BUSINESS IN BRIEF 13/7 Binh Dinh mulls constructing MSW power plant Outgrow Energy Consult Co Ltd (OEC) based out of Bangkok, Thailand has unveiled its proposal to oversee construction of an electricity power plant utilizing municipal solid waste (MSW) technology at the Nhon Hoi Economic Zone. Details of the proposition were discussed in specific detail by Tipanan Sirichana, managing director of OEC at a recent meeting with the Binh Dinh Provincial People’s Committee. The Managing director said MSW technology is a more cost effective and environmentally friendly alternative to landfilling or composting technologies, which would require the province to purchase fuel to incinerate the waste. In contrast, MSW facilities are paid by the fuel suppliers to take the fuel (known as a ‘tipping fee’). The tipping fee is comparable to the fee charged to dispose of garbage at a landfill and would result in significant cost savings for the province. OEC specializes in project development services related to obtaining approval of power purchase agreements, engineering construction and funding services for power plant projects, said the OEC managing Director. The company has previously been actively involved in the construction of five power plants in Vietnam. Vietnam, Romania strengthen economic ties A Vietnam-Romania business forum took place in Hanoi on July 12, aiming to boost bilateral connection and partnerships. Speaking at the forum, Deputy Prime Minister Trinh Dinh Dung said the two countries share a long-term cooperation, with Romania helping Vietnam train thousands of engineers in the sectors of gas and oil, construction, mechanics and agriculture, among others. Bilateral trade revenue hit 150 million USD in 2014, approximately two third of which was from Vietnamese exports. The revenue increased to 170 million USD in 2015, with Vietnam exporting goods worth around 102 million USD to Romania. These figures still fell short of cooperative potential between the sides, Dung underscored, adding that both governments should work to stimulate their affiliations as well as connections among the two countries’ agencies and business communities. Participating in the forum, visiting Romanian Prime Minister Dacian Ciolos said his country holds strengths in oil-refining and agricultural processing and is willing to transfer technologies to and invest in Vietnam. According to the Vietnam Chamber of Commerce and Industry (VCCI), Romania has strongly assisted Vietnam in terms of education. Vietnamese expatriates in the country have a population of approximately 600 people, mostly involved in the garment business at the Dragon shopping centre in Bucharest. Flat solar glass group invests 200 mln USD in Hai Phong The Hai Phong Industrial Zone Management Board has granted an investment license to Flat Group from Hong Kong (China) for a solar glass factory worth 200 million USD. The factory will cover 21.8 hectares in the Dinh Vu Industrial Park, reported Dau Tu newspaper. It is expected to put into operation in late 2017 with a capacity of producing about 580,000 tonnes of solar glass each year. Hai Phong holds its position among the country’s top performers in foreign direct investment (FDI) attraction with 31 newly-registered and capital adjusted projects valued at more than 1.74 billion USD in the first five months of the year. Large economic groups from Japan, the Republic of Korea (RoK) and Belgium chose Hai Phong to land their investments thanks to the northern port city’s favourable geographical location and potential. The city is housing more than 450 valid FDI projects with a total registered capital of over 12 billion USD. Vietnam province to get Japanese support to develop agriculture brand for export The Japan International Cooperation Agency has begun a project to help a Vietnamese province develop an agriculture brand to meet quality requirements to win broad acceptance in Japan and the US. The agency will select one among Ha Giang Province in northern Vietnam, Nghe An in the north-central region, Lam Dong in the Central Highlands and Vinh Long in the Mekong Delta. A survey team has visited all of them. Though no specific produce has been identified, Kenta Harigai, chief engineer at Mitsui Consultants, which will provide technical support in the project, said lychee and mango are the two that can use Japan’s new freezing technology for preservation during the export process. The technology uses ethanol solution, which is 20 times faster than the traditional freezing method and maintains the freshness of the fruits better, Japanese representatives said at a recent meeting in Ho Chi Minh City, Saigon Times reported. Minh Tran takes over major Danang real estate project Real estate developer Minh Tran on July 11 unveiled the signing of a contract with the Thien Vuong Group to manage the Time Hoi An project. The Time Hoi An, comprised of street houses and villas, is located in Hoi An at the juncture of Ly Thuong Kiet and Nguyen Hue streets. The architecture of the complex is a combination of cultures of Vietnam, Japan and China, says Minh Tran, with a lot of lush green areas. The highlight of the project will be a five-star Time Hotel situated on an area of 1.8 hectares, with 1,200 luxury rooms, swimming pool, spa and gym sections. A shopping mall spanning 20,000 square metres with 150-200 stores is on the drawing table. The first phase of the project has been completed with the launch of 100 street houses, connected to the main streets of the town. Vietnam motorcycle sales up for first time since 2012 Vietnam’s motorcycle market has seen an increase in its sales for the first time since 2012, reaching 1.4 million vehicles in the first six months of 2016, according to the Vietnam Association of Motorcycle Manufacturers (VAMM). The figure represented an 8 percent increase from the same period last year. In 2015, the market stabilised after declines in the two previous years, with 2.8 million vehicles sold by the VAMM’s five members including Honda, Piago, Suzuki, SYM and Yamaha. Honda Vietnam (HVN) made up 70 percent of the market with the sale of 1.9 million units. According to Minoru Kato, HVN General Director, Vietnamese customers now prefer automatic bikes to geared ones thanks to their fashionable designs and conveniences. However, geared bikes remain a choice of people living in rural areas. Therefore, the company will continue manufacturing both types of motorbike to meet the demand of all customers, he said. As the local bike market has nearly reached saturation point, it will also boost exports with an aim for a 41 percent increase in export value to 345 million USD in 2016, he added. In 2015, the HVN exported 91,000 motorcycles for 245 million USD, soaring 179 percent from 2014. Hau Giang seeks investments for 33 projects The Mekong Delta province of Hau Giang is calling for investment in 33 projects, especially in farm and food products, hi-tech agriculture, and trade and tourism development, said Chairman of the provincial People’s Committee Lu Van Hung. Hung revealed this at an investment promotion conference held in the locality on July 11 in the framework of the ongoing Mekong Delta Economic Cooperation (MDEC) Forum. He said the local authorities are giving priority to investment projects related to development of high-quality farm product markets, high-tech industrial parks, and concentrated breeding and fresh-water aquaculture areas, fruit preservation and processing and in eco-tourism. The event offered a good chance for investors to seek cooperation opportunities and partners in all fields, thus promoting sustainable economic development in the locality in the future, he noted. The province has directed its departments and sectors to facilitate businesses’ operation and apply preferential policies in disadvantaged economic areas, he added. According to Tran Huu Hiep from the Steering Committee for the Southwest Region, the province should pay more attention to improving its competitiveness and boosting regional links. At the conference, the province’s officials presented investment decisions to four projects with a total capital of over 4 trillion VND (180 million USD). Hau Giang lured 3,710 enterprises with a total investment of over 43 trillion VND (over 1.9 billion USD) during the last 12 years. It recorded 310 newly established businesses every year, mainly in trade, service and construction. To date, the province is home to nearly 500 domestic projects worth 120 trillion VND (5.4 billion USD), up 7.4 times against 2004. The number of foreign-invested projects in the locality is 27, with a total investment capital of 800 million USD.- Seminar discusses draft law on supporting SMEs A seminar on the draft Law on Supporting Small- and Medium-sized Enterprises (SMEs) from the view of the business community took place in Hanoi on July 11. The seminar was organised by the Vietnam Chamber of Commerce and Industry (VCCI) in partnership with the Ministry of Planning and Investment (MoPI). Addressing the event, MoPI Deputy Minister Dang Huy Dong said despite the government’s effort to create a fair and business-friendly environment for local SMEs, which are regarded as the growth engine of the economy, there is still a gap between policies and their implementation in practice as well as between policies and businesses’ expectations. The number of SMEs that go bankrupt or have to temporarily stop operating has been on the rise, while most of the enterprises spent very little on technology application, Dong noted. He stressed the need to thoroughly study the contents of the bill for the early adoption in order to provide timely support for the development of SMEs. According to Nguyen Hoa Cuong, Deputy Director General of the MoPI’s Enterprise Development Agency, the five-chapter and 33-article bill introduces a number of support incentives for SMEs, particularly in terms of access to funding and technology, securing land for operation, information update and consultancy. VCCI Secretary-General Pham Thi Thu Hang said it is vital to ensure that the support policies are practical and suitable to domestic SMEs who are still struggling to compete with their foreign rivals. The bill needs more feedback and recommendations from experts and businesses and should be reviewed with reference to international experience, she suggested. The law itself is not enough but should go with the change in how authorities and state officials work with enterprises, she added. First Vincom Plaza shopping mall breaks ground in Dong Thap Construction on Vincom Plaza shopping complex, the first of its kind in the southern province of Dong Thap, began in Cao Lanh city, on July 11. The five-story mall, will gather famous brands in fashion, consumer goods, cuisine at home and abroad, a recreational area for children, and a modern cinema across a site of over 12,000 sq.m. Managed by Vingroup’s Vincom Retail, which currently operates 25 shopping malls nationwide, Vincom Plaza Cao Lanh is expected to be operational in April 2017 as the most modern in the Mekong Delta. Le Khac Hiep, Vingroup Vice President, said the complex will contribute to boosting trade and changing the face of Dong Thap and adjacent localities. Founded in Ukraine in 1993 under the name of Technocom, Vingroup has become Vietnam’s leading private sector real estate company. It comprises such subsidiaries as Vincom for high-end shopping centres, Vinhomes for residential properties, Vinpearl for tourism and recreational facilities and Vimec for hospitals. The firm was twice named winner of the “Best Developer Vietnam” category at the annual South East Asia Property Awards in 2013 and 2014. Recently, together with Vinamilk, Vietcombank, FPT Corporation and Petrovietnam Gas Joint Stock Corporation, the group made it into the Nikkei Asian Review’s Asia 300 list, which names Asia’s most dynamic companies. Last year, Vingroup opened 10 shopping malls across the country and the ambitious company plans to make nearly 50 trading centres operational in 2016, aiming to nudge international-standard products and services ever closer to Vietnamese people. Vietnam suspends peanut imports from Senegal Vietnam is to suspend the import of peanut (Arachis hypogaea) from Senegal due to the product’s contamination with insects subject to Vietnam’s plant quarantine. The decision, made by the Ministry of Agriculture and Rural Development on July 11, was triggered by 48 containers of peanut from Senegal found to be contaminated with the extremely destructive pests: the Karpa beetle and Groundnut beetle. The containers, weighing over 943 tonnes, were shipped to Vietnam via the northern port of Hai Phong between February 18 and June 14. The suspension will begin after 60 days from the signing of the decision. Pending the enforcement of the decision, the ministry’s Plant Protection Department will closely check peanut imports from Senegal. It will also notify the African country’s relevant agencies about the issue and examine their remedies. PBank wins best mobile banking award Vietnam Prosperity Bank (VPBank) has been recognised as the "Best Mobile Banking Vietnam 2016" by Global Banking and Finance Review, due to its continuous efforts to improve its products. The VPBank Mobile application has been considered to be a small bank available on mobile phones, providing many financial services, such as account management, money transfers, bill payments, and access to saving accounts and loans. This is one of the first e-bank applications in the country allowing operation on iOS, Android and Windows Phones. The latest 2016 version has very fast speeds, is more user-friendly and has doubled the number of transactions, accounting for 30 percent of total online transactions. Further, its back-end system has helped protect customers' information. VPBank plans to upgrade and develop its products to meet the increasing demand of customers while maintaining its first position in the digital banking area.- SME law urged to meet business expectations Policy-makers yesterday were called on to build the law on supporting small- and medium-sized enterprises (SMEs) in a way that helps narrow the gap between policies and expectations of businesses. This opinion was voiced at the conference themed "Draft law on supporting small- and medium-sized enterprises from the enterprise community's perspective" which was jointly held by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Ministry of Planning and Investment (MPI). Deputy Minister of Planning and Investment Dang Huy Dong said the role of SMEs had for long been recognised as a backbone of most of the economies around the world. Despite the Government's effort to create a fair and business-friendly environment for local SMEs, there was still a gap between policies and their implementation in practice as well as between policies and businesses' expectations, Dong said. According to Dong, the number of SMEs that go bankrupt or have to temporarily stop operating has been on the rise, while most of the enterprises spent very little on technology applications. He stressed the need to thoroughly study the contents of the bill for the early adoption in order to provide timely support for the development of SMEs. Nguyen Hoa Cuong, deputy director of the MPI's Enterprise Development Department, said the five-chapter and 33-article bill introduced a number of support incentives for SMEs, particularly in terms of access to funding and technology, securing land for operations, information update and consultancy. VCCI Secretary General Pham Thi Thu Hang said it was vital to ensure that the support policies were practical and suitable to domestic SMEs who are still struggling to compete with their foreign rivals. The bill needed more feedback and recommendations from experts and businesses and should be reviewed with reference to international experience, she suggested.  The law itself was not enough, but authorities and State officials must change their mind-set and the way they work with enterprises, she added. Agreeing with Hang, director of the Economica Consulting Company, Le Duy Binh suggested that Viet Nam should learn from Japan's experience. He said that since 1963 the country had issued many laws to support SMEs which were regarded as a growth engine of the economy. These policies focussed on encouraging the creativity of enterprises and start-ups, improving the management capacity of SMEs, enhancing productivity and facilitate the companies' adaptability to economic fluctuations. Thanks to timely and properly issued policies, Japan had seen the growth of many giant groups, Binh stressed. Binh said that the Government's target to have one million enterprises by 2020 was feasible, citing that from 2005 to 2013, 600,000 enterprises were registered. However, in reality, only 45 per cent of the companies actually operated during the period. This showed a big gap between business registration and actual operations, and therefore, the law must aim at narrowing the gap, Binh said. VCCI chairman Loc also suggested that the law regulate all banks to have programmes to assist SMEs, not just the few banks that were doing so currently. VN rice exports plunge Viet Nam's rice exports in the first half of the year fell by 32 per cent over the same period last year, mostly due to competition from other countries, the Viet Nam Food Association (VFA) has said. In addition to rice exports from Myanmar, Pakistan and India, Vietnamese exporters had to contend with Thailand selling off a huge stockpile of its rice. In the first quarter, rice exports increased more than 50 per cent compared to the same period last year, mostly because of contracts signed last year. But with domestic rice prices higher than global levels in March and April, many domestic enterprises were unable to sign new contracts, leading to a fall in exports in the second quarter. Asian countries remained the main buyers of Vietnamese rice, accounting for 67 per cent of total rice exports, followed by Africa (16.4 per cent) and the Americas (11.9 per cent), according to a report released at a VFA meeting held last Friday. However, in the first half of the year, total rice exports to Asia fell by 5.4 per cent, dropping by 9 per cent to China and 52 per cent to the Philippines. Unlike the fall of exports to Asia, Vietnamese rice exports to Africa and the Americas rose 10.8 per cent and 11 per cent, respectively, compared to the first half of last year. During the period, exports of 5 per cent and 25 per cent broken white rice fell by 29 per cent and 26 per cent, respectively. At the same time, exports of fragrant rice increased by 30 per cent and 15 per cent broken white rice by 18 per cent, while sticky rice rose by 145 per cent. At the VFA meeting, the association adjusted the total export target for the year from 6.5 million to 5.65 million, excluding border trade, a year-on-year fall of 14 per cent. For the first six months, a total of 2.7 million tonnes of rice were exported. Huynh Minh Hue, VFA's general secretary, said that local rice exporters expected to ship three million tonnes in the last half of the year, a drop of 22 per cent over the same period last year. Speaking to the press on the sidelines of the meeting, VFA chairman Huynh The Nang said the target was based on the association's data analytics, and that market conditions could change if the Philippines, Indonesia and others bought more Vietnamese rice. Lam Anh Tuan, director of Thinh Phat Co Ltd, said the target was feasible, as the price of Viet Nam's 5 per cent broken white rice was the most competitive in the region. Besides official exports, enterprises have also exported rice to China via border trade since 2012, with annual export volume reaching 1.5-1.7 million tonnes. VFA said the Ministry of Industry and Trade would organise a meeting later this month to discuss problems faced by the rice production sector. Better performance forecast for banks in H2  Business performance at commercial banks is forecast to continue its upwards trend this quarter after making some improvements in the first half of the year, a State Bank of Viet Nam (SBV) survey said. Under the business sentiment survey covering domestic and foreign banks in Viet Nam released last week, banks also expect better results for the whole of 2016. A total of 86.5 per cent of the respondents expected better results in 2016 than last year, of which 29 per cent anticipated ‘significant improvement'. Compared with the previous survey conducted in the first quarter, banks were also more optimistic about credit growth this year. Banks forecast that the banking system's credit growth would increase to 20.4 per cent this year, roughly 3 per cent higher than the Government's target, thanks to stronger credit demand and better business conditions. In the survey in January, credit growth was expected at 20.1 per cent. The country has targeted credit growth of 18 per cent this year, up from 17.3 per cent in 2015, following growth last year that was its strongest since 2007 thanks to the economic growth. The respondents also anticipated capital mobilisation of the entire banking system this year would reach 17.6 per cent, of which the rising rate for deposits in the dong is raised to 19.1 per cent from 18.4 per cent in the previous survey but deposits in the US dollar is lower to minus 0.09 per cent from previous 6.9 per cent. The central bank has gradually cut or scrapped ceiling rates on dollar deposits to combat dollar hoarding and even abolished some dollar lending, but it recently resumed short-term loans in foreign currencies to support economic growth. Liquidity in both dong and dollar is also expected to be good in the second half of the year. With optimism about   growth prospects and the exciting return of the finance and banking system in 2016, banks also anticipated the industry's labour market would see positive changes next months. According to the survey, it is expected that 42.4 per cent of the respondents would increase their recruitment in the third quarter while 57 per cent of them are expecting more recruitment in the whole year of 2016. In the second quarter, 28.2 per cent of the respondents reported that they had more employment. Car sales surge in June Vietnamese people bought more than 24,400 cars in June, an increase of 31 per cent compared with the same period last year, the Vietnam Automobile Manufacturers' Association said. Passenger cars were the market leaders with sales of 12,916 units, following by commercial cars with 10,325 units and special-purpose vehicles with 1,180 units. In the first half of this year, nearly 126,800 cars were sold, a 31 per cent year-on-year increase. On average, about 700 cars were bought each day. Truong Hai Automobile Joint-Stock Company (Thaco) continued to monopolise the market last month, with sales of 9,246 units, claiming 42.3 per cent of the market share. Thaco said it produced 51,000 cars in the first half of this year and developed 11 new models of buses, tour cars and trucks. Thaco plans to design a new bus under the National brand later this year as a Viet Nam brand promotion strategy in the ASEAN Economic Community and Trans-Pacific Partnership (TPP). Two truck and bus manufacturing plants will be built later this year, with a capacity of producing 16,000 buses and 100,000 trucks per year, while the production capacity of the Kia Thaco plant will be raised from 28,000 to 30,000 cars, and of Vina Mazda to 30,000 vehicles. Thaco's sales were more than double of Toyota Motor Vietnam (TMV), which ranked second with sales of 3,979 units, claiming 18.2 per cent of the market share. These were followed by Ford Viet Nam, Honda, GM Vietnam and Mercedes-Benz Vietnam with sales of 2,369 units, 869 units, 765 units and 655 units, respectively. The top five best-selling cars in the first half of this year were Ford Ranger, Toyota Vios, Toyota Fortuner and Toyota Innova, besides Mazda. Innova is one of five best-selling cars in the first half of this year. The market prices of many models with engine displacement between 1,500cc and 2,500cc were sharply cut. TMV cut the price of Corrola Altis models by VND48 million (US$2,147) to VND59 million each, with the prices now ranging from VND747 million to VND933 million. Other Toyota models the prices of which were cut were Yaris, Vios and Hiace. Meanwhile, the firm raised the prices of Fortuner models by between VND32 million and VND38 million to reach VND1.04 billion and VND1.23 billion. The price of Land Cruiser VX increased by VND870 million to touch VND3.72 billion. A small survey conducted by Vietnamnet.net showed that agents cut the prices of many models in the sedan segment. An auto sales person in Ha Noi, who wanted to remain anonymous, said the prices of models with engine displacement of 1,500cc to 2,500cc had been reduced. The agent did not make any profit, but still accepted the low price to close its revenue account for the first half of this year. Meanwhile, a representative of an FDI auto firm said the price cut was being implemented only by agents. They accepted cut in profits to increase revenue and hoped to receive a cash bonus from the automakers. Agents said they had to reduce the prices of many models because there was fierce competition among companies to claim and maintain market shares. Some businesses have announced price cuts. Meanwhile, some others do not cut the price themselves, but give the ‘green light' to agents to cut prices, while promising to give them cash bonuses in return for increased revenue. Firms busted for tax fraud  Multi-level marketing companies have been discovered indulging in tax fraud worth several billion Vietnamese dong and the sale of fake goods, the Ministry of Industry and Trade's Competitive Management Department said. After three months of investigations, the department yesterday officially announced the inspection results at four companies including Lien Ket Tri Thuc Company, Thang Long Franchise Company, Lien Minh Tieu Dung Viet Nam Company, and Lien ket Viet Nam Company. The inspection team, managed by the Ministry of Industry and Trade (MoIT) and police forces, uncovered several tax violations at the companies. The team found that the Thang Long Franchise Company allowed their distribution agencies to receiving benefits which were not stipulated under the promotion campaigns. This violated regulations of multi-level trading. In addition, several distribution agencies which received commissions from the company had not been mentioned in the list submitted to the team. "The company reported turnover lower than data from their agencies at VND34 billion (US$1.5 million). This indicates violation of tax laws," the ministry said. The inspection at Lien Minh Tieu Dung Viet Nam Company in northern Bac Ninh Province revealed that the company also violated tax regulations in calculating personal income tax for their staff. They did not report turnover of some distributors into the company's total incomes. The ministry added that the company had committed violations by not reporting turnover, invoice usage and use of incorrect accounting documents. It also revealed that there were some unclear turnover calculations, resulting in misunderstanding and wrong applications at companies. The inspection team suggested that management agencies should have made suitable adjustments to ensure united applications at multi-level marketing firms. Incorrect labels The ministry also revealed that the Thang Long Franchise Company advertised two functional foods including Thymo-Zin and Thymo Plus which have not been approved by management agencies. In addition, the two products have some incorrect ingredients and functions which do not match the certification granted by the Ministry of Health. Its other eight functional products have labels which differ from their certifications. "These violated regulations on advertisement of functional foods," the ministry said. The same situation has been seen at the Lien Minh Tieu Dung Viet Nam Company. The ministry would provide the inspection results to relevant agencies for further investigations or punishment. The ministry asked the department to quickly resolve the violations relating to multi-level management. However, the team has not released inspection results at three companies including Amway Viet Nam Company, Unicity Marketing Company and Thien Ngoc Minh Uy which are considered big multi-level marketing firms in Viet Nam. The ministry said they have received several complaints from participants at the Thien Ngoc Minh Uy Company. They established a team to conduct inspections while resolving each complaint. The ministry would announce the results soon. They also planned to conduct a check-up team at the Amway Viet Nam Company on July 18. It added that the Unicity Marketing Viet Nam Company is no longer under the inspection list as the ministry imposed a fine of VND110 million on the company. Gold market shines in uncertain times Gold prices rallied to a two-year high last week which stirred feverish speculation in the Vietnamese market. The first week of July has seen a historic ascent of gold prices in Vietnam, as buying quotes soared from VND36.9 million per tael (US$1,438 per ounce) on July 4 to VND39.5 million per tael (US$1.540 per ounce) on July 6. This also marked the highest prices for gold in Vietnam since 2014 and thus, prompted thousands of individuals to stock up on the precious metal. The buying mania only cooled down as gold prices dipped during the last few days of the week. On July 7, purchasing rates at Saigon Jewellery Company fell to VND37.5 million per tael (US$1,462 per ounce) and plunged even lower to VND36.95 million per tael (US$1,440 per ounce) on July 8. Despite the slight drop, gold prices still jumped by 13% since the start of 2016. Similar excitement has been experienced throughout the global market, as gold reached its peak since March 2014 at US$1,371 per ounce on July 6. This was even higher than the US$1,358 per ounce on June 24, when the UK voted to depart from the European Union. Later on in the week, investors earned profits and gold prices modestly dipped. Earlier, HDBC analysts predicted a sizeable appeal for gold in the coming months, as uncertainties from the UK “Brexit” vote would increase demand and drive up prices for the precious metal. As gold is independent of any economic policy or central bank, it is considered a safe-haven asset whenever investors become pessimistic about the market’s outlooks. “In the event that capital outflows weaken the British sterling and euro, gold would likely be a destination for much of this flow. This could have a bullish impact on the value of gold. While we expect that prices could rally up to 10%, they may rise even higher if there were to be further concerns regarding the future direction of the EU after [the Brexit]”, noted the analysts. Regarding the gold hysteria in Vietnam last week, experts agreed that global rallies and uncertainties following the Brexit may have been two contributing factors. However, according to the chairman of the Vietnam Gold Trading Association, Nguyen Thanh Long, such as steep rise in Vietnam was mainly due to psychological reasons. “Existing investors have hoarded their gold to anticipate higher prices. And new buyers flocked to purchase this precious metal for the same reason. As a result, there was a shortage of gold in Vietnam, last week, which prompted even more hoarding and sparked speculation”, said Long. He then warned that as gold reaches its peak, profit-taking activities will take place and push down gold prices. Thus, investors must take great caution if they want to bet on the further rise of gold rates. Economic expert Nguyen Tri Hieu agreed with this view, adding that individual investors should not allocate more than 30% of their capital to gold, as the precious metal is an asset prone to extreme price volatility. He advised investors to “keep their head cool” and be wary of rumours that gold may surpass US$2,000 per ounce this year. Meanwhile, the State Bank of Vietnam (SBV) announced that it would interfere with the gold market if necessary to keep prices under control. Nguyen Ngoc Canh, head of the Foreign Exchange Regulation Department at the SBV, said that recent gold rallies are short-term spurts. “The SBV will keep a close watch on the gold market and get ready for any necessary intervention. Out actions will be in line with Decree 24/2012/ND-CP, which since its launch has significantly reduced gold conjecture in Vietnam”, said Canh. Knauf Vietnam boots brand awareness in Vietnam Knauf Vietnam Co., Ltd. has introduced its new gypsum board – Knauf StandardShield made in Vietnam - at a ceremony in HCM City on July 8. Knauf Vietnam Company starts construction of its first gypsumboard manufacturing plant in the northern region of Vietnam. The product will be manufactured at the new gypsum board manufacturing plant that opened in June in Hai Phong City's Dinh Vu Industrial Park. The factory has a capacity of 20 million square metres of gypsum board yearly. After only 2 years setting up regional offices and local production in Vietnam, Knauf Vietnam has started to supply the Vietnamese market and gradually increase their brand awareness throughout Vietnam. "Now we are able to provide locally-made and high quality products to the market in Vietnam. I believe that Knauf will be able to grow our market share by increasing our brand awareness and product presence," said David Victor Thomas – General Director of Knauf Vietnam. At the ceremony, Knauf Vietnam also introduced two new distributors in the South, including the I.S Joint Stock Company and Dong Do Interior Decoration Joint Stock Company. Knauf Vietnam plans to have a full product offering throughout the country by the end of 2016. The rise of the landed property sector The landed property sector is outperforming other segments to become Vietnam’s most attractive investment channel. In the latest report by Savills Vietnam, the landed property sector had its best performance ever, with 820 sales in Ho Chi Minh City in the second quarter of 2016, showing growth of 81% quarter-on-quarter (QoQ) and 110% year-on-year (YoY). Smaller townhouse sizes have provided affordable housing for a new generation. Townhouses can compete with apartments as they are not that much more expensive yet offer far greater advantages, such as recreational amenities, pools, on site education facilities, convenient shopping, and the security of a gated community. The Sapphire development, with a range of niche residential to large-scale commercial projects, has recently entered the landed property segment, with 29 riverfront villas at HOLM project. David Clarkin, joint managing director of Sapphire, told VIR that there had always been a global desire for individuals to own their own piece of land and home, Vietnam was no different. The population of Ho Chi Minh City has increased from approximately three million to eight million people over the past 30 years, the opportunity to acquire well located residential land is rapidly diminishing. This makes landed property all the more desirable, according to Clarkin. The problem for developers lies in the finite availability of land in the most desirable residential areas for villas and townhouses. Indeed, this asset class has come of age and now has critical supply mass. A city such as Ho Chi Minh has an almost infinite ability to construct high-rise apartment buildings adding a large amount of units to the market. However, the opportunity to build villa projects, within the inner suburban neighbourhoods, is rare. “The limited supply, coupled with greater demand from the increasingly wealthy middle classes will result in above average capital growth in the landed sector, when compared to other segments,” he stated. With the same view, Matthew Koziora, director of Transactions at VinaCapital, said that townhouses and villas offered local buyers a number of features that condos did not, including greater liquidity. With the forward supply of landed property probably one-twentieth of condos, their ability to re-sell prior to handover surpasses that of condominiums. He pointed out that the main difficulty for new landed projects was finding good sites with approval in place. Lower forward supply will therefore create a more sustainable market in terms of liquidity and sale ability. Local buyers are becoming increasingly price sensitive, they want value for their  money. They are also looking for quality designs and facilities with close proximity to amenities, according to Koziora. VinaCapital’s recent launches have been quite successful, including its latest project, 9 South Estates in Saigon South, which has recorded robust sales over the past five months due to its impressive list of on-site facilities. Troy Griffiths, deputy managing director of Savills Vietnam is bullish on the prospect of the landed segment. “Historically, a townhouse in Ho Chi Minh City was three times as costly as a high-end apartment. However, this has now reduced to 1.7 times in newly developed areas.  This is a low step ratio that shows landed property is well within reach for many,” he said. The local landed property market promotes sustainability because of a healthy purchaser structure. End-users account for the majority of purchasers, with speculators less than 10%. Investors are abundant in the townhouse segment, prompting an expansion of the rental market in the near future. Thus, townhouses have outperformed other residential asset classes in investment returns, thanks to land value appreciation and stable rental returns. Savills Vietnam forecasts that the landed property demand in 2016 would be YoY 103% higher in Ho Chi Minh City and 88% higher in Hanoi, supported by a growing affluent class. Compared to regional peers with similar population densities, such as Kuala Lumpur, Bangkok and Jakarta, Ho Chi Minh City and Hanoi’s primary supply of landed housing (less than 10%) is relatively small, leaving ample room for future growth. Southwest grows 6.5 % in first half The southwestern region grew 6.5 % in the first half of 2016, with Gross Regional Domestic Product (GRDP) estimated at US$11.25 billion. Deputy Prime Minister Vuong Dinh Hue, head of the Steering Committee for southwestern region addresses the event The figures were released at a conference hosted by the regional Steering Committee in Mekong Delta city of Can Tho, on July 11, to review socio-economic performance in the past six months and set tasks for the later half of the year. As heard at the function, 1.57 million hectares of winter-spring rice paddies yielded 10.4 million tonnes of rice, while more than 1.6 million hectares of summer-autumn paddies planted during the period are expected to produce another 9 million tonnes by the end of the season. The six-month regional industrial index increased by 9 % compared to the same period last year, with the industrial production value estimated at over US$12.7 billion, up 11.1 % year-on-year. The overall import-export revenue is estimated to reach nearly US$9 billion, an annual rise of 3.2 %. According to deputy head of the regional Steering Committee Son Minh Thang, the region has been facing various difficulties, including a shortage in water supply caused by saline intrusion and drought, and in capital for local projects in response to climate change impacts. The slow construction of major projects is also an issue, while the volume of foreign investment attracted in the period was still lower than other regions nationwide. Speaking at the conference, Deputy Prime Minister Vuong Dinh Hue, who is also head of the committee, urged the region to focus on boosting agricultural and fishery production to compensate the damage caused by saltwater intrusion and drought in the first and second quarter. He warned that prices of a number of goods might increase by year’s end, which is likely to affect the local consumer price index. Authorities of southwestern provinces and cities should work to boost their regional connection, Hue said. Moving forwards, the steering committee plans to hold conferences on agricultural restructuring, new-style rural development, regional connection and investment attraction, he noted. Hue continued to add that needy people in the Mekong Delta region will receive further support and preferential credit policies will be considered. Hai Duong exports 5,000 tonnes of lychee so far The northern province of Hai Duong shipped 5,000 tonnes of lychee to foreign countries during this year’s crop. China remained the largest importer with over 2,000 tonnes, followed by the Republic of Korea (500 tonnes), France (90 tonnes), Thailand (80 tonnes) and Australia (18 tonnes). To assure the quality of lychee exported to fastidious markets, the province has zoned off an additional 300 hectares of lychee cultivation in Chi Linh town and Thanh Ha district for VietGAP and GlobalGAP standard production. Hai Duong, one of key lychee cultivation localities in the country, has nearly 11,000 hectares of lychee and uses the VietGAP and GlobalGAP standards for about 250 hectares. This year, its lychee output was estimated to reach 50,000 tonnes. VPBank wins best mobile banking award Vietnam Prosperity Bank (VPBank) has been recognised as the "Best Mobile Banking Vietnam 2016" by Global Banking and Finance Review, due to its continuous efforts to improve its products. The VPBank Mobile application has been considered to be a small bank available on mobile phones, providing many financial services, such as account management, money transfers, bill payments, and access to saving accounts and loans. This is one of the first e-bank applications in the country allowing operation on iOS, Android and Windows Phones. The latest 2016 version has very fast speeds, is more user-friendly and has doubled the number of transactions, accounting for 30% of total online transactions. Further, its back-end system has helped protect customers' information. VPBank plans to upgrade and develop its products to meet the increasing demand of customers while maintaining its first position in the digital banking area. Calls for MEPS testing overhaul Thousands of local and foreign manufacturers/importers in Vietnam are suffering a major administrative burden regarding energy labeling and minimum energy proficiency standards certification. Do Huu Hau, general director of German lighting manufacturer OSRAM Vietnam, told VIR that over the past few years his company had been “very concerned about the obstruction of energy labeling and minimum energy proficiency standards (MEPS) certification in Vietnam.” “Such procedures are considered sub-licences, making it extremely difficult for enterprises to import goods into Vietnam,” Hau said, adding that “The process of granting an energy label is lengthy and quite costly.” Before being marketed in Vietnam, thousands of product lines must be tested for MEPS and obtain an energy label, such as refrigerators, printers, scanners, light bulbs, steamers, electric cookers, fans, and washing machines. Under the Ministry of Industry and Trade’s (MoIT) Circular No.07/2012/TT-BCT, enacted in April 2012, in order to certify energy labeling and MEPS, manufacturers/importers must have product samples tested at laboratories appointed by the MoIT. However, in Vietnam there are only four laboratories, with two in the north and two in the south. The tests can take weeks or even months depending on the products and the workload in these labs. According to AmCham Vietnam, in the context of limited quantity and capacity of laboratories, the requirement that samples must be taken from each shipment, with test results used for that shipment alone, has caused a significant delay in customs clearance. “Thousands of products have been in storage for months awaiting test results, this is causing significant losses for related manufacturers and importers,” AmCham Vietnam stated in a document. The burden is far heavier if the products are produced overseas. In this case the products must be examined in the country they are produced in. The MoT has stipulated that its own examiners must physically visit the country for product testing, with the trip’s expenses paid for by the enterprise itself. “This is unfair to the enterprises. For example, if Dutch-backed Philip’s products are made in Thailand, experts must travel to Thailand for testing. However, overseas enterprises often don’t accept such costs, which are considered unofficial expenditure,” Nguyen Thu Ha, managing director of a US-backed investment consultancy firm in Hanoi, told VIR. Echoing this view, Hau said that “OSRAM Group has 46 factories worldwide. So it would be very costly and time consuming for our company to meet these regulations.” “The MoIT is providing energy labels for each product code. If we have new products, we have to go through the energy labeling process, even though the products have already met the high standards set in Europe and the US,” he said. AmCham has recently sent the document to the government, the MoIT, and the Ministry of Justice, explaining this administrative burden. AmCham have suggested that the MEPS testing at in-country accredited test labs should be waived for globally well-known brands or for advanced technologies. Most manufacturers of electronic products such as Apple, Dells, Canon, Sony, HP, and Samsung, already apply international standards of energy efficiency. Their products have been tested by internationally recognised laboratories, before they are circulated on the market. “Therefore, the requirement that these products must be tested again for energy labeling is redundant and unnecessary, especially with the limited capacity and resources of the laboratories in Vietnam,” the document stated. Furthermore, the test results, when required, should be accepted for all the consignments of the same product model. Electronic products are manufactured under well-controlled process and it is an accepted fact that there is no difference in product energy efficiency characteristics with products of the same model. “Therefore, a sample test for every single consignment of the same product and the same model is unnecessary and causes a significant delay in custom clearance, consequently adding significant costs for importers and manufacturers,” the document said. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR