VNPT to sell all shares of MSB

The Vietnam Posts and Telecommunications Group (VNPT) has registered to sell the entire 71.58 million shares or 8.95 per cent stake of the Maritime Commercial Joint Stock Bank (MSB).

VNPT is the second largest telecommunications group in Viet Nam after Viettel in term of profit. - Photo cafef.vn

VNPT submitted the registering file to the State Securities Commission for the sale on September 25 at the starting price of VND11,700 (US$0.52) each.

The price was three times higher than the price of MSB traded on the over-the-counter market. If the transaction is successful, VNPT will collect at least VND837 billion ($37.2 million) from the divestment.

The sale was included in VNPT's implementation of the Government's Decision No 888 to restructure the State-owned group. The decision regulated that the group divest all capital from its non-core business.

Thus, besides MSB, the group will have to divest entirely in 62 companies including Bao Minh Insurance Company, 58 joint stock companies and limited companies, and four investment funds.

Up to now, the telecommunications group has divested over VND701 billion ($31.15 million) and still has other divestment plans worth more than VND1.5 trillion ($66.6 million) in 63 other companies by the year-end, VNPT's general director Pham Duc Long said.

VNPT, reaching $297 million in profit and $4.75 billion in revenue in 2014, was among the three largest telecommunications groups in Viet Nam. The other two were Viettel and MobiFone.

Currently, VNPT has 30.5 million subscribers, of which 4.5 million are landline users and the rest are mobile users.

Also under the government's plan to restructure the State-owned group the first and third largest mobile operators, the Viettel Group and MobiFone were also selling their stakes in non-core businesses.

MobiFone has been selling shares in Tien Phong Bank and South-east Asia Bank, while Viettel has been selling shares in five joint stock companies.

The complete divestment of the three groups was planned to be done this year.

Sales at Discovery Complex II suspended

The investor of the Discovery Complex II has asked distributors to stop selling apartments while it waits for Hanoi authorities to review planning and construction at the project.

The news was released to local media by the sales department at the Kinh Do TCI Group after the Discovery Complex II (also known as Kinh Do Tower) was inspected by the Hanoi People’s Committee at the request of the Prime Minister.

Located in No. 8B, Le Truc Street in Hanoi, the 17-storey complex has attracted a lot of attention as it is much taller than nearby historic buildings such as the Ho Chi Minh Mausoleum, the National Assembly Building, and Ho Chi Minh Museum.

The project has encountered many objections because of its height and sensitive location. Late last week the PM asked the Hanoi People’s Committee to check the execution of plans for the building.

The Discovery Complex II was introduced as a project within the administrative and political center of the capital, close to Ba Dinh Square, West Lake, the International Convention Center, the Temple of Literature, and St. Paul Hospital.

The project is a combination of a business center, office space, luxury apartments, and villas. It has 17 floors with an area of 1,900 sq m. The business center will cover five floors. Apartments will be located from the 6th floor upwards with views of Ba Dinh Square and the historic Hoang Thanh Thang Long area.

Vietnam seeks agricultural trade with India

A workshop was held in New Delhi, India on September 29 to promote Vietnamese agricultural products in the country. 

The event, jointly organised by the Ministry of Agriculture and Rural Development (MARD), the Embassy of Vietnam in India and the Federation of Indian Export Organisations (FIEO), forms part of activities of the MARD’s 2015 trade promotion programme. 

It hosted FIEO President S. C Rathan, MARD Deputy Minister Vu Van Tam, Vietnamese Ambassador to India Ton Sinh Thanh and representatives from Indian and Vietnamese enterprises. 

Addressing the event, FIEO President S.C. Ralhan reiterated that Vietnam is an important partner of India in the Southeast Asian region, adding that bilateral trade between the two nations has increased year-on-year. 

Vietnam has actively participated in a number of regional forums such as the Association of Southeast Asian Nations (ASEAN), the East Asian Summit (EAS), the Mekong-Ganga Cooperation Organisation, the Asian European Meeting (ASEM) and the World Trade Organisation (WTO), he said. 

He also expressed his impressions of Vietnam as one of the world’s fastest-growing economies from 1990-2010, saying that young population and strong and active economic growth have made Vietnam one of the most attractive destinations for foreign investment. 

The FIEO President also pledged to support Vietnamese enterprises entering the host market. 

For his part, Deputy Minister Vu Van Tam hailed India’s role in the trade and growth of Vietnam’s economy in general and agricultural sector in particular. 

The Government of Vietnam has continuously offered incentives for domestic trade promotion activities to boost bilateral and multilateral cooperation with international partners, including Indian firms, according to Tam. 

The Deputy Minister also expressed his hope that the host would facilitate agricultural export in both countries. 

Meanwhile, Ambassador Ton Sinh Thanh highlighted the trade and investment potential between the two nations. He suggested the two governments develop a comprehensive agricultural cooperation programme as well as boost business exchanges for mutual benefit. 

During the event, representatives of Vietnamese enterprises briefed the hosts on the production and export of coffee, tea and dragon fruit in Vietnam. 

In an interview granted to Vietnam News Agency correspondents at the workshop, Tam underlined the potential for the two nations’ cooperation in agriculture, saying that the sector has been buoyed by traditional friendship and cooperative ties. 

Over recent years, India has provided support for Vietnam in training human resources and technology transfer in animal farming and other fields, Tam said. 

The 2.26-billion-people market of India offers huge potential for Vietnamese agricultural products such as tea, coffee, dragon fruit and aquatic products, he said. 

Vietnamese aquatic products have been shipped to Japan, the EU, the US and the Republic of Korea. They are expected to enter the Indian market and contribute to fostering economic and trade cooperation between Vietnam and India, Tam said.

Indonesia to buy Vietnamese, Thai rice

The Indonesian government has announced its intent to purchase rice from Vietnam and Thailand through government-to-government deals and its representatives will soon begin negotiations. 

Honorary President of the Thai Rice Exporters’ Association Chookiat Ophaswongse said on September 29 that Indonesia may have to import from other sources too, as Thailand and Vietnam may not be able to meet the 1.5-million-tonne demand, he said. 

He added that Indonesia will need rice between November 2015 and January 2016 because its own harvest will start in March. 

The 1.5 million tonnes that Indonesia needs is composed of 5 percent white rice and 15 percent broken rice, he said. 

In the first nine months of this year, Thailand exported around 7 million tonnes of rice. The local Commerce Industry is confident the export target of 10 million tonnes will be achieved this year. 

According to Indonesia’s Jakarta Post, the Indonesian government hopes that 47 million tonnes of rice will be produced next year, the same amount as the total rice production predicted for this year by the Central Statistics Agency (BPS).-VNA

Measures discussed to develop manpower

Measures to develop human resources in Vietnam were discussed at a conference, held by the Central Institute for Economic Management (CIEM) in Hanoi on September 29.

Speaking at the conference, CIEM Deputy Director Nguyen Thi Tue Anh highlighted that Vietnam has to improve its human resources for prioritised sectors, saying sustainable economy is premised on human resources development.

Meanwhile, Toma Massaski from the Japanese Embassy in Vietnam underscored that Vietnamese Government and relevant ministries and agencies need to pay attention to the human resources education quality while identifying fields that require advanced qualifications and technology.

He stressed that high-quality manpower has a crucial role in increasing productivity and contributing to the nation’s industrialisation, adding that it is necessary to find key sectors where workers and employers are harmonised.

Regarding solutions to human resources development, Dr. Nguyen Van Thanh from the Hanoi University of Industry recommended the Government supplement and complete regulations to encourage collaboration between universities and enterprises as well as ask enterprises to join vocational training through tax and land use policies.

According to statistics from the Ministry of Labour, Invalids and Social Affairs, graduate and post graduate unemployment jumped from 162,000 to 178,000 people during the first three months of this year.

The highest unemployment rate was seen among those with college degrees (7.2 percent), followed by vocational graduates (6.9 percent) and labourers without certificates (1.97 percent). The country’s average unemployment rate stood at 2.43 percent.

Russian businesses eye cooperation opportunities in Vietnam

The Vietnam Chamber of Commerce and Industry (VCCI) organised a meeting in Hanoi on September 29 for Vietnamese and Russian enterprises to help share information and seek investment cooperation opportunities. 

Members of the Russian business delegation to Vietnam mainly operate in urban construction and design, infrastructure building, transportation and health equipment manufacturing. 

VCCI Secretary General Pham Thi Thu Hang said that Vietnam is becoming an increasingly attractive market to Russian enterprises and investors, especially in the fields of new and renewable energies, industry, high technology, mechanics, and petrochemistry. 

Vietnam is willing to create favourable conditions for Russian firms and other partners to do business in the country, she affirmed. 

Head of the Russian business delegation Strozhaeva Lubov Viktorovna stated that her country’s enterprises are keen to cooperate with Vietnamese partners as a market with high potential. 

Over the past years, Vietnam-Russia economic ties have been intensified in the four key pillars of trade, investment, oil and gas and power energy. 

Bilateral trade jumped from 500 million USD in 2001 to nearly 3 billion USD in 2014.

Vietnamese localities, German businesses boost trade links

A Memorandum of Understanding (MoU) to promote links between Vietnamese localities and German businesses has been signed in Ho Chi Minh City.

Signatories included the Department for Foreign Service under the Ministry of Foreign Affairs, the German Industry and Commerce in Vietnam (GIC) and the German Business Association (GBA).

The document aims to boost German trade and investment promotion in Vietnam towards forming mutually-supportive relations between German enterprises and local Vietnamese authorities.

It also targets the establishment of a channel for German firms to communicate their concerns and questions to local-level Vietnamese authorities, which will also help localities seek suitable partners in Germany and make inroads into German markets.

In order to effectively implement the cooperation programme, the Department for Foreign Service will work closely with the GBA and GIC to arrange workshops, conferences and forums with German companies nationwide.

Addressing the signing ceremony on September 28, Deputy Foreign Minister Bui Thanh Son spoke highly of the initiative to ink the MoU, saying this will contribute to fostering connections between Vietnamese localities and German partners.

According to the official, although economic ties between the two countries have been fruitful, they fall short of their true potential. He stressed that the ministry will offer active assistance to enhance trade and investment cooperation between the two sides in the near future.

Germany is now one of the main strategic partners of Vietnam in the European Union (EU). It is also Vietnam’s largest trade partner in the EU with bilateral trade hitting 4 billion USD in the first two quarters of this year.

Euro Presse Image hails Vietnam’s economic achievements

The Euro Presse Image on September 26 ran an article on Vietnam’s preparations for the 12th National Congress of the Communist Party of Vietnam (CPV) with a positive social-economic record. 

According to the article, Vietnam has undergone an almost complete makeover caused by a fast economic growth combined with continuous industrialised and modernised process. 

Vietnam’s socialist-orientated market economy has been accelerated, contributing to improving the living standard of its citizens, placing the country in the middle-income group. 

The article underlined Vietnam’s signing of an agreement on the establishment of a free trade zone with the European Union (EU) which will, according to EU trade commissioner Cecilia Malmstrom, promote trade ties between the EU and the Southeast Asia, and may serve as a model for EU’s similar agreements with other developing economies. 

Vietnam is also participating in negotiations with 11 other countries on the Trans-Pacific Partnership (TPP). 

At the same time, the article analysed weaknesses of the Vietnamese economy in the short and medium terms, especially administrative reforms and lack of capital for infrastructure projects. 

It said falling oil prices will affect Vietnam’s income, and the budget deficit is predicted to reach 6 percent, surpassing the government’s five-percent goal. 

The country also needs to improve the efficiency of social-economic management, environmental protection and income gap. 

The article highly appreciated Vietnam’s political stability which it said is an important and indispensable factor for development. It quoted the Financial Times as saying that thanks to the stable political environment, Vietnam has been one of leading destinations for foreign investors. 

According to PricewaterhouseCoopers, Vietnam is among countries with fastest economic growth from now to 2050. 

The article came to the conclusion that Vietnam’s Doi Moi policy since the late 1980s has been strengthened through years and will be the main guidelines at the upcoming National Party Congress.

Jan-Sept FDI approvals soar 53.4% y-o-y

Foreign direct investment approvals in the first nine months of this year have surged 53.4% over the same period last year owing to an upsurge in FDI pledges in September, according to the Ministry of Planning and Investment.

Data of the ministry showed FDI enterprises have pledged a total of US$3.82 billion for new and operational projects in Vietnam in September, which is much higher than an average of US$1-2 billion a month in the period before September.

By September 20, investment certificates had been issued for 1,432 new FDI projects with total registered capital of over US$11 billion, rising by 44.5% over the same period last year. Meanwhile, FDI businesses had pledged US$6.11 billion for 461 operational projects in the period, up 72.6% year-on-year.

In all, FDI approvals for both fresh and operational projects had totaled US$17.15 billion as of September 20, increasing 53.4% versus the same period of 2014.

The ministry credited the FDI upsurge in the first nine months to some big-ticket projects approved in August and September, including the US$3-billion project of Samsung Display Vietnam to manufacture, assemble and outsource high-definition screens at Yen Phong 1 Industrial Zone in the northern province of Bac Ninh.

In the two months alone, FDI approvals amounted to US$8.32 billion, or half the total figure in the first nine months.

In January-September, FDI disbursements are estimated to reach US$9.65 billion, up 8.4% year-on-year.

More FDI firms have boosted investment in Vietnam to bank on the opportunities from Vietnam’s deeper international integration and commitments to creating a favorable investment environment.  

Do Nhat Hoang, head of the Foreign Investment Agency (FIA) under the ministry, told a conference on the impact of FDI on Vietnam’s economy earlier this year that FDI pledges were forecast to reach US$18 billion this year. This target is seen obtainable given a strong rise in FDI approvals in January-September.   

Vietnam aims for FDI disbursements of over US$12 billion this year. Experts expect the nation can beat this target because of positive FDI disbursements in the first nine months.  

Total FDI pledges for both fresh and operational projects amounted to US$21.92 billion in 2014, down 1.9% against 2013. Of the amount, US$16.5 billion was registered for 1,843 new projects and US$5.41 billion for 749 existing projects.

Nine month export turnover nears US$230 billion

The General Department of Vietnam Customs has reported that Vietnam’s export import turnover totaled nearly US$230 billion as of September 15, up 12.9 percent over the same period last year.

Trade deficit topped US$4 billion with export turnover neared US$113 billion, a year on year increase of 9.8 percent, and imports hit US$117 billion, up 16.1 percent.

Foreign direct investment (FDI) sector posted the total export import turnover of US$76.89 billion, rising 21.7 percent from a year ago and accounting for nearly 68 percent of the country’s export value.

Their import value approximated US$69.1 billion, up 21.8 percent and accounted for 59 percent of the country’s import value.

Workshop analyzes weaknesses of Vietnamese farm produce

Raw export, low quality, weak connectivity between farmers and businesses and poor preservation are among weaknesses of Vietnamese farm produce that Vietnam should remedy to raise back the decreasing export turnover amid the fiercer competition by free trade agreements, said experts at a workshop in Ho Chi Minh City yesterday.

Dr. Nguyen Quoc Vong from RMIT University said that Vietnam’s WTO membership in 2006 had helped the economy develop and quadrupled agricultural export turnover over before hitting US$30 billion in 2014.

However, Vietnam has mainly exported raw products with value approximating 65 percent of the world common rate.

From this year, the country has become attendance in new and more competitive markets such as ASEAN Trade In Goods Agreement (ATIGA) with gross domestic product (GDP) of US$1.3 trillion, Trans-Pacific Partnership (TPP) with GDP of US$31 trillion and Eurasian Economic Union  (EAEU) with US$4 trillion GDP.

This will bring Vietnam a big export opportunity because these markets will eliminate most tariff lines on products imported from their member nations comprising Vietnam. Still, they will also draw farming products from other nations to Vietnam creating a fiercer competition in local market. 

The concern is that whether Vietnam will be able to exploit this chance or see foreign goods overflow domestic market and put heavier pressure on consumption of locally made products. 

Vietnamese rice quality is inferior to Thai rice, Philippine banana is more eye-catching and better preserved; the quality of Indonesian watermelon, coffee and cocoa is more equal; and Japanese seed is better than Vietnamese.

Therefore, businesses will face big challenges while penetrating into the new markets because they have mainly exported raw products and been incapable to take command of the market.

That has slowed down exports for recent years. Vietnamese rice accounted for 65 percent of China’s import volume in 2012 and 2013, falling to 53 percent in the following year and only 47 percent now with the participation of Myanmar and Thailand.

Vietnam has had to share the Philippine market with rival Thailand instead of monopolizing rice supply via Government to Government contracts as before.

Mr. Vong added that rice farming area limitation to each household and land use time-limit has become barriers for hi-technology application and large scale production modals.

According to surveys by associate professor Ho Thanh Phong, principle of International University under the HCMC National University, farming production has not met consumption demand. A certain farming product usually falls in unsalable condition amid peak harvest time.

Hence, applying advanced science and technology to lengthen the preservation and storage time and increasing processing to diversify products are solutions for that issue, he added.

Independent agricultural expert Dr. Vu Trong Khai said that farmers have produced over small scales and sold their products to traders. They usually break contracts with businesses and sell their products to traders for higher payment. Meantime, businesses hesitate about purchase when prices and consumption reduce.

There are no measures to tackle these violations making the connectivity among farmers, businesses, state and scientists lax and formalistic, he affirmed.

Chairwoman of the High Quality Vietnamese Goods Association Vu Kim Hanh pointed out three weaknesses of Vietnam’s agricultural industry including weak connectivity, inappropriate market interest and unequal profit distribution in value chains.

She proposed to facilitate businesses’ attendance in agriculture, professionalize distribution phase and courage establishment of distribution companies who will bridge farmers and cooperatives to the market.

Associate professor Vo Thi Thanh Loc from Can Tho University, said localities should offer incentives to draw businesses to invest in agricultural industry, develop value chains and improve product quality.

AuchanSuper plans two retail stores by year-end

France’s retailer AuchanSuper plans to open two new stores in HCMC by year-end and 15 more next year as part of a strategy to expand its presence in the retail market, according to its chief financial officer Philippe Delalande.

At a meeting with HCMC vice chairman Le Thanh Liem last week, Delalande said AuchanSuper’s first store, Simply Mart, covers 3,000 square meters on Tran Binh Trong Street in District 5.

One of the two new stores planned for this year will be inaugurated at Le Thanh apartment building in Binh Tan District in November.

Delalande said AuchanSuper planned to spend 35-40 million euros on the new stores occupying 2,000 to 3,000 square meters each and selling a wide range of goods. These new outlets are expected to employ about 1,000 people.

He said AuchanSuper had decided to expand its investment in Vietnam as the local retail market is holding high-growth potential.

Liem noted retail sales in the city account for around 30% of the country’s total, so the market would provide retailers with good growth opportunities.

In HCMC, AuchanSuper might face tough competition with operational local and foreign retailers including Co.opmart, Big C, Lotte, Aeon, Metro, and Giant.

Southern Bank to be merged into Sacombank in Oct

Southern Bank will be merged into Saigon Thuong Tin Commercial Bank (Sacombank) on October 1 as approved by the State Bank of Vietnam (SBV).

Sacombank mentioned the official merger date in a statement issued last week. The merged institution will become one of the top five commercial joint stock banks in Vietnam with total assets of nearly VND297.2 trillion and equity of nearly VND24.5 trillion, including total chartered capital of VND18.85 trillion.

The merged bank going with the name Sacombank will have a network of 563 transaction offices in Vietnam, Laos and Cambodia as well as 15,510 employees.

Sacombank said all legitimate rights of customers will be ensured after the merger.

In his capacity as Sacombank’s major shareholder, Le Hung Dung said at Sacombank’s extraordinary shareholder meeting in July that the merger would help the lender become a bigger player in the banking sector in terms of scale, assets and capital mobilization.

At the meeting, a majority of shareholders voted in favor of the merger and agreed a share swap ratio of 1:0.75, meaning that a Southern Bank share will be exchanged for 0.75 of a Sacombank share. In addition, shareholders will get 0.3875 of a share at the merged bank at the day decided for the share swap.

Last Monday, the central bank allowed Sacombank to increase its chartered capital from over VND12.4 trillion to VND18.85 trillion as part of the merger plan.

Recently, several banks have applied to increase their chartered capital through merger deals or issuance of additional shares. For example, the Military Bank (MB) has issued new shares to increase its chartered capital from nearly VND11.6 trillion to over VND16 trillion.

HCM City’s export restructuring on righ track

Despite declining exports in January-September, the restructuring of export products has been on right track, with shipments of raw materials and semi-processed products falling, according to the HCMC Department of Industry and Trade.

At a meeting held last week, the department said export revenues from many agro-forestry-aquatic products and crude oil had dropped significantly this year.

HCMC’s export turnover has slipped 5.9% against the first nine months of last year to US$22.5 billion.

In addition to a 50% decline in crude oil export turnover, export revenues from agro-forestry-aquatic products have dropped 16.3% year-on-year to US$3.12 billion.

According to the department, the city exported nearly US$670 million worth of rice between January and September, falling by 31% against the same period a year earlier. Vietnam’s main rice markets such as Indonesia and the Philippines have been increasingly self-sufficient while Thailand, India and Pakistan are gaining more market share in Africa and the Middle East. Cambodia’s rice has also found its way to Europe and China due to incentives, making it hard for Vietnamese rice to find customers.

Meanwhile, seafood exports of HCMC have slid 14.4% to US$483 million as exports to the EU, Japan, South Korea and the U.S. are down.

The department said though the world economy has turned uncertain given the devaluations of currencies like the Chinese yuan, Japanese yen and euro, exports might pick up in the final quarter and quarter-four outbound sales are often higher than in the previous three quarters.

Shipments of many items such as hi-tech products, garments and footwear have soared. Exports of computers, electronic products and electronic components have amounted to nearly US$3.3 billion, a year-on-year rise of almost 70%, while garment and footwear exports have picked up 2.4% and nearly 9% respectively.

According to Thai Van Re, director of the HCMC Department of Planning and Investment, exports of HCMC-based enterprises are not high since their products have yet to meet quality and quantity requirements of foreign markets.

HCMC’s 2015 export growth target is 8-10% but in the year to date, its exports have edged down 5.9% and the drop this year is projected at 4.2%. Nevertheless, the city government forecast next year’s export growth at 8%, exclusive of crude oil.

Industrial production rises 10% in first nine months

The national index of industrial production rose 10 per cent in the first nine months of this year against the same period last year.

Further, according to the Ministry of Planning and Investment (MPI), the industrial production sector continued its growth, especially in the processing and manufacturing sectors, Nguyen Thuy Hien, deputy head of the Ministry of Industry and Trade's Planning Department, said at a meeting on reviewing production, business and investment in September, as well as the first nine months of 2015, held by the MPI on Friday in Ha Noi.

During the first nine months, the sectors of mechanisms and electronic equipment assembly grew 45 per cent in television output and 53 per cent in the output of assembled automobiles, in comparison to the same period last year, she said.

Meanwhile, output also surged by 11 per cent for each of the sectors of electric production and distribution and processing and manufacturing, 8 per cent for mining, and 7 per cent for water supply, waste management and treatment.

Also, during the first nine months the oil and gas industry saw an increase of 11 per cent in output of crude oil to 12 million tonnes, and 1.8 per cent in output of natural gas to eight billion cubic metres, compared with the same period last year.

However, other industrial sectors saw difficulties in production and business in the first nine months, including steel, cement and fertiliser, she said. The total crude steel output reached three million tonnes, or 99.8 per cent of the output in the same period last year, while output of urea fertiliser fell 1 per cent to 1.6 million tonnes, against output in the first nine months of 2014.

Regarding the price index of industrial production, the General Statistics Office (GSO) reported on Thursday that the nation had a quarter-on-quarter reduction of 0.14 per cent in the price index of industrial production in the third quarter.

The decrease was mainly due to the reduction in prices of producing mineral products, down 1.41 percent, and processing and manufacturing products, down 0.37 percent, according to GSO's Department of Price Statistics Vu Thi Thu Thuy.

Many other groups of processing and manufacturing products saw decreases in the price index of industrial production for the third quarter, including electronics (1.81 percent), metals (1.37 percent), chemicals (1.03 percent), processed food (1.01 percent), beverages (0.87 percent) and textiles (0.27 percent).

However, the price index for the group of producing and distributing electricity and the group of producing clean water and treating waste water in the reviewed quarter increased 1.94 percent and 0.46 percent, respectively. 

Danang to build new airport terminal

Minister of Transport Dinh La Thang has backed a plan to build a new terminal at Danang International Airport as capacity nears its limit.

If the plan is approved the construction of the new international terminal will start in December or January. 

The new terminal, which will cover 44,000 square metres and cost VND3,200 billion ($152 million), is expected to serve 4 million passengers a year. 

Visitor numbers to Danang have been rising at 14% annually, with arrivals in 2014 reaching 5 million, up 16% compared with 2013, including 900,000 foreign visitors, up 53% against 2013. 

The new terminal could be opened in June 2017.

Surge in loans shifts VN housing stock

Loans in the property sector surged this year, increasing by 70 per cent in comparison with the lowest level in 2012 to touch VND333 trillion (US$14.8 billion).

Statistics from the State Bank of Viet Nam (SBV) showed that in the first eight months of the year, the total loans in the real estate sector rose by 10 per cent from last year.

This is a relatively high growth rate, as the rate was 4.33 per cent during the same period last year.

The central bank's Deputy Governor Nguyen Thi Hong said there was no concern regarding loans in the sector as they accounted for a small portion.

In addition, the loans are invested in apartment buildings for which there is real demand by people for their living requirements. The increasing number of loans in the real estate sector has contributed to reducing inventories in the construction, steel and cement sectors.

However, Hong said the SBV would continue to monitor the increase in loans to ensure safety and effectiveness in credit management.

She said the central bank has promulgated Circular 36/2014/TT-NHNN for the tight supervision of credit to prevent "hot" growth in the real estate market.

Banks said the rising number of loans in the first months of the year was because of the warm property market.

Many home buyers took advantage of falling interest rates to access bank loans to buy apartments.

However, Tran Du Lich, a member of the Monetary and Financial Policies Advisory Council, said bad debts of the real estate sector were still the most difficult for the banking system as the assets did not have high flexibility.

Lich said banks should promote risk management when loans poured into the property sector.

Prime Minister Nguyen Tan Dung has asked banks to closely follow and control their loans to prevent a market "bubble" and unhealthy development. 

Quality not quantity is the real basis for free-trade for VN

Viet Nam must shift its focus from producing large quantities of agricultural goods to producing quality products, experts said at a conference on Thursday in HCM City.

Participants discussed the development of production and consumer markets for Vietnamese agricultural products at the event organised by the HCM City International University and Tuoi Tre (Youth) newspaper.

Viet Nam will find it difficult to benefit from the numerous free trade agreements, and it risks losing out on its own market if it doesn't take steps to improve its agricultural products, said Professor Nguyen Quoc Vong of Australia's Royal Melbourne Institute of Technology.

"Thailand and other countries can defeat Vietnamese products on their home turf, due to their higher quality and more appealing appearance, should the tax barriers be taken down in the future," he said.

Vong noted that global consumer trends were putting more emphasis on high-quality products, safety standards and evidence of origins. The majority of Vietnamese products, however, failed to meet these.

Vietnamese rice, for example, was priced among the lowest in the world, he said. But it was losing out to competitors from Thailand, Cambodia and Myanmar who had stronger branding.

Similar problems could also be found with coffee, cashews, pepper and rubber. Unprocessed and sold in their raw forms, Vietnamese products could only be sold at 65 per cent of the world's average prices.

"This is a huge loss for the country, both in trade value and the wasted opportunities for its scientists and experts to contribute to improving quality of the products," Vong said.

Professor Vo Thi Thanh Loc of Can Tho University, a leading agricultural research institution in the Mekong Delta, said the quest to improve Vietnamese agricultural products needed to begin with Government policies that encouraged Vietnamese businesses to invest in agriculture.

"In order to establish value chains and improve product quality, it is absolutely crucial to attract investment from the business sector," Loc said. "One successful business will positively transform the whole region."

She recommended each locality form a market research task force to look for businesses that specialised in trading the locality's products to set up a supply chain in the region.

Other experts at the conference pointed out numerous shortcomings in the country's agricultural production, such as the lack of advanced production technology. Farmers lost an average of 20 per cent of their crop after harvest because they didn't have the technology to store it properly, according to data from HCM City International University.

In addition, the lack of large, capable corporations distributing agricultural products has kept prices unstable. The consequences were severe for farmers, who were hurt by plunging prices after a good harvest or higher prices after a bad one.

They also urged the Government to implement mechanisms to help businesses connect with farmers and establish a supply chain to bring agricultural products directly to consumers.

EuroCham: Milk prices hard to fall

Many input factors influence prices of powdered milk for children under six years old, making it difficult to make milk cheaper, though prices of some materials are down, according to the European Chamber of Commerce in Vietnam (EuroCham).

The Nutritional Foods Group of EuroCham said in a statement dated September 23 that since April this year, the offered prices of some raw materials including skimmed milk powder and whole milk have slid in some major world markets.

However, the offered prices reflect the prices of raw materials at the date of offer and do not reflect the prices of raw materials used to produce many of the powdered milk products currently available on the market.

The group said a common rule followed by all parties in transaction is that negotiations and contracts for raw materials procurement are concluded far in advance of product entry to the market. This results in a certain delay of 8-10 months in most cases. 

Furthermore, infant formula for toddlers aged up to six months usually consists of 18-20% of skimmed milk and are added with many other nutritional ingredients. As skimmed milk only accounts for less than 20% of all ingredients, the recent 10-20% reduction in the price of skimmed milk could only partially affect products’ unit costs, and could not compensate for the rise of other input costs. 

The group said the Vietnam dong currency has been devalued by around 5.1% following the State Bank of Vietnam’s recent adjustments of the exchange rate between the dong and the U.S. dollar and the dong-dollar trading band. Wages and electricity tariffs have edged up this year as well.

The Ministry of Transport’s strictly controls on truckloads have caused transportation costs to surge.

The price caps, effective since June 1 last year, have led prices of powdered milk for children under six years old to fall by 0.1% to 34%.

As for the newly launched products, companies have had to send explanations to authorities to ensure that maximum prices and price listings are compliant with regulations.

Therefore, prices of powdered milk for children under six cannot be lowered in the current circumstances.

Earlier this month, the Ministry of Finance said prices of powdered milk products for children below six years old cannot be cut as expected by consumers because there was no good reason for that. The ministry pointed out the devaluation of the dong, wage rises and other factors like those provided by the Nutritional Foods Group of EuroCham.

Dairy members of the group include Abbott, Danone, Fonterra, Nestlé, FrieslandCampina and Mead Johnson.

VietinBank ranks first in financial strength rating

The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) has recently been ranked first among nine other rated Vietnamese banks in terms of financial strength by Credit ratings agency Moody’s.

It was followed by VIB, BIDV, Sacombank, Techcombank, ACB, MB, VPBank and SHB.

Vietinbank was also listed among those with a ‘positive’ outlook by Moody’s. Together with BIDV and VIB, Vietinbank was also given a B1 rating in local currency deposit and B2 grade in foreign currency deposit.

Currently, the bank has the largest registered capital among domestic banks in Vietnam.

Previously, Vietinbank was listed among the world’s largest public companies in 2015 (Global 2000) by the US magazine Forbes.

It was ranked 1,902th with assets worth US$30.91 billion and an estimated market value of US$3 billion as of May this year.

Vietnam’s export revenues grow 9.6% in nine months

Vietnam’s total export revenues reached nearly US$120.7 billion in the first nine months of 2015, up 9.6% year on year, with the September figure estimated at US$14.2 billion, down 1.9% against the previous month, according to the Ministry of Planning and Investment. 

The FDI sector exported US$82.2 billion worth of commodities (excluding crude oil) in the January-September period, up 21.1% against 2014, accounting for 68.1% of the total revenues. Export value, including crude oil, sat at around US$85.2 billion, up 15.8%.

Phones and phone parts recorded the largest revenues of US$23.2 billion (up 34% over the same period of 2014), followed by garments at US$17.1 billion (up 10.6%); computers and electronic parts at US$11.4 billion (up 52%); leather and footwear at US$8.8 billion (up 18.4%); and wood and wood products at US$4.9 billion (up 9.1%).

The US remained Vietnam’s biggest importer, posting a nine-month increase of 19.6% in revenues and a 20.6% proportion of the country’s total export revenues. The EU followed with a 12.4% growth and an 18.9% share of the total revenues, while China came third with 12.5% and 10.4% respectively.

Vietnam’s import revenues in nine months were estimated at US$124.6 billion, up 15.9% against 2014, resulting in a trade deficit of about US$3.9 billion.

The country mainly imported petrol and oil (7.1 million tonnes, up 7.5%); iron and steel (115 million tonnes, up 41.5%); fertilizers (3.2 million tonnes, up 8.4%); machinery (US$20.9 million, up 30%); and computers and parts (US$17.3 billion, up 31%); with the Asian region accounting for the largest share, 80.2% of Vietnam’s total import revenues.

VN business climate slow improving

Improvements in the business environment of Viet Nam remained below expectations although the Resolution 19/NQ-CP has been in implementation for six months, a conference heard yesterday.

The conference also suggested comprehensive efforts to be made from central to local levels to create breakthroughs.

Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), said that the promulgation of the resolution in March created opportunities for Viet Nam to improve the business environment and enhance national competitiveness in line with international criteria for the first time.

However, the results after six months of implementation were disappointing from the perspective of the business community, which might erode their confidence in the government, Cung said, adding that the lack of abidance of ministries and government's agencies was among the causes.

As of Wednesday, the Ministry of Planning and Investment received reports of only four ministries and organisations together with three provinces and cities about the implementation of the resolution although reports were required to be submitted quarterly.

Findings of the three-month survey by the CIEM revealed that feelings of businesses about improvements of the business environment were not as good as expected. The CIEM said surveyed businesses highly appreciated the government's efforts in administrative reform in tax filings and payment and customs procedures. However, businesses felt that tax filing time was cut just by 110 hours or 20 per cent while the Ministry of Finance reported that the tax filing time was cut from 537 hours in 2014 to currently 117 hours, and even beyond the resolution's target of 171 hours.

The difference was attributed to inconsistent policies, the CIEM said.

In response, a representative from the General Department of Taxation said that the finance ministry's calculations were based on criteria of the World Bank with constancy from experts. The CIEM also pointed out existing problems in tax refunds, dissolving procedures, companies' failures in keeping updated with policy changes and slow technology renovations.

In addition, specialised examinations for customs clearance were costly and inefficient, according to the CIEM, citing that businesses did not see many improvements in reform of specialised examinations in term of time, procedures and cost.

Cung said that the co-ordination among ministries and Government organisations remained weak, reflecting the slow reforms in sectors which required joint efforts.

State budget revenue down in September

Total revenue to the State Budget in the first half of September was estimated at VND19.73 trillion ($877.2 million), or around 91 per cent of the figure recorded in the first half of September 2014, for a fall of $80.03 million. The information was contained in a report on production, business, services, and investment in September prepared by the Ministry of Planning and Investment (MPI).

The MPI report also noted the reasons behind the fall: tumbling crude oil prices and lower export and import activities.

Accumulated revenues year-to-date by September 15 reached VND640.42 trillion ($28.47 billion), equivalent to 70.3 per cent of the annual plan. Domestic revenue was VND474.62 trillion ($21.19 billion), 74.3 per cent of the annual plan, while revenue from crude oil stood at VND49.58 trillion ($2.20 billion), or 53.3 per cent of the target for the year. Revenue from import and export activities was VND112.84 trillion ($5.02 billion), or 64.5 per cent.

Many domestic revenues were higher than the averate rate against the annual target of 70.3 per cent, such as environmental protection taxes (117 per cent), revenue from land use (101 per cent), registration fees (99 per cent), personal income tax (79.3 per cent), and revenue from the non-state industrial and commercial sector (74 per cent).

As for expenditure, loan repayments totaled VND110.4 trillion ($4.91 billion), 73.6 per cent of the annual plan, and expenditure on socioeconomic development, national security and defense, and public administration stood at VND542.76 trillion ($24.13 billion), 70.8 per cent of the yearly target.

FDI rising considerably

As at September 20 Vietnam had 1,432 newly-licensed foreign direct investment (FDI) projects this year with registered capital of $11.03 billion, a 44.5 per cent increase in capital year-on-year.

There were also 461 projects that increased their investment, adding $6.11 billion to the total; 72.6 per cent higher than in the same period last year.

New project capital and additional capital therefore totaled $17.15 billion, a 72.6 per cent increase against the same period of 2014.

The Ministry of Planning and Investment said that the significant increase in FDI in the first nine months was due to major projects being licensed in August and September. For example, the Coastal 2 Thermal Power Plant in the Mekong Delta’s Tra Vinh province, invested by Janakuasa from Malaysia, has capital of $2.4 billion, while Samsung Display added $3 billion to its investment in northern Bac Ninh province.

It was also estimated that FDI projects disbursed $9.65 billion in the first nine months, an 8.4 per cent increase compared to the same period last year. Disbursement in September stood at $550 million.

Minister of Planning and Investment Bui Quang Vinh said previously that the goal for 2015 is to attract FDI of $23 billion with disbursement of $12.5 billion. This means that, after nine months, new and additional FDI was equal to 74.5 per cent the plan.

Opening offer at Vinpearl Ha Long Bay Resort

Vinpearl Ha Long Bay Resort is offering a special package of “Stay 2 Nights, Pay 1” from October 31 to January 31, 2016 to market its grand opening.

The package costs VND3.5 million ($155) net per room, including daily buffet breakfast for two, a welcome drink and fruit basket upon arrival, and free return transfers from the mainland to the resort. The surcharge on Saturday is $40 per night.

With spectacular views of the limestone karsts of Ha Long Bay, the resort offers a selection of 384 guest rooms and suites with the highest international standards of comfort and the latest modern facilities. All rooms have private balconies with views of the bay and ocean or of the lush tropical gardens and surrounding pools.

Other services and facilities include a 1,025 sq m outdoor swimming pool, an indoor four-seasons swimming pool, six restaurants and bars, the Vinpearl Convention Hall with six modern meeting venues supported by the latest technology and a dedicated service team, Vinpearl Wedding Palace, the luxury Vincharm Spa, water sports and activities poolside and on the beach, three natural beaches, and two tennis courts.

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