Analysts advise caution as money flow increases

Investors should be cautious with their investments as profit-taking may continue next week, according to analysts from securities firms such as BIDV Securities JSC and Bao Viet Securities JSC.

The increasing money flow into the market shows that investors have gained confidence, but over-excitement may increase risks.

It is possible the market may reach 580 points by the end of this week.

Short-terms investors should not sell their shares at the moment and take advantage of declining sessions to buy more shares.

Last week, both indices strongly advanced in the first two sessions but their improvements were restrained in the last three days as investors sold large-cap shares to earn profits.

As a result, the VN Index fell on Wednesday and Friday while the HNX Index struggled to maintain its upward trend.

At the end of the week, the VN Index on the HCM Stock Exchange was up 1.38 per cent to 569.56 points, and the HNX Index on the Ha Noi Stock Exchange closed at 83.23 points, an increase of 4.63 per cent.

Blue chips continued to attract investment, especially Vingroup (VIC), PetroVietnam Gas Joint Stock Corporation (GAS), Vinamilk (VNM), Ma San Group (MSN), FIT Investment Joint Stock Company (FIT) and KLF Global Investment JSC (KLF).

FLC Group (FLC) and Ocean Group JSC (OGC) hit their ceiling prices for the last three sessions to support the market's advance.

Sharp increases in bank shares such as Vietcombank (VCB), the Bank for Investment and Development of Vietnam (BID), Sai Gon-Ha Noi Bank (SHB) and Asia Commercial Bank (ACB) drove the market up.

Securities firms also improved their market values, including Sai Gon Securities Incorporation (SSI), HCM Securities Corporation (HCM), Thien Viet Securities JSC (TVS), IN Securities JSC (VIX) and Sai Gon-Ha Noi Securities JSC (SHS).

Market liquidity rose sharply against the previous week on the two bourses. On the southern bourse, total trading volume during the week was more than 654 million shares worth VND9.67 trillion ($448 million), an increase of 12.8 per cent.

Investors on the Ha Noi bourse traded total nearly 289 million shares during last week, valued at VND3.1 trillion ($143.8 million), up 12.5 per cent over the previous week. Foreign investors remained net buyers last week.

In total, foreign investors recorded a net buy value of approximately VND390 billion ($18 million), equal to 75 per cent of the previous week's figure.

Blue chips, especially bank shares, were the targets for foreign investments. On the HCM bourse, MSN received the highest net foreign purchase of VND70 billion ($3.2 million), followed by Sacombank (STB) and Imexpharm Corporation (IMP) with VND41.5 billion ($1.92 million) and VND38.2 billion ($1.77 million).

In Ha Noi, net foreign investments focused most on Petroleum Technical Services Corporation (PVS) and Viet Nam Construction Group (VCG), with VND17.1 billion ($791,600) and VND16.6 billion ($768,500). 

Eight "ghost" companies prosecuted for selling VAT invoices

Viet Bac Mines Import-Export Stock Company has been prosecuted for misusing its rights to usurp assets and trade value-added tax (VAT) invoices.

The Ha Noi Police also prosecuted Le Van La, a company's employee, on the same charges.

Accused Nguyen Thi Dau has been prosecuted for illegally selling value-added invoices.

According to the police, La, who was a staff of the business section of Viet Bac Mines Import-Export Stock Company, colluded with Dau to set up 8 "ghost" companies for selling VAT invoices to legalise input goods that had no origin.

In the collaboration, La was in charge of dealing with Mine Exploitation Company in Quang Ninh Province to sell them equipment.

Although La provided the company with equipment without origin, he noted in their contracts that they were brand new products from Japan, the United States, and Germany.

Thus, La and Dau acquired large amounts of money through tax evasion and increased real value of contracts.

La and Dau used 8 "ghost" companies to provide VAT invoices to customers.

Between 2010 and 2014, La transferred VND144 billion (Ú$6.6 million) to Dau's account through the "ghost" companies.

Dau took 5-10 per cent of the total money as commission.

The police are widening the scope of investigation into the dealings of the accused.

January-May CBU auto imports surge

The General Statistics Office (GSO) estimates 45,000 completely built-up (CBU) autos have been imported into Vietnam this year, soaring 125.3% against the same period of last year.

The import volume in May alone has reached around 10,000 autos, 4,000 higher than a year-ago period. This is the same as in April but its import value has amounted to US$337 million, up over VND43 million against last month and VND120 million over March.

According to the General Department of Customs, Vietnam imported 5,455 autos worth some US$184 million in the first half of this month.

Soaring auto imports have played a part in Vietnam’s trade deficit which has reached around US$3 billion in the year to date, or 4.7% of the country’s total export value in the period.

China, South Korea, Japan, Thailand and India are the major sellers of CBU autos to Vietnam in the period.

Auto companies attribute higher auto imports to rising demand on the domestic market while locally assembled cars cannot meet expectations of customers, especially in terms of prices when Vietnam has to lower tariffs on CBU autos imported from other ASEAN markets.   

Experts and auto traders forecast auto sales would remain strong in the coming time and the number of imported CBU cars would increase towards this year-end.  

Vietnam imported some 72,000 CBU autos worth US$1.57 billion last year, surging 103.8% in volume and 117.3% in value against the previous year. Imported vehicles accounted for nearly 50% of total auto sales on the local market in 2014.

Social housing package disbursed less than one fifth after two years

The Ministry Construction has reported that the VND30 trillion (US$1.38 billion) credit package for social housing project has been disbursed slowly reaching less than one fifth after two years of implementation.

Banks have pledged to loan house buyers with VND13,078 billion as of April 30.

Of these, VND7,155 billion has been disbursed including VND5,211 billion to 16,432 households and VND1,944 billion to 33 projects of businesses.

According to the ministry, the slow disbursement is because of low social housing supply. Most of unsold apartments are with large areas and high prices, which the buyers are unaffordable for.

In addition, banks have tightened their loaning conditions to ensure debt collection ability.

Investors of sixty commercial housing projects have registered to transfer into social housing with a total supply of nearly 39,000 apartments. Seventy four others want to divide their apartments into smaller ones for easier sales.

Total inventory value in the real estate market reached VND67,443 billion (US$3.09 billion) by the end of April, down 47.53 percent over the first quarter in 2013. Of the inventory were 2,908 apartments.

HCM City doubts financial capability of Bitexco

The government of HCMC has told the departments of construction and planning-investment to look into the financial capability of Bitexco Group before any of the group’s plans to develop projects around the Bitexco Financial Tower in District 1.

The order comes after District 1 People’s Committee has cast doubt on Bitexco’s financial capability despite its support for the firm’s development plans around the Bitexco Financial Tower skyscraper.

The reason is Bitexco has long got approval for some major projects in District 1 such as a residential area project on Nguyen Cu Trinh Street and The One hotel, office and retail project overlooking the landmark Ben Thanh Market. But work on the two projects has been slow.

The city government allocated a land lot on Nguyen Cu Trinh Street to Bitexco in 2006 but nothing has been done yet after nearly one decade. Though 56 households relocated from 2012 and registered to buy new apartments at the project for resettlement, Bitexco has yet to complete site clearance and compensation and build apartments for them.

The company reportedly owes District 1 some VND8 billion in compensation and fees for additional support and services.

This is why the district has asked the city government to inspect Bitexco’s financial capacity before approving the group’s new investment plan.

Vu Quang Bao, general director of Bitexco Group, said Bitexco applied to borrow about VND1.7 trillion from VietinBank in 2012 for The One project, but all the procedures have been completed recently. He affirmed the money for the hotel, office and retail project is being disbursed as planned and components have been implemented as projected.

Bao told the Daily earlier that Bitexco is capable of mobilizing sufficient capital for the project worth up to US$500 million.

Bitexco started work on The One in December 2012 and plans to put it into operation in June 2017. The project has a tower of 55 floors and another of 48 floors, and will supply more than 31,800 square meters of retail space, 17,300 square meters of grade A+ office space, around 350 serviced apartments for lease and 250-room Ritz Carlton Hotel once it is completed.

Bitexco inaugurated the Bitexco Financial Tower on Hai Trieu Street at the end of 2010.

An auction for VND2 trillion (US$91.9 million) worth of five-year and 10-year Government bonds failed on Tuesday with no single bond sold, the first such failure in four years.

The previous auctions still found some buyers of G-bonds but the amount raised by the State Treasury from the sale of debt paper was much lower than targeted. However, the Tuesday auction was unprecedented as the agency raised no money from the sale.

Apart from G-bond auctions held by the State Treasury, the Vietnam Bank for Social Policies organized some bond auctions in the past two weeks. But demand for 10-year and 15-year G-bonds was sluggish as commercial banks and financial institutions are more interested in debt paper with shorter tenors.

The G-bonds offered by the State Treasury usually come with a minimum tenor of five years, so institutional investors have little or no appetite for them. Meanwhile, three-year bonds offered by the Vietnam Bank for Social Policies sold easier this week as such a short term of bond fits the current investment plans of banks which prioritize high liquidity.

On Monday, the Vietnam Bank for Social Policies offered VND1 trillion worth of government-guaranteed bonds with tenors of three years, five years and 10 years, and raised VND300 billion from the sale of three-year bonds with the winning coupon of 6% a year.

Liquidity on the secondary G-bond market has tumbled.

Long-term G-bonds have turned unattractive to investors at a time when the Government is striving to mobilize more capital. This means that raising capital for the State budget via G-bond sales is a tough task now.

The State Treasury plans to issue more G-bonds in the second quarter of this year with the total volume being 14% higher than that in the first quarter.

Experts said the State Treasury could raise bidding coupons in the coming auctions to make G-bond sales attractive to investors.

Data of the Hanoi Stock Exchange showed that the State Treasury has raised some VND67 trillion via G-bond sales in the year to date.

The Consulate General of Vietnam in Japan on May 27 organised a seminar on investment opportunities in Vietnam for Japanese businesses in the Kansai region.

Over 120 Japanese companies from the Kansai region operating in the fields of industrial production, mechanical engineering, agriculture, import-export, cosmetics, construction, banking, and personnel training joined the event.

At the seminar, Japanese firms were provided with the most up to date information on Vietnam’s economic development and trade relations between Vietnam and Japan, as well as the latest policies and regulations related to investment and trade as the Investment Law and the 2014 Enterprise Law will take effect this July.

Representatives from two Japanese companies currently investing in Vietnam – The Support and Nippon Kyohan Kogyo – shared their positive assessment of the business environment and their actual experiences in running business in Vietnam.

A representative from the Kansai Bureau of Economy, Trade and Industry confirmed that Vietnam is now the top preferred investment destination for Japanese firms.

Japanese companies commended the potential and investment opportunities for running business in Vietnam, especially in the context of formation of the ASEAN Economic Community in late December and Vietnam’s active participation in multilateral free trade agreements like the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.

They also spoke highly of efforts by the government of Vietnam in amending and supplementing laws and regulations to facilitate business environment for foreign investors, adding that Vietnam would continue support for Japanese businesses, particularly in accelerating investment licensing process.

The Japanese business community suggested the Consulate General of Vietnam organise more workshops on auxiliary industry, agriculture, human resources and real estate to provide additional information for Japanese businesses during their preparation and development for investment plans in Vietnam.

Myanmar agrees to facilitate Vietnamese investments

Deputy Prime Minister and Foreign Minister Pham Binh Minh asked the Government of Myanmar to consider simplifying administrative procedures and granting investment licences to Vietnamese businesses in the near future while meeting with Myanmar President U Thein Sein and Foreign Minister UWunna Maung Lwin in Nay Pyi Taw on May 28.

The meetings took place ahead of the 8th session of the Joint Committee on cooperation between Vietnam and Myanmar .

The Vietnamese official highlighted the Vietnam Rubber Group’s project in Bago region, the VinaCapital Group’s establishment of an agriculture complex, and the Bank for Development and Investment of Vietnam (BIDV)’s launch of its branch in Myanmar.

The two host leaders spoke highly of the visit by Deputy PM Pham Binh Minh in celebration of the 40th anniversary of bilateral diplomatic relations, adding that its success will help propel bilateral cooperation forward.

The hosts expressed their satisfaction with the sound political and diplomatic ties between the two countries, and consented to increasing high-level delegation exchanges and promoting the efficiency of the current cooperation mechanism.

They confirmed that Myanmar treasures its time-honoured friendship and multi-faceted cooperation with Vietnam .

President U Thein Sein agreed to increase Vietnam-Myanmar cooperation in fields with potential, such as seafood, oil and gas, and information communication technology, while expanding the mutually beneficial cooperation efforts in agricultural exports, vocational training and tourism.

The President revealed that the Government of Myanmar is considering granting an investment licence to BIDV to open its branch in Myanmar in order to facilitate trade between the two countries.

The hosts and guest agreed to continue working together at regional and international forums, as well as working with other Association of Southeast Asian Nations (ASEAN) member states to establish the ASEAN Community in late 2015.

This will contribute to maintaining the bloc’s central role in regional issues, including the East Sea related ones, they said.

Lao Cai province promotes agricultural exports

Nearly 100 domestic and Chinese businesses took part in a conference on boosting exports in farm produce, seafood and timber products, which was held in the northern province of Lao Cai on May 28.

The businesses hailed from localities throughout the country that have a huge demand for these products, including northern Nam Dinh, Thai Binh, Bac Ninh, Bac Giang and Hai Phong provinces, central Binh Thuan province, and Ho Chi Minh City.

Major products exported via the Lao Cai border gate into Yunnan province include rice, rubber, coffee beans, lychees, dragon fruit, shrimp, cassava, maize and bananas.

Vice Chairman of the provincial People’s Committee Le Ngoc said the locality has undertaken efforts to facilitate customs clearance at border gates, reducing costs for Vietnamese and Chinese businesses.

Representatives from Yunnan pledged to create most favourable conditions for exports to China via the international border gate, to expand promotional campaigns and to accelerate the development of infrastructure to foster trade exchange between the two countries, and in the Asian region in general.

Lao Cai province, which shares more than 200km of the border with Yunnan, plays a crucial role in connecting the domestic market with China’s south western market.

PAPI index increasingly important for judging good governance

The Vietnam Provincial Governance and Public Administration Performance Index (PAPI) has increasingly become a valuable and reliable tool for supervising the implementation of policies, Dr Pham Thi Hong, Deputy Director of the Centre for Fostering Personnel and Scientific Research (CFOSR), announced at a conference in central Quang Nam province on May 28.

The conference on improving the PAPI was organised by CFOSR, which is an affiliate of the Vietnam Fatherland Front (VFF).

PAPI data has been used to assess the performance of governance at central and provincial levels as well as for tracking changes in governance and public administration in Vietnam each year, she said.

Participants in the conference agreed that the PAPI Index is now seen as a measure of good governance at the central Government level and the quality of public administration in local Government at all levels.

Since 2009, almost 61,000 individuals have responded to interview questions and provided feedback on their experiences and measures that are applied effectively, thus contributing to improving the PAPI Index.

VFF chapters at all levels coordinated with relevant units to implement the PAPI research project to hear from citizens about their satisfaction with leadership, management and governance capabilities in each locality.

A number of other reports were presented at the conference, such as the PAPI Index 2014 report on trends at the national level from 2011-2014 or a report on the Southern Central provinces’ PAPI Index from 2011-2014.

Participants also discussed achievements and limitations, focusing on the PAPI Index that measures the ‘right to know’ about Government policies that direct impact on residents’ rights, responsibilities and livelihoods.

Participants said there was room for improvement in a number of fields, including transparency in planning and land-use plans, disadvantaged households and poverty, and military servicemen and veterans.

Almost all Hanoi exchange firms see profit in first quarter

Twenty seven of the top 30 stocks in terms of market value and liquidity on the Hanoi Stock Exchange reported profits in the first quarter of this year, data on the bourse shows.

Total net sales of these 30 shares reached 10.067 trillion VND (464 million USD) ending March, down 1.63 percent over the same period last year. After-tax profits also decreased 2 percent, totalling 1.519 trillion VND (70 million USD).

Asia Commercial Bank (ACB) topped the gainers with a net profit of more than 280 billion VND (nearly 13 million USD) in the first three months, a hike of 12 percent over the first quarter of last year.

PetroVietnam Technical Services Corp (PVS) retreated to the second position, earning almost 276 billion VND (12.7 million USD), up 16.2 percent over the same period of 2014.

In total, 16 companies saw positive earnings growth, of which Vietnam Construction and Import Export Corp (VCG) and PetroVietnam Northern Gas Co (PVG) were the most impressive. Both firms leapt spectacularly from losses in the first quarter of 2014 to profits in the same period this year.

VCG's revenue declined 6.6 percent year-on-year, reaching 1.483 trillion VND (68.3 million USD), but it still saw a profit of 100.4 billion VND (4.6 million USD) by the end of March while recording a loss of nearly 10.2 billion VND (470,000 USD) in the same period last year.

Meanwhile, PVG climbed from a loss of 21.5 billion VND (991,000 USD) in the first quarter of 2014 to a profit of almost 4 billion VND (184,300 USD) in the three months ending March.

In the other end of spectrum, 14 businesses had negative earnings growth in the first quarter. Three firms, including Song Hong Construction (ICG), Kim Long Securities Corp (KLS) and An Phat Plastics and Green Environment Co (AAA), moved from profitable positions to losses.

KLS was the biggest surprise. It reported a loss of more than 39 billion VND (1.8 million USD) in the first quarter of this year, but posted a profit of 91.6 billion VND (4.2 million USD) in the first three months last year.

The company attributed this loss to an increase of 50.8 billion VND (2.3 million USD) in provisional funds to hedge possible share downturns. Meanwhile, it had a return of 21.8 billion VND (1 million USD) from this fund during the same period of last year.

AAA also reported a loss of 6.4 billion VND (295,000 USD) in the first three months while it earned a profit of 14.8 billion VND (682,000 USD) in 2014's first quarter.

AAA explained rising competition from China, accompanied by economic slumps of the eurozone, the main exporting market of the company, had adverse impacts on its performance.

ICG also reported a loss of over 1.1 billion VND (51,000 USD) in the first quarter, a slide from a profit of 3.3 billion VND (152,000 USD) in the same period of last year.

Dinh Vu-Cat Hai Economic Zone adjusts master plan

The Prime Minister has agreed in principle to adjust the master plan for the construction of the Dinh Vu-Cat Hai Economic Zone in the Hai Phong city by 2025.

The Hai Phong People ‘s Committee proposed adjustments and additions be made to the previously-approved plan, including the additional construction of ports and wharfs for international cruise ships and the handling of liquid goods, as well as the development of Cai Trap Island as an eco-tourism area with shopping centres and luxury resorts.

According to the local authorities, the added components aim to fully tap into the city’s current strengths and potentials.

The PM tasked the municipal People’s Committee with collecting feedback from the Ministry of Construction in order to prepare, assess, and approve the proposed changes in line with legal regulations.

Previously, the PM approved the master plan for constructing the Dinh Vu-Cat Hai Economic Zone by 2025, which aims to turn the combined economic area that serves various sectors in the northern coastal region into an international logistics hub.

The plan aims to establish modern industrial parks and attractive urban areas in the city, thus drawing in more investments and high-quality human resources.

Can Tho retail sales increase 20 percent yearly during 2010-2014

Can Tho city’s total retail and service sales during 2010-2014 reached 320.9 trillion VND (14.7 billion USD), according to the draft document to be submitted to the congress of the municipal Party organisation for the 2015-2020 tenure.

The figure surpasses the set target by 10.1 percent and was the result of an average 20 percent increase each year.

The result also put the Mekong Delta city third in the country in terms of retail and service revenues, only behind Ho Chi Minh City and Hanoi.

According to Le Hung Dung, chairman of the Can Tho city People’s Committee, the high and steady growth was gained through improved infrastructure and investment in modern trade and service models such as supermarkets, shopping centres, hotels and restaurants.

The commerce and service sector will account for 60.1 percent of the city’s GDP by the end of this year and is expected to increase to 61.75 percent by 2020.

Japanese businesses raring to invest in Vietnam

The Consulate General of Vietnam in Osaka, Japan organised a workshop for Japanese businesses from the Kansai region on investing in Vietnam.

The workshop was coordinated by the Kansai Bureau of the Economy, Trade and Industry, the Japan-Vietnam Business Support Centre, and the Japan-Vietnam Friendship Association in Sakai, among others.

A representative from the Kansai Bureau of Economy, Trade and Industry stated that Japanese firms consider Vietnam as a top investment destination.

More than 120 participating enterprises learned about the trade ties between Vietnam and Japan, the Vietnamese economy and relevant policies.

They commended Vietnam for its business climate and investment opportunities during the formation of the ASEAN Economic Community, as well as its active role in establishing multilateral free trade agreements, such as the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.

They spoke highly of the revised laws on investment and enterprise establishment that will take effect on July 1.

Business leaders expressed their hope for continuous support from the Vietnamese Government, particularly in accelerating investment licensing process.

The Japanese business community suggested the Consulate General of Vietnam launch additional sector-specific workshops on agriculture, human resources and real estate.

The southern-central Kansai region includes the prefectures of Osaka, Mie, Nara, Wakayama, Kyoto, Hyogo and Shiga.

Industrial production index rises 9.2 percent in five months

Vietnam's index of industrial production (IIP) in the five months of the year increased year-on-year by 9.2 percent, the General Statistics Office (GSO) said.

The GSO said the rise of the IIP indicated the country's industrial production had stabilised, targeting a growth rate of 15.2 percent before the global economic slowdown.

It said the relatively high growth rate was due to a high consumption rate of 12 to 14 percent in the past three months, compared with the same period last year. Among these, vehicles saw the highest growth of 42 percent, electronics 31 percent, metal production 24 percent and leather 15 percent.

The office said the decrease in inventory index by 11.5 percent contributed to the industrial production recovery.

The chemical production inventory was lower than the average level of 9.2 percent, cloth by 3.8 percent, and rubber and plastic production 1.4 percent. The inventory of electric equipment and tobacco fell by 2 percent and 24 percent respectively.

GSO said vehicles reported an inventory increase of 32 percent, including 72,400 automobiles, while that of leather shoes was 130.7 million pairs, mobile phones 88.8 million units, TV 1.6 million and fresh milk 428 million litres.

However, other sectors saw low IIP such as raw steel, which rose only 1.5 percent, while natural gas fell 0.6 percent and motorbikes fell 14.2 percent.

The IIP posted a 9.1 percent increase in the first quarter of this year and a 9.4 percent rise in April.

Ho Chi Minh City, Vietnam’s largest economic hub, recorded a positive economic growth rate in May and throughout the first five months of 2015, a conference heard on May 28.

According to the municipal People’s Committee, total retail sales of goods and services are estimated at over 54.3 trillion VND (2.49 billion USD) for May and more than 267 trillion VND (12.28 billion USD) for the January-May period, up by 10.8 percent compared to the same period last year.

The city’s Consumer Price Index rose by 0.3 percent in May against the previous month. This month, the export turnover is estimated at 2.57 billion USD and import turnover at 2.67 billion USD.

During the first five months, more than 113.7 trillion VND (5.23 billion USD) was collected for the city budget, up by 4.7 percent year on year.

Most notably, the city’s index for industrial production is estimated to increase by 6 percent compared to the same period in 2014.

The Director of the municipal Department of Planning and Investment, Thai Van Re, said domestic and foreign investors alike also recorded positive results in the city.

As of May 20, the city granted investment licenses to 207 projects worth a total of 672.7 million USD, 72.5 percent more projects than during the same period last year. Meanwhile, 390 million USD was added to 68 existing projects.

The Chairman of the municipal People’s Committee, Le Hoang Quan, called upon local departments and authorities to focus on helping enterprises overcome difficulties in production and operations.

Localities were asked to develop industry, renovate technologies, increase competitiveness and improve product quality.

In order to maintain Ho Chi Minh City’s rate of economic growth, the committee prioritised intensifying trade and investment promotion efforts, expanding potential markets, and strengthening the connectivity between enterprises and banks.

Argentinian economist: Vietnam - thriving and competitive market

With its relatively high growth rate and improved income per capita, Vietnam has been offering both opportunities and challenges for Argentine enterprises, according to Argentinian economic expert Julio Sevares.

In a story published in Argentina’s Clarin newspaper on May 27, Julio Savares hailed Vietnam’s economic achievements in recent years and highlighted cooperation opportunities in trade and investment.

Julio Sevares, a professor at the University of Buenos Aires (UBA), also indicated a number of benefits and challenges that Argentinian enterprises face when operating or investing in Vietnam.

From its historic military victory, Vietnam has gained successes in the economy, and as a result Argentina has been benefitting from the Southeast Asian nation’s development by exporting goods and diversifying its products and investment portfolio, according to the story.

Vietnam’s economy grew by 5.8 percent last year and is expected to rise by 6 percent this year. Per capita income has increased fivefold since the economic reform process began 30 years ago.

The Vietnamese Government has issued a number of policies to attract private investment and has introduced reforms of its tax, customs and investment regulations. Furthermore, Vietnam is promoting the development of products of highly added value.

In 2002-2014, the trade volume between Vietnam and Argentina increased 20-fold to 1.706 billion USD in total.

In addition to animal food, tanned leather, animal and plant oil, wheat and cotton, Vietnam also has a high demand for Argentinian meat, fruit, wine, milk and pharmaceutical products.

According to Julio Savares, Argentinian businesses operating in Vietnam have to navigate cultural differences and face growing competition from local products.

The Free Trade Agreements (FTAs) between Vietnam and other Asian countries with Chile, Australia and New Zealand pose another challenge to Argentinian businesses, Julio Sevares said.

Vietnam has been a member of the World Trade Organisation since 2007 and a member of the Association of Southeast Asian Nations since 1995. It signed an FTA with the Republic of Korea and is currently finalising the procedures to sign FTAs with the Eurasia Economic Union, the European Union and the Trans-Pacific Partnership, which features the United States and Japan.

Vietnam offer a great opportunity for Argentina, but this also requires Argentinian private and State-owned enterprises to develop and apply a long-term strategy, he said.

The Ministry of Transport (MOT), along with Phu Yen and Khanh Hoa provincial authorities, started work yesterday on the opening of the VND15.6 trillion (US$726 million) Deo Ca Tunnel on National Route 1A.

The tunnel will be 3,900m long, consisting of 2 single tunnels, each with two 3.5m lanes. The speed limit will be 80kmh. Construction on the tunnel started in 2012 under the management of Deo Ca Investment JSC.

When complete the tunnel will shorten the distance between the two provinces by 8km, cutting the travel time in half and alleviating heavy traffic.

The project is scheduled for completion by the end of 2016 and should open in early 2017.

In related news, Prime Minister Nguyen Tan Dung approved a project to upgrade the Hai Van Tunnel, which connects Hue and Da Nang.

The Hai Van Tunnel was built 10 years ago with its original design only included a single tunnel for two traffic lanes and no guard rails. With heavy traffic through the tunnel ensuring safety inside has become increasingly difficult.

There were also other problems such as traffic jams, congestion and fire hazards.

"Upgrading the tunnel will allow vehicles moving in different directions to travel on separate lanes in separate tunnels," a representative from the MOT told the Giao Thong (Transport) newspaper.

The project has a total alignment length of 12.6km. Japanese consulting firm Nippon Koei proposed the tunnel be constructed from the existing rescue tunnel. It should cost VND6 trillion ($277 million).

If approved, the project would start during the first quarter of 2016 and be completed in about three years.

In a recent development, Project Management Unit 6 had submitted a feasibility study on a highway project that would connect Bai Vot and Vung Ang in central Ha Tinh Province to the MOT as a part of the North-South Highway.

The 88km-long project would be constructed using the Build-Operate-Transfer method, with a total investment of VND12.5 trillion (US$578 million). It aims to reduce the travel time between the country's northern and central regions, relieve traffic pressure on National Route 1A and boost the regions' socio-economic development.

Markets losing lead over convenience stores

Wet markets and traditional stores remain the preferred retail channels for Vietnamese shoppers, though they are under threat as consumers shift away, according to a Nielsen report released on Wednesday.

The two have seen a decline in sales of 5 per cent and 17 per cent respectively since 2012.

The frequency of visits also decreased.

While consumers have become more "savvy" in their shopping behaviour in recent years, the need for convenience continues to grow.

In Viet Nam, store expansion also continues to gain momentum, especially in urban areas.

Convenience stores more than doubled from 147 in 2012 to 348 last year, while mini marts increased from 863 to 1452.

This new demand is being led by time-poor and predominantly young shoppers in making everyday food and grocery purchases, and has been a key driver in convenience store expansion.

Some 22 per cent of consumers shop for food and grocery more often at convenience stores compared to 12 months ago.

Food and beverages are driving convenience store sales, with 86 per cent of consumers buying either and 62 per cent of beverage buyers also buying food and 51 per cent of food buyers also buying beverages.

Vaughan Ryan, managing director of Nielsen Viet Nam, said: "Convenience is not a store front, but rather a way of life. Consumers are increasingly demanding products and solutions that help them in their increasingly busy life.

"As a result we will see the emergence in Viet Nam of both the convenience channel and e-commerce to meet this consumer demand."

To address these shifts, retailers must deepen their understanding of this evolving shopper behaviour, foresee changing needs and develop strategies that are focused on differentiation in areas that matter most to shoppers, he added.

Local rice exports continue to decline

Rice exports have declined sharply in the first five months of the year, indicating that the industry is struggling, according to the Ministry of Agriculture and Rural Development's latest report.

In the first five months the country exported 2.4 million tonnes of rice worth US$1.05 billion, according to ministry statistics. These represent declines of 11.4 per cent and 14.6 per cent respectively over the same period last year.

The average price of exported rice was $436.7 per tonne, falling 4.27 per cent below last year's price in the same period.

China remained the country's largest rice import market. Its market share accounted for 34 per cent. Rice exports to China also declined 28.11 per cent in volume and 31.06 per cent in value over the same period last year.

The ministry said rice exporters were facing difficulties in recent months due to competition from other large exporting countries. At the same time the product's global demand has fallen.

In fact, Viet Nam's rice exports had struggled in recent years due to low competitiveness in quality and price, compared with other major rice exporters. Experts attributed this to a lack of a prominent rice brand name.

Viet Nam Food Association statistics showed rice exports declined from 7.7 million tonnes, worth $3.45 billion in 2012; to 6.6 million tonnes and $2.95 billion in 2013; and 6.5 million tonnes and $2.84 billion last year.

Prime Minister Nguyen Tan Dung recently approved a project to develop a leading Vietnamese brand by 2020.

Retail, service revenue increases by 9.1 per cent

Retail sales and service revenue in the first five months of the year totalled VND1,305 trillion (US$60.67 billion), according to the General Statistics Office (GSO).

The figure represents a 9.1 per cent increase on the year, the GSO said, adding that it rose 8.2 per cent excluding inflation.

Retail sales in the past five months accounted for 75 per cent of the sector's total revenue, reaching VND997 trillion ($46.37 billion).

The hospitality sector saw an 11.2 per cent increase in revenue, or VND145.73 trillion ($6.78 billion), owing to the increased spending during the long holiday.

Meanwhile, the tourism sector, which is valued at VND10.59 trillion ($0.5 billion), fell 11.8 per cent.

Purchasing power growth stood at around 8 per cent in the first five months. It increased, inflation excluded, 9.2 per cent in March, 10.7 per cent in February and 11.9 per cent in January.

The growth of purchasing power has declined and stood at 8 per cent in April and May.

GSO statistician Vu Manh Ha said these indices do not reflect real purchasing power, because they are calculated based on the consumer price index (CPI).

The CPI has been fluctuating. It decreased in January and February, but increased again by 0.15 per cent in March, 0.14 per cent in April and 0.16 per cent in May. But the money inflow of consumption and services did not fluctuate much.

Sabeco hikes profits, dividend targets

Saigon Beer Alcohol Beverage Joint Stock Corporation (Sabeco) approved a hike in its net profit target for 2015 to VND3.291 trillion (US$151.7 million), up 8 per cent over last year.

Its dividend rate was also adjusted upward to 30 per cent from the old 25 per cent.

This decision was in line with the requirement of the state, the largest shareholder with a 90-per-cent stake in the corporation, Sabeco's annual shareholders' meeting yesterday announced.

In its previous plan, Sabeco planned a total net profit of almost VND3.11 trillion ($143.3 million) for the whole year, up just 2 per cent over last year's result, and the dividend was projected at 25 per cent.

However, the target of total sales was kept unchanged at VND31.721 trillion ($1.5 billion), equivalent to 1.425 billion litres of beers, up 2 per cent over 2014, of which Saigon Beer will account for 1.388 billion litres.

However, Sabeco's executives warned that the impending hike in the special consumption tax on products like beer and tobacco, proposed by the Ministry of Finance (MoF) in a draft decree on the tax, would have an adverse impact on the corporation's profit and dividend.

In a proposal to the government to amend the law on the special consumption tax, the ministry suggested raising the tax charged on beer and alcohol by 10 to 20 per cent from July 1, 2015.

According to Sabeco's chairman Phan Dang Tuat, if this draft law is approved, Sabeco's profits will be trimmed to VND900 billion ($41.5 million), equivalent to 10 per cent of its total profits.

In addition, if the regulation of labelling stamps on beer cans was valid, it would lose another VND800 billion ($36.9 million) in profit, Tuat said.

Last year, Sabeco sold nearly 1.4 billion litres of beer, surpassing its target by 2 per cent, while sales of alcohol reached 3.4 million litres, equivalent to 65 per cent of its goal, and beverage was 35 million litres, up 5 per cent over the plan.

Its total revenues reached VND30.674 trillion ($1.4 billion), a year-on-year increase of 6 per cent and up 4 per cent over its target, while the after-tax profit attained nearly VND3.05 trillion ($140.6 million), up 9 per cent year-on-year and beating its goal by 11 per cent.

The 2014 dividend was decided at 23 per cent.

Sabeco's General Director Pham Thi Hong Hanh said fierce competition from foreign brewers and the rise in transport costs last year had an undesirable impact on the company's business. Consumption of major flagship products like beer 333 cans, 355 bottles saw a decline compared to the previous year.

The situation this year was likely to remain difficult with strong competition in the domestic market, accompanied by higher prices in materials remaining the negative factors affecting sales, Hanh said.

The corporation this year would promote sales of its premium beer in the local market while boosting exports to other countries including China, South Korea and Cambodia along with Laos and Myanmar.

Tuat said Sabeco has developed two new beer flavours including lemon and tequila which suits Vietnamese tastes while coffee and tea flavours would go on sales soon.

Concerned over the possible co-operation with foreign partners, Tuat said this issue must be approved by the Ministry of Industry and Trade. However, he also said that such business ties, particularly with a financially strong partner, should be watchful on concerns of losing the brand to foreign company risks.

Can Tho's retail sales rise 20 per cent

Can Tho city's total retail and service sales during 2010-14 reached VND320.9 trillion (US$14.7 billion), according to the municipal Department of Industry and Trade.

The figure surpasses the set target by 10.1 per cent and was the result of an average 20 per cent increase each year.

The result also put the Mekong Delta city third in the country in terms of retail and service revenues, only behind HCM City and Ha Noi.

According to Le Hung Dung, chairman of the Can Tho city People's Committee, the high and steady growth was gained through improved infrastructure and investment in modern trade and service models such as supermarkets, shopping centres, hotels and restaurants.

The commerce and service sector will account for 60.1 per cent of the city's GDP by the end of this year and is expected to increase to 61.75 per cent by 2020.

HD Bank to provide services to VNPT

The Housing Development Commercial Joint Stock Bank (HD Bank) last week signed an agreement with HD Saison Finance and the Viet Nam Post and Telecommunications Group (VNPT) to help each other develop their services.

HDBank and HD Saison Finance will provide banking and financial services to VNPT and its members as well as its customers.

VNPT will provide HD Bank and HD Saison a post and telecom services package for use through their entire system and help them apply advanced technologies to improve customer service.

In its 25 years of operations HDBank has tied up with many companies, including EVN, Viet Nam Southern Food Company, Hyakugo Bank, Hana Bank, and Dai-ichi Life.

Science & technology achievement contributes to develop HCMC

Ho Chi Minh city Department of Science and Technology in collaboration with the Ho Chi Minh Communist Youth Union yesterday opened an exhibition of “40 years of science and technology achievements of Ho Chi Minh city - A development stage”, marking Vietnam Science and Technology Day.

More than 90 booths from 60 enterprises, research institutes and centers such as HCMC High Technology Park, Chip Research and Training Center participated in the exhibition.

Through the exhibition, the organization board introduced to the city residents outstanding achievements in the field of science and technology, service industry during past 40 years.

Speaking at the ceremony, Deputy Chairman of HCMC People’s Committee Le Manh Ha stressed that city’s science and technology achievement has played an important role in city’s socio-economic and development for the last 40 years.

Accordingly, some science and technology achievement has also been applied in the fields of education, health, aquatic and agricultural production, which has contributed to attract investment and technology development of the city in particular and Vietnam in general.  

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