Binh Duong popular with German businesses

German businesses eye Vietnam as an attractive investment destination in Southeast Asia and find Binh Duong province particularly desirable, said Marko Walde, chief representative of the German Industry and Commerce (GIC) in Vietnam.

Walde made the statement on November 6 at a meeting with Tran Thanh Liem, vice chairman of the Binh Duong People’s Committee.

Walde spoke highly of the investment environment and incentive policies of Vietnam and Binh Duong province. He expressed his hope that the provincial leaders will continue to create the most favourable conditions for German businesses to operate effectively in the locality.

At the meeting, Liem talked about the investment policies of the province and praised the German business community for their contributions to the locality, especially singling out Vietnam-Germany University.

So far this year, Binh Duong has attracted US$1,478 billion in foreign direct investment, bringing the total number of foreign invested projects to 2,344 with registered capital of US$20.2 billion.

Binh Duong is one of the four provinces and cities in the country which has attracted cumulatively more than US$20 billion of foreign direct investment.

Liem expressed hope that the German Industry and Commerce in Vietnam will continue to introduce German businesses to Binh Duong in the time ahead.

VASEP proposes 0% import tariff on salmon

The Vietnam Association of Seafood Exporters and Producers (VASEP) has sent a proposal to the Finance Ministry for the adjustment of import tariffs on a number of products following WTO commitments in 2015.

The proposal said tax rate would reduce to 0% for frozen imported salmon in order to diversify the sources of imported fish.

According to VASEP, frozen imported salmon, which is listed among tax preferential items, had been projected to face a tariff rate of 18%.

Frozen imported salmon is mainly used for local consumption and export processing purposes, the Association said.

VASEP also asked the Finance Ministry to impose a zero tariff rate on a number of imported seafood products, such as shrimp, tuna fish and octopus, with a view to help local seafood exporters achieve their set targets following the Prime Minister’s approved strategy.

Danang seeks to attract more FDI sources

The central city of Danang has attracted foreign direct investment (FDI) worth US$153 million so far this year, only 52.7% of last year’s FDI.

During the 10-month period, 24 new projects worth US$124 million were registered, while an additional US$28.8 million was invested in the 14 existing projects.

Chairman of the municipal People’s Committee Van Huu Chien said the local authorities would focus on attracting investments in the fields of service, advanced technologies, the support industries and information technology in the near future.

At the same time, relevant sectors will concentrate on promoting foreign affairs and investment, and implementing preferential policies to support FDI enterprises.

According to Nguyen Van Ly, Vice Chairman of the city’s Association of Small and Medium Sized Enterprises, it is essential to develop policies that prioritise important projects in order to attract investors and generate jobs for local labourers.

In addition, the city will continue to promote itself as a top investment destination on key markets such as Japan, the Republic of Korea, and the US, while completing land planning regulations at industrial parks, and developing and upgrading infrastructure facilities in high-tech zones.

It will also work to accelerate administrative reform, simplify investment procedures and improve professional skills for people working in international business.

At present, as many as 304 projects worth US$3.37 billion from 36 countries and territories are operating in Danang.

Japan runs the most projects in the city - 78 in total worth US$371 million, accounting for 11 percent of the locality’s total FDI.

By the end of September, FDI enterprises had contributed US$70 million to the local budget.

Mekong Delta Economic Cooperation Forum issues Joint Statement

The Steering Committee and Organising Board of the 2014 Mekong Delta Economic Cooperation Forum (MDEC) held a meeting in Soc Trang province on November 7 to review and issue the forum’s joint statement.

Running from November 5-7, the eighth MDEC focussed on restructuring agriculture and modernising rural areas in the delta.

A number of activities were held as part of the forum, such as Ok Om Bok, a moon worshipping ritual performed by the ethnic Khmer; and trade promotion workshops on agriculture and rural areas.

A 600-booth fair showcasing the delta’s key products, such as rice, seafood, and fruit, attracted over 350,000 local residents.

During the meeting, delegates agreed on regional and international cooperation programmes for 2015 and decided not to hold the MDEC next year, which will be eventful enough, since localities need to focus on preparing for the 12 th National Party’s Congress.

The MDEC Steering Committee will instead hold review conferences to improve the organisation of the forum in the following years.

According to the Deputy Head of the Steering Committee for the south-western region Nguyen Phong Quang, the committee will coordinate with ministries, sectors and localities in order to organise the Mekong Delta Green Tourism week in Can Tho city next May.

The Mekong Delta, comprising Ho Chi Minh City and 12 provinces, is the country’s largest rice granary, accounting for 27.2 percent of the country’s agricultural land.

Scenarios for crude oil exports

Economists have slashed the forecast for oil revenues in the period 2014-2015 as global oil prices in recent months have plummeted and may continue to fall in the coming time.

On November 7, the Ministry of Finance and the Ministry of Industry and Trade decided to drastically reduce gasoline prices amid the gloomy context of the world oil prices. The petrol price reduction is good news for consumers but declining global crude oil prices have negatively impacted the nation’s budget revenues.

On the sidelines of the ongoing eighth National Assembly (NA) session, Minister of Industry and Trade Vu Huy Hoang told a VOV reporter that the sharp fall in global crude oil prices would affect Vietnam, which is a crude oil exporter.

"Crude oil prices have dropped steadily even to a low record in recent years. Recently, the shrinking world oil prices have forced the price of petroleum products down. In return, it is conducive to Vietnam that imports up to 70% of petroleum products for domestic consumption. However, falling oil prices (from US$100/ barrel in 2013 to only between US$75-76 currently) have put crude oil exports at a disadvantage as a result of declining revenues from crude oil exports. It is difficult to export crude oil at high prices and import petroleum products at low prices.” Hoang said.

Regarding current oil production costs in Vietnam, Minister Hoang said the nation gain low profits if crude oil is exported at just US$76/ barrel.

 “Vietnam needs to increase crude oil reserves in a bid to face a continued further drop in gasoline prices in the time ahead , ensure energy security and cope with disadvantages in domestic oil exploration and production.” the Minister noted.

To deal with falling oil prices, according to Minister Hoang, it is imperative to intensify market research and forecast to adjust exploitation plans in line with the actual needs.

Economic experts have predicted that a continued fall in oil prices in the next three months would greatly affect budget revenues, requiring adjustments in reducing revenue targets for 2014-2015. However, Minister Hoang said the adjustments have not yet been scrutinized while the NA is considering the approval of resolutions on socio-economic development and State budget performance for 2015.

According to an analysis by the Minister, the current global oil market is becoming unpredictable and complex in the wake of political unrest between oil exploiting and importing nations and territorial disputes. All these factors are related to fluctuations in oil prices.

 How current political conflicts between countries in different regions would be, cannot be predicted, resulting in inaccurate forecasts of trends in the global oil exploitation and consumption.

 “What we can do now is to further step up communications, grasp the situation and paint some scenarios to cope with negative events to ensure the most effective oil exploitation. This is a question raised to the Vietnam National Oil and Gas Group (PetroVietnam) and relevant ministries including the Ministry of Industry and Trade.” Hoang stressed.

The scenarios put forth by the Ministry of Industry and Trade include: Oil prices could continue to fall as currently; oil prices could surge gradually and then likely see abrupt increases.

In terms of gasoline price management, Minister Hoang said adjustments in petrol prices under Decree No 83 became effective as of November 1, 2014. All related to the adjustment must be considered by the Ministry of Finance and the Ministry of Industry and Trade.

Since early this year, fuel prices have been adjusted 8 times. Total money from discounted amount was higher than that of price increases. It is too early to give proper assessment of the pros and cons of Decree No 83 which just recently took effect.

Some new features in the Decree would create more opportunities for oil and gas enterprises to compete more promptly thus delivering benefit to consumers. More companies engaging in the petrol retail market would force businesses to improve customer care services and promote technological advances in the distribution and sales system thereby providing leverage for the stronger growth of the petrol market, Hoang said.

Myanmar holds huge promise for local exporters

A group of representatives from the Vietnamese garment and textile sector will visit Myanmar on November 19-22 aiming to learn first-hand about trade and investment opportunities and conduct market surveys.

The group announced plans to attend the 2014 Myanmar International Textile & Garment Industry Exhibition (MTG 2014) – the first international specialised event to be held in Myanmar.

The Association of Garment Textile Embroidery – Knitting (Agtex) in turn unveiled plans of the  group to visit with a number of garment manufacturers and wholesale centres while on their visit.

The event should provide Vietnamese exporters with valuable insight into trade and investment opportunities and a more in-depth understanding of opportunities.

According to statistics from the Vietnam Textile and Apparrel Association (Vitas), in the first 10 months of this year,  the two-way trade turnover with Myanmar jumped 13%  to US$320 million on-year.

Exports to Myanmar, a newly-emerging market, have on average skyrocketed 64.65% on-year over the past three years.

Consumer goods supply to rise over 20 percent over Tet

The supply of consumer goods in Hanoi during the traditional Tet holiday is forecast to increase by 20-25 percent to meet consumers’ high demand, said Tran Thi Phuong Lan, Vice Director of the municipal Department of Industry and Trade.

The Hanoi Department of Industry and Trade will coordinate with retail branches and enterprises to ensure the supply of consumer goods meets the demand, as well as guaranteeing a stable market during the 2015 Lunar New Year.

The department will organise over 200 shipments of basic consumer goods to rural areas, industrial zones and processing zones to serve of farmers and workers in these regions, all the while ensuring stable prices.

Enterprises in the locality have developed plans to increase their stocks by 10-15 percent. Supermarket chains like Metro, Big C, Coopmart and Oceanmart are stocking up on consumer goods, costing more than VND2.3 trillion (US$109.5 million) so far.

Craft villages in the city have devised plans to produce clothes, confectionary items, sausages and other commodities worth VND150 billion (US$7.1 million).

The department will closely monitor the demand and supply of goods and services in the locality and take necessary measures to ensure market stability. The authority calls upon enterprises to participate in the price stabilisation programme and carefully prepare their retail outlets to ensure supply and demand.

Waste treatment firm works on modern Green Technology Park

Viet Nam Waste Solutions (VWS) broke ground for construction of a bridge near the Green Technology Park (GTP) in Long An Province's Thu Thua District yesterday.

Located on 1,760ha, the GTP project aims to provide long-term and comprehensive waste management for HCM City and neighbouring provinces.

It will use global waste management technologies including waste-to-energy, gasification, and transformation processes.

"The project development is designed to be flexible and scalable to meet the region's future changing waste management needs," said David Duong, Chairman and CEO of California Waste Solutions, Inc., the parent company of VWS.

Duong said Viet Nam's current disposal waste stream included about 80 per cent food waste and other organic wastes. The majority of plastic, glass and metals inert materials are removed from the waste stream prior to disposal.

"As the Viet Nam economy evolves, the composition of the waste stream is anticipated to change with the inert material content of the wastes increasing," he said.

The GTP site will consist of facilities such as a waterfront shipping and receiving station for the unloading of waste, recyclables, and construction materials and a hi-tech landfill disposal area.

A segregated portion of the disposal area will be prepared for medical wastes; waste-to-energy residues or ash; other non-classified wastes; compositing-processing facilities and hi-tech landfill support facilities; facilities for municipal water treatment plant sludge; and water treatment facilities for treating hi-tech landfill waste water.

It also will include a multi-functional recycling processing and separation facility; an education and communication centre for citizens and school children; employee housing campus; e-waste and household hazardous wastes collection areas; landfill gas recovery facilities to capture and destroy greenhouse gases; and others.

The Lotus Environmental Technologies Campus of the GTP, which is located on 450ha, will include a park-like buffer (or green) zone with electrical power generated from the landfill gas.

Traffic congestion will be reduced by eliminating at least 50 per cent of the old waste packer trucks. The replacement of old waste packer trucks with sealed transfer containers will reduce leachate leakage from waste hauling trucks.

Duong said employment growth would occur through jobs created at the GTP site and jobs to support the waste transportation network.

Do Huu Lam, Chairman of the Long An People's Committee, noted that GTP was a regional co-operation project between Long An Province and HCM City that was approved by the Prime Minister in 2008.

"It took a long time for VWS to reach agreements and gain approval for site access. Currently the investor has basically got all the paper work needed to implement the project," he said.

Deputy Minister for Construction, Cao Lai Quang, said: "GTP will contribute to successful waste management in Long An and HCM City in particular, and Viet Nam in general."

"It will help achieve targets set under the National Strategy on Solid Waste Management approved by the Prime Minister in December 2009."

With an initial investment of over $500 million in the first 25 years (phase 1), GTP is the second project invested in and developed by VWS in Viet Nam.

The first VWS project, the Da Phuoc Integrated Waste Management Facility, is now in its seventh year of operation. It operates under a 50-year contract signed between HCM City and VWS.

With current investment of over $140 million, the facility is designed to manage up to 10,000 tonnes of waste per day. When fully developed, investment in this facility will exceed $400 million.

SMEs key to sustainable growth

Developing the growth and capabilities of small- and medium-sized enterprises, which make up most of the business sector, is crucial for the country to create sustainable economic growth, experts said at a conference held in HCM City last Friday.

Pham Hoang Tien, director of the Viet Nam Chamber of Commerce and Industry's Small and Medium-sized Enterprises Support Centre, said the proportion of small and micro businesses in the country had increased significantly.

Of the more than 347,000 enterprises in the country, medium-size and large firms accounted for only 1.96 per cent and 2.25 per cent, respectively, he said.

The remaining 95-96 per cent include micro and small enterprises.

The country lacks leading enterprises and a sufficient number of medium-sized firms, who are capable of using new technology and becoming partners of transnational corporations.

SMEs are generally at a disadvantage in production networks compared to large firms, Tien said.

In addition, the growth quality of the private sector has not been sustainable, and productivity and cost-effectiveness has not been high.

He attributed the problems to ineffective support policies for the private sector, unequal access to land and credit, and poor development of support industries.

Major international manufacturing firms assemble and produce relatively advanced products for the international market, but most local firms remain oriented towards the domestic market only, or export commodities with little added value.

The domestic private sector, mainly SMEs, account for the majority of firms and employment in the country, but their participation in global production networks through linkages with multinationals and direct exports has been limited, according to Dominic Mellor of the Asian Development Bank.

The percentage of Vietnamese enterprises in the global value chain production networks is relatively low compared to other similar sized ASEAN economies, he said.

Viet Nam needs to create companies that can fill in the "missing middle" by serving larger export-focused foreign investors and working with smaller companies to develop an effective "pyramid" of companies.

He said that greater participation of Viet Nam's domestic private sector in global production networks through closer linkages with multinational companies and direct exports could be a potent means of accelerating technology transfer.

Tien said the country should restructure institutions to be transparent, as well as develop a policy framework to help SMEs access land, credit and markets.

It is also necessary to develop a policy on support industry development that creates favourable conditions for the private sector to enable SMEs to be involved in that industry.

Many of the conference delegates said the Government should consider providing long-term loans to enterprises and build training centre to train managers and workers.

Dang Duc Thanh, deputy chairman of the HCM City Union of Business Associations, said private companies should devise appropriate business strategies based on market research and upgrade their production technology.

They should also develop an advanced corporate managerial force as well as skilful human resources.

The private sector will continue to be the major driver behind Viet Nam's economic development in the future.

VN, Laos urged to strengthen trade ties

Viet Nam and Laos should achieve breakthroughs in policies to improve the efficiency of bilateral trade and investment relations.

Tran Bac Ha, chairman of the Association of Vietnamese Investors in Laos (AVIL) and concurrent chairman of the Bank for Investment and Development of Viet Nam (BIDV), made this statement at a seminar held in Binh Dinh Province recently on economic co-operation between the south central and central highlands provinces of Viet Nam and the central and southern provinces of Laos, according to Dau tu (Vietnam Investment Review) newspaper.

Ha said Laos has so far granted investment licenses to 413 Vietnamese projects worth US$5 billion, including 90 per cent of projects in the central and southern Laotian provinces. This has made Viet Nam the second largest investor in Laos after China.

Vietnamese investors have disbursed $1.5 billion of total investment capital to projects in Laos, he added.

He noted that bilateral trade value between Viet Nam and Laos in the first nine months of 2014 reached $995 million, and the total bilateral trade value was expected to reach $1.4 billion for the entire year.

The association expects total registered investment capital of Viet Nam in Laos to reach $5.8 billion next year and total trade value between the two countries to reach $2 billion in 2015, according to the Thoi bao Kinh te Viet Nam (Vietnam Economic Times) newspaper.

To achieve these targets, "the governments of Viet Nam and Laos should team up with the government of Cambodia to build special economic co-operation among the three countries by 2020 and until 2030, developing further comprehensive economic co-operation in the Indochina region," Dau tu quoted Ha as saying.

"The two countries should sign the bilateral trade agreement of Viet Nam and Laos this year to create favourable conditions for promoting goods circulation and increasing total trade value between the two countries," he added.

The association also suggested that Laos increase the percentage of foreign workers in Laos above the 10 per cent limit set for each project because the skills of Lao workers have yet to satisfy demand, Ha explained.

He suggested that the governments of the two countries unify procedures in granting licences, statistics and management of Viet Nam's projects in Laos and simplify customs procedures.

The two countries should also promote investment to build infrastructure for trade activities via border gates such as transit warehouses, Ha said.

Nguyen Chi Dung, deputy minister of planning and investment, agreed with Ha about difficulties resulting from policies that Vietnamese investors have faced.

Dung said the two countries should sign the bilateral trade agreement as soon as possible to solve difficulties in hiring workers, granting investment licences and implementing customs procedures.

The two countries should also have specific co-operation programmes to take full advantage of cordial relations between the two countries, he added.

Dung also suggested that the Lao government offer incentives to attract Vietnamese investment in difficult regions and in large-scale projects.

Ha said the governments of the two countries need to review Vietnamese-invested projects in Laos to provide needed support and help solve the difficulties of these projects.

He suggested that the enterprises of the two countries implement projects along their borders, For projects that were implemented too slowly, Laos should revoke the investment licenses and choose other eligible Vietnamese or Lao enterprises to develop those projects, Ha added.

State to sharpen agriculture focus

The Government needs to make amends for its rather dismal performance to date in facilitating investment in agriculture despite the sector's key importance in the nation's growth, experts said at a conference yesterday.

The conference brought leading economists and policy think-tanks together to discuss the role of the State in agriculture restructuring, ways to involve enterprises in the restructuring process and how to make investment structure or the sector more effective.

Tran Dinh Thien, director of the Viet Nam Institute of Economics, said that agriculture restructuring needed to follow three main orientations.

The first was development of products utilizing technology, economies of scale and production zones. The second focus must be on establishing a production chain that would render the agriculture sector "safe," he said explaining that currently, the input chain was dominated by foreign enterprises and domestic processing enterprises were still limited in their scope of action.

The third orientation, Thin said, was to ensure that enterprises are in the vanguard of rural development and market development, ahead of other stakeholders including the State, scientists and farmers.

Meanwhile, Nguyen Tien Phong, a programme officer in poverty reduction and social development with the United Nations Development Programme, said that investment in agriculture had been decreasing of late, and it was important that more resources are mobilised for agriculture and farmers.

"Agricultural productivity in Viet Nam is still low so we need to invest more in research, science and technology transfer and encourage domestic enterprises to invest in agriculture," Phong said.

He added that it was necessary to enhance farmers' capacity so that they can organise production to boost productivity and product quality.

He stressed the role of the State in making this happen, noting that it was the State that sets standards and regulations, and in a position to instruct farmers on which products had good export potential.

"The State has not well performed its role in managing the imbalance in investments into agriculture," he said, "It has not played its role well in setting standards, quality or food safety."

Phong said the State should also support enterprises to invest in agriculture.

"The role of the State in agriculture restructuring needs to be researched more carefully and in more detail," he said.

Nguyen Thi Lan Huong from the Food and Agriculture Organisation (FAO) said that to define the role of the State in agriculture restructuring, relevant authorities should review all policies and documents related to quality management.

"In the context of international integration, it is necessary to link small agricultural households to the global supply chain and promote all advantages of Vietnamese agriculture," she said.

"From that, we can define the role of the State and the State's management to find out which State services need to be extended, which can be prioritised, and which can be conducted under public-private partnership (PPP)," she said.

Minister for Agriculture and Rural Development Cao Duc Phat stressed that the aim of agriculture restructuring was not merely to develop a strong sector and produce more products. Its bigger target was to raise the income and living standards of farmers.

So the first task is to change the awareness of and attitude towards the market, boost the market to work effectively in all agricultural areas and to ensure better State performance, he said.

The conference was held by the Institute of Policy and Strategy for Agriculture and Rural Development.

Thanh Hoa aims to be a stable business partner

The northern central province of Thanh Hoa has committed to becoming a reliable and long-term partner of investors, provincial authorities have said.

Officials said the province's natural resources, good economy and airport and road infrastructure would attract more investors in the near future.

The area's Tho Xuan Airport, Nghi Son Deepwater Port and a modern road system that connects to other provinces and roads in Laos and Thailand would all help to lure more investment.

The chairman of Thanh Hoa, Trinh Van Chien, said the province had a skillful labour force of 2.1 million. Every year, the province supplies 2,000 technicians and economic graduates as well as 14,000 trained workers.

Moreover, the province had favourable conditions for developing high-tech agriculture and aquaculture, he said.

All of the province's economic and industrial zones including Nghi Son, Lam Son Sao Vang, Hoang Long and Bim Son were ready to welcome domestic and foreign investors.

The province also announced that it was calling for investors in 15 projects, mostly in tourism and infrastructure.

Chien said that, as of September, the province had attracted 50 foreign-direct-investment projects with a total capital of over US$16 billion. It is ranked eighth out of 63 provinces in FDI.

Tourism is expected to become a key economic sector by 2020, according to Chien.

In another development, the province has announced that it will strengthen co-operation with HCM City to develop tourism and trade.

Nguyen Thi Hong, deputy chairwoman of HCM City, said the city and province would work together to help businesses solve difficulties while they are operating in Thanh Hoa.

Can Tho zones lure $1.92 billion

Export processing zones (EPZs) and industrial zones (IZs) in this Cuu Long (Mekong) Delta city have attracted 214 projects worth about US$1.92 billion.

Baodautu.vn quoted the latest figures of the Can Tho EPZs and IZs Authority and revealed that projects worth $853 million or 45 per cent of total capital registered in the city to date have so far been implemented.

Included are 23 foreign-invested projects worth $204 million with a disbursed capital of more than $171 million. The remainder, worth about $1.72 billion, were from domestic investors, and 39.7 per cent of the capital has so far been implemented.

According to the Authority, from 2001 to 2009, the EPZs and IZs had witnessed a stronger influx of investment compared with previous periods at $320 million, $689 million and $268 million, respectively. The encouraging results were attributed to intensified efforts to speed up administrative reforms for investors.

However, investment capital in these zones seemed to have slowed down in recent years because of global and domestic economic difficulties. This year, the zones were forecast to attract a total capital of $54.8 million or only 78.3 per cent of the annual target.

Experts said that with its geographical advantage as the centre of the Mekong Delta region and a base of the country's key projects such as Can Tho International Airport, Can Tho Port and O Mon Thermal Power Plant, the city remained an attractive destination for investors.

To attract more investments, local authorities said, the city was accelerating infrastructure construction at its IZs, developing raw material supply areas and improving the quality of human resources.

Vo Thanh Hung, head of the Authority, said Can Tho planned to expand and upgrade a number of IZs in line with a master plan aimed at increasing the locality's total industrial area to 2.267ha and paving the way for the city to become an industrial hub in the Cuu Long Delta region by 2025.

Margin lending reaches $806 million in 10 months

Margin lending reached more than VND17 trillion (US$805.7 million) in the first 10 months of 2014, an increase of about 13 per cent over the nine-month figure.

Pham Hong Son, head of the State Securities Commission (SSC)'s Securities Business Management Department, told local online VnEconomy that the figures were based on reports that securities companies sent to the SSC.

This is one of the few times the SSC has published margin lending figures. Previous estimates were informal and often based on financial statements of securities companies which have different margin lending data. The official publication of this data is expected to help reduce the impact of inflated information on the market.

Son said the size of current margin lending was not risky for the market if compared with the total capital of all securities companies, estimated to be about VND36 trillion ($1.7 billion).

He added that financial leverage had grown by an average of 10 per cent since July.

According to the SSC's regulation, the lending margin of a securities company cannot exceed 200 per cent of its equity capital. Current margin loans accounted for only 47.2 per cent of their total equity.

However, market insiders say this is the "facade" figure shown on companies' financial statements, and the real number could be bigger. Margin lending can also come from banks, where investors have collateral.

It is estimated that the figure on current margin loans is only eight per cent of total lending by securities companies.

The current margin size is not big, but according to some analysts, the fact that margin loans have focused on several large-cap shares could still make it a volatile factor in case securities companies make margin calls when the market tumbles too deeply.

There are nearly 700 stocks trading on the stock market, but the number of codes eligible for margin lending is about 150. These stocks are also the darling of foreign investors, thus erratic performance of these stocks will likely make the market volatile.

Margin trading is expected to increase towards the end of this year with the forecast of a positive market outlook.

Binh Duong firm opens new showroom in Ha Noi

The Binh Duong-based company Minh Long 1 is scheduled to open its first Ha Noi showroom at No 3-5 Nguyen Van Linh Street in the capital city's Long Bien District on Thursday.

The 4,500 sq.m showroom will include over 15,000 bowls, dishes, cups, flower vases, souvenirs, decorations, ceramic jewellery and bowls and plates used in hotels and restaurants.

Ly Ngoc Minh, general director of Minh Long 1, said: "With the new showroom, Minh Long 1 aims to expand its distribution networks to the northern provinces of Viet Nam."

Minh Long 1 products are used to serve business passengers on domestic and international flights operated by the national air carrier Vietnam Airlines, according to the company.

Military Bank receives labour order first class

The Military Bank (MB) received a first-class labour order at its 20th anniversary ceremony last week.

Defence Minister General Phung Quang Thanh said despite economic difficulties and fierce competitiveness, the bank had been dynamic in renovating management, participating in the State Bank of Viet Nam's monetary policies and strictly following State law, army discipline and tax duties.

The bank plans to raise its charter capital from VND11.25 trillion (US$535.71 million) to VND15.50 trillion ($738.10 million) this year, according to a resolution of its shareholder meeting in April.

High-end properties attract buyers

After focusing on low-end projects in previous years, the property market has witnessed the return of high-end projects with high rates of sales from the third quarter of 2014.

At the opening of Vinhomes, a high-end apartment project on Nguyen Chi Thanh Street here at the beginning of this month, more than 250 units or 70 per cent of the total number were successfully sold at prices reportedly ranging from VND3 billion (US$141,500) to VND10 billion ($471,500) per unit.

Units of Little Viet Nam, a project replicating the old architectural features of Ha Noi and Hoi An in Quang Ninh Province's Ha Long Marina Urban Area, were also sold out three hours after opening last September.

Syrena Viet Nam, the project investor, said the large number of interested buyers compelled it to organise a draw to decide who would have the right to purchase.

Other property projects likewise reported successful sales in the third quarter of this year such as Starcity, Diamond Flower Tower and Dolphin Plaza.

Previously, property expert Dang Hung Vo said there were still opportunities in the high-end segment of Viet Nam's property market, although high inventories remained a problem in this segment.

He revealed that it was important that investors knew how to make their projects attractive to buyers and stressed the importance of profits, living environment and conveniences.

Amid worries over the return of a property fever similar to that of 2009, an expert said this was a good time to put property projects on sale because property was becoming an attractive investment channel amid the decline of world gold prices to a four-year low and the reduction by the State Bank of Vietnam of deposit interest rates.

Quarterly market reports of several property companies noted that many buyers have returned to the real estate market as investors or speculators. The participation of speculators and end-users have so far helped the property market see improvements in the third quarter.

Vietnamnet online newspaper quoted Vu Cuong Quyet, general director of the Greenland Service and Real Estate Joint Stock Company, as saying that the market, boosted by rising demand, would remain on a positive trend in the last quarter of this year.

In the long-term, he added, property market recovery would depend on macro-economic recovery. At a recent seminar on the property market, Quyet said the macro-economic situation had witnessed improvements, with falling bad debts and stable stock and financial markets.

Consumer price index to increase in November

Viet Nam's consumer price index (CPI) in November 2014 is expected to rise over that of previous months because of an increase in demand for goods.

According to the Ministry of Industry and Trade's Domestic Market Department, the demand for products such as fertilizers and construction materials, as well as garments, textiles and shoes, will increased in year-end months because of seasonal factors.

But department officials gave assurances that prices would remain stable because of sufficient supply.

Figures from the General Statistics Office revealed that the CPI last month increased by 0.11 per cent over that of September. The price of school commodities and services reported the highest increase, at 1.31 per cent, in the wake of the Government decision to increase school fees in several cities and provinces.

The prices of pharmaceutical and health care services increased by 0.53 per cent because of the increase in service fees of some localities.

The prices for housing, construction materials and transport, which form part of the 11-commodity basket used to calculate the CPI, decreased after petrol prices were cut three times since late September. Other products in the basket increased slightly by 0.01 to 0.22 per cent.

The CPI in the first 10 months of the year increased by only 2.36 per cent compared with the entire 2013, representing the lowest level of CPI increase in the past decade.

Banks willing to give home loans: BIDV head

Banks are ready to give loans to property projects, said Can Van Luc, deputy general director of the Bank for Development and Investment of Viet Nam (BIDV).

He added that giving loans to real estate and the security sector was more risky than consumption or production loans. The indicators in the first two sectors were extremely sensitive to the economy, with frequent changes taking place. The State Bank of Viet Nam clarified that the risk rate in these sectors was 2.5 times higher than of normal loans.

"However, risks are often linked to high profits, making banks interested in such loans," he clarified.

Luc said that the rate of loans in the property sector was more than eight per cent, and the figure had fallen over the previous years.

The rate is expected to increase in the near future, as banks have clarified that the loans for house repair and leasing account for 40 per cent of their total debt balance in the real-estate sector, according to Luc.

In addition, the market is considered to influence other sectors. That's why banks will continue to pour money into the industry, as only a push from banks will improve the real estate sector.

Statistics from the central bank showed that by the end of 2013, the total debt balance in the property market was VND262 trillion (US$12.4 billion), accounting for eight per cent of the total debt balance.

By the end of September, the debt balance in the country's real-estate sector rose 11.5 per cent over the end of last year. Of this, loans for buying houses or for house repair work comprised the highest component with 26 per cent, followed by investment in the property sector with 17 per cent.

In the first nine months of the year, the apartment segment saw the best sales. About 6,800 apartments were sold in Ha Noi in the nine-month period, higher than the whole of last year. In HCM City, the prices of the primary segment rose by two to three per cent. As of the end of August, the property inventory was worth VND83 trillion ($3.9 billion), a 13 per cent fall against the corresponding period last year.

He added that the market had seen positive signs because of the improved economy and the VND30-trillion ($1.4 billion) credit package.

In addition, both investors and home buyers thought that it was the right time to buy a house. Some investors reduced the selling prices by 30 to 40 per cent with marketing strategies and by reducing the scale of the apartments.

Le Xuan Nghia, member of the National Advisory Council for Monetary Policy, said that property had been a potential sector for banks to promote their credit growth.

Credit inflows into the sector will be higher, especially in lending for apartment building projects, ongoing construction projects and houses in the capital's interior districts.

Real estate sector draws foreign investors

The domestic property market continues to lure foreign investors even though it has yet to fully recover, experts say.

According to the Ministry of Planning and Investment's Foreign Investment Agency (FIA), in the first 10 months of 2014, the real estate sector attracted foreign direct investments (FDI) worth US$1.22 billion or 8.9 per cent of the total amount of FDI in Viet Nam.

The sector has the second largest FDI volume in the first 10 months after the processing and manufacturing industry, the agency revealed.

In fact, many existing FDI golf resorts and large urban regional projects that were granted licences with large capital in previous years have yet to be built or have cancelled construction because of numerous difficulties in disbursing investment capital, reported the Sai Gon Dau Tu TaiChinh newspaper.

FDI had yet to be channelled to affordable social housing projects that have high demand in the domestic market. Meanwhile, agriculture, a key economic sector, accounted for 0.5 per cent of total national FDI capital in the past three years, the agency noted.

Phan Huu Thang, former FIA director, said the domestic property market had yet to recover, but foreign investors had found opportunities during difficult times because the property market continued to develop.

Foreign investors placed their money in the domestic property market in preparation for its future recovery, Thang observed.

Pham Sy Liem, deputy chairman of the Viet Nam Federation of Civil Engineering Association, said the state should have a mechanism for granting and revoking investment licenses to ensure efficient property project management.

The State should craft and implement policies urging FDI to co-ordinate whenever investing in capital in sectors, he added.

Hoang Xuan Hoa of the Party Central Committee's Economic Commission said the State should improve FDI quality by refusing to grant investment licenses to projects using old technology and with a negative environmental impact.

For the property sector, the State should encourage investment in projects on urban development, technological infrastructure, social housing development and apartments for low-income citizens, Hoa added.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR