BUSINESS IN BRIEF 10/7 Vietnam cocoa splashes into organic market The global demand for organic cocoa products has been soaring over the past few years, while the supply side has faced challenges keeping up, says the Vietnam Coffee and Cocoa Association. Organic cocoa has more nutritional benefits than its nonorganic counterpart such as more fibre, iron, magnesium, copper, manganese and other minerals. In addition, it contains plentiful antioxidants, which helps to protect skin. Currently, the Dominican Republic dominates the global organic cocoa market in terms of production, holding roughly a 70% market share while Peru, Ecuador and Mexico collectively control around 20% of the market. The remaining 10% is held primarily by other South American countries including Bolivia, Ghana and Brazil with other parts of the world meeting only a miniscule portion of the world’s demand. Speaking at a recent conference in Ho Chi Minh City, Luong Van Tu, chairman of the Association, said market conditions are right for Vietnam farmers and other enterprising entrepreneurs to take the plunge into the niche organic cocoa market. Mr Tu said demand for organic cocoa products is highest in the US, UK and Germany, and manufacturers of organic cocoa products in North America and Western Europe are at wits end trying to find adequate supply sources. On the basis of application, the organic cocoa market is segmented into confectionaries, bakery, functional food, health drinks, home cooking use and others (pharmaceuticals, ointments, and toiletries). Organic cocoa is majorly used in the food industry as a main ingredient of chocolate, which historically has always had a perfectly inelastic demand— meaning it’s high price has had little effect on the quantity ordered. There are particularly huge opportunities in the North American, Western European and Japanese markets, said Mr Tu, and the Asia Pacific region excluding Japan is an untapped market for which there is also a gigantic potential market for organic cocoa. This is attributable to increasing inclination of consumers towards organic products, rapid urbanization, strengthening supply chain for organic cocoa and rising health consciousness among consumers in these markets. Research by the Association shows that over the past decade cocoa consumption in China has tripled and the figures for India and Brazil indicate demand has more than doubled, he noted. All told, our analysis indicate that Asian nations have imported more than 500,000 metric tons of fermented cocoa on average per year from West Africa and South America. There simply is no reason why Vietnamese farmers and businesses can’t be filling that demand as they have the capability to produce a higher quality and timely product at a better price than the competition. As recently as 2013 Vietnamese cocoa was chosen a world’s best quality at a competition in Paris, France and in 2015 the International Cocoa Organization selected it best for fragrance, said Mr Tu. Meanwhile, cocoa prices fell sharply recently as a result of Britain's exit from the EU and fears it would impact demand for the main ingredient in chocolate from the UK, its largest consuming region. Cocoa for September delivery dropped 4.8% to US$3,032 a metric ton on the ICE Futures US exchange. However, most market analysts report this drop will be short-lived and there is already speculation that the price will not only rebound but could see US$3,400 a metric ton in the not so distant future. Vietnam Airlines faces hurdles in launching rebranded offshoot SkyViet, which was restructured from Vietnam Airlines' short-haul carrier Vasco, may have to wait for a while before it can start flying due to new questions about the legitimacy of the restructuring process. In its recent letter to the government, the Ministry of Planning and Investment has demanded a review of SkyViet Aviation JSC's establishment. It was responding to the government's request for inputs before a license to provide passenger and goods transport services can be granted. The ministry said it and the finance ministry had never been consulted on SkyViet's formation. Under existing rules, they must have a say in the business of state-owned enterprises. Vietnam Airlines owns a stake of 51% in SkyViet, which has a chartered capital of VND300 billion (US$13.22 million). Two Techcombank's subsidiaries Techcom Capital and Techcomdeveloper own the rest. The venture acquired a business license from Ho Chi Minh City Department of Planning and Investment in March and was expected to get a flying license in the second quarter. The investment ministry also asked the transport ministry to check the value of VASCO's assets that Vietnam Airlines transferred to SkyViet. The assets were estimated at VND153 billion ($6.74 million), but several media reports have suggested that they could be worth much more than that. Founded in 1987, Vasco now has a share of around 8% in Vietnam's domestic passenger air market, besides hotel and aircraft servicing businesses among others. It posted a profit of VND75.3 billion last year, up 12.6% from 2014. Speaking to Thanh Nien, Deputy Transport Minister Nguyen Hong Truong said Vietnam Airlines hired an independent company to evaluate the assets. Previously Vietstar Airlines, a military-run aviation company, has also faced challenges in acquiring a license to provide passenger and goods transport services due to a financial issue. Founded in 2010 by the defense ministry to provide charter flights, filming and rescue services, the company's equity was estimated at VND652.7 billion (US$29.2 million) at the end of last year. But, the finance ministry said that does not meet the minimum of VND700 billion (US$31 million) required for an airline with a fleet of up to 10 aircraft and operating international flights. Vietnam's domestic passenger air market is now dominated by Vietnam Airlines and private low-cost Vietjet Air, with respective shares of 40.8 and 36.3%. Jetstar Pacific Airlines, another low-cost carrier run by Vietnam Airlines and Australian-owned Qantas, controls 14.9%. Vietnam's air market is forecast to see a rise of 19% to 45 million passengers this year, with the domestic sector accounting for more than 58%. Escorts to widen manufacturing footprint in Vietnam Escorts Group, a leading manufacturer of auto and tractor products for over four decades based out of India, is drawing up plans to expand its presence in the Vietnam manufacturing market. Escorts General Manager Sonal Tyagi on July 6 told of their plans to representatives of the Vietnam Embassy and Trade Office in India at a business meeting in the city of Faridabad in Haryana. “Escorts represents a combination of integrated manufacturing facilities, in-house state-of-the-art R&D, as well as advanced production, testing and validation facilities, which have enabled us to bring new and reliable products on a global platform, said Mr Tyagi. Mr Tyagi said his company now exports to several global auto and tractor companies in countries like Iran, Bangladesh, Sri Lanka, South Africa, Indonesia, Nigeria, the UAE, Thailand, Nepal, Ukraine, Australia, Europe and Latin America. “In the farm tractor export business, we are expecting a 15-20% year-on-year growth, both through an increase in our existing markets and through expansion into new markets,” he said. We are specifically looking to augment our presence in the tractor segment where we already have a formidable presence, both by expanding our footprint into the tractor retail and manufacturing markets in Vietnam. Mr Tyagi said Escorts has reached a milestone having sold more than 1 million tractors to customers around the globe. He said he anticipates Vietnam becoming a highly lucrative place to manufacture tractors, and believes the country will serve as a gateway for his company to reach the entire ASEAN market. Ambassador to India Ton Sinh Thanh in turn encouraged Escorts to invest in factories and production lines in Vietnam and said the Vietnam Embassy in India is willing to accommodate in any manner it can. HCM City aspires to lead business tourism Business convention tourism is one of the most lucrative segments of the tourism industry, but Ho Chi Minh City is lagging behind neighbouring capitals in its potential to attract such clients, market watchers have said. They said the biggest obstacles facing the city are the insufficient number of congress facilities and four- and five-star hotels, which has led to a lack of awareness of the city’s brand among business convention tourists.    "HCM City certainly has all it needs to gradually become a place for business tourism often dubbed MICE for meeting, incentive, conference and exhibition tourism,” said Thailand’s MICE Director, Puripan Bunnag. However, he said, the international competition is fierce for congresses, symposiums, fairs and international seminars because their attendees spend more money than standard tourists. "According to statistics gathered by Thai researchers, business travellers spent three and one-half fold that of more common tourists," said Mr Bunnag. This is not only because business events are usually all-expenses-paid travel, but also due to the events taking place in high-standard facilities and the fact they require additional services such as interpretation, technical equipment and side events. HCM City, Vientiane, Yangon, Phnom Penh and Bangkok are close both geographically and historically, he said, and collectively could become successful business tourism locations if they work collectively toward that end. HCM City currently lacks facilities for organizing business congresses however as applications for MICE events require capabilities of handling an average of between 500 and 700 delegates. The city also needs substantial improvement in its accommodation network. He suggests that to be viable from the very beginning, HCM City’s effort should be launched as a joint initiative by the tourism industry in collaboration with Vientiane, Yangon, Phnom Penh and Bangkok, the five Mekong sub-regional tourism countries. This would also allow for among many other benefits, joint associated financing. Convention bureaus in cities, which top the European MICE ranking, such as Vienna, Stockholm, Barcelona, Birmingham, and others, function this way, he underscored. Over 70 enterprises join VietHome Expo 2016 More than 70 companies are attending the Vietnam real estate and building material fair 2016 – VietHome Expo 2016, which kicked off in Ho Chi Minh City on July 8. They showcase their products in the fields of housing, construction, decoration, finance and banking at 200 booths. Speaking at the event, Deputy Minister of Construction Do Duc Duy said after being frozen for a long time, Vietnam’s real estate market began recovering from the end of 2013, with the number of successful transactions in 2015 doubling in Hanoi and 1.8-fold higher in HCM City as compared to the previous year. According to Duy, the 2016 market will see diverse products that are suitable to customers’ demand and payment capability. During the fair, conferences and meetings will be organised to introduce new policies on housing and the real estate market in Vietnam. The five-day event, with the theme of “Real Product, Real Value”, is co-held by the Vietnam Association of Realtors (VARs) and the Ho Chi Minh City Union of Business Association’s Trade Promotion and Services Corp (TPS). PetroVietnam develops gas extraction The PetroVietnam Exploration Production Corporation (PVEP) is actively developing a number of gas projects with the aim of extracting the first flows of gas at Su Tu Trang (white lion) field in the fourth quarter of 2016 and at Dai Hung field on August 31. To date, the company has carried out 54 oil and gas projects, including 43 at home and 11 abroad. To deal with the fluctuation of global oil prices, the PVEP has enacted measures to stabilise business manufacturing activities. The company exceeded the output target of 2.92 million tonnes of oil in the first six months of 2016, which was set by the Vietnam National Oil and Gas Group (PetroVietnam) thanks to the adjustment of oil prices. It extracted 2.23 million tonnes of oil and 690 million cubic metres of gas in the period, surpassing the set goals by 4 percent and 11 percent, respectively. The PVEP will continue to arrange capital resources for exploratory activities while drilling more fields to extract an additional one million tonnes of oil. State Bank to intervene in gold price, if needed  The State Bank of Viet Nam will keep track of gold price fluctuation and intervene if necessary, said Nguyen Ngoc Canh, director of the bank's Foreign Exchange Management Department. Canh said the intervention to stabilise the gold market would be carried out under the Government's decree on gold bar transactions. "The reason for the hike in gold prices in recent days is the psychological impact following the Brexit vote," Canh said. The gold market calmed yesterday after the central bank's announcement. Insiders said the fluctuation of gold prices in recent days had resulted in losses of millions of Vietnamese dong for buyers in one night but profited gold companies. In many gold shops, the price jumped nearly VND2 million (US$89) on Wednesday but immediately dropped by more than VND2 million yesterday. Gold prices of the Sai Gon Jewelry Holdings Co (SJC)'s suddenly slid yesterday by VND2.3 million to VND36.5 million and VND37.5 million per tael at buying and selling, respectively. Some other companies, including Phu Quy and Bao Tin Minh Chau, listed the buying price from VND36.4 million to VND36.85 million per tael, and the selling price at between VND36.9 million to VND37.72 million. A small survey by local reporters showed that the number of people coming to jewelry shops in Ha Noi yesterday dropped 30 per cent compared with the days before. To Linh Giang, a local resident from Bach Mai Street, said the increasing price of SJC gold in recent days made him dizzy. "I bought gold on the day it was VND35 million per tael. I made a small profit but I do not know if I should sell now to make more profit or continue waiting. It is because there are many predictions that the gold price will continue going up," said Giang. Le Thi Ly from Truong Dinh Street said she heard that gold prices could increase to VND50-60 million per tael so that she would wait. "I bought gold on the day its price was VND37 million per tael, if I sell it now I will lose." According gold traders, many people who bought gold for speculation rather than savings failed to foresee the price trends. This was one reason the gold market was quiet yesterday. On the global gold trading floor, gold was traded at US$1,358 per ounce (also at $1,629 per tael or 1.2 ounce). On the same day, the central bank increased its reference rate per American dollar by eight dong, to VND21,869. Speed up capital disbursement Prime Minister Nguyen Xuan Phuc has asked all relevant agencies and local authorities to fast track the disbursement of public investment capital to accomplish socio-economic development targets by the end of 2016. He said it was necessary to disburse the 2016 capital by the deadline, especially budget capital, Government bonds and Official Development Assistance (ODA) capital. He made the statement while chairing a meeting with the Ministry of Planning and Investment, Finance Ministry and Government Office on Wednesday in Ha Noi. The disbursement of public investment capital has been moving at a slow pace in the first six months of this year compared to the target. Ministries, sectors and localities have disbursed about VND81.8 trillion (US$3.6 billion) of public investment capital in the first five months of this year, completing 32.6 per cent of the disbursement plan for 2016, according to the Ministry of Planning and Investment. Public investment capital disbursement must be regarded as an urgent task, he said, adding that if no action is taken, national economic growth will be seriously affected. Officials at the meeting ascribed the slow disbursement this year to a delay by several ministries, agencies and localities in issuing 2016 capital allocation plans and submitting specific mechanism on managing investment for the PM's approval. The disbursement process was also hindered by the slow assessment of capital and the capital balance of public investment projects, especially those under national target programmes, officials said. Difficulties in land clearance, incompetent contractors and complicated procedures also contributed to the problem. PM Phuc urged ministries and sectors to review the responsibilities of those in charge of public investment disbursement and hand down strict penalties for any delays, such as ending capital or replacing unqualified contractors. A decree that focuses on hastening capital disbursements in 2016 with clarified solutions and assigned tasks for each ministry must be submitted to the PM for approval next week, he said. The PM also asked Deputy Prime Minister Vuong Dinh Hue, who heads the steering committee for public investment disbursement, and his team to step up supervision of the disbursement process. Viet Nam enacted the revised Law on Public Investment on January 1, 2015, to provide a comprehensive legal framework for restructuring the public investment process. An important new point in the law is five-year planning, in accordance with the country's five-year socio-economic development plans, which will facilitate the allocation of investment resources and help ministries and localities make suitable investment decisions, he said. The law is intended to maximise the efficiency of public investment, especially given limited capital resources, and to facilitate the transparent use of State and local funding. Vietnamese exporters still not taking advantage of trade deals Despite the Government's willingness to enter into free trade agreements, Vietnamese companies are not taking advantage of such pacts to increase exports and are even losing out on their home turf to foreign rivals. The 2015 annual Viet Nam Business Report shows foreign companies accounted for 71 per cent of the country's exports, with local firms' share shrinking, according to Doanh nhan Sai Gon (Sai Gon Entrepreneurs) newspaper. In the first five months of this year, local businesses' exports grew by only 3.9 per cent to US$19.44 billion, accounting for 28 per cent of exports. In comparison, FDI companies reported growth of 7.7 per cent while overall growth was 6.6 per cent. The Government in fact offers many incentives for exports, but domestic companies have been unable to cope with challenges facing the global business environment. Around 97 per cent of local enterprises are small- or medium-sized and most of them are outside the global value chain. Their ability to take advantage of Viet Nam's international integration is very low and they are not ready to compete. From next year Vietnamese companies cannot borrow in foreign currencies and dong loans carry much higher interest rates, and this will be another blow to the competitiveness of many companies. The ban comes as part of the central bank's efforts to stop dollarisation of the economy. Bank lending rates in neighbouring countries like Thailand, Malaysia, and China are only 3 – 4.5 per cent. The strong dong is another factor that affects companies' competitiveness. In recent times, while other currencies have fallen sharply against the US dollar, the Vietnamese currency has been very steady. It makes Vietnamese exports costlier. Economists estimate the dong to be overvalued by around 20 per cent. Low productivity is another weakness of Vietnamese companies, and in recent times natural disasters like severe drought and pollution have also hit exports. Drought this year and the resultant seawater intrusion in the Mekong River Delta, and environmental pollution in the central region have sharply reduced seafood exports, one of Viet Nam's strong suits. Furthermore, Vietnamese seafood products will also come under close scrutiny in export markets as a result. European authorities have already notified all EU members that they should tighten checks of imports from Viet Nam. The 2015 Viet Nam Businesses Report also said that the size of Vietnamese companies and their number of workers have shrunk. With domestic firms frittering away the advantages offered by FTAs, their foreign rivals will only be happy to step into the breach. Railway industry needs reform The domestic railway industry should reform to increase its competitive ability and revenue in the second half of this year, an official of the Ministry of Transport has said. At the conference on implementing the railway industry's business missions by this year-end, held in Ha Noi on Wednesday, the Viet Nam Railway Corporation reported that its transport revenue reached VND1.95 trillion (US$88.6 million) in the first half of this year, which was 77.5 per cent of revenue in the same period last year. The low revenue was partly due to the collapse of the Ghenh Railway Bridge in Dong Nai Province, affecting the transport of cargo and passengers in May and June which were hottest months of this summer tourism season. One more reason that impacted the volume of passengers was the massive fish deaths in four central coastal provinces. Dao Anh Tuan, director of Sai Gon Railway Transport Joint Stock Company, said the volume of passengers booking tickets on routes from Sai Gon to Da Nang, Hue, Dong Hoi and Vinh, reduced sharply this summer against last year, the Giao thong van tai (Transport) newspaper reported. In addition, Phung Thi Ly Ha, deputy general director of Ha Noi Railway Transport Joint Stock Company, said the railway industry has faced severe competition from low-cost airlines. The price of an air ticket of a low-cost airline stood at some VND600,000 for a one-way ticket from Ha Noi to Da Nang while the rail fare was VND700,000 per bed, one-way for a 4-bed cabin, with air conditioning. The railway firms could not reduce the fare further because they would suffer losses, Ha said. The local railway industry still has numerous limitations and is not being utilised to its full potential, Tran Ngoc Thanh, chairman of Viet Nam Railway Corporation, said. At present, an important thing was to re-organise transport activities for improving efficiency in transport and business, especially transport of cargo. The market was competitive so the railways must take full advantage to exploit the segment that has a chance of development. To promote transport and business as well as improve competitiveness in the second half of this year, the corporation must re-evaluate its restructure from corporate management to business activities and promote transport of cargo and passengers, Nguyen Ngoc Dong, deputy minister of transport, said at the conference. Manufacturers worry about steel price hikes While the imposition of additional tariffs on imported steel products as a temporary safeguard against cheap imports since March was meant to protect the local steel industry, consumers and firms that use steel for their production are worried about steel price hikes in the local market. It's consumers who must bear the costs rising from the imposition of the safeguard tariffs, said Dam Quang Hung, deputy director of Son Ha International Corporation which produces stainless steel products. Hung said that the imposition of safeguard tariffs would result in higher steel raw material prices and higher prices of products to end-users, and may even cause a monopoly in the domestic steel market. He urged the management agency to closely watch steel prices by local producers to prevent a monopoly while balancing the benefits between local steel producers and firms that use steel as a raw material. According to Pham Quoc Vu, deputy general director of stainless steel producer Dai Duong International Joint Stock Company, the current safeguard duties on imported steel products were high, which would seriously affect firms which use steel as a raw material. Under the Ministry of Industry and Trade's Decision No 862/QD-BTC which came into effect on March 22, temporary safeguard duties of 23.3 per cent is applied on steel billet and 14.2 per cent on long steel products. The safeguard duties will be applied for a maximum of 200 days, or to October 10. Vu said that the ministry should apply more appropriate tariffs for imported steel products, or else, producers that use steel as a raw material would encounter difficulties even in the local market. In the local market, prices of several products made from steel can rise by around 10 per cent compared to March due to the imposition of the temporary safeguard tariff, according Tran Anh Tu, a salesman in a building material store in Ha Noi. Nguyen Tuan Vinh, who planned to build a house in Ha Noi at the end of this year, is worried that if steel prices went higher, it would considerably push up the construction costs. Ho Nghia Dung, chairman of the Viet Nam Steel Association, said that the imposition of safeguard tariffs on imported steel products was aimed to protect local steel production. In trade defence, if benefits of a certain group of firms are protected, others might be affected, Dung said, adding that firms should join with each other to develop a supply chain to deliver mutual benefits. The ministry's decision was issued after the investigation found that significant increases in imports of steel billet and long steel products caused serious damage to local production during the 2012-15 period. Businesses were still importing steel billets and finished steel products, despite the imposition of the temporary safeguard duties, according to the association. The association's deputy chairman Nguyen Van Sua said that cheap steel imported from China might continue to flow into Viet Nam in the second half of this year as China's steel industry was faced with a massive overcapacity. With limited local steel demand, the use of safeguard instruments was essential to protect local producers. More importantly, local producers must enhance competitiveness in product quality and prices, he said. The association's statistics showed that up to 60 per cent of imported steel was from China. Since the beginning of 2016, Viet Nam has imported over 9.6 million tonnes of steel of all kinds, worth around US$3.42 billion, showing a year-on-year rise of 48 per cent in quantity and 1 per cent in value. Inflation may exceed targets State price management agencies will face many challenges in the second half of the year if they are to meet the National Assembly's (NA) target of keeping inflation under 5 per cent, experts said at a conference held yesterday. Reports from the General Statistics Office show that the consumer price index (CPI) rose by 0.46 per cent in June, the highest June increase recorded in the past five years. Compared with December 2015, the index has increased 2.35 per cent. Addressing the conference on price movements, representatives of the Ministry of Finance's Pricing Management Department, expressed concern that inflation in the second half of 2016 will be under pressure by the State budget balance, continuous price hikes in health care and education services in accordance with market mechanisms, as well as the central bank's policies on regulating foreign exchange and interest rates. Deputy director of the Ministry of Industry and Trade's Domestic Market Department, Nguyen Loc An, said global political volatilities and decreasing demand in importing countries would negatively affect prices of many products, including oil. In the domestic market, price hikes in some cities and provinces are also expected as the country is nearing a season of storms and floods. However, An expects prices will not go up strongly as the Government has instructed relevant agencies to prepare sufficient supplies. The Government will also maintain reasonable price hikes in public services, An said, forecasting that the CPI this month will rise at the same rate as last month. Economist Nguyen Tri Long suggested that authorities be cautious in regulating inflation in the coming months given unexpected factors that may cause inflation to rise in the second half of the year. Besides the price hike of public services and adverse weather, Long said, a rising money supply, foreign exchange pressures and price hikes of imported products might be other reasons for the increase. Long said the inflation control target might not be met if the money supply is not strictly controlled. State price management agencies must therefore pay due attention to inflation. Long suggested that in the future, money policies be co-ordinated closely with macro economic stability. He also said some regulations must be adjusted to further tighten lending rules in order to avoid risks for real estate and financial markets. The Governor of the State Bank of Viet Nam (SBV), Le Minh Hung, last week urged caution in price control, warning of great pressure to raise lending rates in the future. Speaking at a Government teleconference, Hung said that aside from existing price control measures, prudent management of other macro-economic activities was also needed to avoid affecting interest rates. While most of the capital for the economy comes from bank credit, the demand for raising capital through government bonds has also increased. Hence, proactive and flexible management is necessary to keep lending interest rates stable, he noted. The six-month inflation rate at 1.72 per cent is assessed to be in line with monetary fluctuations since the beginning of the year, and price control measures during the period have proven effective. Hung said the SBV would keep a close watch on movements in regional and international markets, especially in the European Union (EU) and the United States, and adjust monetary and exchange rate policies in a timely manner. Regarding the United Kingdom's withdrawal from the EU (Brexit), the governor said the central bank immediately responded to the market's psychological reactions, helping minimise Brexit's impact on exchange rates, and rates were now stable. It is still necessary to evaluate more comprehensively the indirect influence of Brexit, particularly the devaluation of major currencies like the British pound and the euro, he added. PVFCC buys over 6 million shares of DCM PVFC Fund Management Joint Stock Company (PVFC Capital) reported the purchase of 6.1 million shares of Ca Mau Fertilizer (DCM). Accordingly, the fund has raised its stake in DCM from 8.01 per cent to nearly 9.16 per cent, reaching a total of nearly 45 million shares. From the beginning of April, PVFCC continuously bought shares in the fertilizer firm in CA Mau Province and became the firm's second largest shareholder. Currently, the largest shareholder of Ca Mau Fertiliser is PetroVietnam (PVN), with more than 400 million shares, equivalent to a 75.56 per cent stake in the company. Ha Noi Exchange reports good results in first half The Ha Noi Stock Exchange (HNX) has mobilised VND212 trillion (US$9.46 billion) in Government bonds for the State budget in the first half of this year, said Nguyen Thanh Long, the exchange chairman. Long, speaking on Tuesday, also said that capital of the Unlisted Public Company Market (UPCoM) doubled compared to 2015 as HNX undertook various measures to promote the scale and liquidity and improve the quality of the market. For example, HNX promptly issued regulations on organisation and management of unlisted firms, which contributed to the liquidity soar during the first six months. The average trading volume reached 9.6 million shares per session and the transaction value over VND134 billion (US$6 million) per day, an increase of 248 per cent in volume and 212 per cent in value compared to the same period in 2015. On the listed market, as of June 30 the share value of the secondary market reached VND750-760 billion per session. The bourse has approved the listings of ten new firms with a total value VND2 trillion, a two-fold increase in the number of firms and of 224 per cent in value over the same period in 2015. Furthermore, HNX also strengthened the management and supervision of listed firms to promote corporate governance in accordance with good practice. At the same time, HNX also actively supported the amendment of directives on building corporate bond schemes and developing policies on the derivatives market. Long said the exchange was also boosting the construction and development of the derivatives market so that it can go into operation in the first quarter of 2017. According to the chairman, the exchange and the Viet Nam Securities Depository were working together to find a system solution on the same technology platform and trading software for the derivative products. Also in the first half, HNX said it carried out 36 auctions, including 24 initial public offerings of State-owned enterprises, selling 290 million shares, or 83.6 per cent of offering shares at a value of more than VND3.7 trillion. Gold prices continue to fluctuate sharply  Gold prices kept sharply fluctuating this morning, slumping heavily in early trading and recovering before noon. Opening at 8.35am, DOJI sold a tael of SJC gold bars at VND36.8 million (US$1,642) and bought it at VND36.3 million, a fall of VND450,000 and VND200,000, respectively, compared to yesterday's rate. Then it lowered the selling price for one tael by VND250,000 and the buying price by VND150,000 to set the rates at VND36.15 million and VND36.55 million, respectively. Later in the morning, DOJI raised the buying and selling prices to VND36.67 million and VND37.10 million, respectively. Thus, compared with the peak of VND40 million per tael recorded on July 6, each tael of gold fell nearly VND3 million in the local market. A DOJI representative said in the past two days, the market saw more selling than buying after a long quiet period in gold trading activities. At yesterday's trading session, DOJI recorded a ratio of 65/35 in selling and buying in their network. In the global market, gold edged down early on Friday, with investors staying cautious ahead of the release of American economic data later in the day, but the metal remained on course for a sixth straight weekly gain. On the global gold trading floor kitco.com, each ounce was rated at $1,358 ($1,636 per tael). In Viet Nam, gold prices fell sharply after the State Bank of Viet Nam sent messages late on July 6, saying that the jump in gold prices was just temporary due to psychological factors among local investors. Representatives of the Foreign Exchange Management Department from the central bank also told people that they should calm down before deciding to buy or sell their yellow assets. On the foreign exchange market, the dollar rates in commercial banks also fell. For example, each dollar was rated at about VND22,270 and VND22,340 (buying-selling) in Vietcombank, down 40 dong compared to yesterday's rates. Ford Everest Titanium Plus price jumps The price of Ford's Everest Titanium Plus has risen by VND307 million (US$14,000) with effect from this month following a steep rise in special consumption tax. The new price is VND1.936 billion ($88,000), the company announced. Everest Titanium Plus is an imported vehicle and the tax applied on it has increased from 60 per cent to 90 per cent since it has a 3.2 litre engine. The next highest price hikes, ranging from VND10 million to VND39 million, were for the Ranger. Ford's other models have seen prices decline by around VND20 million ($900). But Ford continues to see record sales. This year it has sold 13,610 cars for a growth of 52 per cent. The special consumption tax is based on engine capacity. Cars with engines of less than 1.5L have seen the tax fall from 45 per cent to 40 per cent. At the upper end, vehicles with engines of 5-6L have seen the rate rise from 60 per cent to 150 per cent. Vinh Long province invites investment in agriculture Vinh Long province, located at the heart of the Mekong Delta – a farming hub of Vietnam, is calling for investment in 43 projects on agriculture and rural areas in an effort to restructure local agriculture. Most of the projects, key in the local agricultural restructuring blueprint, focus on farm produce processing. Among them, a vegetable processing factory in Tan Quoi industrial cluster, Binh Tan district, is waiting for a 200 billion VND (8.97 million USD) investment. Vinh Long is also seeking for 150 billion VND (6.73 million USD) to be poured into a canned food factory in Mang Thit district. The province hopes that 50 billion – 200 billion VND (2.24 million - 8.97 million USD) will be channeled into three fruit and vegetable warehouses apiece in the vegetable growing commune of Thanh Loi in Binh Tan district, and Binh Minh industrial park in Binh Minh township. Investors can also engage in seven pig and beef cattle farming projects, worth 10 billion – 50 billion VND (448,400 – 2.24 million USD) each. Nguyen Minh Tho, Director of the provincial Department of Agriculture and Rural Development, said the administration plans to support the 43 projects with about 97.2 billion VND (4.36 million USD), sourced from the State and local budgets. Land and tax incentives along with site clearance assistance will also be provided for investors. Vinh Long also encourages connectivity among enterprises, farm owners and cooperatives to ensure sustainable agricultural production, he noted. Vientiane hosts Vietnam-Laos Trade Fair 2016 The Vietnam-Laos Trade Fair 2016 kicked off in Vientiane, Laos, on July 7, attracting the participation of over 200 enterprises with 400 booths. In 120 booths, 98 Vietnamese businesses bring to the fair their outstanding products, ranging from pharmaceutical products and medical equipment, industrial machines and construction materials, garment and textiles, to agro-fishery-forestry products. Speaking at the opening ceremony, Vietnamese Deputy Minister of Industry and Trade Nguyen Cam Tu said that the event aims to realise the Vietnamese Government’s international economic integration commitments, boost Vietnam’s exports to Laos and Northeastern Thailand, introduce its business and investment environment and seek more investment opportunities in Laos. According to him, the two countries’ economic relationship is thriving, with average growth of 20 percent per year in the past five years. Lao Deputy Minister of Industry and Trade Somchith Inthamith showed his belief that the success of the fair will help tighten cooperation between the two countries’ enterprises, thus contributing to increasing their two-way trade. Vietnam and Laos look to a trade value of 3 billion USD by 2020. The fair will remain open to visitors until July 11.- Manufacturers worry about steel price hikes While the imposition of additional tariffs on imported steel products as a temporary safeguard against cheap imports since March was meant to protect the local steel industry, consumers and firms that use steel for their production are worried about steel price hikes in the local market. It’s consumers who must bear the costs rising from the imposition of the safeguard tariffs, said Dam Quang Hung, Deputy Director of Son Ha International Corporation which produces stainless steel products. Hung said that the imposition of safeguard tariffs would result in higher steel raw material prices and higher prices of products to end-users, and may even cause a monopoly in the domestic steel market. He urged the management agency to closely watch steel prices by local producers to prevent a monopoly while balancing the benefits between local steel producers and firms that use steel as a raw material. According to Pham Quoc Vu, Deputy General Director of stainless steel producer Dai Duong International Joint Stock Company, the current safeguard duties on imported steel products were high, which would seriously affect firms which use steel as a raw material. Under the Ministry of Industry and Trade’s Decision No 862/QD-BTC which came into effect on March 22, temporary safeguard duties of 23.3 percent is applied on steel billet and 14.2 percent on long steel products. The safeguard duties will be applied for a maximum of 200 days, or to October 10. Vu said that the ministry should apply more appropriate tariffs for imported steel products, or else, producers that use steel as a raw material would encounter difficulties even in the local market. In the local market, prices of several products made from steel can rise by around 10 percent compared to March due to the imposition of the temporary safeguard tariff, according Tran Anh Tu, a salesman in a building material store in Hanoi. Nguyen Tuan Vinh, who planned to build a house in Hanoi at the end of this year, is worried that if steel prices went higher, it would considerably push up the construction costs. Ho Nghia Dung, Chairman of the Vietnam Steel Association, said that the imposition of safeguard tariffs on imported steel products was aimed to protect local steel production. In trade defence, if benefits of a certain group of firms are protected, others might be affected, Dung said, adding that firms should join with each other to develop a supply chain to deliver mutual benefits. The ministry’s decision was issued after the investigation found that significant increases in imports of steel billet and long steel products caused serious damage to local production during the 2012-15 period. Businesses were still importing steel billets and finished steel products, despite the imposition of the temporary safeguard duties, according to the association. The association’s deputy chairman Nguyen Van Sua said that cheap steel imported from China might continue to flow into Vietnam in the second half of this year as China’s steel industry was faced with a massive overcapacity. With limited local steel demand, the use of safeguard instruments was essential to protect local producers. More importantly, local producers must enhance competitiveness in product quality and prices, he said. The association’s statistics showed that up to 60 percent of imported steel was from China. Since the beginning of 2016, Vietnam has imported over 9.6 million tonnes of steel of all kinds, worth around 3.42 billion USD, showing a year-on-year rise of 48 percent in quantity and 1 percent in value. HCM City advised to encourage PPP infrastructure projects HCM City should promote the public-private partnership model in infrastructure projects to diversify capital resources for developing urban infrastructure, according to economic experts. At the conference on solutions to mobilising capital for infrastructure development in 2016-2021 held in the city on July 7, experts said the city will need up to 44 billion USD for urban infrastructure until 2021. According to Nguyen Hong Van, Head of the Public-Private Partnership (PPP) Desk under the HCM City Department of Planning and Investment, it is necessary to promote Vietnam’s PPP market to foreign investors to reel in capital from the private sector, and gain international experience and capability. The city should issue practical preferential policies such as land leasing or planning to encourage local and foreign investors to join the PPP model. Attracting official development assistance (ODA) capital for infrastructure projects is an effective solution, according to Nguyen Thi My Linh, Deputy Head of the Finance & Bank Faculty of the HCM City University of Industry. Linh said, land clearance and the legal framework are the main reasons foreign investors are shying away from infrastructure projects in Vietnam in general and in HCM City in particular. During 2011-2015, 11,946 billion VND (526 million USD) out of the total investment capital of 38,608 billion VND (1.7 billion USD), or equal to 31 percent, was sourced from other resources outside the State budget and ODA. As of the second quarter this year, the city has been implementing 19 projects using the PPP model. Ha Nam calls for Japanese investments in modern agriculture The northern province of Ha Nam has called on Japanese businesses to invest in modernising local agriculture, according to Chairman of the provincial People’s Committee Nguyen Xuan Dong. The official told representatives of nearly 40 Japanese enterprises, which are scoping out Ha Nam’s agricultural investment climate on July 7, that the province regards developing the farming sector as one of the key economic tasks in a bid to raise the income of local farmers. Six Japanese businesses have registered to invest in the local farming sector, he said, listing an array of incentives for foreign investors in the province regarding land lease and infrastructure construction like transport, electricity and irrigation. Joko Akira, Director of Kokorozashi Network company, praised Ha Nam’s good investment environment as well as the locality’s support for Japanese small- and medium-sized enterprises (SMEs). He said the businesses joining this field trip are mostly SMEs specialising in the spheres of transportation and farm produce processing, noting his hope that the province will create more optimal conditions for these Japanese firms. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR