More than $40 million to be spent on stabilising prices for Tet

Many provinces and cities have launched price stabilisation programmes for the end of the year and upcoming Tet holiday, with total capital of about VND840 billion (US$40 million), says the Department of Price Management.

Prices will be stabilised for essential goods, such as rice, sugar, cooking oil, cattle and poultry, confectionery, sausage and seasoning powder.

More than 60 enterprises have participated in the price stabilisation programme while the number of outlets selling price-stabilised commodities tops 3,000.

Sacombank launches international management system

Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) has just become the first Vietnamese bank to implement an environmental and social management system.

The system was built in accordance with international standards and suitable for Viet Nam conditions, said Price Waterhouse Coopers Netherlands.

A system is a set of management processes and procedures that allows banks to analyse, control and reduce the environmental and social impacts of its activities, products and services.

Vinatex to sell non-core operations

The Viet Nam Textile and Garment (Vinatex) Group plans next year to continue divesting capital from non-core lines of business such as banking, securities investment and beverage production, according to the newspaper Dau Tu (Investment).

Vinatex will renew its focus on such core business areas as fibre production, knitting, dyeing and garment production. It will withdraw its investments from Sai Gon-Quang Ngai Beer Joint Stock Co and Gia Lam Garment Engineering Co, after selling shares at Dong A Textile Garment Joint Stock Co, offering its shares in these companies on the nation's stock exchanges on December 28.

Shares of Sai Gon-Quang Ngai Beer Joint Stock Co will be sold at an initial price of VND10,000 per share while shares of Gia Lam Garment Engineering Co will be auctioned with an initial price of VND170,000.

Vinatex is one of a number of State-owned enterprises that have encountered some difficulties in divesting from non-core areas, according to senior economist Pham Chi Lan.

In the current market context, the enterprises have had no choice but to sell holdings at low prices in order to quickly recover capital, Lan said.

Compared to other major State economic groups, the capital Vinatex has invested into non-core areas was modest at VND259 billion (US$12 million) out of a total State equity of VND4 trillion ($190 million). Vinatex holds a 100-per-cent interest in four companies, a majority interest in 13 other companies, and a minority interest in 48 other companies.

"Despite encountering a series of hardships, we commit to complete divesting from non-core areas before 2015," said Vinatex deputy director Le Tien Truong.

Bar set higher for bank branches

A bank would need to have VND300 billion (US$14.28 million) in charter capital in order to open a branch in Ha Noi or HCM City, trippling the current stipulated level, according to a draft circular from the State Bank of Viet Nam.

According to the draft, all banks would be allowed to open a maximum of 10 branches each city. Banks that had been operational for more than 12 months would be permitted to open no more than five branches a year, while others would be limited to three.

It also regulates that every branch could establish a maximum of five transaction bureaus, with no more than two to be opened within a year.

It noted that banks must continue to control their bad debt ratios at no more than 3 per cent of their total outstanding loans, or lower levels possibly stipulated by State Bank Governor Nguyen Van Binh, if they wanted to establish a new domestic branch.

Industry insiders said that this explained why many banks had struggled to open new branches in recent months because bad debt ratios were over 3 per cent.

Banks planning to set up foreign branches must have been operational for at least three years with VND10 trillion (US$476.2 million) in equity and VND100 trillion ($4.76 billion) in total assets. They also needed to have been profitable for three consecutive years.

The State Bank said it was collecting opinions about the draft circular and the Viet Nam Banks Association said it would hold a meeting early next week to consult members.

The central bank announced plans to tighten regulations regarding the establishment of branches and transaction bureaus over a year ago.

Experts call for debt market
 
Viet Nam should seriously consider setting up a market for the sale and purchase of debts, several experts said at seminar held late last week.

The seminar was jointly organised by the Ministry of Finance and the University of Marketing and Finance (UMF).

Debts are usually purchased at a fraction of their original value by firms that collect them on their own or farm it to other institutions in various forms.

Dr. Dao Huu Huan of the UMF said the purchase and sale of debt can be seen as a solution to financial problems facing many enterprises.

He said companies specialising in debt management and asset exploitation would buy the debts.

This move would be of great significance since enterprises would face a deadlock or go bankrupt if they are not able to settle their bad debt problem, Huan said.

Experiences from many countries show that trading in debt can protect the country from a crisis, stabilise the financial situation and improve the strength of financial institutions, he said.

Bad debts have been rising in Viet Nam and since there was no outlet for them, setting up a market is an urgent task, Huan said.

In fact, there has been no consensus among policy makers, commercial banks, the central bank and some international organisations on what the exact amount of bad debt is at present.

A report tabled by Prime Minister Nguyen Tan Dung at the fourth session of the National Assembly, said bad debts at local credit institutions have tended to increase rapidly in the last six months of 2011.

A recent central bank inspection estimated the bad debt ratio in Viet Nam at 8.82 per cent of the economy's total credit, which was VND250 trillion (US$12 billion) in 2011.

At present, Viet Nam has the Debt and Asset Trading Corporation (DATC) under the Ministry of Finance and about 20 small-scale companies that belong to commercial banks.

However, these institutions have neither the financial capacity nor the tools to effectively handle the large volume of bad debts.

DATC director Pham Manh Thuong said that the company by itself had a very modest capital base so it would be very difficult to settle such a large volume of bad debts in a short time.

The 20 debt management and asset exploitation companies are in the same situation, although the commercial banks have engaged in some mutual selling and buying of bad debts, said Pham Huu Hong Thai, UMF deputy director.

Nguyen Thi Hai Binh of the Institute of Financial Strategies and Policies said that to develop a debt market, Viet Nam needed to perfect a legal framework to ensure that debt settlement, including buying and selling of debt, would happen in line with the market principles.

Binh also stressed the need to further develop the local capital market and the mergers and acquisition market, and encourage the participation of international investors in debt settlement.

Thuong said the trading in bad debts was a positive measure since they are also commodities.

However, it was necessary to have strict regulations that force commercial banks to actively settle bad debts instead of letting them manipulate them in whichever way they want, he said.

He also said that many investors have expressed interest in trading in bad debts, but there were several legal obstacles in doing so at present.

Vietnam Airlines offers flights to Jakarta

Vietnam Airlines (VNA) officially launched its direct route from HCM City to Jakarta yesterday, which will see four flights make the trip per week.

The ceremony was held in Jakarta with the participation of Vietnamese Ambassador to Indonesia Nguyen Xuan Thuy, Deputy General Director of VNA Trinh Ngoc Thanh, the representative of Indonesia's Directorate General of Civil Aviation and several ambassadors of ASEAN countries to Jakarta.

"The new route meets the increasing demand of people travelling between the two countries and contributes to enhancing the connectivity among ASEAN countries," said Thanh.

He also highlighted the huge potential offered by the new route and said VNA plans to expand the frequency from four flights to seven in the near future.

Meanwhile, Ambassador Thuy said the VNA's efforts to open the new route are highly appreciated and already proving popular, with all flights since the inaugural one on December 2 being fully booked.

The route, served by the carrier's Airbus A321, is the second new international route put into operation by VNA this year following the launch of flights to Chengdu in China.

Two shrimp firms receive hefty fines

The People's Committee in the central province of Thua Thien Hue has fined two shrimp farms, the Truong Son JSC and Thien An Phu Ltd Company, VND453 million (US$21,700) for polluting the environment.

Following inspections, the provincial Department of Natural Resources and

Environment detected the firms were violating environmental regulations regarding waste water.

Friends of Phu Quoc clean up their island

Some 2,000 students and residents of many communes across southern Kien Giang province's Phu Quoc Island joined the Clean-up Day campaign yesterday.

Wearing "I Love Phu Quoc" T-shirts, they picked up unsightly rubbish from public places as part of efforts to clean up the island's environment.

"Litter and rubbish pollutes the environment. We want to keep Phu Quoc clean to preserve its natural beauty and encourage tourists to visit the island,"said Luong Thanh Hai, director of the Kien Giang Biosphere Reserve.

Phu Quoc is the focus of a number of international events this week, including a conference that celebrates and promotes the values of the Kien Giang Biosphere Reserve.

The Conservation and Development of Kien Giang Biosphere Reserve Project, jointly funded by AusAID and German Co-operation Organisation (GIZ), focuses on waste management and litter prevention as an important part of environmental protection.

The Clean-up Day builds on other awareness programmes delivered by the project, including the development of schools resource materials, which aim to make environmentally-friendly behaviors part of daily life.

Toxic waste continues to blight the environment

HCM City discharges nearly 500 tonnes of hazardous waste each day, but only 10 per cent are treated properly, according to a survey conducted by the Environmental and Natural Resources Institute under the Viet Nam National University-HCM City.

The city contains 49 waste treatment plants licensed to handle toxic waste, yet only 19 companies are actually capable of treating it, said the institute's deputy director Le Thanh Hai.

"The remaining waste is treated improperly by businesses themselves or by private waste treatment plants," Hai said.

In some cases, hazardous waste was also discarded without treatment.

"Many businesses hire private waste treatment companies to treat their toxic waste, but these enterprises are not licensed to handle the waste because they lack the proper equipment," he added.

Often, according to Hai, businesses could not classify harmful waste because they lacked the necessary equipment.

"Such hazardous waste comes not only from industrial production plants and businesses, but also households," Hai said. "Many local people find it hard to distinguish between toxic and normal waste. Used batteries, for example, are classified as toxic waste, but you can still find them in household garbage dumps."

Deputy Director of HCM City Environmental Company Nguyen Minh Hoang told Thoi bao Kinh te Sai Gon Online (Sai Gon Economic Times) that the city's treatment plants were unable to treat the huge amount of waste discharged each day.

That waste mainly consists of fuel, batteries, chemicals, light bulbs and printing ink, as well as other waste from the pharmaceutical and metallurgy sector.

HCM City plans to implement 39 projects that will treat all wastewater discharge as well as solid and toxic waste from factories, hospitals and households by 2015, according to the city's Department of Natural Resources and Environment.

Infrastructure projects, which will put facilities in place to treat the solid waste, make up 13 of the planned projects. A toxic-waste treatment plant with a capacity of 21 tonnes a day has already gone into operation.

Experts praise irrigation systems
 
Well-developed irrigation systems in Mekong (Cuu Long) Delta have played a key role in agricultural and fishery production and the ongoing shifting of the regions' economic structure, speakers pointed out at a conference held yesterday in Can Tho.

The conference was organised by the Southwestern Steering Committee and Ministry of Agriculture and Rural Development yesterday in Can Tho.

In 1995, when the irrigation system was poorly developed, average agricultural productivity was only 4.1 tonnes per ha, and paddy yield 12.8 million tonnes.

Since 1996, paddy productivity has increased sharply. Last year, productivity reached an average of 5.6 tonnes per ha, with total production of 23.1 million tonnes.

The region now has five reservoirs, 1,221 pump stations, 11,138 kilometres of canals, more than 25,900 kilometres of dykes, and sea dykes measuring a total of 460 kilometres in length.

These works help bring water to nearly 4 million ha of farmland every year.

The irrigation system has also helped expand aquacultural farms in the area.

In 1995, the region had a total of 289,200 ha of water surface, with aquaculture productivity of 267,000 tonnes.

Last year, the region had nearly 740,000 ha of water surface for fish and shrimp cultivation.

The Delta has identified priority projects, programmes and implementation plans through 2020 and to 2050.

A few months ago, the Government also issued a irrigation development plan for the Cuu Long (Mekong) Delta that would help the area adapt to climate change and higher sea-levels.

The plan aims to gradually improve the irrigation systems, water supply, drainage, flood control and salinity control for 1.8 million ha of rice-farming land in the Cuu Long (Mekong) Delta.

The plan also calls for the completion of a system of sea dykes and river dykes, and regulation of the sewerage system to maintain fresh water and prevent salinity.

HCMC export turnover shows substantial increase

Ho Chi Minh City export turnover in 2012 increased by 7.36 percent since last year, to touch US$30.25 billion, said Huynh Khanh Hiep, deputy director of the Department of Industry and Trade, at a meeting on December 11 to review the present export status and to plan for 2013.

The meeting was presided over by Nguyen Thi Hong, deputy chairwoman of the City People's Committee.

Foreign invested sector registered an export value of $8.8 billion, a year-on-year increase of 14.87 percent and the state-owned sector reported an export turnover of $21.45 billion, an increase of 4.56 percent.

Five export items saw a rise in turnover of more than one billion dollars, namely, textile and garment, leather products, electronics, rice, shoes and cashew.

Production of some items was sufficiently increased to earn more dollars for the country, such as rice, coffee, cashew and seafood.

18,000 enterprises increased their export markets in 2012 and export products from the City reached 228 nations and territories, of which four are new markets.

The deputy chairwoman said that despite facing many difficulties and challenges this year, enterprises have sought new markets and increased their export turnover to bring dollars for the City.

She is now working with the Department of Industry and Trade and related agencies to review past achievements and fulfill future challenges and goals. The department has been asked to prepare a report and send to the People’s Committee by next week.

Two online trading companies shut operations

On December 11, nearly 1,000 employees of Nhom Mua Company received a letter from the HR department informing that investors had stopped providing funds to the Company.

The financial sponsors of Nhom Mua Company are three sources in Vietnam, namely, IDG Ventures, Reabate Networks and Ru-Net, having 72.73 percent stake in Nhom Mua.

Soon after the website shutdown, groupon company Nhom Mua (www.nhommua.com) experienced another upheaval in its board of directors, with the general manager stepping down.

The letter also mentioned that Kyle Pham will leave CEO position from December 11.

Kyle Pham, who was appointed to manage the deal-of-the-day company on November 13, announced Tuesday that he has submitted a letter of resignation ‘citing personal reasons’ to the group of shareholders of the company on the same day.

Kyle Pham confirmed his resignation as CEO, as he was tired and worried about the future of the company as investors stopped funding operations and hence business activities could no longer continue.

The company employees were also asked to take a day-off on Tuesday, and await further announcement, while its headquarters in Ho Chi Minh City was temporarily closed.

Nhom Mua vouchers, however, still remain valid for use, the company asserted.

Earlier in mid-November, Nhom Mua headquarters were blockaded by the economic police, and its website became inaccessible for four days, triggering a wave of concern for customers who had already bought its vouchers.

Some restaurants and services actually rejected payments using the company vouchers, until the website resumed operations.

Nhom Mua made its debut in Vietnam in October 2010 based on the idea to carry online commercial deals through advertising. The Company’s website got about four million visitors each day.

It is known that the average revenue of Nhom Mua reached VND44 billion per month, accounting for 60 percent of market share of online business in Vietnam.

Another groupon website, www.dealsoc.vn earlier this month also stopped operations while its owner--All in One Co Ltd headquartered in Ho Chi Minh City--was shut down.

The Company was accused by its partners for not clearing payments on their product supplies as promised and delaying debt settlements.

Private sector’s role highlighted in government agenda

The government, in a bold move, is prepared to think out of the square to innovate its policy-making.

The Vietnamese government has endorsed plans to invite the private sector, non-governmental organisations and civil society groups to engage in its policy-making process.

This is reflected in the Vietnam Partnership Document (VPD) completed by the government in association with international donors and organisations.

Cao Manh Cuong, vice head of the Ministry of Planning and Investment's Foreign Economic Relations Department, told VIR that the initiative was "totally new to Vietnam."

The government, Cuong said, would be "totally open" to the participation of the private sector, CSOs and INGOs in its policy-making, especially private enterprises as the policies would greatly affect their business performance.

"This will be a big advance," Cuong said. "Vietnam's socio-economic development must be joined by all economic sectors and international organisations."

United Nations resident coordinator's office acting head Peter Reeh and World Bank country officer Mette Frost Bertelsen praised the decision.

They said the participation of the private sector, civil society organisations (CSOs) and international non-government organisations (INGOs) in the government's policy making process was "a must" as the relationship between the Vietnamese government and donors had been shifting from official development assistance (ODA)-based support relationship to equal development partnership.

"The participation of private enterprises, CSOs and INGOs will provide more inputs to Vietnam's socio-economic development, helping better the government's policy effectiveness," Reeh said.

At present, private enterprises, CSOs and INGOs largely stood outside the government's policy making process, said Cao Vinh Hai, director of Consulting Centre for Environment-Resources and Rural Poverty Alleviation.

The VPD has been presented for endorsement to the Annual Consultative Group Meeting in Hanoi on December 10, 2012. The VDP will be implemented from 2012 to 2015 with many actions carrying forward to 2020 in service of Vietnam's socio-economic development.

Under the VPD, "the government commits to implement policies and measures to support fair competition, a positive business environment and expanded private sector participation in development agendas, including domestic and foreign investment in infrastructure development through public-private partnership."

MPI Deputy Minister Cao Viet Sinh said the government would encourage the private sector, including foreign direct investment. The government would also strengthen policy and institutional frameworks to promote private investment in infrastructure development.

The VPD also stated that by expanding partnerships with civil society, "Vietnam's government commits to create an enabling environment to facilitate the participation of CSOs and INGOs in achievement of the socio-economic development plan development agenda."

Sinh said the government would promote a favourable policy and institutional environment for the participation of local CSOs and INGOs in development agendas. The government would also support the establishment of a local CSO resource centre for the purposes of coordination, capacity strengthening and information sharing.

The VPD would be specified by sectors devising their own action plans in cooperation with the private sector, CSOs and INGOs.

Cuong said within the VPD, the MPI was drafting a decree to replace the government's Decree 131/2006/ND-CP on ODA management and use. Under the new decree, the private sector would be allowed to join ODA-funded projects. So far, no private enterprise could do any such projects.

"This will be a big advance. Vietnam's socio-economic development must be joined by all economic sectors and international organisations," Cuong said.

Vietnam less attractive for foreign investment

Vietnam’s business environment has become less attractive in comparison to other regional countries such as Indonesia and Thailand, said Minister of Planning and Investment, Bui Quang Vinh.

Vinh said at a press conference after the 2012 Consultative Group Meeting that the expected foreign direct investment (FDI) may reach around USD13 billion this year, with around USD10.5 in actual allocations.

These figures are below the expectations set by the ministry’s Foreign Investment Agency (FIA) which hoped to see USD15-16 billion in FDI with disbursement of around USD11 billion this year, he noted.

According to the FIA, as of November 20 the country granted investment licenses to 980 new foreign-invested projects with a total registered capital of USD7.25 billion. This figure is down 39.6% from last year.

The country attracted total of USD12.18 billion in FDI in the first eleven months of this year, down 21.4% from the same period last year. Actual disbursement reached USD10 billion during the period, about the same as a year a earlier.

Vinh estimated that next year FDI may reach from USD14-15 billion, while real capital disbursement has been estimated to be from USD10-11 billion.

He said that international donors have pledged to provide nearly USD6.5 billion in official development assistance (ODA) to Vietnam in 2013, a figure which is down nearly USD1 billion from last year.

He blamed slow progress of ODA disbursement for the shortage of reciprocal capital on the Vietnamese side.

Slow site clearance, resulting from obstacles in land compensation, also added difficulties in allocation, in addition to the lack of professionalism and competence by ODA management agencies.

“The Government has advanced an additional VND5 trillion (USD239.7 million) for ODA-backed projects for 2012, but such projects may face tightened budgets beginning next year,” he said.

The Government has also been looking to other sources through public-private partnership.

USD1-billion hotel project lot remains a wasteland

A USD1-billion hotel project site invested in by the Kinh Bac City Development Holding Corporation in Hanoi remains a wasteland.

Located in My Dinh Commune, Hanoi, the Lotus Hotel project was scheduled to be completed in October 2010. It was at one point considered among the biggest hotel projects in Hanoi, likely to rival Keangnam Hanoi Landmark Tower and Grand Plaza and expected to be the highest building in the city once put into operation.

The project would include shopping centres, hanging gardens and a luxury hotel.

In 2009, Japan’s Riviera Group withdrew from the project due to financial difficulties. After that, the Hanoi People’s Committee allowed Kinh Bac City Development Holding Corporation to take over the project with investment valued at USD500 million.

Early in 2011, chairman of the group Dang Thanh Tam said the project would be started in the first quarter of the year and the group would raise the project investment capital to USD1 billion.

However, the project has remained only on paper so far. The land plot has been used for vegetable cultivation, parking, and as football pitches.

The 46,000 square metre land plot has also been used as a rubbish tip.

Vinatex unravels its business positions

Leading textile and garment group Vinatex is ramping up efforts to divest from non-core businesses.

After selling stake in Dong A Textile Garment in mid 2012, Vinatex mulled divesting from Saigon-Quang Ngai Brewery and Gia Lam Mechanical Garment.

Accordingly, Vinatex’s entire stake at these two businesses will be auctioned at Ho Chi Minh City Stock Exchange and Hanoi Stock Exchange on December 28, 2012.

The move comes as Vinatex is starved of capital to inject into core businesses like garment and textile dyeing. Vinatex’s over 1.6 million shares at the Saigon-Quang Ngai Brewery which has VND450 billion ($21.4 million) in chartered capital in which Vinatex holds less than 4 per cent will be offered at VND10,000 per share starting price whereas 20,700 shares worth VND100,000 ($4.7) in the face value at Gia Lam Mechanical Garment offered at VND170,000 ($8) per unit.

Vinatex retains 30 per cent stake at Gia Lam Mechanical Garment which reported VND6.9 billion ($330,000) in chartered capital.

In the context of a lackluster stock market, Vinatex’s continual divestiture commitments showcased the group’s strong determination for business restructuring to scale up its capital usage efficiency.

In 2013, the group managed to take back capital from one security business, seven banks and the remaining fields which were viewed as challenging tasks as no bright signs for a better future are seen in the horizon.

Senior economic expert Pham Chi Lan said the only way to speed up divesture commitments would be selling stakes at bargain prices, making the target of ensuring state capital high investment efficiency hardly achievable.

Vinatex’s current situation is common to diverse other state groups.

Vinatex’s deputy director Le Tien Truong said the target of preserving state capital investment efficiency has slowed down the group’s divestiture pace.

In late May 2012, Vinatex put into auction its over 1.4 million shares at Dong A Textile Garment with VND20,000 per unit in starting price.

However, only more than a half of the shares found owners.

Compared to other state group, the capital portion Vinatex pumped into non-core businesses remains minuscule at around VND259 billion ($12.3 million). The group is holding 100 per cent chartered capital in four companies, 50 per cent stakes in 13 firms and less than 50 per cent shares in 48 other units.

“Despite facing mounting hardships, Vinatex will try its best to finalise divestiture commitments before December 31, 2012 pursuant to prime minister approved state owned enterprises restructuring plan via Decision 929/QD-TTg of July 17, 2012,” said Truong.

DHL opens its new depot in Danang

DHL, the world’s leading logistics company, has strengthened its Vietnam network by opening a new VND10 billion ($500,000) depot in Danang.

The latest opening of its new 650 square metre depot is the latest investment made by DHL in Vietnam, further solidifying its market leading position in the country.

The new, modernised depot located at 33, Nguyen Du Street, Hai Chau district, serves as a central point for DHL’s customers in Danang and has the capability to process an estimated to process over 250,000 shipments annually. The opening of the new depot reinforces Danang’s status as the hub of the key economic zone in central Vietnam.

Built to international standards, the depot is also fully compliant with both Global Standard Operations Procedure (GSOP) and Transported Asset Protection Association (TAPA) standards.

Danang, the commercial and leading industrial center of central Vietnam, has attracted over $152 million in foreign direct investment in the first nine months of the year. The city’s gross domestic product (GDP) is estimated to have expanded 10.2 per cent and has seen a 17.6 per cent increase in revenue in the export and import sector in the first half of 2012.

“Danang and the centre of Vietnam is a key economic area and has seen considerable growth in the recent years, especially in hospitality, IT and tourism. The opening of the Danang depot is part of our long-term investment and commitment to support the burgeoning growth that we are experiencing in this part of the country,” said Yasmin Aladad Khan, senior vice president, DHL Express Southeast Asia.

“In recent years, we are seeing greater demands for fast and reliable international express services. The addition of this new depot to our eight pre-existing facilities will ensure that our customers benefit from seamless connectivity from Vietnam to 220 countries and territories across DHL’s vast network. Danang is one of the country’s most important ports and supports industries such as machinery, electronics, chemicals, shipbuilding and textiles.”

“Vietnam is gaining importance as a key trading partner both regionally and globally. Thus the investments that DHL has made in the country will prepare us for growth and allow us to continue supporting our customers with their needs in the future,” said Christopher Ong, general director, DHL-VNPT Express

DHL currently has eight other facilities in Vietnam - three service centres, three depots and two gateways. The VND10 billion investment in the Danang depot brings the total investment by DHL Express to VND300 billion over the past six years.

PwC inks cooperative agreement

PwC, the State Securities Commission (SSC) and Hanoi Stock Exchange (HNX) today joined a signing ceremony of a cooperative framework agreement.

Attending the ceremony were Vietnam’s Deputy Finance Minister Truong Chi Trung, global PwC network chief executive officer (CEO) Dennis Nally and SSC chairman Vu Bang, leaders and representatives from relevant businesses and several press organisations.

The move was to develop an early warning system for SSC to monitor securities firms. The agreement between HNX and PwC aims to support HNX in risk management, systemise key risks relevant to strategy, finance, operation, system and obedience as well as present management measures and remedies in response to such risks.

“Due heed should be paid to risk management to better confront changes in domestic and international financial-securities market as well as satisfy the demand for market quality improvements in the face of stiffer competition and deepening integration. Having in place early warning system would uphold SSC in overseeing securities firms’ performance and early detect latent risks at securities companies, from there introducing measures to tackle risks in a timely and radical manner, avoiding hurting the market,” said SSC chairman Vu Bang.

HNX director Tran Van Dung said: “HNX seeks to systematise current risk management operations and develop a comprehensive risk control framework to effectively support HNX in risk management. The cooperation between PwC and HNX contributes to bettering risk management expertise while perfecting our internal control system.”

“Integrating into the global economy brings myriad development opportunities to Vietnamese businesses as well as great challenges. Hence, to evolve in a sustainable manner, businesses need efficient risk management system parallel to a well-conceived business strategy,” said PwC Vietnam’s general director Dinh Thi Quynh Van, adding that through teaming up with SSC and HNX, PwC wished to constitute a cost-effective risk control framework to Vietnam stock market for its future sustainable growth.

Firms get in order

Efforts are being ramped up to ensure a smooth introduction of a national business registration information portal in the first quarter 2013.

“Information relevant to business registration like name of business, enterprise code, address of head office, its legal representative can be procured charge free at the portal,” said a representative of the Ministry of Planning and Investment’s Business Registration Management Agency.

The draft regulation on management and operation of the portal will soon be completed by the agency. Accordingly, procuring information concerning business registration certificates, certificates on business registration of branch offices and representative offices, proposal to business registration, company rules, and joint stock companies’ financial statements shall incur fees.

Customers shall also pay for information about company leaders in three most recent years.

A big challenge facing business registration experts is how to ensure registered business information be always precise and frequently updated. Under the draft regulation, access control and user authenticity will be set as a top priority through using user database. For instance, to ensure security registered users not working in the system from 60 days will have their access accounts temporarily halted, according to the agency.

Gunnar Koren, chief technical advisor to Vietnam’s business registration reform project, said businesses needed to do their utmost to ensure accuracy and timeliness of their registered information which should be taken as their obligation before state management agencies, partners and customers.

“Towards this goal, the business community must fully recognise the advantages and interests they gained from the system,” said Gunnar.

One Vietnam province is learning about the effects of such a portal. The business information portal of Lao Cai Department of Planning and Investment was recently launched at #www.htdn.laocai.gov.vn, according to Nguyen Ba Canh, deputy head of the province’s business registration division.

“On the eve of the launch, more than 1,500 businesses in the area were compelled to submit their 2011 financial statements as regulated. Through reviewing, we detected score of firms did not place name signs on their headquarters,” Canh said.

Canh added that system would help reduce risks for business transactions while constituting a more transparent and safer business climate.

Online purchases in Vietnam double over the past year

E-commerce is booming and making its presence felt in Vietnam with online purchases doubling in many categories over the past year.

According to the findings of the latest Visa e-Commerce Consumer Monitor Research 2012, Vietnamese are rapidly embracing online shopping. This trend can be attributed both to heavy use of the internet and also growing confidence in online security measures.

The Visa APCEMEA E-commerce Consumer Monitor Research 2012 is an online survey conducted by TNS from March to June 2012. The survey asked over 8,000 respondents from eight countries around the world (Hong Kong, Korea, Japan, Singapore, Vietnam, Russia, the Philippines and South Africa) about their online payment attitudes and behavior. Respondents were internet users (accessing internet at least once a week), aged 18-55 years old, selected based on a soft quota taking into consideration age, gender and annual household income.

The internet has become an integral part of daily life for most Vietnamese. Surveys show that Vietnam’s internet usage is roughly on par with the global average, with 67 per cent of users going online daily (68 per cent globally). This has helped to create a suitable environment for e-commerce to grow.

According to Visa’s research, 98 per cent of respondents in Vietnam have browsed online for products and services in the past 12 months and 71 per cent of them actually made online purchases within this period. Some 90 per cent of respondents say they will continue to do so in the future.

Another factor that has contributed to the growth of e-commerce in Vietnam is the higher level of security measures. Around 70 per cent of consumers who have shopped online in the past year said that the improved level of security persuaded them to shop more online.

A majority of respondents (83 per cent) reported that they felt far more confident in the system. Top reasons cited as contributing to more secure online transactions include online payment security features such as Verified by Visa and security around personal and financial information upheld by financial institutions and online merchants. All these factors have combined to bolster consumer confidence in the online system.

With this momentum as a driver, the coming year is likely to see e-commerce gain even greater acceptance. There is huge potential for this growth in Vietnam. Around 60 per of local businesses still do not have online payment acceptance capabilities and only about 20 per cent of Vietnamese have bank accounts.

Areas that have witnessed a boom in e-commerce include the health and wellness sector which has seen online payments surge from 4 per cent to 11 per cent over the past twelve months. Other growth areas include baby care products, fashion and household electronics.

The advent of smartphones and 3G networking has also created an avenue for e-commerce growth. The survey shows 39 per cent of respondents use mobile devices to browse for products and services online. Popular categories include bill payment (14 per cent) as well as online gaming and digital content (13 per cent). Armed with a smartphone and a payment card, consumers can browse products and services anytime, anywhere. They can also make online purchases with ease.

Lorijon Bacchi, country manager for Visa in Vietnam, said: “At Visa, we value the importance of e-commerce in emerging markets such as Vietnam. As an international electronic payments technology leader, Visa is committed to assist in the growth of e-commerce by providing an online payment solution with advanced security features like Verified by Visa (VbV).”

“VbV is a free, simple-to-use service that confirms consumers’ identities with an extra password when they make an online transaction. Our survey shows that the enhancement in online security has certainly had a positive impact on online sales. Some 85 per cent of respondents said that the use of VbV enhances their positive perceptions in the security of a merchant’s website. More than half of the respondents also said they would increase their shopping if security features such as VbV were implemented on websites. Visa is looking forward to giving more local consumers a convenient and safe online shopping experience.”

Recently, Visa partnered with MyUS.com as part of Visa’s efforts to raise interest in online shopping among local consumers. This service provides access to US stores for Visa cardholders in Vietnam through its personal shipping service, including some that do not ship internationally or accept non-US payment cards.

“Online shopping has opened up the global market. Visa hopes to make online shopping part of a consumers’ life because it is not only convenient but it is also secured. In addition, cardholders can take advantage of offers that will increase their savings even more,” Lorijon Bacchi said.

Foreign investment soars in Binh Duong

The southern province of Binh Duong will attract an estimated US$2.6 billion in foreign direct investment (FDI) in 2012, far exceeding the target of $1 billion, according to the provincial People's Committee.

Among the foreign firms to invest in the province was Japan's Sai Gon Stec Co which spent $175 million on expanding its factory to produce electronic circuit boards for cameras in the Viet Nam-Singapore Industrial Park (VSHIP) II. This expansion has raised the company's total investment in the province to $340 million.

Another Japanese enterprise, Wonderful Sai Gon Electrics, added $150 million to its hi-tech factory to produce camera modules used in mobile phones, allowing it to turn out 245 million products each year. Sun Steel Co also expanded its operation in steel and corrugated iron with a capital supplement of $100 million.

New FDI registered in the province also contributed to this year's boom. Over 100 new projects, capitalised at $1.58 billion, were granted investment certificates.

To date, the province has attracted 2,117 foreign-invested projects worth a combined capital of $17.3 billion.

"We have attempted to implement policies with a focus on developing infrastructure and ensuring a skilled labour force to better facilitate foreign investors," said vice chairman of the provincial People's Committee Tran Thanh Liem.

In an attempt to continue this positive trend, the province has set a target of attracting between $1-1.2 billion per year until 2020 with a focus on countries such as Japan, the US and the EU.

According to financial analysts, the strong inflow of FDI to Binh Duong, despite the global economic difficulties, showed that the province had responded to demands from investors for a safe and secure investment environment.

Binh Duong's high quality infrastructure and its provision of land were attractive to overseas investors, they said.

To date, the province has developed 28 industrial parks, covering a total area of over 9,000ha, many of which have become well-known in international business circles, including VSIP, My Phuoc and Song Than.

While maximising its existing strong points, local authorities have realised that they need to pay more attention to improving local services and the quality of its human resources as well as simplifying administrative procedures to make it easier for investors.

Sluggish reforms discourage investors

Investment funds are leaving the Vietnamese stock market despite falling share prices, VinaCapital chairman Terence Mahony told the Lao Dong (Labour) publication.

Cash would only pour back into the market when fund managers believed authorities had implemented strict measures to handle bad debt and equitise state-owned enterprises (SOEs), Mahony said.

Many institutional investors have forsaken the market. Late last month, SSI Vision Fund – with charter capital of VND1.7 trillion (US$80.9 million) – announced an end to its five years of operation, and VietCapital Fund will dissolve this month.

The funds that remain have had to narrow the scope of their investment activities. One fund belonging to VinaCapital did not approve a single new investment last month, saying any cash surplus would be returned to shareholders.

Dragon Capital also seemed to take more caution in its investments. Dragon Capital's Vietnam Grow Fund increased the percentage of cash in its portfolio to 3.8 per cent on October 31, compared to 2.3 per cent in August. Meanwhile, the asset value of Dragon Capital's Vietnam Enterprise Investments Limited fund dropped about $25 million in three months to $373 million.

Although share prices did not fall sharply during this period, investors were not particularly motivated to pour money into the market given the continuation of what Mahony called "core problems": bad debts and the lack of reformed SOEs.

In a recent report by Saigon Securities Inc (SSI) on December's market strategy, the company's analysts said no new information had been released about the national asset management corporation, which the Government says will settle bad debts.

And at the Viet Nam Business Forum held last week, the working group on capital markets said SOE equitisation had not made progress either.

The country needed a new roadmap with clear criteria and a detailed timetable, the group said. Investors were also worried that, core economic issues aside, the watchdogs had not even come up with immediate solutions to help increase liquidity.

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