VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 1 00:44     Foreign direct investment into Vietnam surges in July Vietnam attracted 3.15 billion USD in foreign direct investment (FDI) and capital for share purchases in July, representing a rise of 79.8 percent against the same period last year and 76.2 percent against June, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. Of the figure, 1.02 billion USD was registered to be poured into 202 new projects, up 2.8 percent and 19.1 percent over June and the same period last year, respectively. Ninety-three existing projects increased their registered capital by a total of 992 million USD, more than two times higher than the same month of 2019. Foreign investors spent nearly 1.13 billion USD to buy stakes at 334 projects, 2.8 times higher than July 2019. In the first seven months of 2020, Vietnam attracted a total sum of 18.82 billion USD, equivalent to 93.1 percent of the same period last year. A sum of 10.12 billion USD was disbursed in the seven-month period, equivalent to 95.9 percent of last year’s amount. There were 1,620 new FDI projects in the period with a total registered capital of 9.46 billion USD, 4 billion USD of which was registered to flow into the Bac Lieu LNG power plan. Average registered capital per project was 5.8 million USD compared to 4.3 million USD in last year’s same period. About 619 projects had their registered capital increased in the period by more than 4.7 billion USD altogether, up 37.7 percent. However, capital for share purchases dropped by around 50 percent to 4.64 billion USD. According to the Foreign Investment Agency, FDI flowed into 18 sectors in January-July, led by the manufacturing and processing industry with total registered capital of more than 8.96 billion USD. Power production and distribution ranked second with a total registered capital of 3.95 billion USD. Vietnam saw the FDI inflow coming from 104 countries and territories from the beginning of this year. Singapore was the largest investor in the period which registered to pour 6.44 billion USD in Vietnam, followed by the Republic of Korea with 2.8 billion USD, and China with 1.7 billion USD. In terms of new projects, the Republic of Korea ranked first with 421 projects, China came second with 237 projects and Japan came third with 175 projects. Foreign players invested in 59 out of the country’s 63 provinces and cities in the January-July period, with Bac Lieu province being the top destination thanks to the 4-billion-USD LNG power project. Hanoi ranked second with 2.82 billion USD registered FDI and HCM City third with 2.4 billion USD. By the end of July, there were 32,391 valid FDI projects in Vietnam with total registered capital of 380.6 billion USD, 221.8 billion USD was disbursed. The agency said that the COVID-19 pandemic was weighing on FDI attraction in the period but also created significant opportunities for Vietnam to capture the capital flow spurred by the global shift of value chains, given the country’s improved investment climate and infrastructure system. The recent European Chamber of Commerce in Vietnam’s Business Climate Index survey found that European business leaders were positive about the country’s business and investment environment with around half predicting that Vietnam’s macro-economic climate would “stabilise and improve” in the next quarter. According to Japan External Trade Organization (JETRO), fifteen out of 30 Japanese firms chose Vietnam as the destination for production expansion within the Japanese government’s programme to support Japanese firms to diversify their value chains in foreign countries. Vietnam set the target of attracting 35-36 billion USD in FDI this year. The country attracted 38.02 billion in FDI last year, up 7.2 percent against 2018 with 20.38 billion USD disbursed./. Gold prices continue to go up on domestic market Gold prices continued to rise on the domestic market on the last day of July, reaching near 58 million VND (2,495 USD) per tael (1.2 ounces). On July 31, Saigon Gold and Jewelry Company listed each tael of SJC gold at 56.60 million VND for buying and 57.92 million VND for selling. Phu Quy Group rated its buying price at 56.40 million VND with a selling price of 57.60 million VND per tael. Doji Group and Bao Tin Minh Chau Gold Firm listed the buying prices of each tael 56.50 million VND and 56.45 million VND respectively, while they sold gold at the rates of 57.58 million VND and 57.65 VND million per tael. The prices of each tael of the yellow metal were up more than 3 million VND from last week's rate./. Vingroup to carry out four projects worth US$3.43 billion in Hanoi The four projects include the Center for National Exhibition Fair project and three housing developments. Vietnam Exhibition Fair Center Joint Stock Company (VEF), a subsidiary of Vietnamese conglomerate Vingroup, has plans to invest VND78,700 billion (US$3.43 billion) in four projects in Hanoi, VnExpress reported. They include the Center for National Exhibition Fair project and three housing developments.  The project of National Fair Exhibition Center is expected to be carried out in Dong Anh district VEF's own equity will make up 15-20% of the cost of the four projects while the rest will come from loans and other sources. The National Fair Exhibition Center project is expected to be carried out in the outlying district of Dong Anh with an investment of VND7.336 trillion (US$320 million), of which 15% is sourced from the investor’s own funds. Construction can kick off in the fourth quarter (Q4) of this year and is scheduled to be completed in Q3/2024. The other three projects include Dong Anh New Urban Area (Vinhomes Co Loa), a complex of apartments and shopping mall at No.148 Giang Vo street (Vinhomes Gallery) in Ba Dinh district, and South Urban Area Project in Thang Long Boulevard. These projects will cost VND34.879 trillion (US$1.5 billion), VND 17.440 trillion (US$759 million) and VND19.090 trillion (US$828.6 million), respectively. According to VEF, Vinhomes Co Loa is expected to be built from 2020 to 2025, the remaining two projects will be executed in accordance with the schedule approved by competent agencies. VEF had total assets of VND6.8 trillion (US$291.8 million) as of end-June. It is 83.3% owned by Vingroup and 10% by the Ministry of Culture, Sports and Tourism./. Gov't approves plan to implement VN-U.S. customs mutual assistance agreement Prime Minister Nguyen Xuan Phuc has recently approved a plan to implement the Viet Nam-U.S. Agreement on customs mutual assistance.  The Ministry of Finance was assigned to supervise the implementation of the agreement.  The agreement offers a legal basis for cooperation, technical assistance and information exchange mechanism between the two customs agencies, aiming to prevent, detect and handle violations of customs laws. Particularly, in the context of the increasing Viet Nam-U.S. trade relations, assistance activities based on the agreement will bring substantive contributions to trade facilitation and contribute to the fight against trade frauds and the illegal transportation of goods across each other’s territory to evade trade remedies. The Customs Mutual Assistance Agreement was signed by Vietnamese Deputy Finance Minister Vu Thi Mai and U.S. Deputy Chief of Mission in Viet Nam Caryn McClellanda in Ha Noi on December 6, 2019. The agreement took effect from May 20, 2020. Hanoi sees surge in visitors in July Hanoi welcomed nearly 1.2 million visitors in July, a surge of 51.2 percent over that in June, including 16,600 foreigners, reported the city’s Tourism Department. Total earnings from tourism in the month are estimated to reach 3.47 trillion VND (151.4 million USD), up 50.2 percent year on year. According to the department, in the first seven months of 2020, the number of visitors to the capital city is about 6.13 million. In August, the department will continue to apply information technology in tourism management, while directing relevant agencies, organisations and travel firms to strictly implement regulations on COVID-19 pandemic prevention and control. At the same time, it will strengthen tourism promotion and expand connectivity for tourism development./. Vietnam finance ministry extends program to support stock market The reducing and waiver of securities services fees would last until June 30, 2021. Vietnam’s Ministry of Finance (MoF) has decided to extend the validity period of Circular No.14 that exempts fees for six securities services and lowers the fees for nine others for another 10 months to June 30, 2021 in a move to support traders.  Vietnam's finance ministry has decided to extend a support program for the stock market. The free services include registration for listing; securities registration; securities borrowing and lending via the Vietnam Securities Depository (VDS); membership registration for derivatives transaction; registration for clearing participant; and first time online connection. Meanwhile, nine other securities services are subject to reductions from 10% to 50% of the current fees, including a 10% reduction for transaction fees on the share and derivatives market, securities depository; 15 – 20% reduction for position management fee, management of margin assets on the derivatives market; 30 – 50% reduction for management of covered warrants after listing, information registration, stock transfer, auction and competitive offering. Circular No.14 was enacted on March 18 and was initially set to take effect until August 31 to help stock investors overcome impacts of the Covid-19 pandemic. At the close today, Vietnam’s benchmark VN-Index plunged 5.3% to 785.17 as news about the local coronavirus infections in Danang spooked investors. This was the sharpest drop among stock markets globally during Monday’s trading session./. India looks to boost cotton exports to Vietnam The Cotton Corporation of India (CCI), which is holding surplus stocks of cotton just ahead of the next harvest season, is trying to boost exports of cotton to Bangladesh and Vietnam. The Economic Times on July 27 said that a memorandum of understanding is being worked out to export 1.5-2 million bales (of 170 kilogrammes each) of cotton to Bangladesh while the state-run CCI will also set up its own warehouse in Vietnam to boost cotton exports. “We are in the process of signing a government-to-government memorandum of understanding with Bangladesh to export about 15-20 lakh bales of cotton to that country," said CCI Chairman PK Agarwal. The corporation had procured nearly a third of India’s 2019-20 cotton output. Of the 12.1 million bales it had procured, along with its agent Maharashtra State Cooperative Marketing Federation, it has been able to sell 900,000 bales in the present cotton season, which ends on September 30. Countries such as Bangladesh, Vietnam and Sri Lanka have duty-free access to the markets of Europe, the US and China, which give them an edge over Indian yarn and garment exporters who have to bear the burden of various duties./. Another factory licensed to export milk to China Another Vietnamese factory has been granted with a transaction code to export dairy products to China, according to the Asia-Africa Market Department under the Ministry of Industry and Trade. The department said the Chinese General Administration of Customs on July 27 granted the code to the Saigon Dairy Factory of the Vietnam Dairy Products JSC (Vinamilk), allowing this plant to export flavoured fermented milk to this major market. So far, Chinese authorities have permitted five companies and factories of Vietnam to sell dairy products to China. They consist of TH True Milk (with sterilised and modified milk), Hanoimilk (fermented milk), Bel Vietnam (cheese), Thong Nhat Dairy Factory (condensed milk), and Saigon Dairy Factory (flavoured fermented milk)./. Hanoi sees surge in visitors in July Hanoi welcomed nearly 1.2 million visitors in July, a surge of more than 51 percent over that in June, including 16,600 foreigners, reported the city’s Tourism Department.  Total earnings from tourism in the month are estimated to reach over 151 million USD, up more than 50 percent year on year. According to the department, in the first seven months of 2020, the number of visitors to the capital city is about 6.1 million.  In August, the department will continue to apply information technology in tourism management, while directing relevant agencies, organisations and travel firms to strictly implement regulations on COVID-19 pandemic prevention and control.  At the same time, it will strengthen tourism promotion and expand connectivity for tourism development./. Russia willing to expand agricultural cooperation with Vietnam, ASEAN Russia is willing to expand cooperation with Vietnam and member countries of the ASEAN in the field of agriculture, including the development of innovative technologies, the Ministry of Economic Development said on July 27. At an online economic consultation meeting between Russia and the Association of Southeast Asian Nations (ASEAN), head of the Ministry’s department for multilateral economic cooperation and special projects Natalya Stapran reported that Russia’s export of farm produce to Vietnam in the first five months of this year increased by four times year on year. She said this prompted the ministry to expand ties with Vietnam and the ASEAN in this field. The official also affirmed that Russia will work in ASEAN in potential projects in cleaning water resources and applying new technology to enhance sustainable use of farm land. Besides, Russia has proposed an initiative on joining hands with ASEAN in seeking ways to address economic problems caused by the COVID-19 pandemic, she said./. Over 340 Vietnamese citizens brought home from Japan More than 340 Vietnamese citizens came back home from Japan on July 28 on a flight arranged by Vietnamese authorities, the Vietnamese Embassy in Japan, national flag carrier Vietnam Airlines together with Japanese agencies. The passengers include the elderly, pregnant women, the sick, stranded tourists, labourers with expired contracts, and apprentices and students without accommodations. The Vietnamese Embassy also sent staff members to support them at the airport. To prevent the spread of COVID-19, disease prevention measures were carried out throughout the flight. The flight crew and all passengers were also given heath examinations upon landing at Tan Son Nhat International Airport and then sent to a concentrated quarantine area in line with regulations. Under the Prime Minister’s direction, domestic authorities and Vietnam’s overseas representative offices are making plans to fly more Vietnamese citizens home, depending on the citizens’ need and the country’s quarantine capacity./. Local fuel prices edge up Domestic fuel retail prices of E5 RON92 bio-fuel, diesel oil, kerosene and heavy fuel oil were revised up by VND150-VND280 per liter or kilogram today, July 28, while the RON95 gasoline price was kept unchanged at VND14,973 per liter, according to an announcement jointly released by the ministries of Finance and Industry-Trade. The ceiling price of E5 RON92 gasoline is now VND14,409 per liter, up VND150 per liter, the local media reported. Diesel oil and kerosene sell for some VND12,390 and VND10,270 per liter, respectively. The price of heavy fuel oil is not higher than VND11,183 per kilogram, up VND280 per kilogram. The ministries told fuel traders to continue extracting VND100 for each liter of bio-fuel E5 RON92 sold to replenish the national fuel price stabilization fund. The extraction levels for each liter or kilogram of RON95 gasoline, diesel oil, kerosene and heavy fuel oil sold are VND200, VND500, VND300 and VND300, respectively. Besides this, fuel traders were allowed to tap the stabilization fund at VND900 for each liter of E5 bio-fuel sold, at VND479 for each liter of RON95 petrol sold and at VND100 for each liter or kilogram of kerosene or heavy fuel oil sold./. New Mien Dong Coach Station to open in mid-August The New Mien Dong Coach Station project located in HCMC’s District 9 will be finally put into operation on August 15 after repeated delays, according to the Saigon Transportation Mechanical Corporation, which built the station. In the first phase, the operations of 71 coach routes at the existing Mien Dong Coach Station in the city’s Binh Thanh District will be moved to the new station. These routes will serve passengers travelling between HCMC and localities in the central and northern regions. The Transport Ministry has approved a proposal by the HCMC Transport Department to announce a list of coach routes that will operate at the new station. Besides this, the ministry asked the HCMC Transport Department to keep unchanged the announced routes and existing transport operators, aimed at enabling them and the new station to soon establish stable business operations as well as to meet the travel demands of local residents. Further, the municipal transport department was told to team up with the police and the relevant agencies to tackle coaches, which operate unlawfully on fixed routes in the city and thus affect the business of licensed transport firms and cooperatives. Located next to the Hanoi Highway, the new coach station covers 16 hectares in District 9 and a part of Di An Township in Binh Duong Province. Work on the country’s largest coach station project started in April 2017. Once completed, it is expected to serve over seven million passengers per year./. Saigon J.S. Commercial Bank appoints acting CEO There has been a change in senior personnel at Saigon J.S. Commercial Bank (SCB), as the bank’s Board of Directors has decided to appoint Mr. Hoang Minh Hoan, Deputy CEO of Finance and Capital Management Division, to be SCB’s Acting CEO from July 29th, 2020, in replacement of Mr. Vo Tan Hoang Van, who has stepped down after serving as SCB’s CEO for the past seven years. After resignation, Mr. Vo Tan Hoang Van continues to be a member of SCB’s Board of Director in phase 2017-2022. Mr. Hoang Minh Hoan, acting CEO of SCB, has more than 20 years of experience in banking and finance sector, holding several managerial positions at many banks. At SCB, he was the Head of Treasury Division, Chief Financial Officer (CFO), Deputy CEO of Finance and Capital Management Division. With great experience and profound expertise, together with deep understanding about SCB, Mr. Hoang Minh Hoan is believed to be an excellent successor to govern SCB in phase 2020-2030, which is a period for strong transformation and sustainable development of SCB. On July 27th, 2020, SCB and McKinsey & Company Vietnam signed a cooperation agreement. According to SCB, this indicated the strategic plan during the bank’s transformation period. McKinsey will help SCB capture valuable opportunities of the banking industry amidst the new digital era. McKinsey also brings new comprehensive solutions to help SCB maintain a high growth rate, enhance its customer service and experience./. Eximbank’s 2020 annual shareholder meeting postponed again The 2020 annual shareholder meeting of the Vietnam Export Import Bank (Eximbank), which was scheduled for this morning, July 29, has been postponed for the second time because only 142 shareholders representing some 523.3 million shares or 42.57% of the total shares were present. Tran Ngoc Dung, head of the shareholder checking board, stated that the attending shareholders must hold at least 65% of the total shares. The meeting was postponed for the first time on June 30 after it failed to secure the required attendance as only 133 shareholders representing some 215.6 million shares or 17.54% of the total shares attended. Before the meeting was postponed, a shareholder who holds some 1.9 million shares of Eximbank sent a letter to the governor of the State Bank of Vietnam and chairman of the State Securities Commission saying the bank’s board of directors had violated the shareholder attendance right. The shareholder also accused the board of directors of violating the information release regulation and disrespecting the right of Sumitomo Mitsui Banking Corporation (SMBC), a foreign shareholder that holds a 15% stake in Eximbank. SMBC had requested the bank to reorganize the extraordinary shareholder meeting several times after it was postponed on June 30. As per the prevailing regulations of Eximbank, if an extraordinary meeting is canceled, the bank has to reorganize it within 30 days. However, the bank has yet to reorganize the extraordinary shareholder meeting. The appointment of high-level personnel had also been a pressing issue prior to Eximbank’s shareholder meetings. On June 25, Cao Xuan Hinh resigned from the post of Eximbank chairman due to personal reasons. Yasuhiro Saitoh, who was previously vice chairman, took over the post. On July 25, the bank’s board of directors adopted a resolution removing Dang Anh Mai from the post of vice chairman./. Mai Linh set to pivot toward tech-based taxi services Mai Linh Group, a traditional taxi operator in Vietnam, has targeted to offer 20,000 tech-based taxi cabs after 2021, gradually moving toward operating as a tech-based taxi operator, it was announced at its annual general meeting for shareholders on July 28. Mai Linh Group is set to continue restructuring its operations and developing and applying technology to gradually switch from the traditional taxi service to the tech-based taxi service step by step. On July 16, the group introduced a ride-hailing service on a trial basis in Nghe An Province, as part of the initial step. At the meeting, the group also announced that it would enter other segments including bus and express boat services, logistics and auto maintenance and repair in the years to come. Mai Linh Group saw a net revenue of some VND2.2 trillion in 2019, with revenue from taxi operations accounting for 83.1% of the total and a before-tax profit of VND2 billion. Its 2019 net revenue inched down compared to 2018 due to the emergence of tech-based taxi services. The group aims to earn VND1.7 trillion in net revenue and will increase the number of taxis to some 30,000 against the figure of over 17,000 seen in late 2019./. Work on three North-South Expy subprojects to begin in September The Transport Ministry has been urged to conduct further procedures to break ground on three component projects of the North-South Expressway, including the Mai Son-Highway 45, Vinh Hao-Phan Thiet and Phan Thiet-Dau Giay in September, and put them into operation by 2022. The request was included in the Government’s Resolution No.112, which has been issued to roll out the National Assembly’s Resolution No.117 regarding the transfer of the investment method for some subprojects of the expressway during the 2017-2020 period. The Transport Ministry was given the right to consider and approve adjustments to the three subprojects, which were changed from the public-private partnership format to the public investment format. Also, the ministry has to monitor and take charge of the accuracy and logic of the total adjusted investment of these three subprojects. Meanwhile, the Ministry of Planning and Investment was required to cooperate with the Ministry of Finance to work on capital allocation issues, so these component projects can be executed as planned. In addition, chairpersons of provinces and cities through which the three subprojects pass have to ensure site clearance activities are conducted in a timely and appropriate manner./. Vietnam to review anti-dumping measures against Chinese aluminum One year after adopting antidumping measures on some aluminum products originating from China, the Ministry of Industry and Trade is set to review the application and make a new decision on Chinese aluminum products. The Trade Remedies Authority of Vietnam under the ministry on July 29 announced that it had received petitions for a review over antidumping measures for some aluminum products imported to Vietnam from China. The Ministry of Industry and Trade has the right to make a decision on reviewing the implementation of antidumping measures one year since the date of the application in line with the Law on Foreign Trade Management, according to the authority. In late September last year, the ministry announced the results of an antidumping probe into some aluminum products from China, which was conducted in January in 2019. The results indicated that the local aluminum sector had suffered injuries as Chinese aluminum products were being dumped in the market. In 2018, the volume of extruded aluminum bars imported from China to Vietnam doubled that of 2017. As a result, Vietnam imposed antidumping duties of 2.49%-35.39% on aluminum products from China in October to safeguard the interests of local producers. Based on the results of the review, the ministry will decide whether it will impose new tariffs./. Hoa Sen Group seeks to withdraw from US$10 billion Ca Na steel project Hoa Sen Group is seeking partners to transfer all of its capital contribution at the US$10 billion Ca Na steel complex project in the south-central coast province of Ninh Thuan, with a transfer price of not less than the investment the group has made into the project. At the board of directors meeting on July 21, Hoa Sen leaders revealed that they are withdrawing from the project because the current situation is no longer suitable with the initial goal and the group wants to focus on its traditional strengths including corrugated iron, steel and plastic. The group will disband six affiliates that were founded to develop the project including the Hoa Sen Ca Na - Ninh Thuan International General Port Company, the Hoa Sen Ca Na - Ninh Thuan Industrial Zone Infrastructure Development Company, the Hoa Sen Ca Na - Ninh Thuan Steel Complex Investment Company, the Hoa Sen Ca Na - Ninh Thuan Cement Company and Hoa Sen Quy Nhon JSC. The Hoa Sen board of directors said they would ask the chairman and vice chairman to work with partners who have a strong financial capability and are developing projects in Ninh Thuan to accelerate the transfer. The Ca Na steel project requires an investment of over US$10 billion and will have an annual capacity of 16 million tons. It has been included in the steel industry development plan till 2025 with a vision to 2035 by the Ministry of Industry and Trade. When the project was proposed in 2016, it sparked controversies over possible marine environment pollution. In April 2017, the prime minister asked the Ninh Thuan Province government to suspend the project, explaining that it was poorly planned, as it did not provide sufficient information, data and assessment. At the annual shareholders’ meeting in January 2018, Le Phuoc Vu, chairman of Hoa Sen Group, said the project was undergoing legal procedures to register for investment and working with partners to choose suitable technology and machinery. In April 2018, the Ninh Thuan Province government approved the first phase of the Ca Na - Ninh Thuan General Port project. It will cover over 314 hectares with three ports capable of receiving 20,000-100,000 DWT ships. In November 2018, the province approved the scale 1/500 detailed zoning plan for the project./. PM asks for solutions to manage farmstay model Prime Minister Nguyen Xuan Phuc has asked the Ministry of Culture, Sports and Tourism, the Ministry of Natural Resources and Environment and the Ministry of Agriculture and Rural Development to suggest solutions to manage the farmstay model. Farmstay is a combination between a farm and a homestay and has attracted many real estate developers in Vietnam. Many investors are buying land to develop farmstay projects across the country, especially in Hanoi, Hoa Binh, Vung Tau, Binh Thuan, Ninh Thuan, Gia Lai and Long An.  However, farmstay is a new model so the operation principle and return on equity of farmstay projects remain a big question. Leader of a real estate company in HCMC said most farmstay projects are built on agricultural or forestry land, so their legality is not guaranteed and it’s not clear whether farmstay projects will get land use rights certificates. Some experts said farmstay projects have flexible land use rights and short investment times and the contract provisions are negotiated by sellers and buyers. Therefore, the contracts are commonly incoherent and risky for buyers and there is insufficient legal foundation to resolve conflicts or disputes./. Sky-high livestock prices may breach competition law Although many livestock companies could face an inspection to ensure they follow through on commitments to cut their prices, the market outlook still looks dreary in spite of the government’s call to stabilise the selling cost of live pigs. The Ministry of Industry and Trade wants to see stabilisation of the selling price of live pigs in order to avoid unfair competition. At a recent seminar on the situation, Cao Xuan Quang, head of the Consumer Protection Division at the Vietnam Competition and Consumer Protection Authority (VCCA), stated that the hike in pork prices has created difficulties for consumers. Amid the COVID-19 pandemic, the competition agency of Vietnam has already drawn attention to the issue, and the VCCA is gathering information to learn about the collective increase of the price offered by husbandry companies across the country. Although the high price of pork was previously attributed in part to African swine fever, there has been increasing scepticism that some companies have been taking advantage of their dominant position to exploit consumers by charging irrationally high prices for live hogs. It suggests a potential breach of Article 27 under Vietnam’s Law on Competition. The total number of pigs slaughtered by the 15 largest enterprises accounts for 35-40 per cent of the total supply, while the rest comes from local farms and households. Pursuant to the Law on Competition, an enterprise is deemed to hold a dominant market position when it has substantial market power or has 30 per cent or more of the market share in the relevant market. The substantial market, known as the ability of a company to raise price profitably above the competitive level, is determined by a variety of factors, including market shares in the relevant market; financial strength and size; barriers to market entry and expansion to other enterprises; ability to obtain, assess, and control the goods distribution and consumption market or sources of supply; advantages in technology and technical infrastructure; right to own, obtain, and assess infrastructure; right to own or use subject matters of intellectual property; and ability to transfer to other sources of supply or demand associated with other goods and related services. A breach of Article 27 of the Law on Competition by engaging in prohibited acts of abuse of dominant position would see the violator given a fine ranging from 1 to 10 per cent of their total turnover earned from the relevant market in the financial year preceding the year in which the violation is committed. In addition, the profits illegally obtained from the violation of the enterprise engaged in the prohibited conduct also may be confiscated. The company that abuses its dominant position may also be forced to carry out restructuring. Violators of the Law on Competition, depending on the nature and seriousness of the violation, can be prosecuted for criminal liability. Under the Penal Code, criminal penalties in the field of competition include fines of up to VND3 billion ($130,000) and a term of imprisonment of up to five years. Additionally, if loss or damage is caused to other parties, compensation must be paid./. Hung Vuong Corporation removed from HSX 227 million shares of Hung Vuong Corporation – which used to be Vietnam’s largest pangasius producer – will be removed from the Ho Chi Minh City Stock Exchange (HSX) due to a violation of information disclosure rules from August 5. Previously on May 14, the ticker was suspended from transaction due to a violation of information disclosure rules. This day will also be considered the final transaction day of the corporation’s shares. The violation involved Hung Vuong not issuing a second-quarter financial statement, despite being reminded twice by HSX. In addition, the corporation shifted counting its fiscal years from January 1 to December 31, instead of October 1 to September 30 as previously, but it has yet to publish the audited financial statement for the fourth quarter of the new 2019 fiscal year. The corporation claimed the delay was due to its lack of accountants. In addition, delays in receiving a debt validation letter from overseas gave the audit company no basis to issue the audited financial statement for the period from October 1 to December 31, 2019. Duong Minh Ngoc, general director of Hung Vuong had said that the corporation was mobilising its human resources to complete the statements in order to publish them before June 15. However, as of now, these reports have not been published. Hung Vuong first listed 60 million shares on the HSX in November 2009 with the transaction price of VND57,500 ($2.50). At the latest transaction day, the total share volume was 227 million with the value of VND5,400 (23.5 US cents). Its market capitalisation was VND1.22 trillion ($53 million). At a time it was Vietnam’s largest pangasius producer but was overcome by other players, namely Vinh Hoan and Bien Dong and then was hit heavily by the global health crisis. After selling numerous assets in 2017-2019, in this January, it entered a co-operation with Thadi – a subsidiary of Truong Hai Auto Corporation (THACO) – to restructure its operations. Notably, Thadi bought 53.9 million shares for VND8,000 (34.8 US cents), equalling a 24.28 per cent stake, to become a large shareholder of Hung Vuong. As per the agreement, THACO, through Thadi, would support Hung Vuong in restructuring its operations and manufacturing system, as well as development strategy, and deal with its financial problems. Thadi would assign senior personnel to the position of vice chairman of the Board of Directors, financial director as well as provide technical experts to Hung Vuong. According to the agreement, the joint venture would invest VND2 trillion ($86.96 million) in breeding mother pigs in An Giang and Binh Dinh provinces while Thadi would invest in developing pig farms(1.2 million pigs per year) meeting the Development Food Security Activities (DFSA) standards./. COVID-19 hampers IPO plans of local startups The COVID-19 lockdown has forced local tech startups to put their plans of staging initial public offerings on hold. This was shared by Nguyen Anh Nhuong Tong, chairman of Yeah1 at a recent tech event. Accordingly, the pandemic has increased hazards for SMEs, delaying their IPO plans. Echoing this, Lam Minh Chanh, founder of BizUni Business Administration JSC, said, “There will be no startups listed on the local stock exchanges in the next five years at the least.” He explained that startups in Vietnam are still far from staging initial public offerings (IPOs) because most of them are running tremendous losses. According to the Securities Law, companies need to report profit for two consecutive years before they can be listed. Moreover, the Ho Chi Minh City and Hanoi stock exchanges also require a minimum capital of VND120 billion ($5.2 million) and VND30 billion ($1.3 million). As of now, only three tech companies – Yeah1, FPT, and ADG – have been listed on the local stock exchange among the 1,702 businesses in the database of the National Business Registration Portal. Accordingly, Yeah1 is one of the many listed local companies with a market capitalisation in excess of $100 million. Meanwhile, VNG – with $2.2 billion in market capitalisation – has been preparing to list on the over the counter (OTC) market. The listing process is usually time-consuming. For instance, Yeah1 took 12 years to ready itself, while FPT and ADG took 18 and 11 years. VNG, after announcing plans of listing on the NASDAQ in 2017, has yet to publish more information ever since. “This is a long-term groundwork that will facilitate the transformation from a startup into a public company,” said Tong from Yeah1. “Five years before the IPO, Yeah1 had hired an audit consultant to handle the related procedures.”/.  Vietnam welcomes expansion of Japanese business activity Given Vietnam’s improved investment climate, Japanese investors are making efforts to bolster their presence in the country through both direct investment and mergers and acquisitions. Japan’s Ministry of Economy, Trade and Industry has announced a group of 87 Japanese companies that will receive subsidies to diversify their production bases. Among them, 15 companies will increase expansion in Vietnam as part of their efforts to improve supply chain agility. According to Hirai Shinji, chief representative of the Japan Trade Promotion Organization in Ho Chi Minh City, the programme provides support for voluntary corporate initiatives for the purpose of diversification of their production base in order to strengthen supply chain resilience. Shinji insisted that it is not designed to facilitate businesses to either relocate their production bases to other countries or reshore them back to Japan. The programme envisages a variety of corporate initiatives for strengthening the supply chain including support for the construction of additional manufacturing plants and enhancement of production/logistical efficiency, by utilising digital technologies and producing alternative intermediary goods. Shinji noted that the 15 companies, which already have a presence in Vietnam, will get financial support to ramp up expansion in the country. They include Akiba Die Casting, Inoue Iron Works, Able Yamauchi, Showa, Techno Global, Hashimoto Cross, Fujikin, Plus, Pronics, Hoya, Matsuoka, Meiko, Yokoo, Shin-Etsu, and Kikkiso. More than half of the companies specialise in critical industries for pandemic response such as pharmaceutical manufacturing equipment, medical gloves, masks, and medical clothing among others. The rest operate in electronic spare parts and accessories. Shinji expected expansion will help drive Japan’s investment into Vietnam this year. In fact, Vietnam is emerging as a potential investment destination for Japanese investors on the back of market size and growth potential. “Vietnam’s GDP per capita of $3,000 is expected to double in the next 10 years, thus Japanese backers are increasingly interested in Vietnam and the early chance to capitalise on market growth,” Shinji said. For example, trading firm Toba Inc. has established a wholly-owned subsidiary in Vietnam in anticipation that more Japanese manufacturers will invest in its rapidly growing economy, as reported by NNA Business News. With capital of $500,000, subsidiary Toba Inc. (Vietnam) Co. was established in Hanoi on June 16. Staffed by five employees, the unit will start work next month, the parent company said in a statement on last Monday. The subsidiary will sell control machinery and factory automation equipment such as industrial robots, and other industrial equipment, along with providing consultancy on efficient, cutting-edge production. In addition, Japan will assist apparel maker Matsuoka Corporation in producing protective clothing in Vietnam to diversify supply chains and lessen its dependence on China amid the coronavirus crisis. Matsuoka plans to invest ¥3 billion ($28 million) in An Nam Matsuoka Garment Co., its Vietnamese manufacturing unit, to start production of protective wear and other items in the next few months. Dai-ichi Life Holdings, meanwhile, has recently set up a representative office in Hanoi in light of the country’s remarkable economic growth and its expanding life insurance market. The capital office will not only conduct research and surveys on the insurance market and regulatory trends but also work on building relationships with relevant local authorities and Japanese companies in this country. Besides making direct investment, Japanese companies have actively conducted mergers and acquisitions with Vietnamese counterparts. For instance, NYK Line has recently acquired 15 per cent shares of Thoresen Vinama Tug (TVT) and entered the tugboat business. TVT has two tugboats providing services at Phu My and Cai Mep ports near Ho Chi Minh City, the largest ports in the nation in terms of cargo throughput. “NYK made this decision after considering the tugboat business in Vietnam, a country that has achieved remarkable economic growth in recent years, and recognising that the tugboat sector is primed for future growth,” NYK said in a press release. Meanwhile, Mitsubishi UFJ Lease and Finance Co. will acquire a 49 per cent stake in a leasing arm of major state-backed commercial lender VietinBank as part of its efforts to expand in Southeast Asia. The deal is subject to approval from the State Bank of Vietnam. After the share purchase, one of the four largest state-backed lenders will hold a 50 per cent stake in the local peer with registered capital of VND1 trillion ($43 million), while a local business will hold the remaining 1 per cent, spokesman Kenichiro Ota told NNA Business News. Similarly, Japanese private equity firm Daiwa PI Partners has poured $8 million into Vietnamese cinema chain Beta Media in a deal that values the firm at VND1 trillion ($43 million), as per a company statement. Thus, Daiwa PI Partners’ investment aims to bet on the growth of the country’s movie industry, which is driven by an increasing number of middle-income class and interest in entertainment. Japanese buyers have still managed to ink deals with Vietnamese companies despite the global health crisis. They are also keen to expand to overseas markets like Vietnam given the diminishment of its own market not only because of the coronavirus effect, but also from issues arising from a falling and ageing population that was already a pressing concern before the pandemic hit./. VNN