BUSINESS IN BRIEF 8/2 Exports a major driver of Vietnam’s growth   Vietnam’s export sector brought in estimated revenues of US$19 billion in the first month of 2018, up 33.1% from a year earlier, remaining an important driver of economic growth. Robust growth continued to be witnessed in a number of key exports such as phones and phone parts, garment products, electronics and computers, footwear, coffee, machinery and equipment, and fruit and vegetables. Such positive signs offer hope of another flourishing year for the Vietnamese export sector. A look back at 2017 shows that, among the country’s economic achievements, exports emerged as a bright spot, continuing to affirm its role as one of the most important drivers of growth in the country. Last year, total exports far exceeded expectations and hit US$213.8 billion, up 21.1% from a year earlier and three times higher than the set target. Exports in 2018 are expected to maintain strong growth thanks to an improving global economy and growing shipments of high-tech products. In 2017, the fastest growth was seen in mobile phones, electronics and computers, garment products and machinery and equipment, which have become the new major exports of Vietnam, accounting for a combined 39.2% of the total revenues. The shift in the export structure is expected to remain on-going in 2018. A shift in export markets was also witnessed with shipments to China surging by 60.6%, making China the third largest export market of Vietnam. The United States retained its position as the largest importer of Vietnamese goods, with a share of 19.4%, followed by the European Union with 17.9%. Notably, in 2017, exports to the Republic of Korea jumped by 31.1%, accounting for 7% of the total Vietnamese exports, immediately behind Japan and ASEAN. Such figures indicate a high degree of concentration in Vietnam’s export markets as exports to the six leading markets account for nearly four fifths of the total exports. With deeper international integration and the implementation of free trade agreements, the role of these six export markets will continue to be strengthened in 2018, but the difference between them may be narrowed and their positions could be swapped in 2018. Vietnam’s export sector in 2017 recorded not only growth in value but also a noteworthy shift in the structure of goods towards sustainable development, which has laid the foundation for even greater success in 2018 and the subsequent years. Tan Thuan EPZ inaugurates its multi-storeyed workshop Tan Thuan Export Processing Zone (EPZ) this morning inaugurated its multi-storeyed workshop in HCMC with total investment capital up to US$ 7million. Tan Thuan EPZ inaugurates its multi-storeyed workshop The workshop was completed after three years of construction (2015-2018), under part of the multi-storeyed workshop model in the export processing zones and industrial parks, high tech areas. The workshop is designed with 8 floors and one basement covering an area of 22.9 sq. meters. The multi-storeyed workshop model has popularized widely in the world such as Singapore, Korea, Japan…., aiming to save land resources and maximize land use efficiency. Commercial banks report record high profit in 2017 Commercial banks announced their performance results last year in the last two weeks of January 2018, reporting huge pre-tax profit far exceeding the year plan. Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) posted the pre-tax profit of VND11 trillion, up nearly 33 percent over 2016. It was followed by Joint Stock Commercial Bank for Industry and Trade of Vietnam (Vietinbank) with VND9.2 trillion, the highest level in the history of 30 years of the bank’s operation. Similarly Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) reported the record high pre-tax profit of VND8.8 trillion. Vietnam Prosperity Joint Stock Commercial Bank (VPBank) recorded before and after tax profit of VND8,126 billion and VND6,438 billion respectively. Small banks also reported high pre-tax profit, for instance Kien Long Bank saw an increase of 71 percent over 2016 to VND259.5 billion, ABBank posted the growth of 115 percent to get VND619 billion. VietBank said that it had cleared the loss from previous year and achieved VND263 billion in profit. Under restructuring Sacombank also enjoyed strong profit increase. According to experts, the economy has recovered, credit operations of banks have been improved and bad debt has gradually been handled. These all have positively impacted banks’ profit. Last year Gross Domestic Product (GDP) grew 6.81 percent and credit growth hit 18.78 percent. Financial reports of banks show their credit growth rate hit the ceiling level of 19-20 percent so revenue from credit activities continued accounting for a large ratio in the total revenue of banks. In addition, retail, non-credit products and services have significantly contributed to banks’ revenue. Difficulties after implementing the banking restructuring project in the phase of 2011-2015 have been overcome, creating momentum for banks to develop. In previous years, bank profit was eroded because high bad debts forced them to extract profit for risk provision fund establishment. Pre-tax profit of Eximbank topped VND1 trillion after many years majorly because of a strong reduction in risk provision cost. It was only VND604 billion last year, much lower than VND1,089 billion in 2016. Explaining the big change, the bank’s leaders said that bad debt handling had been stepped up and the bank no longer spent a large amount on risk provision fund. Mr. Nguyen Dinh Tung, director general of Orient Commercial Joint Stock Bank (OCB), said that one of reasons for the bank’s strong profit increase topping VND1 trillion was that loan quality and deep debt had been limited and risk provision cost had been lowered.Supermarkets increase opening time in days near Tet Businesses under the price subsidization programs including supermarkets such as Co.opmart, BigC, Aeon, Citimart, Vinmart and Lotte mart will increase their opening time by 2-4 hours everyday in days near the Tet holiday, according to the HCMC Department of Industry and Trade. Specifically, they will open from 7a.m.-11 p.m. on February 5-12 and from 6a.m. to midnight on February 12-14, 6a.m. till noon on February 15. They will shut down from the afternoon on February 15 until February 16, the first day of the lunar year and reopen at 8a.m. on the following day. Opening time will be from 8a.m. until noon on February 17-20, the second to fifth day of the year of the Dog. Operation will be back to normal on February 21. Some supermarkets such as Lotte Mart will not shut down in Tet days. Supermarkets will supplement 30 percent of staff to reduce pressure in days near the Tet. Management boards of traditional markets said that they would ask for district people’s committees to permit traders to prolong sale time until 6-7 p.m. instead of 5p.m. as normal. Some boards permit traders to sell until 9 p.m. every day after February 8. All markets will close down before noon on February 15, the last day of the year of Rooster, to clean markets to celebrate the lunar new year. 72 percent overseas remittances run into production, trading Seventy two percent of US$5.2 billion remitted to HCMC last year ran into production and trading, 22 percent to real estate and the remaining funds to consumption and relative assistance, reported chairman of Committee for Overseas Vietnamese in HCMC Phung Cong Dung yesterday. Last year overseas remittance to HCMC posted a year on year increase of 4.5 percent over 2016. According to Mr. Dung, many overseas Vietnamese returned to visit their fatherland, helped relatives and positively attended social and charitable activities. Overseas Vietnamese experts and intellectuals contributed in improving city human resource quality, offered suggestions to Vietnam’s electronic circuit field to attend Industry 4.0 and assisted the city to develop hi-tech agriculture. However, building database on overseas Vietnamese to study, analyze and give professional advises for long term programs has met with lot of difficulties and shortage of coordination and assistance from authorized agencies. The Committee for Overseas Vietnamese in HCMC proposed the city People’s Committee to supplement policies and regulations to suit the situation of Vietnamese abroad, especially the policy of luring overseas Vietnamese businessmen and intellectuals. This year, the committee will work with relevant sides to organize dialogues between agencies and overseas Vietnamese businesses to solve difficulties for them. In addition, they will host connectivity activities between overseas Vietnamese intellectuals and universities or businesses to create highly applicable and practical science study and research environment. Ministries require not to increase petrol prices The Ministry of Finance and the Ministry of Industry and Trade required businesses to keep petrol price unchanged and increase spending of price subsidization fund in the price adjustment period on February 3. That aims to control inflation, limit consumer price index increase, assist businesses and production and stabilize residents’ psychology ahead of the Lunar New Year Festival. A liter of ethanol blend E5 RON 92 is now priced VND18,672, kerosene VND14,560, diesel VND15,959 and a kilogram of mazut is priced VND12,765 at the maximum. The two ministries permit businesses to strongly increase the spending level from the price subsidization fund. Specifically, it hikes from VND857 in the previous price adjustment period to VND1,141 a liter of E5 Ron 92, moves up by VND400 to VND400 a liter of RON95 and VND678 a liter of diesel, raises from VND460 to VND710 a liter of kerosene and from VND150 to VND320 a kilogram of mazut. HCMC to develop more multi-storey workshop buildings The HCMC government has plans to develop more multi-storey workshop buildings in several industrial and export processing zones after the success of such structures in Tan Thuan Export Processing Zone in the city’s District 7. Tan Thuan Co Ltd on February 3 put an eight-storey workshop building into operation in Tan Thuan Export Processing Zone, bringing the total number of multi-storey workshop buildings in the zone to four. Each building can offer business or production space for several companies, especially small- and medium-sized ones. The workshop building, developed at a cost of nearly US$7 million, offers full amenities for tenants like elevators, parking lot, power stations, backup electricity generators, fire prevention system and standard lighting system. Having a total floor area of 22,852 square meters and ceiling heights of 4-5 meters, it is the largest workshop building in the country at present. The workshop building was built of reinforced concrete with the strong floor able to support heavy machinery at between 600 kilos and one ton per square meter, thus suitable for manufacturing businesses. Managed by Savills Vietnam, the modern building also provides office spaces. According the investor, four enterprises had signed rental agreements before the workshop building is complete while three other multi-storey workshop buildings in Tan Thuan Export Processing Zone are full. Tsao Chung Hung, general director of Tan Thuan Co Ltd, said the multi-storey workshop building is suitable for small and medium enterprises as they can rent 500 to thousands of square meters, and enterprises active in supporting industries that need their facilities to be close to multinational corporations in industrial parks or export processing zones. Beside Tan Thuan Export Processing Zone, HCMC will also pilot multi-storey workshop buildings in Hiep Phuoc Industrial Park, Linh Trung Export Processing Zone, Saigon Hi-Tech Park (SHTP) and others. The building would have 3-8 floors, with areas designed for tenants ranging from 100 to 3,000 square meters. Nguyen Hoang Nang, director of the HCMC Export Processing and Industrial Zones Authority (HEPZA), said the multi-storey workshop building model has just appeared in Vietnam recently but it holds high potential and will boom in the coming time. According to the HCMC government, the multi-storey workshop building helps the city optimize land use, develop supporting industries and lure more investors. HCMC woos investors for canal-side home relocation project The HCMC government has said it needs VND23.24 trillion (US$1.02 billion) for a large-scale project to relocate more than 20,000 makeshift homes along the city’s canals. At a conference held in the city on February 1 to call for investors to get involved in the project as part of a program to revitalize the urban landscape, Tran Trong Tuan, director of the HCMC Department of Construction, said the city has relocated some 36,000 households along canals over the past 20 years. There remain 21,850 slums and makeshift houses that need to be cleared to deal with environmental pollution and flooding which affect local people’s health. Of the total shanty canal-side homes, 11,400 homes are located in District 8, more than 2,500 in Binh Thanh District, 2,060 in District 7 and nearly 1,800 in District 4. The program to revitalize the city’s landscape as one of seven key projects in the city will use VND2.5 trillion from the city budget, said Su Ngoc Anh, director of the HCMC Department of Planning and Investment. Due to the city’s tight budget, local and foreign investments will help promote sustainable development for the city’s economy, he added. Under prevailing regulations, there are three ways to mobilize private capital including putting up for auction land which has been already cleared, inviting tenders for projects whose land clearance procedures have not been implemented, and implementing projects under public-private partnership (PPP) format. Nguyen Dang Truong, head of the Bidding Management Department under the Ministry of Planning and Investment, told the conference that it is a big challenge to relocate 20,000-plus homes along canals in three years as the city has managed to remove 36,000 similar houses over the past two decades. However, investment conditions are becoming more favorable for investors, especially with the PPP model. It is not difficult to seek investors for the project but the support of municipal agencies is of crucial importance, Truong noted. HCMC vice chairman Tran Vinh Tuyen said the city has to cope with traffic congestion, flooding, environmental pollution and climate change despite its status as an economic hub of the country. He expected the program to rehabilitate the urban landscape in the 2016-2020 period would help stabilize the lives of residents along canals. To obtain the foresaid targets, the city will have to take appropriate measures in a timely manner to serve local residents’ demand and city development, Tuyen said, adding the policy to call for private investment is meant to ease the burden on the city’s budget. The city government has assigned relevant departments and agencies to issue preferential mechanisms and policies to lure investors to carry out the project under the PPP format. At the conference, the city also sought comments from leaders of departments and agencies, experts and scientists on the project. Nguyen Thien Nhan, secretary of the city’s Party Committee, reiterated the city’s efforts to implement the canal-side home relocation project and put floods and traffic congestion under control. He advised relevant agencies to learn from experiences of Japan and South Korea to successfully conduct the project. An objective of the program to revitalize HCMC between 2016 and 2020 is to make the most of rivers and canals in the city to develop waterway tourism. The program will be implemented under multiple investment models such as PPP, build-transfer (BT) and investment in exchange for land, among others. WeChat Pay offered for Chinese tourists to Danang’s Lotte E-wallet service provider Vimo Technology ISC has clinched a cooperation agreement with Lotte Duty Free to accept payments by Chinese tourists via WeChat Pay e-wallet at Lotte duty-free stores at Danang International Airport. Chinese tourists can able pay for goods and services by using WeChat Pay app on their smartphones to scan QR codes instead of using bank cards or cash. Vimo and Lotte Duty Free have offered the service at five stores under Lotte Duty Free at Danang International Airport. The partnership will contribute to boosting sales at Lotte duty-free shops which sell a variety of high-quality products such as cosmetics, watches, wines, medicine, clothes and jewelry products of more than 100 popular brands. Vimo is the first intermediary payment service provider in Vietnam to allow Chinese tourists to use WeChat Pay e-wallet service in the country. Vimo has accepted payments via WeChat Pay at 500 agents including more than 100 stores of seven corporations at five international airports with direct air services from China. Vietnam is one of the destinations most visited by the Chinese in the region. Last year saw some 3.5 million Chinese visitors come to Vietnam. By enabling WeChat payments at thousands of stores locally, Vimo targets to boost spending by Chinese tourists in Vietnam by 10% this year from an average of US$638 in 2017. Locally-assembled auto prices lowered The scarcity of imported autos opens up a huge opportunity for locally-assembled vehicles to fill the gap, and assemblers have managed to seize the opportunity by lowering prices sharply in the run to the upcoming Lunar New Year holiday, Tuoi Tre newspaper reports. Early this month, Truong Hai Auto Corporation (THACO) has reduced prices of its locally-assembled autos such as Kia Morning, Kia Cerato, Optima and Rondo by VND5-50 million. Particularly, the Kia Rondo price has been lowered sharply from VND799 million to VND749 million, while Kia Cerato has also seen its price tag down by VND10-14 million, and Kia Optima plunging by VND30 million to VND789 million in the new year. Meanwhile, Toyota  Vietnam has offered a reduction of 3-10%, equivalent to VND25-28 million, for its Vios, Innova and Altis autos since November last year. Mitsubishi Motors Vietnam has also announced its selling prices for crossover Mitsubishi Outlander autos assembled in Vietnam which is VND200 million cheaper than those made in Japan. Isuzu mu-X model assembled in 2016 is now sold at a discount of up to VND114 million. Buyers of Mazda 2, Mazda 3 and Mazda 6 autos will be also offered discounts of VND10-40 million. Local auto firms reduce selling prices to stimulate consumption and compete with autos imported from Thailand and Indonesia, which will enjoy a zero import tariff once all regulatory barriers are cleared, said some auto traders. Auto importers such as Ford and Honda said they are facing difficulties in importing autos into Vietnam due to the Government’s Decree 116 which requires them to submit vehicle type approval (VTA) certificates issued by authorities in exporting countries. They are not sure when they can receive batches of imported autos. China remains Vietnam’s biggest apparel material supplier China remained the largest material supplier of Vietnam’s apparel industry last year with nearly US$9 billion, growing over 12% versus 2016 and accounting for 42.7% of total apparel material imports, according to the General Department of Vietnam Customs. Data from the department shows Vietnam spent US$21 billion importing such material in 2017, making up 10% of the nation’s total import spending and increasing more than 11% against the previous year. Major buyers were foreign-invested firms, news website Dan Tri reports. It is noteworthy that the import value of textile-garment materials from China was four and five times higher than those of South Korea and Taiwan respectively, the two markets that Vietnam has bought large volumes of apparel materials recently. In reality, foreign direct investment (FDI) enterprises accounted for a majority of textile-garment material imports. They spent US$6.9 billion on fabrics and US$1.2 billion on cotton. Meanwhile, the country exported US$26 billion worth of textiles and garments last year and nearly US$4 billion worth of cotton and fabrics. Thus, the sector enjoyed a trade surplus of only US$5 billion which is also considered the added value. This is low as textiles and garments are among Vietnam’s biggest export earners. FDI firms shipped abroad more than US$15 billion worth of textile and garment products, accounting for nearly 60% of the export revenue from the products. Pham Chi Lan, an economic expert, said the increase in textile-garment materials imported from China is due to a shortage of local materials. In addition, enterprises of Taiwan, Hong Kong and China have built their production plants in Vietnam to enjoy a preferential tax rate of 0% when shipping such products to the U.S. and the EU, and most of these firms buy materials from China. Taxable income threshold should be raised: experts The Finance Ministry should have raised the monthly taxable threshold, and deductions for taxpayers’ dependents in its recent draft amendments to the Personal Income Tax (PIT) Law, according to experts cited by Thanh Nien newspaper. The PTI threshold for taxpayers is VND9 million, plus a deduction of VND3.6 million a month for each of their dependents. The regulation has been effective since 2013, saidNguyen Ngoc Tuan, vice chairman of Dong Nai Province’s Import and Export Association. He stressed the cost of living has significantly increased so far, but the Finance Ministry makes no mention of raising the taxable threshold and deductions for dependents in its draftlaw. Although the inflation rose by 16.75% in the 2013-2017 period, the taxable threshold and the deductions for dependents have stay put. As such, they have become outdated given strong price hikes over the past recent years. According to the current PIT law, the Government has the right to seek the National Assembly Standing Committee for approval to revise deductions for dependents if there is a 20% rise in consumer prices compared with the level at the time the law takes effect. Besides, the region-based minimum wages have seen sharp rises in recent years, so the upcoming tax reform should include a new taxable threshold and new deductions for dependents. In particular, the Government has increased minimum monthly wages by VND1.11-1.63 million to VND2.76-3.98 million depending on regions from early this year compared with 2013. Employees working for enterprises in region one comprising major cities and provinces enjoy a new minimum salary of VND3.98 million while the new levels for those in regions two, three and four are VND3.53 million, VND3.09 million and VND2.76 million respectively. The real monthly wages are calculated by multiplying these levels with a coefficient depending on employee’s seniority. Coal inventory estimated at over 10 million tons Business performance of Vietnam National Coal and Mineral Industries Group (Vinacomin) in 2017 improved significantly compared to previous years, but its core business of coal mining performed poorly, as inventory rose to more than 10 million tons, according Lao Dong newspaper. Although the group met most of its targets last year, it had difficulty selling coal due to storms and a longer-than-expected rainy season that caused coal demand to drop. Vinacomin’s high inventory resulted from its bulky structure, tough mining conditions and high production cost that made domestic coal US$10-15 per ton more expensive than imported coal. Storms and rainfalls surged to record levels last year, forcing Vietnam Electricity Group (EVN) to purchase more electricity from hydropower plants and less from thermal power plants, thus making thermal power plants’ coal consumption decrease by 7 million tons compared to the plan. Many subsidiaries of Vinacomin reported high inventory such as Vinacomin Dabac Lacoghicity with 5 million tons, Hon Gai Coal Company with more than 450,000 tons and Vang Danh Coal Company with more than 400,000 tons. According to Vinacomin, most of the inventory was coal used for electricity generation. Its subsidiaries had failed to forecast the market demand and diversify their products. This year, Vinacomin expects to sell 36 million tons of coal and reduce coal inventory to 8 million tons. To meet the targets, the group will have to reduce production cost and boost mechanization. Over 2,800 businesses set up in HCMC in January Last month saw 2,817 new enterprises coming into being in HCMC with total registered capital of VND19.58 trillion, data of the HCMC government shows. Besides the new enterprises, as many as 3,640 existing enterprises adjusted their business registration content last month with an additional VND40.567 trillion. In all, total fresh and additional capital of HCMC-based enterprises in January was VND60.15 trillion, up nearly 40% against the same period a year earlier. Meanwhile, foreign direct investment (FDI) attraction of HCMC recorded a year-on-year rise of nearly 27% last month with some US$224 million. In particular, there were 41 new projects, 13 projects with adjusted investment capital, and 147 cases in which foreign investors contribute capital, acquire shares and buy stakes in domestic enterprises. The HCMC investment environment continued to improve last year as manifested by increasing overall investment in the economy, FDI capital, domestic investments, budget revenue, exports and imports. The city’s gross regional domestic product (GRDP) grew by 8.25% last year. As for this year, the city government looks to achieve GRDP growth of 8.3-8.5%, raise total investment to 35% of GRDP, and realize the budget collection target of VND376.78 trillion. The city also aims to have 46,000 new enterprises, generate jobs for 130,000 people, raise the percentage of workers with vocational training to 80%, and bring down unemployment to below 3.8%, among others. In addition, HCMC targets a place in the top 16 of the Vietnam Provincial Governance and Public Administration Performance Index (PAPI), the top five of the Provincial Competitiveness Index (PCI) and the top 10 in the Public Administration Reform Index (PAR Index). British firms seek to invest in Vietnam’s airport projects British companies have shown interest in airport projects in Vietnam, according to the Ministry of Transport. Deputy Minister of Transport Le Dinh Tho on Wednesday met with British Ambassador to Vietnam Giles Lever to promote cooperation between the two countries in the aviation sector. The meeting was attended by some British firms like Arup, Atkins and Benoy. Ambassador Lever said at the meeting that UK companies are interested in the Long Thanh International Airport project in Dong Nai Province and the Tan Son Nhat International Airport expansion project in HCMC. They want to join hands in conducting the feasibility study for Long Thanh airport. Besides, they would cooperate with Vietnamese partners to expand Noi Bai International Airport and develop urban railway projects. Transport Deputy Minister Tho said the Transport Ministry will assist British investors in surveying airport projects. For Long Thanh International Airport, the ministry has assigned Airports Corporation of Vietnam (ACV) to select appropriate partners to conduct a feasibility study. Bidding shall begin on February 23. The government of Dong Nai Province is preparing site clearance, which is scheduled for completion in 2021. The feasibility study would take 16 months. Once the study is approved by the National Assembly, work will start on the first phase which comprises a runway and a terminal capable of handling 25 million passengers and 1.2 million tons of cargo a year. The first phase would be finished by 2025. The Long Thanh International Airport project was approved by the NA in June 2015. Its total cost is estimated at VND336.6 trillion (US$16.03 billion), with the first phase requiring VND114.45 trillion. Power tariffs seen stable in first half Power prices in the first half of the year are expected to be stable but will fluctuate in the second half based on price auditing results. News site Vietnamnet cited a price report of the Price Management Department as saying that the power price hike of 6.08% on December 1, 2017 will drive up the consumer price index (CPI) by 0.1% this year and indirectly affect prices of commodities whose production has power as an input expense. According to the department, commodity prices inched up slightly in the early months of last year, went down in quarter two and picked up in the final months. The average CPI last year rose by 3.53% against 2016 and 2.6% against December 2016. The global crude oil price is forecast to be US$50-55 per barrel on average this year, whereas the price of finished petrol products will stay at US$66-70 per barrel, up 5-10% against last year’s average. The domestic fuel price’s projected rise of 5-15% will cause an increase of 0.28-0.64% to CPI. The price of RON92 petrol was hiked ten times last year with a combined VND3,916, and revised down nine times by VND2,920. Meanwhile, diesel had its price adjusted up 15 times by VND4,101 and marked down seven times by VND2,370. Prices of educational services could pick up 8-10% this year. Besides, price adjustments of healthcare services and base salaries are forecast to give rise to a CPI increase. Vietnam dong weakens against most foreign currencies While Vietnam’s dong currency has got firmer against the U.S. dollar, it has depreciated against most other hard foreign currencies like Euro, British pound, Canadian and Australian dollars, Tuoi Tre newspaper reports. The euro has made a strong rise of 17.45% over the past month, increasing from VND24,107 early this year to the current VND28,315. The British pound has come second, rising from VND28,297 to VND32,382, or a 14.44% hike. The Australian, Singapore, and Canadian dollars have grown by 10.9%, 10.35%, and 8.53% respectively against the dong to VND18,349, VND17,395 and VND18,569. The Chinese yuan has also risen by 10.38% to VND3,649 from the previous VND3,306. Experts say the appreciation of foreign currencies against the dong has major effects on prices of imports, and costs of study and healthcare in countries using them. However, a weaker Vietnam dong will spur Vietnam’s exports. Holders of the foreign currencies made handsome profits last year, compared with those owing the U.S. dollar. However, local residents seem less keen on these currencies due to high exchange risk. A majority of local banks merely accept savings in U.S dollar and euro. Notably, Vietnam Export Import Bank (Eximbank) accepts other currencies, namely British pound, Japanese yen, Canadian dollar, and Australian dollar at an interest rate of 0.1% per annum. BOT road investor in north may lose contract The investor of Hoa Lac-Hoa Binh road in northern Vietnam has been given ten more days to mobilize enough capital; otherwise, the build-operate-transfer (BOT) contract will be canceled, heard a meeting of the Ministry of Transport on Wednesday. News website Dan Tri quoted a Ministry of Transport official as saying that the investor has infringed the BOT contract signed with the ministry with regard to equity. If the contract is terminated, the investor can only get back 80% of the amount it has spent. The project to build Hoa Lac-Hoa Binh road and upgrade Xuan Mai-Hoa Binh section of National Highway 6 has an investment of over VND2.99 trillion and a length of 43.4 kilometers. The investor is a consortium consisting of Corporation 36, Hanoi Investment and Trading Co. and Truong Loc Construction and Trading Co. The project was originally set for completion on August 31, 2016. While the highway upgrade component was done in April 2015, the building of Hoa Lac-Hoa Binh road has fallen behind schedule over a year as the investor is out of money when SHB as the project’s creditor has stopped disbursing funds. Though the project’s timeline has been extended three times, the investor has yet to work out efficient solutions. Minister of Transport Nguyen Van The said that if the investor fails to come up with a solution, the ministry will cancel the contract. Responsibility of the parties concerned will be clarified according to the contract. After 10 days, starting from January 31, if capital mobilization by the investor fails, the project management unit will have to report to the minister on ways to terminate the contract. SBV requires safe banking for Tet The State Bank of Vietnam (SBV) has issued Official Dispatch No.726 asking SBV branches, commercial banks, foreign bank branches and National Payment Corporation of Vietnam (Napas) to ensure safe and secure banking for the upcoming Lunar New Year (Tet), Tien Phong newspaper reports. SBV Deputy Governor Dao Minh Tu in the official dispatch asked SBV agencies like the Issue and Vault Department to ensure sufficient cash supply for Tet. SBV’s Information Technology Department, Payment Department and Transaction Center were assigned to ensure smooth operations of the interbank electronic payment system, cooperate with other agencies and banks to provide convenient transaction services for individuals and organizations, detect and timely repair technical errors and ensure network security. SBV asked Napas to ensure sufficient staff for the bank card switching, clearing and settlement system during the nation’s biggest holiday and cooperate with other SBV agencies and credit institutions to timely solve any problems that arise and customers’ complaints. Inspection agencies are responsible for inspecting credit institutions and foreign bank branches to ensure stable currency and remittance market, and handling violations in the trade of gold and foreign currencies. The directors of SBV’s provincial branches are responsible for ensuring sufficient cash supply for credit institutions in their provinces and smooth operations of ATM systems, and timely solving problems that may occur when cash withdrawals surge ahead of Tet. Businesses are encouraged to make payments for laborers in cash to avoid ATM overload. Foreign currency exchange services must be maintained during the holiday to serve international tourists. Wínk Hotels announces first 2 projects in VN     Wink Hotels, a visionary brand run by the Indochina Vanguard Hotels group, has confirmed its first two projects in the country - one in HCM City and the other in the central city of Da Nang. The hotel site in HCM City is located at 75 Nguyen Binh Khiem Street, a rapidly growing area within District 1, the city’s central business district. Scheduled to open in the fourth quarter of next year, the hotel will consist of 226 rooms. Demolition of the existing structure at the site is currently underway, and the development and hotel management teams are in the process of refining the design and completing other critical pre-development procedures. The Da Nang hotel site is located at 178 Tran Phu Street, in the heart of the city’s business and entertainment district. The 243-room hotel will feature a sky lobby and offer spectacular views of Han River, Hai Van Pass and Son Tra Peninsula. It is scheduled to open in the first quarter of 2020. The two sites have been formally handed over to owner-developers ICC-Kajima, the real estate development arm of Indochina Capital, the United States’ leading Viet Nam-based property developer. Formed in joint venture with Kajima Corporation, Japan’s most prolific overseas real estate developer, the group’s core mandate is to develop innovative and high-quality projects throughout Viet Nam. Wink typifies the ICC-Kajima approach. “Indochina Capital has always been bullish in the hospitality market in Viet Nam, as evident from The Nam Hai, Six Senses Con Dao and Hyatt Regency Da Nang,” Indochina Capital CEO Peter R. Ryder said. “The roll-out of Wink Hotels will add to the group’s portfolio of past and present hospitality projects, introducing a novel hotel concept ---Viet Nam’s first international hotel brand --- that will redefine traditional hospitality norms,” he added. The affordable luxury hotels in HCM City and Da Nang will be the first two of a targeted 20-plus Wink Hotels to be developed, opened and operated throughout Viet Nam and neighbouring Indo-China countries by the end of 2023. PVOil launches cashless payment app for drivers     PetroVietnam Oil Corporation (PVOil) on Tuesday launched PV Oil Easy, an application for smartphones and tablets that allows users to buy petrol and manage their purchases via a QR code. Cao Hoai Duong, general director of PVOil, said the app was a solution for its member corporate customers to manage petrol purchases of drivers and for drivers to buy petrol without paying in cash or with credit cards. All transactions will be recorded via the QR code. Duong said many firms were facing difficulties in managing the petrol purchases of their drivers due to a huge volume of bills, and the app would make it easier to manage. On Tuesday, Vietel Post signed up for PVOil, becoming one of the first customers to use the app. Criteria relaxed for Vinafood 2’s strategic investor selection     The Ministry of Agriculture and Rural Development has approved a new set of criteria to select strategic investors for the Viet Nam Southern Food Corporation (Vinafood 2). These requirements are more relaxed than those proposed by the corporation earlier. Specifically, strategic investors must have a minimum charter capital of VND2.5 trillion (US$110 million) in 2016 and record positive after-tax profits in three consecutive years from 2014-16, with no accumulated losses until December 31, 2016. The earlier proposal by Vinafood 2 stipulated strategic investors to have total assets worth at least VND10 trillion by December 31, 2015, as stated in their audited financial report, a minimum charter capital of VND3.5 trillion and positive after-tax profits in three consecutive years, with no accumulated losses by the end of 2015. Besides this, the corporation also set some specific criteria on profits that strategic investors must meet. Nguyen Ngoc Nam, Vinafood 2 acting general director, said the reduction in the charter capital as well as the removal of minimum total assets and profit ratios in the criteria list would help invite potential investors. He said food and seafood processing and production would continue to be the core businesses of Vinafood 2 after equitisation. Vinafood 2’s initial public offering (IPO) is scheduled to take place on March 14. The corporation’s equitisation plan was approved on December 29, 2017, by Prime Minister Nguyen Xuan Phuc. After the equitisation, Vinafood 2’s charter capital is estimated at VND5 trillion ($220 million), of which the State will hold 255 million shares, representing 51 per cent, and strategic investors will hold 125 million shares or 25 per cent. The number of shares that will be offered in the IPO is over 114.8 million, representing 22.97 per cent of the corporation’s charter capital. The starting price of the IPO is VND10,100 for each share. PG Bank allowed to raise charter capital     State Bank of Viet Nam (SBV) has allowed Petrolimex Group Commercial Joint Stock Bank (PG Bank) to raise its charter capital from VND3 trillion (US$132 million) to VND3.165 trillion. The capital can be increased by issuing shares to distribute dividends among shareholders from unallocated after-tax profits. The plan to increase the charter capital was approved at the Annual General Meeting through Resolution 02/2017/NQ-DHDCD-PGB, dated October 17, 2017. The issuance volume is 16.5 million shares corresponding to the exercise ratio of 5.5 per cent. Shareholders will not be allowed to transfer this right; the shares will be freely transferable after being issued. According to PGBank, the increasing charter capital will be used to invest in infrastructure and modernising banking technology (VND65 billion) and expanding the scale of lending (VND100 billion). SBV requires PG Bank to implement the raising of charter capital in line with the law, including compliance with shareholding limits of shareholders as stipulated in the Law on Credit Institutions and guiding documents of SBV after increasing charter capital. After completion of procedures for issuing shares to increase the charter capital, PGBank will be responsible for submitting the application for amendment of charter capital in the licence to SBV (through the Banking Inspection and Supervision Agency).  VNN