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HCMC apartment supplies surge; Dong fall piles pressure on foreign debt payment; Fuel import tariffs hiked to back wholesalers - ministry; Amata seeks to invest in Binh Dinh; HSBC puts GDP growth at 6.1% this year

HCMC apartment supplies surge

Property services provider CB Richard Ellis Vietnam (CBRE) estimates nearly 15,000 apartments were put up for sale in HCMC last year, the highest volume in four years.

The volume of apartments doubled that of 2013 and quadrupled that of 2012, Duong Thuy Dung, head of research and consulting at CBRE Vietnam, told a media briefing Tuesday on the city’s property market in the fourth quarter.

Districts 2 and 7 were home to a majority of those apartments with nearly 6,000 belonging to 11 projects, while there were no new apartment projects offered for sale in districts 10 and 3 last year.

Of the total number, 6,670 apartments were launched in the fourth quarter of last year alone, up a staggering 117.8% against the previous quarter and 150.2% year-on-year.

The sharp rise resulted from several large-scale property projects such as Vinhomes Central Park in Binh Thanh District with 1,100 units up for sale in the initial time out of 10,000 units developed, Masteri Thao Dien in District 2 with 1,499 units out of more than 3,000 units and Scenic Valley in District 7.

As studied by CBRE Vietnam, most of the apartments at Vinhomes Central Park and Masteri Thao Dien projects have found buyers. The investor of Scenic Valley has sold 251 units of blocks D2 and E1.

Strong sales of luxury apartments raised the consumption rate of the luxury segment to 60%, followed by the medium-cost segment with 35%.

Dung said the average price of upper-class apartments in the fourth quarter of last year declined 5% year-on-year due to fierce competition on the market while that of medium-cost condos improved over the previous quarter.

Marc Townsend, managing director of CBRE Vietnam, said property investors in Vietnam were waiting for the market to recover and would increase purchases when market conditions improved.

Most of the investors now buy houses for lease and this requires them more time to complete necessary procedures related to rent and taxes and find tenants.

As for offices for lease, CBRE Vietnam predicted rents of the projects in prime locations in HCMC would rise in the second half of this year due to limited supply.

The monthly rents of offices of grades A and B averaged out at US$25.34-32.18 per square meter in the fourth quarter of last year, up 1-1.8% quarter-on-quarter. More than 30% of the leasing requests in the period were for offices in the center of the city.

CBRE Vietnam forecast that the landlords of some office projects would adjust up rents by 10-20% in the second half of this year after they complete renovation and due to rising demand of multinationals from Japan, South Korea and Singapore.

More office projects will be up and running in the city in the 2015-2016 period, including Ascott Waterfront Saigon, Saigon Plaza and C.T. Plaza Saigon.

Dong fall piles pressure on foreign debt payment

The central bank’s decision to depreciate Vietnam dong by 1% against the U.S. dollar, with effect on January 7, will place more pressure on the Government’s foreign debt payments this year.

In its recent report on public debts, the Ministry of Finance said Vietnam’s public debts had reached VND2,395,488 billion as of December 31, 2014, equivalent to 60.3% of gross domestic product (GDP), and that foreign debts accounted for 39.9% of GDP.

If last year’s GDP was around US$183 billion, the country’s foreign debts would be some US$73 billion. With the inter-bank exchange rate between the U.S. dollar and Vietnam dong adjusted up from VND21,246 to VND21,458 per dollar, Vietnam will have to pay an additional VND15 trillion.

These are just estimates as debts carry long terms. Meanwhile, there is no accurate data about foreign debts Vietnam has to pay this year to anticipate short-term impact.

Talking about the impact of the fall of the local currency on public debts, Pham Hong Hai, chief executive officer of HSBC Vietnam, said obviously the depreciation of dong would increase the cost of foreign loans.

“Foreign loans of the Government normally carry long terms. But the immediate impact is a higher amount of local currency the country will use to buy foreign currency for principal and interest payments this year,” he said.

Therefore, what is important is how to make full use of loans to ensure maximum benefits, according to Hai.

The Ministry of Finance said in the report, Vietnam’s becoming a lower middle income country has made it more challenging to access official development assistance (ODA) loans with long terms and low interest rates. The lending rate for World Bank (WB) loans has picked up from 0% to 1.25% per year while the rate for loans of the Asian Development Bank (ADB) has risen from 1-1.5% to 2% per year.

As a result, when the interest rates on international capital markets are up, the Government’s debt obligations would increase. Besides, with outstanding foreign loans accounting for around half of the Government’s total outstanding loans, if the exchange rate moves up, it would push up public debts, Government debts and payment obligations correspondingly, according to the report.

Currently, foreign loans are mainly ODA loans and concessional loans from donors with interest rates of 1.6% per year, low capital costs and an average lending term of around 20 years.

On November 11, 2014, the Government successfully issued US$1 billion worth of 10-year Government bonds on international capital markets with an annual coupon of 4.8% to restructure the bonds issued previously, reduce borrowing costs and set a new coupon more beneficial for Vietnam’s economic and financial activities on international markets.

On Tuesday afternoon, the central bank revised up the inter-bank exchange rate between the Vietnam dong and the greenback from VND21,246 to VND21,458 per dollar. With a trading band of 1% on either side, the price of the U.S. dollar is allowed to move in the range of VND21,243 and VND21,673.

After the new exchange rate took effect, banks raised the selling price of the greenback to VND21,500-21,515 on January 7 morning but many lowered the price to VND21,470-21,480 in the afternoon.

Central bank depreciates local currency

The central bank announced on January 6 that the inter-bank exchange rate between the U.S. dollar and Vietnam dong will be adjusted up to VND21,458 from VND21,246 today, meaning the local currency is down 1% against the greenback.

With the new trading band of 1% on either side, local banks are allowed to trade the U.S. dollar in the range of VND21,243 and VND21,673, according to a statement the central bank posted on its website last night.

The central bank made the decision over six months after the exchange rate had been kept stable at around VND21,246 per dollar. It said the move goes in line with developments on the local and international financial markets and would secure stability of Vietnam’s foreign exchange market.

It said appropriate measures and policies would be adopted to maintain forex stability after the new exchange rate takes effect.

The U.S. dollar appreciated strongly against Vietnam dong yesterday and almost reached the ceiling of VND21,458 allowed by the State Bank of Vietnam.

Vietcombank sold a U.S. dollar at VND21,455 yesterday, rising VND15 over the previous day and VND20 compared to the end of last year. The selling prices of the greenback at DongA Bank and Eximbank were VND21,455 and VND21,453 respectively.

However, the exchange rate at banks with majority State ownership such as VietinBank, Vietcombank, and BIDV has been stable in the past days, with one dollar selling for VND21,405.

The U.S. dollar has been firmer against Vietnam dong since late last year. At that time, Ngo Dang Khoa, head of trading at HSBC Vietnam, said the greenback normally appreciated at the year’s end when local exporters needed to buy this currency to repay their dollar loans and importers used it to pay for their bills, and foreign-invested firms repatriated their profits in dollar back to their home countries.

The rising demand for the U.S. dollar has piled pressure on the exchange rate. However, Khoa predicted that the forex rate would be stable after the Lunar New Year holiday, better known as Tet.

Last year, the central bank set a target for Vietnam dong to devalue by no more than 2% but the official rise was just 1%. The target for this year is the same at 2%.

Vietnam’s balance of payments ran a surplus of US$11-12 billion thanks to a trade surplus of US$2 billon and higher-than-expected foreign direct investment flows into the country.

The balance of payment surplus is estimated at US$8 billion this year. The Ministry of Industry and Trade has forecast Vietnam could face a trade deficit of US$6 billion this year after three consecutive years of enjoying a trade surplus.

Eastern HCMC and its attractiveness

The eastern part of HCMC is capturing much attention of real estate firms, investors and homebuyers thanks to rapid transport infrastructure development and a long-term vision of urban planning there.

As projected, the city will be developed in multiple directions, with the east (where Hanoi Highway and HCMC-Long Thanh-Dau Giay Expressway are located) and the south (Nguyen Huu Tho Street) emerging as the two major areas of development.

Between 2012 and 2020, there will be 11 property projects, small and large, to be implemented in the east. Their combined investment capital is estimated to amount to nearly VND250 trillion, equivalent to 70% of the total cost for road projects across the city.

Several key infrastructure projects in the area have been finished, such as Saigon River Tunnel, Saigon 2 Bridge, Mai Chi Tho Highway and Vo Van Kiet Highway, thereby shortening travel time between districts 1 and 2 to 10-15 minutes. Besides, Metro Line No. 1, which connects the landmark Ben Thanh Market in downtown HCMC and Suoi Tien Park in District 9, will shape the urban development landscape of the city when it is in place.

The pace of development of the area reflects the principle of development of big cities in Japan, where cities are developed on the basis of public infrastructure development with a vision lasting 20 to 30 years. In urban development, Japan often builds rail links with the downtown area to create a convenient transport network and attract people to new urban areas. This is also a crucial factor for property enterprises to develop their projects in HCMC’s eastern area to benefit from convenient transport infrastructure.

Vu Quoc Dung, a businessman, decided to buy a three-bedroom apartment at Masteri Thao Dien, a housing project under construction at 159 Hanoi Highway in District 2, last October. What made him buy the apartment is the presence of a major road nearby his home. More importantly, the apartment project is near the city’s first metro line Ben Thanh-Suoi Tien, while the price of the apartment is acceptable.

“I lived abroad for a long time, so I know homes near metro lines are always expensive. But prices at Masteri Thao Dien are quite reasonable. Thus, I decided to buy one when the project was put up for sale,” Dung said.

Another advantage of the eastern area is a green environment with many garden houses and green trees along the Saigon River. This is a place for customers who look for a clean living environment.

‘Green space’ is the main theme of housing projects developed in the eastern area. Masteri Thao Dien, for instance, sets aside over 60% of its area for lakes (around 3,500 square meters), parks (nearly 6,000 square meters) and pedestrian roads, making it separate from noisy urban life.

With modern facilities and services like Metro An Phu, international schools and hospitals, the eastern area has a fast pace of urbanization but the living environment there is healthy and clean. It promises to become a modern urban town that meets regional standards in the coming time.

According to surveys of realty consulting firms GIBC and CBRE conducted in the past quarters, property prices in eastern HCMC have picked up 7-10%, indicating that housing values are rising as more infrastructure projects there are being completed.

Fuel import tariffs hiked to back wholesalers - ministry

The Ministry of Finance said that the fuel import tariff spikes of 8-11 percentage points on Tuesday would assist fuel trading enterprises in actively drawing up their business plans.

The ministry said in a statement released on Tuesday that it issued Circular 03/2015/TT-BTC increasing duties on gasoline, kerosene, heavy fuel oil and diesel imports from 27% to 35%, 26% to 35%, 24% to 35% and 23% to 30% respectively.

According to the ministry, the new tax rates are in line with the ranges endorsed by the National Assembly’s Standing Committee and Vietnam’s commitments to the World Trade Organization (WTO).

A representative of a fuel firm told the Daily that the tax hikes have helped the firm sell more as the slight price decline could lead fuel retailers to increase stockpiles, instead of waiting for further price falls.

However, he said the two consecutive rounds of tax hikes in the past one month could help his firm as much as explained by the ministry. “We can only be well prepared when fuel import tariffs are stable,” he said.

When the fuel import taxes were adjusted up from 14-18% to 23-26% on December 5, PetroVietnam Oil Corporation (PV Oil) proposed the ministries of finance and industry-trade increase the fuel import duty by 5-7%.

PV Oil said the world’s oil prices had declined sharply while the company had to store enough fuel volume for 30 days’ sale, thus affecting its business performance.

Many fuel trading firms have bemoaned losses from the retail price reductions in the past time. Vietnam National Petroleum Group (Petrolimex), for instance, reported at a recent review meeting of the trade ministry that it used profits in last year’s first three quarters to offset the losses from its fuel trading in the three final months.

An executive of a fuel firm in the southern region claimed his firm could not afford more losses triggered by further fuel price cuts.

According to the base price calculation by the Vietnam Petroleum Association (Vinpa), with the current tax rates and the import price of US$64 per barrel, taxes and fees make up VND6,863 of the fuel price, or 39%. With diesel and kerosene, taxes and fees account for VND4,967 per liter (30%) and VND5,339 (31%) when the import price is over US$69 per barrel.

Amata seeks to invest in Binh Dinh

Amata Corp., Thailand’s developer of industrial estates, is exploring opportunities to invest in Binh Dinh Province, where another Thai investor, PTT, is involved in a mammoth petrochemical project.

A source from the provincial Investment Promotion Center said representatives of Amata recently visited the south-central province to gauge investment opportunities. The field trip was headed by the chairman of Amata Vietnam Joint Stock Company, Huynh Ngoc Phien.

The visit came after Amata Corp. chairman Vikrom Kromadit expressed interest in developing a major industrial-urban area in Binh Dinh at a meeting with Vietnamese Prime Minister Nguyen Tan Dung on the sidelines of the fifth Greater Mekong Sub-region (GMS) Summit in Bangkok last month.

Talking to the Daily on the phone, Phien said Amata highly appreciated potentials and advantages as well as investment policies of the coastal province.

According to Phien, leaders of Amata plan to return to Binh Dinh Province this month for further study. If Amata’s investment plan is forthcoming, the project would need thousands of hectares of land.

Sources close to the matter said Amata was seeing good business prospects in the province given the refinery and petrochemical complex project of PTT at Binh Dinh’s Nhon Hoi Economic Zone.

In Vietnam, Amata is one of the major developers of industrial estates, with an industrial park in operation in Dong Nai Province. Last September, it signed a cooperation agreement with the government of Dong Nai to develop a hi-tech park and an urban area in Long Thanh District with a total investment of US$530 million. Amata is also planning a large-scale hi-tech park in Quang Ninh Province in the country’s north.

The Government has agreed on preparation steps for the US$22-billion petrochemical complex, so now it is included in the national oil and gas industry development plan. The government of Binh Dinh has been assigned to consider licensing the project.

Man Ngoc Ly, head of the Nhon Hoi Economic Zone Authority, said if the petrochemical project’s documents are completed soon, an investment license could be issued prior to the week-long Lunar New Year holiday (Tet), which starts on February 19.

The authorities of Binh Dinh hope that the project would help attract many other investors to the province after it is licensed.

A number of Thai firms visited Binh Dinh in the past to explore the possibility of supplying services for the project at Nhon Hoi Economic Zone, according to the authority.

VEC to open road section leading to expy

Vietnam Expressway Corporation (VEC) is set to open to traffic a four-kilometer-long section leading to HCMC-Long Thanh-Dau Giay Expressway this Saturday before allowing vehicles to use the entire expressway next month.

The information was confirmed by Pham Hong Quang, deputy general director of Vietnam Expressway Corporation (VEC) at a conference held on January 7 to provide updates about the project.

The 26.5-meter-wide road section connecting An Phu Intersection in HCMC’s District 2 and Belt Road No.2 is designed for vehicles to run at a maximum speed of 80 kilometers per hour.

According to the HCMC Department of Transport, the section leading to Long Thanh-Dau Giay Expressway will help reduce traffic on Dong Van Cong Street, especially at My Thuy Roundabout.

Dau An Phuc, head of the infrastructure management division at the department, said traffic signs and lights have been installed in order to prevent traffic jams at An Phu Intersection during rush hours. This solution is temporary because An Phu will be developed into a two-level interchange.

The transport department will consider allowing motorcycles to run on the An Phu-Ba Dai Bridge part of the road section.

Regarding the 31-kilometer-long part of HCMC-Long Thanh-Dau Giay currently under construction, Quang of VEC said 17 kilometers of it has been completed while 80% of construction work of the remaining part has been finished.

Vehicles will be permitted to run on the whole expressway by February 8, more than one week prior to the Lunar New Year holiday, or Tet, Quang said.

The expressway will help reduce traveling time between HCMC and Vung Tau to one hour and 20 minutes instead of two and a half hours via Hanoi Highway, National Highway 1 and National Highway 51. Meanwhile, it will take one hour to travel between the city and Dau Giay T-junction in Dong Nai Province, instead of three hours when cars use Hanoi Highway and National Highway 1.

The first phase of the 55-kilometer-long expressway costs VND20.63 trillion, funded by official development assistance (ODA) loans and Vietnam’s reciprocal capital. The project got off the ground in 2009 and the 20-kilometer-long section connecting HCMC and Long Thanh was opened to traffic in early 2014.

HDBank pledges funding for big paddy field project

HCMC Development Joint Stock Commercial Bank (HDBank) and Vietnam Southern Food Corporation (Vinafood 2) on January 7 struck an agreement to provide credit and secure consumption of agricultural products for those embracing the big paddy field model in the Mekong Delta.

HDBank will provide loans for farmers, households, rice producers and traders through Vinafood 2. Participants of the program will have their output consumed by the enterprise.

However, the bank revealed no information about the total value of the lending package, interest rate and lending term.

The large-scale field project has been developed by the Ministry of Agriculture and Rural Development since 2010, attracting many plant protection and fertilizer enterprises. However, few large food companies have joined the program.

Experts believed that food businesses must join the program to help promote the model. Le Van Banh, director of the Mekong Delta Rice Research Institute, said local food enterprises could lose material cultivation zones to foreign firms if they do not take part in the big paddy field model.

“As far as I know, many foreign companies are interested in the big paddy field model in Vietnam with consumption contracts signed with farmers in the Mekong Delta,” said Banh.

VND5.1-trillion canal, road project in the offing

The HCMC Department of Transport has sent the city government a VND5.1 trillion (US$238.3 million) project to dredge Xuyen Tam Canal and build roads and residential areas along the canal.

Residential areas will go up along the canal, which stretches from Nhieu Loc-Thi Nghe Canal in Binh Thanh District to Vam Thuat Canal in the outlying district of Go Vap.

The department said Hanoi 1000 Years JSC wanted to implement the project in the build-transfer (BT) format and will recover investments by the money it earns from using land plots on both banks of the canal.

The project involves construction of resettlement apartments and residential areas, site clearance and relocation of affected households, dredging the canal and building canal-side roads.

According to the department, Xuyen Tam Canal consisting of Son and Lang canals serves as a natural drainage system for many residential areas in Binh Thanh and Go Vap districts. The project will help improve drainage and reduce pollution in these areas.

The HCMC Environmental Protection Agency said pollution at the canals in the center of HCMC has improved in the last two years. The quality of water at Nhieu Loc-Thi Nghe, Tan Hoa-Lo Gom, Tau Hu-Ben Nghe and Tham Luong-Vam Thuat canals has been better.

Wood products exports lower than expected

Wooden products exports last year rose 11% year-on-year to more than US$6.2 billion but still lower than the target set by the Handicraft & Wood Industry Association of HCMC (HAWA).

HAWA expected the local wood industry would obtain export revenue of US$6.5 billion in 2014 given strong sales growth in certain markets such as the United States and Japan.

The U.S. and Japan contributed much to the export revenue increase last year when wooden products shipped to these markets grew 12.5% and 18% respectively.

Notably, the gap in contributions of local and foreign-invested firms to the sector’s export revenue was narrowed last year.

According to the Ministry of Agriculture and Rural Development, local firms exported around US$2.8 billion worth of wooden products in January-November last year, equivalent to half of the nation’s total export value in the period. Meanwhile, domestic wood processing enterprises accounted for around US$2.4 billion of the US$4.9 billion export recorded in the same period of 2013.

Last year saw imports of wooden products and materials soaring 34% year-on-year to US$2.2 billion.

HAWA vice chairman Huynh Van Hanh said the association forecast exports of wooden products to expand 15% this year.

The agriculture ministry said the country exploited nearly 6.5 million cubic meters of natural wood, a year-on-year rise of 15%.

Deforestation is still a major concern in Vietnam. The country lost up to 4,000 hectares of forest last year, with 3,157 hectares burned and the remaining area of trees chopped down, up 173% and 8% respectively over the previous year.

More than 76,040 hectares has been reserved for tree planting but only 2,540 hectares of it has been forested, according to the ministry.

Wood products exports lower than expected

Wooden products exports last year rose 11% year-on-year to more than US$6.2 billion but still lower than the target set by the Handicraft & Wood Industry Association of HCMC (HAWA).

HAWA expected the local wood industry would obtain export revenue of US$6.5 billion in 2014 given strong sales growth in certain markets such as the United States and Japan.

The U.S. and Japan contributed much to the export revenue increase last year when wooden products shipped to these markets grew 12.5% and 18% respectively.

Notably, the gap in contributions of local and foreign-invested firms to the sector’s export revenue was narrowed last year.

According to the Ministry of Agriculture and Rural Development, local firms exported around US$2.8 billion worth of wooden products in January-November last year, equivalent to half of the nation’s total export value in the period. Meanwhile, domestic wood processing enterprises accounted for around US$2.4 billion of the US$4.9 billion export recorded in the same period of 2013.

Last year saw imports of wooden products and materials soaring 34% year-on-year to US$2.2 billion.

HAWA vice chairman Huynh Van Hanh said the association forecast exports of wooden products to expand 15% this year.

The agriculture ministry said the country exploited nearly 6.5 million cubic meters of natural wood, a year-on-year rise of 15%.

Deforestation is still a major concern in Vietnam. The country lost up to 4,000 hectares of forest last year, with 3,157 hectares burned and the remaining area of trees chopped down, up 173% and 8% respectively over the previous year.

More than 76,040 hectares has been reserved for tree planting but only 2,540 hectares of it has been forested, according to the ministry.

Parkson speaks up after store closure

Parkson Hanoi Co. Ltd., a unit of Malaysian retailer Parkson, January 6 defended the sudden closure of its department store at the 72-storey Keangnam Landmark Tower in Hanoi, saying it is temporary even though counter tenants already removed all their fixtures and stocks from the store.

The firm denied any unilateral actions of closuring the store and locking in counter tenants and shoppers on January 2.

A statement signed by general director Tiang Chee Sung says Parkson Hanoi sought various options to continue the operations of Parkson Landmark at the tallest building of the country but finally decided to temporarily shut the store.

The company said that the temporary closure was unavoidable as a result of certain unresolved matters between the building owner and Parkson Landmark. “We wish to clarify that the incident was not in any way due to Parkson’s action. This was subsequently resolved following discussions between Parkson and the landlord,” the company said in the statement.

Counter tenants at the store said they did receive the company’s announcement via email on January 2 saying that the entire store would cease its business operations with immediate effect and the last trading date would be the same day.

Parkson explained in this annoucement that it had to close the store three years after its opening and that tenants operating in the store had also racked up huge losses.

The shutdown of the Hanoi store has caused concerns among tenants at eight Parkson department stores in other parts of the country. But Parkson said: “The temporary closure will not have any effect on the operations of other department stores of Parkson brand name in Vietnam and also in the region.”

The company promises to ensure the interests of customers. “All the privileges of our customers including but not limited to the membership program remain the same and can still be used at Parkson Viet Tower in Hanoi.”

Parkson even said it would expand its Vietnam operations with the forthcoming opening of a store in Danang City on January 11.

Regarding tenants at Parkson Landmark, Parkson Hanoi said it is working with tenants to deal with their problems as many of them also operate their counters at other Parkson centers in Hanoi, Haiphong and Danang.

A source from the company said Parkson and the owner of Keangnam Landmark Tower are still in talks, so when the store is reopened is unknown.

Parkson is one of the first foreign retailers licensed to open department stores in Vietnam. The retailer had obtained high profits in the initial years between 2005 and 2010. However, the market has turned more competitive in the past three years given the presence of more retail stores on the local market.

HSBC puts GDP growth at 6.1% this year

HSBC Bank has predicted that Vietnam would obtain a gross domestic product (GDP) growth rate of 6.1% and run a budget deficit equivalent to 6% of GDP this year.

The bank’s projections are different from what Vietnam expects. The GDP growth target set by the Government for this year is 6.2% and that for the budget deficit is 5%.

In a report released yesterday, the bank said 2015 may appear to be a daunting year at first glance as Vietnam is an export-oriented economy but global demand is slowing.

Oil prices have slid, limiting Vietnam’s key fiscal revenue and export income. Domestic demand, despite improving slowly, is still dented by the banking sector’s high non-performing loans (NPLs) and the private sector’s conservatism.

However, a closer look suggests that the economy would perform better this year with a growth of 6.1% compared to 6% last year, the bank said.

HSBC said low demand and weak commodity prices would certainly drag down the nation’s raw material exports. However, its economy and export composition have become more diversified, less reliant on raw commodities and more reliant on manufacturing.

The December HSBC manufacturing Purchasing Managers’ Index (PMI) rose to 52.7 from 52.1 in November, which corresponded to 6.8% year-on-year growth in GDP in the fourth quarter of last year.

Rising relative labor cost competitiveness is the key reason. Last year, the economy attracted foreign direct investment disbursements of US$12.4 billion and pledges of US$20.2 billion. Most of the investments flowed into manufacturing, transforming Vietnam’s export structure.

In 2006, crude oil made up 21% of total exports and phones were 0%. By 2014, crude shipments declined to 4.8% while handsets rose to 16.1% of total exports. HSBC also expected export value to expand 12% this year.

While key challenges will remain in 2015, including NPLs and shortages of skilled labor, growth will likely accelerate.

“Higher U.S. demand and anticipation of trade pact conclusions will also help exports. Unfortunately, the country’s fiscal deficit will bear the costs of lower oil prices, which we forecast to be 6% of GDP, higher than the government’s 5% target for 2015,” the bank explained.

Coupled with the decline of oil revenue, projects linked to Chinese state­-owned enterprises are also running out of steam, necessitating the Government to search for other means to contract and finance its major infrastructure projects.

The Government will likely tap into the international global market, bilateral and multilateral organizations such as Japan International Cooperation Agency (JICA) and the World Bank as well as domestic funding to finance new projects.

In the medium term, Vietnam will need to address the issue of limited linkages between domestic and foreign enterprises and develop a clear strategy of how the economy will compete when labor cost competitiveness disappears.

Whether the economy will roar in the years ahead will depend on the strategy that the Government adopts in the short term to systematize and build up capability, HSBC said.

FLC posts US$19 million profit for 2014

Property developer FLC Group (FLC) posted an aggregate profit of VND400 billion (US$19 million) for the whole of 2014, registering a 15 per cent year-on-year increase.

FLC's Deputy General Director Huong Tran Kieu Dung said that in the last quarter of 2014 alone, its pre-tax profit was VND100 billion, while the turnover from real-estate sales contributed considerably to the profit amount. The figures are expected to be the foundation for higher turnover and profit this year.

FLC has implemented several projects such as FLC Samson Beach and Golf Resort and FLC Complex Thanh Hoa.

Ocean Group gets new board member

Ocean Group (OGC) has again replaced a board member.

This time, Duong Thi Cam Thuy has taken the place of Nguyen Quang Vinh, who resigned just two months after being appointed.

Meanwhile, OceanBank, one of the group's strongest arms, has changed its chairwoman for the second time, electing an independent member of the management board, with an aim to recover from the financial scandal involving former chairman Ha Van Tham.

State to sell entire stake in Vinamotor

Deputy Prime Minister Vu Van Ninh has approved the sale of the entire State ownership in Vinamotor, according to the Government portal

After the company's initial public offering in March last year, its charter capital reached VND876 billion (US$41.1 million), in which the State has a 97.7 per cent stake. Vinamotor will get to offer 85.5 million shares by selling the State's stake.

HLA to be delisted from HCM Stock Exchange

Huu Lien A Chau (HLA) will be delisted due to the huge losses it has suffered, the HCM City Stock Exchange has announced.

The company posted losses worth VND475 billion (US$22.3 million) last year, causing the accumulated losses to exceed its charter capital. The company has also been reminded several times about delayed disclosure of financial statements. HLA shares closed at the floor price of just VND1,700 (8 cents) yesterday.

Meanwhile, construction firm CIC Corp registered to list about 14.8 million shares on the exchange. HCM City Securities is the consulting agency for the listing. In the first nine months of 2014, CIC Corp earned VND20.25 billion ($0.95 million) in net profits, an increase of 37 per cent over the same period in 2013.

Deal gives Mekong rice farmers access to loans

The HCM City Housing Development Bank (HDBank) and the Viet Nam Southern Food Corporation (Vinafood 2) signed an agreement on Wednesday to provide loans to stakeholders involved in large-scale rice field projects in the Cuu Long Delta.

Under the deal signed in HCM City, farmers and processing and trading businesses will be able to obtain loans via Vinafood 2, the country's largest rice producing, trading and exporting company.

The co-operation promises to create close links between farmers and businesses and the bank under the large-scale rice field model in the country's granary, which is expected to spark an improvement in rice production and trading.

Bac Lieu seeks $447m from agriculture exports

The Mekong Delta province of Bac Lieu hopes to earn US$447 million from exporting agricultural products in 2015, a $47 million increase from 2014.

Bac Lieu will focus on promoting aquaculture and offshore fishing while implementing effective models of shrimp, rice-shrimp and shrimp-crab-fish farming, according to Luong Ngoc Lan, director of the provincial Department of Agriculture and Rural Development.

Additional emphasis will be placed on intensifying intensive and semi-intensive shrimp farming, as well as developing large-scale rice field models that apply Vietnamese Good Agriculture Practices (VietGap) standards.

Training course helps handicrafts businesses

The British Council and the Handicraft and Wood Industry Association of HCM City will run a training course aimed at helping companies in the handicrafts and interior decoration sectors improve their business and design skills to meet the demands of international markets in HCM City on January 21 and 22.

The course will provide both theoretical and practical training. Besides, British experts will assist three to four companies in creating new designs and provide consultancy in business skills and assessing the international market for six months.

Exporters and young designers in the two sectors with at least three years' experience are encouraged to participate in the training course.

Noi Bai Cargo shares debut

Noi Bai Cargo Terminal Services (NCT) shares debuted on the stock exchange yesterday with a reference price of VND75,000 (US$3.5), but hit the ceiling price of VND90,000 ($4.2).

The company is the first to list its shares in 2015 and the first listed cargo services company to do so.

NCT has listed a total of 24.92 million shares, equivalent to the charter capital of VND249.2 billion ($11.7 million).

The plan to list was approved by the company's shareholders in early 2014, which is part of the company's restructuring strategy, aimed at boosting transparency and attracting investment.

Currently, national flag carrier Vietnam Airlines owns more than a 55 per cent stake in Noi Bai Cargo. Another large shareholder is Noi Bai Airport Services, with its 6.98 per cent stake.

Despite the challenges seen in the country's economy during recent years, Noi Bai Cargo has been able to maintain high growth, especially dividend payments, which are among the highest in the market.

In 2013, the company's revenue and profit jumped 35 per cent and 55.8 per cent to touch VND574.5 billion and VND310 billion, respectively.

Noi Bai Cargo managed to keep its net profit on equity ratio at 71.34 per cent and 89.46 per cent in 2012 and 2013, respectively.

During the first nine months of last year, the company's profit reached VND264 billion. Although, the financial statement for the entire year was not released, sources from the company said it had achieved its target of VND324 billion for gross profit.

During 2011, Noi Bai Cargo paid dividends at 138 per cent and then raised them to 160 per cent in 2012 and 163 per cent in 2013. This year, dividends are also expected to be paid at more than 100 per cent.

Given its effective operations, as proven above, and considering its tradition of paying high dividends, investors are encouraged to buy NCT's stock.

Exports to France fetch US$2.8 billion

Vietnam exported US$2.8 billion worth of goods to France last year, up 8% year-on-year, according to the Ministry of Industry and Trade (MoIT).

The five groups of key exports included telephones and components, with a turnover of US$900 million, which were up 48%; footwear exports were pegged at US$237.8 million, up 12.6%; footwear with US$141 million, up 19%.

Exports of bags and suitcases rose 10.7% to US$64.5 million, and those for coffee jumped 21.3% to US$88.5 million.

MoIT said that with suitable business strategies, Vietnamese enterprises could also start exporting other items to the market, such as cashew nuts, pepper, rubber, garments, bamboo-made goods and electric cables.

It also suggested that domestic firms should take the initiative to join business forums and participate in international trade fairs and exhibitions .

Good prospects for Vietnam-France trade in 2015 are expected to emerge once the Vietnam-European Union free trade agreement is signed, Vietnamese Trade Counsellor in France Nguyen Canh Cuong, said at a recent roundtable meeting in Paris.

Cuong said the agreement will include offers for preferential tax rates on many commodities, while commitments on investment and intellectual property protection will encourage Vietnamese and EU businesses, including those from France, to intensify trade and investment exchanges.

Jean-Phillip Eglinger, the Manager of Vietnam-France Strategies Company said France's small- and medium-sized enterprises, which operate in food, agricultural products, health, pharmaceuticals, and waste treatment, stand a good chance of success in Vietnam when co-operating with Vietnamese partners as they can support each other to explore and exploit their respective market.

He suggested that Vietnamese companies improve production and processing capacities to create brand names for advantageous products, such as tea, coffee and cashew nuts.

OSS model for Laos-Vietnam border hailed

The Lao Government has applauded Vietnam’s coordinated efforts in building ‘one-stop-shop’ (OSS) model at the international border gates of Lao Bao (Vietnam) and Densavan and Savanakhet (Laos).

The OSS model helps to reduce waiting times and increase precision throughout the customs clearance process.

The Lao side is improving infrastructure and training human resources for the project that is expected for operation in February this year.

The project is part of the  Memorandum of Understanding (MoU) signed in 2005 on the implementation of the Cross-Border Transportation Agreement (CBTA) among the Greater Mekong Sub-region (GMS) in the East-West Economic Corridor (EWEC).

Vietnam tightens control of milk prices

The Ministry of Finance (MoF) has requested the government to reassign responsibility for ensuring compliance with its decision to impose price ceilings on milk products for children to the Ministry of Industry and Trade (MoIT).

Under a prior decision, the Ministry of Finance (MoF) has placed a cap on the wholesale prices of 25 milk products for children under the age of six for the country’s five largest dairy producers and wholesalers.

The price charged to consumers by retailers for these products has in turn been limited to15 percent of the wholesale ceilings based on a set formula factoring in related costs.

The five producers account for roughly 90% of the dairy market for children under six and the MoF has now requested responsibility for making sure they comply with its decision be reassigned from the Ministry of Health to the MoIT.

In its request, the MoF explained this responsibility falls within the MoIT’s mandate to control the food industry and processed milk products and the agency has the authority to issue appropriate licenses and initiate compliance investigations. The MoF noted that it would continue to actively co-ordinate with the MoIT on compliance related matters.

80MW of electricity added to national grid

As many as 80 MW of electricity has been added to the national grid as the first turbine of the Mong Duong 1 thermo power plant was successfully connected to the grid, according to the Electricity of Vietnam (EVN).

At present, the contractor - Huyndai Engineering & Construction Co. Ltd of the Republic of Korea is conducting necessary tests for the official operation of the turbine in the second quarter of this year.

Located in Mong Duong ward, Cam Pha city, northern Quang Ninh province, the 33.6 trillion VND (1.7 billion USD power plant is designed to have two turbines with a combined capacity of 1,080 MW. Its second turbine is expected to be completed in October 2015.

Once operational, the coal-fueled plant, using the Circulating Fluidized Bed Boiler (CFP) technology, will generate about 5.8 billion kWh per year.

It is hoped to boost the socio-economic development of Vietnam’s northeastern key economic region in 2015 and following years while easing the electricity system’s dependence on hydropower sources, especially during the dry season.

Mollusk exports to RoK increase sharply

Vietnam’s mollusk exports to the Republic of Korea (RoK) for the eleven months leading up to December 2014 jumped 26.8% on-year tallying in at US$156.4 million, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Exports of frozen octopus alone accounted for 35.7% of the country’s total mollusk exports and sold for an average price hovering in the range US$5.34-US$6.55 per kilo.

Last year, Vietnamese exporters enjoyed an average monthly growth rate of 20%-35% to the market, making it the second largest mollusk supplier to the RoK.

VASEP optimistically has forecasted that exports will continue to increase in early 2015 and Vietnamese exporters should take steps to insure adequate inventories are on hand.




Hanoi proceeds with park revitalization program

The implementation of Hanoi leaders’ promise to revive parks has begun: admission to Thong Nhat Park is now free after the removal of the fence, and Con Coc Flower Garden has a new look. However, there are still many things that need to be done.

Vietnamese farmers on board the ‘digital agriculture train’

In the digital era, next-generation farmers can fertilize and water their fields in Binh Phuoc from afar, even in a different country.

Vietnam forecast to become second-largest economy in Southeast Asia by 2036

2023 is predicted to be the year of many challenges for the Vietnamese economy due to the gloomy outlook of the global economy and multiple crises.

Prenn Pass leading to Dalat to be closed for expansion

Vehicles will be banned from using the seven-kilometer-long Prenn Pass to travel to Dalat City as work on the pass upgrade and widening project begins on February 6.

Coach Park Hang-seo to hold event thanking fans for their support

The event will be held at Athena Room 2, Hanoi Grand Plaza Hotel, from 6pm to 8.30pm on February 2.

Hanoians queue at 3am to buy gold on the God of Wealth Day

To buy gold for luck on the God of Wealth Day (the 10th day of the lunar year - January 31), many Hanoians queued in front of gold shops on Tran Nhan Tong and Cau Giay streets from 3 am.

10,800 new enterprises established in Vietnam in January 2023

Vietnam had 10,800 newly established enterprises in January, an increase of 0.7% over the previous month and a fall of 16.6% over the same period last year.

Hai Phong hosts 700-year-old wrestling festival

As part of the Lunar New Year celebration, known locally as Tet, local people of Vinh Khe village in An Duong district of Hai Phong hold a wrestling festival on the seventh day of the first lunar month.

International visitors to Vietnam increased sharply in January 2023

International visitors to Vietnam in January 2023 reached over 871,000 arrivals, an increase of 23.2 percent compared to December 2022 and 44.2 times higher than last year.

Hanoi sees strong increase of apartment prices

Prices for apartments in Hanoi tend to increase as supply becomes short, according to the Vietnam Association of Realtors (VARS).

Tennis: Vietnam against Indonesia for Davis Cup World Group II berth

According to the Vietnam Tennis Federation (VTF), Vietnam will play Indonesia in the 2023 Davis Cup World Group II Play-offs on February 4-5 at the Hanaka Paris Ocean Park in the northern province of Bac Ninh.

Nearly 100 petrol stations shut down during Tet holiday

Nearly 100 petrol stations nationwide were closed during the Tet Lunar New Year holiday, claiming they had run out of stock and lacked employees.

Health ministry asks for strengthening COVID-19 diagnosis and treatment

The Ministry of Health has ordered local health departments to strengthen diagnosis and treatment of COVID-19 in the context of new variant emergence.

Da Lat hot air balloon festival slated for late April

Local people and tourists will have the chance to enjoy famous tourist sites throughout Da Lat city in the Central Highland province of Lam Dong from above during hot air balloon trips which will run from April 27 to May 3.

Buon Ma Thuot Coffee Festival scheduled to kick off in March

The eighth edition of the Buon Ma Thuot Coffee Festival is set to be held in the Central Highlands province of Dak Lak from March 10 to March 14, as announced on January 30 by the provincial People’s Committee.