BUSINESS IN BRIEF 29/6 Hong Kong firms eye entering Vietnamese market Companies from Hong Kong are seeking investment opportunities in Vietnam, while many Vietnamese firms consider Hong Kong a bridge that helps them access international customers, a Hong Kong economic expert has said. Ex ecutive Director of Hong Kong Trade Development Council (HKTDC) Margaret Fong made the statement at a workshop in Ho Chi Minh City on June 24, which attracted nearly 60 CEOs and regional directors from Hong Kong’s businesses and representatives from 600 Vietnamese firms. Fong said through Hong Kong, Vietnamese businesses can enter the Chinese market and Hong Kong’s enterprises can support Vietnamese counterparts in approaching international and online markets. With over 47 representative offices worldwide, including in HCM City, the HKTDC hopes to contribute to promoting economic cooperation between Hong Kong and Vietnam, she stressed. Vice Chairman of the Government Office Le Manh Ha affirmed that the Vietnamese Government will create the most favourable conditions for foreign investors, including those from Hong Kong, to operate in the country. As an important financial and trade centre of Asia and the world, Hong Kong is a potential partner for Vietnamese companies to enhance links, he said. Vice Chairman of the Ho Chi Minh City People’s Committee Tran Vinh Tuyen said the workshop offers a chance for Vietnamese and Hong Kong enterprises to enhance links. He said the municipal authorities are making every effort to improve the business climate, towards facilitating the operation of foreign enterprises and investors, and those from Hong Kong in particular. Vietnam is Hong Kong’s ninth largetst trade partner, with two-way trade hitting 16.3 billion USD last year. Hong Kong ranked sixth among countries and territories investing in Vietnam. As of April this year, Hong Kong’s enterprises have invested 16 billion USD in 1,018 projects in Vietnam, mainly in processing industry, manufacturing, electricity and real estate. Ho Chi Minh takes the lead in attracting foreign direct investment (FDI) from Hong Kong, with 343 valid projects totaling 2.89 billion USD. Raising productivity crucial for stronger competitiveness A critical solution to promote businesses’ competitiveness is to improve labour productivity which is still a weakness of Vietnamese enterprises, an official of the Ministry of Finance said at a workshop on June 24. The average productivity of each Vietnamese worker has increased by nearly 24 percent from 2010, but it is still lower than that in neighbouring countries, Dang Quyet Tien, Deputy Director General of the ministry’s Department of Corporate Finance, quoted the General Statistics Office’s data. Each Vietnamese worker had a productivity equivalent to 79.3 million VND (3,660 USD) in 2015. The average productivity rose by 3.9 percent annually between 2006 and 2015. The 23.6 percent increase from 2010 is lower than the targeted 29 – 32 percent, according to the statistics office. Nguyen Anh Tuan, Director of the Vietnam National Productivity Institute, said labour productivity in Vietnam has grown strongly in recent years, especially in the industry and construction sector. However, productivity in the agro-forestry-fishery sector is equivalent to only one-fourth in industry and construction, and over one-third in the services sector. That has partly affected the overall productivity of the society, he added. Nguyen Thi Tue Anh, Deputy Director of the Central Institute for Economic Management, said a healthy competitive environment is a necessary condition, and manpower quality is a foundation for higher labour productivity. A rigid institutional system will impede productivity augmentation, while a flexible one will give an impetus to productivity growth, she noted. Dollar strengthens as central bank lifts rate The US dollar strengthened at domestic commercial banks on Monday, following an increase in the reference exchange rate that the State Bank of Viet Nam adjusted for the day. The central bank set the reference rate for Monday at VND21,866 per dollar, rising by 21 dong from last weekend's level. With the current trading band of plus or minus 3 per cent applied for the rate, a dollar can domestically be traded between VND21,210 and VND22,522. Almost all commercial banks increased the dollar rates in the morning, reported Nhip cau Dau tu (Investment Bridge) online. Vietcombank listed the buying price at VND22,310 per dollar and the selling price at VND22,380 per dollar, both 15 dong higher than the previous session's levels. VietinBank maintained the selling price at VND22,370 per dollar, but increased the buying price by 30 dong at VND22,300 per dollar. Sacombank quoted the buying price 10 dong higher at VND22,310 per dollar, and the selling price 20 dong higher at VND22,380 per dollar. Eximbank bought a dollar at VND22,300 and sold it at VND22,380, both increasing 10 dong over the previous session. At DongABank, the buying price was unchanged at VND22,300 per dollar, while the selling price was up 10 dong at VND22,380 per dollar. Techcombank reduced the buying price by 10 dong at VND22,280 per dollar, buy lifted the selling price by a similar amount at VND22,380 per dollar. The Bank for Investment and Development of Viet Nam bucked the trend, lowering both buying and selling rates by 10 dong at VND22,300 and VND22,370 per dollar, respectively. Asia Commercial Bank kept the dollar buying and selling rates intact at VND22,300 and VND22,380, respectively. After a British vote to leave the European Union (EU) last week immediately hit the global financial market, local brokerage MB Securities said the Brexit might lead to a devaluation of the Chinese yuan. There was a possibility that China would devalue its currency to improve the competitiveness of its exports to the EU. This might also force Viet Nam to depreciate the dong to ensure competitive exports, the brokerage said. Cam Ranh airport terminal project to be adjusted   Cam Ranh International Terminal JSC has decided to expand the area of the proposed new international terminal at Cam Ranh International Airport in the central province of Khanh Hoa to 178,000 sq.m, up 126,000 sq.m compared to the initial plan. The information was revealed at a meeting chaired by Minister of Transport Nguyen Nhat in Hanoi on June 27, which was to review the implementation of the project. The adjustment aims to meet technical requirements and standards, towards effectively operating the terminal. Previously, Cam Ranh International Terminal JSC has submitted a feasibility study on the construction of the project under the form of build-operate-transfer (BOT) to the ministry. Accordingly, t he project, with a total investment capital of nearly 3.4 trillion VND (152 million USD), was designed to receive four million passengers per year. The capacity would be increased to six million passengers in 2030 to meet the increase in passengers to Nha Trang City. The international terminal was planned to cover an area of approximately 52,000 square metres with 80 check-in counters, 10 boarding gates and six baggage carousels. Singapore architecture firm CPG Consultants and US-based PAE were selected as the project’s consultancy design unit. The two firms have previously consulted on designs of terminals at Phu Quoc, Can Tho, Vinh, Cat Bi, Tho Xuan and Da Nang airports. The project is expected to start this August if it receives approval from the ministry. It is scheduled to be completed and put into operation after 16 months of construction. Cam Ranh International Airport is one of the largest airports in Vietnam. It served over 1.8 million passengers in the first five months of this year, up 102 percent year-on-year. At present, the international terminal of Cam Ranh International Airport has a capacity of 1.5 million passengers annually. In the recent years, the number of passengers has increased remarkably between 30 and 60 percent per year. By the end of last year, the airport welcomed more than 2.7 million passengers, overloading its capacity. Vinh Phuc rakes in 802 mln USD in export revenue The northern province of Vinh Phuc grossed 802 million USD in export revenue in the first six months of 2016, a year-on-year rise of 10.1 percent, according to the provincial Department of Industry and Trade. Domestic businesses recorded 27.2 million USD in export turnover, a yearly increase of 22.1 percent, while foreign invested firms raked in 775 million USD, up 9.7 percent. High revenue commodities included electronic products, vehicles and spare parts, and garment-textile. The province’s key traditional markets encompassed the EU, ASEAN, the US, Russia, Japan, China, the Republic of Korea, and Taiwan (China). Local authorities have created all favourable conditions for businesses to stabilise manufacturing activities and promote products’ brand names in recent years. The province has focused on land clearance and infrastructure investment in industrial parks while attracting companies in the support industry. Additionally, the locality is pushing ahead with administrative reform and enhancing human resources training with a view to drawing tens of foreign direct investment (FDI) projects on an annual basis. Liaison board set up to link Vietnamese businesses in NZ The liaison board of the Vietnamese business association in New Zealand was officially established during a meeting with Vietnamese businesses operating in the country jointly held by the Vietnamese Embassy in New Zealand and the Ministry of Industry and Trade (MoIT). The five-member board will give support and share business opportunities among Vietnamese enterprises in the host country while serving as a bridge to connect those businesses with local firms. It also works to bring New Zealand businesses to Vietnam. Speaking at the event, Vietnamese Ambassador Nguyen Viet Dung briefed the participants on the sound relations across politics, diplomacy, economy and trade between the two countries in the past years. He said that the development of their comprehensive partnership towards a strategic partnership is billed as the foundation for both sides to boost bilateral trade in general and activities of Vietnamese enterprises in New Zealand in particular. He expressed his hope that the association will continue serving as a useful channel to enhance coordination and information exchange between the two countries’ firms. Hailing the Vietnamese Embassy’s initiative to organise the meeting, MoIT Deputy Minister Nguyen Cam Tu highlighted that free trade agreements which both Vientam and New Zealand are joining like ASEAN, Australia and New Zealand Free Trade Area (AANZFTA), Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) will help the two nations strengthen their trade ties. Agri-forestry-fishery exports fetch 15 billion USD Vietnam’s combined agriculture-forestry-fishery export turnover reached 15.05 billion USD in the first six months of 2016, up 5.4 percent from one year ago, according to the Ministry of Agriculture and Rural Development (MARD). Of which, agriproducts contributed 7.32 billion USD, a 5.1 percent increase against the same period last year. In terms of rice, the country exported 2.69 million tonnes to earn 1.21 billion USD, down 9.8 percent in volume and 5.9 percent in value year-on-year. Coffee exports fetched 1.71 billion USD from 985,000 tonnes while 107,000 tonnes of pepper brought home 864 million USD. Rubber exports reached 429,000 tonnes, up 3.5 percent, but earned 12 percent less than that of the same period last year at 532 million USD due to a price loss of 15 percent. Cashew remains a strong commodity with an increase of eight percent in price, earning the country 1.2 billion USD, up 11 percent year-on-year. The export value of fishery products in the first half of this year amounted to 3.07 billion USD, a rise of 3.8 percent from the 2015 same period. The United States, Japan, China and the Republic of Korea were leading importers of Vietnamese seafood with a proportion of nearly 53 percent of the total export value. The forestry sector earned 3.33 billion USD from exports during the period, a slight yearly downturn of 0.1 percent. Workshop helps north central firm improve competitiveness A workshop on institutional reforms, economic integration and how to improve business competitiveness took place in central Nghe An province on June 27 for enterprises and business associations in the north central region. It was organised by the Vietnam Chamber of Commerce and Industry (VCCI) in partnership with the provincial People’s Committee. During the workshop, enterprises and business associations shared challenges they face in operation, such as limited access to land and soft loans, high land rental rates, troublesome and complicated administrative procedures. According to a representative of Thanh Hoa Province ’s business association, many firms in the region have exerted efforts to apply new technologies and advanced quality control systems and improve the skills and professional competence for their workers. But it also requires efforts from the government to push for institutional reforms and improve competitiveness to help enterprises enter a bigger playground, the representative said. The Thanh Hoa business association proposed that the government should simplify land administrative procedures; forgive existing deferred interest charges on land use fee payments; and soon issue market-based minimum land price framework that ensures equity among businesses. In addition, the participating companies suggested the government helps small- and medium-sized enterprise (SMEs) get easier access to soft loans while localities should increase dialogues with businesses and apply e-administration. They also discussed ways to effectively implement the government’s Resolution 19-2016/NQ-CP on improving the national business climate and competitiveness and Resolution 35/NQ-CP on enterprise development by 2020. Chairman of Nghe An provincial People’s Committee Nguyen Xuan Duong urged the enterprises to get prepared for the fierce competition when a number of free trade agreements (FTAs) take effect, adding that the provincial authorities will create all possible favourable conditions for them to develop. VCCI President Vu Tien Loc said the chamber will send the enterprises’ feedback and proposals to related government bodies to help them resolve difficulties. More information on the FTAs will also be provided for the firms to be better prepared to take advantage of the pacts. HCM City pledges to accelerate Metro Line No.2 Ho Chi Minh City will speed up the implementation of the Metro Line No. 2 project, Secretary of the municipal Party Committee Dinh La Thang has affirmed. During his reception for German Ambassador to Vietnam Christian Berger in the city on June 27, Thang said the city welcomes all foreign investors, including German ones to engage in the second phase of the project in the city. For his part, the German ambassador expressed his admiration of the significant achievements the city has made, particularly in transport infrastructure. He also called on Ho Chi Minh City and relevant ministries to facilitate foreign investment, including Germany’s, in a bid to accelerate the implementation of the project. Metro Line 2, which is 11.33km long links Ben Thanh station in District 1 to Tham Luong station in District 12 in the suburbs. It was originally slated to be built from 2010 to 2018 at a total cost of 26.1 trillion VND (1.3 billion USD). This amount included 540 million USD from the Asian Development Bank (ADB), 313 million USD from the German Development Bank (KfW), 195 million USD from the European Investment Bank (EIB) and over 326 million USD from Vietnam's reciprocal capital. However, the project costs last year surged by 51 percent to 2.07 billion USD after design revisions. That amount does not cover Ben Thanh Station and its operation and maintenance costs. The city's Management Authority for Urban Railways attributed the rise in costs to inflation, higher wages and prices of materials and an increased workload. Due to adjustments for site clearance and compensation for the construction of stations, work did not begin until early last year on the section's final station and control building. The project is now expected to be delayed until 2019, one year behind schedule. Total Official Development Assistance (ODA) disbursed for the project from the beginning of 2015 until January 15, 2016 reached nearly 108 billion VND (4.8 million USD), and Vietnamese reciprocal capital was 8 billion VND (360,000 USD). Vietnam Airlines operates flights at new terminal in Myanmar Vietnam Airlines will operate flights between Vietnam and Myanmar at the new terminal T1 of Yangon international airport from June 28, 2016. Passengers will make all necessary procedures at the new terminal T1, which was put into use on March 12, to improve the quality of services. The carrier will support passengers to move from the old terminal T2 to the new one. Currently, Vietnam Airlines is conducting 10 flights per week between Vietnam and Myanmar, including five from Hanoi to Yangon and five between Ho Chi Minh City and Yangon.- Shrimp exports down in volume, up in value 5.9% Through May 2016, shrimp exports were down in volume compared to last year’s corresponding period but still managed a modest 5.9% overall improvement in value due to higher export sales prices. China, with a 34.3% market share, remained the largest buyer of Vietnamese wild caught and farm raised shrimp and prawns for the January-May period, according to statistics released by the Vietnam Association of Seafood Exporters and Processors (Vasep). The US was the second largest importer of black tiger shrimp from Vietnam, with a proportion of 17.4%. Black tiger sales to the US reported a good result, with raw material supply on par with competitors. Vietnam shrimp exporters have shifted production in favor of black tiger shrimp, a move expected to counter dwindling raw materials of other shrimp and prawn species in hopes of keeping the industry afloat. The third and fourth largest export markets were the EU and Japan with market shares of 18.9% and 17%, respectively. Ascott secures contract to manage serviced residence in Danang CapitaLand’s wholly-owned serviced residence business unit, The Ascott Group Limited (Ascott), has secured a contract to manage the Citadines Blue Cove Danang, company officials report. The deal is testament to our local partner's confidence in Ascott, said company officials, and it represents the largest serviced residence contract in Vietnam and our largest property globally, with 550 units. Ascott clinched the contract working through Hoa Binh Corporation, an established real estate company with numerous developments across all of the major cities in Vietnam. The 550-unit Citadines Blue Cove Danang serviced residence is scheduled to open in 2018. Southeast Asia remains Ascott's fastest-growing market and second-largest globally after China, where it has the most number of properties. The Ascott has more than 28,000 operating serviced-residence units in key cities of the Americas, the Asia-Pacific, Europe and the Middle East; another more than 19,000 units are under development, making for a total of more than 47,000 units in more than 290 properties. VinaTrucking fails to woo firms VinaTrucking, the first Vietnam Transport Trading Floor has been operational for more than five months, but it has failed to meet expectations and attract transporters and freight operators. According to Tạ Công Thuận, general director of VinaTrucking, some 500 firms and individuals have registered to take part in transactions via the trading floor as of May. Of that number, truck operators make up 334 and freight owners account for 103. VinaTrucking also has more than 50 visiting members. Though firms had registered to conduct 225 transactions, only 40 have realised. Time-consuming procedures are one of the reasons behind the small number of successful transactions. The director of a transport firm in HCM City said enterprises have to complete a complicated application process before they gain membership and transact on the trading floor. Another problem is that the management of VinaTrucking has not clarified the charges suggested by freight owners for transport firms to consider. Thuận said that VinaTrucking has not been performing as well as expected given the fact that there are a higher number of registered truck operators as compared to freight owners. The trading floor is still new and many enterprises are still unaware of it. Besides, freight and truck owners have yet to build mutual trust. Thuận said it would take more time to encourage businesses to shift from the more traditional way of conducting transactions. Firms are afraid of losing some benefits as the transport charges are not transparent. To conduct transactions on VinaTrucking, transport enterprises and cargo owners have to register for membership at www.sanvantaiviet.vn . Members can log into the website to see offers or requests, then send their transaction request and proposed charges to their potential partners. Once the request is accepted, the exchange will connect the two parties and suggest an appropriate transaction method. At present, enterprises can launch membership registrations and conduct transactions on VinaTrucking at no charge. The floor only collects fees from tenders organised to pick transport firms for large volumes of cargo. Deputy General Director of the Vietnam Road Administration (VRA) Nguyễn Xuân Cường said VinaTrucking had initially been promoted by enhancing transport models. By using this trading floor, transport companies could post their demands for shipping and transport linkages between carriers and freight owners. The purpose of this method was to reduce the number of vehicles which lay idle, minimise intermediary costs, offer transparent freight rates, as well as connect transport models and contribute to minimising traffic accidents. Bùi Danh Liên chairman of Hà Nội Transport Association, also attributed the problems facing VinaTrucking to the traditional way of conducting transactions. Many transport firms are averse to online transactions. Trần Quốc Hoàn, director of Global Transport Company Limited said a majority of transactions between freight owners and truck owners was still being conducted in the traditional way. They still want to meet face-to-face or talk on the phone. Nguyễn Xuân Cường, deputy general director of the Vietnam Road Administration, said that VinaTrucking needed to put cargo on the trading floor. At first, it should implement measures to work with relevant agencies and associations to promote and attract transport firms. Cường said that over the months the administration has launched various initiatives on how to calculate the list of vehicles, freight owners, volumes, and co-ordinate with transport and logistics associations to introduce VinaTrucking’s operations. Credit rise but not loose monetary policy Việt Nam seemed to have adopted a loose monetary policy - an expanded national monetary supply easilly accessible to citizens to encourage economic growth. But it has not done so. Some analysts point to several of the following factors which they say prove a loose monetary policy: The State Bank of Việt Nam (SBV) reported on May 20, money supply has increased by 5.88 per cent this year compared to 2.24 in the same period last year. Banking credit growth this year has been 4.52 per cent compared with 4.26 per cent in the same period last year. In HCM City, where lending is the highest in the country, credit growth this year has been 5 per cent, the highest level in three years. Some major banks like BIDV estimate credit has increased by 8-9 per cent, while Vietcombank reported a 6.3 per cent growth, and ACB, 7.6 per cent.     The analysts said Circulars No 06/2016/TT-NHNN and 07/TT-NHNN from the SBV resolved several issues, enabling commercial banks to increase their credit growth.   But a central bank official, who declined to be named, said deposit interest rates are continuing to rise, meaning banks still lack liquidity, a basic necessity to loosen monetary policy. So what accounts for the significant credit growth if not policy loosening? The market has seen some favourable occurrences like the economic recovery and businesses’ increasing demand for credit to expand their production and trading activities, especially since lending interest rates are down sharply from just a few years ago. Demand for credit from individuals to fund purchase of consumer goods and houses has also increased. Analysts expect the demand to further rise since foreign direct investment has increased sharply in recent months and is expected to keep rising. This would result in an increase in demand for funds from many other sectors to serve the foreign investors’ needs like industrial parks, infrastructure, office space and services. But analysts are against loosening policy though the economy has shown some positive signs, saying the time is not ripe yet and could pose risks to the economy. They fear that if banks do not lend fearing the returns will be low, money could flow into other assets pushing up their prices. This could cause cost-push inflation due to a substantial rise in the cost of many goods or services that lack suitable alternatives. To avoid this, experts said the government should improve the effectiveness of the restructuring of the banking sector and State-owned enterprises to ensure that money is used carefully and efficiently. Recently the SBV issued a directive to regulate monetary policies and the banking sector’s operations this year. Agencies under the central bank have to closely monitor and control credit growth to have proper measures to address problems that may arise. The central bank has also called for a close watch on credit institutions with large exposure to certain risky industries and sectors that have also reported rapid credit growth. State firms unable to sell stakes in banks In a resolution passed at the monthly Cabinet meeting in May, the Government urged State-owned enterprises to quickly complete withdrawal from non-core sectors, especially banking. It is estimated that in banks, SOEs including giant players like EVN, PetroVietnam and MobiFone have invested around VNĐ10 trillion (over US$444.44 million). PVcomBank is the lender in which SOEs have the largest stakes, with PetroVietnam alone owning 52 per cent in the bank. Current legal regulations allow a single institutional shareholder to own a maximum of 15 per cent in a bank, while institutions can hold a combined 20 per cent. But despite its huge stake in PVcomBank, PVN has no plans to discuss selling its shares at its shareholders meeting this month. A PVN source said last year the company drew up a proposal to sell its stakes in PVcomBank to the State Bank of Việt Nam. It was reportedly submitted to the Government for approval, but nothing has come of it yet. MobiFone has also faced many problems in selling its stakes in banks. Recently it wanted to sell 14.3 million shares in TPBank, but managed to sell less than 39 per cent of them. Its attempt to sell off its 33.4 million shares in SeABank (6.12 per cent of the bank’s prescribed capital) also failed, as only two million shares were bought. VNPT has been unable to pull out of Maritime Bank, in which it owns 71.5 million shares worth VNĐ700 billion (US$31.11 million). In 2015 electricity monopoly EVN offered for sale 82 million shares of ABBank, which accounted for 21.27 per cent of the lender’s chartered capital, but managed to sell only 50 per cent. So far only Petrolimex and PVGas have successfully sold their stakes in PGBank and SeABank. The reason they are struggling to sell shares in banks is that the prices of many of them have tumbled in the market, some to as low as VNĐ5,000. The SOEs do not want to sell them at such low prices because they have been warned not to squander away public money. Besides, SOEs must have their pullout plans approved by the central bank in case they want to sell their stakes in certain sectors like banking and finance. For the central bank too the State-owned firms’ pullout from banks is a headache since it is not easy for the lenders to find new investors with good financial and management capabilities. Analysts said the easiest way out is for the central bank to buy out the firms’stakes in the banks or require the banks themselves to buy back. But the SBV does not want to take on the job since it does not have enough human resources or the funds. All this means the vexing question of how SOEs can sell their shares in banks while ensuring no one loses still has no answer. Dong Nai Province attracts US$1 billion in FDI The southern province of Dong Nai attracted US$1.01 billion in foreign direct investment (FDI) in the first six months of the year, surpassing its US$1 billion target set for the year. While nearly US$400 million was for 53 new projects, over US$600 million was added to another 42 projects. South Korea invested US$111 million for 23 projects. Most of the investment was in projects in high-tech, environmental development, and industrial production. Forest land use debated in Ha Noi  Nearly 2.2 million hectares of forest land across the country is at high risk of being exploited and having its designated use changed illegally, a workshop heard yesterday in Ha Noi. The forest land at risk has been controlled by people's committees at the commune level, creating a problem of conflicts of forest land usage between locals, forestry companies, and forest management boards. The workshop plans to discuss using forest land effectively and sustainably, following the forestry sector restructuring project approved by the Ministry of Agriculture and Rural Development (MARD) in 2013. The 2013 MARD decision means there will be changes in forests and forestry lands in the coming years. Until 2020, the total area of forest for special purposes will remain at about 2.3 million ha. Meanwhile, protected forest will be transformed into productive land, to ensure the livelihoods of locals and to provide materials for processing and industry. In a related move, Prime Minister Nguyen Xuan Phuc ordered the closing of natural forests in the Central Highland provinces this week to avoid overharvesting wood. Cao Chi Cong, Deputy General Director of MARD's Forestry Administration, told Nong Thon Ngay Nay (Countryside Today) the PM's order aims to ban wood processing factories from illegally exploiting natural forests for profit, in addition to ending illegal deforestation. The Central Highland region lost 180,000 ha of forest land between 2010 and 2014, according to MARD. In 2015 alone, more than 16,000 deforestation cases were documented in five Central Highlands provinces, an increase of nearly 500 cases compared to the previous year. Nguyen Bon, the chairman of Dak Nong Province's People's Committee, said many forest rangers and police sell forest land illegally, leading to deforestation of a vast area of the region. Remittances to HCM City rise 3% to $2.1b Remittances to HCM City in the first half of this year rose 3 per cent year-on-year to US$2.1 billion. The deputy director of the State Bank of Viet Nam's HCM City branch, Nguyen Hoang Minh, said the remittances mainly went to production and businesses. Minh forecast that remittances to the city would continue to rise, reaching roughly $5.7 billion due to the city's rapid economic rebound. Remittances to HCM City, one of the top localities nationwide with the largest volume of remittances, have increased roughly 10-12 per cent on average for the past five years. The rise in remittance sources has been mainly thanks to an increase in remittances from the United States and the European Union, Minh said, adding that remittances from China and the Republic of Korea had remained modest.        Remittances to HCM City last year reached $5.5 billion, inching up against the $5.2 billion received in 2014. More than 70.8 per cent of the remittance value flowed to production and businesses, while roughly 21.6 per cent went into real estate and 7 per cent was destined for relatives. Compared with last year's overall remittance of nearly $12.3 billion, Viet Nam's remittance for this year has been forecast to increase slightly in the wake of Government policies to encourage overseas Vietnamese to invest in their homeland and due to the warming of the local real estate market. LienVietPostBank's transaction network now spans 63 cities, provinces  In getting the central bank's approval to open more branches and transaction offices this week, LienVietPostBank became the first joint stock commercial bank to have a transaction network covering the entire country. Based on the approval notice, LienVietPostBank will be allowed to open an additional seven branches in the provinces of Phu Yen, Hung Yen, Tay Ninh and Ha Tinh, as well as Lai Chau, Son La and Binh Dinh, along with 62 transaction offices in 22 cities and provinces. Currently, only the State-owned commercial banks of Bank for Agriculture and Rural Development (Agribank) and Bank for Social Policies have a transaction network spanning all 63 cities and provinces. Some joint stock commercial banks also have roughly 200-400 branches and transaction offices, but most of them are mainly based in major cities and towns, while the number of offices in remote areas remains limited. LienVietPostBank said the expansion plan is aimed at better managing the bank's post-transaction offices in cities and provinces and implementing financial and credit policies on rural and agricultural development. The expanded network will also ease the bank's social insurance payment and micro financial service provision. Under current regulations, besides earning a profit, complying with the central bank's regulations on operational safety and having non-performing loans of fewer than 3 per cent of the total outstanding loans, the minimum capital requirement for opening a new branch and transaction office in Ha Noi and HCM City is VND300 billion (US$13.3 million) and VND50 billion in other cities and provinces. SSC to promote VN as an emerging market The State Securities Commission (SSC) will receive strong support from finance and business information provider StoxPlus Corp to promote Viet Nam's stock market from a frontier to an emerging market. That is the goal of the Memorandum of Understanding (MoU) that was signed yesterday between the SSC and StoxPlus Corporation (StoxPlus), which aims to improve SSCs data analysis and technological system to increase the stability and sustainability of the stock markets, and enhance Viet Nams position in the global financial markets. On June 15, the Morgan Stanley Capital International (MSCI) index added Pakistans Karachi stock market in its benchmark MSCI Emerging Markets Index, while Viet Nam remained in the MSCI Frontier Markets classification. Being an emerging market means that Pakistan is able to absorb US$400 million from foreign investors, which is a small proportion of the total $1.5 trillion flowing into emerging markets compared to only $15 billion for frontier markets. Meanwhile, being still a frontier market means foreign investment funds and companies would be hesitant to purchase local assets as the Vietnamese market has not met the basic financial standards and is a high-risk venture for foreign investors. That has raised concerns for both government agencies, especially SSC, and local enterprises over how to improve market conditions to attract foreign investments and promote it to the emerging market level. In order to promote Viet Nams stock market from a frontier market to an emerging one, the country needs to work on its policies that attract participation of more foreign investors in the securities market and encourage local companies to disclose their business information to investors. SSC worked on some solutions and plans to ensure necessary conditions for a healthy and credible securities market, Nguyen Thi Lin Hoa, SSCs Vice Chairwoman, said. "One of those solutions is to attract more foreign investors and foreign capital in the market, and to meet international standards if Viet Nam wishes to become an emerging market," she said, adding that the country might become an emerging market in the next two or three years. Yoichi Noor Iwamoto, managing director of Nikkei China, said that it is time Viet Nam becomes "a real rising dragon" to stimulate business and economy all over the world. "The Trans-Pacific Partnership agreement (TPP) is going to contribute to Viet Nams rapid development," he said. "TPP is able to enhance Viet Nams potential power as an export-driven country." TPP will increase the value of foreign direct investments in the country, and usher in more business opportunities in the stock market, and the Vietnamese economy will expand undoubtedly, according to the director. "StoxPlus Corp will assist SSC to improve information disclosure of public companies and market members, increase market transparency and development as well as draw more attention from foreign investments into the local market, Nguyen Quang Thuan, CEO of StoxPlus Corp," said. "StoxPlus will also help SSC develop high quality design and translation of its annual reports in order to provide foreign and local investors with SSCs operation information as well as statistics and information disclosure." Sugar stocks are getting sweet Five years after staying silent in the market, sugar stocks rose with high liquidity, thanks to better sales from local firms and higher demand in the world market. According to the market data, sugar stocks were recording their best results after five years. In particular, yesterday, shares of Son La Sugar JSC (SLS) rose 402 per cent over last year's level to reach VND120,000 (US$4.5) on the northern bourse. Shares of Kon Tum Sugar Joint Stock Company (KTS) also increased nearly four-fold from last year to reach VND64,000 each yesterday on the southern bourse. At the same time, shares Thanh Cong Tay Ninh JSC (SBT) rose 129 per cent, shares of Lam Son Sugar Joint Stock Corporation grew by 64 per cent, and shares of Bien Hoa Sugar Joint Stock Company shot up 42.11 per cent. The rise in those stocks was due to better results of leading local sugar manufacturers in the first quarter of this year. The total sales of the five big firms reached nearly VND34 trillion, an increase of 80 per cent over the same period last year. Their gross profit also reached VND470 billion, up 89 per cent. In the first quarter, SBT reached total sales of VND1.24 trillion, 2.2 times higher than in the same period last year, thanks to the merger with Gia Lai Sugar JSC (SEC) last year. Similarly, BHS recorded sales of nearly VND1.2 trillion, up 55 per cent thanks to the merger with Ninh Hoa Sugar (NHS). Meanwhile, Q1's sales of LSS, KTS and SLS, also rose 104 per cent, 103 per cent and 29 per cent, respectively, in the first quarter. Also, due to the higher prices and lower cost for production, all the companies registered much better profits in Q1. According to local securities experts, the global prospect, after world sugar prices notched up an impressive record this year, would be a boost for local sugar firms. The sugar futures contracts on the intercontinental exchange floor recorded a 23-year high in February due to lower production caused by El Nino globally. According to the industry outlook report from Vietcombank Securities Company (VCBS), there was a shortfall of 3.5 million tonnes of sugar in 2016 after five years of surpluses. Nguyen Ngoc Thach, head of the brokerage section Sai Gon Securities Inc, said domestic drought conditions reduced Việt Nam sugar production to 15.9 per cent or 1.59 million tonnes, however, the shortage raised domestic sugar prices by 35.6 per cent from 2015. Thach said the price would go up during 2016 and 2017 and benefit local firms. However, experts also noted that under the trans-Pacific Partnership Agreement (TPP), sugar firms were among those who benefitted the least. While TPP fetched great benefits to other industries such as textile and seafood, sugar producers were seen to face serious challenges because of the fierce competitiveness of TTP members. While TPP rival Australia was the world's third largest sugar exporter and could produce a tonne of sugar at about $20, Việt Nam, one of the least productive sugar manufacturers, could produce a tonne of sugar at between $55 and $60. VCBS said Việt Nam must face up to the stiff competition in the next three years, so local firms should stabilise and expand the cultivated area as well as enhance productivity and output to join the game. Under the development plan, SBT has expanded to Cambodia with 3,000 hectares of sugar plantation during the 2015-2016 period while SLS planned to expand its capacity by 17 per cent. Workshop on boosting Vietnam – Japan investment A workshop, themed "Opportunities for investing in support industry in Vietnam” was organised in Osaka City, Japan on June 23. The event, jointly organised by local authorities, the Japan External Trade Organisation (JETRO), the Osaka Chamber of Commerce and Industry (OCCI), and the Consulate General of Vietnam in Osaka, drew the participation of 120 local enterprises. Addressing the event, General Consul Tran Duc Binh highlighted Vietnam’s potential for investment, which is spurred by natural conditions, human resources, market scale and a favourable investment climate. The country’s international and regional integration via its membership of the ASEAN Economic Community and the Trans Pacific Partnership Agreement will help expand investment and trade cooperation between Vietnam and Japan, Binh affirmed. Echoing Binh’s view, representatives from the Japanese Agency for Small- and Medium-sized Enterprises (SMEs) Support Mitsunori Kawahara underlined Vietnam’s potential for Japanese SMEs, particularly in the support industry. Representatives from the host enterprises expressed hope that the Government of Vietnam will continue promoting administrative procedure reform and creating a favourable climate for Japanese investors in the coming time. A delegation of 20 Japanese enterprises, led by the Osaka Mayor is scheduled to visit Ho Chi Minh City in September. Business exchange promotes Vietnam-Mozambique trade links A business exchange and an exhibition of made-in-Vietnam goods was held in Maputo, Mozambique on June 23-24, aiming to promote economic and trade links between the two countries. Jointly held by the Vietnamese Embassy in Mozambique, Vietnam’s trade representative office in South Africa and Mozambique, and Hanoi’s Department of Industry and Trade, the events offered a chance for the two sides’ firms to seek and establish partnerships. Addressing the business talks, Envoy of the embassy Vu Thanh Nam stressed that economic, trade and investment ties are among the top cooperation priorities between the two countries as agreed by their leaders on the occasion of then President Truong Tan Sang’s State visit to Mozambique last March. He highlighted the significance of the arrangement of the events, saying that he hopes these will open opportunities for Vietnam’s commodities to enter the African country. The delegation of Hanoi’s enterprises to the events include those operating in Vietnam’s fields of strength such as agriculture, aquaculture, garment and textiles and mining. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR