VietinBank receives green light to sell VietinBank Aviva holding

The government has given permission to the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank, HSX stock code CTG) to transfer its holding in the VietinBank Aviva Life Insurance Company to Aviva International Holdings Ltd (AIH).

The share price is yet to be announced. VietinBank contributed VND400 billion ($17.64 million) when the company was set up but by the end of 2016 the net value of its investment, by the equity method, was only VND183.8 billion ($8.1 million), while the value at the end of 2015 was approximately VND318 billion ($14 million).

The equity method reflects the ownership of the investor in the business result of the investee. It was not exceptional for VietinBank Aviva to report losses last year.

VietinBank Aviva has charter capital of VND800 billion ($35.3 million) and was set up in 2011 with a 50-year lifespan. It is a joint venture between VietinBank and Avia International Holdings Ltd (established in the UK), with each side holding 50 per cent.

The company is a major player in the life insurance field. According to estimates by the National Insurance Supervision Bureau, it ranks tenth in premium revenue and has a market share of 1.52 per cent.

Shareholder structures in life insurance companies have seen many fluctuations in recent years. In the PVI Sunlife Company, a Sunlife Group partner completed the acquisition of the entire capital from PVI after two transfers. The deal helped PVI record a large profit and led it to withdraw from the life insurance business after three years of involvement.

VPBank to conduct private placement this year

The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) is proceeding with a 15 per cent private placement to local and international investors in 2017 as part of its plans to increase its charter capital by around 40 per cent to over VND14 trillion ($620 million).

The price will be determined by mutual consent through negotiations between the bank and its investors, Mr. Nguyen Duc Vinh, CEO of VPBank, told shareholders at a meeting on April 10. Purchasers cannot re-sell their shares for at least one year.

The bank is also positive it will list its shares on the Ho Chi Minh Stock Exchange (HoSE) this fiscal year after a year-long delay.

It has told investors it expects the listing process to be completed in the third quarter at the earliest. The transaction is subject to regulatory approval, however. It has engaged an advisory company for the process.

Regarding capital supplements to the parent bank, VPBank said it was still in talks to sell 49 per cent of its consumer finance arm, FE Credit.

FE Credit is growing strongly, the bank said, and it needs to increase funding sources to assure the minimum capital adequacy ratio. The 49 per cent sale will also provide more capital to the parent bank.

The initial plan to partially exit the consumer credit unit was announced in 2015 but is yet to be finalized.

VPBank did not elaborate on the bidders or the price in the sale, but local media have reported it is in negotiations with a Japanese institution.

Vietnam’s ninth-largest lender in terms of total assets claims itself as one of the most active lenders in attracting financial facilities from major global institutions, including the International Finance Corporation (IFC) and Credit Suisse.

By the first quarter of 2017, IFC, the World Bank Group’s private lending arm, had completed a total of more than $200 million in financing packages for VPBank, including syndicated loans and quasi-equity investment.

Buoyed by such financial support, the Vietnamese lender is positioned to ramp up financial services for the country’s small businesses and private sector.

It is also targeting to become a leading player in retail banking and online banking, having empowered Vietnam’s first digital bank, Timo, which bagged a strategic investment from Canada’s Sun Life Financial.

SSI regains lead in brokerage share on HNX

Hanoi Stock Exchange (HNX) recently announced securities brokerage market share in the first quarter of 2017.             

Accordingly, Saigon Securities Incorporated (SSI) regained leading in the top 10 securities brokerage firms with the largest brokerage market share on the HNX with 9.87 per cent of market share. Thus, in this quarter, SSI continues to lead the brokerage market share of both HSX (14.12 per cent) and HNX, affirming the position of Vietnam's No.1 securities company. Meanwhile, Saigon - Hanoi Securities (SHS) slipped to the second place with a market share of 8.51 per cent, sharply down from 10.6 per cent in fourth quarter of 2016. The third and fourth places have not changed compared to the fourth quarter of 2016, namely VNDirect (VNDS) and Ho Chi Minh City Securities Corporation (HSC) with market share of 8.28 per cent and 7.5 per cent respectively.

MB Securities (MBS) and ACB Securities (ACBS) exchanged positions in the first quarter of 2017. In particular, MBS came in at fifth rank with 6.57 per cent and ACBS down one rank and placed at 6th with 5.68 per cent.

FPT Securities (FPTS), from the 10th place, ranks at the 7th position with a market share of 4.41 per cent. The 8th and 9th places, unchanged from the previous quarter, were the Bank for Foreign Trade of Vietnam Securities (VCBS) and the Bank for Investment and Development of Vietnam Securities (BSC) with market share 3.98 per cent and 3.82 per cent respectively. Notably, Viet Capital Securities (VCSC) has fallen to 10th place with 3.58 per cent market share.

It can be seen that the top 10 leading companies accounted for 62.2 per cent of brokerage market share of HNX in the first quarter of 2017, of which the top 3 securities companies with the largest market share were SSI, SHS, VNDS accounted for 26.66 per cent market share nationwide.

On the UPCoM market, leading brokerage market share in the first quarter of 2017 is VCSC with a market share of 9.49 per cent. The second place belongs to HSC with 9.04 per cent. The next two positions are SHS and SSI with 8.45 per cent and 8.24 per cent respectively.

Regarding the share of government bond brokerage on the HNX in the first quarter of 2017, four companies - BSC, VCBS, BVSC and HSC - led the market and all accounted the market share of over 10 per cent.

Savills: HCMC apartment transactions slow in Q1

Transaction volumes in Ho Chi Minh City’s apartment segment as well as in the villa and townhouse segment were down in the first three months of the year, according to the first quarter report released by Savills on April 12. Other segments, such as retail, office, and serviced apartments were relatively stable.

Savills noted that Vietnam’s real estate market in general and the Ho Chi Minh City market in particular are in a period of stability. The apartment segment had about 5,200 new apartments for sale in the first quarter, down 47 per cent quarter-on-quarter. Total primary supply in all segments reached around 42,500 units.

At the same time, the total volume of transactions in the first quarter fell 13 per cent quarter-on-quarter, at about 8,800 units. Grade C transactions increased 10 per cent while Grade B declined 35 per cent. Market absorption was approximately 21 per cent, down 1 percentage point quarter-on-quarter due to lower absorption rates in Grade A and Grade B.

Savills forecasts that supply from the second quarter of 2017 to 2019 will reach 62,200 units, of which District 2 and District 7 will continue to see the most, with about 21 per cent each. In the villa and townhouse segments, primary supply declined by 14 per cent in the quarter to 2,600 units but was up 25 per cent year-on-year.

Trading volumes were not very positive, declining 11 per cent compared to the last quarter of 2016, in which eastern districts accounted for 74 per cent of all transactions, especially District 9, with 49 per cent. The absorption rate was 34 per cent, up 1 percentage point quarter-on-quarter and 12 percentage points year-on-year.

From the second quarter of 2017 to 2019, the city will receive about 14,200 units from 44 new projects. Eastern districts are expected to account for 55 per cent of total future supply.

In the office segment, a number of Grade C projects in Binh Thanh district entered the market, offering over 4,400 sq m. Total market supply in the first quarter therefore reached 1.6 million sq m, stable on a quarterly basis and up 1 per cent year-on-year.

Savills also reported that operating performance was maintained, with average rentals increasing by 1 per cent quarter-on-quarter and 2 per cent year-on-year. Rentals rose due to a scarcity in Grade A and Grade B vacancies in the CBD. Average capacity was 97 per cent, stable quarterly and up 2 percentage points year-on-year.

The market is expected to receive over 390,000 sq m of new office floor space by 2019. In the remaining three quarters of 2017, the figure is expected to be 123,000 sq m, equal to 8 per cent of existing supply.

The serviced apartment segment was relatively stable in the quarter, with total supply of 4,600 units, up 2 per cent quarter-on-quarter and 6 per cent year-on-year. Leasing occupancy averaged 87 per cent, up 5 percentage points year-on-year, with average rentals also rising 5 percentage points over the same period of 2016.

C&W: Hanoi office-for-rent sees stable growth in Q1

Hanoi’s office market is expected to have more than 200,000 sq m of new supply completed, of which half will be concentrated in secondary areas, 41 per cent in the west, and only 9 per cent in the CBD, according to Cushman & Wakefield Vietnam (C&W)’s first quarter report on the capital’s office market.

One Grade B office building was completed, adding 8,400 sq m to the market. There are now 17 Grade A and 69 Grade B office buildings in the city, providing over 400,000 sq m and 800,000 sq m of space, respectively, to the market. Over 45 per cent of total stock was concentrated in secondary areas (Ba Dinh, Hai Ba Trung, and Dong Da districts), 34 per cent in the west, and 19 per cent in the CBD.

Both grades showed improvements in market performance. Grade A occupancy increased 4 percentage points quarter-on-quarter and 13 percentage points year-on-year to 86 per cent. Meanwhile, Grade B office space recorded a modest 1 percentage point increase quarter-on-quarter and 2 percentage points year-on-year, to 91 per cent.

Significant absorption was recorded, totaling nearly 30,800 sq m in both grades, up 47 per cent quarter-on-quarter and 65 per cent year-on-year, Grade B outperformed Grade A in the quarter and contributed 54 per cent to total absorption. More than half of total net absorption was recorded in secondary areas while a quarter was attributed to western areas due to reasonable rents.

Average rents in both grades continued to trend upwards, with Grade A spaces climbing to VND679,000 ($30) per sq m per month, up 1 per cent quarter-on-quarter and 5 per cent year-on-year, while Grade B spaces remained at VND422,000 ($18.5) per sq m per month, stable quarter-on-quarter and up 2 per cent year-on-year.

Competition will be more intensive not only because of upcoming projects but also from the gaining popularity of alternative office spaces such as serviced offices, co-working spaces, and “office-tels”, the report noted. The market is expected to remain tilted in favor of tenants in the short term.

“Vacancy rates in both Grade A and Grade B buildings in the CBD are under 10 per cent and have fallen consistently for the last 18 months and we have reached the lowest CBD vacancy rates of 4 per cent in Grade B and 4.6 per cent in Grade A,” said Mr. Alex Crane, General Manager of Cushman & Wakefield Vietnam.

“Therefore, office space is, and will continue to be, difficult to find for the foreseeable future, with no new significant projects planned for the CBD. Demand has shifted to other sub-markets, which as a result has increased net absorption in these secondary areas and the west.”

“The asking rent in both grades has increased marginally across the market, led by CBD prices. The market is, however, expected to remain tilted in favor of tenants as the secondary and western areas continue to attract occupiers with good quality space at attractive prices compared to the CBD. This shift will continue through 2017 and 2018.”

VOF & VNL divest from Dai Phuoc Lotus project

The VinaCapital Vietnam Opportunity Fund Limited (VOF), a London Stock Exchange Main Market traded investment company established to target key growth segments in Vietnam, and VinaLand Limited (VNL), a closed-end fund trading on the London Stock Exchange’s Alternative Investment Market (AIM), have announced their full divestment from the Dai Phuoc Lotus real estate project in southern Dong Nai province.

The site is a future residential - township development with a total site area of 198.5 ha and was acquired in 2007. The project is currently undergoing its first phase of construction and sales.

VOF and VNL disposed of their entire stake in the project to a company within the China Fortune Land Development Co., Ltd for net cash proceeds of approximately $48.8million, resulting of an IRR of -3.0 per cent.

“With the closure of the divestment, VOF’s exposure to direct real estate falls to approximately 5 per cent of total NAV,” said VOF Managing Director Andy Ho. “This is a significant milestone in the company’s ongoing strategy to reduce direct real estate holdings and enables VOF to remain opportunistic in areas of the market where we see significant upside, namely privately negotiated deals and OTC investments.”

The project is a residential development and split into six zones. It is currently undergoing its first phase of construction and sales in one zone, with a further zone having received master plan approval for development.

VinaLand Limited invests in key growth segments within Vietnam’s emerging real estate market, including residential, office, retail, hospitality and township projects. Its objective is to provide shareholders with an attractive level of income as well as creating potential for capital growth.

Thái Nguyên ranks second in export in Q1

The northern province of Thái Nguyên ranks second in the country in terms of export value in the first quarter of 2017, the General Department of Customs said.

It has surpassed Đồng Nai, Bắc Ninh and Bình Dương provinces with an export value of US$5.16 billion for Q1, up 12 per cent compared to the same period last year.

The first place is held by HCM City, whose export value for the quarter stands at roughly $8 billion.

Thái Nguyên’s key export goods are electronics and hi-tech products such as mobile phones, phone components and tablets.

The spectacular rise in its export performance in recent years is the result of major investments by the Samsung Group, said Nguyễn Thị Thanh Hảo, head of the import-export division under Thái Nguyên’s industry and trade department.

Under the province’s economic development plan for the 2016-20 period, its target is to achieve US$27 billion in exports by 2020, and become the top exporter in the country’s northern mountainous region.

The province’s export value is expected to grow by nine per cent a year, with export turnover per capita averaging $20,000 a year by 2020.

In order to achieve this goal, Thái Nguyên has put in place a strategy that focuses on production of key export items, such as electronic and hi-tech products at the Samsung facilities based in Yên Bình Industrial Zone, and different varieties of tea.

As one of the largest tea growers in the country, Thái Nguyên aims to ship 10,000 tonnes of tea overseas in the next three years, based on maintaining an annual growth of 13 per cent.

By 2020, the province plans to generate $360 million from the export of apparel, accounting for around 70 per cent of its total export turnover.

HCMC to build over 400 new filling stations by 2030

Deputy chairman of the HCMC People’s Committee Tran Vinh Tuyen has approved a project planning filling station development to build an extra of 407 new filling stations by 2030, taking the total number to 939.  

The project planned for the 2020s with visions untill 2030 targets meeting growing petrol use demand resulted from population increase. 

The Department of Industry and Trade forecast that the city’s petrol consumption will reach 2.35 million cubic meters in 2020, hike to 3.25 million in 2025 and near 4.3 million five years later. 

According to the project, HCMC will give priority to developing new filling stations in outskirts where have wide land fund. The new facilities will meet requirements of the petrol industry and attach to relevant commercial infrastructures comprising markets, supermarkets, convenient stores, seaports, logistics centers and parking lots. 

The connectivity between petrol stations and development of the other infrastructures aims to contribute in building a smart city and better serve citizens. 

By the end of 2016, the city had 638 filling stations including 532 active ones and 106 stations having stopped operation or been removed, reported the Department of Industry and Trade. 

Licenses granted by the agency for investors to build new filling stations will be invalid after a year and transferred to other investors. This aims to prevent unaffordable businesses from struggling to gain projects but being unable to implement, resulting in planning failure.

Expert: let market forces dictate allocation of resources

Economic restructuring largely centers on allocation of resources, and to ensure success, the Government should create conditions for market forces play their role rather than maintaining the current ask-and-give mechanism, an expert said on April 12.

Nguyen Dinh Cung, president of the Central Institute for Economic Management, told an annual economic forum held in Can Tho City on April 12 that economic restructuring is to improve productivity, efficiency and competitiveness first, and then the prosperity of the country and its citizens. Regrettably, many people including State officials do not see the underlying significance of economic restructuring, he commented.

In his view, the cornerstones of economic restructuring are to reallocate resources and encourage initiatives of residents and enterprises rather than to reduce the proportion of the agricultural sector compared to those of industry and services.

The restructuring of the economy will be successful if the market is free to allocate resources, especially manpower, capital and land use right, he told the forum themed “Solutions to enhancing Can Tho City’s competitiveness in 2017-2020 with a vision to 2030.” Changes to the proportions of such sectors are what to be achieved later, not the focus of restructuring, he said.

“How should we allocate resources?” Cung asked. “We should let the market determine its demand, rather than making the distribution based on the current administrative ask-and-give mechanism.”

He noted that “all our resources are being allocated under an “ask-and-give” mechanism; those having good connections can tap the resources regardless of efficiency.”

To allow for the market to distribute resources, conditions must be created for the development of the capital market, the labor market, the land use right market, and only when these markets are developed can the current mechanism be replaced, according to Cung. The economist asserted the State must change its role first.

“The State must undergo changes first; if the State still maintains the ask-and-give mechanism, such markets cannot develop, which hinders the initiatives and innovations of citizens and enterprises,” he said.

Therefore, the Government should take steps to remove the prevalent ask-and-give administrative mechanism, he stressed.

Can Tho City’s vice chairman Truong Quang Hoai Nam said at the forum that many investors recently visited Can Tho to sound out business opportunities, but the majority of them, especially foreigners, did not set up shop there.

One reason is that authorities of Can Tho in particular and the Mekong Delta in general do not take appropriate measures to persuade investors.

In particular, local governments often provide them with lists of projects. This imposes fields, scale and pledged capital of projects on investors, according to Nguyen Phuong Lam, deputy director of the Vietnam Chamber of Industry and Commerce in Can Tho.

Cung suggested the municipal authorities look for a good logistics location to call for investors, especially those from Singapore. “I’ve attended some meetings, and realized their keen interest in investing in the Mekong Delta,” he said.

Makino opens technology center in HCMC

The Makino Milling Machine Co Ltd of Japan on April 13 received an investment certificate from the management board of Saigon Hi-Tech Park for developing a technology center in the park.

Makino Vietnam will build the two-floor Makino technology center on 4,700 square meters at an investment cost of US$2.6 million.

The center which is expected to be built in June for completion in mid-2018 will provide technical support services for high-tech enterprises. In addition, the center will provide solutions in areas such as management, consulting, research, knowledge sharing and technology transfer.

George Lim, vice president of Makino Asia, said the center with advanced equipment will provide good training for human resource development, helping small and medium enterprises to produce their own products for multinational companies such as Samsung, Nidec and Canon.

Lim said high-tech machines require high-skilled operators. Universities and colleges cannot have such high-tech machines, so they face difficulties in training technicians and engineers. As such, Makino will cooperate with local engineer training institutes so that graduates can come to the center to share and enrich their knowledge, Lim added.

Through Makino's products and management and technical consulting programs in collaboration with the Japan International Cooperation Agency (JICA), Makino Center's clients will have the opportunity to meet and seek business partners.

Le Bich Loan, deputy head of the Saigon Hi-Tech Park management board, said the center will support small and medium enterprises.

Makino has many offices and more than 10 technology centers in Japan, Europe, the U.S. and the Asia-Pacific region including China, India and ASEAN.

Air and train fares jump for upcoming holiday

Air and train ticket prices during the Reunification Day (April 30) and International Labor Day (May 1) holiday have soared due to high demand.

According to some ticketing websites, most ticket prices of flights from April 28 to April 30 have increased sharply. For example, Vietjet Air has hiked the fare for the Hanoi-Phu Quoc service on April 28 to more than VND3.1 million (exclusive of taxes and fees) from VND1.7 million on April 27. Meanwhile, tickets for Vietjet’s Hanoi-Phu Quoc flights on April 29 are fully booked.

Similarly, Vietnam Airlines charges VND3.3 million on April 28 on this same route, compared to more than VND1 million on April 27.

The price hike also applies to other routes such as Hanoi - Nha Trang, HCMC - Phu Quoc and HCMC - Danang.

Representatives of airlines said that due to high travel demand during the holiday, they have to add flights and increase ticket prices to offset their higher operating costs.

Meanwhile, train tickets from HCMC to tourist destinations like Nha Trang also recorded a strong increase. For example, the fare for the HCMC – Nha Trang route has edged up to VND216,000 from VND141,000, while the price of tickets on a sleeper carriage

has increased to VND482,000 from VND337,000 before the holiday.

Prices of bus tickets to other provinces such as Ba Ria-Vung Tau, Binh Duong, Dong Nai, Lam Dong and Quang Ngai during the holiday have also soared 30-40%.

In related news, Vietnam Airlines announced to add 175 one-way flights on eight domestic routes during the upcoming holiday, with a total supply of over 180,000 seats, up nearly 25% compared to ordinary days and 15 % over the same period last year.

Extra flights during the peak period from April 27 to May 3 mainly focus on routes from Hanoi and HCMC to tourism destinations such as Danang, Nha Trang and Phu Quoc. Vietnam Airlines adds over 100 flights for Hanoi/HCMC - Danang routes, 40 flights for Hanoi/HCMC - Phu Quoc routes and 18 flights for Hanoi/HCMC - Nha Trang routes.

Digiworld expands to functional food business

Digiworld Corporation will distribute functional food from June beside mobile phones, computers and office equipment, said Doan Hong Viet, CEO and chairman of Digiworld.

If the distribution of this new product succeeds, Digiworld will develop the market and trade in more new items, Viet added.

Digiworld intends to invest about VND40 billion (US$1.76 million) in the distribution expansion using the available management resources, operating software and warehouses of the distribution system of IT products and mobile phones. This healthcare product will also be distributed through pharmacies.

After conducting a market and product research, Digiworld recognizes the increasing demand for healthcare products, Viet said. According to statistics of the World Bank and market research companies Frost & Sullivan in the U.S. and BMI in the UK, the total cost of healthcare in Vietnam is US$13 billion in 2015 and is expected to increase to US$24 billion by 2020, up 13.4% annually.

Digiworld expects the new product will contribute VND80 billion to the company’s total revenue this year, and hopes it can have profit from the new business by 2018.

The corporation also expects its total revenue to reach about VND3,900 billion with key products being mobile phones, computers and digital equipment, up 2% over last year, and earn after-tax profit of about VND75 billion, up 12%.

Malaysian medical tourism attracts Vietnamese

More and more Vietnamese are traveling to Malaysia for medical tourism, which prompts the Malaysia Healthcare Travel Council to prop up publicity here in Vietnam.

Sherene Azura Azli, CEO of the Malaysia Healthcare Travel Council, or Malaysia Healthcare, said nearly 10,000 Vietnamese traveled to Malaysia for medical treatment in 2016 and they spent RM10.8 million (about US$2.43 million) on this purpose, up 86% against 2015.

About 50% of the Vietnamese patients visit Malaysian hospitals for cancer and cardiovascular disease treatment, she said at the launching ceremony of the website YTE Malaysia on Tuesday. This is the first website built abroad by Malaysia Healthcare to equip Vietnamese patients with necessary information on medical tourism including hospital facilities and health experts.

Sherene Azura Azli highlighted the high quality and competitive cost of medical treatment services in Malaysia, saying medical treatment costs for foreign visitors are not much higher than locals.

Malaysia Healthcare will also open representative offices in HCMC and Hanoi. The council will cooperate with its strategic partner Insmart to launch “My Health Program” to promote Malaysian healthcare services in Vietnam. The program is aimed to connect hospitals and clinics with professional medical services and experienced doctors in Malaysia to provide the best services in Vietnam.

The Malaysia Healthcare Travel Council is an agency under the Malaysian Ministry of Health tasked to develop the medical tourism sector of the country.

Many localities want to run Vietlott business

Representatives of many cities and provinces have asked the Ministry of Finance for permission to run the computerized lottery business of the Vietnam Lottery Company (Vietlott) in their localities.

At a seminar called “Transparency in the lottery market” organized by Thanh Nien newspaper in HCMC on April 12, Nguyen Hoang Duong, deputy head of the Department of Finance, Banks and Credit Institutions under the Ministry of Finance, said the ministry had assigned Vietlott to assess market potential and business opportunities to submit the proposals for approval.

Vietlott, a state-owned enterprise under the Ministry of Finance, is headquartered in Hanoi and has many local branches. Profit of these branches will go to the local budgets for health, education and society development.

At present, the computerized lottery business is present in 12 cities and provinces namely HCMC, Hanoi, Can Tho, Danang, Haiphong, An Giang, Ba Ria-Vung Tau, Dong Nai, Binh Duong, Khanh Hoa, Dak Lak and Quang Ninh.

However, the high demand for this lottery product has led to many individuals and organizations retailing tickets in the localities where there is no official Vietlott presence to pocket VND1,000-2,000 or even VND5,000 a ticket.

The ministry has assigned Vietlott to closely watch this illegal business and impose sanctions if necessary, the representative added.

The seminar was attended by representatives of Vietlott, financial experts, lawyers, and Berjaya of Malaysia. Berjaya is the party transferring technology to Vietlott. However, there were no representatives of lottery enterprises showing up.

Govt weighs incentives for herbal medicine development

The domestic and export demand for medicinal plants is high, but little attention has been given to the development of this industry despite huge potentials. The Government, therefore, will have incentives for herbal medicine development, heard a national conference on herbal medicine development in Lao Cai Province on April 12.

Data of the World Health Organization (WHO) shows that 80% of the people in developing countries use traditional or herbal medicines and annual revenue from herbal medicinal products worldwide is over US$80 billion.

According to the Ministry of Health, the demand for herbal medicines in Vietnam is estimated at 60,000-80,000 tons and many medicinal herbs can be cultivated domestically. By 2016, Vietnam had recorded over 5,000 plant species used as medicine such as cinnamon, anise, turmeric and artichoke.

“The cultivation of medicinal plants can bring economic efficiency 3-5 times higher than some agricultural crops such as rice, corn and cassava,” said a representative of the Ministry of Health.

However, the cultivation of medicinal herbs in Vietnam has not received appropriate investment. Therefore, most herbal medicinal products used in Vietnam are imported from China with low quality and unclear origin.

According to an inspection in 2015 and 2016, 22 of 436 samples of herbal medicines in Hanoi failed to meet standards.

At the conference, Prime Minister Nguyen Xuan Phuc affirmed that the Government will focus on the development of herbal medicines in the coming time.

Phuc said that cultivating and processing facilities need to apply science and technology to improve productivity and value of their herbal medicinal products. Eye-catching packaging and strong promotion will also play an important role.

According to Phuc, the herbal medicine industry must be recognized as a central strategy of the health sector and reorganized thoroughly, especially in processing, using and combining with modern medicines.

Also at the conference, representatives of the Ministry of Health proposed creating preferential mechanisms and policies to support enterprises and individual households to invest in the fields of cultivating medicinal plants and developing herbal medicinal products. Some herbal medicinal materials of high economic value such as ginseng and golden camellia need special investment to become Vietnam’s key pharmaceutical products for domestic use and export.

At the same time, it is necessary to create a good environment for the trading of herbal medicines and take measures to control the quality of imported herbal medicinal materials. In addition, there should be appropriate incentives for herbal medicinal products that meet the Good Agricultural and Collection Practices (GACP) standards in public procurement of drugs by public hospitals.

Banks want secured transaction papers quickly handled

Representatives of some banks have petitioned HCMC to tell district authorities to speed up the processing and return of applications for secured transactions between credit institutions and enterprises.

At a seminar held in the city on April 12 to discuss ways to solve the difficulties faced by credit institutions, banks said it often took more time than expected to handle economic cases related to businesses. District-level land registration offices are slow in dealing with secured transaction applications for credit institutions and enterprises.

Current rules specify that the time for registration of secured transactions is three working days. Some districts like Binh Thanh, District 7 and District 11 perform this job very well, with results coming out within one day.

However, the process remains sluggish elsewhere, so banks have petitioned districts, especially outlying ones, to shorten the time needed for return of secured transaction applications to one day. With this, it would be easier for citizens and banks to carry out contracts and transactions related to land papers.

“The time for dealing with secured transaction applications is very important. A delay of one day could lead to big financial consequences,” said HCMC vice chairman Tran Vinh Tuyen.

Pham Ngoc Lien, director of the Land Registration Office under the HCMC Department of Natural Resources and Environment, said Binh Thanh District, District 7, and District 11 could handle and return the applications in one day because the workload in these districts is light, plus better machinery, equipment and software than others.

Meanwhile, “the equipment at many land registration offices (in other districts) is outdated! They are using machines that process secured transaction applications with computers dating back to 1986.”

“We are currently disposing of these computers to apply for a project of renting management technology from Quang Trung Software City to connect the land registration offices of all districts in the city,” Lien said.

A leader of the HCMC Department of Information and Communications estimated the cost of investment in servers, equipment and software in such a connecting project would be about VND20 billion.

Nguyen Dinh Tung, general director of Orient Commercial Joint Stock Bank (OCB), suggested the municipal government banks to invest VND20 billion in equipment required for speeding up the processing of secured transaction applications and in return collect a service fee from the parties concerned.

The HCMC branch of the State Bank of Vietnam (SBV) asked banks in the city to pay proper attention to credit growth. The lesson of overheated credit growth remains bitter, especially with credit growth in potentially risky areas.

Tran Dinh Cuong, deputy director of SBV’s HCMC branch, said capital raising by banks in the city as of March 31 had amounted to over VND1.79 trillion, up 1% from end-2016 and 11.1% over the same period last year. Deposits in the dong grew 14.13% year-on-year, accounting for nearly 85% of the total figure, while those in foreign currency declined nearly 6.3%.

Finance ministry proposes to manage enterprise development fund

The finance ministry has proposed to take over the management of the Enterprise Arrangement and Development Support Fund from the State Capital Investment Corporation (SCIC) to improve its efficiency.

This is part of the proposed amendments to Government Decree 59/2011/NĐ-CP about the transformation of state-owned enterprises into joint stock companies.

According to Deputy minister Trần Văn Hiếu the fund is currently under the direct management of the SCIC, and the finance ministry is in charge of supervising fund management. But it is difficult for the ministry to actively monitor revenues, expenses and balances of the fund.

This management model makes administrative procedures more complicated and must be changed as the government is speeding up efforts to simplify administrative procedures and improve the business climate.

The ministry has also proposed that proceeds from the privatisation of state-owned enterprises be paid to the fund, which is important to prevent loss-making parent companies from using it to compensate for the losses.

The draft decree also reportedly proposes a new method, book building, for initial public offerings, besides auctions, underwriting and direct deal. Book building is popular for efficient price discovery, which will improve the chances for the IPO’s success.

Recent statistics have revealed that though around 96 per cent of state-owned enterprises have begun their equitisation to date, the state capital equitised remained low at eight per cent.

Vietnam promotes tourism startups

Tourism startup projects with innovative solutions to diversify tourism products will be nurtured at a programme to speed up Vietnam Tourism Startup, launched in the central city of Danang on April 14.

The programme is sponsored by the Vietnam Mentors Initiative, Angel Investor Network, Women’s Initiatives Startups and Entrepreneurship (WISE), Swiss Entrepreneurship Programme (Swiss EP) and SONGHAN incubator.

It draws the participation of lawyers, investors and Vietnamese leading experts in tourism, innovative startup, digital technology, information and technology, media, finance, human resources and administration. 

In-depth tourism consultancies and connection between Vietnamese and international investors will be included in the programme.

Ten most standout tourism ideas will be incubated into ten companies in the sector. Each project will receive trade support service worth VND20 million (US$882).

The programme will conclude on November 30, 2017.

Vietnam values contributions of Japanese investors

Japanese firms have contributed significantly to the development of Vietnam’s economy, stated Minister of Planning and Investment Nguyen Chi Dung at a meeting with Sakakibara Sadayuki, Chairman of the Japan Business Federation (Keidanren) in Japan on April 12. 

Keidanren, the biggest business organisation in Japan, consists of more than 1,000 enterprises and 100 associations.

At the meeting, Minister Dung said his ongoing visit to Japan aims to convey the Vietnamese Government’s appreciation for support and cooperation from Japan, particularly its business community.

He highlighted the importance of Japan’s official development assistance for Vietnam, saying it has helped the country form key parts of its economic infrastructure.

Vietnam wants to share new visions and orientations with Japan, thus improving the bilateral comprehensive strategic partnership, the official added.

He also lauded Keidanren’s efforts in promoting investment in Vietnam, expecting the federation to maintain its work with Vietnam, help the Vietnamese Government improve the business climate and encourage more Japanese investors to enter the country.

For his part, Sakakibara Sadayuki said Vietnam and Japan shared a partnership of mutual trust with abundant cooperation opportunities.

Pointing to the 1,500 Japanese firms currently investing in Vietnam, Sakakibara asked for further support from the Vietnamese Government for the firms.

Stressing that 60 Japanese enterprises joined Prime Minister Shinzo Abe on his official visit to Vietnam in January 2017, the Keidanren Chairman said he believes in the desire to boost trade with Vietnam from the Japanese Government and businesses.

The same day, Minister Dung attended a conference on investment opportunities in Vietnam’s infrastructure development, transport and energy sectors, which took place at Keidanren’s headquarters.

In his speech, the Vietnamese official acknowledged effective operations by Japanese investors in Vietnam, who he called “economic diplomats”.

He pledged that the Ministry of Planning and Investment of Vietnam is willing to create the best conditions possible for Japanese firms to invest in the country.

Japan is currently Vietnam’s second biggest foreign investor with 3,355 projects worth 42.49 billion USD.

Vietnam runs trade surplus with Canada in first 2 months

Vietnam exporters ran a trade surplus with Canada for the first two months of the year, owing to strong sales in electronics, footwear, clothing and textiles, according to the Office of the Trade Counsellor to Canada.

Trade Counselor Hoang Anh Dung said exports by foreign and domestic sector businesses operating in Vietnam to Canada registered US$586.6 million while imports tallied in at US$131.1 million, resulting in a trade surplus of US$455.5 million.

The trade surplus was much smaller than that for the same 2-month period last year due to a sharp increase in coal imports from Canada, which more than doubled to US$38 million, accounting for almost 30% of the total imports of Vietnam.

Vietnam issues final AD duty on galvanized steel imports

The Ministry of Industry and Trade has announced its final determination on its antidumping duty investigation on galvanized steel products imported into the country from China and the Republic of Korea.

vietnam issues final ad duty on galvanized steel imports hinh 0 Accordingly, for Chinese companies the final AD rates stand at 3.17% for Yeih Phui Technomaterial, 26.36% for Bazhou Sanqiang Metal Products, 38.34% for BX Steel POSCO Cold Rolled Sheet, 27.36% for  Bengang Steel Plates, 26.32% for Tianjin Haigang Steel Coil, 38.34%, for Tangshan Branch, 33.49% for Wuhan Iron and 38.34% for other Chinese manufacturers/exporters. 

For Republic of Korea companies the final AD rates stand at 7.02% for POSCO and 19% for other manufacturers/exporters.

The investigation was initiated last March upon the filing of a complaint by domestic producers JSC China Steel Sumikin Vietnam, Tom Phuong Nam Joint Stock Company and Nam Kim Steel Joint Stock Company Ton Dong.

The products in question fall under the Customs Tariff Statistics Position Numbers 7210.41.11 through 7226.99.11 spanning the spectrum of galvanized steel product imports.

Hung Yen calls for RoK investment

Vice Chairman of the Hung Yen provincial People’s Committee Nguyen Van Phong called for foreign investment, including those from the Republic of Korea (RoK) at a workshop in Seoul on April 13.

The event saw the participation of Vietnamese Vice Ambassador to the RoK Tran Anh Vu, representatives the Korea Chamber of Commerce and Industry (KCCI) and 100 entrepreneurs from RoK and other nations eyeing on Hung Yen investment opportunities.

Phong introduced his locality’s potential to participants, underlining the young population, trained human resources, stable economic growth and increasing export value.

Hung Yen has focused its investment on developing technical infrastructure and human resources training.

The province is home to numerous successful RoK investors, including Hyundai Aluminum Vina, Tae Yang Vietnam, DongYang, Mirae Fiber, Phong affirmed.

He pledged that the locality will create the most favourable condition possible for foreign investors in line with the country’s law.

Addressing the event, Kang Homin from KCCI said many RoK firms have smoothly operated in Hung Yen, adding that the event will presents a good opportunity for RoK enterprises to have an insight into the province’s potential.

He also offered to connect local enterprises with Hung Yen, affirming that strengthening trade exchanges between the two sides will contribute to economic and diplomatic ties between Vietnam and the RoK.

In his address at the event, Vice Ambassador Tran Anh Vu said the RoK has become one of Vietnam’s biggest investors, with over 50 billion USD and 5,600 enterprises, which created jobs for around 700,000 labourers and accounted for 30 percent of the country’s total exports.

The presence of such big names as Samsung, LG, Hyundai, Kia, Lotte, Posco, Shinhan, Hyosung, Hanwha in Vietnam has proven the attraction and safety of the country’s business environment, he said.

He underlined the win-win Vietnam – RoK relations, saying that they explore financial and technological resources of the RoK and skilled and large human resources of Vietnam.

The diplomat expressed his belief that more RoK firms will invest in Hung Yen to implement new projects and expand the existing ones after the event.

At the workshop, representatives from different sectors of Hung Yen introduced big projects calling investments. 

The event also witnessed the signing of two memoranda of understanding on developing a 3,000-hectare industrial zone and building and operating a waste treatment plant in Hung Yen province.

Rice quality matters: Prime Minister Phuc

Since taking office in 2016, Prime Minister Nguyen Xuan Phuc has helped drive an industry-wide discussion and led the effort to improve the quality of rice grown in Vietnam.

With more than 50% of Vietnam rice being sold on the export market, improving its quality is imperative for maintaining exports, as well as competing domestically with an increasing population of discriminating consumers.

The Vietnam government continues to be committed to improving rice quality, working with public breeding partners as well as buyers to develop better varieties and implement innovative technologies that bring value not only to the end buyers and end users, but to the farmer as well.

New high-yielding varieties capable of producing the appearance and cooking properties desired by important foreign and domestic buyers are needed, said Dang Quang Vinh, a researcher at the Central Institute for Economic Management.

Mr Vinh noted the rice currently produced in Vietnam is not competitive in some markets such as those in Central America that prefer parboiled rice, which possesses superior cooking and processing properties.

Quality improvements could also be achieved by developing semi-dwarf varieties that possess better milling traits and better long-grains offering excellent blast resistance and good grain quality with yield potential that rivals the highest-yielding cultivars currently produced anywhere.

In addition, Mr Vinh suggested that rice farmers consider the use of bubble dryers to improve the quality of local rice.

The post-harvest loss rate currently stands at 13.7%, which is too high and much greater than that of Thailand at 6.1% and India at 6%, said Mr Vinh, noting that a sizable portion of the loss results from poor drying techniques.

He said bubble dryer technology, powered by solar energy prevents contamination, aflatoxin in maize, reduces cost and enhances profit.

He made the comments at a training workshop in Hanoi, adding that the bubble dryer, is ‘green dryer’ technology that uses solar radiation to power a system to blow hot air to dry rice.

It is said to reduce moisture levels in rice from 22% to between 12 and 13% in as little as 24 hours.

Mr Vinh lamented that though new farming technologies were in existence, Vietnamese farmers underutilize them and said it was time they welcomed innovation for growth in the segment.

He said the bubble dryer is proven technology that is currently in use by smallholder farmers and farmer groups around the globe and urged local farmers to take advantage of the technology.

Dang Kim Son, former director general of Institute of Policy and Strategy for Agriculture and Rural Development in turn said the focus should be to help increase earnings for smallholder farmers.

He also hinted at plans to offer technical training for actors in the rice value chain saying that without trained farmers, the country could not achieve food security.  He underscored the need for regular capacity building for farmers.

Vietnamese farmers need to learn and use new farming techniques. They must know about seed quality, types of soil and chemical application not only dropping the seed in the soil.

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