BUSINESS NEWS IN BRIEF 6/8 HNX sells 15.77 trillion VND worth of bonds in July The Hanoi Stock Exchange (HNX) sold 15.77 trillion VND (677.4 million USD) worth of bonds during 33 auctions held in July, down 6.9 percent from June. Of the amount, the State Treasury raised 15.42 trillion VND and the Bank for Social Policies raised 350 billion VND. The interest rates of successfully bid 5-year bonds ranged from 3.45– 4.1 percent per annum, while those for 7-year bonds were from 3.85-3.9 percent per annum. Ten-year bonds fetched annual interest rates of 4.4-4.8 percent, and 15-year bonds fetched 4.7-4.78 percent per annum. The annual interest rate for successfully bid 20-year bonds was 5.22 percent, and that for 30-year bonds was 5.42 percent. In general, the interest rates showed increases for bonds of all terms compared to those sold in June. On the secondary G-bond market, the total volume of G-bonds sold by the outright method exceeded 554.6 million, worth more than 62.4 trillion VND, down 42.3 percent month-on-month.  Meanwhile, trading volume through repurchase agreements (repos) reached over 902 billion bonds valued at more than 92.5 trillion VND, up 39.7 percent from June.  Foreign investors made outright purchases of more than 2.18 trillion VND and outright sales of over 6.42 trillion VND. They did not conduct any repo transaction during July. Vietnam exports timber products to 120 countries, territories Vietnam has exported timber products directly to 120 countries and territories instead of having to go through a transit market like China’s Taiwan, Singapore and the Republic of Korea (RoK) to export to the third country. The US, China, Japan and the RoK are the four largest importers of Vietnam’s timber goods, accounting for 78.5 percent of the country’s total export value of those products. Other markets with strong growth are Malaysia, France and Australia. Wood and timber products ran a trade surplus of 3.52 billion USD in the period, with imports of those products standing at 1.24 billion USD, a slight increase of 0.4 percent compared to the same period last year. According to the Vietnam Administration of Forestry under the Ministry of Agriculture and Rural Development, main forestry products in January-July were estimated to earn the country over 5 billion USD, fulfilling nearly 56 percent of the yearly target and making up 22.6 percent of the total export turnover of the agriculture sector. The forestry sector recorded a trade surplus of 3.77 billion USD in the reviewed period.  The export value of main forestry products continued to maintain a year-on-year average growth of over 14 percent. The export turnover of wood and timber products is expected to increase in the remaining months of this year in line with consumption habits.  In addition, Vietnam and the European Union (EU) are completing legal procedures to approve the signing of the voluntary partnership agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT). By mid-July 2018, the European Commission (EC) approved the content of the agreement and agreed to submit it to the EU Council of Ministers for official signing. The Vietnamese Ministry of Agriculture and Rural Development has submitted the document to the Government for signing. Vietnamese steel exporters warned of possible 25% tax The Ministry of Industry and Trade has announced that a steep tariff is likely to be imposed by the European Commission (EC) on Vietnam’s steel processors and exporters. The ministry made the prior announcement to help steel firms cope with the tough time ahead, reported Sai Gon Giai Phong newspaper. As the EC has issued a regulation to apply temporary safeguard measures, imposing quotas on 23 of 28 types of imported steel products, those steel firms whose steel exports exceed the allowed quota will have to pay an additional 25% tax. Three of Vietnam’s 23 steel products---non-alloy and other alloy cold-rolled sheets, metallic coated sheets and stainless cold-rolled sheets and strips---are subject to export quotas, while 20 other types of products shipped to the European Union are temporarily exempted from the quota regime, meaning they are not subject to the 25% tariff. However, Vietnam will face protectionist charges after February 3, 2019, if the country’s steel exports exceed quotas by 3% following the EC’s temporary protective measures. The Trade Defense Department will announce the quantity of steel bound for the European Union so that Vietnam’s steel enterprises and the relevant agencies can control and limit exports appropriately to avoid additional duties. Vietnam’s tea exports fall 6.9 percent in revenue   Vietnam’s tea exports as of mid-July dropped 11 percent year on year in volume to 61,530 tonnes, and 6.9 percent in value to 99.94 million USD, according to statistics from the General Department of Vietnam Customs. Pakistan was the largest consumption market of Vietnamese tea as it bought 13,400 tonnes worth 29.94 million USD, up 10.8 percent in quantity and 22.3 percent in value compared to the same time last year. Exports to the US, Saudi Arabia, Malaysia, Germany and the Philippines also rose. Notably, Vietnamese tea export growth in the US was higher than that of other exporters like China, Argentina, Japan, India and Canada. Vietnamese tea only occupied 2 percent in the US’s total tea imports, up from the market share of 1.6 percent recorded last year. A fall in tea exports in recent times has put pressure on the tea industry to enhance product quality amid rapid international integration and fierce competition.  To increase Vietnamese tea value, producers and exporters must work to develop a value chain and pay attention to food hygiene and safety, said a representative from the Ministry of Agriculture and Rural Development’s Processing and Market Development Authority. Financial leasing significant to mobilise capital Financial leasing is an effective solution to solving medium- and long-term capital shortages for local businesses, head a conference held by the BIDV-SuMi TRUST Leasing (BSL) in Ho Chi Minh City on August 1. Financial leasing is an alternative way of financing whereby a licensed leasing firm purchases an asset on behalf of its customer in return for an agreed series of payments, which usually include interest.  This kind of credit has become popular globally, with total revenue of up to US$1 trillion per year. In Japan, the annual figure is some US$50 billion. However, revenue from financial leasing in Vietnam was just VND8.6 trillion (US$369.8 million) by the end of the second quarter in 2018. According to Can Van Luc, Chief Economist of the Joint Stock Bank for Investment and Development of Vietnam (BIDV), there will be huge demand for machines, equipment and vehicles in the next two years as stable growth has been forecast for the Vietnamese economy, with GDP growth expected to exceed 6.5% during the period. With banks limiting short-term capital for medium- and long-term loans, and small and medium enterprises short of mortgageable assets, financial leasing is an important solution helping local firms overcome capital barriers,  Luc said. BSL general director Nguyen Thieu Son said financial leasing mobilises resources for sustainable development. It also settles problems of money balance, capital restructuring and effective use of capital. Vietnam’s financial and banking sector has been developing rapidly, with 91 commercial banks, 27 financial and financial leasing firms and 1,100 credit institutions. Financial leasing has grown in stature as a channel to inject capital for local companies. Fujita Takeshi, BSL deputy general director, gave a bright outlook for the Vietnamese financial leasing market, due to expected overall economic growth.  The BLS has designed financial leasing models to serve demands of companies, contributing to the development of businesses and the financial market, he added. It is a joint venture between the BIDV and Sumitomoto Mitsui Trust Bank, the first financial leasing joint venture between a Vietnamese bank and a foreign financial institution in Vietnam. With a chartered capital of VND900 billion (US$38.7 million), the venture is expected to attract more than 3,200 Japanese firms operating in Vietnam that have been using financial leasing services and other locally-based firms. Gas decree leads to confusion         Both authorities and gas traders are facing difficulties in implementing Decree 87/2018 on gas trading, which took effect on July 31, heard at a conference held in Ha Noi on Tuesday. Nguyen Van Long, a representative from Hai Phong’s Department of Industry and Trade said according to the decree, gas businesses have to provide documents proving they meet requirements for fire prevention and fighting. However, based on the Fire Prevention and Fighting Law, the document that fully satisfies the requirements stipulates many conditions such as signs, regulations on responsibilities for fire prevention and fighting, electric systems, lightning protection, electric appliances, fire and heat sources to ensure fire safety. In addition, the law also stipulates that gas traders must apply for fire prevention tests as well as have a water supply and transport systems for the work. “According to the regulations, the Departments of Industry and Trade do not know which fire prevention regulations to follow, and this also makes it difficult for enterprises,” Long said. He proposed the Ministry of Industry and Trade (MoIT) give specific guidance. Departments of Industry and Trade and businesses should not have to search for different regulations themselves. “Do not let the companies ‘grope’ with the rules that we give,” he said. He added that the ministry which drafted the decree should have specific guidance on licencing of gas stations. A representative from Ha Noi’s Department of Industry and Trade wondered who will take responsibility for fires after licensing as the department is not required to visit businesses for evaluation. Answering the questions, Nguyen Huu Dung, Head of Industrial Safety Office under the ministry’s Department of Safety Technical and Industrial Environment said gas traders are required to implement fire prevention and fighting conditions themselves. Departments of Industry and Trade take responsibility for supervision and after-checkups. Nguyen Anh Son, director of MoIT’s Legal Department said gas businesses would not be granted licences if they do not meet conditions in reality despite having enough documents. “Decree 87 aims to simplify administrative procedures, removing business conditions and changing from before-check to after-check. Businesses will get fined or have their licenses revoked if violations are found,” Son said. A gas trader at the event also wondered if the decree requires gas production, distribution and retail businesses to record type of gas storage tank, serial number, customer name, address and delivery day. He said the work could take time and cost a lot of money as the number of gas storage tanks circulating was up to several millions. Gas firms would need big resources to manage information on gas storage tanks. “Gas traders are mainly household businesses and small-and-medium sized enterprises which do not have enough people to implement the regulation. Currently, the country has about 15,000 gas shops with only one to two labourers each. They would need an additional one or two people to do that, causing waste to businesses,” he added.  Plastic products exports up 20%      Exports of plastic products were worth US$1.43 billion in the first half of the year, a year-on-year increase of 20 per cent, according to the General Department of Vietnam Customs. They were shipped to many markets, with Japan being the largest, accounting for $312.5 million worth, 15.7 per cent up. Shipments to the US were worth $223.7 million, while the other major buyers were the Netherlands ($75.9 million) and South Korea ($75.3 million). Exports to many markets, including India, Hong Kong, Turkey, China, Ukraine, Russia, and Bangladesh, are rising. Shipments to India rose by over 159.4 per cent to $17.6 million. Exports to Hong Kong were up 158.8 per cent to $29 million. But exports to certain markets such as the Philippines (down by 31.3 per cent), Laos (26.3 per cent) and UAE (26.2 per cent) declined. According to the Viet Nam Plastics Association, the industry is one of those to achieve steady growth of 14-15 per cent a year with its export growing by 12-14 per cent annually. The industry still has a lot of room to grow because the per capita consumption of plastic products in Viet Nam remains low at 41kg per year, while it is 48.5kg in Asia and 69.7kg globally. Companies have increased investment in technology and plants and are tying up with foreign partners to improve their competitiveness.  HCM City to host int’l food, beverage, packing expos A total of 550 enterprises from 20 nations and territories will take part in the 22nd International Exhibition on Food and Beverage and the 22nd International Exhibition on Food Processing, Packing Technology and Equipment (VietFood & Beverage – ProPack) to be held in Ho Chi Minh City from August 8-11. The participating businesses will showcase their products in 600 pavilions, including seven national ones of India, Poland, the Republic of Korea, Thailand, China and Vietnam. Nguyen Khac Luan, General Director of the Vietnam National Trade Fair & Advertising Joint Stock Company (Vinexad), said that more than half of 93 million Vietnamese people are aged under 30 and have improved income compared with the past.  Therefore, the habit of buying convenience food is getting more popular, thus making Vietnam become a consumption market for food and beverage of considerable potential in the region, Luan said. Nguyen Ngoc An, deputy head of the Food and Foodstuff Association of Ho Chi Minh City, said the association continues to coordinate with Vinexad in organising the two exhibitions to create a prestigious venue for both domestic and foreign enterprises to introduce their products, boost trade and seek partners. With the trade value generated over the past more than 20 years, the exhibitions has drawn much attention from domestic and foreign enterprises, he added. A survey in 2017 showed that 80 percent of the exhibitors felt satisfied with the exhibition events, with 70 percent affirming to continue their participation in the next ones. Positive economic index in July Vietnam’s socio-economic performance in July continued to see positive developments with equal growth in all the three sectors, namely macro economy, industrial production and services. According to the General Statistic Office, the index of industrial production (IIP) in the month rose 14.3 percent, the highest level since February this year. In the first seven months of this year, the country’s IIP recorded the highest rise of 10.9 percent since 2012.  The processing and manufacturing industry posted the strongest growth of 13.1 percent. Despite a year-on-year decline of 1.7 percent to 19.5 billion USD in July export turnover, that in the seven months rose 15.3 percent to 133.7 billion USD. The total retail sales of goods and services in July saw the highest growth of 13.3 percent since 2014. The newly-registered and increased foreign direct investment (FDI) in January-July period reached 18.15 billion USD, down 3.5 percent against the same period last year. However, the disbursement was estimated at 9.85 billion USD, a year-on-year increase of 8.8 percent. The number of newly-established firms in July decreased 7.8 percent against the previous month and 3.5 percent over the same month last year to 11,262 enterprises. In the seven months, the country saw 75,793 new businesses, up 3.9 percent compared to the same period last year, but lower than the six-month growth of this year (5.3 percent). The consumer price index (CPI) in July declined by 0.09 percent against June after three consecutive months of increase (April 0.08 percent, May 0.55 percent, and June 0.61 percent). Economists said Vietnam’s economy will encounter a number of challenges in the remaining months of this year; hence, the country should adopt a number of measures to realise the growth target of 6.7 percent in 2018. According to the Ministry of Industry and Trade, from now to the year’s end, there are still many unpredictable factors in the global economic environment, including the rising trade protectionism that will increase the risk of global trade war. In this context, a flexible adjustment of exchange rates could help Vietnam boost exports if the country is able to maintain macroeconomic stability, experts suggested. To ensure the economic growth target in 2018, Deputy Minister of Industry and Trade Cao Quoc Hung said his ministry will continue watching of the market, create an equally competitive environment, and protect the interests of domestic production industries, especially steel, automobile, fertilizer, and chemicals sectors, in association with reforming the economic structure and improving competitive edge. To keep the inflation rate below 4 percent as planned, the ministry will further work with relevant ministries, departments and localities to monitor the developments of goods supply and demand, as well as domestic prices. At a recent meeting of the National Financial and Monetary Policy Advisory Council, participants suggested managing effectively monetary and fiscal policies to bring inflation under control and keeping a close watch on the developments of raising interest rates of the US Federal Reserve (Fed) as well as issues arising in the China-US trade conflict. Sacombank adopts credit risk measurement model Sacombank has begun installing a Credit Risk Model, which will help measure the risk of business portfolios for formulating business strategies, managing credit portfolios and portfolio limits, and classifying assets based on risk levels. It will also help the bank evaluate lending limits based on risk analysis of customer segments and product portfolio, develop new products, assess the level of expected risks and losses to determine the level of retained capital needed to ensure safe operation, and improve and optimise the process of lending. Through this and a project to complete the risk management database framework launched on July 25, Sacombank is accelerating the process of completing the Standardised Approach and adopting the Internal Rating Based Approach proposed under the Basel II capital adequacy rules for banks. Phạm Văn Phong, the bank’s permanent deputy chairman, said: “Implementing Basel II not only aims to meet the requirement of the State Bank of Vietnam, but also, more importantly, to perfect the management system of Sacombank. “So we will focus the maximum resources to accomplish this goal.” The credit risk model is being installed with consultancy from PricewaterhouseCoopers (PwC) and deployed by CMC Saigon System Integration Co.,Ltd.  Novaland reports 29 per cent sales growth Housing developer Novaland Group has reported revenues of nearly VNĐ4.3 trillion ($188.5 million) in the first half of this year, a 29 per cent increase year-on-year. Profit after tax was VNĐ723 billion ($31.2 million). NVL said the revenues were mostly from Lakeview City, Rivergate Residence, The Tresor Residence, Golden Mansion, Wilton Tower, Kingston Residence, and Lucky Palace. They would remain the mainstay in the second half too, it said. In the period the company had mobilised $310 million from a bond issue. NVL, established in 1992, has developed 40 housing projects so far, most of them in HCM City. Toyota launches next generation models      Toyota Motor Vietnam (TMV) on Wednesday officially introduced its new generation Vios and Yaris 2018. The new generation Vios provides customers, especially families and young people, with a variety of exterior choices with the addition of Red 3R3, while the new generation Yaris is impressive with a whole new appearance in three dynamic colors: Yellow 6W2, Red 3R3 and Orange 3R8. The models with quality design and advanced convenience and safety features will be officially on sale across TMV’s dealer network nationwide from now with three new kinds of Vios with prices ranging from VND531million to VND569 and 606 million while the Yaris is priced at VND650 million. Officially launched in August 2003 as a strategic CKD model, Vios has continuously consolidated its leading position in the compact-mid segment and persistently maintained its position as the number one top selling model in the market with total sales of more than 114,000 units as of July 2018, while Yaris has sold more than 12,000 units as of December last year.  Plastic products exports up 20 percent Exports of plastic products were worth 1.43 billion USD in the first half of the year, a year-on-year increase of 20 percent, according to the General Department of Vietnam Customs. They were shipped to many markets, with Japan being the largest, with 312.5 million USD, 15.7 percent up. Shipments to the US were worth 223.7 million USD, while the other major buyers were the Netherlands (75.9 million USD) and the Republic of Korea ($75.3 million USD). Exports to many markets, including India, Hong Kong, Turkey, China, Ukraine, Russia, and Bangladesh, are rising. Shipments to India rose by over 159.4 percent to 17.6 million USD. Exports to Hong Kong were up 158.8 percent to 29 million USD. But exports to certain markets such as the Philippines (down by 31.3 percent), Laos (26.3 percent) and UAE (26.2 percent) declined. According to the Vietnam Plastics Association, the industry is one of those to achieve steady growth of 14-15 percent a year with its export growing by 12-14 percent annually. The industry still has a lot of room to grow because the per capita consumption of plastic products in Vietnam remains low at 41kg per year, while it is 48.5kg in Asia and 69.7kg globally. Companies have increased investment in technology and plants and are tying up with foreign partners to improve their competitiveness. Demand for rental office continues to rise Vietnam’s rental offices exceeded other countries in 2017. The end of 2017 marked a transformation of the condominium market from robust growth to more sustainable growth with high profit. The positive trend still maintained in the first six months of 2018 and economists said leasing office market would grow more. One of the reasons is that limited supply. According to CBRE Vietnam, the current trend suggests inadequate supply of grade A buildings. Specifically, in the first quarter of 2018, grade A buildings was just 382,763 square meter and 813,362 square meter for grade B buildings in Ho Chi Minh City yet in the next quarter, no new building for leasing will be inaugurated. It is forecast that from now to end of 2018, just two grade B buildings will be operative in HCMC but not much space for leasing because investors will use it as their office. There was no new supply in Ho Chi Minh City’s office market in the second quarter of the year, according to CBRE’s Q2 Quarterly Report; accordingly, rent price skyrocketed in past time. For instance, in the first quarter, it were $39.71 per square meter per month for grade A building and $22.35 per square meter per month for grade B building. With such price, there has been an increase of 3.5 percent q-o-q and an increase of 7.4 percent y-o-y. for grade A building. While in the second quarter, grade A rent price increased by 7 percent against the previous quarter and 17 percent compared to the same last year because new buildings are soon filled out and new supply is quite rare. According to CBRE, in first six months of 2018, no supply of grade A and B buildings. It is expected that in last months of the year, buildings with 125,000 square meters will be supplied bringing up the rental office area to 1.4 million square meter. Though total new supply showed a decrease, good product configuration helps the market to maintain good absorption. According to James Lang LaSalle (JLL) Vietnam report, average occupancy rate of office buildings in the HCMC achieved greater than 95 percent occupancy. This showed an extremely high demand in the market for both Grade A and Grade B office submarkets. Especially, net absorption in grade B building is thanks to giant rent area in newly buildings with 9,000 square meter filled out by local firms, foreign companies and Non-government organizations. Economists valued that demand for rent building will maintain high, more companies are seeking big and high quality leasing area; consequently, rent will go up by 2 percent annually and all buildings will be filled out. Marketing research companies’ statistic, more buildings were built in 2014-2016 and 2017 is considered as the year to absorb all supply. 2018 will be the year for transformation of boom in 2019 and 2020. Research companies predicted building supply will boom resulting in new circle in two next years. Investors will carry out new projects when all buildings were absorbed. Dang Phuong Hang, Managing Director of CBRE, expects that Grade A rental will maintain its increasing trend because of limited available supply from now until late 2019 or early 2020. Vacancy rates will also decrease slower because of Grade A’s higher rentals. Grade B is expected to see more stable and healthy performance because of its small but more constant supply from now until 2019. The market from 2018 - 2020 will still be a landlord’s market. HCMC wants more enterprises to access city’s stimulus program HCM City would continue improving admin procedures, investment environment, creating favorable condition, having preferential policies, helping enterprises develop effective production & business.  HCMC wants more enterprises to access city’s stimulus program Chairman of the HCMC People’s Committee Nguyen Thanh Phong asked the departments of Investment & Planning and Industry & Trade in coordination with relevant agencies to re-check the city’s stimulus program; report to the city to make suitable adjustments with aiming at creating favorable condition for more enterprises to access the program. Chairman Phong concluded it in an announcement of the result of the meeting between the city leaders with HCMC Mechanical-Electrical enterprises. As per the announcement, the city plans to re-check land fund to increase land for the industry on hi-tech applications, limiting the industries to use many laborers.    In addition, the city would form some industrial parks for innovative start-ups. Therefore, mechanical-electrical enterprises should propose plan for itself upcoming industrial park. HCMC will support enterprises in promoting their products to 50 consumption markets cross over the world which the city has signed cooperation agreements. However, enterprises should also seek actively other potential markets. On the other hand, the city would continue improving admin procedures, investment environment, creating favorable condition, having preferential policies, helping enterprises develop effective production and business.  Besides, the city suggested mechanical-electrical enterprises to link together for its sustainable development. Steel exporters warned of the risk of exceeding export quotas to Europe The Trade Remedies Authority of Vietnam, under the Ministry of Industry and Trade, has issued warnings to steel exporters to European countries. Accordingly, the European Commission (EC) has decided to initiate investigations on the application of safeguarding measures on 28 groups of imported steel products, of which 23 are subject to tariff quotas. Three out of the 23 groups of Vietnamese products subjected to tariff quotas include cold-rolled and non-alloy steel, galvanised steel sheet and cold-rolled stainless steel sheet and bars. For the other 20 steel product groups from Vietnam, the EU has temporarily excluded them from the quotas application range and they will not be subjected to the 25% tariff in excess of quota. However, if during the application period of provisional safeguard measures, the importation of these products from Vietnam in excess of 3% would face the risk of being excluded when the EC applies official safeguard measures after February 3, 2019. The Vietnamese agency will publish monthly export data to the EU in order to alert the possibility of exports exceeding the 3% threshold and the risk of being subject to formal safeguards by the EC. Airbus to work with Vietnam to develop country’s space industry Airbus and Vietnam’s Ministry of Science and Technology (MoST) have signed a letter of intent (LoI) indicating their plans to work together on several areas of interest in the space sector. Potential areas of collaboration between Airbus Defence and Space and MoST include the exchange of information on issues related to Earth observation, organizing and participating in scientific and technological events and research on satellite technology. “Airbus and Vietnam are already partners on the VNREDSat-1 satellite, and with the recently signed LoI, we hope to further support the development of Vietnam’s space industry. The agreement will allow us to continue working together, strengthening our close ties,” Nicolas Chamussy, head of Space Systems, Airbus, said in a statement. In 2010, Airbus was awarded a contract to develop, manufacture and launch Vietnam’s first Earth observation satellite. VNREDSat-1 was successfully launched in May 2013, enabling Vietnam to better monitor and study the effects of climate change, predict natural disasters and optimize the management of its natural resources. As part of the VNREDSat-1 program, Airbus and the Vietnam Academy of Science and Technology established bilateral cooperation that included academic and on-the-job training programs for Vietnamese engineers, as well as technology transfer. Airbus has been a partner in the Asian space sector for almost 40 years, supplying space equipment for geostationary and low-orbit spacecraft operators in Japan, Singapore and South Korea. Airbus has also helped launch satellites for Australia, India, Indonesia, Japan and South Korea. With 15 international programs in place, Airbus is the leading exporter of Earth observation satellite systems worldwide and provides turnkey solutions to both civilian space agencies and defense organizations. Benefiting from decades of experience in the development of satellite systems designed for dual use, the AstroBus-S is ideal for very-high resolution applications, combining the advantages of a low-mass system with the strong performance of a larger platform. In Vietnam, in addition to the VNREDSat-1 satellite, Airbus has successfully provided solutions for its commercial aircraft, defence and helicopter businesses. The European manufacturer is also developing its industrial presence in the country, where several local firms supply aerostructures and components across the Airbus civil aircraft product line. This helps generate fulltime employment for 550 highly skilled Vietnamese workers. In education, the company is supporting the development of two new degree programs at the University of Science and Technology of Hanoi, aimed at helping Vietnam meet its growing requirements for aerospace engineers and professionals. Real estate inventories drop The total value of property inventories had plummeted to a little more than VND24 trillion as of June 20, down by VND700 billion compared with the first quarter of this year, according to a report by the Department of Housing and Real Estate Market Management under the Ministry of Construction. Nguoi Lao Dong newspaper cited the report as saying that the property market maintained steady growth in the first six months of 2018, rising by 4.12% year-on-year. The real estate sector recorded the registration of some 3,300 new firms, up by a staggering 44.2% year-on-year. The sector saw new foreign direct investment approvals totaling some US$4.9 billion. The total capital of property projects now underway is estimated at VND3,500-4,000 trillion. The total value of property inventories as of June 20 slipped to VND24,072 billion. Real estate loans account for 6-8% of total outstanding loans, remaining under control. According to the Department of Housing and Real Estate Market Management, medium- and high-end properties have faced a slowdown, but low-cost condo buildings and houses have risen slightly due to high demand and limited supply. Nguyen Trong Ninh, head of the department, noted that the real estate market will not see major changes in the rest of the year, insisting that stable development was more likely. He, however, warned property firms of the fever for vacant land in some localities as several individuals have been taking advantage of the plan to establish special economic zones and large traffic projects, such as Long Thanh International Airport, metro lines in HCMC and expressways, to spread rumors of land price rises. Vietnamese steel exporters warned of possible 25% tax The Ministry of Industry and Trade has announced that a steep tariff is likely to be imposed by the European Commission (EC) on Vietnam’s steel processors and exporters. The ministry made the prior announcement to help steel firms cope with the tough time ahead, reported Sai Gon Giai Phong newspaper. As the EC has issued a regulation to apply temporary safeguard measures, imposing quotas on 23 of 28 types of imported steel products, those steel firms whose steel exports exceed the allowed quota will have to pay an additional 25% tax. Three of Vietnam’s 23 steel products---non-alloy and other alloy cold-rolled sheets, metallic coated sheets and stainless cold-rolled sheets and strips---are subject to export quotas, while 20 other types of products shipped to the European Union are temporarily exempted from the quota regime, meaning they are not subject to the 25% tariff. However, Vietnam will face protectionist charges after February 3, 2019, if the country’s steel exports exceed quotas by 3% following the EC’s temporary protective measures. The Trade Defense Department will announce the quantity of steel bound for the European Union so that Vietnam’s steel enterprises and the relevant agencies can control and limit exports appropriately to avoid additional duties. Vietnamese steel exporters warned of possible 25% tax The Ministry of Industry and Trade has announced that a steep tariff is likely to be imposed by the European Commission (EC) on Vietnam’s steel processors and exporters. The ministry made the prior announcement to help steel firms cope with the tough time ahead, reported Sai Gon Giai Phong newspaper. As the EC has issued a regulation to apply temporary safeguard measures, imposing quotas on 23 of 28 types of imported steel products, those steel firms whose steel exports exceed the allowed quota will have to pay an additional 25% tax. Three of Vietnam’s 23 steel products---non-alloy and other alloy cold-rolled sheets, metallic coated sheets and stainless cold-rolled sheets and strips---are subject to export quotas, while 20 other types of products shipped to the European Union are temporarily exempted from the quota regime, meaning they are not subject to the 25% tariff. However, Vietnam will face protectionist charges after February 3, 2019, if the country’s steel exports exceed quotas by 3% following the EC’s temporary protective measures. The Trade Defense Department will announce the quantity of steel bound for the European Union so that Vietnam’s steel enterprises and the relevant agencies can control and limit exports appropriately to avoid additional duties. Dong Nai: Export revenue surges 12.7 percent The southern province of Dong Nai earned more than 10.6 billion USD in export revenue in the first seven months of 2018, a year-on-year increase of 12.7 percent. Of the total, the foreign direct investment (FDI) sector contributed 9.1 billion USD. Meanwhile, the non-State and State-owned sectors bagged 1.4 billion USD and 132 million USD, respectively. The surge in export revenue was spurred by large orders, new export markets and the rise in export prices of some products. During the period, shipments of footwear fetched 2 billion USD, garment and textiles more than 1.1 billion USD, machines and equipment 776 million USD and computers, electronic products and spare parts 384 million USD. Major importers of the locality were the US (2.3 billion USD), China (more than 1 billion USD) and Japan (896 million USD). An export upturn was also seen in the Republic of Korea and Germany. Local coffee, pepper, cashew and rubber experienced a decrease in export revenue due to stagnant demand and large stockpiles. Specifically, each tonne of cashew is currently sold at 9,282 USD, down 12.5 percent, while that of coffee and pepper was 1,803 USD and 3,533 USD, falling 25.2 percent and 41.7 percent. In the same period, the province splashed out 9 billion USD on imports, up 8.1 percent from the same period last year. The province enjoyed a 1.6 billion USD trade surplus, accounting for more than 50 percent of the country’s trade surplus during the January-July period. Aquatic product export expected to rise 13 pct in Q3 Export revenue of aquatic products is estimated to hit 2.7 billion USD in the third quarter, a 13 percent rise year-on-year, said the Vietnam Association of Seafood Exporters and Producers (VASEP). After a strong increase of 17 percent in the Q1, aquatic products exports in the following quarter slowed down to 5.7 percent, raking in 2.2 billion USD. The slower increase rate was attributed to sharp decline in shrimp prices amid increasing global supply. In July, export value of aquatic products was at 793 million USD, up by 7 percent year on year thanks to the recovery of shrimp shipments. The figure for the first seven months came to about 4.78 billion USD, up 8.5 percent against the same period in the previous year. According to experts, aquatic exports are facing many challenges in import markets, including anti-dumping tariffs on shrimp and tra fish in the US and the European Commission’s “yellow card” on illegal, unreported, and unregulated (IUU) fishing. However, as demand for shrimp is likely to rise and domestic prices of material shrimps become stable, export is expected to recover in upcoming months. In January-July, shrimp export earned nearly 2 billion USD, recording an increase of 5.5 percent year-on-year. Aside from shrimp exports, VASEP said that tra fish exports will see stronger growth, at around 30 percent, in remaining months of the year, along with seafood products like tuna, squid and octopus. East-West Economic Corridor int’l fair opens in Da Nang The East-West Economic Corridor’s International Trade, Tourism and Investment Fair – Da Nang kicked off in the central city of Vietnam on August 3. The event, which will last through August 8, features over 350 booths of nearly 200 Vietnamese and foreign businesses. It showcases various tourism, trade and investment products such as electrical, electronic and IT products, processed food, wood products, home accessories, leather footwear, apparel, pharmaceuticals and cosmetics, along with restaurant and hotel services. Other activities of the fair include a conference to connect suppliers and buyers, a workshop introducing Cambodia’s tourism and travel tours. In his opening speech, Deputy Minister of Industry and Trade Do Thang Hai said the fair has been held annually over the past years to introduce development achievements and trade, investment and tourism potential of Vietnam’s central and Central Highlands regions, localities along the East-West Economic Corridor, and countries of the Greater Mekong Subregion. He expressed his belief that this year’s event, with a diversity of high-quality products, would be an effective platform for enterprises to access consumers, promote trade and seek business partnerships. It would also help step up trade, investment and tourism ties among central and Central Highlands provinces, and increase trading activities with neighbouring countries, he added. The 1,450km-long East-West Economic Corridor links the Indian Ocean and the Pacific Ocean. It begins at the Myanmar port city of Mawlamyine and ends at Da Nang Port of Vietnam. It traverses 13 provinces and cities of Myanmar, Thailand, Laos and Vietnam, which are members of the Greater Mekong Subregion. VNN