‘Shareholders need better protection'

The rights of investors in Viet Nam's stock market need better protection, and this will also help boost the market, analysts told a seminar in HCM City on Thursday.

Speaking at the seminar — on the role of the stock market in the economy — Nguyen Duy Hung, chairman of Saigon Securities Inc., said companies listed on the country's two exchanges in HCM City and Ha Noi as well as brokerages had to ensure the transparency of the information they disclose and its accuracy to protect investors.

He described as unfair the tax on securities investments while bank deposits were not taxed, adding it encouraged people to put their money in banks rather than buy stocks.

Nguyen Thanh Long, vice chairman of the State Securities Committee, said the watchdog had been focusing on investors as a key factor in the market, and derivatives were a positive tool for protecting and diversifying investments.

The Government had recently issued a decree on derivatives and the derivative market — to take effect on July 1 — which was expected to boost the market.

Listed firms needed to abide by international accounting and auditing criteria to provide accurate information to investors, he said.

Viet Nam needed more institutional investors since they did not speculate and invested in value and were capable of guiding the market, he said.

Vu Viet Ngoan, chairman of the National Financial Supervisory Committee, said investor protection was one of the key factors in the healthy growth of the market as were policies related to corporate bankruptcy, access to capital, and implementation of the law.

Tran Du Lich, deputy head of the HCM City National Assembly delegation, called for a tax cut for public companies to stimulate firms to go public, which would improve their transparency and the market's.

The seminar, organised by HOSE and Saigon Securities Inc., is among programmes to celebrate the 15th anniversary of Viet Nam's stock market, which began with the opening of the HCM City Stock Exchange, formerly the HCM Securities Trading Center, in July 2000.

According to HOSE chairman Tran Dac Sinh, more than 300 companies are listed on his exchange with a market capitalisation that adds up to 25 per cent of the country's GDP.

On average, firms had doubled their chartered capital after listing in HCM City, he said.

More than 350 companies had their IPOs at HOSE, including some big names like Vietcombank, Vinamilk, and Bao Viet.

The exchange had average daily trading of VND2.1 trillion last year.

New e-commerce website launched

PeaceSoft Group, the leading group for e-commerce and payments in Viet Nam, in partnership with WeShop Global Group (Singapore) and Interpark Group (Korea), has launched the first multinational & cross-border retail platform in Viet Nam and South East Asia at www.weshop.com.vn.

Consumers are now able to shop for high quality products from the United States, Korea and other developed countries, with great deals and promotions.

WeShop provides a complete cross-border shopping process, allowing Vietnamese consumers to experience online shopping from foreign websites as simply and easily as from local sites.

WeShop.com.vn currently supplies more than 200 million diversified products from large brands in the United States, like Amazon, 6PM, Forever21, TopShop, Disney and ToysRus.

Amigo, MB sign contract to deploy data

Amigo Technologies Joint Stock Company (Amigo Technologies) and Military Bank (MB) signed a contract to deploy a data warehouse on Wednesday.

The project will play an important role in the finance and banking sectors, aiming to help the Bank develop a database and strong IT infrastructure. It will also help the bank to raise management, supervision and risk management, and adhere to international standards.

Taxi companies set to raise fares in HCM City

The Vinasun taxi company yesterday increased its fares from between VND400-500 (US$1.84-2.3 cents) per kilometre.

Other taxi companies operating, including Mai Linh, Hoang Long and 27/7 are also planning to adjust their fares, but are waiting for verification from relevant agencies.

The increase is expected to be between VND500 to 1,000 (2.3- 4.6 cents) per kilometre.

Ta Long Hy, chairman of the HCM City Taxi Association, said many members were keen to raise fares following an increase in global prices.

Hoa Phat complex to add thermo power plant

The Hoa Phat Energy Joint Stock Co signed a contract to provide equipment to Trung Khoa International Trade Co., Ltd for the construction of a thermo-power plant (phase 3) in the Hoa Phat iron and steel complex in northern Hai Duong Province.

The new facility, which will cost VND300 billion ($13.8 million), will have a capacity of 15MW.

The new work will lift the power generating capacity of the coke and thermo-electric plant to 52 MW.

Nam A Bank profit up by more than double

Nam A Bank earned VND3 billion (US$142.86 million) in pre-tax profit during the first quarter of this year, nearly 2.5 times more than its figures for last year's Q1.

This was achieved without extracting any provisional funds during the quarter, the bank said in its latest financial report.

Nam A Bank's net revenue expanded 65 per cent at VND198 billion ($9.43 million) during Q1. Except for securities trading suffering a loss of VND11 billion, other financial norms posted healthy growth, the report said.

India's Exim Bank seeks collaborations with Dong Nai

A delegation from the Export-Import Bank of India (Exim Bank) yesterday held a fact-finding tour of southern province Dong Nai seeking partnership opportunities.

The province is currently inviting investments to the industrial parks, he said, noting that Exim Bank would help encourage Indian enterprises to invest in Dong Nai.

The delegation's visit aimed to study local investment policies and locations for possible Indian investments, especially in the field of textiles, dyeing, electronics, and health equipment.

The bank proposed Dong Nai to allot 50 hectares in an industrial park for Indian businesses to build their textile and dye factories.

Waterway could cut road traffic between City-Ca Mau

The HCM City - Ca Mau waterway would be upgraded to accommodate 2,000-tonne container barges under a project to improve transport from HCM City to Ca Mau via Can Tho. The plan was submitted to the Ministry of Transport for approval.

The Traffic Development and Strategy Institute said the upgrading would help reduce the load of road traffic from HCM City to the southernmost province of Ca Mau.

Total cargo is expected to reach 93.5 million tonnes by 2020, a year-on-year rise of 7.7 per cent in the 2016-20 period.

Of that amount, transport by road accounts for 25.3 million tonnes (27.1 per cent); inland waterway, 62.3 million tonnes (66.83 per cent); and river and sea 5.67 million tonnes (6.07 per cent).

The institute said the country should issue incentives and favourable policies on land, taxes and interest rates for enterprises, including shipowners, shippers, and sea transport-service providers, to build or upgrade container ports and other facilities at ports.

According to the institute the country also needs to call for the private sector to invest in building or upgrading ports and seaports as well as storage facilities in Tien Giang, Can Tho, An Giang, Kien Giang, Ca Mau and HCM City.

Urgent work includes the upgrade of the waterway from HCM City to Ca Mau for container barges of more than 2,000 tonnes, an upgrade of Xa No Canal and coastal routes running through Dai Ngai – Bac Lieu – Gia Rai.

Large-scale river ports also need upgrading in order to upload containers at storage centres to collect and ship cargo. Ports include Binh Long Port (An Giang), An Phuoc Port (Vinh Long), Long Binh Port (HCM City). A new cargo port should be built inland in Cai Lay in Tien Giang Province, the institute recommended.

Shipping facilities for carrying containers (types: 36, 54, 72, 120 TEU) are also needed. Improvement of facilities to upload containers on inland waterway should also be carried out, the institute said.

The second phase of the project would upgrade the Cho Gao canal, and dredge and widen the flow of canal to 80 metres for container barges of more than 2,000.

The institute said the country should soon put into operation transport routes such as Binh Thuan – Kien Giang and link with ports in HCM City, Tien Giang, Can Tho and Ca Mau. Vessels of 1,000 DWT could be received and then later vessels of 2,000 and 4,000 DWT.

The institute also urged the completion of the project Quan Chanh Bo that would receive vessels of 10,000 DWT and 20,000 DWT.

As for roads, the country would need to improve the capacity of road traffic to transport and collect cargo, and transport goods to inland river ports in Can Tho, An Giang, Ca Mau, An Giang, Ca Mau and Kien Giang.

Seminar told Long Thanh airport hub is long-term strategic issue

The Civil Aviation Authority of Viet Nam on Thursday held a seminar in HCM City to discuss the issues facing the proposed US$8 billion Long Thanh International Airport near the city.

Lai Xuan Thanh, head of the CAAV, said building an aviation hub or entrepot was a long-term strategic mission of his agency.

The airport would also help resolve the issues facing Tan Son Nhat International Airport like noise and air pollution and threats to the safety of densely populated urban areas nearby.

"In future Tan Son Nhat will no longer meet the demands of airlines flying to Viet Nam." Tran Dinh Thien, the director of the Viet Nam Economic Research Institute and an enthusiastic backer of the project, said since the airport was closely linked with the country's future, there should be a vision for a longer term than just five or 10 years.

Even if Tan Son Nhat was expanded to double its current size, it would remain a traditional terminal, and in any case, due to its urban location, expansion was impossible, he said.

"The regional hub cannot always be Singapore. If we want to compete with Singapore and Thailand, we should have a different view on Long Thanh International Terminal. It should not only be a place for transporting passengers; it is also a transit point for cargo."

Le Manh Hung, general director of the Airports Corporation of Viet Nam, said Tan Son Nhat had a capacity of 25 million passengers a year, and would be overloaded by 2017.

To expand its capacity to 40-50 million, an additional 641ha of land would be needed in Tan Binh, Go Vap, and Phu Nhuan District and 500,000 people would have to be relocated, he said.

"The location selected for building the international airport has adequate conditions for establishing a transit international terminal that will be competitive in the region."

Dr Tran Dinh Ba, the man who had proposed the much-debated straight-line air route between HCM City and Ha Noi, expressed the fear that the new airport's US$18.7 billion cost was too high for the country.

Deputy Minister of Transport Pham Quy Tieu said it was imperative to quickly build Long Thanh airport, adding it would give a boost to the country's economic development.

Long Thanh, approved by the Government in 2011, is scheduled to open in 2020 with a capacity of 25 million passengers a year, according to authorities in Dong Nai Province, where the airport is to be built.

To be built in three phases, it is expected to be fully completed by 2035 with a capacity of 100 million passengers.

Construction is scheduled to begin this year.

Vietnamese lychees meet US quarantine requirements

Vietnam can now export fresh lychees to the United States (US) and Australia after the US Department of Agriculture (USDA) accepted the country’s plan of irradiation as quarantine treatment for exported lychee.

Nguyen Huu Dat, Director of the Post-Import Plant Quarantine Centre, said on May 15 that 2015 will be the first year Vietnamese lychees will be freighted to US and Australian markets where there are strict quarantine regulations on fruits.

Six approval codes were given to lychee growing areas in northern Bac Giang province and two to neighbouring Hai Duong province where production has satisfied safety standards, he said.

Technical solutions from sector authorities have finally paid off, Deputy Head of the Plant Protection Department Hoang Trung said, regarding the result as a breakthrough for the domestic lychee industry which will pave the way for the Vietnamese tropical fruit to enter other foreign markets.

This year’s lychee crops will be transported to South Vietnam for irradiation treatment until a new centre for irradiation becomes operational by the end of this year, before the 2016 crop begins.

Vietnam has also imported Cells Alive System, a Japanese quarantine technology, to preserve food for exports to Japan. The country is currently negotiating permission to apply this technology to fresh lychee and longan exports to the US and Australia.

Indian State-run bank keen on collaboration with Dong Nai

A delegation from the Export and Import Bank of India (EXIMBANK) on May 15 paid a fact-finding tour to the southern province of Dong Nai to seek partnership opportunities.

During a working session with the delegation, Vice Chairman of the provincial People’s Committee Nguyen Phu Cuong said the locality has zoned off 31 industrial parks, 27 of which have been put into operation.

Currently, the province is calling for investment into the parks, he said, proposing that the EXIMBANK Indian will help encourage Indian enterprises to invest in Dong Nai.

A representative from the Indian delegation said as a State-run agency tasked with assisting Indian enterprises in investing abroad and exporting, the delegation’s visit aims to study local investment policies and locations for possible Indian investment, focusing on textile, dyeing, electronics and health equipment.

The bank proposed that Dong Nai put aside 50 hectares in an industrial park for Indian businesses to build their textile and dyeing factories.

The provincial leader suggested that the investors should construct their textile and dyeing factories in Nhon Trach and Nhon Trach 6 industrial parks in Nhon Trach district.

Vietnam farm products introduced in Indonesia

A forum to introduce Vietnamese agricultural products and promote trade between the country and Indonesia was held by the Vietnamese Embassy in Indonesia on May 15 in Jakarta.

At the event, Vietnamese Ambassador to Indonesia Nguyen Xuan Thuy gave an overview of the economic cooperation between Vietnam and Indonesia in recent years with trade reaching 5.4 billion USD in 2014. The two sides are striving to raise the figure to 10 billion USD by 2020.

Meanwhile, Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) Juan Gondokusumo pointed to the government’s policies towards small- and medium-sized enterprises, including those from agricultural and aquatic sectors.

Event participants were also introduced to Vietnam’s potential in producing and processing farm products.

Representatives from the Lotte Mart Corporation, which owns a chain of foods and shopping services in Indonesia, appreciated the quality of Vietnamese products, including rice, watermelon, lychee, dragon fruit, and other aquatic products.

Steel imports from China shoot up

Chinese steel landing in Vietnam in the January-April period has seen a yearly increase of 135.4 percent, which is in turn having an enormous impact on Vietnamese steel sector, said Nguyen Van Sua, Vice Chairman of the Vietnam Steel Association (VSA).

According to a VSA report, Vietnam imported 292,000 tonnes of steel billets in the first four months of this year, mostly from China. It said that the number is forecasted to increase to a million tonnes.

Domestic steel billet capacity reached 11 million tonnes, yet demands for these commodities only stands at 6.5 million tonnes this year.

The VSA leader said that there has also been a significant escalation in the amount of imported Chinese so-called alloy steel products, including steel rod, steel wire and galvanised steel, exports of which are tax free from China.

Meanwhile, there is surplus of those products from Vietnamese enterprises.

Sua highlighted that steel enterprises need to implement reforms while making efforts to increase product competitiveness as there is currently no practical solution to address this issue.

In a bid to control the import of alloy steel from China, more detailed standards for steel products are required to reduce trade fraud, he added.

Workshop on improving export business awareness in trade remedies

Enterprises should grasp and effectively apply trade remedy measures to develop sustainably and overcome economic integration challenges, trade experts said at a workshop themed “Vietnam in non-border global trade” held on May 15.

Trade remedy lawsuits—anti-dumping, anti-subsidy, and safeguard measures—usually take a long time, at least two years, to solve, and they usually result in serious damage to export businesses’ trademarks and finances, said Pham Chau Giang, an official from the Vietnam Competition Authority under the Ministry of Industry and Trade.

According to Director of the Ho Chi Minh City branch of the Vietnam Chamber of Commerce and Industry Vo Tan Thanh, free trade agreements (FTA) that Vietnam has negotiated and signed with many partners are expected to bring new opportunities along with increasing numbers of trade remedy cases to domestic enterprises.

As a result, Vietnamese export businesses need a comprehensive overview of the signed FTAs and issues related to trade between the country and its partners, said Wong Chian Voen, Consulting Director of Mayer Brown company from Singapore.

She added that businesses should actively prepare necessary strategies and policies to minimise the possibility of trade remedy cases.

Ideas for Vietnam’s mid-term financial policy making

Domestic and foreign economists offered helpful ideas about mid-term financial policy making to Vietnam during a workshop held in Hanoi on May 15.

Consultant Paul Beckerman said national spending, balance of payment, foreign debts and currency accounts should be considered in making mid-term financial forecasts.

A representative from the US Agency for International Development (USAID) also stressed the need to design a mid-term financial framework, saying forecasts on budget account movements over the next couple of years will be useful when designing budget estimates.

Dr. Vu Sy Cuong from the Academy of Finance said the mid-term financial framework will align fiscal policy with socio-economic development goals, repair imbalances in the allocation of financial resources and define investment priorities towards a more transparent budget.

However, he also pointed out existing weaknesses including the limited capacity of statistics, analysis and forecasts, macro-economic fluctuations and insufficient legal frameworks.

Piloting four mid-term financial plans for six ministries and four provinces from 2006-2011, Vietnam achieved progresses in improving the transparency of local budget management as well as relevant cooperation between ministries and localities.

The event was hosted by the Ministry of Planning and Investment.

Japan commits to more ODA provision for Vietnam

Japan regards Vietnam as an important partner and will continue providing official development assistance (ODA) for the country’s sustainable development, infrastructure improvements and climate change adaptation.

Japanese Vice Foreign Minister Nakane Kazuyuki made the statement at a meeting with Vietnamese Deputy Minister of Foreign Affairs Nguyen Quoc Cuong in Hanoi on May 14.

Cuong said Vietnam attaches substantial importance to the extensive strategic partnership with Japan and expressed his pleasure at the strong, comprehensive development in the two countries’ relations in recent years.

The two sides discussed measures to deepen bilateral relations across fields, especially agriculture.

They consented to maintain regular delegation exchanges at all levels and improve the efficiency of the current exchange and cooperation mechanism.

The host and guest also reviewed regional and international issues of mutual concern and agreed to increase cooperation at multilateral forums and negotiations to forge regional economic links, including the Trans-Pacific Partnership (TPP) agreement.

Vietnam, Azerbaijan work towards 1 billion USD in trade

State President Truong Tan Sang has proposed Vietnam and Azerbaijan raise two-way trade to 1 billion USD in the coming years, and pledged to create optimal conditions for Azerbaijani businesses to operate in Vietnam.

Speaking at the Vietnam-Azerbaijan business forum on May 14, the President highly valued the bilateral trade, which topped 422 million USD in 2014 or a year-on-year increase of 30 percent.

He noted potential for stronger cooperation in labour, construction, healthcare and transport.

The State leader also informed businesses about a number of contents reached by leaders of the two nations, including delegation exchanges and trade promotion in respective markets.

He described bilateral cooperation in oil and gas as a long-term, strategic priority.

Earlier the same day, the President met with veteran Azerbaijani civilian and military experts who once helped Vietnam ’s national defence and construction.

He said he is pleased with progresses in the two countries’ relations, especially in the political and economic fronts, which have been strengthened via regular high-level delegation and trade exchanges in recent years.

He spoke in length Vietnam ’s socio-economic attainments after 30 years of “Doi Moi” (reform) process, as well as its foreign external policies of enhancing cooperative ties with traditional friends, including Azerbaijan .

For their part, veteran Azerbaijan experts showed their delight at the growing friendship between the two countries.

On May 15, President Truong Tan Sang met with the Vietnamese community in Azerbaijan , whom he described as an inseparable part of the nation.

He asked the Vietnamese Embassy in Russia and Azerbaijan to further support the overseas Vietnamese to do business and popularise Vietnam ’s culture to international friends.

Experts: trade facilitation committee urgently needed

The establishment of a national committee on trade facilitation is essential to enhance customs management, simplify export and import procedures and boost economic growth.

Experts at a conference held in Hanoi on May 15 by the United States’ Agency for International Development (USAID) in collaboration with Vietnam Customs said such a committee would ensure smooth coordination between relevant parties and cement partnerships between the State and private sectors.

Pham Thanh Binh, a consultant for the USAID’s Governance of Inclusive Growth (GIG) project, said the results of a survey released by the world customs organisation in April this year showed 23 of 66 member nations had committees or organisations addressing trade facilitation.

In Vietnam, she said, factors such as a lack of policy and law transparency combined with cumbersome administrative procedures—especially inspections and control at border gates—are barriers to trade activities.

Limitations on infrastructure are leading to lags in goods transportation between inland areas and border gates, Binh said.

She said that the formation of a national committee on trade facilitation in Vietnam will contribute to the implementation of Government Resolution 19/NQ-CP which aims to enhance the production and business environment and improve national competitive capability for 2015-2016.

The committee will help increase customs management effectiveness, reduce declaration time and increase international customs cooperation.

It also brings benefits to enterprises such as reducing declaration time and cost, thus increasing competitiveness and promoting exports and expanding markets, Nguyen Toan, head of Vietnam Customs’s International Relation Department, said.

According to Pete Faust, an international expert on trade facilitation at the GIG project, the participation of private enterprises is important in the formation of the committee to ensure its operations meet demands from businessmen and the enterprise community.

Tran Huu Huynh, a representative from the Vietnam Chamber of Commerce and Industry, said the formation of the committee will help honour Vietnam’s commitments to enterprises and the international economic community.

Activities and programmes by the committee help reduce trade costs, increasing job and income opportunities and ultimately promoting economic growth, Huynh said.

It needs the participation of all ministries, sectors, business communities, associations and media agencies, he added.

Kien Giang lures over 240 tourism projects

The Mekong Delta province of Kien Giang has to date lured 243 tourism investment projects requiring a combined 8,000 hectares, 154 of which have already been granted licences, according to the provincial Department of Culture, Sports and Tourism.

Those projects focus on four key tourism areas including Phu Quoc, Ha Tien – Kien Luong, Rach Gia – Kien Hai and U Minh Thuong. Phu Quoc Island alone has attracted 189 projects covering over 6,800 hectares.

Some 37 projects with a total investment of over 1.8 trillion VND (83.4 million USD) have gone into operation, mainly hotels, resorts and shopping malls. A highlight is the 300-hectare Vinpearl Resort Phu Quoc which offers a 750-room five star hotel, an entertainment complex and a world class golf course.

This year, the province expects to have 370 accommodation options with 7,750 rooms and suites, 12 of which are 3-5 star hotels, located primarily in Phu Quoc, Rach Gia and Ha Tien.

Kien Giang has also been developing tourism infrastructure with the construction of the Rach Gia Port, An Thoi Port, Bai Vong Port, Phu Quoc International Airport and a number of highways and roads in line with the upgrades to Rach Gia Airport. Several islands, such as Phu Quoc and Hon Tre, have also received access to the national power grid.

The province has worked hard to attract visitors with a wide range of tour offerings and festivals, such as eco-tours, tours to local beautiful beaches and islands as well as to folk villages that produce traditional fish sauce, sim wine (wine made from Rose Myrtle), peppers, pearl products and handicrafts made from stone, timber and gastropod shell.

Additionally, the locality has worked with other cities and provinces, including An Giang, Can Tho, Ca Mau and Bac Lieu, to link tours with several popular destinations.

The province has earned over 6.1 trillion VND (280.6 million USD) from around 18.4 million tourist arrivals over the past four years, including 874,000 from overseas, and expects over 6 million domestic and foreign visitors in 2015 alone.

The locality has welcomed 1.9 million tourists during the first four month of this year, fulfilling 31.6 percent of its yearly target.

Malaysia investigates dumping of steel coils from Vietnam

The Malaysian Ministry of International Trade and Industry (MITI) has launched an investigation into alleged dumping of steel coils imported from Vietnam and China, following a petition filed by FIW Steel Sdn Bhd (FIW).

In a prepared statement, the MITI said it has received the petition from the Malaysian producer, requesting the imposition of dumping duties on imports of pre-painted, painted and colour coated steel coils from both Vietnam and China.

The petitioner alleges these steel coils are being dumped into the Malaysian market at prices much lower than those prevailing in the domestic markets of Vietnam, China or Malaysia.

Further, the petition alleges the anti-competitive practices are the direct and proximate cause of both the Malaysian steel coil industry and the petitioner specifically suffering material injury.

In addition, the petition alleges the absolute volume of the imports from Vietnam is causing irreparable material injury to the domestic industry and serves as a basis for the imposition of anti-dumping import duties.

The MITI has determined that there is sufficient prima facie evidence of dumping, injury and causal link and therefore has initiated a preliminary investigation on imports of pre-painted, painted and colour coated steel coils.

In accordance with Malaysia’s Countervailing and Anti-Dumping Duties Act of 1993 and related regulations, the MITI said an investigation will be undertaken and a preliminary determination made within 120 days from the date of initiation of the action.

If the final determination is affirmative the government will impose an anti-dumping duty at a rate necessary to prevent further injury to the domestic industry the MITI statement concluded.

In connection with the investigation, MITI will provide a set of questionnaire to interested parties (importers, foreign producers, exporters and associations). Other interested parties may request for the questionnaires no later than May 14, 2015 and may also provide additional supporting evidence to the MITI on or before May 28, 2015.

In the event no additional information is received within the specified period, the government will make its preliminary findings based on all available facts.

According to the petition, for the period October 1, 2013 to September 30, 2014 Vietnam exported an estimated 37,950 million tonnes of steel coil to Malaysia, accounting for 68.2% of market share.

The period of investigation is October 1, 2013 to September 30, 2014. However, for the purpose of analysing injury, data of the previous two years from October 1, 2011 to September 30, 2013 would also be considered, it added.

The petition lodged by FIW – a Singaporean and Japanese joint venture based in Malaysia – alleges the dumping margin amounted to 13.68%.

Ho Nghia Dung, President of the Vietnam Steel Association (VSA), in turn stressed that the association is working with domestic enterprises to coordinate an appropriate response to the petition.

Dung advised any interested party to cooperate fully in supplying information to the MITI to expedite the dispute resolution process and bring about a favourable resolution.

Vietnam property market on rebound, says economist

Vietnam's real estate market will likely yield better returns this year than the stock and gold markets, but investors should be cautious in the rebound, a leading economist said.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, told a conference in HCM City on real estate investment opportunities over the next five years, that the property market was rebounding.

He said buyers were becoming more careful in the market and had better legal knowledge.

A rising number of approved property developments in Hanoi and HCM City were helping the rebound.

Vietnam’s demand for housing is forecast to sharply increase as economic growth rises, with GDP expected to grow by between 6.5 percent and 7.5 percent over the next two decades.

The rental market was also expected to benefit from the property upturn, he said.

Thanh said 2015 would unlikely be good for either gold or stock investors due to foreign exchange rate uncertainties and sluggish progress towards privatization of state-owned enterprises. But the government remained concerned about overheating the property market.

In the first quarter of this year, there were 8,000 transactions in the real estate market, up some 30-40 percent on the previous year.

“Speculation may help boost market liquidity, but there are dangers if it becomes too strong. Investors should always be aware of risk," Thanh said.

HCM City sees overdue loans inching up

Bad debt had edged up to 5.53% of total outstanding loans in HCMC by March 31 this year from 5.31% late last year, according to an updated report of the central bank’s city branch.

The report showed overdue loans at banks and non-credit institutions in the city had amounted to more than VND60.88 trillion as of the end of March though over VND6.1 trillion was settled in the first quarter of this year.

Nguyen Hoang Minh, deputy director of the branch, told a meeting between deputies of the National Assembly and representatives of banks in HCMC Tuesday that overdue loans rose slightly with the potentially irrecoverable debt (group 5) accounting for the biggest proportion.

Minh said joint venture banks and financial firms made up a majority of bad debt and the bankruptcy of small-and medium-sized enterprises gave rise to the rising bad debt in the city.

Meanwhile, the bad debt ratio of a dozen commercial banks based in the city was a mere 2.45%, which is lower than the central bank’s target of 3% this year.

The bad debt ratio of the banking system in HCMC started to swell at the end of last year due to several ailing banks including Vietnam Construction  Bank (VNCB) and violations at the Mac Thi Buoi branch of Agribank, prompting bad debt to go up by VND10 trillion.

In addition, bad debt inched up due to the central bank’s Directive 02 on strengthening bad debt, which requires banks to follow stricter requirements by the Credit Information Center for loan classification.

Le Thanh Trung, deputy general director of HDBank, said all banks have bad debt but it is important to have effective measures to keep it at safe levels and know where bad debt comes from.

Bad debt settlement requires a joint effort of banks and their borrowers, relevant ministries and agencies. If agencies can help companies find markets, the latter will have money to pay bank loans.

Despite rising bad debt, there were positive signs for capital mobilization and lending at banks in the city in the first four months of this year.

Minh said capital mobilization increased 1.91% to more than VND1,300 trillion, buoyed by individual deposits which grew 6% and accounted for 55% of the total capital mobilization at local banks.

More deposits of over one year enabled banks to increase their medium- and long-term loans for enterprises.

The first four months saw credits up 4.14% compared to end-2014 to VND1,120 trillion. Of the total amount, loans in Vietnam dong rose by 4.5% to VND944 trillion and those in foreign currencies grew 2.12%, and loans for production and trading making up 80%.

Such credit growth was higher than the same period of previous years, with only 0.79% last year, 2.11% in 2013 and minus 0.64% in 2012.

Medium- and long-term loans in HCMC were up 7.66% in January-April and made up 53.5% of total outstanding loans in the city. Meanwhile, short-term loans edged up 0.36%.

Nguyen Minh Tam, deputy general director of Sacombank, said corporate deposits at banks dropped this year, suggesting that more capital went to production and trading.

Fuel price hikes likely on falling price stability fund

Another fuel price hike is in sight as the rising prices of crude oil-based products on world markets have widened the gap between the base price and retail prices while the national fuel price stabilization fund is depleting.

According to the Ministry of Industry and Trade, Singapore fuel prices have remained high since May 5, with RON92 gasoline hovering around US$81.68 per barrel on May 6, the highest in six months. Meanwhile, kerosene and diesel were priced at US$80.2 and US$80.3 per barrel respectively.

At the trading session on Tuesday, the respective prices of RON92 gasoline, kerosene and diesel dropped to US$80.25, US$77.84 and US$78.63 per barrel. But these prices were higher than the 15-day average used to set the base price and adjust retail prices on May 5.

A source from a fuel trading firm told the Daily that the current base price of gasoline was VND1,800 per liter higher than the retail price. Fuel trading firms lose over VND300 for each liter sold as they get VND1,427 a liter from the fuel price stabilization fund.

According to the ministries of finance and industry-trade, the fuel price stabilization fund had VND2.843 trillion left in the first quarter of this year, down more than VND1 trillion compared to late last year.

The source said the fund at his company and other fuel trading firms have declined dramatically compared to the end of quarter one as spending has been much higher than revenue in the past year.

In particular, since May 5, the national fuel price stabilization fund has spent VND1,427 on each liter of gasoline sold but retailers have got only VND300. Besides, it has spent VND322 and received VND300 for each liter of diesel sold.

The new base price is expected to be announced on May 20. If the world oil price stays high, another bout of fuel retail price spikes will be a matter of time as the fuel price stabilization fund is shrinking.

No merger of DongABank and ABBank in sight

A plan to merge DongABank and ABBank may not materialize anytime soon as negotiations have been put on hold due to unsolved differences, a source told the Daily.

Major shareholders of both sides have failed to reach common ground. When talks resume remains unknown, the source said.

In December 2014, there were rumors that DongABank with chartered capital of VND5 trillion (US$230 million) would be merged with ABBank capitalized at nearly VND4.8 trillion.

The deal would mark the second stage of the Government’s banking sector restructuring scheme. Merging the two private lenders does not fall in the category of nine ailing banks subject to forced restructuring in the first stage.

At ABBank’s 2015 annual general meeting late last month, chairman Vu Van Tien said aside from internal restructuring since 2012, ABBank would prepare for a merger with an appropriate credit institution this year.

According to its report at the end of 2014, the group of shareholders including Vietnam Electricity Group (EVN) held a 17.27% stake at ABBank while that involving Geleximco owned 19.88%. Tien and related persons owned a 5.23% stake.

Foreigners had a 30% stake at the lender, including 20% of Maybank and 10% of International Finance Corporation (IFC).

For DongABank, Tran Phuong Binh, vice chairman and general director, held a 3% stake at the end of last year while shareholders associated with Binh owned 6.7% and the bank’s trade union 0.9%.

Phu Nhuan House Trading & Construction Co. Ltd. owns 2.14% of DongABank, Ky Hoa Trade & Tourism Co. 3.78% and Phu Nhuan Jewelry Co. (PNJ) 0.77%.

As for its board of directors, Nguyen Dinh Truong held 0.013%, Tran Van Dinh 0.14% and Nguyen Thi Kim Xuyen 0.34%.

According to bankers, the halt to negotiations over the deal between the two banks is not a surprise. As one of them is in the north and the other in the south and they have different approaches to business.

Their registered capital is almost equal, making the merger tough and time-consuming.  

Vietnam spends big on unprocessed seafood imports

Despite its huge fish farming sector, the country still has to spend some US$800 million a year importing unprocessed seafood to turn out products for export.

According to the Import-Export Department under the Ministry of Industry and Trade, 80% of the amount goes to unprocessed shrimp imports, and Ecuador and India are the main suppliers of shrimp for Vietnam.

Seafood imports are currently subject to high duties. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), import tariffs are 10-15% for shrimp, 12-24% for tuna, and 10-17% for squid and octopus.

However, VASEP said Vietnam will have to lower the duties on unprocessed seafood imports soon as committed to its trade agreements with other countries.   

VASEP proposed the Ministry of Finance cut the tariffs on seafood material to 0% to support domestic exporters to improve their competitiveness as prices of many Vietnamese seafood products are now higher than in regional countries.   

Nguyen Hoai Nam, deputy general secretary of VASEP, said the import tariff exemption would help local seafood processors to boost exports.

Nguyen Thi Bich, a market analyst at VASEP, said with annual shrimp exports of 500,000-600,000 tons, Vietnam is among the top shrimp exporters in the world.  

Bich said that last year shrimp export revenue of China reached US$2.5 billion, India US$3.7 billion, Thailand US$2 billion and Vietnam US$3.95 billion. “The figures indicate Vietnam was the biggest shrimp exporter in the world,” she said.   

Statistics of the Ministry of Agriculture and Rural Development showed that the country netted nearly 1.1 million tons of seafood in the first four months of this year, 6% higher than the same period last year. Of this volume, fish catches exceeded one million tons, up 6.1% year-on-year.

Fish farming yielded 750,000 tons in January-April, inching up 1.5% against the same period last year.

VASEP said Vietnam obtained seafood export revenue of some US$1.4 billion in the first three months of this year, including over US$261 million (19.16%) from the United States, US$251 million (18.4%) from Europe, and US$193 million (14.15%) from Japan.    

Seafood shipments to South Korea accounted for US$119 million (8.76%) of total revenue and ASEAN nations US$106 million (7.81%).

HCM City okays multi-million-dollar velodrome project

The HCMC government has approved Vietnam Sports Platform Limited (VSP) to develop a velodrome project at Rach Chiec National Sports Complex in District 2.

VSP will partner with a unit assigned by the city government to build the velodrome at a cost of US$150-200 million in An Phu Ward.

The Department of Planning and Investment is assigned to coordinate with the department of finance and culture-sports to propose a partner for VSP, the joint venture model, investment capital, capital for site clearance and compensation for the city government for consideration.

Meanwhile, the Department of Culture and Sports will work with VSP to draft a memorandum of understanding in investment and development for the project.

During their visit to Busan later this year, officials of the city plan to visit the velodrome of this South Korean city.

Besides, HCMC will report the project and pilot sport betting to the Government and the Ministry of Culture, Sports and Tourism for consideration.

Dong Nai active in integrating into ASEAN Economic Community

Enterprises in the southern province of Dong Nai have been advised to innovate manufacturing technology, improve their brand names and boost trade promotion to anticipate opportunities offered by the formation of the ASEAN Economic Community (AEC) by the end of this year.

Talking about the AEC at a workshop in the province on May 14, Director of the provincial Department of Industry and Trade Le Van Danh said that once established, the AEC will help Vietnam expand its market, penetrate ASEAN partners’ markets, and participate in the global value chain.

The establishment will also eliminate most tariff and non-tariff barriers while helping Vietnam speed up reform and improve its economic institutions and international trade policies, and increase national competitiveness.

However, the increased opportunities are coupled with increased competition in product price and quality. The gap in incomes between AEC countries will force Vietnam to manage the free movement of goods, capital and skilled labour within ASEAN.

Twelve types of goods will receive integration priority, including farm produce, aviation, automobiles, electronics, tourism, and garment-textiles.

Dong Nai is home to around 20,000 enterprises. To anticipate opportunities and surmount challenges posed by the integration process, many have actively invested in expanding production scales and applying new technologies in business and production management.

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