plants, toll roads, water supply, ports and logistics, consumer goods, healthcare, agriculture, and manufacturing. It has been involved in projects such as Vinmec International Hospital, the Vinh Son - Song Hinh Hydro Power Plant, the Toan My Highway 14 BOT JSC, the Ho Chi Minh City Infrastructure Investment JSC (CII), the Saigon Water Infrastructure Corporation (SII) in Ho Chi Minh City, and this project in Hanoi. Rice export slumps in second quarter Rice export volume in the first quarter this year posted a strong year on year growth but drastically dropped in the first two months of the second quarter, reported the Vietnam Food Association (VFA). Rice export volume and value grew 57.6 percent and 51.1 percent over a year back in the first quarter, high compared to annually average level for the same period. The increase was thanked to contracts signed in 2015, especially Government to Government (G2G) deals with Indonesia and the Philippines and a large number of commercial deals with China. According to the VFA, the strong growth in the first quarter and drought have affected rice productivity and output in the Mekong Delta and highly increased domestic rice prices. Therefore, exporters have offered higher prices than those from India, Pakistan and Thailand. Vietnamese rice price was US$10-20 a ton higher than Thai rice. This has caused many businesses hesitate and not sign new export contracts. Commercial contracts especially from China drastically fell while G2G contracts nearly ran out in April and May, resulting in volume drop to below the annually average level of 600,000. The strong fall has sent Vietnam to reduce rice export norm in the second quarter from 1.8 million tons to 1.5 million tons. However with current situation, the second quarter is likely to export about 1.3-1.4 million tons, the lowest for the same period of the last several years. The VFA forecast that the number will approximate only 450,000 tons in June. Total export volume thus might reach 2.7-2.75 million tons in the first half this year. Government to continue investment in Vung Ang EZ infrastructure After ten years of building and development, the 22.78 hectare Vung Ang Economic Zone has gradually been built into an industrial, commercial and service center and a modernly and sustainably developed urban area in the north central province of Ha Tinh, said the provincial Economic Zone Management Board. The Government will continue giving capital priority to building of technical infrastructure of the key coastal economic zone in the phase of 2016-2020, according to the board. The Vung Ang is now home to over 500 businesses and 109 projects which have been licensed with VND46,146 billion (US$2.07 billion) and US$11,469 million in registered capital. Projects at the zone have been implemented and operated with a growth in production and trading. The Vung Ang EZ submitted VND12,571 billion to the state budget in the phase of 2011-2014. The contribution amount was VND8,027 billion in 2014 and VND7,470 in 2015 accounting for 62 percent of the province’s total budget revenue. As of April this year, the zone has had 21,860 workers with the average income of VND6.8 million a person a month. In the future, the Vung Ang is expected to be a steel refining center with its capacity of 22.5 million tons a year, thermal power center with the capacity of over 7,000 MW and oil refinery center having the capacity of 16 million tons a year. In addition, the Son Duong deep seaport complex will receive vessels of up to 300,000 tons. The total investment capital in Vung Ang EZ is expected to approximate US$30 billion. HCM City looks to open tech exchange in 2018 The HCMC government looks set to launch a tech exchange in 2018 to boost development and application of scientific and technological advances and innovations, and labor productivity. The exchange is part of a major scientific and technological development program for the 2016-2020 period approved by the city government on Tuesday. The program expects annual growth of 15% in sales of scientific and technological products and services in the next five years. The city will have the tech exchange connected to those of other provinces and nations in 2019. To this end, the city will develop a database of scientific and technological products, and provide information about inventions, online tools for technological assessments, reports on technological trends and successful transfers of technological models. In 2011, the HCMC Department of Science and Technology implemented a pilot scheme for a tech exchange model in the city.       The department said around 15 Vietnamese officials were sent to Shanghai to learn about the operation of a tech trading floor early last year and more will go to China for this purpose. Besides the establishment of the tech exchange, the city looks to have 70% of total industrial production enterprises investing in new technologies in 2020 and their investments would account for 8% of their pre-tax profit. Over the years, the department has conducted a number of programs to promote commercializing research results and inventions but the effort has not been as successful as expected due to a lack of investors. US$170-million project proposed for Central Highlands road upgrade The Traffic Safety Project Management Unit has proposed a US$170 million project to upgrade part of National Highway 19 which connects the Central Highlands and the central region of Vietnam. The unit suggested the Ministry of Transport seek the Government’s nod for the project with funding sourced from the World Bank (WB), a Vietnam News Agency report said. The highway stretches 243 kilometers and links the Central Highlands and the south-central provinces of Vietnam and those bordering Laos and Cambodia. It starts from Quy Nhon Port in the central province of Binh Dinh and ends at Le Thanh border gate in the Central Highlands. A 77-kilometer-long section of the highway has been upgraded under the build-operate-transfer (BOT) format, and the investors have set up two tollgates in Binh Dinh and the Central Highlands province of Gia Lai to collect tolls in 20 years to recover capital. The remaining part of the highway is unattractive to BOT investors as they are not allowed to establish more tollgates on the highway since two toll stations on the same road must be at least 70 kilometers apart. Therefore, the ministry proposed building the remaining 140 kilometers of the highway plus 30 kilometers of bypass in urban areas, financed by the proceeds from Government bond sales and official development assistance loans. However, these two funding sources for the project are not feasible as Government bonds come with high coupons while the WB plans to stop providing low-interest loans through its lending arm International Development Association (IDA) from July 2017 so there will not be enough time for completing relevant procedures. Therefore, the unit suggested taking out loans from the International Bank for Reconstruction and Development (IBRD) under the WB to execute the project as well as applying a special mechanism to turn it into a reality. Around US$150 million out of the US$170 million needed for the project is expected to come from the IBRD and the remainder from the State budget. If the Government approves the project, the unit can complete an initial investment plan for it this month and the pre-feasibility study in January 2017. The unit also wanted a no-bid contract for the consultant of the feasibility study. The project aims to give a boost to socio-economic development in the Central Highlands region. Emirates announces new country manager for Vietnam Emirates Airline on Monday appointed Haitham Al Battawy as country manager for Vietnam, effective from June 2016. Haitham Al Battawy, a UAE national, joined Emirates in 2006 as part of the UAE National Trainee Management Program, and was first appointed as a commercial manager.  In 2009, he became country manager in Libya and started his journey across Emirates’ global destinations. He held this position in Oman, Iraq, and most recently in both Egypt and Libya. Haitham holds double bachelor’s degrees in Finance & Banking and Management from University of Dubai and a Master’s in Strategic Marketing from University of Wollongong Dubai. With a decade of experience in aviation industry, Haitham is expected to bring a strong leadership to Emirates’ Vietnam team, especially when the airline is going to launch a new daily service from Hanoi and Myanmar’s Yangon to Dubai on August 3. In this new role, he will be responsible for overseeing Emirates’ operations, optimizing revenue and expanding the airline’s footprint within the country. Emirates Airline flies to 155 destinations in 81 countries and territories across the globe. In Vietnam, Emirates started operating daily and nonstop flights between HCMC and Dubai since 2012. The airline will also launch a daily service to Hanoi on August 3. Passengers travelling with Emirates from either HCMC or Hanoi from August 3 will be on board Emirates' Boeing 777-300ER, including more than 2,000 channels of the latest movies, TV shows and music from around the world on the award-winning in-flight entertainment system. They also will be able to accumulate spending miles to exchange rewards, and benefit from a generous baggage allowance of 30 kilos in Economy Class and 40 kilos in Business Class. Cross-border e-commerce alliance along Mekong River to be established Companies and organizations from six countries along the Mekong River have established a business alliance, with a view to building a cross-border e-commerce platform. The information was announced at the forum on the Greater Mekong Sub-region (GMS) held in Kunming, Yunnan, China. The alliance is expected to boost cross-border trade through e-commerce, said chairman of the alliance Yi Hong. The GMS Economic Cooperation Program was launched in 1992 by six countries along the Mekong River including Cambodia, China, Laos, Myanmar, Thailand and Viet Nam with the aim of supporting regional infrastructure projects as well as promoting trade, investment and economic development. Members of the alliance include e-commerce institutions, trade promotion institutions and e-commerce companies. The platform will be available in six languages of the member countries and English, providing training programs to encourage new companies to focus on e-commerce transactions. As many as 100,000 commodity categories are expected to be traded in the early stage. Govt plans to borrow VND452 tril. this year The Government plans to borrow a hefty VND452 trillion (US$20 billion) and spend around VND273 trillion paying debt this year. Prime Minister Nguyen Xuan Phuc has signed Decision 1011/QD-TTg approving the Government’s borrowing and debt payment plan for this year. The Government expects domestic capital to be raised from bond issues, the social insurance fund and State Capital Investment Corporation (SCIC) to amount to VND336 trillion. Official development assistance (ODA) and concessional loans are estimated at US$4.7 billion, or VND99 trillion, including VND43 trillion for re-lending and VND56 trillion for financing the budget deficit. The Government will also raise VND17 trillion from other sources such as selling bonds on global financial markets. Bonds in yen will be issued for the Japanese market if needed. Of the VND273 trillion for debt payments, direct payments will be VND154 trillion while payments for foreign loans used for on-lending and loan rescheduling are estimated at VND24 trillion and VND95 trillion respectively. The Government will implement the borrowing and debt payment plan based on the 2002 State Budget Law as the new law will not come into force until 2017. Under the new law, G-bonds will be counted as part of the budget deficit. A report of the National Assembly Financial and Budgetary Committee presented last March showed overspending had kept rising year after year. The budget deficit made up 4.4% of GDP in 2011 and the percentage rose to 5.4% in 2012, 6.6% in 2013, 5.64% in 2014 and 6.11% in 2015. As for budget spending in the 2011-2015 period, the committee said public debt is rising fast and approaching the ceiling approved by the legislature. The State budget still needs to allocate capital for many expenditures, especially social security. The proportion of routine expenditures has surged while development investment has declined, according to the committee. HCMC sees strong credit growth in Jan-May Credit expanded 5% in HCMC in the first five months of this year, the highest in three years, according to an updated report of the central bank’s branch in the city. The report showed total outstanding loans amounted to VND1,290 trillion in January-May, up 5% against the end of last year. Enterprises took out bank loans to implement their production and expansion plans. In January-April, credit growth stood at 4.2%, well above 3.5%, 0.7% and 1.7% in the same period of 2015, 2014 and 2013. Meanwhile, capital mobilization had exceeded VND1,630 trillion by end-May, a 4.46% pickup compared to the end of last year. Of which, residents’ deposits reached VND883 trillion, accounting for 54% of the total and rising by 7.84% against end-2015. The central bank’s HCMC branch said in the five-month period, interest rates were 5.2-5.3% per year for less-than-six-month deposits and 5.75-7% for deposits with tenors of six to 12 months. The rates for over-12-month tenors reached 6.6-7.2%, up 0.4 percentage point compared to the end of last year. A couple of banks offered the highest annual rate of 8% for these tenors. Interest rates of short-term loans moved between 6.7% and 8.9%, and those of long-term credit at 9-10%. A number of lenders hiked medium- and long-term rates to entice depositors amid rising demand of borrowers. In the first four months of this year, total outstanding loans with medium- and long-term tenors surpassed VND746 trillion, up 5.1% against end-2015 and making up 60% of total outstanding loans. Meanwhile, short-term outstanding loans inched up 3.12% in the period. The HSBC Global Research team in a report has expressed concern over Vietnam’s recent move to loosen credit to stimulate private sector and government spending. In early May, Prime Minister Nguyen Xuan Phuc urged ministries and agencies to do whatever it takes to achieve the gross domestic product (GDP) growth target of 6.7% for this year while reining in inflation.     However, HSBC said it is difficult to achieve the growth target, given the weakness of the first-quarter growth number and larger-than-expected headwinds to exports. But larger-than-expected headwinds to trade mean that domestic demand, in particular investment, will have to rise strongly to make the growth target a reality. The Government’s pro-growth stance suggests the central bank is likely to let credit growth, which had reached 17.3% year-on-year as of April 2016, to run closer to 20% in the second half of the year. Construction bank, debtor at odds over debt Vietnam Construction Bank has said bad debt owed by Futa Bus Lines Phuong Trang Inc (Futa) amounts to VND9.5 trillion (US$425.5 million) while the debtor has insisted the actual figure is just VND3.4 trillion. A source familiar with the matter said Futa’s debt including principle and interest at the bank totals VND9.5 trillion (US$425.5 million). At the end of last month, the bus operator wrote to the bank claiming that it had used real estate projects, 211 coaches and other assets as collateral with a total value of VND14 trillion. However, the construction bank said the assets had been valued at less than VND7 trillion before the institution was acquired by the central bank for restructuring. According to the bank, the enterprise has repaid just 0.3% of the principle in the past five years while interest and the major part of the principle have remained unsettled. The bank on Wednesday announced that it had filed a lawsuit against the enterprise over VND3 trillion (US$134.2 million) in unpaid debt. The lender said the loans were disbursed by its predecessor TrustBank. If the bank wins the case, it would liquidate Futa’s assets to recover debt which has been classified in group No. 5 of potentially irrecoverable debt. Both sides have met several times to help the borrower deal with difficulties and pay its debt but to no avail, forcing the bank to take legal action. Property investment is the culprit behind Futa’s financial woes, not bus services as its core business. High interest rates triggered by high inflation from 2009 to 2012 and the real estate market slowdown rendered the firm unable to repay debt. FutaLand, its real estate investment arm, then announced huge projects such as New Pearl in HCMC’s District 3, The Landmark City in District 1, Quang Thuan in Thu Duc District, Golden Gate in District 7 and others in Danang City on the central coast. The firm has been repeatedly restructured in recent years. Meanwhile, a source from Futa told the Daily it would sue the bank for damaging its image. According to the source, the bank has a list of many property projects which Futa has used to secure its loans and the projects are worth hundreds of billions of dong each. In the document sent to the bank, the enterprise accused the lender of providing inconsistent information about its debt. For instance, the bank in a document mentioned working sessions between the two sides to solve the problem but then said Futa had yet to arrange a meeting with it. Regarding the lawsuit over the VND3-trillion debt, the firm said its actual debt at the bank is just VND3.4 trillion. In 2012, it was the company which sought a lawsuit as per the Law on Credit Institutions to determine an exact debt figure. The enterprise suggested the bank give an answer for VND14 trillion worth of assets used as collateral for loans if it settles the VND3.4-trillion debt; otherwise it will sue the bank for the damage caused. Both sides are expected to meet on June 14, the source said. Last year, VNCB sold bad debt worth VND500 billion to Vietnam Asset Management Company (VAMC). This year, it will continue selling bad debt to VAMC and coordinate with competent agencies to find ways to collect big debts.   VNCB was among the banks acquired by the State Bank of Vietnam at zero dong. Futa was set up in 2002 and now also provides taxi services and operates in the real estate sector. Vietnamese goods week successful in France A Vietnamese goods week themed “Honouring Vietnam”, the third of its kind, was recently held in the French city of Lyon, attracting nearly 100 French trade agencies and firms and 20 guest Vietnamese businesses. Goods from Vietnam were put on display at Casino Gambetta supermarket, including fresh fruits, frozen spring rolls, shrimps, beverages, rice and apparel, among others. Present in Lyon for the event, Deputy Minister of Industry and Trade Ho Thi Kim Thoa hailed the export of Vietnamese goods to European Union via distribution outlets, particularly those in France – a strategic partner of Vietnam, where nearly 400,000 Vietnamese are living and working. A leader from Casino giant retailer pledged to continue shipping goods from Vietnam to Casino supermarket chains in Europe and the world in the future. Last year, the group sold 30 million USD worth of Vietnamese goods, sourced from 60 Vietnamese suppliers On the occasion, the Vietnamese Ministry of Industry and Trade, the Vietnamese embassy in France and the Rhone Alpes region’s Chamber of Commerce and Industry held a seminar featuring the strong growth of Vietnamese economy. Speaking at the event, Deputy Minister Thoa hailed France as a promising market of Vietnam and the two countries’ enterprises serve as a bridge to bring Vietnamese goods to the world and French goods to Vietnamese consumers. Vietnamese and French business communities should utilise bilateral free trade agreements to seek mutually-beneficial cooperation opportunities, she said, noting that the Vietnamese Commercial Affair office in France is ready to provide them with assistance. Francois Turcas, President of the General Confederation of Small and Medium-sized Enterprises of Rhone Alpes region, expressed interest in business opportunities in Vietnam – a vibrant economy and a gateway to ASEAN. Participants shared information about business climate, policies and legal regulations to boost two-way trade and attract French investment in Vietnam. French businesses operating representative offices in Vietnam spoke highly of reform in the country, suggesting that Vietnam should continue upgrading infrastructure to meet requirements for socio-economic development and urbanisation. Apart from the activities, Deputy Minister Thoa also held working sessions with representatives from retailer Auchan and several French businesses. PVI in Forbes Vietnam’ 50 best Vietnamese listed companies The PVI Holdings (PVI) has been honoured by the Vietnamese edition of Forbes Magazine as one of 50 best companies in Vietnamese stock market. PVI is among five companies listed on the Hanoi Stock Exchange (HNX) earning a place in the Forbes’ list for its standout business efficiency and robust growth in the finance and insurance sector in 2016. Last year, the company’s combined revenue stood at nearly 10 trillion VND (447.7 million USD) and before tax profit at 700 billion VND (31.3 million USD). The A.M.Best Company, the world’s oldest insurance rating and information source, affirmed the financial strength rating for PVI’s two unit members with a B++ (Good) for PVI Insurance Corporation and B+ for PVI Reinsurance Joint Stock Corporation. The company was also named as Vietnam’s most valuable brand by the Brand Finance-a London-based brand valuation and strategy. Formerly known as PetroVietnam Insurance Company, PVI was founded in 1996 and was one of the first enterprises in Vietnam to implement equitisation to become PetroVietnam Insurance Joint Stock Corporation in 2006. It was listed on the stock market in 2007 with stock code PVI. In August 2011, the company restructured successfully to operate on the parent company-subsidiary model. The parent PVI Holdings performs such main functions as capital management and investment, strategy management-planning, HR and brand and IT management. Forbes Magazine selected 50 companies of all sizes with the best business performance in 13 sectors, including multidisciplinary. The companies' market capitalisation reached 829 trillion VND (37 billion USD), accounting for 62.14 percent of the total market on the two bourses as of May 16, 2016. Their total revenue reached 475.5 trillion VND, or 37.77 percent of the total market revenue and their profit after tax reached 53.5 trillion VND, 53 percent of the total profits in the market. Most of the companies in this list were traded on the southern bourse of HCM Stock Exchange (HoSE). Compared to last year, 2016's list has 10 new companies. To formulate the list, Forbes Vietnam used its own method with the consideration of specific characters of local businesses under the basis of the audited financial statements in five years in a row and the fiscal year 2015 of all the companies. MoF to accelerate SOE equitisation The Ministry of Finance has planned to boost the equitisation of State-owned enterprises (SOEs) through rating the publicity and transparency of the enterprises’ financial statements, a finance ministry official said. Deputy General Director of the ministry’s Corporate Finance Department Dang Quyet Tien said that his department is working with securities exchanges and other relevant agencies to be able to implement the plan this year. Independent agencies and mass media would be also invited to take part in the rating to make it more transparent, Tien said. He said that the plan is aimed at affirming that SOEs are also equal to other firms in the economy, besides making investors secure. It, therefore, would help accelerate the SOE equitisation process. “If information is vague investors cannot be expected to feel secure,” Tien said. He expected the new plan to create a leap in the country’s SOE restructuring. The finance ministry made the move as a number of ministries and agencies still want to be dominant stakeholders of some their subsidiaries. He gave the example of the Vietnam Machinery Installation Corporation (Lilama) - a subsidiary of the Ministry of Construction. The Ministry of Construction currently still holds 90 percent of Lilama’s stakes while some investors expected to have a higher ownership. Meanwhile, without reforms, especially in corporate governance, it would be difficult for Lilama to compete against foreign rivals the next time. According to Tien, when investors pour their money into enterprises they would also like to make decisions related to the enterprises. Therefore, the opportunities to equitise the SOEs would be missed if the State still holds a majority stake in the enterprises. The Ministry of Finance on Monday announced that 37 SOEs received approvals for their equitisation plans in the first five months this year, including Machines and Industrial Equipment Corporation, Vietnam Engine and Agricultural Machinery Corporation, Vietnam National Construction Consultants Corporation, and Corporation 36, in addition to the Vietnam Forest Corporation, and Vietnam General Corporation of Agricultural Materials. The SOEs sold shares worth more than 2.08 trillion VND (92.85 million USD) in book value for 4.17 trillion VND in the period. The State Capital Investment Corporation(SCIC)also offloaded its shares in a number of companies during the period, earning more than 2.8 trillion VND from a total book value of 985 billion VND. VN leads in import of South Korean clothes Viet Nam took the lead in importing clothes from South Korea in 2015 with value at US$382 million, an increase of 132.5 per cent compared with five years ago. This is according to the latest statistics released by the Korean Customs Service (KCS). China is at second place with import turnover of $372 million. According to KCS's analysis, Viet Nam's import turnover has rapidly increased because the quantity of clothing accessories exported to South Korean businesses' factories in Viet Nam is going up. The information, quoted by the Korean Broadcasting System, revealed that the country's export turnover of clothes reached $1.94 billion, 4.5 per cent lower than the previous year. Boosting low-income housing The Government is continuing with its efforts to boost the social housing development. While the disbursement of the housing stimulus package worth VND30 trillion (US$1.43 billion) in preferential loans, which was due to be completed by the end of last month, was finally extended by the central bank, the policies for social housing development and purchase are now eyeing long-term measures. The VND30 trillion housing stimulus package, that began on June 1, 2013, was, in fact, meant to be a short-term solution by the Government when the real estate market had hit bottom, experts said. As the June 1 initial deadline for the disbursement of the housing stimulus package approached, it triggered worries among buyers and developers. Management agencies and experts during the past months calmed the market saying there would be other preferential loans. With the realty market on the path to recovery since the end of 2014 and proving to be more solid recently, the Government's policies for social housing development are still being continued through long-term measures with the promulgation of the Government's Decree 100/2015/ND-CP on social housing development and management, the central bank's Circular 25 on preferential loans for buyers of social housing projects and Document 9496/NNHN-TD ordering the Viet Nam Bank for Social Policies (VBSP) to provide preferential loans for social housing buyers. The orders came into effect in December. In the latest move, Prime Minister Nguyen Xuan Phuc recently signed a decision on preferential loan interest rates provided by VBSP to buyers of social housing apartments as part of efforts to implement Decree 100. Accordingly, the rate until the end of the year will be 4.8 per cent annually, much lower than the popular rate of commercial banks for house purchases at some 8-9 per cent, and will be applicable for all existing outstanding loans. However, VBSP was waiting for more detailed instructions, Nguyen Tuan Ngoc from the bank's International Co-operation Department said. The Government's Decree 100 said the funds would partly come from the State and local budgets, and bond issuances. How the Government funded the VBSP in providing loans to develop the social housing sector remained a problem that would need to be explained more explicitly, Tran Ngoc Quang, general secretary of the Viet Nam Real Estate Association (VNREA), said. The problem currently is how to improve the supply of social housing projects as developers are still hesitating to invest in this segment, despite incentives, Tran Du Lich, deputy head of the HCM City National Assembly Delegation, said at a forum on Wednesday organised by the Thanh Tra (Inspector) newspaper in collaboration with the (VNREA). Since land prices in the downtown area (HCM City) are high, social housing projects are often developed on the outskirt areas, Lich said, adding that policies to improve infrastructure connectivity of social housing projects are of great importance. He said a transport planning mechanism should be developed. He gave as an example a residential area in Japan, deserted for 20 years, which turned into a bustling area once an urban railway was built. In addition, policies on land prices should be reviewed to encourage property developers to invest in social housing projects, Lich said. "The demand for social housing projects in the next five years remains huge." Viet Nam is undergoing rapid urbanisation with urban citizens anticipated to rise to 46 million, accounting for 45 per cent of the country's population by 2020. Low-income housing demand was estimated to total more than five million units within the next 10 years. Experts also urged low-income and social housing projects to go green with smart, energy-saving designs and improved infrastructure and facilities. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR