BUSINESS IN BRIEF 14/9 Role of “angel investors” discussed in Hanoi The role of international “angel investors” in Vietnam’s startup ecosystem was discussed at a seminar in Hanoi on September 12. Organised by the Mekong Angel Investors Network, the Mekong Business Initiative and the Asian Development Bank (ADB), the event welcomed investor groups from the European Union, New Zealand, the US and local investors and startup enterprises. Co-founder and CEO of HATCH, a startup incubator, Pham Quoc Dat said “angel investors” are affluent individuals who possess huge properties and provide capital for startups. Angel investors pool their investment capital and want to meet and work with talented people, Dat added. ADB Country Director for Vietnam Eric Sidgwich said that Vietnam needs a dynamic private sector which should come from a solid foundation of small-and- medium sized innovative enterprises. He asserted that as a partner of Vietnam, the bank will support the country’s private sector. Participants at the event also discussed a number of startup matters such as experience in developing a company, building trust between angel investors and Vietnamese enterprises and how to approach angel investors. Transport ministry launches PPP website The Transport Ministry has launched a website listing public-private partnership (PPP) projects at http://ppp.mt.gov.vn . Speaking at the launching ceremony, Deputy Transport Minister Nguyen Nhat said the website aims to improve the efficiency of the ministry’s communications and provide full and timely information in an open and transparent manner. The website features a list of projects looking for investment, screens qualified investors and ongoing projects and provides legal and guiding documents from State agencies, which will be updated regularly. Nhat highlighted the need to publish an English version of the portal as soon as possible to attract foreign investment. HCM City firms get preferential bank loans Thirty-four small and medium-sized businesses in District 1 received total bank loans of nearly VNĐ3.1 trillion (US$139.1 million) at preferential interest rates under the banking-enterprise linkage programme. The State Bank of Việt Nam's HCM City branch in collaboration with the People's Committee of District 1 and the Department of Industry and Trade organised a ceremony to sign credit contracts between companies and banks on September 9. The banking-enterprise linkage programme was instituted four years ago to ease the funding and interest difficulties faced by companies based in the city. As of today, nearly VNĐ159.95 trillion (US$7.17 billion) has been lent to 18,916 enterprises in the city, Trần Đinh Cường, deputy director of the SBV's HCM City branch, said. This year 16 banks have pledged to earmark VNĐ211.55 trillion ($9.48 billion) and an additional US$15 million in foreign currency to provide preferential loans to small and medium-sized enterprises and firms, with a maximum interest rate of 7 per cent for short-term loans and around 9 per cent for medium and long-term loans.  BCC to issue another 14.3 million shares Bim Son Cement JSC (BCC) has announced it will issue 14.3 million shares to pay dividend in the fourth quarter of 2016. Accordingly, Bim Son Cement will issue another 14,349,209 shares, paying 15 per cent dividend for 2015. MB Securities Company (MBS) had recently recommended to its customers to buy shares of the cement company at a price of VND20,800 per share. Despite the issues in the real estate sector, Bim Son Cement has still shown good business results, thanks to the rising number of construction projects in Thanh Hoa Province, where it is based, following the wave of investment in property from large real estate investors, such as Vingroup, FLC, T&T and HUD, MBS said. The cement company, as a result, earned revenue of VND2.2 trillion in the first half, an increase of 14 per cent compared with the same period last year. This year, the company has set a sale target of over VND4 trillion and profit after tax of VND260.6 billion. The company has, so far, achieved 54 per cent of this year's plan. The company, with charter capital of nearly VND1 trillion, has its shares listed on the Ha Noi Stock Exchange since 2006. Till date, the shares have increased more than 46 per cent over the last year. On September 13, each BCC share closed at VND18,700 on the northern bourse. Tata Motors launches mini-truck in Viet Nam Tata Motors, in coordination with Vietnamese domestic partner TMT Motors, launched the Tata SuperAce, its first product in Viet Nam, late last week. The company officially announced its entry into the country last year. The Tata SuperAce mini-truck, which is an innovative cargo transport solution, offers versatility, safety and comfort. Engineered to perform all the tasks of a small pick-up truck, the Tata SuperAce has a rated payload of one tonne, meeting requirements of both inter and intra-city transportation. It is also suitable for market loads such as cement, construction items, vegetables and fruits, as well as food grains and fast moving consumer goods. As the only diesel powered mini-truck in its segment, Tata SuperAce also comes with a petrol powered engine for a superior fuel economy and can hit a top speed of up to 130km per hour. "Having sold over 1.5 million mini-trucks on the Ace platform globally, so far, Tata SuperAce has been developed based on Tata Motors' deep understanding of the CV customer for a wide range of applications," Ravindra Pisharody, executive director (commercial vehicles) of Tata Motors, said. "Through our partnership with TMT Motors, we are committed to shaping the commercial vehicles industry here and are determined to build a long-lasting relationship with the customer for competitive business advantages and the trusted credentials of the Tata Motors brand," he said. Tata Motors Limited is current India's largest automobile company with consolidated revenue of US$41.6 billion in the 2015-16 period. It's also the country's market leader in commercial vehicles and among the top in passenger vehicles. Ford still fastest growing auto brand in VN Ford remains one of the country's fastest growing auto brands with 2016 sales increasing year-on-year by 57 per cent to 18,443 units. In August alone the US auto maker's sales increased by 57 per cent year-on-year to 2,123 vehicles, led by strong demand across its lineup. EcoSport, Ranger and Transit led the record sales month with each leading their respective segments for the month as well as the year-to-date. "Consumer confidence remained healthy in August despite it being Ghost Month [seventh lunar month], and continued strength in demand for Transit, Ranger and EcoSport helped drive our best-ever sales for the month," said Pham Van Dung, managing director, Ford Vietnam.  MOIT pushes trade with Mexico, TPP Local companies are looking to forge new and better, stronger and deeper ties with Mexico, said Do Kim Lang of the Ministry of Industry and Trade (MOIT) on September 13 at seminar in Hanoi. Mr Lang, who heads up the MOIT’s Trade Promotion Agency, spoke at length to the hundreds in attendance on the benefits of the Trans Pacific Partnership (TPP) and how it would benefit trade and investment ties between Vietnam and Mexico were it to be ratified.  The TPP involves 12 countries: Vietnam, Mexico, the US, Japan, Malaysia, Singapore, Brunei, Australia, New Zealand, Canada, Chile and Peru. The pact aims to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth and, if ratified, would create a new single market something like that of the EU. Vietnam and Mexico, said Mr Lang, have pledged to eliminate 65% and 72.2%, respectively, of import tariffs on commercial trade items upon inception of the TPP, which if that were to happen, would provide a tremendous economic stimulus for the economies of the two nations. Mexican Ambassador to Vietnam Sara Valdés Bolãno, in turn also talked about the benefits of the TPP, saying increased trade between Mexico and Vietnam was highly dependent on its passage. One thing is certain, said the Ambassador, international trade between Vietnam and Mexico is essential, and whoever gains the best market access terms will bring a significant comparative advantage to its exporters. Chances of passage for the TPP yet this year continue to look grim as the US Senate leader has said he will not bring the bill up for a vote yet this year, but that there may be opportunities to pass the deal next year after a new US president takes office. Ratification of the TPP by both the US and Japan is essential in order to trigger its formation, according to the terms of the agreement signed earlier this year. Vietjet sells 600,000 promotional tickets As celebrations for the launch of Vietjet's new routes in September, the new-age carrier is offering 600,000 promotional tickets priced at zero dollars from September 13 to 15.  Under the "12pm, It's time to Vietjet" campaign, the discounted airfares are applicable on all Vietjet's domestic and international flights from the country to Kaohsiung, Taipei, Tainan and Seoul, as well as Singapore, Bangkok, Kuala Lumpur and Yangon.  The travel period will be from October 1 to March 31, 2017, which is the most convenient and favoured travel time of the year, and the 600,000 promotional tickets will benefit locals and tourists.  During the two-day event, Vietjet set up its own booth to promote its brand and provide visitors opportunities to win surprising gifts. Visitors to the airline's booth enjoyed the opportunity to download the "VIETJET FLY" game application on their mobile phones and play fun games to win promotion codes for Vietjet flight tickets (Ha n oi-Seoul and HCM City-Seoul) with discounts of 30 percent, 50 percent and 100 percent.  The HCM City-Seoul flight operates on a daily basis with a flight time of five hours 15 minutes per leg. The flight takes off from HCM City at 2.30am and lands in the Republic of Korea at 9.40am (local time). The return flight departs at 11.40am and arrives in HCM City at 3.10pm (local time).  Meanwhile, the Ha n oi-Seoul has a flight time of four hours 45 minutes per leg. The flight takes off from Ha Noi at 1.45am and lands in the Republic of Korea at 7.55am (local time). The return flight departs at 11.05am and arrives in Ha n oi at 2.10pm (local time).  Late last week, Vietjet participated in the "2016 Melody Forest Camp," which was held in Jaraseom, Gapyeong, Gyeonggi-do, the Republic of Korea. Vietnam to mark off areas forbidden to foreign homebuyers Vietnam may soon define which residential areas will be off-limits to foreign homebuyers on the grounds of national security. Vietnam may soon define which residential areas will be off-limits to foreign homebuyers on the grounds of national security, more than a year after the relaxation of ownership restrictions took effect and gave the market a jolt. The Ministry of Construction has recently sent an official request urging the ministries of national defense and public security to promptly demarcate any zones that should be kept out of bounds for foreign ownership. The issue has been mostly left untouched since legislators updated the Housing Law in 2014. Under the amended law, foreign investment funds, foreigners with valid visas, international firms operating in Vietnam and overseas Vietnamese have been allowed to buy residential properties. For the first time they can own the property for a maximum of 50 years and have the same rights to lease, transfer or sell it as Vietnamese citizens. The changes came into effect in July 2015 and were widely perceived as good news for the local housing market. However, the restriction regarding residential areas deemed critical to national security has never been explicitly clarified. As a result, many cities and provinces are sometimes uncertain about which projects or areas are strictly off-limits to foreign buyers. China, ASEAN to boost e-commerce cooperation Promoting e-commerce cooperation between ASEAN and China was the focus of discussions at an event on September 12 on the sidelines of the 13th China-ASEAN Expo and China-ASEAN Business and Investment Summit in Nanning, Guangxi Zhuang Autonomous Region. The China-ASEAN Information Harbour Forum and E-Commerce Summit saw the participation of senior officials of China and ASEAN, experts, and representatives from over 600 enterprises.  During the two-day meeting, participants discussed ways to foster internet-based economic cooperation, transnational e-commerce promotion, and win-win connectivity and cooperation between China – ASEAN.  Addressing the event, Huang Shiyong, Vice Chairman of the Guangxi Zhuang Autonomous Region government said e-commerce has changed traditional commerical activities and opened up a new free trade area.  Guangxi wishes to further cooperate with ASEAN nations, particularly in e-commerce by taking full advantage of the China-ASEAN information Harbour, he said.  The two-day event will seek strategies to promote in-depth e-commerce between China and the ASEAN.  The 13th China-ASEAN Expo (CAEXPO 2016) and the 13th China-ASEAN Business and Investment Summit (CABIS 2016) are taking place in Nanning, the capital city of China’s Guangxi Zhuang Autonomous Region, from September 11-14 with the participation of nearly 2,700 businesses from both sides.  Themed "Jointly building the 21st Century Maritime Silk Road, Forging an Even Closer China-ASEAN Community of Common Destiny," the annual event this year has a total area of 130,000 square meters featuring 5,800 pavilions, an increase of 1,200 from the previous event. Within the event’ framework, more than 30 forums and seminars will be organised to encourage China-ASEAN cooperation in such fields as education, environmental protection, culture, transport and tourism, together with 72 investment and business exchange events.  First held in Nanning in 2004 following China’s initiative, the exhibition aims to foster friendship and cooperation between China and the ASEAN. US$45,000 to be granted for e-tourism marketing initiatives One billion VND (US$45,000) will be granted for e-tourism initiatives to promote Vietnam ’s tourism to international markets, according to the Vietnam National Administration of Tourism. Individuals and units are invited to propose online tourism marketing ideas based on cutting-edged information technology foundation, aiming at target markets before September 20. Vietnam is considered one of the safest destinations in the region, with great potential in tourism. E-marketing has become necessary and an effective tourism promotion method in improving tourism markets, including Vietnam. Director of the European Union- funded Environmentally and Socially Responsible Tourism Capacity Development Programme (EU-ESRT) Vu Quoc Tri said that tourism promotion activities in Vietnam have been carried out independently between state bodies and companies, hindering their efficiency.  He said that in modern tourism, E-marketing is an effective tool. The annual “Google travel study” revealed that the proportion of tourists using the internet has increased remarkably, hence the benefits that E-marketing could bring are undeniable, he added. Malaysia reopens its labor market for Vietnamese Vietnamese laborers are allowed to join Malaysia’s manufacturing, construction and plantation sectors. After a halt from February 2016, the Malaysian government has welcomed a new workforce from foreign countries including Vietnam, which has a track record of sending large numbers of laborers to ASEAN’s third largest economy. The green light issued by Malaysia's Ministry of Foreign Affairs on August 24 applies to workers in three sectors- manufacturing, construction and cultivation. In February 2016, Malaysia's government temporarily stopped granting work permits to foreigners, including Vietnamese, to review the status of foreign workforce employed in that country and re-evaluate tax policy for foreign employees. The move has disruped Vietnamese labor export to Malaysia in recent months. The total number of Vietnamese going to Malaysia for work in the first eight months of this year reached only 1,762 while the annual average figure is about 7,000. The Vietnamese government started labor exports to Malaysia in April 2002. After nearly 15 years, there are approximately 60,000 Vietnamese laborers in this ASEAN’s economic pillar. With relatively low fee (from US$1,000 to US$1,200 for a Vietnamese laborer) and low requirements for skills, qualification and language, Malaysia has been considered as a suitable labor market for Vietnamese rural workers, especially low skilled ones in mountainous areas and ethnic minorities.  Vietnam's annual average income was US$2,100 last year, according to the World Bank (WB). Vietnamese laborers participate in all sectors of Malaysian economy excluding security. Manufacturing attracts the highest number of Vietnamese workers, with seafood processing, electronics, mechanics being the most popular. Women laborers from Vietnam are often recruited in textile sectors alongside the service sector as house maids, hotel maids to waiting staff or even gold artisans. Vietnamese workers also contribute largely to Malaysian farming and agriculture sectors. Insiders blame Ghost Month for car sales drop Car sales in Vietnam last August fell 17 percent from the previous month to 23,540 units, attributable to consumers’ unwillingness to do big business like car purchases in the “Ghost Month”.  The data were released by the Vietnam Automobile Manufacturers’ Association (VAMA) on September 12. It comprises retail sales of VAMA members and completely built-up units (CBUs) imports of non-VAMA members.  Insiders said August coincided with the seventh lunar month, traditionally called the “Ghost Month”, during which many people believe that it would be unlucky to start building houses or buying cars which are big assets to them.  In August, 15,033 passenger cars and 7,547 commercial vehicles were sold, representing respective monthly decreases of 14 percent and 22 percent. The number of special-purpose vehicles sold was 960, down 17 percent.  Both domestically assembled cars and imported CBUs shared the same 17-percent decline to 17,531 and 6,009 respectively.  From January to August, total auto sales rose by 32 percent from a year earlier. The respective volumes of sold passenger, commercial and special-purpose vehicles hiked 30 percent, 33 percent and 46 percent year on year.  The sales of domestically assembled cars enjoyed a 35-percent rise while that of imported ones climbed 25 percent compared to the same period last year, VAMA said. Japan’s economic region strengthens cooperation with Vietnam Kansai, the second biggest economic region in Japan, wants to seek a new path to further cooperation with Vietnam, especially after the Trans-Pacific Partnership (TPP) agreement comes into force. Chairman of the Kansai Economic Federation (Kankeiren) Shosuke Mori made the statement at a meeting with Deputy Prime Minister Vuong Dinh Hue in Hanoi on September 12. He said Kansai is home to three major cities: Osaka, Kyoto and Kobe, adding that the region accounts for one quarter of Japan’s trade turnover with Vietnam and over 20 percent of Japanese businesses operating in the country are from Kansai. He said he hopes to make contributions to Vietnam’s sustainable economic development, especially in the field of environment. Kansai gathers a lot of companies that are strong in environmental technology such as waste treatment, air population treatment, and energy saving, he added. He confirmed Kankeiren will spare no efforts to develop relations with Vietnam, noting that the Ministry of Planning and Investment of Vietnam has organised dialogues together with the federation in recent years to link investment and cooperation between the two sides. Deputy PM Vuong Dinh Hue underlined Vietnam’s policy of rapid and sustainable development across three pillars: economy, society and environment, stressing that the country will not exchange the environment for economic growth. To realise that goal, the Vietnamese Government is pushing ahead with economic restructuring and shifting the growth model towards quality, productivity and efficiency while increasing national competitiveness and putting more focus on innovation and growth quality, he said. Vietnam’s strategy is to ensure harmony between export investment and domestic consumption, he added. The Deputy PM affirmed that Vietnam always prioritises selecting hi-tech foreign businesses that are willing to connect with Vietnamese firms in the global production chain, especially in the support industry. With over 10 valid and signed free trade agreements, including the TPP, Vietnam and its partners will have more opportunities to expand investment and production, he said, adding that Vietnam hopes businesses from Kansai and Japan in general will have more investment opportunities in the Southeast Asian nation in the coming time. He called on Japanese small-and medium-sized enterprises to increase investment in Vietnam in processing industry, farm produce and food processing, while receiving more Vietnamese apprentices to work in Japanese companies. He also encouraged Kansai banks to get engaged in the banking restructuring activities in Vietnam in the time ahead. Prospects for Vietnam’s export of frozen raw shrimps to Australia Vietnam is looking to export frozen raw shrimps to Australia as the country has a great demand of this kind of product, said Deputy Minister of Agriculture and Rural Development Vu Van Tam.  In his interview granted to Vietnam News Agency correspondents in Sydney on the occasion of his working visit to Australia from September 8-10, Tam said that the issue was discussed during his meeting with officials from the Australian Department of Agriculture and Water Resources.  Vietnam has so far shipped only processed shrimps to Australia, but not frozen raw ones. The country has been the largest supplier of processed shrimp products to Australia over the past five years.  According to the Deputy Minister, the Australian side showed interest in importing Vietnamese frozen raw shrimps.  In the fourth quarter of 2016, a delegation of Australian experts will make a fact-finding tour to Vietnam to inspect whether Vietnam meets requirements in production in order to export raw shrimps to their country or not.  Deputy Minister Tam said he believes that Vietnam can meet all requirements of Australia as over the past time, the country has focused on investing in shrimp farming technologies, and paid attention to controlling diseases and improving the quality of young shrimps.  According to the Vietnamese Trade Office in Australia, Australia has a great demand of seafood, with the import turnover increasing from 868 million USD in 2011 to 1.6 billion USD in 2015.  Vietnam is the fourth biggest seafood provider for Australia, but accounting for only 11.2 percent of the market share.  In the past five years, Vietnam remains the largest supplier of processed shrimps to Australia. However, its export turnover in the market decreased by 25.6 percent last year, and by 16 percent in the first seven months of this year.  The meeting also looked at measures to remove hindrances to trading of agricultural products between the two countries, including Australian fruits and cattle. S Korea: top HCM investor? Đinh La Thăng, secretary of HCM City’s Party Committee, told a meeting of business leaders in Seoul late last week that the city would create more favourable conditions for South Korean investors in HCM City.  Speaking to representatives from 100 enterprises at the South Korea–Việt Nam Business Forum, Thăng said that South Korea was the city’s fourth largest investor, but that huge potential between the two countries had yet to be fully realised. Park Noh Wan, consul general of South Korea, told the business leaders that the country aimed to be the top foreign investor in HCM City. During the forum, four Memoranda of Understanding were signed between HCM City and Korean enterprises in the fields of chemical industry, food processing, part supplying industry and infrastructure construction. Thăng said that Korean firms had shown a deep interest in Việt Nam’s investment climate and HCM City firms were determined to improve co-operation with South Korea. “HCM City is placing emphasis on continuing to be the country’s driving force and leading the southern region’s development as well as the motivating force behind national strategic targets,” Thăng said. “Our ambition is to be a major hub for finance, commerce and science-technology in Southeast Asia,” he added. Kim In Shik, chairman of the Korea International Co-operation Agency, said the agency would enhance co-operation with Việt Nam, especially HCM City, and develop public private partnership (PPP) projects.   During the visit, Thăng also met leaders of seven large South Korean groups, including CJ, Hyosung, GS, Lotte, Hanwha, E-mart and Samsung, who reported on their companies’ performance. Investors from South Korea have topped the list of foreign investors in Việt Nam in the last two years. The event was organised by the South Korean Consulate General, HCM City’s Department of Planning and Investment, Department of Foreign Affairs, HCM City Investment and Trade Promotion Centre, and the Korea Venture Business Association. The forum was held under the framework of a week-long visit to South Korea by HCM City’s high-level delegation led by Thăng from September 7-14. South Korea was the largest foreign investor in Việt Nam in the first five months of the year, with a total of US$3.42 billion. HCM City firms get preferential bank loans Thirty-four small and medium-sized businesses in District 1 received total bank loans of nearly VNĐ3.1 trillion (US$139.1 million) at preferential interest rates under the banking-enterprise linkage programme. The State Bank of Việt Nam’s HCM City branch in collaboration with the People’s Committee of District 1 and the Department of Industry and Trade organised a ceremony to sign credit contracts between companies and banks on September 9. The banking-enterprise linkage programme was instituted four years ago to ease the funding and interest difficulties faced by companies based in the city. As of today, nearly VNĐ159.95 trillion (US$7.17 billion) has been lent to 18,916 enterprises in the city, Trần Đình Cường, deputy director of the SBV’s HCM City branch, said. This year 16 banks have pledged to earmark VNĐ211.55 trillion ($9.48 billion) and an additional US$15 million in foreign currency to provide preferential loans to small and medium-sized enterprises and firms, with a maximum interest rate of 7 per cent for short-term loans and around 9 per cent for medium and long-term loans. Tây Ninh aims to be agri-tech hub The southern province of Tây Ninh aims to increase economic growth and farmers’ incomes by becoming a high-tech agricultural hub for the region, according to Trần Lưu Quang, the provincial Party secretary. Quang was quoted as saying on vnexpress.net that 70 per cent of the province’s residents made a living in the agricultural industry. However, economic efficiency in the sector is low, he said. Tây Ninh is calling for more investment in high-tech agriculture and it plans to give priority to land and strengthen connections with farmers, sciences and banks. Lavifood, a company producing farm products from Long An Province, has signed a contract with Tây Ninh’s farmers to grow 14,000ha of pipe apples. Under the agreement, the company will buy all of the pipe apples and process them before export. The firm also plans to work with scientists in teaching farmers how to choose seeds and plant pipe apples in the most effective way, said Director Phạm Ngô Quốc Thắng. He said that harvested products would be processed at a plant in Long An Province and exported to the US, Japan and the EU. If it is successful, another plant would be set up in Tây Ninh Province. Organic Life, which specialises in organic vegetables and fruit, will develop a project on an area of 94ha which will start in the last quarter of the year, said director Lê Thành. His company has signed a Memorandum of Understanding with Japanese companies that were invited to visit the firm’s production model. Products grown in Tây Ninh will then be exported to Japan. Tây Ninh’s hot weather is suitable for growing spicy herbs and vegetables not planted in other provinces. If the model is a success, it will be expanded throughout the province. Tây Ninh is currently negotiating with a supermarket chain in HCM City to distribute farming products. Markets and centres that collect products from farmers will be responsible for distributing products to buyers, according to Quang. Along with providing clean vegetables for their own people in Tây Ninh, the province will supply vegetables to HCM City, Quang said. Developing high-tech farming is expected to increase income from VNĐ40 million (US$1,800) to VNĐ100 million ($4,500) per hectare for each crop. Ilahui offers entrepreneurs fast track opportunities Retail franchisor – Ilahui – based out of the Republic of Korea (ROK) has announced the grand opening of its first two franchise retail establishments in Vietnam, with many more in the pipeline. The establishments, one each in Hanoi and Ho Chi Minh City, are a spinoff of a familiar concept in retail franchising where all products sell for the same price— in this case everything in the store will sell for VND 10,000 (US$0.45). Stores like Ilahui constitute a growing phenomenon as businesses like these are popping up everywhere around the globe, say store representatives, because demand has never been higher for affordable shopping. These stores offer a tremendous opportunity for Vietnamese entrepreneurs who would like to run their own business because they are relatively simple to operate, and have an excellent potential to generate a nice profit with very low overhead. Ilahui offers a total comprehensive package, which covers every pertinent aspect of opening and running a retail business long term.  They assist in finding the new store location, help negotiate the lease, perform the store design and layout, do the physical build out, help secure financing as well as provide ongoing support.  They also supply all store merchandise, fixtures, equipment along with the work crew to open the store, and do it quickly and professionally. Each store is stocked with 20,000-25,000 products that all sell for VND10,000. The items sold run the gamut from fashionable men and women, accessories, toys, stationery, household items to home, electronic accessories, cosmetics—bringing Vietnamese customers a vast array of choices. The representative say Ilahui plans to open six-eight franchises by the end of 2016 with plans for more than 200 on the development schedule over the next five years, representing fast track opportunity for talented entrepreneurs. Banks raise deposit rates ahead of SBV rules Many commercial banks have recently raised their deposit interest rates in an attempt to satisfy new State Bank of Việt Nam’s regulations that are due to take effect in 2017. Under Circular 06/2016/TT-NHNN, commercial banks will have to lower the ratio of short-term funds used for medium and long-term loans from 60 per cent to 50 per cent from January 1, 2017 to December 31, 2017. In the past, many lenders used short-term funds for medium and long-term loans. Because of this, they are now forced to increase the interest rate of Vietnamese đồng deposits to attract more capital to meet the requirement. The Bản Việt Commercial Joint Stock Bank typified the trend. On September 5, the bank raised its six-month Vietnamese đồng deposit rates by 0.1 percentage points to touch 7.1 per cent per year. Meanwhile, the interest rate of its 13-month term deposits was increased from 7.5 per cent per year to 7.8 per cent per year. Earlier, VPBank also announced, effective from September 1, a rise of 0.2 percentage points in the one-month and two-month deposits, which are now 5 per cent and 5.2 per cent per year, respectively. Meanwhile, the rates for three-month deposits was adjusted from 5.2 per cent per year to 5.3 per cent per year. To attract more long-term capital, the bank also raised the interest rates by 0.1 percentage points for those deposits with 13 and 15 month terms. In its new rate list, Eximbank also increased its short-term deposit rate by 0.3 and 0.4 percentage points to touch 5 per cent and 5.5 per cent. Leaders of some commercial banks said the raising deposit interest rates was designed to ensure liquidity. Many commercial banks have boosted long-term loans, which now account for up to 80 per cent of short-term funds for real estate projects. So, from now to year-end, many banks are seeking to increase liquidity shortages to be able to meet the central bank’s request. Meanwhile, the amount of money that the lenders borrowed from other banks are not included in their capital sources. This has encouraged many commercial banks to adopt measures to actively seek capital, especially those with long-terms to provide against a possible breakdown of liquidity. Due to the deposit rate hikes, there is some concern that a lending interest rate hike is imminent. However, the SBV said in a report released recently that it would ask commercial banks to keep lending rates stable over the remaining months of the year. SBV said it would continuously instruct commercial banks to balance their capital sources and lending capital sources to stabilise deposit interest rates in the remaining months of the year. Better business performance and lower input costs are also required for maintaining lower lending rates. As a result, lending interest rates have been rather stable despite the fact that the banks are competing with each other to raise their deposit interest rates. In August, for instance, lending interest rates were 6 per cent to 9 per cent for short-term loans and 9 per cent to 11 per cent for medium-long loans. Dat Xanh to issue $15.7mn in corporate bonds The Dat Xanh Service and Real Estate Construction Corporation (DXG) is planning to issue $15.7 million worth of non-convertible corporate mortgage bonds with a three-year maturity. “The aim of issuing the bonds is to invest in projects and provide capital for investment and business activities,” Mr. Tu Minh Ly, a sales officer at DXG, told VET. Potential buyers are financial institutions and credit institutions in Vietnam. The shares will not be listed on any stock exchange. Dat Xanh was established in November 2003 as a real estate agent with charter capital of $35,000 and ten staff. It now has charter capital of VND2.53 trillion ($113.67 million) and more than 2,000 staff. Its primary business sectors are construction, investment-finance, and real estate. On August 23 DXG purchased all shares in the Vido Land Invest Corp. for $4.93 million. In the first half of 2016 it held VND388 billion ($17.4 million) in cash, which came down to VND278 billion ($12.5 million) after the Vido Land purchase. DXG’s long-term and short-term liabilities are $9.3 million and $5.7 million, respectively, which represent a small part of its capital. According to Mr. Ly, DXG’s revenue in the first six months of 2016 was $48.8 million, reaching 50 per cent of its annual plan. Profit was $6.7 million, or 33 per cent. Net revenue in the second quarter is estimated at VND772 billion ($34.6 million), with real estate bringing in VND570 billion ($25.6 million), a dramatic increase of $25.16 million) compared to the same period last year. In the first half of 2016, despite having sharply rising revenue, DXG’s profit fell 5 per cent year-on-year.  Minimum wage to increase, insurance payments may decrease Deputy Prime Minister Vuong Dinh Hue agreed with a Ministry of Labor, Invalids and Social Affairs (MoLISA) proposal to increase the 2017 minimum wage by an average of 7.3 per cent and asked the ministry to reduce social insurance payments from enterprises, at meeting of the Central Steering Board in Hanoi on September 7. The National Wage Council therefore concluded its plan to increase the minimum wage from 7.1 per cent to 7.5 per cent in the four regions. In Region I the minimum wage will increase by VND250,000 ($11.2), or 7.1 per cent, and in Region II will increase by VND220,000 ($9.86), or 7.1 per cent. In Region III it will increase by VND200,000 ($8.96), or 7.4 per cent, and in Region IV by VND180,000 ($8.07), or 7.5 per cent. Overall, the minimum wage in the four regions will increase by an average of VND213,000 ($9.55), or 7.3 per cent.    MoLISA is collecting opinions from other ministries and related agencies before submitting the proposal to the government. At the meeting, Deputy Prime Minister Hue also asked related agencies to carefully review the impact of minimum wage increases on both workers and enterprises. Deputy Minister of Labor, Invalids and Social Affairs Pham Minh Huan assessed that insurance payments (including health insurance, social insurance, and unemployment insurance) are too high, at 32.5 per cent of wages and allowances, in which workers pay 10.5 per cent and enterprises 22 per cent. Many enterprises have proposed cutting their contribution to 18 per cent from 22 per cent, he said. The ministry is considering reducing insurance payment from enterprises by 0.5 per cent and is also considering reducing occupational accident insurance by 1 per cent. Occupational accident insurance is excluded from the 32.5 per cent figure above and not all enterprises pay it. Those that do and face difficult business conditions will pay 1 per cent less, Mr. Huan explained. Vietnam has applied new methods to calculate insurance payments from this year. Previously insurance payments were based on the minimum wage, but for this year and next year it will be based on wages and allowances in labor contracts. From 2018, payments will be based on wages, allowance and other additional payments in labor contracts.      As this is the first year the new method has been applied, Mr. Huan is concerned that an increase to insurance would be a burden on enterprises. ETF rebalancing to impact equity market Exchange traded funds (EFF) FTSE and VNM this week will begin their portfolio rebalancing, which is expected to leave significant impact on the equity market, according to securities companies. Nguyen Ngoc Lan, head of brokerage at Agribank Securities Company (Agriseco), was quoted by Dau tu Chung khoan newspaper as saying that the two ETFs may offload a number of large caps and pick dairy stock VNM. This means VNM could attract cash flow while heavyweights like VCB, MSN, HPG and PVS might face a selloff. She said the stock market could turn volatile as ETFs’ rebalancing will greatly affect supply and demand on the market. The VN-Index ended down 0.35% at 666.88 points last week while the HNX-Index added 0.51% at 84.47 points. The average matched volume remained almost unchanged at 97.4 million shares per session on the HCMC bourse, and inched down 2% to 39.9 million shares per session on the Hanoi exchange. Stocks plunged on profit taking in the first three sessions last week. Losses of blue chips and large caps like VCB, BVH and GAS weighed on the main index.  Meanwhile, certain mid- and small-cap stocks lured certain buyers and supported liquidity to stay high. The market rebounded last Thursday, backed by heavyweights GAS, VNM, FPT and HPG. According to Viet Capital Securities Company, the VN-Index opened strong last Friday, reaching an intraday high of above 672 points in the morning session. However, by the late afternoon stocks had dipped, leading the index’s gains to shrink to 0.1% at 666.88 points. VCB took the lead among the gainers, making the largest contribution to the main VN-Index, followed by VIC with a 2.1% increase, CTG 1.2%, ROS 6.8% and MSN 0.7%. On the other side, losers were led by VNM, which has edged down 8.3% so far this month, and MWG that has slid 9% since its record high on August 17.  The brokerage said with a 0.4% fall last week, the VN-Index eased off a four-week winning streak. Foreign investors net sold VND979.5 billion of shares on the HCMC market last week. They offloaded VNM with VND532.4 billion, VCB with VND243.5 billion, PVD with VND111.3 billion and MSN with VND63.2 billion. They picked HSG, SKG and VNS shares with a respective value of VND74.9 billion, VND41.9 billion and VND28.1 billion. The Hanoi market reported foreigners’ net sales of VND88.7 billion. These investors sold PVS with VND106.2 billion, SCR with VND31.5 billion and VCG with VND8.6 billion, while they acquired VND12.5 billion of NET shares and VND8.3 billion of BVS shares. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR