BUSINESS NEWS HEADLINES MAY 27  02:17       Exports shrink to lowest in first half of May Exports totalled 8.22 billion USD in the first half of May, the lowest recorded on a fortnightly basis since the beginning of this year excluding the last two weeks of January when the Tet holiday took place. According to the Ministry of Industry and Trade, sharp declines have been seen in a number of key export items, such as phones and parts, down 16.9 percent, and machinery, tools and components, down 14.5 percent. Meanwhile, imports rose 1.9 percent to 9.2 billion USD during the period. The COVID-19 pandemic has caused disruptions to global supply chains, considerably affecting Vietnam’s import and export import activities, the ministry said. Foreign trade will bounce back in the second half of 2020 if the disease is brought under control by the end of the second quarter, it added./. Vietnam – emerging tiger in Asia: Egyptian media In the economic aspect, The Egyptian Gazette noted Vietnam is viewed as an emerging tiger in Asia with a GDP growth rate of over 7% in 2019, annual per capita income approximating US$2,800, and household poverty rate brought down to 1.45%. Regarding the fight against the COVID-19 pandemic, the newspapers said the UN and many countries around the world have expressed their admiration for Vietnam’s accomplishments. In terms of bilateral cooperation, the Egyptian media highlighted that the two countries have enjoyed new strides in their relations in multiple spheres and at different levels. As the ASEAN Chair this year, Vietnam can act as an important bridge linking Egypt with other ASEAN members, thereby helping the Egyptian Government promote its “Look East” policy, the newspapers noted./. Vietnam needs to change its ways to attract FDI: experts Vietnam has some great advantages while competing with regional countries in attracting capital flows after the COVID-19 pandemic, experts have said. A report by SSI Research said foreign projects set up in industrial parks in the country were up 32 percent year-on-year in the first four months of the year to 9.8 billion USD. The pandemic has shown that many large countries’ supply chains are heavily dependent on China, and they have taken drastic steps to cut this dependency. Many large US, Japanese and European companies are gearing up to shift production away from China. Vietnam is one of their destinations besides some others in the region such as Indonesia, Thailand and Malaysia. "Compared to Indonesia, which directly competes with Vietnam in attracting FDI, Vietnam has the advantage of proximity to China,” the report said. “Vietnam also offers support to businesses, with many incentives for large FDI projects, and has a lot of free trade agreements in which Indonesia does not participate. Recently the Vietnamese dong has been very stable compared to the Indonesian rupiah." Nguyen Van Toan, Vice Chairman of the Vietnam Association of Foreign Investment Enterprises, said the opportunity to attract the FDI wave looking to relocate from China is quite clear, but not really big, and whether the opportunity can be grasped depends largely on Vietnam. "We also need to be aware that investors will not easily pull out all investment from China because that country has great advantages such as a strong work force, good use of technology and products for all market segments, not just the affordable segment." Vietnam would face difficulties in competing with so many rivals to attract a part of the capital flows moving out of the neighbouring country, he said. Experts agreed that to compete in the race, the country would need to change its way of attracting FDI and quickly. Phan Huu Thang, former Director of the Foreign Investment Agency, said, “[We] will fail if we try to attract foreign investment in the traditional way. “For example, India has immediate policies to allocate land, prepare infrastructure, identify potential investors to approach, announce tax reduction plans ... Investors are gearing up to shift their production. If we continue to act slowly, we will miss an opportunity that comes once in 100 years.” Toan said Vietnam needed to further improve its business and investment environment and administrative procedures. He believed that HCM City, which leads the country in FDI attraction, has all the conditions and capacity required to make good use of this opportunity./. Survey finds high domestic travel demand until year end Close to 85 percent of respondents have said they have plans to travel from now until the year end, a survey by the Vietnam Tourism Advisory Board (TAB) has found. Among them, 49.3 percent will travel for 2-3 days, 10.7 percent want to take a holiday longer than 7 days and 2.4 percent will go on a one-day tour, according to the survey. Some 60.5 percent of the respondents said they plan to travel with their families, 29.1 percent will go with friends while 6 percent want to travel alone. A majority, 51.7 percent, want to travel by plane while 20.3 percent said they will use their own cars. The survey said that the most popular destinations were seaside resorts, followed by mountain resorts, eco-tourism sites and cities./. Vietnam, China works to fuel agricultural trade Vietnam and China are going to hold several teleconferences in the next few days to promote the trade of agricultural products and specialties. The Ministry of Industry and Trade (MoIT) said on May 24 that its Trade Promotion Agency and the Vietnamese trade office’s branch in China’s Kunming city will coordinate with the Yunnan branch of the China Council for the Promotion of International Trade to hold a teleconference on May 26 and 27 to boost the trade of agricultural products and food between the two countries. During the talks, 21 Vietnamese businesses operating in the agricultural, fisheries, food processing and beverage sectors will introduce their products to Yunnan importers. Do Quoc Huong, who is in charge of the Vietnamese trade office’s Kunming branch, said all production and business activities in Yunnan province have been basically resumed, but agricultural production there is still facing difficulties. The Yunnan Department of Commerce predicted that from now to the end of June, the province will have a high demand for essential farm produce like fruit and vegetables. The MoIT and the Ministry of Agriculture and Rural Development of Vietnam also noted that a major international meeting will be held online on June 6 to promote lychee trade between the two nations. It will connect tens of locations in Bac Giang, Lao Cai, Lang Son, Da Nang and Ho Chi Minh City with those in China’s Yunnan and Guangxi provinces. Data from the MoIT show that bilateral trade hit more than 35 billion USD in the first four months of this year. Vietnam earned 12.7 billion USD from exports to China and purchased goods worth 22.38 billion USD from the neighbouring market, respectively rising 22.1 percent and falling 1.6 percent year-on-year./. Local firms urged to diversify markets, understand post-pandemic trends Vietnamese firms need to diversify their overseas markets and improve their strengths to capitalise on opportunities after the COVID-19 pandemic ends, a recent online seminar heard in Ho Chi Minh City. Pham Chi Lan, an economist who was an advisor to the Government in the past, said firms would need to join hands with industry business groups to study new market trend and changes in consumer habits after the pandemic to identify large and niche markets and reshape their business strategies. “The market will never return to the old normal that existed before the pandemic but to a new normal. New normal will have new abnormalities. Therefore, research should be conducted. “Businesses that are in associations should sit together to discuss what they can do and should not wait for the Government. Based on their requirements, they can propose policies.” Nguyen Thi Thu Trang, Director of the Vietnam Chamber of Commerce and Industry’s WTO and Integration Centre, said: “The demand for IT products will increase to meet the new way of working. Demand for green products will be further boosted. After the end of social distancing, there will be demand for products and services that were not available before. “This is a change in consumption trends as people realised what is essential for life when they stayed at home. “If we want to seize the opportunity, we will have to change too.” Vietnam’s exports depend on two factors: global demand and competition with similar products, according to Trang. Demand is very low, leading to a reduction in the exports of many products in the second quarter. But Vietnam still has a chance to promote exports. Firstly, during the epidemic, Vietnam improved its reputation by controlling the epidemic well and donating face masks and other medical stuff to support its partner countries. Secondly, demand for items such as food, medical supplies and computer equipment in which Vietnamese firms have export strengths has increased globally. “The EU-Vietnam Free Trade Agreement, which will come into effect this year, also offers opportunities for Vietnamese firms to export to the EU,” she said. "The EU has over 400 million people and the second largest purchasing power in the world. Other major exporting countries to the bloc, such as China and Thailand, do not have FTAs with it," she pointed out. She said local firms should pay more attention to their domestic market. “Vietnamese enterprises should promote exports but meanwhile increase consumption in the domestic market.” Lan said Vietnam should continue to develop sectors such as medical products and pharmaceuticals for both the domestic and export markets. Many countries were worried about another wave of the pandemic, and so demand for these products would still be high, she explained./. Former wife of Hoa Sen boss wants to sell entire HSG holding As soon as the performance of Hoa Sen Group (HSX: HSG) turned better, its chairman’s former wife has decided to sell her entire shareholding in the local steel giant. Hoang Xuan Huong, the former wife of Hoa Sen Group’s chairman Le Phuoc Vu, has just registered to sell her entire 7.15 million HSG stocks, equalling 1.54 per cent of the company’s charter capital. The transaction will take place under the form of private placement and auction. The trading timeline is from May 22 to June 20. Ending the session on May 20, its stock was at VND9,530 (41.43 US cents), down 1.75 per cent against the previous session. Based on this price, Huong may get nearly VND70 billion ($3 million) from the deal. Huong purchased the 7.15 million stocks in late 2018. In the same year, Tam Thien Tam One Member Limited Company (also operated by her) divested all 24.2 million HSG stocks. At the time, her company was a large shareholder of Hoa Sen Group. HSG stock rose from the bottom of VND4,330 (18.8 US cents) in late March this year to nearly VND10,000 (43.48 US cents) per share, the highest price from October 2018. Its stock was buoyed by many positive signs stemming from the steel company reaching about VND90 billion ($3.91 million) of after-tax profit in April. Accordingly, its accumulated losses during the first seven months of the fiscal year (starting in October) hit VND472 billion ($20.5 million), exceeding the target of VND400 billion ($17.4 million) for the 2020 fiscal year. Lao Cai launches promotion programme to boost tourism The northwestern province of Lao Cai organised a summer tourism promotion programme from May 22-24 with a view to luring holidaymakers to the locality in general and the resort township of Sa Pa in particular. As many as 82 local travel businesses were engaged in the programme, which covers special ticket discounts of 10-60 percent to tourist sites, while the quality of accommodation and catering services were enhanced. Fansipan Legend Cable Car Company of Sunworld Group is offering a 60 percent discount for tourists coming from the northwestern provinces of Lao Cai, Lai Chau, Son La, Dien Bien, Yen Bai and Hoa Binh. The preferential programme will run until June 28. Lao Cai aims to draw 2.5 million tourists in 2020. Due to the impact of COVID-19, the number of visitors to Lao Cai in the first five months of the year reduced 73.2 percent to 666,000./. Tien Giang to support tourism businesses hit by COVID-19 Local businesses hit hard by COVID-19 are seeking support, including deadline extensions for tax payments, from Tien Giang Province authorities. Nguyen Duc Dam, director of Tien Giang's Department of Culture, Sport and Tourism, said that more than 1,200 businesses, households and clubs in the fields of culture, tourism and sport had to stop operating due to COVID-19. In the first quarter, Tien Giang received only 375,000 tourists and reached VND160 billion in tourism revenue, a drop of 43 per cent and 50 per cent, respectively, year-on-year. Phan Hoai Lam, deputy director of Saigontourist's branch in the province, said that revenue had dropped drastically and there were no foreign tourists. Domestic tourism had just started to pick up, he added. Lam said his company was looking for tax reductions and extended deadlines for social insurance and VAT payments. Nguyen Thi My Trang, deputy director of Lang Viet Travel Co., Ltd, said she hoped that local authorities would lower land rent and insurance fees and extend payment deadlines. The Tien Giang Tourism Association has asked authorities to lower bank loan interest rates and extend payment deadlines. The association said that loans with low interest rates are needed for organisations in the fields of tourism, sport and culture. To help those businesses recover, reduction in land rent fees and extension of payment deadlines are needed as well. Nguyen Duc Dam said the department had been working with other agencies to carry out policies from the central and local governments to assist businesses affected by COVID-19. In the future, departments would develop a media campaign on safe travel to Viet Nam and Tien Giang to encourage tourism. The province would also help businesses improve tourism products and build tourism stimulation programmes. Dam said that tourism businesses should provide newer tourism products and services, and that departments should focus on promoting tourism and work cooperatively with HCM City, Ha Noi and Mekong Delta provinces.  VietinBank plans equity capital increase from accumulated profits VietinBank (VTG) planned to increase its equity capital from its accumulated profits or paying dividend by stocks. The plan is being completed by the competent State agencies to complete the legal procedures for implementation. Le Duc Tho, chairman of VietinBank’s Board of Directors, made the statement at its 2020 annual general meeting of shareholders held in Ha Noi on Saturday. “The capital raising requirement of VietinBank is extremely urgent. Unlike other commercial banks, VietinBank could not raise capital through additional issuance solutions to investors due to its limitations: State ownership in joint stock commercial banks having State capital must not be less than 65 per cent while the foreign investors' ownership percentage is a maximum of 30 per cent," he said. This year, the bank was assigned a credit growth limit of 8.5 per cent by the State Bank of Viet Nam (SBV). However, if the economy sees a good recovery, Vietinbank would submit to increase the limit. VietinBank expected outstanding loans to grow by 4 to 8.5 per cent in 2020. The mobilised capital would grow in line with the use of capital, balanced with the growth rate of outstanding loans, expected at 5 to 10 per cent. Meanwhile, the non-performing loans (NPL) ratio would be controlled at less than 2 per cent. The bank has not set a specific profit target this year, but affirmed to ensure business effectiveness and improve its operation. It will closely follow changes and impacts of COVID-19 to update its profit plan based on the approval of authorities. VietinBank clarified tasks in the restructure plan and resolving bad debts in the 2016-20 period, improving profitability and renewing business structure, customers and managing growth quality. VietinBank would meet requirements of Basel II as soon as it completes the equity capital increase. Especially, it would complete the development strategy in 2021-30 and middle-term business plan in 2021-23 . It would continue to restructure credit categories, increasing the portion of small-and-medium sized enterprises and retail segments while diversifying revenue structure. “As the global and domestic economy faces many challenges, the whole system of VietinBank will implement practical and effective solutions to support businesses and people to overcome difficulties, having breakthrough developments after the COVID-19 pandemic,” the chairman said. Responding to shareholders’ questions about bad debt, he said that it was difficult to predict the impact of COVID-19 because the pandemic had not been controlled. Influence from other countries would greatly affect an open economy like Viet Nam. The bank has implemented necessary support measures to accompany customers to stabilise production and business activities, offering many support programmes. However, many customers of VietinBank are affected by decreasing incomes, affecting consumer loans, business and production. VietinBank’s capital adequacy ratio (CAR) has been at 10 per cent according to Basel I and 8.6 per cent according to Basel II which is under SBV’s stipulated level. The bank estimated that its profit would reach VND6 trillion by the end of the second quarter of the year. The bad debt rate would be controlled at 1.5 per cent. VietinBank bought VND3.1 trillion from Viet Nam Asset Management Company (VAMC) while the company still owned over VND9 trillion, of which over 50 per cent has been set aside. The meeting dismissed the position of members of VietinBank Board of Directors for Hiroshi Yamaguchi and Hideaki Takase at the proposal of Tokyo-Mitsubishi UFJ Bank (MUFG Bank). It voted three members into the board in 2019-24 period including Masahiko Oki, Deputy Head of Planning Department at MUFG and deputy general director of Vietinbank, Shiro Honjo, MUFG's executive staff, head of global commercial banking planning and Nguyen Thi Bac, Head of Risk Management Division at Indovina Bank.  2020 consumption stimulus event to kick off in July  The HCM City Department of Industry and Trade announced that it would hold the 2020 consumption stimulus event from July 2-5 this year as a measure to support local producers amid the COVID-19 pandemic. According to the department, the event is expected to boost economic recovery and normalise commercial activities in the city that have been affected by the COVID-19 pandemic At the event, about 500 booths will showcase specialties of HCM City and other localities, industrial consumer products, agricultural goods, foods and export products. The event, which will be financed by firms and the Government’s trade promotion funds, will also include promotion and discount programmes to stimulate consumption and help local firms remove their stockpile.  FPT a match made in heaven for AI centre Vietnam’s ICT-related services group FPT Corporation is looking like the clear favourite to develop the central province of Binh Dinh’s ambitious AI hub, which is planned to turn it into a regional and global powerhouse in AI development. The corporation is reportedly working with the central province to join its project on building its hallmark AI Centre and adjacent supporting urban area. Binh Dinh Department of Planning and Investment early this year announced details of the project, whose investment capital is estimated to be VND4.36 trillion ($189.6 million) and which is aimed to be developed into one of the world’s largest AI centres. The total investment will include VND3.9 trillion ($169.5 million) for construction, with the remaining capital going to site clearance. FPT is operating a number of projects on AI and high-tech education in the province. These initiatives are said to position the group favourably to be selected as the developer of this particular centre, which is planned to be built on a large golden location at the centre of Quy Nhon city. The 94-hectare project in Tran Quang Dieu and Bui Thi Xuan wards will include an AI research and development (R&D) centre, a software development facility, smart buildings housing 2,100 apartments, and public infrastructure as well. When picking the developer, Binh Dinh Department of Planning and Investment will look at applicants’ financial capacity first, then ascertain whether investors’ equity is VND655 billion ($28.5 million) at least. Subsequently, it will look into the applicants’ ability to arrange the necessary finances for the project. “The investors have to have experience in similar projects, including developing buildings, urban areas, commercial housing, multi-purpose complexes consisting of R&D, AI, and software development components, which they have done by themselves or contributed at least 50 per cent of the total capital,” the document of Binh Dinh Department of Planning and Investment highlighted. Investors can lodge the bidding registration documents before May 28. FPT appears as a clear front-runner of the bidding. Last December the corporation broke ground on its FPT University campus specialising in R&D and technology. This 5.7ha campus in An Phu Thinh urban area is expected to supply high-quality human resources especially in AI, a core technology of Industry 4.0, for Binh Dinh and the country and enabling the province to become a global AI centre. Previously, FPT established FPT Software Quy Nhon in 2018, also specialising in AI, with the target of employing a workforce of 500 within two years. However, tech experts question the capacity of FPT in this sector. “The 500 employees of FPT mainly do outsourcing work for data labelling, which is the bottom rung of AI research,” said one expert. However, the FPT University campus and the FPT Software Quy Nhon speak strongly in favour of the corporation’s bid to develop Binh Dinh’s largest technology centre that encompasses the province’s strategic national and regional ambitions. The corporation has been steadily building up their presence in the province and the city, setting itself up to bag this project. “The project was practically made for FPT, and will most likely go to them,” said the expert./. Overseas investors ramp up preparations for post-pandemic operations Foreign investors could angle to add even more capital to their current projects in Vietnam as a result of superb COVID-19 prevention in the country. The impact of the coronavirus pandemic on foreign investment inflows in Vietnam has been noticeable. However, a rise in additional investment in existing projects in the first four months of the year has been a highlight in a bleak foreign investment picture, showing unbroken trust in the investment environment and their long-term commitment to Vietnam. The latest report from the Foreign Investment Agency under the Ministry of Planning and Investment showed that in the first four months of 2020, about 335 capital-adjusted projects recorded an added investment of more than $3.07 billion, up 45.6 per cent on-year. However, total newly- registered capital hit $6.8 billion, down 9.1 per cent on-year. Several notable moves were made just before the globe was affected by coronavirus, with many groups looking to get back on track as soon as possible. Recently, Thailand-based SCG gained approval to pump an additional $1.39 billion into Long Son Petrochemical Complex located in the southern province of Ba Ria-Vung Tau, increasing the total investment capital to $5.1 billion. The new investment in the Long Son complex is expected to breathe new life into the venture which is running significantly behind schedule. The project’s construction began in early 2018. Last year, SCG vowed to put the project into operation in late 2022. The integrated complex will have a total olefin production capacity of 1.6 million tonnes a year and will create more than 20,000 jobs during construction, including more than 1,000 skilled positions. It is expected to contribute around $60 million to the annual state budget. In February, German bearing and industrial equipment manufacturer Schaeffler Vietnam inaugurated its $50 million new plant at Amata Industrial Park in the southern province of Dong Nai, setting a solid foothold in Vietnam with the total registered investment capital of $160 million. Helmut Bode, general director of Schaeffler Group in the Asia-Pacific, said the facility will produce robotic components to orders by businesses from across the world. Georg F. W. Schaeffler, chairman of the group, added that Vietnam has a strategic location in Asia and a diversified, stable, and fast-growing economy with a talented and well-educated workforce, which was why the company chose the country to build its first manufacturing plant in Southeast Asia. Meanwhile, Bosch Vietnam has expanded investment in its existing manufacturing facility in Dong Nai, increasing the company’s total registered capital in Vietnam to $530 million. As of now, the group has disbursed $195 million of this, from the initial $54 million figure. The production capacity of the factory has also been continuously extended, with the annual initial capacity rising from 1.6 million to 26 million transmission belts, satisfying Bosch’s global manufacturing and quality standards. The investment and the company’s continuous growth in the past 10 years has shown Bosch’s long-term commitment to further strengthening its presence in Vietnam. “The group will pour an additional $100 million in the manufacturing facility in Dong Nai in the next five years to expand the operation of the transmission belt as well as modernise manufacturing lines,” said Mallikarjuna Guru, general director of Bosch Vietnam. Banks skeptical of BOT transport project relief Despite the Ministry of Transport’s proposal to increase the debt repayment period and cut lending rates for build-operate-transfer transport project operators, lenders remain concerned. On May 8, the ministry (MoT) sent Document No.4416/BGTVT-DTCT to the prime minister seeking for financial supporting policies for build-operate-transfer (BOT) transport projects, including restructuring the debt repayment period, cutting lending rate by 2-3 per cent, and stopping banks from changing them into bad debts. The proposal, however, may be a tough task because banks have remained silent on the matter. “It is difficult to restructure the debt repayment period as banks are not ready and are concerned about risks. BOT transport is not a priority for them,” Le Duc Khanh, director of the market strategy department at PetroVietnam Securities, told VIR. “However, powerful state-run banks would have to follow a government order.” Phan Dung Khanh, investment advisory director for Maybank Kim Eng Securities, said that along with transport, businesses in other sectors also have difficult access to bank loans. “Banks are in a dilemma. Vietnam’s bad debts are forecast to increase in the coming time and so banks are tightening control,” Khanh noted. The MoT, which is managing 61 BOT projects, also proposed reducing tax and allocating VND5.08 trillion ($220.87 million) to support BOT projects that are suffering partly because they have not received permission to increase tolls. The ministry even proposed to buy related projects with funding from the 2021-2025 public investment pot. The proposal comes as BOT operators are facing huge losses due to a fall in traffic during COVID-19. At the end of 2019, 45 BOT projects reported lower revenues than forecast in their contract signed with the state, with Thai Nguyen-Bac Kan and Thai Ha Bridge reaching only 13-15 per cent of initial plan. While the Ministry of Finance’s Circular No.159/2013/TT-BTC dated November 15, 2013 on adjusting road toll by roadmap stipulates BOT transport operators can increase tolls every three years at the rate of 12-18 per cent, the government’s Resolution No.35/NQ-CP released in 2016 on supporting enterprises until 2020 stopped them from executing this right. Pham Quang Dung, chairman of Tasco JSC, already constructing many BOT projects nationwide, said, “If we get permission to increase tolls now, BOT developers would not need to restructure bank debts. Companies cannot wait until 2022 for permission.” Nguyen Tuan Huynh, general director of Cienco 4, the investor of the Thai Nguyen-Cho Moi BOT project, said that many ventures will go bankrupt by the 2022 deadline, and banks will see more bad debts. Shrinking revenue at BOT projects has been a hot issue for years because of the high initial construction costs, long duration of recovery (20-30 years), and a lack of a risk-share mechanism, which makes it difficult for the transport sector to attract international ventures despite strong interest. Recently, the eight public-private partnership sections of the eastern cluster of the North-South Expressway had to cancel international bidding partly because of these reasons. Thus far, any BOT transport schemes are bogged down in difficulties, with many halting construction for years even, due to difficult loan access. Thailand’s exports up 2.1 percent in April thanks to agricultural, gold shipments Thailand’s customs-based exports recorded an annual growth of 2.12 percent in April as a result of higher shipments of agricultural products, food and gold, according to the country’s Commerce Ministry. Exports of agricultural and agro-industrial products went up 4.03 percent, corresponding to rising global food demand during lockdowns to curb the spread of the coronavirus disease. Rice exports bounced back to increase 23.1 percent, while the shipment of industrial products overseas grew 4.05 percent, led by gold, aircraft, electric circuits, and medical supplies. Exports to Thailand’s major markets – the US and Japan – continued to grow significantly. However, the severe spread of the virus in Europe suppressed its exports to 15 EU countries last month. Local media said the spike in gold exports showed the risk aversion effects arising from the COVID-19 pandemic and global economic slowdown, resulting in rising gold prices and large exports to Switzerland, Singapore, and China’s Hong Kong. In addition, global oil prices have suppressed exports of oil-related products to the ASEAN and CLMV (Cambodia-Laos-Myanmar-Vietnam) markets. Excluding gold, oil, and weaponry, Thai exports decreased 7.53 percent in April, the ministry said. For the first four months of this year, exports increased 1.19 percent, however, it contracted 0.96 percent excluding gold, oil, and weaponry./. Ha Nam becomes attractive destinations for investors The northern province of Ha Nam has become an attractive destination for domestic and foreign investors thanks to the locality’s transparent investment policies and mechanisms. In recent years, Ha Nam has focused on selecting investors with sound financial capacity that use advanced production technologies. To fully tap its potential, the locality is focusing on upgrading and developing modern transport infrastructure systems connected to neighbouring localities to form a synchronous network, serving the locality’s socio-economic development roadmap. It has paid heed to improving the quality of services in industrial parks (IPs) and vocational training, thus facilitating production and business activities while meeting the demand for skilled human resources. Attention has also been paid to accelerating administration reforms, and taking measures and incentives to support businesses. The IPs in Ha Nam with a high occupancy rate are Dong Van IPs I, II, and III. By the end of the first quarter, Ha Nam was home to 956 valid investment projects worth over 5.36 billion USD, including 302 foreign-invested projects. In 2019, enterprises operating in the locality contributed nearly 6 trillion VND (over 257.6 million USD) to the State budget, accounting for 66.67 percent of the province’s total budget revenue. They created jobs for nearly 144,000 labourers./. Wood exports grow thanks to businesses’ activeness Despite the COVID-19 pandemic’s impact, the wood industry still enjoyed 3.2 billion USD in exports in the first four months of 2019, up 6 percent year on year, thanks to businesses’ efforts to switch to online trading and find new markets. During the period, about 7 percent of members of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) had to halt operation while 51 percent cut output. About 45 percent of their employees were also laid off temporarily. However, HAWA members still earned more than 1 billion USD from timber and forestry product exports, rising by over 10 percent year on year. Of the value, over 698,000 USD was from wood product shipments, up 5.8 percent from a year earlier. Data from the Binh Dinh Department of Industry and Trade also shows that wood firms in the province also recorded a year-on-year increase of 13 percent in exports to about 188 million USD in the four months. Chairman of the Binh Dinh Forest Products Association Le Minh Thien attributed the growth to a sudden surge in the sales of wood chips to China. Meanwhile, the export value of wooden furniture was maintained as businesses had already manufactured products in 2019 and focused on exports right after the Lunar New Year holiday in late January. Vietnam’s effective control of the COVID-19 outbreak amid production suspension by rivals in other ASEAN countries, the EU and the US has also helped local firms receive more orders. Besides, Thien noted, businesses have also proactively sought new orders from the Australian, EU and US markets while importers and exporters, along with producers and distributors, have discussed mutual support measures with one another. President of the Vietnam Timber and Forest Product Association (VIFOREST) Do Xuan Lap said he believes that the wood industry can still record nearly-double-digit growth in 2020, adding that controlling the pandemic will help turn the country into a magnet for global wood processors. Many Vietnamese enterprises are also actively restructuring their products to adapt to changes in the market. The output may decline in the second quarter, but it’s normal since orders usually drop by 30 percent during summer, he said. According to Thien, the wood industry still needs to improve the quality of seedlings, expand the certified forests that are specialised in timber production, and ensure legal supplies of input materials. It is also necessary to promote wood processing, connect manufacturers with firms in the support sector, develop production chains, help companies improve their competitiveness and raise market shares in key export destinations, and diversify products. VIFOREST recently coordinated with associations, producers and processors in the industry to devise solutions to sustain production activities, including advertising and selling products on the internet and providing training in sales skills on big e-commerce platforms like Amazon and Alibaba./. S&P maintains stable outlook for Việt Nam’s sovereign credit rating S&P Global Ratings has announced it has maintained Việt Nam’s sovereign credit rating at BB, with a stable outlook, in its latest report released late last week, according to the Ministry of Finance. The move is a reflection of the strong potential for recovery in Việt Nam’s economy following a period of deceleration due to the COVID-19 pandemic. S&P evaluated that Việt Nam’s solid growth achievements over past years will continue to support the maintenance of the country’s sovereign credit rating. In the scenario where the global pandemic is basically controlled by the end of 2020 or early 2021, S&P forecasts that Việt Nam’s real GDP growth will recover in 2021 and from 2022 onward will approach the development speed the country set in the long term, of 6 to 7 per cent. Globally, since the beginning of April, S&P has adjusted the negative credit rating of 32 countries. While working with S&P to evaluate the sovereign credit rating in late April, the Ministry of Finance and relevant agencies presented convincing evidence about the adaptive capacity of Việt Nam’s economy, which has been clearly illustrated in the challenging global context. Apart from successfully curbing the COVID-19 pandemic, Việt Nam has supported, cooperated, and shared experience in fighting the disease with other countries and international organisations, which has been greatly appreciated by the international community, the ministry said. This outcome demonstrates the deep connection between the Vietnamese Government and people, which facilitated the strong recovery of the economy after COVID-19, it added.  HCMC to build one more industrial zone HCM City Department of Planning and Architecture is planning to build a new hi-tech industrial park that covers 380ha in Binh Chanh District. HCM City People's Committee asked the department to review the current industrial and processing zones and find suitable lands to attract investments to the city and build the new hi-tech industrial park. The new park will be a new gathering place for hi-tech firms and support start-up companies. HCM City Export Processing Zone and Industrial Park Authority (Hepza) will work with the department on how to deal with violations such as firms that operate not in accordance to their registered businesses. Hepza must also report about suitable land that can attract immediate investment or for business expansion. They must propose solutions to violations and difficulties that firms may face. HCM City has three processing zones and 16 industrial zones that cover a total 4,532ha. 17 of them have gone into operation in the past years. 1,716ha have been rented out. According to the plan, HCM City will have 23 processing and industrial zones that cover 5,822ha by the end of 2020./. Lengthy break-even period discourages investment in underground parking lots Authorities in HCMC are finding it hard to attract investors in underground parking lot projects, largely due to the lengthy period of capital recovery. The municipal government has planned for the construction of several underground parking lots within the city center, but these projects have yet to get off the ground. One project, which aims to develop the basement of the Le Van Tam Park into a parking lot and public service complex, is awaiting the appraisal of its technical designs. The investor in an underground parking lot at the Trong Dong (Bronze Drum) Music Stage Theater in District 1 is making adjustments to its basic designs. Meanwhile, other investors are starting to work on similar projects at Hoa Lu Stadium, Tao Dan Cultural Park and September 23rd Park, all in District 1. The HCMC Traffic Department noted that underground parking lot projects require large sums from investors. However, the main stream of revenue is parking fees. Part of the parking lots are zoned for business, service and commercial activities, but their overall profit rates may be low and it may take a long time to break even, according to authorities. Data revealed that underground parking lots at Le Van Tam Park and Tao Dan Cultural Park are expected to take 31 and 46 years, respectively, to recover their investment costs. Also, office leasing services in downtown HCMC are subdued, which will have a major impact on the projects’ capital recovery and financial plans./. Danang needs US$13 billion for city development The People’s Council of Danang City approved the master zoning plan for the coastal city on May 22, saying that the city will seek VND300 trillion (about US$13 billion) to carry out the plan. The master plan will then be sent to the Ministry of Construction for its evaluation, before being submitted to the Prime Minister for approval. The first phase, in 2020-2025, needs more than VND232 trillion, while the remainder is for the second phase, planned for 2025 to 2030. “This investment capital is combined from many sources [State and local budgets, loans and private investment], including those for projects carried out from 2021 to 2030,” Tran Chi Cuong, head of the Economics and Budget Committee of the municipal People’s Council told the Saigon Times. Some key projects in the first phase are developing the Lien Chieu seaport into an international seaport, and Tho Quang wharf. Meanwhile, the second phase will see the relocation of the railway station and Han River crossing tunnel, apart from other urban development projects. At the meeting, some members said the total investment capital is too large, especially in the 2020-2025 period. Therefore, it is essential to have a priority roadmap for key projects to avoid a lack of capital during the investment process. At the same time, the city should carry out investment procedures quickly so that private investors can participate in some projects. Speaking at the meeting, Ho Ky Minh, Vice Chairman of the municipal People’s Committee, said the city would have to call for investment capital from the business community, both local and foreign. Earlier, the city government announced that it was developing a master plan in a bid to receive input from other concerned parties. Consultants for the master plan include the joint venture of Sakae Corporate (Japan) and Surbana Jurong (Singapore). VNN