BUSINESS NEWS HEADLINES MAY 7 02:35        Firms need policies for sustainable development after pandemic Viet Nam needs policies to promote the sustainable development of businesses after the COVID-19 pandemic ends, according to the Viet Nam Chamber of Commerce and Industry (VCCI). The VCCI's Chairman Vu Tien Loc said sustainable development was vital for businesses in the long term, adding that this was also a “lifebuoy” to help businesses cope with and recover from any situation. Nguyen Quang Vinh, deputy chairman of the Viet Nam Business Council for Sustainable Development (VBCSD) under the VCCI, said that the pandemic had caused considerable declines in consumption and exports and caused a shortage of raw materials, creating difficulties for firms. It’s time for firms to develop appropriate strategies to address pressing issues in the short term in tandem with their sustainable development in the medium and long terms, Vinh said. According to a VBCSD survey, 31 per cent of member companies said they would focus more on the domestic market and reduce dependence on foreign markets, while 81 per cent said that they would strengthen sectoral ties to prevent value chain disruptions if a similar crisis hit again. The firms also said they would promote the development of e-commerce, online business and digital transformation to ease the reliance on traditional business models. However, the first thing to do was cut costs, enhance savings and prioritise investment for pressing needs. Vinh urged firms to rebuild their development strategies and restructuring plans towards sustainable development. “Goals for sustainable development should be integrated in the corporate management strategy,” he said. As the global supply chain changes, firms must improve their capacity, diversity and consolidate their resistance, Vinh said, adding that businesses also needed to develop risk management scenarios. Regular updates about the Government’s long-term economic development strategies and the global economic development trends were also important to building an appropriate development strategies, he said. VBCSD also urged the Government to develop a legal framework to aid the sustainable development of firms. Vinh said Viet Nam should build and implement the project about improving sustainable corporate management capacity in 2021-25 and the national programme about supporting businesses in implementing circular business models in 2021-30. Nguyen Van Than, chairman of the Viet Nam Association of Small and Medium – Sized Enterprises (SMEs), said SMEs needed policies which could not only tackle pressing issues but also aid long-term development.  Sa Pa tourism enterprises kick off stimulus programme The People's Committee of Sa Pa Town, Lao Cai Province has cooperated with the Sa Pa Tourism Association and the Fansipan Cable Car Service Co, Ltd to kick off a tourism stimulus programme. This is the first large-scale tourism stimulus programme in the North to help the local tourism industry resume after a period of suspension due to the COVID-19 pandemic. This programme is scheduled to run in May and June. Hotels, homestays, tour operators and tourism destinations in Sapa Town would reduce service prices by between 30 per cent and 60 per cent. To Ba Hieu, vice chairman of the Sa Pa Tourism Association, said those businesses have been asked to work together to attract tourists. Besides that, they must still implement strict measures on control and prevention of the pandemic. Of which, there are businesses to cut room prices by 50 per cent, such as Legend Hotel, Huong Sen, Retreat Sapa, Rong Sapa Hotel, Sapa Green hotel and Rex homestay. The Sun World Fansipan Legend tourist resort has a discount of up to 60 per cent on Fansipan cable car tickets for travellers of six northwestern provinces including Lao Cai, Lai Chau, Son La, Dien Bien, Yen Bai and Hoa Binh. The Sapa tourism market has been mostly suspended due to the outbreak of COVID-19. The number of visitors to Sapa dropped by 50 per cent in March and 100 per cent in April.  ABBANK shrugs off pandemic to grow profits An Binh Commercial Joint Stock Bank reported pre-tax profit of VND362 billion (US$15.5 million) for the first quarter. It has deposits of VND71.6 trillion ($3.07 billion) as of March 31, a 21 per rise year-on-year but 4 per cent down from the previous quarter. Its outstanding loans were VND59.2 trillion ($2.54 billion), up 18 per cent and down 6 per cent. It has total assets of VND95.3 trillion ($4.09 billion). Its bad debts ratio was 2 per cent, or within the safety threshold prescribed by the State Bank of Vietnam. Le Hai, acting general director of the lender, said: “ABBANK’s business results in the first quarter, despite being impacted by the Covid-19 pandemic, was positive in the context of both the domestic and global economies facing many difficulties. This shows our investment in enhancing operational efficiency and operations last years was right. “ABBANK will adjust its key business strategies to cope with the pressure but still practise risk management to ensure safe, stable and sustainable operations.” It has supported businesses by reducing or even waiving interest and restructuring their debts, he said. “We believe economic activities will improve in the second quarter and make a steady recovery in the third quarter, which will create opportunities for the bank to continue developing.” The bank has delayed its annual general meeting until June.  The PAN Group reports slump in business due to pandemic The PAN Group has reported revenues of VND1.28 trillion (US$55.1 million) and profits after tax of VND28.7 billion ($1.2 million) in the first quarter, year-on-year decreases of 20 per cent and 60 per cent, respectively. It blamed the results on the impacts of the COVID-19 pandemic and unfavourable natural conditions such as saltwater intrusion in the Cuu Long (Mekong) Delta, hail and tornadoes in the north and severe drought in the Central Highlands. The seed and confectionery businesses suffered the biggest sales declines of 35 per cent and 30 per cent mainly due to the impact of the pandemic on selling, travelling and marketing. The company’s corn exports to major markets including Laos, Cambodia and China were disrupted because of closed borders to control the outbreak. Prolonged drought has led to a sharp decline in the arable area, especially in the Central Highlands. The Tet holiday came slightly early this year and too close to the New Year, affecting the company’s confectionery revenues compared to a year ago. The highlight of the company’s activities was the continued growth in cashew exports to Japan, helping the segment's profits to increase slightly. It has developed dried fruit products, the shrimp segment achieved the same result as last year and the fish sauce segment saw profits increase by 11 per cent. The company makes a wide range of products for both domestic and export markets, and its export markets are spread relatively evenly geographically. Its production and business activities were impacted by the pandemic but not disrupted because of its closed value chain. To deal with the effects of the pandemic, it actively monitors the situation and plans for various possible scenarios. It bought back treasury stocks when their price dropped to the lowest level in four years. While it deployed measures to cut costs, it did not reduce its payroll. Production and business are expected to recover gradually by the end of the year as the pandemic comes under control, social distancing is eased and the food and agriculture sectors enter their peak business season.  Aquatic companies’ profits hurt by disease Fishery enterprises’ first-quarter profits were hit hard due to the negative impacts of the COVID-19 outbreak. According to the General Department of Customs, seafood export turnover in the first quarter of 2020 reached over US$1.61 billion, down 9.9 per cent compared to the same period in 2019. Cuu Long Fish JSC (ACL) reported post-tax profit down by 98 per cent to just over VND1 billion (US$43,550), the lowest profit the company has recorded in the last four years. As of March 31 this year, ACL's total assets stood at VND1.4 trillion, a slight decrease of 3 per cent compared to the beginning of the year. Inventory amounted to nearly VND721 billion, up 14 billion from the beginning of the year, and accounted for over 50 per cent of total assets. This year, ACL expects to collect only VND1.35 trillion in revenue and VND75 billion in pre-tax profit, down 5 per cent and 53 per cent compared to the previous year. According to ACL’s leaders, this year posed many challenges for Viet Nam’s pangasius export market because the COVID-19 pandemic had caused suspended production and economic damage. They said that they would increase their participation in trade promotion programmes and exploit new markets such as China and Mexico in addition to maintaining key export markets such as the US and Asia. Vinh Hoan JSC (VHC)’s first-quarter revenue was reported at VND1.63 trillion, down by 9 per cent year-on-year. The high cost of goods sold caused gross profit to halve to only VND215 billion. The company’s after-tax profit decreased by 51 per cent to touch VND152 billion. At the end of March, VHC's total assets stood at VND6.44 trillion, down nearly VND200 billion from the beginning of the year. Short-term receivables were recorded at nearly VND1.3 billion, down 14 per cent compared to the beginning of the year. VHC's inventories and liabilities decreased by 5 per cent and 19 per cent, respectively, to nearly VND1.34 trillion and VND1.4 trillion. VHC attributed the sharp decline in business results to the sharp decline of pangasius prices and the impacts of the COVID-19 pandemic. VHC forecast two scenarios for its 2020 business results. In the negative scenario, VHC expects to collect VND6.45 trillion in revenue and VND800 billion in post-tax profit, down by 18 per cent and 68 per cent year-on-year. In a more positive scenario, the company targets a fall of nearly 10 per cent in post-tax profit compared to the previous year. This is the first time VHC has planned a fall in profit since its listing. Hung Vuong JSC (HVG) suffered a loss of nearly VND254 billion in Q1. HVG's sales of goods and services decreased by 46 per cent compared to the same period in 2019, to over VND729 billion. HVG said that since October last year, purchasing power in most export markets had dropped sharply. Mekong Fisheries JSC (AAM) also witnessed profit falling by 79 per cent to reach only VND666 million in the first quarter. AAM attributed the decline to the sharp decrease in export sales. Pangasius was a strategic product of the fishery industry, but was facing increasingly strict economic and technical barriers, the company said. In 2020, AAM leaders have set a target of VND220 billion in revenue, equal to 2019, and pre-tax profit of VND6 billion, down 25 per cent.  Ninja Van raises new funding Ninja Van, an e-commerce logistics company, has raised at least US$274 million in new funding, reported TechInAsia. The company operates in Southeast Asia, including Viet Nam. Its series C round was raised in January 2018. Zamrud, a Brunei state fund, has taken a significant stake in the company. Other new investors include US VC firm Carmenta Capital Management, Bangkok Bank, Thai telco Intouch Holdings, and GxH Investments. Existing investors include European logistics major Geopost and B Capital, the venture capital firm started by Facebook co-founder Eduardo Saverin.  Rice exports to China continue to skyrocket Rice exports to China skyrocketed throughout March as their export value experiencing a four-fold increase in comparison with the same period from last year, according to the Agro Processing and Market Development Authority. In total, the nation shipped 400,000 tonnes of rice worth US$185 million abroad during April, bringing the total export volume and value throughout the four-month period to 1.92 million tonnes and US$886 million respectively, representing a year-on-year decrease of 7.9% in volume and 0.5% in value. March alone saw the country export 594,200 tonnes of rice with a value of US$257.2 million to the Philippines, the nation’s largest export market, a rise of 8.2% in volume and 19.1% in value on-year. Other markets that have seen a sudden increase in rice export value include China, with a 4.37-fold increase, Taiwan, a market that has enjoyed a 2.79-fold rise, and Indonesia, which has soared by 92.1%. According to data released by the General Department of Vietnam Customs, China purchased 66,222 tonnes of rice from the nation with a value of US$37 million, representing a seven-fold increase in volume along with an eight-fold rise in value on-year. Overall, the average export price of rice during the three-month period enjoyed a surge of 6.3% to US$461.9 per tonne in comparison with last year’s corresponding period. Elsewhere in the global market, the export price of Indian rice during mid-April hit an eight-month high with traders beginning to sign new contracts after enduring approximately three weeks of disruption as a result of the imposition of lockdown measures aimed at preventing the spread of the novel coronavirus (COVID-19). Amid the domestic market, rice prices in the Mekong Delta region tend to increase in April, especially the price of ordinary rice. Many localities have seen traders purchase a variety of ordinary rice in order to process it into white rice for the purpose of export, resulting in a price hike. This has been occurring more frequently following the government permitting the export of rice to resume in early April. Specifically, the price of rice in several provinces located in the western region has seen increases of between VND200 and VND500 per kilo to between VND5,800 and VND6,700 per kilo, depending on the type of rice. Moreover, rice prices in stores across Ho Chi Minh City have also surged by VND2,000 to VND3,000 per kilo. Export momentum bounces back With Vietnam successfully bringing the novel coronavirus (COVID-19) epidemic under control, local firms have begun to receive new export orders whilst others have been striving to seize upon the fresh opportunities to recover, according to insiders. According to the General Statistics Office (GSO), during first four months of the year, the country’s export turnover of goods increased by 4.7% to nearly US$83 billion in comparison with the same period last year, with trade surplus estimated to reach US$3 billion. Meanwhile, the agricultural sector’s export value throughout the reviewed period dropped by 4.9% on-year to US$11.9 billion, yet still managed to record a trade surplus of US$2.8 billion. Elsewhere, a number of commodities which have successfully been able to maintain their growth momentum, including, timber and wood products, coffee, cashew nut, vegetables, rattan, along with bamboo products. Nguyen Quang Hoa, director of Duong Vu Co.Ltd, an enterprise that specialises in exporting sticky rice from the Mekong Delta province of Long An states that as of April 24, sticky rice will be permitted to be exported based on market demand. Hoa elaborated that the country had put a temporary stop to the export of rice, including sticky rice, for a period of one month, leading to a scarcity in consumption markets such as China, the Philippines, and Malaysia. Phan Minh Thong, general director of Phuc Sinh Joint Stock Company, noted that the company’s major export products- coffee and pepper- have both achieved a growth rate of approximately 20% in contrast to the same period last year. Despite the coffee industry enduring a sharp decline in terms of sales volume in coffee chains, restaurants, and hotels due to the negative impact of the COVID-19, the quantity of coffee distributed in the supermarkets of importers and via online sales channels has enjoyed a significant increase, according to Thong. He can attribute these positive signs to the efforts made by domestic businesses and the support provided by the government in facilitating a continuing circulation of goods amid the complicated nature of the impacts of the COVID-19. Ong Hang Van, deputy general director of Truong Giang Seafood Joint Stock Company in the Mekong Delta province of Dong Thap, revealed that the company’s export orders in April witnessed a 1.5-fold increase when compared to the first three months of the year. Van expressed that although seafood exports to both the United States and China have enjoyed strong growth during the epidemic period, the price of aquatic exports has fallen due to foreign partners pushing the price lower. Based on this, he therefore advised businesses to wait until June to boost their exports in order to enjoy higher export prices and to be alert to keep tabs on updates in terms of the evolving market situation. The apparel and textile sector has been one of the industries hardest hit by the impact of the COVID-19 pandemic with orders from the EU and US markets coming to a standstill as consumers prioritise the need to purchase essential goods. Pham Van Viet, deputy chairman of the Ho Chi Minh City Association of Garments, Textiles, Embroidery, & Knitwear, said due to the temporary suspension of large-scale orders from major markets, local firms have turned to places such as Japan, the Republic of Korea, and other ASEAN member states. In addition to this, they have also shifted to produce face masks and protective clothing in an effort to help create jobs for Vietnamese workers during this challenging time. Viet has advised businesses to restructure their operations and to prepare for the post-pandemic period with the EU and US markets anticipated to bounce back by the end of September or by the end of the year. According to a representative of Vietnam Pulp and Paper Association, in a bid to remove difficulties caused by the epidemic, paper enterprises have taken advantage of machine maintenance, strived to transform their respective business models, and are in the process of seeking new customers. The representative went on to propose devising flexible policies aimed at helping enterprises enjoy access to capital sources and maintain production, thus contributing to reviving the economy in the near future. Foreign-invested economic sector enjoys growth from export and import turnover The first four months of the year saw both the export and import turnover of foreign-invested economic sectors through ports in Ho Chi Minh City enjoy high levels of growth as the state economic and non-state economic sectors endured severe drops due to the impact of the recent global economic downturn. Of the total export turnover, including crude oil, of exporters through various ports in Ho Chi Minh City during the four month period, the foreign invested sector was able to maintain its growth momentum, recording an increase of 31.2% to approximately US$8.7 billion in total export turnover of US$13.1 billion. This was followed by the non-state economic sector at US$3.6 billion throughout the same period, while the state economic sector suffered falls of 24% to a mere US$812.7 million. Regarding the five groups of goods which were exported through the southern metropolis’ ports during the reviewed period, excluding crude oil, only agricultural products such as rice and coffee, along with industrial goods like computers, electronic products and components, footwear, machinery, and equipment recorded strong growth rates. Most notably, industrial products accounted for 78.6% of the overall export proportion. Specifically, computers along with electronic products and components reached over US$5.6 billion in export turnover, representing a 61.1% increase during the same period. Moreover, approximately 280,000 tonnes of rice with a value of US$ 348 million, were shipped via ports in the southern city, an increase of 25.5% on-year. April alone saw the total export turnover of firms exporting goods, including crude oil, via the ports reach approximately US$3.5 billion, a fall of 5.1% from the previous month. The majority of export products endu280red a fall throughout April compared to the previous month as a result of the novel coronavirus epidemic negatively affecting the demand of importing countries, leading to delays, extensions, and cancellations of orders, therefore resulting in a sharp decrease in export turnover. Despite these challenges, some export items were still able to maintain growth over the previous month, such as fruit and vegetable, up by 9.9%, coffee, which enjoyed a rise of 6.3%, cashews, an increase of nearly 5%, and seafood products, up 3.2%. Regarding imports, the foreign-invested economic sector continued to record the majority of the total four-month import turnover of US$13.8 billion, an annual increase of 10.8%, while the import of the state economic and non-economic sectors dropped off. The state economic sector was only able to reach approximately US$348 million, a fall of 28.6%, while the non-state economic sector recorded roughly US$6 billion, down 4.5%. In contrast, the foreign-invested economic sector reached US$7.5 billion, representing a rise of 30.7%. Vietnam’s export revenue reaches nearly US$83 billion in four months Vietnam posted total export revenue of US$82.94 billion in the first four months of this year, up 4.7% over the same period in 2019, the Ministry of Industry and Trade announced on May 4. During the four-month period, the country enjoyed a trade surplus of US$3.04 billion. (Illustrative image) Of the amount, domestic enterprises reported total export revenue of US$26.45 billion, a year-on-year increase of 12.1%, while the foreign direct investment (FDI) sector posted total export revenue of US$56.49 billion (including crude oil), a year-on-year increase of 1.5%. During the four-month period, the country enjoyed a trade surplus of US$3.04 billion, much higher than the surplus of US$983 million from the same period in 2019. While the FDI sector posted a trade surplus of US$10.17 billion, the domestic sector posted a trade deficit of US$7.13 billion. The US continued to be the largest export market of Vietnam in the first four months of this year with Vietnam’s export revenue to the market reaching US$20.25 billion, up 13.4% over the corresponding period in 2019. The Chinese market came in second with export revenue of US$13.12 billion, up 26.7% against the same period last year. It was followed by the EU, ASEAN, Japan and the Republic of Korea. PM to hold conference with businesses to boost virus-hit economy A conference between Prime Minister Nguyen Xuan Phuc and the business community is scheduled for May 9 to discuss measures aimed at restarting the economy, which has been affected by the coronavirus (Covid-19) epidemic. The conference will be conducted via video link and broadcast live on television. The decision to hold the conference comes as Vietnam has reported no community transmissions of Covid-19 for nearly three weeks and the country is striving to reboot its economy, which slowed to 3.82% in the first quarter of 2020. The Ministry of Planning and Investment will be responsible for collecting enterprises’ opinions and reports from ministries, agencies, local authorities and trade associations. It is also tasked with preparing the documents for the conference and formulating a government action plan based on the inputs from the conference. At the conference, ministries, agencies and provincial governments are expected to answer queries and recommendations by enterprises so as to boost post-coronavirus economic recovery. Travel enterprises, airlines promote many new business methods Many economic industries have suffered heavy losses due to the impact of the Covid-19 pandemic; however, several agencies and enterprises have dynamically promoted new business methods to stimulate consumers to make purchases, gaining high sales. When the Covid-19 epidemic was initially put under control in Vietnam, the Vinpearl hotel system and VinWonders amusement park launched the largest “preferential package” ever to promote online tourism. Accordingly, promotional vouchers with a discount of 50% each are available between noon and 2pm on the online platform of Vinperal and VinWonders from April 26 to May 2, including 14,000 vouchers for hotel rooms with the stay time until November 30 and over 30,000 for services in the amusement park until the end of July. A tourism voucher from Vinpearl is priced VND2.5 million per person for a 3-day and 2-night luxury vacation package, including round-trip air ticket. The cheap cost and the expansion of the stay time to late November attracted many people to hunt for preferential vouchers. Similarly, in the context of the “frozen” tourism market due to Covid-19, many travel agencies have still sold a large number of tours thanks to discounted vouchers. Recently, a travel company launched 1,000 vouchers for 2-day-1-night excursions on Ha Long Bay by five-star cruise with discounts of 50%. The vouchers, which will expire the end of 2020, are available for all days, except the holidays. The price of a full tour package for two visitors is just over VND4 million; last year, this price was for one guest only and had to be booked at least one month in advance. The exploration of Ha Long Bay on “floating five-star hotels” is a new and attractive form of travel. However, some experts noted that consumers should carefully study vouchers, especially those launched by small agencies and enterprises that are not popular in the market. Their vouchers can be vague and unclear on advertisement information. Le Ngoc Dung, a travel consultant, gave this advice to customers: “In order to buy tourism vouchers, users should carefully read the accompanying policies. The enterprises usually provide attractive offers in the vouchers and hide the attached conditions. In terms of law, they are still valid with these numbers so buyers should study them carefully to avoid money loss”. With the aim of “high quality products at low prices”, vouchers have attracted the attention of many consumers even though they were launched during a time when the economy is in “hibernation”. According to the information technology research units, during the recent social distancing period, the number of people working online at home has increased; therefore, in contrast to sluggish traditional business activities, the demand for online purchases of almost commodities has also increased, especially for essential products (up 250%), kitchen appliances (up 49%) and fashion (up 42%). Vietnamese people used internet for about 28 hours per week before the epidemic outbreak and spent at least 35-40 hours per week online during social distancing time, mainly via smartphones. In mid-April, for the first time in Vietnam, the new-generation airline Vietjet Air presented its versatile “mutipurpose flight card” named Power Pass that allows passengers unlimited travel on nearly 300 green flights every day, on 45 routes around Vietnam. A passenger who owns a POWER PASS card will take advantage of 100% free of charge ticket pricing, free 15kg check in baggage, free 7kg hand baggage and especially no limitation on domestic flights during the card's validity. Passengers are not limited to schedule changes, at a small fee of only about VND100,000 each. In addition, to meet the diverse demands of people, Vietjet Air has provided Power Pass Sky 6 cards (worth VND9 million each) for domestic flights within six months (until September 30) and Sky 12 cards (worth VND17 million each) for domestic routes within 13 months (until March 31, 2021). The airlines is also offering discounts of 50% on 100 Sky 6 and 100 Sky 12 cards as well as presenting VND300,000 to customers who pay via the new credit cards and international payment cards of HDBank. The national flag carrier, Vietnam Airlines, has also announced that it will upgrade its Flight Pass, a cooperative product between the airlines and Optiontown, a technology company aimed at developing ticket package utilities. This is the earliest ticket package product to have been launched in Vietnam, in July 2019. With just one purchase, passengers can own a package consisting of flight tickets to one or more of the many destinations operated by the airlines. The number of flights chosen ranges from 4 to 1,000, with a departure effect of 1 to 12 months depending on the needs of passengers. The Flight Pass package has been further improved with many advantages compared to the similar products, such as the allowance of up to 400 people sharing a package, and flexible booking time up to six hours before departure. The package’s cost includes airfare, taxes, fees and surcharges; therefore, customers do not have to pay any additional expenses. According to some tourism experts, the above-mentioned tactics are actually a form of “future sales”. As the products and services are sold with deep discounts, customers feel very happy and comfortable to pay money in advance and receive products later. This form has helped enterprises to boost short-term revenue, offsetting the cash flow shortage during the recent difficult time. It can be seen that admist the epidemic outbreak, the enterprises still have opportunities to turn the situation around, towards the successes. However, they should calculate their capacities to avoid negative impacts later. Vietnam’s crude oil shipments rise, oil prices dip Vietnam saw crude oil exports reach an estimated 500,000 tons, worth US$154 million, in April, up 26.5% in volume and down 14.2% in value against the March figures, data from the General Department of Vietnam Customs showed. In the first four months of the year, the country shipped 1.72 million tons of crude oil, valued at US$734 million, to the global market, up 25.6% in volume and 4.6% in value year-on-year. As for imports, Vietnam bought some one million tons of fuels worth US$145 million in April, skyrocketing by 105% in volume and dropping by 27.6% in value against the previous month. Between January and April, Vietnam’s fuel imports hit 2.8 million tons valued at US$1,125 million, down 7.3% and 40.5%, respectively, from the year-ago period. The drop in global oil prices and the coronavirus pandemic have taken a heavy toll on major local fuel firms, the local media reported. Vietnam National Petroleum Group, or Petrolimex, has announced its first quarter business results, noting that the group’s revenue plunged by VND3.5 trillion to VND38.5 trillion. Binh Son Refining and Petrochemical JSC suffered losses of VND2.3 trillion in the first quarter of 2020, while PetroVietnam Oil Corporation (PV Oil) sustained losses of VND400 billion. Economic recovery is an urgent task post-pandemic: HCMC chairman Economic recovery is an urgent task for HCMC after the coronavirus pandemic is contained, the city’s chairman, Nguyen Thanh Phong, said at a seminar this morning, May 5. With the pandemic causing significant damage to most industries, the city’s economic growth rate in the first quarter of 2020 was only 0.42%, way below the 7.64% recorded in the same period last year and the lowest since 1986. Phong said the economic downturn in HCMC, which is Vietnam’s economic hub, would significantly affect the economic growth of the entire country. “Therefore, mobilizing all resources and taking all possible steps to help the city’s economy rebound is an urgent task at the moment,” he stressed. Phong spoke highly of businesses’ efforts to survive and overcome difficulties including the shortages of input materials and capital, lower consumption demand and shrinking markets during the pandemic. He also emphasized the need for support from the Government, without which many socioeconomic problems would arise, such as bankruptcy, a rising unemployment rate and crimes. The city will focus on restoring key industries including food processing and manufacturing, electronic products, retail, transport and warehousing, finance and banking and insurance. The municipal government will also create favorable conditions for the recovery of the hardest-hit sectors such as tourism, catering services and hospitality. Phong stated that the city is striving to help businesses and citizens affected by the Covid-19, the disease caused by the new coronavirus, to easily access stimulus packages, improve market reach to boost exports and develop new products to adapt to changes in the market. Citing Prime Minister Nuyen Xuan Phuc, who called for the transformation of challenges into opportunities, the city’s chairman called on experts, businesses and researchers to give appropriate advice for the city to quickly revive the economy, expand production and trade and seek new opportunities after the pandemic ends. Only property firms eligible for Thu Thiem land auction HCMC will continue to auction the three land sites of R1, R2 and R3 and 14 apartment blocks with 2,220 units in District 2 in the coming months, and this time, only eligible property firms will be permitted to attend. Under the plan approved by the city government, firms joining the auction must make a deposit equivalent to 20% of the starting price by bank transfer. Deposits by bank guarantees are not applicable. The Land Fund Development Center of HCMC will be in charge of the auction and preparations are underway. Unlike previous auctions, the city will only allow property firms to participate. According to the HCMC Department of Natural Resources and Environment, buyers cannot be individuals seeking to buy homes to live in but enterprises running a property business. Moreover, products for sale are land-use rights and land-attached assets that are of high value, cover 45,971.4 square meters and hold 2,220 AA apartments. To attend the auction, firms must meet requirements such as being active in the property business, using land sites in accordance with land planning and use purposes and committing to paying the bid price given in the contract. Speaking of the auction, the director of a property firm in HCMC noted that due to the impact of the Covid-19 pandemic, the auction might not attract many potential buyers. However, if the city keeps the starting price unchanged from previous auctions, there is a slight chance the auction will be successful, he added. According to the director, firms are hesitant to buy old apartments that have no residents, as these apartments have a high risk of deterioration. Thus, successful buyers may incur extra costs for repairs or demolition and rebuilding activities. Enterprises do not know the state of the apartments in advance, and shoddy repairs can affect the reputation of enterprises. Moreover, rebuilding apartments is expensive. “The auction of land sites in Thu Thiem is not simply a financial matter, as construction quality is a concern too. It would be more feasible for HCMC to put up land sites for auction, enabling firms to develop their own projects. Unfinished, deteriorating apartments are a hard problem to solve,” stated the director. HCMC in 2007 auctioned 3,790 resettlement apartments in Thu Thiem at a starting price of VND8.8 trillion. The starting prices in 2018 and 2019 were VND9.1 trillion and VND9.936 trillion, respectively. The three auctions had no participants as the total value of the land sites and land-attached assets was high. If a firm wins a bid, it needs to pay the deposit within 1-3 months. Private sector investment in power grids proposed The Ministry of Industry and Trade has proposed allowing the private sector to invest in power grids, according to Nguoi Lao Dong newspaper. In a report sent to Prime Minister Nguyen Xuan Phuc, the ministry said power grids connecting power plants or power clusters owned by one or several investors should be opened to private investment. However, private investment in power grids of national importance will need further review. The private sector's involvement in power grid development projects is not a new issue given overloaded power transmission systems, especially after several renewable power plants linked up recently. The poor power transmission infrastructure has also hampered the development of renewable power. Prior to the Ministry of Industry and Trade’s proposal, several private companies had expressed interest in power grid investment. Ninh Thuan Province selected Trungnam Group as the investor for the 500KV Thuan Nam-Vinh Tan power transmission line, with costs estimated at VND600-700 billion, to address the overloaded power grid for renewable power. Disbursement of VND410 billion for Trung Luong-My Thuan Expressway project stalled Prime Minister Nguyen Xuan Phuc has urged the provincial government of Tien Giang to speed up capital disbursement for the Trung Luong-My Thuan Expressway project, for which VND410 billion of State capital has still not been disbursed. The project requires a total investment of nearly VND12.7 trillion, including State capital of VND2.186 trillion, with the rest coming from the investor’s equity and bank loans. A representative of BOT Trung Luong-My Thuan JSC, the developer of the project, told The Saigon Times that to date, nearly five months after the prime minister approved funding for the project, the company still does not know when the remaining VND410 billion in State capital will be disbursed. The prime minister visited the project site in early March and asked the Tien Giang Province government to quickly disburse the capital for the project. However, the provincial government recently, for the second time, sent a letter to the relevant ministries and departments suggesting options for the use of capital from the State. The Government Office has asked the ministries of Planning and Investment, Transport and Finance to comment on the province’s proposal. However, the exact date of disbursal has not been announced. The four-lane Trung Luong-My Thuan Expressway will be some 51 kilometers long, with 4.5 kilometers of access roads, running through five outlying districts of the Mekong Delta province of Tien Giang. Together with the HCMC-Trung Luong and My Thuan-Can Tho expressways, it will enhance transport connectivity between HCMC and Mekong Delta provinces and cities and boost the region’s socioeconomic development. World Bank: Vietnam’s economy could thrive again after social distancing eased The World Bank (WB) has issued an update on Vietnam’s macro-economy for May, in which it said the economy may prosper again after social distancing measures were eased nationwide on April 23. The WB noted that after posting GDP growth of 3.8 percent in the first quarter of this year, Vietnam’s economy then showed signs of recession in April, when the index of industrial production fell 13.3 percent month-on-month - the sharpest decline ever. Retail sales fell 9.6 percent year-on-year as consumers encountered many changes and travel restrictions. Meanwhile, passenger and goods transport contracted 27.5 percent and 7.2 percent, respectively. It also cited the General Statistics Office (GSO)'s data as reporting that employment in the processing and manufacturing sector was affected most by the COVID-19 pandemic (1.2 million jobs influenced in Q1), followed by wholesale and retail (1.1 million jobs) and accommodation (740,000 jobs). Exports grew by an estimated 4.7 percent year-on-year between January and April compared to 6.5 percent in the same period last year. Committed FDI reached 12.3 billion USD in the first four months, down 15.5 percent year-on-year. Registered FDI surprisingly rebounded in April, by 81 percent month-on-month and 62 percent year-on-year, according to the WB. Credit growth, meanwhile, bounced back in March after being stagnant in January and February. The State Bank of Vietnam said credit growth in late March stood at 1.3 percent compared to the beginning of the year and about 11 percent year-on-year. The State Bank of Vietnam has provided aid packages since early March to allow banks to restructure loans and cut interest rates for borrowers. It also considered support for certain commercial banks to improve liquidity via raising credit limits so that these banks could increase loans for businesses facing financial difficulties. Meanwhile, Fitch Ratings has revised Vietnam’s outlook from “positive” to “stable” and maintained the country’s credit rating at BB. The outlook revision reflects the impact of the escalating COVID-19 pandemic on Vietnam’s economy through its tourism and export sectors and weakening domestic demand. It also demonstrates the country’s strong medium-term growth prospects, lengthening record of macro-stability, lower government debt levels, and stronger external finances compared with its peers, including foreign-exchange reserves built up over the previous few years. GTNFoods still in red after massively profitable first quarter GTNFoods JSC, an arm of milk giant Vinamilk and the owner of famous milk brand Moc Chau, has released its financial statement for the first quarter of 2020 with a slight increase in revenue to VND633 billion ($27.5 million). Costs of sales reduced sharply, so the gross profit margin has improved significantly to 26.3 per cent from 16.8 per cent, while gross profit gained VND166.7 billion ($7.25 million), increasing by 59 per cent on-year. The revenue from financial activities has doubled to VND30.8 billion ($1.34 million), thanks to the interest on deposits. As a result, GTNFoods obtained VND40 billion ($1.74 million) in after-tax profit, rising 2.3-fold on-year, with VND16 billion ($695,650) belonging to the parent company. However, GTNFoods still reported more than VND195 billion ($8.5 million) in accumulated losses as of March 31, 2020. In 2020, GTNFoods plans to reach VND2.909 trillion ($126.5 million) in revenue, down 2 per cent on-year, but after-tax profit will have to rise by 662 per cent on-year, to VND99 billion ($4.3 million). Thus, the first quarter has already advanced 22 per cent towards the revenue target and 40.4 per cent towards the profit target of the full year. At the end of the first quarter, the total assets of GTNFoods have been maintained at VND4.057 trillion ($176.4 million), equivalent to the beginning of the year. Of this, short-term deposits have risen to VND1.929 trillion ($83.87 million), 2.8 times as much as at the beginning of the year, making up 47.5 per cent of the total assets. However, money and money equivalents dropped sharply to VND120 billion ($5.2 million) from VND1.289 trillion ($56 million). VNN