Reference exchange rate stays stable

The daily reference exchange rate for VND/USD set by the State Bank of Vietnam is kept unchanged from a day ago at 22,449 VND per USD on July 11.

With the current trading band of /-3 percent, the ceiling rate applied to commercial banks during the day is 23,114 VND and the floor rate 21,770 VND per USD.

The opening hour rates listed at commercial banks on July 11 saw slight fluctuations.

Vietcombank increased its buying rate by 5 VND to 22,715 VND per USD and reduced its selling rate by 5 VND to 22,785 VND per USD.  

The rates at BIDV are at 22,720 VND (buying) and 22,790 VND (selling), up 20 VND, per USD.

At Techcombank, the greenback is being bought at 22,700 VND, up 10 VND, and sold at 22,800 VND, remained unchanged from July 10.-

Stocks plunge on falling investor confidence

Shares slumped in both local markets on July 10 as investor confidence dropped on negative market conditions and sliding oil prices.

The benchmark VN-Index on the HCM Stock Exchange fell 1.18 percent to close at 766.56 points, extending its fall for a second day from a loss of 0.9 percent on July 7. The benchmark index also had the worst decline since the beginning of 2017.

The HNX-Index on the Hanoi Stock Exchange lost 1.19 percent to end at 100.37 percent. The northern market index fell 1 percent on July 7.

More than 328.2 million shares were exchanged on both bourses, worth 5.26 trillion VND (233.7 million USD).

Market conditions were negative with declining stocks outnumbering gainers by 348 to 139, and 17 of the 20 sectors on the stock market ending in the negative territories.

In the VN30 Index, which tracks the movement of the 30 largest companies by market capitalisation, 28 stocks declined.

The worst decliners included Sai Gon Securities Inc (SSI), BIDV (BID), MBBank (MBB) and Vietcombank (VCB), and DHG Pharmaceutical Co (DHG).

Volatile crude prices also had negative impacts on energy stocks, pulling PetroVietnam Gas (GAS) down 0.7 percent.

According to market analysts and brokerage firms, the sharp decline came after both local indices continuously hit their fresh highs last week, allowing investors to lock in profits for their portfolios.

The VN-Index last Thursday set a nine-year high of 782.65 points and the HNX-Index climbed to 102.60 points after a seven-day rally.

Nguyen The Minh, head of the capital market analysis at Sai Gon Securities Inc, said investors thought the local indices had reached their expected profitable levels, so they simply offloaded stocks to earn some profits.

The selling also helped ease the margin lending condition on the market, he said, as money had been transferred from large-cap and mid-cap stocks to penny ones, putting the stock market at high risk of correction.

The local market was also affected by negative trends in the global markets, such as the volatility of oil prices and risks in the US market, he added.

In addition, investors started offloading stocks of companies that had been expected to release good earnings reports for the second quarter, Minh said.

They were seeking a chance to sell those stocks as they had priced in the results of those stocks in advance, especially after those companies experienced strong gains in their first-quarter earnings, Minh added.

The Aluminum-Bauxite Complex Project in Central Highlands’ Lâm Đồng Province has started seeing profit, expecting to earn VNĐ1.2 trillion (US$52.6 million) per year, following three consecutive years of losses.

The project was forecast to incur losses for the first five years of operation, but it has seen profits right from the fourth year, which was considered a success, Deputy Minister of Industry and Trade Đỗ Thắng Hải said during his visit to the project on Saturday.

According to the Việt Nam National Coal and Mineral Group (Vinacomin), the project’s investor, Lâm Đồng Bauxite-Aluminum Complex has total investment of VNĐ15.4 trillion. 

When beginning operations, the project had completed over 98 per cent of designed capacity. It is expected to reach 100 per cent of it designed capacity this year, equivalent to 630,000 tonnes of aluminum.

In the first six months of 2017, the total output of aluminum produced reached 325,900 tonnes, equal to 51 per cent of the yearly plan. Sales in the first six months touched VNĐ2 trillion.

An inspection undertaken by the Ministry of Finance revealed that the Lâm Đồng Aluminum-Bauxite Complex incurred a loss of nearly VNĐ3.7 trillion following the first three years of operation.

Of the estimate, loss from production was VNĐ2.52 trillion, accounting for 70 per cent, and the remaining was due to fluctuation in the foreign exchange rate.

Bà Rịa-Vũng Tàu to reclaim 8 slow-moving tourism projects

The People’s Committee of Bà Rịa-Vũng Tàu Province last week held a meeting with relevant departments, agencies and localities on the handling of eight delayed tourism projects.

The Department of Planning and Investment of Bà Rịa-Vũng Tàu Province reported that there were currently eight slow-moving tourism projects in the province -- four projects in Vũng Tàu City, two projects in Đất Đỏ District and two projects in Xuyên Mộc District.

These projects were moving at a slow pace from three to five years compared to the issued investment certificates. Among the reasons for the delays was that investors could not afford to finance the project, no compensation and clearance had been done and investors had not been approved the detailed construction plan at 1:500 scale.

Nguyễn Thành Long, vice chairman of the provincial People’s Committee, requested the Steering Committee on handling the provincial projects with slow implementation, to review each project and invite investors to find appropriate solutions.

For projects that could not find a viable solution, investment policy must be revoked, he said.

Binh Duong inks cooperation deal with Russia’s Oryol Oblast

Vietnam’s southern province of Binh Duong and Oryol Oblast, a federal subject of Russia, signed a memorandum of understanding (MoU) on setting up multi-faceted cooperation in Oryol city on July 7.

Vice Chairman of the Binh Duong People’s Committee Mai Hung Dung said the document on cooperation, including in economy-trade, science-technology and culture, is a foundation for the two sides to enhance their friendship and mutual understanding. It is especially meaningful as it was signed shortly after President Tran Dai Quang’s recent official visit to Russia during which the two countries’ leaders stressed the resolve to boost bilateral trade to 10 billion USD in 2020.

He introduced his province’s potential to Russian officials, noting that it is one of the five localities attracting most foreign investment in Vietnam. It has so far been home to nearly 3,000 foreign invested projects with total capital of over 27 billion USD from 59 countries and territories.

The Governor of Oryol Oblast, Vadym Potomsky, affirmed that reinforcing the Vietnam-Russia strategic partnership is the determination of both countries. He valued Vietnam’s development and growing economic and political influence. 

Vietnam is the first country to ink a free trade agreement with the Eurasian Economic Union, which is led by Russia. Therefore, it is also the first to have favourable access to the Russian market and partner countries of Russia.

He added with favourable geographical location, Oryol Oblast is able to help deliver Vietnamese goods to the centre of Russia.

Vice Chairman Dung told Vietnam News Agency that Binh Duong will promote export to Oryol Oblast in the near future. While local businesses showed their interest in such products as cashew and coffee which are the strength of Binh Duong, businesses of the Vietnamese province want to buy Russia’s technologies, such as oil refining technology.

Binh Duong, with the most dynamic growth in Vietnam, has big demand for skilled personnel and high technology. Meanwhile, the Russian side is also able to ensure cooperation in science-technology and training of students, lecturers and researchers, he added.

Quang Ninh lures additional 47 million USD of investment

The northern province of Quang Ninh drew in more than 47 million USD in foreign direct investment (FDI) in the first six months of 2017.

The sum came from two new and six existing projects, raising the number of valid FDI projects in the province to 58, with a total registered capital worth over 2.3 billion USD.

Notably, Texhong Vietnam invested more than 20 million USD in supporting infrastructure and water supply for the Texhong Hai Ha industrial zone of the province.

In the coming time, Quang Ninh’s authorities will submit its investment policies for the prime minister’s approval. 

Meanwhile, the province will provide support for foreign investors to complete investment procedures of major projects such as infrastructure development in Song Khoai industrial zone and Hon Giai ecological, resort tourism project in Van Don district.

Besides, the province has worked with Texhong Vietnam to devise a feasibility study of the Hai Ha thermal power plant at the Hai Ha industrial zone. The plant with a capacity of 2,100 MW is expected to cost over 3 billion USD.

Hoa Lac High-Tech Park lures more RoK investors

A conference to promote investments from the Republic of Korea (RoK) in the Hanoi-based Hoa Lac High-Tech Park was held on July 7, expected to open cooperation opportunities for Vietnam and the RoK across fields, especially health care. 

Addressing the event, Deputy Minister of Science and Technology Pham Dai Duong said his ministry and the park’s management board have exerted all-out efforts in building infrastructure and completing institutions to create legal corridors and the most favourable conditions for foreign investors, including those from the RoK. 

RoK Ambassador to Vietnam Lee Hyuk said the RoK has become Vietnam’s largest foreign investor, second largest official development assistance (ODA) supplier and third biggest trade partner. 

Meanwhile, Vietnam is the RoK’s fourth largest trade partner, he said, noting that it is time for the two countries to propel their cooperation. 

Nguyen Trung Quynh, deputy head of the park’s management board, briefed participants on investment situation in the area as well as incentives for businesses operating in the park. 

On this occasion, the board handed over investment licences to two projects, including one invested by the RoK, raising the total number of projects in the park to 80 with total registered capital of 61.3 trillion VND (2.7 billion USD). 

The Hoa Lac High-Tech Park now accommodates many Korean businesses like Vietnam-Korea Medical Joint Venture, SDS Company and DT&C Co.,Ltd.

Lao official hails Vietnamese community’s contributions

Member of the Lao People’s Revolutionary Party’s Politburo and President of the Lao Front for National Construction Saysomphone Phomvihane had a meeting on July 7 with the Vietnamese community in Laos onthe occasion of the occasion of the 40 years of the Vietnam-Laos Treaty of Amity and Cooperation and 55th anniversary of bilateral diplomatic ties.

SaysomphonePhomvihanehighly valued the role of the community in the national defence and development of Laos, while stressing the need to preserve, protect and develop the special solidarity and comprehensive cooperation between Vietnam and Laos at present andin the future.

He stated that the Party, State and people of Laos never forget the great sacrifice of Vietnam’s volunteer soldiers and people in protecting Laos’ revolution and leaders in the past.

Amidst the complicated developments in the region and the world, it is crucial for Vietnam and Laos to educate theirpeople, especially young generations, on the special solidarity, fighting alliance and comprehensive partnership between the two countries. 

On behalf of the Vietnamese community in Laos, President of the Vietnamese Association in Laos Nguyen DuyTrung thanked the Lao Front for National Construction as well as the Party, Government and people of Laos for creating favourable conditions for Vietnamese people to settle their lives in the country.

He also pledged that the community will always unite with Lao people in developing Laos, while serving as a bridge to protect, preserve and promote the special solidarity and comprehensive cooperation between Vietnam and Laos.

Viettel - main factor of telecom boom in Vietnam: Defence Minister

The military-run telecoms group Viettel is the main factor creating a boom in telecommunications in Vietnam, contributing to completing the national target of universalising telecom services ahead of schedule, said Defence Minister General Ngo Xuan Lich.  

Speaking at a working session with Viettel representatives on July 7, Minister Lich also praised the group’s efforts in supplying high-tech equipment to the army, helping ease reliance on imports and ensure information security.

Sharing Lich’s views, Minister of Information and Telecommunications Truong Minh Tuan said Viettel is one of the enterprises significantly contributing to cyber security in Vietnam.

Viettel is the first Vietnamese telecom firm to invest abroad and export services, he said, lauding the group’s noted contributions to national gross domestic product (GDP) as well as its brand name in the international market. 

Minister of Science and Technology Chu Ngoc Anh said Viettel has been named in the top 100 most valued telecom companies worldwide, highlighting its outstanding achievements in launching 4G services, with 36,000 4G stations installed. 

According to Viettel Director General Major General Nguyen Manh Hung, Viettel aims to become a strong global industrial and telecom group by 2020, focusing on telecommunications, foreign investment, market expansion, high technology and cyber security. 

General Lich stressed that joining economic development is one of the tasks and functions set for the army. 

Therefore, Viettel needs to pour more investment into building broadband telecom infrastructure with 4G as the focus in order to create a foundation for the country to engage in the fourth industrial revolution, he noted. 

At the same time, Viettel should pay more heed to producing telecom electronic equipment, he said, asking the group to replace imported core network equipment with the ones it makes by 2018.

A high-tech defence industrial complex is being shaped by Viettel, which is expected to remarkably contribute to army modernisation and national defence, he said. 

Lich also asked the group to step up the research and production of equipment and weapons in order to meet demands of the army as best as possible while continuing to invest overseas in the field of telecommunications, with priority given to neighbouring countries and other ASEAN nations, gearing towards a stronger and more prestigious brand name. 

Another task is to combine economic development with national defence and turn the group into a model of State-owned businesses, he said.

Long An authorities collect feedback from Taiwanese investors

The Long An People’s Committee, on July 7, held a dialogue with Taiwanese enterprises operating in the Mekong Delta province. 

At the meeting, a representative from Tainan Enterprises Co. Ltd, a garment manufacturer in Kien Tuong town’s border economic zone, expressed concerns over complicated and time-consuming administrative procedures for foreign workers.

The director of Wu Feng Vietnam, which makes bathroom products at the Hoang Gia industrial cluster in Duc Hoa district, said her company is yet to take hold of the entire area it has leased at the zone and asked for help from the local authorities.

The Dai Hiep company at the Hai Son industrial park in Duc Hoa district noted congested traffic caused by degraded roads despite being fixed for five times.

Tran Van Can, Chairman of the provincial People’s Committee, said the provincial leaders will direct relevant agencies to carry out prompt actions to remove difficulties for businesses.

Taiwan is taking the lead among 37 countries and territories investing in Long An with 180 projects worth over 980 million USD. These projects are mostly in the fields of outsourcing, garment and footwear, and plastic.

Photo exhibition in Lao Cai spotlights Vietnam’s tourism

A photo exhibition, themed “Discovering Vietnam”, opened at the Lao Cai Museum on July 7, as part of the 2017 National Tourism Year – Lao Cai – Northwest Region.

The event showcases 100 photos taken by 82 photographers nationwide on a range of subjects, including islands, spiritual and eco-tourism.

These photos reflected the unique beauty of the country, people, cuisine and cultural traditions.

The same day, the Lao Cai People’s Committee presented the province’s special art-literature awards on the occasion of its 110th founding anniversary (July 12, 1907 - 2017). 

Thirty-five artworks received the awards, including six first, six second, ten third and 13 consolation prizes.-

Party leader urges Bac Kan to focus on infrastructure development

Party General Secretary Nguyen Phu Trong has suggested the northern mountainous province of Bac Kan seek ways to mobilise resources from the society to invest in transportation infrastructure development, thus propelling socio-economic growth and connecting with regional localities.

At a working session with provincial leaders on July 7, the Party leader hailed efforts made by Bac Kan’s Party Organisation, authorities and people in implementing Party resolutions as well as in improving socio-economic situation and locals’ living conditions.

He noted thatup to 90 percent of local residents have to date accessed clean water, while annual per capital income has increased to 26 million USD, doubling the figure five years ago.

Forest coverage has reached 70 percent. Bac Kan set to have eight additional communes recognised as new-style rural areas this year, raising the total number to 10.

Stressing the important strategic location of Bac Kan and its advantages in land and climate, General Secretary Trong said that the province holds great development potential and needs to take right actions to fully tap it.

He also acknowledged Bac Kan’s efforts to streamline and reform its public administrative system, which has helped the locality enhance its competitiveness and improve business environment.

Earlier the same day, the Party chief visited the mountainous commune of Si Binh in Binh Thong district,which is home to Tay, Dao and Nung ethnic minority groups. 

He praised the commune’s success in boosting the forestry sector to raise locals’ income. So far, 70 percent of communal roads have been asphalted and cemented while 100 percent of local households have gained access to power.

Also on July 7, he visited the Bac Kan General Hospital, which is built from Government bonds. Operating since December 2016, the 500-bed hospital has helped improve health care services for people in the provinceand nearby localities.

On the occasion of the 70th anniversary of the Invalids and Martyrs’ Day, the Party leader laid a wreath at the Bac Kan Martyrs’ Cemetery.

On July 6, right after arriving in the province, Party General Secretary Nguyen Phu Trong visited and presented gifts to a number of people who rendered service to the nation in the locality.

Dong Nai strives for on-schedule launch of Long Thanh airport project

The southern province of Dong Nai will continue to review and make necessary preparations to ensure rapid and efficient compensation and resettlement so that the Long Thanh International Airport project could be kicked off in 2019, said a local official.

Dinh Quoc Thai, Chairman of the provincial People’s Committee, made the statement at the closing ceremony of the fourth meeting of the ninth provincial People’s Council, adding that the first phase of the project is scheduled to become operational in 2025.  

Reviewing Dong Nai’s economic situation in the first half of this year, Thai said the province’s GDP grew by 7.26 percent year-on-year with industrial production index up 7.82 percent while trade and services up 6.23 percent, respectively. 

Despite impacts of unusual weather, which caused losses for tens of thousands of areas of fruits, as well as the oversupply of some agricultural products such as pork, banana and pepper, the local farming sector still expanded by 2.45 percent, he said. 

The province’s export turnover hit nearly 8.1 billion USD, up 11.2 percent against the same period last year while its import revenue was 7.5 billion USD, Thai said. 

Of note, he said, Dong Nai’s trade surplus stood at nearly 600 million USD, a record high in recent years, and its contributions to the State budget was over  22.26 trillion VND (980 million USD), representing a year-on-year rise of 12 percent. 

According to Thai, in order to maintain the economic growth rate, the province will focus on facilitating production and business activities, promoting cultural and tourism development, improving the quality of education, ensuring social welfare,  managing natural resources and the environment, intensifying administrative reform and enhancing national defence and security. 

During the meeting, the provincial People’s Council passed 28 resolutions on socio-economic development, national defence-security and issues regarding social welfare and environmental protection.

Foreign banks on trend to exit Vietnam

Foreign banks have exited Vietnam or narrowed operations in the Southeast Asian country, against early expectations that they would soon eat into the market shares of local lenders.

The upcoming sale of the Ho Chi Minh City branch of the Commonwealth Bank of Australia (CBA) to local lender VIB, as announced earlier this week, is only the latest evidence that foreign credit institutions are setting up strategies to pull out of Vietnam.

CBA first entered Vietnam in 1994 with a representative office in Hanoi and only opened its Ho Chi Minh City branch in 2008.

Analysts believe that the sale of CBA’s Ho Chi Minh City operations to VIB is an indicator that the company is planning a complete exit from the Southeast Asian country. 

In March 2016, British bank Standard Chartered removed its representative from the board of directors of ACB and signaled plans to withdraw its 15 percent stake from the Vietnamese lender. 

In April this year, ANZ reached an agreement to sell its Vietnamese retail business to Shinhan Bank Vietnam in a move aimed at pivoting toward institutional banking in the country. VIB also showed interest in acquiring ANZ but was ultimately outbid.

Two months later, HSBC announced it would sell its entire 19.41 percent holding in local lender Techcombank.

The Vietnamese bank is seeking shareholders’ approval to purchase these shares for VND4 trillion (US$176.21 million).

While it had previously been expected that foreign banks would pose tough competition for local lenders, these four significant moves in less than two years are signaling otherwise.

Insiders are pointing to several reasons to explain the exit trend of foreign banks in Vietnam, including inadequate knowledge of the local business environment and a higher level of expected legal compliance.

“While they have better technology and stronger financial muscles, foreign banks cannot operate just as their Vietnamese counterparts as they must follow some specific regulations for international credit institutions,” the director of retail of a Ho Chi Minh City-based bank explained.

The banker added that foreign banks have paid little attention to expanding their ATM or POS networks, making it difficult to broaden their retail operations. 

Whether it boils down to inability or unwillingness, the situation is causing foreign banks to either sell their retail business to local banks to focus on institutional banking, as was the case of ANZ, or completely pull out like CBA, according to the banker.

Banking expert Nguyen Tri Hieu said foreign banks take local laws and the rules for risk management more seriously than their Vietnamese counterparts, which is a major factor in their inability to compete.

“Foreign banks also have a poorer understanding of the local markets and customers than Vietnamese lenders,” Hieu said.

“Even when they have entered Vietnam, many foreign banks still serve their traditional customers instead of looking for new, local clients, leading to their poor growth and slow development.”

Hieu said the total assets of foreign banks in Vietnam currently make up only ten percent of the Vietnamese banking sector.

“This has hindered the expansion of foreign banks, especially at a time when competition is tough and operation costs keep rising,” he elaborated.

“This is why foreign banks are leaving Vietnam.”

However, Nguyen Dinh Tung, CEO of local lender OCB, believes that the recent developments do not send enough signals that foreign banks are on trend to leave Vietnam.

“Global banks have their own business strategies and it is normal for them to leave a market where their operations are worse than expected or the local competition is too fierce,” Tung said.

“This can be observed in many other markets, not just Vietnam.”

‘Direct to customer’ innovation needed for textiles, clothing

The textiles and clothing segments in Vietnam stand little chance for any meaningful economic growth in international sales over the near term without substantial reform, says the Textile Outlook International.

For starters, domestic companies need to change their method of sales from outsourcing to selling direct to customer, says Textile Outlook. 

This suggestion is consistent with the global trend in textiles and clothing away from outsourcing. International brands are increasingly seeing less benefit from outsourcing and are moving back to the direct to customer model.

More top global brands are finding that the Vietnam allure of cheaper overhead, lower labour cost and reduction in taxes isn’t really a more profitable option for them over the long term.

According to leading US experts, the number of manufacturers selling directly to customers is expected to grow 71% in 2017 to more than 40% of all manufacturers. And over a third of US consumers report they bought directly from a brand manufacturer’s web site last year.

The textiles and clothing segments in Vietnam could find themselves shrinking over the next decade if the transformation away from strictly outsourcing to the direct to customer model isn’t adopted.

International brands no longer see outsourcing as the panacea they once did and textiles and clothing in Vietnam need to be forward looking and make the transformation to direct to customer before it’s too late.

Secondly, only a small portion of clothing produced in the Southeast Asian country is fabricated from materials sourced in country, says Textile Outlook, noting that this needs to increase significantly.

Here again, this recommendation is in line with the recommendation of substantially all the industry experts— as boosting the localization in the segments is a prerequisite to benefit from free trade agreements such as the Vietnam-EU pact, which comes into force in 2018.

To benefit from the trade deal, roughly 50% or better of the raw materials and intermediary goods in textiles and clothing need to be sourced in country, from EU member countries or from the Republic of Korea.

Thirdly, Textile Outlook noted there needs to be a monumental shift away from manufacturing lower end products to creating innovative quality, high value manufactured items and fashionable clothing.

Lastly, more efficient sourcing through vertical integration is essential, as well as an improvement in productivity by enhancing research, training and development.

The segments have already began acquiring advanced machinery and equipment for items such as ring spindles and open-end rotors to modernize its manufacturing facilities but much more extensive investment is needed, Textile Outlook concluded.

Textile Outlook International is published six times a year by Textiles Intelligence. Each issue provides an independent and worldwide perspective on the global fibre, textile and apparel industries.

VN joins Inclusive Framework to fight tax avoidance     

Viet Nam has become the 100th member to join the Inclusive Framework (IF) on Base Erosion and Profit Shifting (BEPS), the General Department of Taxation announced.

BEPS refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the IF, 100 countries and jurisdictions are collaborating to implement measures to tackle the problem of BEPS.

The announcement was made by Dang Ngoc Minh, deputy chief of the General Department of Taxation. The move represents another important step taken by the country in the international tax arena, as well as in the Asia-Pacific region, Minh said.

Being part of the IF will facilitate the implementation of agreed minimum standards, and peer review processes will provide Viet Nam with support and guidance under the Platform for Collaboration on Tax, put in place by the International Monetary Fund, the Organisation for Economic Co-operation and Development (OECD), the United Nations and the World Bank Group, he added.

The IF was established in January 2016, after the G20 Leaders urged the timely implementation of the BEPS package released in October 2015 and called on the OECD to develop a more inclusive framework with the involvement of interested non-G20 countries and jurisdictions, including developing economies.

Members of the IF have the opportunity to work together on equal footing with other OECD and G20 countries to implement the BEPS package and develop further standards to address the remaining BEPS issues.

Viet Nam has also expressed interest in joining the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Global Forum on Transparency and Exchange of Information for Tax Purposes, Minh said. 

Hanoi to impose parking space rules for high-rises     

The People’s Committee of Ha Noi has proposed regulations related to underground parking space in high-rises to the municipal People’s Council, which will be approved in a meeting in July.

Accordingly, at least 22 per cent of the total construction area must be dedicated to underground parking space in new buildings in downtown districts; it is 17 per cent for other districts.

The People’s Committee said the regulations proposed are based on the established rules on parking areas by the Ministry of Construction, and on the real demand for parking in the city.

In 2016, the municipal Department of Planning and Architecture had issued a regulation that a building must have at least three underground floors, but soon after, it was withdrawn because it did not reflect the reality.

Statistics show that in the 2012-16 period, the capital city had 5.5 million vehicles, including 5 million motorbikes, with an average growth rate of 4.6 per cent per year.

In downtown, there are 590 parking lots that occupy a total area of 37.88 hectares, which meets only 8-10 per cent of the demand. The total area of public parking places in the city met around 66 per cent of the demand.

MoIT plans out transition to bio-fuel     

The Ministry of Industry and Trade on Thursday worked with petrol wholesalers on the roadmap to replace RON 92 petrol with E5 bio-fuel from 2018.

Urging all petrol wholesalers to put in their utmost to make the switch, Deputy Minister Hoang Quoc Vuong said the deadline of January 1, 2018, would not be extended.

Using bio-fuel E5 will help protect the environment while putting four bio-fuel plants in Viet Nam back into business, thus creating jobs as well as incomes for farmers who are growing cassava, a material used to produce bio-fuel, Vuong said.

Vuong asked petrol wholesalers to invest in facilities this year to be able to distribute E5 bio-fuel across the country from the beginning of next year.

Additionally, the Ministry of Finance should put in place policies to ensure that the price of E5 bio-fuel is reasonable so as to encourage consumption, Vuong said.

Ten years after the project to develop bio-fuels was approved in 2007, bio-fuel has not been widely used in the domestic market so far.

Pham Duc Thang, deputy director of Petrolimex, said that petrol wholesalers must be offered incentives to promote the use of bio-fuels, especially in term of rates, as the cost of E5 remains higher than RON 92 petrol.

BIDV launches new money transfer service     

From July 5, customers of the Bank for Investment and Development of Viet Nam (BIDV) can receive money transferred from other banks immediately with their ATM card number (16-digit card number printed on the front of the ATM card).

This feature is part of the service "Interbank money transfer 24/7" by BIDV in co-operation with National Payment Corporation of Viet Nam (Napas), launched on July 5, 2017.

Accordingly, BIDV customers can receive money transferred from 38 banks connecting money transfer services 24/7 with the ATM card number without any transaction time limit or need to declare bank or branch name information.

Previously, BIDV successfully deployed the quick customer transfer service through card and account number. The banks offer this service via one of the following channels: Internet Banking, Mobile Banking, ATM, SMS Banking and transaction counters.

With the advantage of fast transfer and receipt, after a few seconds of completing the operation through the above-mentioned electronic transaction channels, customers can receive the money transfered, not limited to transaction time, even on a public holiday. Money will be credited to the customer immediately. 

$8.9b received from loan interest     

Credit institutions have received some VND200 trillion (US$8.9 billion) yearly from interest rates of bank loans, according to the Ministry of Finance’s estimates.

According to the ministry, the amount is higher than the country’s total corporate income tax of some VND188 trillion yearly, noting that a 0.5-1 per cent reduction in lending interest rate would result in a more positive impact on firms’ business and production than a reduction in corporate income tax.

Finance minister Dinh Tien Dung said it meant most input costs of domestic firms were paid for lending interest rates as they had to mainly base them on bank loans.

Due to the restricted development of the local capital market, the banking system is currently still the most important channel to provide capital for the economy. The banking system’s loans are equal to some 110-120 per cent of the country’s GDP, or VND6 quadrillion.

Currently, the popular lending interest rates are 6-9 per cent per year for short term and 9-11 per cent per year for medium and long term. For customers with transparent financial situation, short-term lending rates ranged from 4 to 5 per cent per year.

The General Statistics Office reported that credit growth in the first half of this year reached 7.54 per cent, the highest level in the last six years. The record high, far above the previous record of 6.28 per cent set in 2015, reflected the market’s significant improved capacity to absorb capital, the office said.

The loans in the period were mainly focused on prioritised and large projects as instructed by the Government, accounting for some 50 per cent of the total outstanding loans. Agriculture and rural industries and small- and medium-sized firms received some 19 per cent and 22 per cent of the total outstanding loans, respectively.

Viet Nam has targeted credit growth of 18 per cent this year, however, some deputies suggested increasing the target to support economic growth at the National Assembly’s meeting recently. 

VN building management firms forced to improve     

The rapid urbanisation of Viet Nam, together with a boom in the number of high-rise buildings, is pushing local building management firms to be more professional in order to compete with foreign rivals.

According to Nguyen Thanh Hung, Deputy President of Viet Nam Building Management and Maintenance Association, local building management firms were facing a lot of difficulties, including an incomplete legal framework and a shortage of recognised brand names and talent.

Vietnamese firms were less experienced in building management compared to global names such as CapitaLand, Somerset, Savills, CBRE, Hilton and Sheraton, Hung said, adding there was a shortage of human resources in property management. Until now, there have been no schools or universities providing courses in building management.

Meanwhile, building management comprises a variety of sectors, including financial management, asset management and public services. “It is critical to improve the quality of building management in Viet Nam,” he said.

In addition, caps on profits, at between 5-10 per cent, were also hindering the development of local building management firm. The rates were too modest for reinvestment, Hung said.

Hung said that it was necessary to have a foundation in charge of providing training and granting licences for building management together with an improved legal framework.

Building management must also be evaluated regularly to prevent violations and ensure services quality.

“Building management will be hot in the future, given the rapid urbanisation in Viet Nam,” Hung said, citing statistics from the World Bank showing that the number of citizens living in urban areas would rise 50 per cent by 2040.

According to Vu Kieu Hanh, head of property management at Savills Ha Noi, the Vietnamese property market is undergoing rapid development with the number of apartment buildings and office buildings increasing constantly.

However, the lack of professionalism in building management was one of the causes behind mounting disputes between citizens and operators.

Hanh said that the definitions and regulations regarding property management remained too general, and managing a property was never an easy job.

Hanh said that training was needed to improve the quality of building management in Viet Nam. 

Vietnam Airlines earns $36.4m in pre-tax profit     

Vietnam Airlines Corporation earned syndicated revenue of nearly VND43 trillion (US$1.89 billion) in the first half of this year, marking a year-on-year increase of 18 per cent.

The information was released at a conference held to review the corporation’s operation result in Ha Noi on Thursday.

The corporation said its financial situation remained stable with good payment capacity. It is estimated to earn pre-tax profit of VND830 billion ($36.4 million), or 51 per cent of its yearly target for this year.

During the period, the corporation operated more than 70,400 flights with nearly 10.3 million passengers, up 6 per cent. Its average rate of On Time Performance (OTP) was 91.3 per cent, 6.1 points higher than the same period last year and exceeding its target by 3.3 points.

Some 155,000 tonnes of goods were transported during the period, marking a year-on-year increase of 24 per cent.

The firm this week opened a round-the-clock customer care centre with more than 100 telephone operators on June 1 and conducted an online survey to receive feedback on service quality from passengers, aimed at providing prompt services to its customers.

Speaking at the conference, Minister of Transport Truong Quang Nghia appreciated the corporation’s efforts since early this year despite facing many difficulties. In particular, the firm had taken some important development steps, including OTP index and high service quality.

In the second half of this year, the corporation will continue focusing on security and safety, especially during the summer holiday. It will closely co-operate with its subsidiaries, strategic partner Japan’s ANA Holdings Inc and members of the global SkyTeam Alliance to create good products, convenient flight connections and attractive prices, in addition to providing international four-star standard service quality, meeting the increasing demand of passengers.

Mobile World begins delivery of Samsung Galaxy J7 Pro     

The Gioi Di Dong (Mobile World) late last week delivered the first Samsung Galaxy J7 Pro phones to customers who had made bookings since the beginning of this year.

The company said the mid-segment phone had seen the biggest booking volume in years, revealing it had received 16,578 orders with deposits paid in 13,458 cases.

Priced VND6.99 million, the phone was launched nearly a month ago and went on sale on Friday.

According to Mobile World, the most popular colour is silver blue followed by gold and black.

It is the first phone in the segment to come with Android 7. It has two cameras and 32GB of ROM.

Mobile World is one of the biggest mobile phone retailers in the country.

Last month it opened its first store in Cambodia. 

PM gives green light to BMW automakers     

Automaker BMW can access its batch of cars being held at HCM City’s port for maintenance but the firm must replace its local dealer Euro Auto due to violations of the country’s regulations, said Prime Minister Nguyen Xuan Phuc at a conference with German businesses in Berlin on Thursday.

Phuc said the batch’s import tax was calculated much lower than its real value, while local bodies found several false documents during the import process.

The Government leader affirmed that these violations were not caused by the BMW Group in Germany but its agent in Viet Nam.

“The replacement of dealer is needed,” said Phuc.

“We will continue investigation and strictly punish the violators to protect the environment for other investors and ensure their rights and interests. I will direct the Customs Office to allow BMW to maintain the batch of autos worth 15 million euros.”

Regional Manager BMW in Southeast Asia Karsten Engel said the firm had not exported cars to Viet Nam for seven months and hoped that the 700 vehicles at the port would soon undergo maintenance.

Vietnamese authorities discovered many violations while examining the company’s imports in late 2016. The finance ministry sent a document to the General Department of Customs Vietnam to stop customs clearance for all BMW autos imported by Euro Auto Company, the BMW dealer in HCM City.

The company was found to have sold imported cars while the cars were awaiting customs clearance. It also failed to provide legal documents to prove the origin of many products, and allegedly used fake documents such as purchase contracts and receipts to import cars.

The CEO of Euro Auto company, Nguyen Dang Thao, was arrested for allegedly smuggling luxury cars into the country in April. He has been CEO of the firm since November 2015. 

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET