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 Gold prices rise as uncertainty grows; Government to strive for business-friendly conditions; Mekong Delta opens doors to investors; Myanmar to establish steel JVs with Vietnam; Viet Nam, Thailand eye 20% annual growth in trade

Gold prices rise as uncertainty grows

Gold prices rose to their highest in a month in the local market, by yesterday afternoon.

Each tael of gold increased VND830,000 (US$39.5) in trading prices.

The price of gold in the morning session increased slightly but it began rising fast after 12 pm. Until 3pm one tael of the state-owned SJC gold was sold at VND36.55 million ($1,740) at the Sai Gon Jewellery Company.

Bao Tin Minh Chau Jewellery and Gemstone Company (BTMC) recorded a higher number of buying transactions for gold in its northern branches, adding that buying/selling rate difference was 6 over 4 yesterday. Other companies also experienced much stronger buying demand for gold on the same day.

The global gold trading floor,, also reported a higher price for gold. The gold price was listed at $1,299.90 per ounce or $1,566 per tael, an increase of $6.5 per tael from yesterday's session.

Escalating violence in Ukraine was mentioned as a reason for the global rise because the metal was often seen as a safe investment during political uncertainty.

Thus, each tael of gold in Viet Nam was $174 higher than in the world market.

On the same day, Vietcombank and other commercial banks sold one US dollar between VND21,115 and VND21,125. The State Bank of Viet Nam kept the US dollar's exchange rate at VND21,036 on Monday, unchanged for nearly 10 months.

Government to strive for business-friendly conditions

Prime Minister Nguyen Tan Dung has instructed ministries and other agencies to review and streamline administrative formalities to make them less burdensome and more businesses-friendly.

Following a conference he held with businesses in Hanoi on April 28, he also told the State Bank of Vietnam to improve credit access for businesses but also credit quality.

It should ensure banks restructure their debts and raise capital through the stock market to offer medium- and long-term loans to businesses, he said.

The Government will continue to draft preferential policies for businesses and provide them with necessary and legal assistance through business groups and industry associations.

Mekong Delta opens doors to investors

The Mekong Delta region is becoming more attractive to both domestic and foreign investors thanks to its clear business environment and simplified administrative procedures.

According to the Vietnam Chamber of Commerce and Industry’s Can Tho city chapter (VCCI-Can Tho), there have to date been 1,000 projects worth VND264 trillion (US$12.4 billion) invested by domestic businesses in the region. The projects mainly focus on agriculture, fisheries, transport, trade and tourism.

Meanwhile, foreign investors have poured more than US$11 billion into the area.

VCCI-Can Tho Director Vo Hung Dung said that over the years, the 13-member region has adopted a number of preferential policies benefiting investors. Among other incentives, they can enjoy an exemption of corporate income tax for 1-2 years and a reduction in land use cost.

They are also provided with assistance in vocational training, advertisement and consultation.

Meanwhile, localities have intensified cooperation within the region, and with Ho Chi Minh City and other countries in order to attract more investment, while upgrading their infrastructure, Dung said.

Slovenian businesses keen on Vietnamese market

A large number of Slovenian businesses attended an economic integration seminar in capital Ljubljana on May 13, exploring cooperation opportunities in Vietnam.

Vietnamese ambassador to Slovenia Nguyen Thiep highlighted the great potential for expanding economic and trade relations between the two countries.

He noted that Vietnam, a market of nearly 100 million consumers, is integrating deeper into the global economy. It is speeding up negotiations of a free trade agreement with the European Union, and the Trans-Pacific Partnership (TPP) agreement, to be signed late this year or early next year.

Thiep answered Slovenian businesses’ questions related to the possibility of expanding trade ties with Vietnam, primarily in the areas of agricultural product processing, and equipment and machinery manufacturing, as well as incentives for small-and medium-sized enterprises.

Janez Sirse and Nina Pecoler, two businesspeople who previously worked in Vietnam, took the floor, presenting investment prospects in the tourism sector.

After the seminar, Slovenian businesses met with Vietnamese expatriates in Slovenia, examining business connectivity between the two countries.

Tra Bong cinnamon receives Asian honour

Cinnamon, a spice of Tra Bong commune, Quang Ngai province, has been recognised as one of the specialty gifts of Asia by the Asia Record’s Organisation (ARO).

The product, appreciated for its potency and aroma, was honoured at a ceremony held in Tra Bong commune on May 14.

“This is the chance for Quang Ngai to introduce Tra Bong cinnamon as a speciality of the province, as well as promoting Quang Ngai’s land and people to the world,” said Nguyen Phuc Nhan, Deputy Director of the provincial Department of Culture, Sports and Tourism.

He said he hopes relevant agencies and tour operators will help Quang Ngai’s specialties, and Tra Bong cinnamon in particular, penetrate markets and become valuable gifts to tourists visiting the locality.

Tra Bong commune plans to develop a brand for its cinnamon and expand farming areas, considering cinnamon one of its key agricultural products.

Ho Chi Minh City willing to welcome Czech businesses

Ho Chi Minh City wants more businesses from the Czech Republic to come and seek investment opportunities, a municipal official has said.

At a May 14 reception for visiting Czech Minister of Industry and Trade Jan Mladek, Vice Chairwoman of the municipal People’s Committee Nguyen Thi Hong said the two countries should continue to expand bilateral cooperation based on the traditional ties.

The city now has six Czech-invested projects with a total investment of more than US$6 million, which does not sufficiently reflect the potential, she said, suggesting the two sides foster investment promotion activities and the exchange of information related to investment, tourism and culture.

Mladek in turn said the Czech Republic always attaches importance to its collaboration with Vietnam, adding the two countries possess much cooperation potential in the spheres of investment, trade and infrastructure.

He underlined the attractive and convenient investment climate of HCM City and other southern localities, revealing that his country is willing to invest in the city in a range of fields, including energy, mining, agriculture, health, and finance and banking.

In the coming time, the two sides need to forward the information exchanges and activities to learn about investment environment between their businesses, the guest suggested.

Myanmar to establish steel JVs with Vietnam

Myanmar will speed up the establishment of steel production joint ventures with Vietnam, Industry Minister U Maung Myint told his Vietnamese counterpart Vu Huy Hoang in Hanoi on May 14.

He proposed Vietnam invest in Myanmar’s garment industry and encourage its chemical manufacturers to boost exports to the country.

Myint said the purpose of his Vietnam visit is to seek partners to promote bilateral industrial cooperation, especially in chemical, fertilizer, steel, and agricultural machinery manufacturing.

He had working sessions with leaders of the Vietnam National Chemical Group (Vinachem), the Vietnam National Textile and Garment Group (Vinatext), the Vietnam Steel Corporation (Vnsteel), and the Bank for Investment and Development of Vietnam (BIDV).

He revealed that BIDV will lend the Myanmar bank for small and medium businesses under a memorandum of understanding due to be signed in late May.

Vietnam Minister Vu Huy Hoang expressed hope Myanmar will soon promulgate its foreign investment law to facilitate Vietnamese investment in the country.

Viet Nam, Thailand eye 20% annual growth in trade

Viet Nam and Thailand target 20 per cent annual growth in trade, hoping to increase it to US$15 billion by 2020, the Viet Nam Chamber of Commerce and Industry said.

At a Viet Nam – Thailand Business Meeting held in HCM City yesterday, Nguyen The Hung, deputy director of the VCCI's HCM City chapter, said last year Thailand became Viet Nam's biggest trade partner in ASEAN after trade growth rose 9 per cent to $9.4 billion.

In January this year he said trade was worth $1.4 billion of which Viet Nam's exports - mostly mobile phones and accessories, steel, and seafood - accounted for nearly $500 million.

Its main imports from Thailand were machinery, oil and gas, auto parts, animal feed, and pharmaceuticals.

Hung said the two countries have great untapped potential in trade, and many promotional programmes have been organised with an eye on this.

For instance, a delegation of 10 Thai food companies yesterday came to HCM City to show off their products and look for partners.

Prasatsuk Niyomrat, an official in Thailand's Department of Industrial Promotion, said the visit was also meant to obtain information for Thailand's small and medium-sized enterprises about regional markets ahead of the formation of the ASEAN Economic Community in 2015.

Animal feed makers face fierce competition

Local animal feed companies are unable to compete with foreign rivals on the local animal feed market, said experts.

The Viet Nam Animal Feed Association said Viet Nam has about 58 enterprises producing and processing animal feed with 200 factories, 50 of which with foreign investments account for 60 per cent of the local market share, reported the Tien Phong (The Vanguard) newspaper.

The companies that dominate the local market include CP, Cargill, Japfa, Grobest and New Hope from the US, Thailand and China, the association said. Some of them have expanded their production in Viet Nam.

For example, Cargill has just completed a US$20-million expansion project of its factory in Binh Dinh Province, one of its eight factories producing animal feed in Viet Nam.

With this project, the group has increased its capacity to 1.4 million tonnes of animal feed each year in Viet Nam and its total investment in the country to $117 million. At present, Cargill controls 7 to 8 per cent of the local animal feed market, the company said.

The US Gold Coin group has just begun operations of its Gold Coin Hai Duong animal feed factory with a capital of VND260 billion ($12.38 million), including a number of its animal feed production factories in three units in Viet Nam.

Last year, CP of Thailand started construction of its animal feed production factory in Binh Dinh Province. Kyodo Sojitz of Japan invested $24 million to build a factory in Long An Province.

Greenfeed started operating its third and fourth factories that produced animal feed, in Binh Dinh and Hung Yen provinces.

The Ministry of Agriculture and Rural Development said Viet Nam needs 18 to 20 million tonnes of animal feed at present and 25 million in 2020, reported, an online newspaper. The local animal feed market has total revenue of $6 billion every year.

The local animal feed industry has supplied 15.5 million tonnes per year with a growth rate of 13 to 15 per cent, becoming the largest animal feed producer in the Southeast Asia region.

Meanwhile, there are a few well-known domestic animal feed firms, including Proconco, Vina, Dabaco and Lai Thieu, with a total output of 300,000-400,000 tonnes per year, the association said.

Almost all Vietnamese firms are small and medium enterprises and often lack capital for production, it said.

Pham Duc Binh, General Director of Thanh Binh Company, said the market share of Vietnamese firms on the domestic animal feed market has reduced because management of domestic firms is weak while foreign firms have attractive trade promotion activities to make new customers.

Le Quang Thanh, chairman of Thai Duong Animal Feed Joint Stock Company, said that since Vietnamese firms cannot compete with their foreign rivals, they compete with each other for a slice of the market share. That action has made local firms weaker.

Nguyen Van Anh, director of an enterprise specialising in production of animal feed in Dong Nai Province, said Vietnamese animal feed producers are weaker on the local market, either because they lack capital for production or get loans with high interest rates.

Foreign firms, meanwhile, get funding from their parent companies for building factories and capital with soft interest rates from foreign banks for production, Anh said.

Therefore, local firms should cooperate with each other to increase their market share in the future, he said.

Cards win over more consumers

The Viet Nam Bank Card Association's report says that 68.55 million bank cards were in use in the Vietnamese market at the end of the first quarter of 2014.

This is an increase of 3.5 per cent against 2013. Debit cards comprised 92.14 per cent of the total; 3.68 per cent were credit cards; and the rest were prepaid cards. All these cards were issued by 52 card firms. Around 15,500 automated teller machines (ATMs) and 137,700 points of sales (POS) have been set up to facilitate the bank card market.

"The habit of using cash for payment is changing significantly," said Nguyen Tu Anh, CEO at Smartlink Card Company.

The growing popularity of bank cards is said to be reducing the share of cash transactions in the total money supply from 20.3 per cent in 2004 to 12 per cent by the end of 2013.

The State Bank of Viet Nam aims to cut the cash ratio to fewer than 11 per cent of total money supply by the end of 2014, and to raise the number of POS to touch 250,000 for handling 200 million transactions yearly.

However, the association warned that most of the card transactions were money withdrawals, while the use of other payment services such as POS or money transfers was still at a modest level. The infrastructure for the bank card market needs improvement to prevent congestion.

The service fees for internet banking in Viet Nam is usually between VND10,000 and VND20,000, or between 47 and 96 US cents, per transaction depending on the type and destination of the transaction.

HCM City banks get green light for restructuring plans

Fourteen banks in HCM City have restructuring plans for the 2013–15 period; of these, eleven have already had their schemes approved by the State Bank of Viet Nam (SBV).

This statement was reported at a working session of the local National Assembly member delegation with the SBV branch and credit institutions in the city on May 12.

The eleven banks include Sai Gon Commercial Bank, Nam Viet Bank, Eximbank, An Binh Bank, Saigon Bank for Industry and Trade, Nam A Bank, Viet Capital Bank, Orient Commercial Bank, Asia Commercial Bank, DongA Bank and VietABank.

The three banks whose restructuring plans have not been approved yet include Sacombank, Southern Bank and HDBank.

Southern Bank was approved by the SBV in principle to merge with Sacombank, while HDBank acquired the Societe Generale Viet Finance Co and merged with DaiA Bank.

On March 31, the total bad debts in the city had reached around VND46.4 trillion, or US$2.21 billion, representing 4.85 percent of all local loans. Mortgages for the non-performing loans amounted to nearly VND77 trillion, or $3.67 billion, in value.

In the first quarter of the year, local lenders solved VND3.53 trillion, or $168.10 million, worth of bad debts. Of the figure, VND487 billion, or $23.19 million, was sold to the Viet Nam Asset Management Company.

Delays lead to revocation of projects

The central province has revoked four investment projects due to delayed commencement since early this year, the provincial department of planning and investment reported.

A total capital of VND580 billion (US$28 million) was registered for the projects—restaurant and resort; luxury apartment complex; rubber plantation project; and the Golden Sun tourism site.

The department noted that the investors have delayed either the schedule of construction or land clearance procedure.

Last year, the department also revoked nine investment projects, with a total capital of VND1.2 trillion (over $57 million).

According to the department, the province will withdraw slowly commencing or ineffective projects to make room for other investors and developments.

Real estate market to greet new investments

After consecutive years of losses, several real estate firms in HCM City started to show more optimism in the market as the number of transaction is picking up.

Savills Vietnam reported that, in the first quarter of 2014, 1,600 apartments were sold, the highest number in the last three years. In addition, house prices in HCM City have dropped, but remain stable. Phan Thanh Huy, head of Novaland Group said, "We are buying back a number of projects located in the city centre. Our goal is to sell 3,000 apartments and earn VND6 trillion (USD28.5 million)."

Thu Duc Housing Development also sets a goal of VND64.3 billion in profits this year, three times higher than last year. Le Chi Hieu, Chairman of Thu Duc Housing Development, said the real estate market has shown signs of recovery and the company would focus exclusively on housing for middle-class and low-income families.

Foreign investors have also also been upbeat, taking this time as a good opportunity for investment. Kim Kyoo Chul, member of the board of directors of South Korea's National Housing Organisation, announced that they would invest USD1 billion into 14 projects for low-income people in Vietnam. "In 2015, we'll complete our 'First Home Project'. Each square metres will be sold at only VND9 million," he said.

According to Kim Kyoo Chul, foreign investors are very interested in the Vietnamese housing market, but the number and quality of housing projects was not in tune with demand. He said, "Vietnam has a young population and many still haven't had their own home yet. I think Vietnam is an exciting potential market."

Several consulting firms and analysts have commented that foreign investors are beginning to have more confidence in the Vietnamese housing market. Marc Townsend, Managing Director of CBRE in Vietnam, pointed out that in the first four months of 2014, four large-scale projects and over USD3 billion in FDI have been registered.

Listed firms to spark real estate renaissance

Listed companies are preparing to launch new products following the thawing real estate market.

Several listed firms have been able to resume work on stalled projects

Hanoi Post and Telecommunication Equipment Joint Stock Company (Postef), listed under the POT code, is finally progressing with its real estate development at 61 Tran Phu street, Hanoi after three years of delays.

At its recent annual shareholder meeting Postef leaders said the project had finally completed its detailed design and the site had been cleared.

Postef seems confident enough to start another real estate development at 63 Vu Trong Phung street, also in Hanoi. The company expects a detailed design to be finished in the next few months.

Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII), although not a specialist real estate developer, has decided to experiment in the sector.

Apart from purchasing shares and becoming the largest shareholder in some real estate companies, CII has also established a real estate company to invest in their own projects.

CII is currently awaiting agreement to start on developing infrastructure on the northern residential area of the Thu Thiem New Urban Area under a build-operate-transfer agreement which awaits prime ministerial approval.

CII will in return receive land to develop a VND7 trillion ($333 million) real estate project.

Meanwhile, the Hanoi Investment and Construction 1 JSC (HUD1) is targeting a recovery on its investments from the sale of the Linh Dam TT4 residential project and setting up zoning and investment plan for the 176 Dinh Cong residential project in Hanoi. The company is also waiting for the approval to develop the Lien Bao new residential area in Bac Ninh province, 40 kilometres from Hanoi.

Real estate developers, the FLC Group JSC – has kicked off a series of projects, including resorts, recreation, housing and urban development areas during May and June this year in Thanh Hoa province.

The Quoc Cuong Gia Lai Joint Stock Company (QCG), after a period facing difficulties with debt and delays in administrative procedures on its proposal to convert properties for the more popular mass housing market, has begun selling apartments and leasing offices in a series of projects.

According to Quoc Cuong Gia Lai’s management, its Giai Viet project located in Ho Chi Minh City’s District 8 had received a positive response. This has helped Quoc Cuong Gia Lai improve its revenue and allowed it to finance other projects.

Similarly, the Nam Bay Bay Corporation (NBB), after a period of cash flow difficulties, has finally managed to restart a range of projects through a new financial plan that will allow it to proceed with its City Gate, NBB1 and NBB3 developments also located in Ho Chi Minh City.

Ford Vietnam delivers best-ever April performance

Ford Vietnam today announced its best-ever performance for the month of April with retail sales increasing 37 per cent year-over-year to 939 units.

The exceptional month helped Ford capture 8.3 per cent market share, up 0.5 per cent from a year ago. The record April was driven by the highest-ever monthly sales from the Ranger and Transit nameplates – both of which continue to lead their respective segments in Vietnam – as well as continuing demand for the Fiesta and Everest nameplates.

“Exceptional customer response to our segment-leading Ford vehicles is helping drive these record monthly performances,” said Jesus Metelo Arias, managing director, Ford Vietnam.

The class-defining all-new Ranger remained the best-selling pickup truck in Vietnam in April, with sales soaring 258 per cent from a year ago to a monthly record 351 units.  

Demand for all variants has helped drive year-to-date sales of the Ranger up 176 per cent to 1,040 units.

“The Ranger’s unmatched versatility and capability continue to appeal to a wide range of customers’ work- and lifestyles across the country,” explained Arias. “Ranger also features a class-leading safety package, including six airbags on the high-series models.”

The Ford Transit remained Vietnam’s best-selling commercial van in April with retail sales jumping 133 per cent to its own monthly record of 297 units. Year-to-date sales of the Transit have increased 135 per cent to 1,089 units.

“The Transit delivers an unmatched combination of fuel economy, power and cargo capacity, and is helping meet strong demand for high-quality, reliable and affordable commercial vehicles in the market,” said Arias.

The sporty Ford Fiesta saw April retail sales increase 29 per cent year-over-year to 106 units. Year-to-date sales have gained more than 35 per cent to 408 units.

The recently launched Fiesta 1.0L EcoBoost delivers the power and performance of a naturally-aspirated 1.6L petrol engine, while delivering class-leading fuel economy and emissions levels.

Featuring a striking new look, the new Fiesta is packed with smart technologies, including Ford’s award-winning SYNC in-car connectivity system, and a class-leading safety package that includes seven airbags on the high-series models.

“Our product-led transformation continues to build momentum as each new global Ford vehicle that we introduce helps further broaden the appeal of the Ford brand.”

The popular Ford Everest family SUV also contributed to the record April with retail sales of 127 units, helping drive its year-to-date sales up more than 24 per cent to 544 units.

Vietnam Sotheby’s International Realty awarded best real estate agency

Vietnam Sotheby’s International Realty was recently awarded “Highly commended best real estate agency in Vietnam” at The Asia Pacific Property Awards 2014-2015 in Shangri-La, Kuala Lumpur, Malaysia.

According to Michael Piro, general director of Vietnam Sotheby’s International Realty, this award remarks the recognition of region and globe’s professionals towards what the company has achieved in Vietnamese real estate market.

“More important, we are proud to establish customer trust. Vietnam Sotheby’s International Realty has succeeded to build up the long-term firm connection between leading quality projects in Vietnam and targeted customers. A significant number of buyers after the first transaction, gladly come back to us with the second, third, even fourth transactions and own the properties of the same project or other high-end ones,” Piro said.

In the first two months of 2014, Vietnam Sotheby’s International Realty recorded the sales revenue of VND73.5 billion ($3.5 million) for Hyatt Regency Danang Residence, a beachfront project.

In 2013, more than VND1.05 trillion ($50 million equivalent) in sales revenue across a diversified projects and most notably VND21 billion ($10 million) in general brokerage listings working on both buy and sell sides of transactions by Vietnam Sotheby’s International Realty.

During just a month, 13 luxury condominiums at Indochina Plaza Hanoi were sold by Vietnam Sotheby’s International Realty.

The Asia Pacific Property Awards, combined with the other regional awards’ programmes for Europe, Central and South America and Canada, forms the globally renowned International Property Awards.

Candidates and projects from various countries are judged by a panel of over 70 experts covering every aspect of the property industry.

In 2014, The Asia Pacific Property Awards witnessed the participation and severe competition of hundreds of Asia Pacific’s leading property professionals and developers from 29 countries to celebrate their success in overall project, architecture and interior design.

According to Stuart Shield, president of the International Property Awards the Asia Pacific region has the best track record for companies that go on to receive an International Property Award.

“This sets the bar so high, other regions have a hard task ahead if they hope to outshine Asia Pacific in the finals,” Shield said.

Mercedes-Benz Vietnam launches all-new CLA-Class

Mercedes-Benz Vietnam on Saturday launched an all-new sport sedan – the CLA-Class – with three versions including CLA 200, CLA 250 4MATIC and CLA 45 AMG.

The respective prices of these versions are VND1.45 billion, VND1.699 billion and VND2.089 billion, including VAT.

The CLA is a sport sedan with the curves from a Coupe, an elegant car with muscular lines and an emotional vehicle with outstanding efficiency.

The CLA 250 4MATIC generates 211 HP at 5.500 rpm and 350 Nm at the range of 1,200-4,000 rpm via the turbocharged 2.0L engine. Especially, the effective 4MATIC drivetrain improves the traction and the agility on all the terrains. The CLA 250 4MATIC can reach 100km/h in 6.7 seconds.

It consumes about 6 liters/100km on average. The CLA 200 variant consumes just 5.2 liters/100km, equivalent to a mini urban car with the displacement of 1.0L ranging up to 1.000km with one full tank.

In addition, the electric pump inside the 7G-DCT maintains the oil pressure when the engine is switched off via the start/stop function. This means that the transmission is immediately operational when the engine is restarted and the vehicle can move off again without any delay.

The CLA has many safety air-bags including  front airbags, side-bags, window bags for both rows and knee-bag for the driver. These features help protect the occupants at top standard in case of collision.

AIA Vietnam, Citibank ink bancassurance pact

Life insurer AIA Vietnam and Citibank Vietnam have signed an agreement for exclusive distribution of AIA insurance products on the domestic market.

Vietnam is one amongst 11 markets in the Asia-Pacific region under the exclusive distribution agreement between AIA Group and Citibank which was announced in December 2013.

In Vietnam, AIA products including individual and group life insurance solutions will be introduced to Citibank’s clients through a range of distribution channels. The bancassurance partnership has an initial duration of 15 years.

Raul Parades, Citibank Vietnam’s Consumer Business Manager, said in a statement released last Friday that the strategic partnership marks another milestone in the development of Citibank in Vietnam.

"We are confident that the cooperation between the two firms in banking and insurance will meet growing needs of Vietnamese customers," he said.

Brokerages warn of high risk this week

Though the stock market ended last week with a strong rebound, securities firms have advised investors to stay cautious as there is high risk ahead.

Contrary to expectations of most securities firms that the market would open on a cautious note last Friday after a steep fall on the previous session, the indexes of HCMC and Hanoi exchanges rebounded sharply, evident in high turnover. The 2.92% and 3.54% gains of the VN-Index and HNX-Index respectively were helped by oil and gas blue-chips including GAS, PVD and PVS.

Foreigners continued to accumulate shares but the volume was equivalent to just one-third of the total on Thursday. The largest net purchase positions were seen on GAS, HPG, MSN, PPC, PVD and VIC on the Hochiminh Stock Exchange while PVS accounted for almost half of the foreign net buying value on the Hanoi market.

Escalating tensions in the East Sea sank the local market into negative territory on Thursday. Despite a strong rebound on the next day, the VN-Index last week lost 6.15% at 542.46 points while the HNX-Index ended 7.12% lower at 74.19 points.

However, liquidity improved on both exchanges with the average matching volume jumping 30% against the last week of April. Foreigners net bought VND521.7 billion during the week.

Viet Capital Securities Company noted that the State Securities Commission announced after the strong decline on Thursday that it would not be adjusting down the daily trading bands (7% on either side on the southern bourse and 10% on either side on the northern exchange). However, the SSC warned that it might launch an investigation and impose penalties on any attempts to manipulate the market.

"We are of the view that using technical measures to mange the market such as narrowing the daily trading bands is not a solution since it could cause much uncertainty," it said.

Viet Dragon Securities Company said the strong rebound of the market, particularly oil and gas tickers last Friday, could not secure a positive outlook in the near term. Therefore, the market would not resume its uptrend soon as East Sea tensions and the upcoming court hearing of a massive financial scandal will continue to worry investors.

"We think that the VN-Index would not improve in the short term. Investors should stay outside the market to avoid risks in the coming days and now is really not the right time for short-vision investors. However, medium to long-term investors may consider picking up some stocks that have declined sharply in prices," it said.



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