Japan’s Furukawa Battery Company, which has specialized in battery manufacturing for 100 years, is reported to have acquired a 10.54 per cent stake in the Dry Cell and Storage Battery Company (PAC).

The stake represents 4.9 million shares and were purchased on September 28. At a price of VND40,000 ($1.79) per share, the Japanese company outlaid VND196 billion ($8.78 million) for the acquisition.

On September 28, PAC’s shares were trading at around VND38,000 ($1.70) to VND39,600 ($1.78), or less than the negotiated sale price. It remains unknown who sold the PAC stakes to Furukawa Battery.

This is not the first time the two companies have worked together. In 2010 the Japanese company provided technical support to PAC in producing PRLA batteries for motorbikes.

On September 5 another foreign company, the Sarus Indochina Select Company, purchased 2,334,238 PAC, or 5.02 per cent. On September 21 Sarus acquired a further 460,729 shares, bringing its ownership to 6.01 per cent.

Furukawa was founded in 1914 and is one of the largest battery companies in Japan. In the first half of this year it reported revenue of $111.06 million, down 4.9 per cent year-on-year, with after-tax profit of $109.13 million, down 72.3 per cent year-on-year. Its charter capital currently stands at $15.45 million.

It manufactures lead-acid batteries for motor vehicles, motorcycles, trams, trains, and aircraft, and batteries for mobile phones and solar panels. It also produces power supply systems for communications, emergency lighting, and disaster prevention instruments, etc.
The company has been listed on the Tokyo Stock Exchange since 1961. 

In 2003 it successfully developed the first batteries for space applications in the world. In 2008 it began producing wind-integrated battery systems that allow an electric vehicle using an Ultra Battery to run for 100,000 miles.

PAC was established in April 1976 with charter capital of nearly VND310 billion ($13.9 million). Its biggest shareholder is the Vietnam Chemical Group, with 51.4 per cent.
PAC’s shares reached a peak of VND49,600 ($2.22) on July 8 but have fallen since and were trading at VND38,000 ($1.78) on October 6.

Work starts on US$52.8 million plant oil extraction factory in Bac Ninh province

The Dabaco Vietnam Corporation (DABACO) commenced construction of a plant oil extraction factory capable of handling 1,000 tonnes of soybean per day, at the Tan Chi Industrial Cluster in northern Bac Ninh province’s Tien Du district on January 9.

The factory will be built on an area of six hectares with a total investment of VND1.2 trillion (US$52.8 million), including VND850 billion (US$34.7 million) in fixed assets.

Scheduled to be completed after 14 months of construction, the factory is expected to manufacture and refine over 80 million litres of cooking oil and 270,000 tonnes of soybean residue as ingredients for livestock feed each year.

According to Chairman of the Board of Directors of DABACO Nguyen Nhu So, the building of the oil extraction factory aims to realise the corporation’s strategy of strongly developing the field of high-tech food and agriculture, towards controlling the entire value chain according to the model of 3F: Farm (plant seeds, farm) - Feed (livestock feed) - Food (food processing).

The factory will be located next to the Tan Chi Dabaco Port with an unloading capacity of 2.4 million tonnes of cargo annually, which will make it convenient for the transportation of materials from producing areas to the factory.

Once put into operation, the factory will not only add value to farming products but also create stable jobs and incomes for about 400 direct labourers.

Conference reviews tourism cooperation in north-western provinces

A conference, reviewing the tourism development cooperation programme in 2016 by eight north-western provinces, was held in Phu Tho province, on January 9.

At the conference, participants noted that the affiliation showed good results in terms of policies, the expansion of products, and the promotion and development of human resources for the tourism sector.

However, they held that over the coming time, the localities should organise more regular exchanges to boost tourism towards utilising their similarities and promote each locality’s unique.

They sought measures to further diversify tourism products and develop products of strength for each locality, while stressing the need for higher quality human resources for the sector as more than 60 employees in the regional tourism are untrained.

Over the last year, eight north-western provinces enjoyed a year-on-year increase of 11.8 percent in the number of visitors thanks to their close cooperation in tourism promotion.

The localities, comprising Phu Tho, Lao Cai, Lai Chau, Dien Bien, Son La, Yen Bai, Ha Giang and Hoa Binh, welcomed nearly 18 million visitors, including 1.2 million foreigners.

In 2017, the eight localities will work closely to implement the National Tourism Year Tay Bac-Lao Cai 2017, while holding a Tay Bac (north-western) tourism fair and join international events. They will also focus on building a waterway tour on the Da River.

On the occasion, the culture departments, tourism promotion centres and travel associations of the eight localities signed a cooperation programme for 2017.

Vietnamese apparel firms receive full orders until March

Garment and textile enterprises have received enough orders to keep them busy through the first quarter of this year, said Le Tien Truong, General Director of the Vietnam National Textile and Garment Group (VINATEX).

At a press conference on January 9, Truong said that in 2017, the group targets a rise of 11 percent in export turnover, 14 percent in production value, and 12 percent in revenue.

He predicted that this year, Vietnam’s garment and textile sector will face numerous challenges, including a lack of support in taxation policies as several important trade deals such as the EU-Vietnam free trade agreement and the Trans-Pacific Partnership, will not become effective in 2017.

Competition will become fiercer as other countries will continue attracting orders thanks to their advantages in tax and exchange rate, he said, adding that the instability in the EU economy will also affect the industry.

Last year was gloomy for the world apparel sector. Major importers, including the US, the EU and Japan experienced low or decreased demand for garment and textile products, he noted.

Vietnam’s apparel also saw under-expectation result with 28.3 billion USD in export, up 5.7 percent year on year. VINATEX earned over 2.5 billion USD, a rise of 5 percent over 2015, with a pre-tax profit of over 41 trillion VND on a 5 percent year on year increase. Its employees’ average income rose 8 percent over the previous year to reach 6.7 million VND per month.

Truong also said that the results showed the great efforts of the sector, as Vietnam recorded higher growth than major competitors such as China, India, Bangladesh and Indonesia.

Thua Thien-Hue grants licence to Spanish-funded tourism service project

The central province of Thua Thien-Hue on January 9 granted an investment licence to Spain’s PSH Group to construct the Hue Amusement & Beach Park project in Phu Vang district.

Covering 49.5 hectares in Vinh Thanh and Vinh An commune, the project aims to build a tourism service complex comprising 1,000 four and five-star hotel rooms, 93 resort villas and an amusement area with water park, bird park, trade centre, and a handicraft production and display zone.

With total investment of 1.06 trillion VND (47 million USD), the project is scheduled to start in the second quarter this year and become operational in two years.

At a meeting with local officials, President of PSH Group Gregorio Perez said he hopes to receive support from the local government during the project implementation contributing to diversifying tourism in the province and attracting more tourists.

In 2016, the central province welcomed 3.25 million tourists, including over 1 million foreigners, up 4 percent against the previous year.

New shopping model for Saigon Co.op

Saigon Co.op and Saigon Co.op Investment-Development Company has launched Sense Market, a new shopping model that combines food market and modern shopping places at the September 23 Park’s Zone B in HCM City’s District 1.

Opening from 8:30am to 10:00 pm daily, the Sense Market covers more than 5,000sq.m of the park’s underground and consists of the 1,500sq.m Asiana Food Town featuring nearly 100 street food booths selling foods of different countries, such as Vietnamese, Japanese, Thai, Lao, Cambodian, Indian and others, and Taka Plaza with 400 booths selling different kinds of products at reasonable prices.

Sense Market is also home to Co.op Food, a post-office service counter and foreign exchange counter.

To mark the opening, many promotions are available at many booths there.

Bonds yield funds, Government slow to use them

By December 7, the treasury had raised more than 280 trillion VND by auctioning Government bonds, achieving the target for the year.

But the money raised has been used at a slow pace.

According to a recent announcement by the Vietnam State Treasury, by November only 659.39 billion VND (29.6 million USD) had been used, without including debt repayment, provision of aid, additional expenditure and risk provision. The amount accounted for only 78.8 percent of the year’s spending estimate.

Of the figure, capital expenditure was 217.51 billion VND, making up only 64.3 percent, much lower than in the same period the previous year.

The Ministry of Transport is one of the ministries that did not use even half the amount allocated for 2016.

In fact, it was allocated 25 trillion VND raised from Government bond issuances, but has to date spent only 40 percent of it.  

This is diametrically opposite to the situation that existed until a few years ago when ministries would clamour for more funds, which would often not be forthcoming.

Most sectors had great demand for funds to carry out their projects.

A treasury official said the agency was always ready to provide money for projects that merited then. Why then was the disbursement too slow last year?

Many analysts this on the slow progress of public investment plans due to tortuous investment and construction procedures.

There are overlapping, inconsistent, incompatible and even contradictory regulations in documents guiding implementation of the Investment Law and in investment decrees.

Another reason is that the Law on Public Investment took effect only in 2016, meaning many ministries and agencies were struggling to fully understand its sub-laws.

Faced with the situation, the Government issued Decree No 60/NQ-CP on major tasks and solutions to accelerate implementation of and release of funds for public projects.

It requires all ministries and local authorities to review and perfect legal frameworks so that they dovetail with the country’s laws and quickly remove all hindrances to speed up disbursement of funds for public projects to ensure they proceed on schedule.

The treasury for its part has promised to release capital for qualified projects within four days.

Ca Mau restructures key economic sectors

In 2017, the southernmost province of Ca Mau will continue to accelerate economic restructuring, with a focus on the key sectors of agriculture, industry and services.

Gross regional domestic product (GRDP) is expected to hit 37.84 trillion VND (1.66 billion USD), up seven percent.

Other targets include total social investment reaching 12 trillion VND (582 million USD); exports 1.1 billion USD; fishery output, 530,000 tonnes; and food production, 580,000 tonnes.

In order to realise the targets, the province aims to take comprehensive measures to promote the economic restructuring, focusing on quality, efficiency and competitiveness.

Agricultural restructuring will enhance added value and sustainable development in tandem with building new-style rural areas, focus on measures against climate change, and develop complete chains for key products, like shrimp, rice, and forestry products.

New style cooperative models will be encouraged with the use of technology in breeding and production while connecting agricultural production and consumption.

The fishery sector will also be restructured to improve its efficiency, increasing income for local fishermen. Supervision will be strengthened in production to ensure aquatic product quality.

Ca Mau will also accelerate the new style rural area building programme, focusing on sustainable production, improved efficiency and incomes for rural residents while addressing environmental pollution.

The province will zone off areas for agro-forestry-fishery product processing with the application of technology to diversify products. Infrastructure facilities will be developed for the Nam Can economic zone and other industrial parks to draw investment. The Ca Mau Gas-Power-Fertilizer Factory will be put into operation while accelerating local power projects, including the Khai Long wind power plant and the power supply project for rural areas from 2015- 2020.

Efforts will be made to improve the quality of services in trading, tourism, banking, insurance, education and health care.

Transport services and sea-based tourism will be promoted. Hon Khoai sea port will be built to service marine transport.

Hanoi takes actions to keep sustainable growth

Hanoi is making moves to fuel development since it assesses local GDP growth, which hit 8.2 percent in 2016 – a six-year high, as unsustainable.

The municipal People’s Committee is reforming its operations by aligning work regulations with laws, increasing administrative discipline, and enhancing public employees’ sense of responsibility.

The capital is stepping up IT application to build an e-administration and promote administrative reforms, enhancing the administration’s contact with local people and firms. This is hoped to improve the business climate to facilitate start-ups and attract investment.

A number of new policies and mechanisms have been carried out to solve social issues and tackle business obstacles. They focus on site clearance, building resettlement houses with private funding, renovating old condominiums, social housing, calling for private investment in rural water supply and burying overhead cables, and treating water pollution.

Hanoi has been urging agencies and localities to apply IT to facilitate tax payments. As a result, nearly 174 trillion VND (7.7 billion USD) was collected for the State budget in 2016, rising by 16.2 percent from the previous year. A price stabilising programme was also implemented, helping to control inflation, stabilising the economy and boosting growth.

Improvements have been made in the local investment and business environment, thanks to mechanisms and policies dealing with site clearance problems and accelerating domestic and foreign invested projects. 

Hanoi has had many business climate-related criteria higher than the targets set by the State such as online business registration and e-tax payment.  It ranked 24th of the 63 provinces and cities in terms of the Provincial Competitiveness Index last year, climbing two places from 2015, the highest position it has ever been ranked.

The city has used synchronous solutions in investment attraction, luring 163 domestic projects and 445 foreign ones. New enterprises set up in 2016 had charter capital of over 203 trillion VND (nearly 9 million USD), up 42 percent year on year.

The industry-construction sector enjoyed a growth rate of 8.8 percent. While investment in local industrial parks increased by 4.6 times from 2015, construction activities had an added value jump of 13 percent thanks to recovery in the property market and support policies on social housing.

Authorities in Hanoi will pay attention to tourism, which the city considers a key industry. The city recorded a 8.1-percent rise in tourist arrivals in 2016.

Gov’t demands 2% workforce reduction

The PM has issued Directive No.02/CT-TTg which requires each ministry, agency and locality to reduce the number of civil servants by 1.5-2% annually from now to 2021.

Ministries, agencies and localities that did not streamline workforce in 2016 are tasked to reduce civil servants by at least 3% in 2017.

The Directive also tasks ministries, agencies and localities to accelerate the implementation of autonomy mechanism of public non-business units.

Heads of ministries, agencies and localities are responsible for fulfilling workforce reduction plans approved by competent authorities.

VRG to open domestic rubber trading floor

Deputy Prime Minister Truong Hoa Binh ordered the Vietnam Rubber Group (VRG) to coordinate with other relevant agencies to establish rubber trading floor in the country.

Speaking at a meeting to implement the VRG’s plan for 2017 on January 10, Deputy PM urged the Group to promote equitization, management and effective use of land as well as reduce price to enhance competitiveness and grow other trees with rubber tree and run hi-tech agriculture not to waste the land.

Deputy PM added that the VRG should reduce production of raw rubber and increase rubber industrial products in order to gain more profit as well as open domestic rubber trading floor. 

The VRG said the group has 20 member companies and four administrative companies which are running equitization as its roadmap. In 2016, Ba Ria and Tan Bien Rubber Companies were equitized. Rubber is one of Vietnam’s ten major agricultural products with export turnover of over US$1 billion. 

HCM City party chief urges agencies' connectivity to develop tourism

HCMC has had enough solutions and policies to develop the city's tourism industry but it is short of determination, enthusiasm and connectivity from agencies citywide, said HCMC Party Chief Dinh La Thang on January 10.

At a meeting with HCMC Department of Tourism, Mr.Thang affirmed that tourism is a key economic sector with revenues accounting for 10 percent of HCMC Gross Regional Domestic Product (GRDP).

Tourist development requires multi field connectivity including infrastructure, public order, health and culture and a 'commander' to gather agencies’ attendance. First is to determine the position of city tourism sector in the world and neighboring nations, he added.

Director of the Department of Tourism Bui Ta Hoang Vu reported that HCMC now has 1,150 travel companies including 150 international firms. Last year, the city received 5.19 million international visitors, up 13 percent over 2015, and 21 million domestic visitors out of the total number of 60 million.

Many new tourist services have been opened such as waterway travel to Can Gio district and eco tourist tours in new rural areas. The industry strives to obtain 5.8 million international visitors this year.

On the other hand, the director admitted a weakness of having no plan for the tourism industry. Despite being the center of the southern region, HCMC has yet to connect with provinces and other cities in tourism.

City coordination with central agencies has been complicated causing feeble administrative reform in the tourism industry. For instance, it takes several months to assess hotel rating now. Other limitations include short and weak human resource and asynchronous infrastructures including traffic and IT.

City party secretary Dinh La Thang said that if priority level for the tourism industry was not high, it would be impossible to demand quick development. So he asked the tourism agency to put forward which priorities for the field to move up in 2017.

In response, Mr. Vu said thing which could be done now was waterway travel. However it had faced difficulties in water quality with some canals being smelly during low tide. The city had been unable to apply sanctions on some citizens for fishing in cleaned up canals, the throw of fishing lines might affect the safety of tourists.

Moreover the city has no quay plan so it has been difficult for the city to attract investors to waterway tourism, he added.

Being questioned about the quay planning, leader of the Department of Transport said that the agency was getting opinions from relevant agencies.

Whenever being asked, the Transport Department has answered that it is working to develop infrastructures but why the agency has worked too slowly. With that way of doing, how the city could have infrastructure to develop tourism, Mr. Thang queried.

Secretary Dinh La Thang stated that companies have provided their own tourist products without collaboration so they have yet to create strength.

He required agencies to analyze and estimate strengths and weakness of the city’s tourism industry compared to the world and Asian nations. They should change their thought and awareness of tourism development, mobilize the entire society and all agencies to join hands.

Tourism is a ‘no fume’ industry contributing largely to the city’s economic growth. So its development is the affair of not only the tourism industry but also all agencies and the entire society via regional connectivity, he says.

The city’s tourism does need a real ‘bandmaster’ or ‘commander’ because the field is economic-service synthetics needing regional and inter agency links, he stated.
 
Mr. Thang proposed deputy chairman of the city People’s Committee Tran Vinh Tuyen to keep the role of ‘commander-in-chief’ to link up and speed up agencies to develop tourism.

According to Mr. Tuyen,  next year HCMC will promote new original tourist products such as enjoying fresh and clean fish in Can Gio district, eco waterway travel and possible free buses for visitors.

Besides, the city will organize international marathons, street art festivals, weekend lion dances, light and firework art festivals. Furthermore, it will boost tourism in new rural areas to provide more jobs for locals and supply visitors with cuisine and cultural products.

Director of the Department of Industry and Trade Pham Thanh Kien said that toilet building for tourists has been a long urgent need. Many solutions have been anticipated such as mobilizing hotels to let tourists use their restrooms and building more public toilets. However they all have proved infeasible.

Deputy permanent secretary of the city Party Committee Tat Thanh Cang expressed an initiative that administrative organs will provide a certain area in the premises of their headquarters for building restrooms. Another measure is to ask banks to build toilets while installing ATM posts.

Tourist prices in Thailand have been low because there is synchronous coordination among restaurants, hotels, airlines and tourist destinations. Meanwhile Vietnamese travel firms have yet to work together, he commented.

He suggested broadening new tourist types covering health check and treatment, shopping and study; and connecting the tourist agency with the system of hotels, buses, airlines and tourist destinations to provide visitors all services they need at the same place.

Mr. Cang prompted relevant sides build Safari park in Cu Chi and facilities at Ben Duoc tunnels such as accommodations for visitors, open routes to Monkey Island in Can Gio district in combination with visiting Sac forest.

The city People’s Committee should send to the Standing Party Committee reports in writing on the progress of tourist development works quarterly and monthly, he suggested.

VinaCapital raises holding in leading soy milk producer

Funds under VinaCapital Corporate Finance Vietnam Ltd. have raised their combined holding in Quang Ngai Sugar Joint Stock Company (UPCoM: QNS) from 4.97 to 5.13 per cent, turning VinaCapital into a major shareholders of the company.

According to information publised by QNS, on December 27, Foremost Worldwide Limited bought an additional 224,900 shares, raising its holding from 4.86 to 4.98 per cent, while VOF Investment Limited bought another 69,000 shares, raising its holding from 0.11 to 0.15 per cent.

QNS’s products include soymilk (Vinasoy and Fami brands), Biscafun confectionery, and Thach Bich bottled water.

As of the end of December 2015, Vinasoy and Fami together held about 84 per cent of the Vietnamese branded soymilk market, according to market research firm Nielsen. QNS’ soymilk factories currently have a combined annual capacity of over 300 million litres.

In the first nine months of this year, QNS earned a total VND5.3 trillion ($237.67 million) in revenue and VND807 billion ($36.2 million) in net profit, a year-on-year decrease of 12 and 19 per cent, respectively. The soymilk operations contributed over half of the revenue and profit.

However, according to an analysis by Ho Chi Minh City Securities Corporation, in the period between 2011 and 2015, the company enjoyed an average growth rate of 18.3 per cent in revenue and 20.8 per cent in net profit.

QNS started trading 187 million shares on UPCoM on December 20 at the initial price of VND80,000 ($3.6) a share. On January 10, 2017 the stock closed at VND107,500 ($4.8) apiece.

Transport sector urged to speed up restructuring

The Ministry of Transport needs to focus on its restructuring, adjusting planning schemes and strategies with detailed implementation roadmaps and ensuring traffic safety in 2017.

Deputy Prime Minister Trịnh Đình Dũng made the suggestion at a conference hosted by the ministry in Hà Nội on Tuesday to review the implementation of tasks in 2016 and deploy missions in 2017.

Dũng said the ministry must accelerate the building of the North-South expressway project to submit to the National Assembly for consideration at its session in May.

The ministry also needs to speed up the mapping out of an investment plan for Long Thành international airport and a pre-feasibility study for the express railway project to submit to the NA in 2018, along with mobilising resources to build seaports, upgrade waterway infrastructure and build railways linking to industrial parks in order to reduce road and air overloading.

The Deputy PM highlighted the sector’s achievements in administrative reform, investment allocation, transport development and traffic safety.

The ministry worked with other relevant ministries and sectors to accelerate its infrastructure projects, including those using the build-operate-transfer (BOT) form.

The sector restructuring was speeded up, with the focus on public investment, enterprises and transport. It saw a surge in transport production, exceeding 1.27 billion tonnes of cargo and 3.62 billion passengers, up 10.6 percent and 9.6 percent from 2015, respectively; exceeding its yearly target by 7-8 percent.

By the end of December, VNĐ3.68 trillion (US$2.8 billion) was disbursed, or 82.6 percent of its target. The figure is expected to exceed VNĐ69 trillion by the end of January 2017, making up of 90.4 per cent.

At the conference, Minister of Transport Trương Quang Nghĩa requested all units to embark on their tasks right from the beginning of 2017, with focus placed on strengthening their roles in State management, completing legal frameworks in combination with the inspection work to ensure effective implementation of the working agendas of the government and the ministry.

In 2017, the management of projects will be strengthened to ensure their schedules and efficiency of investment capital, Nghia said, adding that more efforts are needed to speed up the disbursement of the remained investment for key projects.    

The ministry needs to prioritise urgent and regional connectivity projects while completing the pre-feasibility study on the north-south express railway to submit to the NA for approval, Nghĩa added.

According to the ministry’s report, in 2017, the sector aims at a year-on-year growth of 8-9 per cent in cargo and passenger transport, and over 10 per cent in the railway sector. An estimated VNĐ51.61 trillion is expected to be disbursed during the year. 

Mekong Capital invests in F88
     
The Mekong Enterprise Fund III Ltd (MEF III), managed by private equity firm Mekong Capital, on Tuesday inked an investment deal with the Ha Noi-based pawn shop chain F88.

This is the third investment from the US$112.5 million fund since its launch in May 2015.

The value of the deal has not been disclosed, but it is believed to be an eight-digit number, according to a source familiar with the deal.

MEF III, which focuses on investments in Vietnamese consumer-driven businesses such as retail, restaurants, consumer products and consumer services, targets investments ranging from $6-15 million each.

F88, founded in 2013, pioneered the commercialisation of pawn services in Viet Nam. It currently operates 15 shops in Ha Noi and the surrounding provinces and targets expanding its business network to 70 shops by the end of this year.

With strong investment in technology and a management system, the firm is committed to bringing fast, reliable and professional financial solutions to consumers, from which it can change social perceptions of the traditional pawn market.

F88 currently provides loans on diverse assets such as cars, motorcycles, mobile phones, laptops and jewellery.

“We are very proud and excited that F88 is the third investment we’ve announced for the Mekong Enterprise Fund III,” said Chris Freund, partner of Mekong Capital.

“F88’s competitive edge lies in its entrepreneurial co-founders, professional management team, IT infrastructure and strong corporate governance. We believe that with Mekong Capital’s well-proven approach towards adding value and our extensive network of international experts and resources, F88 will continue to improve its operations and successfully execute an ambitious nationwide expansion plan,” Freund said.

Admitting that F88 shares many similar business traits with mobile phone store chain The Gioi Di Dong (Mobile World), one of the fund’s most successful investments, such as starting out in a fledging and fragmented market, being the only business chain in the country and opting for transparency in management, Freund believes F88 has the opportunity to succeed.

Phung Anh Tuan, chairman and general director of F88, said the firm had differentiated itself from banks and financial institutions by targeting individual customers who are in urgent need of money with a small loan amount of under VND10 million ($443).

With investment from Mekong Capital, F88 aims to expand the store chain to 300 shops by 2020 and hopes to go public in the next five years, Tuan said. 

Ha Noi remains positive development on property market in Q4
     
The Ha Noi real estate market saw strong development in the condominium, villa and townhouse segments in the fourth quarter of 2016 and experts predict further growth this year.

Nguyen Hoai An, manager of professional services at CBRE Viet Nam Co, said at the company’s press conference yesterday that 9,128 units were avilable for sale in 34 projects across the city last year.

The fourth quarter peaked both in terms of launched units and launched projects, she said. The western sections of the city accounted for 37 per cent of new launches, more than the 20 per cent of 2015.

In terms of price segments, 56 per cent of units were mid-range, 30 per cent were high end and 11 percent in what is called the affordable segment.

2016 marked the return of the luxury segment, with two projects located near the Westlake area. At the same time, supply in the affordable segment dropped significantly - 71 per cent. However, with big developers starting to eye this segment, that trend is expected to change.

Overall, market sentiment remained positive, An said. In the fourth quarter, a total of more than 6,600 units sold adding up to 21,188 for the year. The mid-end segmentcontinued to perform well with more than 10,100 units sold in last year, accounting for nearly half of total units sold. By location, Hai Ba Trung and Ba Dinh were districts recording to the highest sale rate of new launched projects.

In terms of average asking price, the high-end segment went up 9 per cent and the mid- and affordable-range segments rose 2 and 1 per cent, respectively.

In the secondary market, the average prices dropped slightly by 0.5 per cent. Only the asking prices for affordable apartments rose - 1.9 per cent.

An said the condominium market was expected to remain upbeat this year, supported by sound macroeconomic factors including positive gross domestic product (GDP) growth, a stable exchange rate and high inflow of foreign direct investment (FDI) to Viet Nam, especially to real estate, from South Korea, Japan and Singapore.

The west end of Ha Noi was forecast to continue dominating building start-ups. However, large-scale projects were expected to be scattered in different areas of the city. By segment, big developers may introduce large-scale projects in affordable segment, significantly boosting the shares of this segment in new building start-ups. In terms of pricing, the average primary asking price was forecast to increase 0.5 per cent to 4 per cent in the coming years.

Meanwhile, Savills Viet Nam Co Ltd reported its total stock was approximately 35,000 dwellings, up 12.8 per cent from 2015.

Sales increased 129 per cent q-o-q to 766 units, of which 64 per cent were townhouses. Dominating in sales this quarter were Tu Liem with 24 per cent and Ha Dong with 23 per cent. Villa and townhouse sales exceeded the former record set prior to 2011.

In the first quarter 2017, more than 2,300 dwellings are expected to enter the market, mainly from Vingroup.

Expert Dang Hung Vo said stability in the property market this year would continue in all segments but would focus on the mid-end and affordable segments. Foreign investment would continue to flow to the property market, increasing housing supply. Consumers would benefit from the increase, with reasonable prices, quality and convenient services, he said.

The HCM City Real Estate Association agreed to have stability in selling price and transactions this year. 

Slow rise in consumer lending
     
Consumer lending is seeing only a slow rise ahead of Tet (Lunar New Year), despite commercial banks offering preferential loans to both individuals and enterprises, Dau tu Chung khoan (Securities Investment) newspaper reported.

Vietnam International Commercial Joint Stock Bank (VIB) is offering auto loans to customers at 7.6 per cent per year. The credit limit is up to 80 per cent of the car value and the loan is for a maximum duration of eight years. Early repayment is free of charge from the fourth year of the loan.

Car loans at preferential rates of 7 per cent per year are also applying at HDBank.

Maritime Commercial Joint Stock Bank (MaritimeBank) is also launching loans at 5.99 per cent per annum for customers who need money to shop for Tet, and at zero per cent to customers who take installment loans via credit card.

Military Commercial Joint Stock Bank (MB) is also funding up to 90 per cent of their customers’ capital needs for purposes of production and business.

Similarly, to help small- and medium-sized enterprises (SMEs) during the festive season, Asia Commercial Joint Stock Bank (ACB) has offered loans at an interest rate of 7 per cent per year, with a ceiling limit of VND4 trillion (US$176.21 million).

The ACB also has a promotional lending product at 7.5 per cent per year for business households borrowing capital to supplement capital and expand business premises and for homebuyers.

Though the demand for capital is rising sharply ahead of Tet, industry insiders said supply and demand are unlikely to match.

General director of a bank, who did not wish to be identified, said that though this was a good time to develop outstanding loans, it would not be that easy as customers are expecting interest rates to drop further, an expectation that cannot be satisfied because the banks’ cost of mobilising capital tends to rise close to Tet. In fact, mobilisation interest rates have again increased at many banks by 0.2 to 0.4 per cent per year, depending on the terms.

Besides, financial expert Huynh Trung Minh said that the US Federal Reserve’s 25-percentage point hike in interest rate (from 0.25-0.5 to 0.5-0.75 per cent per year) has strengthened the US dollar and put pressure on the dollar/dong exchange rate. When exchange rates rise, interest rates in dong go up as a sufficiently attractive interest rate gap is needed to prevent people from switching to depositing in US dollars, Minh said. This partly explains the slow growth in lending, though banks launched promotional products at the end of 2016.

In addition, many customers are hesitant to take preferential consumer loans, home loans or home repair loans because they are worried about high lending rates after the promotional period is over.

Lending interest rates are also forecast to inch up during the early months of 2017 because of increasing input costs.

Banking expert Tran Du Lich said that further reduction of lending rates in 2017 would be tough as inflation has shown signs of rising and there is pressure as another Fed interest rate hike is expected this year. 

SBV demands quarterly reports on SME lending
     
The State Bank of Viet Nam has asked its branches and credit institutions nationwide to report quarterly their lending to small-and medium-sized enterprises (SMEs).

Under Document No 62/NHNN-TD issued last week, the branches and institutions are instructed to report to the central bank their lending to SMEs as well as SMEs’ business performance and supporting policies offered to SMEs in their cities and provinces.

Besides reporting achievements and difficulties in implementing the lending, the branches and institutions must also propose policies to increase lending to SMEs.

According to the central bank, the move was aimed at helping the central bank catch up with the lending situation to SMEs in a timely manner, which is expected to effectively remove difficulties related to lending to firms, assisting them in accessing bank loans for better business and production.

The branches and institutions must also closely work with relevant municipal and provincial agencies to remove hindrances in implementing policies to support SMEs related to the banking industry.

"Special" law to boost bank restructuring
     
The State Bank of Viet Nam (SBV) will co-operate with relevant agencies to map out a "special" law to boost bank restructuring and settle bad debts in 2017, according to SBV Governor Le Minh Hung.

Hung said the new law on supporting banking sector restructuring and resolving bad debts would mention all legal regulations related to the activity. Obstacles in the existing legal regulations would also be addressed under the new law to remove hindrance in resolving bad debts.

With a detailed and adequate legal framework, he expected it would be easier for the banking system to implement restructuring.

“The central bank would report to the National Assembly to convert into law regulations related to the seizure of mortgaged assets to guarantee the rights of the lenders,” Hung said, adding that this is currently the most critical issue while dealing with bad debts.

Besides the recoupment and provision for bad debts, if the regulations were approved by the National Assembly, the settlement of bad debts would be greatly accelerated, he said.

According to experts and credit institutions, non-performing loans (NPLs) with mortgaged assets account for up to 90 per cent of the country’s total NPLs. However, creditors are facing obstacles in settling mortgaged assets due to an incomplete and unsuitable legal framework.

They say efficient collateral settlement requires a legal system, with uniformity, transparency and consistency. It must also be respectful of the legitimate rights of creditors. The law must create a legal framework for the parties involved, especially for the creditors, to be able to enforce their legitimate rights under the agreement.

The institutions said many legal regulations have no detailed instructions on dealing with mortgaged assets. It, therefore, takes a long time to deal with the assets. In addition, they said, the slow judgment process also negatively impacts credit institutions’ business performance and leads to wastage of time and money while recouping toxic debts.

Under the new law, Hung said, the central bank would also suggest adding regulations on stake ownership of credit institutions to tighten banking ownership, thus avoiding the necessity to deal with cross-ownership and manipulation in the banking system. Individual groups, which would like to buy credit institutions’ stake, must prove their legal income sources and cannot allow the use of lending sources in whatever form.

Recently, many violations in the banking industry have stemmed from individual groups that invested in banks just to serve the interests of their own backyard firms.

Information related to bank managers must be published and violation cases would be prohibited from taking part in managing and executing banks permanently, Hung said.

Due to the existing incomplete and unsuitable legal framework, a larger number of bad debts are still stuck at the central bank-run Viet Nam Asset Management Company (VAMC), which is entrusted to buy bad debts from credit institutions.

According to the Government’s financial watchdog National Financial Supervisory Commission, VAMC has, so far, recouped just 15 per cent of the NPLs purchased from credit institutions and still has some VND224 trillion (US$9.86 billion) on standby to be sold. 

Vinatex to invest $240 million to boost production
     
The Viet Nam Textile and Garment Group (Vinatex) will mobilise VND5 trillion (US$242 million) for fibre, textile and garment development to boost this year’s production.

Of the total mobilised capital, Vinatex’s general director Le Tien Truong said, the parent company would finance projects worth around VND2.4 trillion, while the subsidiaries would fund projects for around VND3 trillion.

In 2016, the group invested VND5.5 trillion in 41 projects, including 17 garment projects, nine industrial fibre manufacturing projects, nine textile dyeing projects and six machinery upgradation projects.

According to Truong, Viet Nam’s textile industry exports in 2016 were estimated to touch $28.3 billion, up 5.7 per cent year-on-year, while Vinatex’s exports reached $2.5 billion, up 5 per cent against 2015.

As Vietnamese garment enterprises attempt to penetrate the foreign market, exports to key markets such as the US, EU, Japan and the Republic of Korea are rising, Truong said, adding that in 2017, Vinatex aims 14 per cent growth in industrial production value, an increase of 11 per cent in exports and a rise of 12 per cent in revenue, compared to 2016.

Australia bans green and raw shrimp import from Viet Nam
     
A Vietnam News Agency reporter in Sydney has reported that Australia’s ban on green and raw shrimp from Asian nations, including Viet Nam, took effect on Monday.

The Australian government banned Asian shrimp imports after detecting white spot viruses in shrimp sold at stores and after a white spot outbreak in Queensland.

Starting Monday, shipments to Australia will be destroyed or re-exported. Prawn farmers were also requested to research the viruses as well as any problems in censorship which led to the outbreak.

Earlier, the federal government banned import of raw or green shrimp after the outbreak of white spot disease was detected in five aquaculture sites on Logan River, southeast Queensland, as well as live shrimp in the river. The infected shrimp have been being destroyed, while the Logan River area and the nearby rivers will continue to be closely examined.

Shrimp farm owners suspected viruses entering Australia from imported products from infected areas abroad, however, the cause of the outbreak has not been verified.

Late last week, the Australian government said it was investigating an importer for not following the rules to prevent white spot diseases entering Australia. Four other importers are also under investigation.

A spokesman for the Minister for Agriculture and Water Resources Barnaby Joyce said that the investigation is ongoing and that the temporary ban on imported raw shrimp allows the ministry to reconsider risk management. White spot disease in shrimp is not harmful to human health, but it kills shrimp. It is estimated that the disease could cause a loss of tens of millions of US dollars to shrimp farmers. 

Producers petitions for tax free fertilisers
     
 Fertiliser producers are petitioning the Government and the National Assembly to add a tax exemption for fertiliser products to the Law on Value-added Tax.

Producers argue that imported fertilisers’ minus 5 per cent value added tax automatically puts domestic products at a price disadvantage. This makes competition fierce for Vietnamese producers, causing them to decrease production quantity.

Furthermore, even though fertilisers have been cleared of value-added tax since the beginning of 2015, domestic businesses and farmers have been suffering from losses from the higher input and output prices.

While other countries have put up technical barriers to protect domestic production, the new Law on Value-added Tax encourages imported fertilisers against Vietnamese ones, despite clearing the latter’s taxed value.

As such, producers are urging the Government to change the law and help them improve production.

According to a representative from the Dam Phu My Company, their plant had a production capacity of 800,000 tonnes per annum with 5 per cent value-added tax before 2015, but the imported ingredients--with 10 per cent tax--were abated. Yet, according to the new law, their products will not be subjected to output tax, but their input tax will receive no abatement either, making the company’s production cost go up VND400 billion (US$18.04 million) each year.

The Fertiliser Association of Viet Nam asserted that without an immediate change to the law, many fertiliser producers will be standing on the brink of bankruptcy, and a well-meaning policy will regrettably backfire. 

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